Wizz Air is one of the most ambitious airlines operating today, eager to increase market share while also extending its network so it can fly more people to more places.
Significantly expanding one’s fleet of aircraft while also being loss-making is a calculated risk for Wizz Air – aggressively grow while rivals are trying to recover from the pandemic.
AJ Bell’s Russ Mould said: “To some extent, the risk has paid off with abig jump in the number of passengers as it had much greater capacity to capitalise on the surge in travel demand post-pandemic. The big challenge is to now turn a profit which is no easy task given ongoing cost pressures.
“It needs to have more bums on seats per flight, find additional ways to generate revenue beyond the cost of a ticket, and to keep a lid on costs. It says that average fares across both the ticket and add-ons such as baggage fees are already trending higher.
“There is a lingering feeling that Wizz Air is still aiming for the stars, despite having already invested in more aircraft. That means acquisitions could be on the agenda.
“Even though it is still losing money, the company’s performance during and post-pandemic is probably strong enough to convince shareholders that its growth plans are working, and so it might have enough support to raise a significant amount of money to turbocharge that growth through a corporate deal.
“EasyJet has previously been seen as the logical takeover target for Wizz and there is still merit in parking the two companies together, although Wizz would need to make a generous offer if it wants to stand a chance of sealing adeal. Owning EasyJet would give Eastern Europe-focused Wizz Air a greater presence in the Western European market and a position in the package holidays industry.”