"The idea is to have fewer bases and fly to fewer places but more frequently, " chief financial officer Nick Manoudakis said on Friday in an interview from the company's headquarters in Bratislava, Slovakia. "Our main focus is to bring down the costs."

The airline will close bases in Budapest and Krakow, Poland, this month and move planes to Vienna, where higher incomes and growing business travel should help boost sales, Manoudakis said.

The carrier will retain bases in Bratislava and Prague.

SkyEurope aims to trim spending to the level of Ryanair, the largest discount airline in Europe.

Ryanair's costs per passenger are 40% lower than the average of six European competitors including SkyEurope, Joe Gill, an analyst at Goodbody Stockbrokers in Dublin, said in a note to investors on 15 October.

SkyEurope shares fell as much as 5 cents, or 2%, to 2.40 and traded down 1.2% at 11:53am in Vienna.

The stock has declined 15% this year, giving the company amarket value of 104m.

Manoudakis declined to provide SkyEurope's costs per passenger. The airline is on the "right path" to turn its first profit by renegotiating fees with airports and closing the two bases, he said. "We are saving on all . . . from coffee to fuel."

SkyEurope and other discount carriers such as Air Berlin Plc are threatened by the growth of Ryanair, Gill said. Dublin-based Ryanair is increasing routes from Bratislava this month to nine from three, adding flights to cities such as Stockholm, Dublin and Barcelona, Spain.

SkyEurope increased frequency on flights to major European cities to two or three times a day, while cutting routes to destinations where the airline flew once or twice a week, Manoudakis said.

The carrier, founded in 2001, is introducing flights connecting the biggest Austrian cities in order to compete with national carrier Austria Airlines Group.

SkyEurope is also challenged by Wizz Air Ltd. The Hungarian carrier ordered 50 Airbus SAS's A320 airliners last week with a list price of $3.65bn to boost its network.

The purchase will take Wizz's A320 fleet to 82, compared with SkyEurope's plan to have 32 planes in 2010.

"It will be very tough for SkyEurope to bring down its unit costs when they are actually reducing the fleet unlike its regional competitor, " said Balazs Szegner, an asset manager at Equilor Investment Ltd in Budapest who sold his SkyEurope shares this month.

The carrier said on 4 Oct that it is selling deliveries of two new Boeing Co 737-700s and a handling unit in Budapest to boost cash reserves for the winter in part because of record oil prices. The company wouldn't provide transaction details and said the planes had not been scheduled for winter flights.

"We are turning around, " said Manoudakis, who was hired for the job this year and served as the financial director of EasyJet Plc for five years through 1999. "We will survive the winter."