Wizz Air Holdings Plc 15% passenger growth and 6% higher unit revenues help to offset higher fuel prices

Wizz Air Holdings Plc (LON:WIZZ), the largest low-cost airline in Central and Eastern Europe, today issues unaudited results for the three months to 31 December 2018  for the Company as a whole, and separately for its airline and tour operator business units1.

1 The Group discloses revenues and expenses for its airline and tour operator business units separately. Where a measure is reported for a business unit then this is explicitly stated. All other measures and statements relate to the Group as a whole.

2 EBITDAR: profit (or loss) before net financing costs (or gain), income tax expense (or credit), depreciation, amortisation and aircraft rentals.

3 EBITDAR Margin: EBITDAR divided by total revenue.

4 Under IFRS15, which was adopted by the Company from 1 April 2018, €0.4 million of compensation paid to customers is deducted from ticket revenue.

József Váradi, Wizz Air Chief Executive said:

“In our third quarter Wizz Air delivered 15% passenger growth and 91% load factor, 2 percentage points higher year on year. Due to higher fuel prices we proactively adjusted growth capacity to help offset the cost pressure with higher yields. As a result the Company saw 6% increase in unit revenues per ASK in the reporting period. The introduction of a new carry-on bag policy in November of last year contributed to a strong performance in ancillary revenue with unit revenue per passenger 7% higher in the quarter. Our industry leading aircraft utilization, which helps drive our unit costs lower, was negatively impacted by the capacity adjustments in the quarter, but with the recent fall in fuel prices we will be increasing our utilization levels back to the high levels from the start of F20.

The Company maintains its net profit guidance range of between €270m and €300m for the full year, where we will be within this range will depend on the extent of March yield pressures which will be affected year-on-year given Easter falls after the financial year-end in April and external factors such as BREXIT uncertainty.

Wizz Air remains well on track to deliver its mission to be the undisputed ultra-low cost carrier in the industry as cost leadership positions the airline for disproportionate growth opportunities across Central and Eastern Europe and Western Europe, and makes us an increasingly formidable business under any market circumstances. The roll out of our A321 NEO fleet will commence in the fourth quarter, which combined with our industry leading unit cost, a highly valued employee base and an investment grade balance sheet with €1.1 billion of free cash makes Wizz Air a structural winner in the European airline industry.”

REVENUE AND COST HIGHLIGHTS

Revenues: Total revenue increased 21.2% to €512.7 million on 14.9% passenger growth to 8.1 million in the quarter:

o Ticket revenues increased 20.4% to €291.1 million.

o Ancillary revenues grew 22.3% to €221.5 million.

o Unit revenues increased by 5.6% to 3.54 Euro cents per available seat kilometre (ASK).

o Ancillary revenue per passenger increased by €1.5 to €27.1 per passenger.

Costs: Total operating costs increased 25.6% to €512.7 million and total unit costs increased by 9.3% to 3.53 Euro cents per (ASK). The increase was driven by:

o Fuel unit costs which were 21.6% higher at 1.15 Euro cents per ASK.

o Ex-fuel unit costs which were 4.3% higher at 2.39 Euro cents per ASK reflecting a temporary 6.6% decrease in utilisation from 12.1 hours per day to 11.3 hours per day and the effect of a one-time increase of pilot salaries introduced in April 2018.

IMPROVING OPERATIONAL METRICS

Steps taken by the Company to address the challenging industry-wide operating environment is yielding positive results with on-time performance improving to 80.4% in the quarter, which is 8.3ppts better than the first half of 72.1%. The Company had to cancel only 79 flights out of schedule of 45,946 flights, this compares to 251 cancelled in the first half of the financial year and 226 in the same period last year. Disruption costs were €5.9 million in the third quarter compared to €7.9 million in the same period in the previous year.

LEADING POSITION IN CENTRAL AND EASTERN EUROPE

· Passengers carried increased 14.9% to 8.1 million, securing Wizz Air’s position as CEE’s leading low cost carrier.

· Wizz Air started 53 new routes in Q3 and now offers more than 600 routes to 44 countries from 26 bases.

· The Company announced its 26th base in Krakow with two aircraft being deployed from summer 2019.

· Fleet has continued to grow with two new Airbus A320 aircraft added during Q3 taking the fleet to 106 aircraft, a mix of 72 A320s and 34 A321s.

· Average aircraft age of 4.4 years, one of the youngest fleets of any major European airline.

· Wizz Discount Club membership increased by 25% to over 1.26 million at the end of Q3.

BUSINESS DEVELOPMENTS AND INNOVATION

· Wizz Air UK received its UK route licence in the quarter, future-proofing the status of Wizz Air UK Limited as a British airline, regardless of the outcome of the negotiations and therefore will enable the Group to continue flying from the UK to non-EU countries following Brexit. A further two aircraft were also committed to Wizz Air UK from summer 2019, taking its fleet to 11 aircraft.

· Wizz Air introduced a new transparent baggage policy aimed at easing the boarding experience for customers and decreasing baggage-related delays.

· Wizz Air’s brand new €30 million state-of-the-art pilot and cabin crew training centre was inaugurated in Budapest. The facility currently operates two full motion simulators and can train up to 300 crew members on a daily basis.

· The Company was awarded the highest 7-star safety ranking from the world’s only one-stop airline safety and product rating agency AirlineRatings.com

FULL YEAR F19 GUIDANCE

The Company maintains its full year net profits guidance range of between €270m and €300m. The table below sets out the components of the Company’s full year outlook.

ABOUT WIZZ AIR

Wizz Air is the largest low-cost airline in Central and Eastern Europe, operates a fleet of 106 Airbus A320 and Airbus A321 aircraft, and offers more than 600 routes from 26 bases, connecting 144 destinations across 44 countries. At Wizz Air, a team of more than 4,000 aviation professionals delivers superior service and very low ticket prices making Wizz Air the preferred choice of over 33 million passengers in the past 12 months. Wizz Air is listed on the London Stock Exchange under the ticker WIZZ and is included in the FTSE 250 and FTSE All-Share Indices. Wizz Air is registered under the International Air Transport Association (IATA), Operational Safety Audit (IOSA), the global benchmark in airline safety recognition. The company recently received the highest 7-star safety rating by airlineratings.com, a world’s only safety and product rating agency, as well as was recently named 2017 – European Airline of the Year by Aviation 100, a renown annual publication that recognizes the year’s most outstanding performers in the aerospace industry.