Arriving in Luxembourg in June 2023 with the promise of a low-cost offer and flights to Bucharest, Rome and Skopje, the Hungarian airline Wizz Air is already absent for its first year in Luxembourg. Since February, the company, which is celebrating its 20th anniversary this year, has suspended its flights, due to a maintenance operation carried out by the manufacturer Pratt & Whitney on the engines which equip its Airbus A320 and A321. The operation is expected to be completed by the end of the year.
This did not prevent Wizz Air, which covers around fifty destinations around the world, from returning to profitability, after three years of losses. Over its staggered financial year, ending in May, it made a net profit of 365 million euros, with record traffic of 62 million passengers, up compared to last year. Good results which can also be explained by “an improvement in Rask of +4.6%”. This is a key performance indicator that measures revenue generated per available seat kilometer. This therefore includes the company’s total revenues, divided by the total capacity, calculated by multiplying the number of seats available by the number of kilometers traveled. The company was also able to count on a reduction in fuel costs, down 14.8% compared to the previous year. Other costs increased by 15.4%. Among them, personnel costs.
On an operational level, its flights experienced a occupancy rate close to 100% (99.4%) and the company improved its punctuality (to 65.3% compared to 56.2% the previous year). It also expanded its workforce with the hiring of 600 people, bringing the total number of employees to 8,000 worldwide. Rather positive prospects which will allow the company to develop its fleet over the next six years, with the purchase of 300 new aircraft. The objective is in fact to reach 500 aircraft by 2030-2032.
Its turnover increased by 30.2%, to exceed 5 billion euros in 2023-24, with Ebitda at 1.19 billion euros. Its total cash balance stands at €1.59 billion. Still, the company says it has suffered a number of challenges caused by external factors, such as geopolitical tensions in the Middle East and disruptions to flights to Israel, as well as the more common macroeconomic factors of inflation or tension on supply chains.
Over this financial year, Wizz Air repaid a bond of 500 million euros and its net debt is up, to 4 billion euros, with a decreasing leverage ratio thanks to the increase in Ebitda.
For the upcoming financial year, Wizz Air intends to resolve the problem linked to Pratt & Whitney engines, of the “GTF” type. The company is not the only one impacted by these problems: 600 to 700 aircraft are affected by this inspection operation by the manufacturer, due to microscopic contaminants which can cause a risk of premature wear, explained Airbus in July last. Asked about a date for Wizz Air’s return to Luxembourg, the company had not yet provided us with this clarification at the time of publishing this article.
