Wizz Air Holdings Plc (LON:WIZZ), the fastest-growing European low-cost airline, today issues unaudited results for the six months to 30 September 2023.
This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report should be read in conjunction with the 2023 Annual Report and Accounts, and any public announcements made by Wizz Air Holdings Plc during the interim reporting period.
FINANCIAL RESULTS (Unaudited)
| Six months to 30 September | 2023 | 2022 | Change 1 |
| Passengers carried (million) | 33.0 | 26.5 | 24.6 % |
| Total revenue (€ million) | 3,052.3 | 2,193.8 | 39.1 % |
| EBITDA (€ million) 3 | 878.1 | 217.8 | 303.2 % |
| EBITDA Margin (%) 3 | 28.8 | 9.9 | 18.8ppt |
| Operating profit/(loss) for the period (€ million) | 522.9 | (63.8) | n.m. |
| Unrealised foreign currency losses (€ million) | (14.3) | (285.2) | (95.0) % |
| Profit/(loss) for the period (€ million) | 400.7 | (384.3) | n.m. |
| RASK (€ cent) | 4.91 | 4.48 | 9.6 % |
| Fuel CASK (€ cent) | 1.55 | 2.11 | (26.5) % |
| Ex-fuel CASK (€ cent) | 2.60 | 2.62 | (0.8) % |
| Total cash (€ million) 2 | 1,837.8 | 1,529.0 | 20.2 % |
| Load factor (%) | 92.6 | 86.9 | 5.7ppt |
| Period-end fleet size | 187 | 168 | 11.3 % |
| Period-end seat count (thousand) | 35,625 | 30,485 | 16.9 % |
1 n.m.: not meaningful as a variance is more than (-)100 per cent.
2 Total cash is a non-statutory financial performance measure and comprises cash and cash equivalents (30 September 2023: €1,132.3 million; 31 March 2023: €1,408.6 million), short-term cash deposits (30 September 2023: €600.5 million; 31 March 2023: nil) and total current and non-current restricted cash (30 September 2023: €105.0 million; 31 March 2023: €120.4 million).
3 For further definition of non-financial measures presented refer to “Glossary of terms and alternative performance measures (APMS)” section of this document. These measures incorporate certain non-financial information that management believes is useful when assessing the performance of the Group.
HIGHLIGHTS
▶ Profit for the period of €400.7 million, with Q2 five times higher year-on-year.
▶ Record high traffic of 33.0 million passengers in H1 (vs 26.5 million in H1 F23 and 22.1 million in H1 F20).
▶ 27.0 per cent higher ASK capacity in H1 vs H1 F23 (+63 per cent vs H1 F20).
▶ Unit revenue (RASK) was +9.6 per cent higher year on year; ticket RASK +17.4 per cent.
▶ Load factor recovered to an average of 92.6 per cent (vs 86.9 per cent in H1 F23 and 95 per cent in H1 F20).
▶ Unit cost (CASK) -12.3 per cent year-on-year; ex-fuel CASK -0.8 per cent (driven primarily by continued airport delays, a higher volume of past disruption claims and crew cost).
▶ Total cash balance at €1.8 billion, reflecting larger selling volumes and strong cash management.
▶ Investment in operational strength delivering significant results:
◦ Improved flight completion rate to 99.2 per cent (vs 98.1 per cent F23).
◦ Utilisation in H1 increased to 12:18 hours (vs 11:49 in H1 F23); Q1 to 11:58 hours and Q2 to 12:37 hours (vs 11:50 in Q2 F23).
▶ Sustained robust demand environment throughout the period.
▶ On track to take delivery of 21 Airbus 321neo aircraft by end of F24 in line with projections for the year.
▶ Currently extending 13 CEO leases (including 4x A321s – 230 seats) with seven already completed and six in documentation stage.
▶ Based on a service bulletin in relation to GTF engine inspections (issued 3 November, 2023), and verification performed with Pratt & Whitney, we are projecting a grounding of 45 aircraft by the end of F24 (including aircraft previously grounded in September ’23 and from mid-January ’24). Overall impact to ASK capacity for H2 F24 expected to be c.20 per cent higher YoY (Q3 c.25 per cent, Q4 c.15 per cent). Near and longer-term operational and financial impact is mitigated by management actions and OEM compensation that has now been secured.
