Hungary Set To Star in 5th Freedom Battle

When Emirates launched flights between Milan and New York City the battle was fierce. Alitalia sued in Italian courts (and eventually lost) while the Big 3 US carriers all opposed the move from he western side of the Atlantic. Indeed, the market has seen yields drop precipitously since that service started with bargain fares to be found far more frequently. And it looks like Budapest is next.

Saif al-Suwaidi, the director general of the UAE’s General Civil Aviation Authority, confirmed this month that the Gulf country has requested access to two fifth-freedom services over Budapest. Without naming the destinations being discussed, Péter Szijjártó, Hungary’s foreign minister, added: “We are prepared to provide this freedom and will conduct the required procedures rapidly with both the Emirates and the European Union.”

Malev is gone so objections from within Hungary are likely to be few. Indeed, there is no nonstop service between the US and Hungary anymore since American pulled its flights in 2012. From that perspective this is new service from both sides, the sort of thing which the Open Skies treaty is meant to encourage. And Hungarian officials appear at the ready to get flights operating ASAP. But that doesn’t mean it will be approved without objections. With the joint venture operations handling nearly 80% of the North Atlantic ASMs it is hard to see true potential to destroy the market with one more unaligned route being added. Then again, it is an addition with significant capacity (likely a 777 at a minimum) and which will again raise the questions of unfair competition and subsidies in the market.

In the mean time, passengers are likely to benefit from the new service. If nothing else additional nonstop service on an underserved route should be celebrated. But in the current competitive climate that doesn’t always seem to happen. Oopsie.