Interesting news from Wizz Air: while many European airlines report lower results and yields under pressure, the ultra-low-cost airline from Central-Eastern European sees significant growth. Wizz closed its FY2020 Q1 with a net profit of EUR 72.4 million, compared to a 29.3 million loss in the same period last year.
The reason? 20.1 percent more passengers, from 8.6 to 10.4 million. They pushed revenues to EUR 691.2 million, up 25.4% from Q1 last year which runs from April to June. Its revised policy drove ancillary revenues up 41.4 percent to 311.9 million, or EUR 30.1 per passenger, an increase of 17.7 percent. During the quarter Wizz opened 60 new routes, with 20 extra aircraft deployed in Eastern Europe (Chisinau, Kutaisi, Krakow, Skopje, Varna Timosoara) and 17 in Central/Western Europe (Vienna, London Luton).
Higher revenues were offset by 25.5 percent higher costs which rose to EUR 598.6 million, with fuel costing 9.1 percent more per Available Seat Kilometer at EUR 1.12 or 30.7 percent more at EUR 202.2 million. Load factor was up 1.7 points to 93.7 percent. Staff costs increased 25.7 percent as capacity has grown, yet the airline’s costs measured in CASK went up only EUR 0.07 to 3.39.
The higher fuel prices have hit many airlines, but Wizz Air claims to thrive as reduced competition has improved its position. With regional growth expected to continue for the remainder of the year, Wizz increased its full-year capacity growth from 16 to 20 percent with net profit expected to remain unchanged from the previous guidance of EUR 320-250 million.
Wizz continues to rave about the economics of the Airbus A321neo, which it refers to as a ‘game-changing aircraft’ that helps reduce costs. The airline’s parent company Indigo Partners signed an MoU for 20 A321XLRs in Paris in June. The current fleet consists of 114 aircraft, but this will grow to 145 in FY20/21, including 31 A321neo’s which together with 41 A321ceo’s account for 56 percent of the airline’s seat-count.