▶ Suspended Israel capacity until end of November ’23 (redeploying it across the network), while observing security situation and maintaining a plan to redeploy capacity should things improve (in H1 F24 ASK capacity to/from Israel amounted to 5 – 6 per cent of total capacity).
József Váradi, Wizz Air Chief Executive, commented on business developments in the period:
“This summer we delivered significantly improved operational performance compared to last year. There were fewer flight cancellations, and overall fleet utilisation and productivity increased year on year. Our revenue and profit results reflect the higher volumes we now operate and the enormous amount of work and investment over the past three years.
In the first half, we saw very strong load factor recovery, as demand remained robust, including in new markets that are maturing steadily and where we continue to add frequencies and improve our schedule. The Middle East route network is tracking a similar maturity profile to the development of our CEE network, supporting our decision to continue to invest in, add to and evolve capacity there. Our wider fleet allocation programme remains active, and in addition to our expanded flying programme this winter, we have announced a summer 2024 expansion to Romania, Italy and Albania, operating new A321neo aircraft.
The security of our Airbus order book continues to be the backbone of our planned capacity growth and fleet renewal programme. The initial GTF powder metal engine inspection requirements had minimal impact on our operational capacity, and we are taking measures to mitigate the impact of further inspections, including higher utilisation from our existing fleet, aircraft lease extensions and continued new aircraft deliveries.
With respect to sustainability in our operations, we continue to make good progress, and we have made direct investments in new start-ups and signed a number of off-take agreements with SAF producers, thus securing a portion of our supply in the years to come.”
On current trading and the outlook, Mr Váradi said:
“We continue to see positive bookings in Q3, with selling load factors exceeding last year’s levels by single digit percentage points. We estimate overall H2 ASK capacity will be circa 20 per cent higher year on year, despite the number of GTF engines needing off-wing inspection in the period. This figure still represents industry-leading capacity growth and is a further testament to the Company’s ability to overcome adverse external factors.
Our plans to grow capacity next year are based on: combination of new aircraft deliveries, existing fleet lease extensions, securing additional aircraft capacity from the market and delivering improved utilisation. Based on current best knowledge we anticipate capacity for F25 to be at similar levels to F24. We have secured a comprehensive compensation support package from the OEM that will protect the Company’s commercial and operational performance in the coming quarters, protecting us from the costs of grounding any aircraft while our GTF engines undergo inspections.
Most of the financial impact from GTF removals will be mitigated by timely OEM compensation, while higher yield opportunities in our commercial programme will help protect revenue as market capacity remains constrained. We are narrowing our F24 net income guidance, initially set in June 2023, to a range of EUR 350-400 million. This guidance reflects our expectations for H2 F24 in the context of the ongoing macro environment uncertainty and continuing difficult operating conditions, from an infrastructure and security perspective.
We remain well protected against volatile fuel costs and FX movements via a systematic hedging programme, and our strengthened operations and a renewing fleet (tracking at 57 per cent at the end of September ’23) continue to deliver efficiencies for the business while reducing unit costs.
Our continued ability to manage the impact of complicated issues gives us the confidence that Wizz Air has the strategy and expertise to achieve our profitable growth ambitions.”
NEAR-TERM AND FULL-YEAR OUTLOOK
▶ Capacity (ASKs): H2 F24 c.20 per cent higher YoY (Q3 c.25 per cent, Q4 c.15 per cent).
▶ Load factor: F24 above 90 per cent.
▶ Cost: F24 ex-fuel CASK lower versus the prior year.
▶ Financial performance: narrow F24 net income outlook to the range of €350-400 million.
▶ Above guidance remains subject to any adverse external events (including macro, security, infrastructure and/or supply chain developments), revenue performance, for which company has limited visibility at this point in time, especially for Q4 period, as well as any airworthiness directive in relation to GTF engine inspections and number of available spare engines.
REVENUE AND COST HIGHLIGHTS H1
Total revenue amounted to €3,052.3 million, an increase of 39.1 per cent versus H1 F23:
▶ Passenger ticket revenue1 increased by 49.1 per cent to €1,762.2 million.
