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10 Questions

with Jason Bitter
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January 9th, 2008 issue

VLADIMÍR WEISS/THE PRAGUE POST
SkyEurope Airlines' Jason Bitter says Prague is the budget airline's best-performing hub.
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THE BITTER FILE

Job title: CEO, SkyEurope Airlines
Nationality: Canadian
Previous position: COO, SpiceJet Limited
Education: B.A., York University; Ph.D., University of Toronto

SkyEurope, the rapidly expanding but unprofitable Slovak budget airline, has gone through a turnaround under Jason Bitter, who succeeded founder Christian Mandl as CEO in June 2007. The airline added Prague as a hub in 2006. Bitter tells The Prague Post why his airline was like a dotcom startup and what low-cost airlines look for in airports.
➊ What prompted SkyEurope’s restructuring?
Our airline lost a lot of money over a number of years. It was almost like a dotcom: We’ll grow, grow, grow and profit later. Now we’re focusing on profitability. It’s better to be strong in a few places rather than not strong in a lot of places, so we decided that Prague, Bratislava and Vienna are the places that we could be strong in. There we have weak competitors with very high cost bases.
➋ How important has Prague become to your operations?
Prague is our best-performing base right now. We’ve more than doubled our size there. The number of passengers we carried increased 288 percent in November 2007 versus November 2006. In our last year, we moved a half-million people through Prague; this year, it will be 1.5 million.
➌ How much are Czechs using the airline?
Over 30 percent of our passengers in Prague are now Czech. When we started, it was around 7 percent. On our London service, it’s 70 percent. This compared to the Budapest base that we closed, where we had maybe 5 percent Hungarians.
➍ What was unattractive about Kraków and Budapest, where you recently closed bases?
Prague has leisure, business, visiting friends and relatives — everything. And it’s got less seasonality. There’s not much business in Kraków. For 10 weeks of the year, Kraków makes a lot of money, but, for 42 weeks of the year, it loses money. It’s hard to make up 42 weeks of losses in 10 weeks.
➎ What is SkyEurope doing to curb its carbon emissions?
We are probably the leader in Europe in conserving emissions. We’re working on a green campaign to tell people what we’re doing. EasyJet has claimed they’re the greenest airline. They’re not. They fly heavier aircraft than us. Their 737s don’t have winglets; ours do.
We’ve put in a lot of fuel-saving initiatives. We changed our flight plans so that we’re actually flying slower; on average our flights are two minutes longer, but we’re saving maybe 20 to 30 kilos of fuel every flight.
➏ In 2007, your airline introduced a prominent campaign called “We Play Fair” that challenged budget airlines to list the hidden fees on their flights. Did that gain any traction?
Fare listings are going to have to be regulated. We need to benchmark ourselves against other airlines. And, unless everyone is doing the same thing, you hurt yourself. In the UK we’re doing it primarily because it’s been mandated. But we wound up hurting ourselves here becausepeople would do a comparison and didn’t know they weren’t doing an apples-to-apples comparison.
➐ How is Prague’s Ruzyně Airport doing in comparison with Vienna?
Operationally, we prefer Prague. The airport has a lot of growth potential, while Vienna is limited. It is constrained there, not just the runway but also the terminal, very crowded. And in Vienna’s airport you’re always taking buses to the airplanes, which I don’t like.
In Prague, they overbuilt. Normally airports build too little and then they’re always doing construction. Ruzyně is not going to have to do any terminal construction for a long time. They built for the future, which is smart.
➑ Any improvements you’d like to see airports make?
A lot of airports don’t understand what an airline wants. Low-cost airlines want a low-cost base. We don’t want a Taj Mahal airport. We want something that allows us to get our passengers in and out as quickly and as cheaply as possible. Some of the management of Prague’s airport gets this. At some other airports, they have no idea.
➒ Has Europe’s budget airline market reached any sort of equilibrium, or do you expect more competitors?
There’s a lot more development to come. If you look at the U.S., deregulation came there in 1979. In Europe, it came only 10 years ago. Ryanair and EasyJet’s combined fleets are still not as big as just Southwest’s, which has 500 airplanes, and Europe’s a bigger market with more people. As the weaker state-owned carriers falter, there’ll be more opportunities.
➓ What role do you see for state-owned airlines?
It’s difficult to say. Some of them shouldn’t even exist. Olympic? Alitalia? A lot of them have high costs and union issues — they’re so inefficient. And the EU’s competition rules are making it difficult for the states to continue to support them. Look at every other industry. Dinosaurs die. Anybody who thinks that the status quo will last? They’re dreaming.
Want your manager to answer our 10 Questions? Contact Paul Voosen at pvoosen@praguepost.com


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