Wizz Air Maintains Strong Demand and Stable Yields Amid Operational Challenges
Wizz Air projects a “transition year” in fiscal 2025 with flat capacity growth due to ongoing operational challenges, notably those related to Pratt & Whitney GTF engine issues which are expected to ground approximately 50 aircraft by late September. Despite these hurdles, the Hungarian airline is optimistic about the sustained demand and yield strength in its markets, setting its sights on expansion towards Eastern markets for future growth.
In a recent conference call discussing the fiscal 2024 results, which saw the airline rebound from a €466.8 million loss in fiscal 2023 to a profit of €437.9 million, CEO József Váradi expressed confidence in the robustness of demand across Wizz Air’s core markets. “We are not seeing a softening of yields. Demand is very, very robust, so we are not seeing any significant weakening of markets, anywhere,” Váradi stated. This contrasts with comments from Ryanair’s CEO, who anticipated lower airfares over the peak summer season.
Váradi highlighted the airline’s scarcity of capacity as a factor driving yields higher, rather than decreasing. He discussed the pricing strategy, emphasizing that continual significant price increases are not sustainable annually without affecting market dynamics negatively.
Looking forward, Wizz Air is targeting growth opportunities in the East, where economic convergence dynamics present attractive market prospects, similar to those seen in Central and Eastern Europe two decades ago. Váradi mentioned that as these regions liberalize their marketplaces, significant growth opportunities will arise.
The airline, celebrating its 20th anniversary, remains focused on maintaining market share in key countries such as Albania, Hungary, Italy, Poland, Romania, and the UK. Despite the financial impact of the Israel-Hamas conflict, which cost the airline €80 million, demand for flights to Tel Aviv has been recovering steadily since Wizz Air resumed services there in the last quarter.