Wizz Invests in Network Breadth

Edward Russell
June 7th, 2021 at 12:01 AM EDT

Wizz Air is using the crisis to expand the breadth of its network in a push that its CEO József Váradi sees as both strengthening its business and accelerating its recovery. During its 2021 fiscal year that ended in March, the Hungarian discounter opened or announced 18 new bases, including ones in Abu Dhabi, Cardiff and Milan, greatly expanding its footprint across Europe and the Middle East.

“It’s a much more diversified network than before,” said Váradi during Wizz’s fiscal year results call last week. “That gives us a significantly improved ability to manage headwinds from a situation like Covid.”

The expansion is straight out of budget carrier’s pandemic playbook. Around the world, these often smaller and more nimble airlines have used the suspensions and retrenchments of larger competitors to elbow into markets where they previously had a minimal or small presence. JetBlue Airways took advantage of this shift to open a new base in Los Angeles last year; Australian regional Rex Airlines added Boeing 737s and began flights on the country’s busiest routes following Virgin Australia‘s voluntary administration restructuring; and Ryanair has opened eight new bases across Europe.

Wizz’s expansion came even as its capacity fell nearly 64 percent from 2020 to 2021. The airline posted a €576 million ($703 million) net loss during the fiscal year. Revenues fell 73 percent to €739 million and expenses 48 percent to €1.3 billion compared to its 2020 fiscal year. Passenger traffic was down nearly 75 percent year-over-year.

These pandemic losses have not dampened Wizz’s appetite for growth. The airline added 16 Airbus A321 Neo jets to its fleet during its 2021 fiscal year for a total of 137 aircraft at the end of March. The new bases allow the airline to put these new jets — and the 248 A320 Neo family aircraft it has on order — to work even as overall frequencies remain below pre-crisis levels.

Italy and the UK are two growth markets for Wizz. The airline is “going for Italy” that Váradi called an “investible market.” The airline opened or unveiled plans to base 17 aircraft in the country at Bari, Catania, Milan Malpensa, Palermo and Rome Fiumcino during the past year. And despite lower traffic volumes due to pandemic restrictions, Váradi said the market reaction to the new services has been “very positive.”

Wizz’s investment comes amid significant changes in the Italian market. Beleaguered flag carrier Alitalia is in the midst of a government-led restructuring that will see it relaunched as Italia Trasporto Aereo (ITA) sometime later this year. The new carrier is expected to be smaller and more nimble than Alitalia by taking the airline’s strongest assets and leaving its debts.

“Our Italian expansion has nothing to do with what will happen to Alitalia,” said Váradi when asked.

In the UK, Wizz continues to await a ruling on slots at London Gatwick where it plans to continue growing. The airline is also due to open a new base in Cardiff on June 17.

Not all of the carrier’s pandemic growth has been a success. A move into the Norwegian domestic market at the end of 2020 comes to an end later in June. Váradi described the closure of Wizz’s Oslo base and exit from domestic flying in the country as strictly a “financial decision” — implying that the opportunities in Italy are greater than those in Norway. Wizz will continue to serve points in Norway with flights to elsewhere in Europe.

Wizz did face a shrunken, but also financially strengthened, Norwegian Air that emerged from its restructuring at the end of May. In addition, Norwegian startup Flyr plans to launch domestic flights from Oslo at the end of June. Fly aims to serve eight destinations by the end of August.

Edward Russell

Route Briefs

  • Taking advantage of leisure travel recovery, Air Serbia will add two new beach routes in June and July. The carrier will connect Niš and Tivat, Montenegro, from June 15; and Kraljevo and Thessaloniki, Greece, from July 13. Both routes will operate through the summer.
  • Paine Field is back in full at Alaska Airlines. The carrier will resume its full complement of 18 daily flights by next spring and, in the meantime, add new seasonal winter service between the airport in Everett, Wash., and Tucson from November 19.
  • Orlando has landed another new route as leisure and VFR travelers continue to lead the recovery. Avianca will connect the home of Disney World with Cali, Colombia, with an Airbus A320 from July. The new route comes as the airline’s U.S. capacity remains down more than 43 percent in June compared to two years ago, Cirium schedules show. Orlando’s only nonstop to Cali, the route joins recently unveiled new international services from both KLM and Spirit Airlines.
  • Nearly a year after officially exiting its only South Florida gateway in Fort Lauderdale, Emirates is back with new service to Miami. The carrier will connect Dubai and Miami with a Boeing 777-300ER from July 22. Miami will be Emirates’ 12th U.S. destination and its first new point there since the crisis began.
  • FlyDubai is adding Egyptian beach destination Sharm El Sheikh to its map in July. The budget carrier will connect Dubai and Sharm El Sheikh — its second Egyptian destination — from June 15. FlyDubai has unveiled a rash of new leisure routes in recent months, including Mykonos and Santorini in Greece, and Bodrum and Trabzon in Turkey.
  • Norwegian startup Flyr has set a date for its first flight: June 30. The carrier will begin with service between Oslo and Tromsø with a Boeing 737-800. By the end of August, Fly plans to connect Oslo to eight cities: Alicante, Bergen, Bodø, Harstad/Narvik, Málaga, Nice, Tromsø and Trondheim. One catch, the carrier has yet to secure its air operators certificate, though at the end of May it said it expects the document “well before June 30.”
  • Latam Airlines is wasting no time in beefing up its network in Brazil following the end of its codeshare with Azul at the end of May. Latam will add one new destination — Comandatuba — and 10 new domestic routes from July 1 with an eye on flying 90 percent of its 2019 Brazilian capacity by year-end. The new routes are: Fortaleza to Belem, Manaus and Teresina; Rio de Janeiro Galeão to Maceio, Natal and Recife; and São Paulo Congonhas to Comandatuba, Fortaleza, Maceio, Natal and Recife.
  • UK regional carrier Loganair is adding a connection between Edinburgh and Cardiff — the capitals of Scotland and Wales, respectively — from August 2. The airline will fly 50-seat Embraer ERJ-145 jets on the route.
  • With leisure and VFR bookings up, Swiss is adding six routes to capture more of these travelers. The carrier will connect Geneva and Santorini, Greece, from June 19; Geneva and Ponta Delgada, Portugal, from June 25; and Geneva with Split, Croatia, plus Zurich with Billund, Denmark, and Tallinn, Estonia, from July 2 with all of the routes operating through the summer. Then in September, Swiss will add new flights between Geneva and Funchal, Portugal.

Edward Russell

Edward Russell
June 7th, 2021 at 12:01 AM EDT

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