How bad could it get? America’s ugly election

A go-getting Hungarian airline sees opportunity in the pandemic

Wizz Air

Rising in the east

Helping purple get back in the black

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The Economist

September 5th 2020 

Business

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fleet, less than a third the size of Ryanair’s

and half of EasyJet’s, meant it could keep a

bigger share of its aircraft in the air. 

Wizz Air’s resilience is not all down to

good fortune. Mr Varadi’s focus on costs

helped, too. He claims Wizz Air’s are the

lowest in the business, thanks mainly to

the industry’s largest fleet of super-effi-

cient Airbus 

a

321s (though he got lucky

here, too, by not picking Boeing’s rival 737

max 

jets, the grounding of which after two

fatal crashes has delayed deliveries to big

buyers like Ryanair). Using the biggest ver-

sion of the single-aisle workhorse has

helped to spread expenses among more

passengers. One estimate put Wizz Air’s

unit costs at half those of EasyJet, an airline

that increasingly resembles the legacy car-

riers it once sought to subvert. And Mr Va-

radi has pulled this off without irritating

passengers or gaining a Ryanair-like repu-

tation for stinginess.

Now, thanks to mass lay-offs of pilots,

cabin crew and other staff, labour costs are

tumbling. Empty airports are wooing carri-

ers with cheap landing slots and discounts

on other charges. That has allowed Wizz

Air to set up ten new bases in the past three

months, including at London’s Gatwick

airport, as well as in Germany, Albania and

Russia. Plans to serve the Persian Gulf in a

joint venture with Abu Dhabi’s sovereign-

wealth fund remain on track. 

Things could still go wrong. On Septem-

ber 1st, as European countries reimposed

travel restrictions, Wizz Air tempered its

plans to return to 80% capacity next quar-

ter. It is now aiming for 60%, still better

than 45% or so for most European rivals. Its

share price is below its peak in mid-Febru-

ary, but back where it was at the start of the

year (see chart). Mr Varadi says Wizz Air’s

€1.5bn in cash would last 20 months even if

all its planes stop flying. He relishes the

chance to “sort winners from losers”. No

points for guessing which group he thinks

his firm belongs to.

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