▶ Ancillary revenue1 increased by 27.5 per cent to €1,290.1 million.
▶ Total unit revenue increased by 9.6 per cent to 4.91 Euro cents per available seat kilometre (ASK).
▶ Ticket revenue per passenger increased by 19.7 per cent to €53.4 and was also up by 23.8 per cent versus H1 F20. Ticket RASK improved by 17.4 per cent to 2.83 Euro cents year-on-year, supported by strong pricing momentum in the period.
▶ Ancillary revenue per passenger increased by 2.4 per cent to €39.1 and was also up by 21.3 per cent versus H1 F20. Ancillary RASK stayed flat year-on-year at 2.07 Euro cents as more focus went to ticket pricing in the period, while ancillaries continued to be attractively priced to drive the demand.
Total operating costs increased 12.0 per cent to €2,529.3 million versus H1 F23:
▶ Total unit costs (including net financing expense) decreased by 12.3 per cent to 4.15 Euro cents per ASK.
▶ Ex-fuel unit costs decreased by 0.8 per cent to 2.60 Euro cents per ASK, mainly driven by higher than expected flight disruption and compensation charges and higher crew cost reflecting pay adjustments made since summer of 2022.
▶ Fuel unit costs decreased by 26.5 per cent to 1.55 Euro cents per ASK.
Total cash increased by 20.2 per cent to €1,837.8 million from €1,529.0 million.
The unrealised foreign currency losses in H1 amounted to €14.3 million (H1 F23: €285.2 million), this favorable change from last year is largely attributed to the slower depreciation of the EUR against the USD, leading to a more favorable revaluation of our USD lease liabilities on the balance sheet.
1 For further definition of non-financial measures presented refer to “Glossary of terms and alternative performance measures (APMS)” section of this document.
NETWORK UPDATES
▶ Wizz Air announced significant growth in the Polish market during the period, adding an eleventh aircraft to its Warsaw base and further expanding the route network from other Polish bases.
▶ Wizz Air Abu Dhabi is growing the fleet this winter and is adding two more aircraft, taking the fleet to eleven in total, which is one extra aircraft compared to its initial plans.
▶ Bucharest, Romania, will grow in size as largest base in the network with addition of two A321neo from June 2024.
▶ Tirana, Albania, will receive two additional A321neo aircraft from next summer, adding two new routes and growing the number of frequencies on existing routes.
▶ Next summer, Italian bases in Rome and Milan will see the largest schedule deployed to date with the addition of four new A321neo aircraft, with three going to Rome and one to Milan. The expansion will support six new routes and grow frequencies on 17 existing routes.
▶ During the period, Wizz Air also announced that its entire fleet of aircraft at London Luton Airport will be comprised of Airbus A321neos by 2025.
Base aircraft additions
▶ Catania, Italy: one additional aircraft, taking the base to four aircraft.
▶ Tirana, Albania: three additional aircraft, taking the base to thirteen aircraft.
▶ Warsaw, Poland: one additional aircraft, taking the base to eleven aircraft.
▶ Belgrade, Serbia: one additional aircraft, taking the base to four aircraft.
▶ Skopje, N. Macedonia: one additional aircraft, taking the base to six aircraft.
▶ London Luton, United Kingdom: one additional aircraft, taking the base to twelve aircraft.
▶ Bucharest, Romania: two additional aircraft, taking the base to nineteen aircraft.
▶ Rome, Fiumicino: three additional aircraft, taking the base to fourteen aircraft.
▶ Milan, Malpensa: one additional aircraft, taking the base to eight aircraft.
▶ Abu Dhabi, UAE: two additional aircraft, taking the base to eleven aircraft.
Base aircraft reductions
▶ Tuzla, Bosnia and Herzegovina: two aircraft
▶ Suceava, Romania: two aircraft
FLEET UPDATE
▶ In the six months ended 30 September 2023 Wizz Air took delivery of 18 new A321neo aircraft, and 10 A320ceo aircraft were redelivered, thus ending the first half with a total fleet of 187 aircraft: 40x A320ceo, 41x A321ceo, 6x A320neo and 100x A321neo.
▶ Four of the aircraft delivered were financed through Japanese Operating Leases with Call Options (JOLCO) and the rest through sale and leaseback transactions.
