Wizz Air Aims To Triple Fleet over Next Decade

 - June 5, 2018, 12:00 PM
Executives from Airbus, Wizz Air, and Pratt & Whitney join Hungarian government officials during a ceremony at Budapest Airport that marked delivery of Wizz Air’s 100th Airbus A320-family jet. (Photo: Airbus)

Wizz Air expects to take delivery of its first Airbus A321neo in January next year, and while the Hungary-based low-cost carrier has not received notification from Airbus or Pratt & Whitney about possible delays due to problems with Pratt’s PW1100G engines, the airline’s CEO, Jozsef Varadi, asserted the aircraft manufacturing industry is not in good condition. “It’s not just Airbus or Pratt; overall the manufacturing industry is not well coordinated and in its best shape,” he said. Wizz expects to take 13 A321neos in 2019, as part of a firm order for 110 A321neos placed in 2015.

“We are protected by contract, with pretty high penalties after the grace period,” Varadi explained to AIN on the sidelines of a ceremony in Budapest marking delivery of a new IAE V2500 A5 powered A321, increasing the size of Wizz Air's fleet to 100 Airbus narrowbodies. “Of course, this is not a guarantee the aircraft will be delivered on time.” He declined to disclose details on the penalties or grace period, noting only the latter is “short” and acknowledged that the PW1100G engine troubles present a risk to the airline’s planned expansion.

Wizz Air holds outstanding orders for 268 A320 family aircraft, including 72 A320neos and 184 of the larger variant, though it retains the contractual right to substitute a number of the A320neos with A321neos and vice versa, depending on its future requirements.

By year-end, Wizz will operate 108 A320 and A321 aircraft. The A321s, of which it flies 30, came configured with 230 seats and all A320s that joined the fleet since last year have come with 186 seats. Varadi said he sees “no case” to densify the older A320s with an additional eight seats.

A321s now account for about 33 percent of the aircraft flown, and that proportion will grow to around 50 percent by the end of 2019. At the end of 2023, the A321 will make up “most” of Wizz’s fleet, he said. “It is the growth engine of this company,” he noted, describing the aircraft as a “game changer” due to its 10 percent cost savings compared with the A320. Varadi said he expects the A321neo will deliver a 20 percent cost saving against the A320ceo.

Wizz Air has embarked on an ambitious growth plan, dubbed W300, that will see it triple its fleet to almost 300 aircraft by the end of 2026 while carrying 100 million passengers a year, up from 29.6 million passengers in the financial year ending March 31. “W300 is our vision of the future,” he said. “We want to be the fifth biggest airline in Europe.” Still, he named the biggest challenge going forward “ourselves.”

“When a business is very successful management gets tempted into doing other things or exceeding the growth it can internally absorb,” he said. The airline, which sees itself as an “ultra” low-cost carrier and aims to achieve unit costs rivaling those of Ryanair, achieved a 20 percent compound annual growth rate in the past decade. “I don’t think that is sustainable in the next decade,” said Varadi. “I think 15 percent is more reasonable; otherwise something will break and we don’t want that to happen,” alluding to an operational meltdown due to poor pilot rostering, a business model upgrade, and a continued high growth rate that caused an operational meltdown at Ryanair last fall.

Varadi vowed Wizz would stick to the “very basic, simple, well defined” business model it launched 14 years ago. “We are not looking at cargo, or connecting or feeding or hub-and-spoke. We are a point-to-point airline looking to stimulate the market,” he said, adding that growth will be largely organic. Mergers and acquisitions add complexity: “We do not embrace that,” he explained. Geographic focus will remain Central and Eastern Europe and two-thirds of the 100 or so aircraft that will join the fleet in the next five years will serve that region. Wizz Air currently flies some 600 routes connecting 141 airports in 44 countries.