Wizz Air Ltd.’s Ukraine division said stricter aviation regulations to be imposed in the country could ultimately force it to cease flying.

An “order of designations” requiring carriers to be more than 50 percent Ukraine-owned and offer domestic flights along with international ones can be satisfied only by flag-carrier Ukraine International Airlines, the Kiev-based unit said today.

“Wizz Air Ukraine is deeply concerned by this document as it contains a number of restrictions which signal a major step back,” it said in a statement. “The new order goes against the liberalization of the Ukrainian aviation market and the general wish to harmonize regulations with the European Union.”

Parent Wizz, based in Vecses, Hungary, and with its hub in Budapest, has become Eastern Europe’s top budget carrier after starting flights in 2004. It carried 15 million people in the 12 months through August and will have 54 Airbus Group NV A320s by the end of this year. The Ukraine arm serves 16 routes from Kiev with two jets, and attracted 1 million passengers in 2013.

Ukraine’s National Aviation Service adopted new procedures for issuing and cancelling route rights on Oct. 24, Kiev-based newspaper Kapital reported yesterday, citing NAS Chairman Denys Antonyuk. The decree was registered by the Ministry of Justice on Nov. 13, with the document to be officially published in the local press in coming days, it said, citing Antonyuk.

Less Choice

The measures, with which carriers must comply within a year, will pare the number of routes, restrict customer choice between airlines and increase air fares, Wizz Air Ukraine said.

While adapting its ownership structure to meet the new requirements might be possible, the operation of domestic services presents a potentially insurmountable hurdle for the unit, whose jetliners have 180 seats and are designed to tap high-density international routes.

The carrier has already been forced to close a base in Donetsk and to suspend plans for another in Lviv as a result of the international crisis that followed the Russian invasion of Crimea, removing three aircraft from Ukraine as a result.

Government-held Donetsk airport was shelled by pro-Moscow rebels Thursday, military spokesman Andriy Lysenko said in Kiev.

Wizz is seeking new markets after the propensity of central and eastern Europeans to fly grew almost five-fold between 2002 and 2010, according to the carrier.

The same trend has prompted carriers from the west of the continent to take an interest in the market, led by Ryanair Holdings Plc, Europe’s biggest discount operator.

To contact the reporter on this story: Christopher Jasper in London at cjasper@bloomberg.net To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

Photo Credit: Wizz Air's Ukranian division may have to cease operations in the Ukraine because of restrictions being imposed. Chris Rohde / Flickr