Budget wars?

WHILE the US is tightening its border controls, the EU is relaxing theirs - at least as far as business is concerned. And with 10 new Central and Eastern European countries having joined the EU in May, the face of Europe is undergoing radical change.
Changing along with it is easyJet Airlines, the no-frills air carrier that recently announced an expansion into Slovakia.

WHILE the US is tightening its border controls, the EU is relaxing theirs - at least as far as business is concerned. And with 10 new Central and Eastern European countries having joined the EU in May, the face of Europe is undergoing radical change.

Changing along with it is easyJet Airlines, the no-frills air carrier that recently announced an expansion into Slovakia.

Founded in 1995, easyJet Airlines is entering a young but strongly competitive low-budget air carrier market. SkyEurope, the Bratislava-based airline with strategic hubs throughout Central and Eastern Europe, has done fairly well for itself. SkyEurope routinely offers the lowest priced fares out of Bratislava, with tickets starting at €17.

SkyEurope presented such a threat that British Airways, which operates some of the same routes as its no-frills competitor, responded by drastically cutting its prices - a move it was able to afford by increasing the use of electronic ticketing and thus reducing the cost of paper ticket processing.

EasyJet Airlines will kick off its Slovak operations on two new routes: Bratislava - Berlin, which launches November 25; and Bratislava - London Luton, starting December 8.

Yannis Capodistrias, the head of marketing for easyJet Airlines, said they are confident they can take on SkyEurope. Established by the heirs of Greek shipping tycoon Stelios Haji-Ioannou, easyJet Airlines has a long history of competing with budget carriers. They have shown themselves to be unafraid to take on bigger airlines, such as British Airways, as well.

EasyJet's business model is Web-based. Those who have tried to book a flight through easyJet Airlines cannot do so through a travel agency. To get low-cost fares on easyJet, passengers have to book online using a debit or credit card. While this has not been an impediment in Western Europe where Internet access is ubiquitous, it will be interesting to see how Slovak customers react.

SkyEurope, realising the necessity of reaching a broader spectrum of travellers early on, offers its tickets through travel agencies as well as online.

For example, SkyEurope passengers in Slovakia can purchase fares by cash at any Satur travel agency. In this way SkyEurope gives Slovaks an alternative to easyJet's Web-based business model.

According to Capodistrias, while easyJet does not discourage travel agencies to use corporate credit cards to secure fares for agency customers, easyJet is not interested in travel agency collaboration.

With only 40 percent of its clientele travelling on business, the majority - 60 percent - of easyJet's customers are either tourists or people who are relocating.

This group, which flies primarily during holidays to visit family and friends, is less likely to have established a credit rating with an internationally linked financial institution.

When asked about the challenges presented by easyJet, Stanislav Šaling, SkyEurope's marketing manager, would not comment. Still, as long as the easyJet Airlines business model stays the same, SkyEurope will likely stay Slovakia's favourite airline.


Car rental agencies ride the trend


Airlines are not the only businesses helping to change the face of Europe, of course. Other transportation enterprises are spreading into new markets as well, thanks to relaxed business regulations in accordance to new EU economic law.

For example, Avis, formerly the only internationally recognised car rental agency in Slovakia, now competes for market share alongside Europcar, Hertz, National and German-owned Sixt. Not only that, but taking a rental car outside Slovakia is a lot easier as well.

It used to be that car rental companies required drivers to complete numerous forms before allowing them to drive into neighbouring countries. Nowadays, that's changed. All that drivers need is a confirmation from car rental companies that they are aware of intended travel abroad.

It is great to see immigration and custom officers honouring the relaxed rules. If you look hard, with a little bit of luck, you might even spot a smile on their faces.

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