▶ Wizz Air is extending thirteen leases, of which seven have been signed and the other six are in the documentation stage. The lease extensions range between two and four years and have been secured at discounted or original lease rates.
▶ The average age of the fleet currently stands at 4.20 years, and remains one of the youngest fleets of any major European airline, while the average number of seats per aircraft has climbed to 223 as at September 2023.
▶ The share of new “neo” technology aircraft within Wizz Air’s fleet increased to 57 per cent and is planned to reach 63 per cent by the end of F24.
▶ In the remainder of F24 we expect 21 new A321neo aircraft deliveries, while four A320ceo aircraft will be redelivered to lessors and will exit the fleet. We expect minimal impact from Airbus delivery delays in F25 and F26.
▶ As at 30 September 2023, Wizz Air’s delivery backlog comprises a firm order for 13x A320neo, 287x A321neo and 47x A321XLR aircraft, a total of 347 aircraft.
▶ The table below provides expected number of aircraft for the current and next fiscal years, including current extensions:
| March 2024 | March 2025 | March 2026 | |
| Planned | Planned | Planned | |
| A320ceo (180/186 seats) (7x extension) | 35 | 27 | 17 |
| A320neo (186 seats) | 6 | 6 | 9 |
| A321ceo (230 seats) | 41 | 37 | 25 |
| A321neo (239 seats) | 121 | 162 | 219 |
| A321neo XLR (239 seats) | – | 2 | 11 |
| Fleet size (with finalised extensions) | 203 | 234 | 281 |
| A320ceo (180/186 seats) (2x extension) doc stage | 1 | 2 | 2 |
| A321ceo (230 seats) (4x extension) doc stage | – | 4 | 4 |
| Fleet size (after extension) | 204 | 240 | 287 |
▶ Based on a service bulletin (issued 3 November, 2023) and verification performed with Pratt & Whitney, we are projecting a grounding of 45 aircraft at the end of F24 (including aircraft grounded in September ’23) in order to administer mandatory GTF engine inspections. The so called ‘Second Batch Engines’ are expected to be removed from middle of January ’24, subject to regulator’s airworthiness directive. The final number of aircraft impacted by the inspections at the end of F24, and periods beyond, depends on utilization of engines (cycle count), number of spare engines available and MRO induction slots schedule. Near and longer-term operational and financial impact is mitigated by management action and OEM compensation that has now been secured.
FINANCIAL UPDATE
▶ Fitch Ratings has affirmed Wizz Air Holdings Plc’s long-term issuer default rating and senior unsecured rating at ‘BBB-.
▶ As of 6 November, 2023, using jet fuel zero-cost collars, Wizz Air has accumulated hedge coverage of 70 per cent of its jet fuel needs for F24 at a price of 811/931 $/mT. For F25 the coverage is 38 per cent at the price of 747/854 $/mT. The jet fuel-related EUR/USD FX coverage stands at 69 per cent for F24 at 1.0686/1.1114, while the coverage for F25 stands at 32 per cent at 1.0931/1.1369 rates.
▶ The initial €500 million bond, issued under the €3 billion EMTN programme, matures in January 2024 and will be repaid from cash.
▶ The outstanding balance on the PDP facility at the end of September 2023 stands at €117.9 million. The facility is paid down automatically with new aircraft deliveries. The facility has been extended to enable additional draw-downs, with the objective of maximizing capacity utilization throughout the F24-F25 period.
▶ Net debt1 at the end of 30 September 2023 was flat at €3,889.5 million vs €3,892.8 million at the end of 31 March 2023, while the Company’s leverage ratio1 (net debt to EBITDA) decreased from the F23 year-end 29.0x to 4.9x. Over the same period, liquidity1 reduced to c.36 per cent.
▶ The Pratt & Whitney engine support package includes multiple benefits for the Company, including compensation for impacted aircraft. An element of this compensation, which was not material, relates to costs incurred in the period ended 30 September 2023. These credits are included in net other expense in the condensed consolidated interim statement of comprehensive income.
1 For further definition of non-financial measures presented refer to “Glossary of terms and alternative performance measures (APMS)” section of this document.
