I joined SkyEurope in May 2007 backed by my airline industry experience with easyJet, where I was one of the founding members. EasyJet was a huge success while its business principle was very simple: for short, point to point air travel, consumers basically want a very good price, onvenience and safety. By eliminating unnecessary costs and simplification, easyJet was able to attract millions of new passengers, stimulate the market and be very profitable.
When the opportunity came up with SkyEurope, I looked at the region and I thought that there was an opportunity to stimulate the market, especially in a region with long-term economic growth. I saw that SkyEurope had the potential to grow, expand and become the strongest regional player, especially in southeast Europe. When I joined SkyEurope, I saw substantial room to reduce costs and become competitive with other low-cost airlines, which became my priority along with revising our reporting systems to make them compatible with the industry. Within one year our cost base was pushed down to the level of other low-cost airlines such as easyJet. In fact, during the period of high fuel prices we were the only airline in the world to report an improvement in our cost base.
Unfortunately, this achievement was undermined by a number of factors: the high fuel prices forced us to raise prices, which had an adverse effect on demand. The world economy started to suffer as well, with further impact on demand. In addition, our commercial policies and pricing were not always consistent. And, last but not least, the changes in our network, for example establishing Vienna as a base, were done without additional capital investment, which we thought at the time would be forthcoming.
Due to these factors, the company entered an ever worsening liquidity crisis, which damaged the company and eventually caused the collapse of the airline. The management, including myself, increasingly ended up “fire fighting” and involved in continuous crisis management. We all fought a very hard battle to give the company time to secure the required investment. Very long and stressful days became a standard. There were no breaks and no room for any meaningful personal life. In the last year I think I had maybe two days of holiday.
We put the company into restructuring as we were convinced that was the only way to save it. Unfortunately, due to a combination of factors, the restructuring was unsuccessful. It is now all over and for me it feels like losing a child. A lot of effort went into making this work and many sacrifices were made, but without a happy ending. If there is any consolation, then it is that no effort was spared and everyone fought hard to the end. I still believe that there is a great opportunity in the region for a successful low-cost airline and I am confident that I will be proved right. In closing, I would like to express my deepest personal thanks to our staff, customers and partners for their enduring support.
Nikolaos “Nick” Manoudakis is the Chairman of SkyEurope Airlines
More information about Slovak business environment you can find in our Investment Advisory Guide.
7. Dec 2009 at 0:00 | Nikolaos Manoudakis