Wizz Air is benefitting from European airlines’ schedule cuts

They say one person’s trash is another person’s treasure, and that’s proving true in the operational issues facing European airlines this summer. Wizz Air is benefitting from the widespread schedule cuts with fuller planes and higher fares. “The fare environment remains strong, with industry capacity reducing and consumer demand over summer strong,” the Hungarian discounter said in an investor update on July 11. Wizz benefits from a route network that is focused on Eastern Europe where there have been fewer of the operational issues. Many of the challenges are at Europe’s largest hubs — Amsterdam, Frankfurt, and London for example — where Wizz has a smaller presence than many of its competitors. But this does not mean the airline is immune to the continent-wide bedlam; to “avoid cancellations and secure a more punctual operation to our customers,” Wizz has reduced its planned summer capacity by 5 points, to up 35 percent compared to 2019. Wizz expects a “high-single digit” increase in unit revenues during the September quarter compared to the same period in 2019. This would be a nearly 20-point swing from the 10% year-over-three-years unit revenue decrease in the June quarter. Flights are forecast to be on average more than 90% full over the summer. This is good news for the budget airline that posted a significant loss in its last fiscal year, which ended in March. It also suggests that the forecast in June by Wizz CEO Jozsef Varadi that summer airfares could be as much as 60% higher than they were in 2019 may yet prove too conservative.<br/>