SUSTAINABILITY UPDATE
Wizz Air’s CO2 emissions amounted to 51.6 grams per passenger/km for the rolling twelve months to 30 September 2023 (4 per cent improvement compared to the F23 average which was 53.8 grams, and 9.6 per cent lower than H1 F23 results a year ago, 57.1 grams per passenger/km), continuing the decreasing trend in the Company’s average carbon intensity performance in a twelve-month period. The most important sustainability developments during the six months ended September 2023 were:
| Month | Project | Description |
| April 2023 | Cepsa – SAF partnership | Memorandum of Understanding (MoU) with Cepsa, a leading international company committed to sustainable mobility and energy, for the supply of SAF from 2025 onwards. |
| April 2023 | First equity investment in sustainable aviation fuel R&D | The airline announced a £5 million investment in a biofuel company, Firefly, marking its first equity investment in sustainable aviation fuel research and development. |
| May 2023 | CleanJoule | CleanJoule, a green-tech startup focused on the production of SAF, announced a US$50 million investment via a consortium led by the principals of Indigo Partners, a US-based private equity firm, and GenZero, a decarbonisation-focused investment platform company of Temasek based in Singapore. As part of the consortium’s investment, Frontier Airlines, Wizz Air and Volaris have signed binding agreements to purchase up to 90 million gallons of SAF. |
| June 2023 | World Finance Awards 2023 | Wizz Air was named the Most Sustainable Low-Cost Airline for the third consecutive year at the World Finance Sustainability Awards 2023. |
| July 2023 | First fully electric turnaround in Rome Fiumicino | Wizz Air celebrated the arrival of its eleventh Airbus A321neo aircraft at its Rome Fiumicino base with a fully electric turnaround – the first one for the airline. Aviation Services used all-electric baggage tractors and belt loaders, passenger stairs, ground power unit and a towbarless pushback. The electric turnaround allowed Wizz Air to reduce carbon emissions from the ground handling process by 85 per cent compared to using diesel-powered equipment. |
| September 2023 | ReFuelEU Aviation Regulation | Wizz Air supports the ReFuelEU Aviation Regulation, recently adopted by the European Parliament. The regulation establishes minimum shares of SAF to be blended with conventional aviation fuel which are binding. Wizz Air has established its SAF strategy, which includes securing offtake agreements with suppliers for the future and has already signed agreements with Mabanaft/P2X Europe, OMV, Neste and Cepsa. |
| September 2023 | Wizz Sustainability Ambassador Programme | Wizz Air launched its new, and first of its kind, Wizz Sustainability Ambassador Programme. Among over 7,000 of Wizz Air’s cabin crew and office employees, 24 Sustainability Ambassadors have been selected, representing 22 bases and two offices across Albania, Austria, Bulgaria, Cyprus, Georgia, Hungary, Italy, Malta, North Macedonia, Poland, Romania, the UAE and the UK. The Wizz Sustainability Ambassadors will support local sustainability projects at the airline’s bases and offices. |
OTHER DEVELOPMENTS
▶ In July Ms Phit Lian Chong joined the Board of the Company as an independent Non-Executive Director. A citizen of Singapore, Ms Chong has held multiple senior roles in aviation, travel and logistics, including as a CEO of low-cost carriers Jetstar Asia Airways and ValuAir from 2006 to 2012.
▶ At the Annual General Meeting of Shareholders held on 2 August 2023 Shareholders approved all resolutions with the voting participation rate reaching 86 per cent. On the same date Shareholders also approved a resolution to purchase an additional 75 A321neo aircraft with delivery dates in 2028-2029.
▶ Wizz Air launched Wizz Discount Club Light, a new loyalty programme that offers exclusive in-flight discounts.
▶ Wizz Air Hungary’s cabin crew training organisation, which provides initial cabin crew training, obtained approval from the Ministry of Construction and Transport in Hungary to issue cabin crew attestation. Wizz Air is the first airline in the country whose training organisation can issue this type of international document on behalf of the Hungarian Civil Aviation Authority. This document will also be valid in all EU countries.
▶ Wizz Air was awarded as Global Environmental Sustainability Airline Group of the Year for the second consecutive year at CAPA Asia Aviation Summit in Kuala Lumpur.
