Wizz Air views itself as the new Ryanair in growth push

The Hungarian airline is looking to position itself as a leader in Europe’s low-cost airline market
Wizz Air views itself as the new Ryanair in growth push

Hungary's Wizz Air is adopting Ryanair's growth model.

Hungarian airline Wizz Air is looking to position itself as the new Ryanair as it aims to take market share from EasyJet and cement itself as a leader in Europe’s low-cost airline market.

Low-cost carriers are being tipped for the swiftest recovery within the wider aviation market when travel resumes after the Covid crisis eases.

Within that recovery, Wizz is being seen as one of the airlines most likely to succeed, with it having the operational structure and the finances to build market share.

Wizz CEO Jozsef Varadi has modelled the company after Ryanair. Both airlines have signalled they will keep taking plane deliveries and opening new bases in preparation for the upturn. In a market unlikely to return to 2019 levels for several years, any gains they make will come at the cost of others.

Wizz will “continue to grow, I assume more in Central and Eastern Europe,” Ryanair chief financial officer Neil Sorahan said this week. 

“We’ve got a significantly lower cost base than them. They’re a good competitor, however. I think we will both do well over the next few years.”

Wizz this week posted a €259m loss for the first nine months of its financial year. However, Davy has increased its, albeit modest, net income projections for the airline to €45m and €370m in each of its next two financial years.

Wizz is the third-largest low-cost airline in Europe, behind EasyJet and market leader Ryanair.

It has snapped up airport capacity in Italy, Germany, Norway, and the UK – where it is looking to take on EasyJet – during the pandemic, but the westward push has been slowed by measures meant to stabilise an industry hard hit by the outbreak.

UK and EU authorities have extended a waiver of rules that force airlines to relinquish unused take-off and landing slots – shielding them from rivals targeting expansion at hubs such as Gatwick in London. Mr Varadi has said the measures are protectionist, and that airports starved for fees would welcome fresh tenants.

Wizz wants to base 20 planes at Gatwick, where EasyJet will have 71 in the summer, but so far it is only been able to place one.

Wizz – which has cut capacity less than its rivals and seen its shares grow – says it needs permanent airport rights to justify its investment at Gatwick, where it envisions employing 800 people.

Controlling more slots would help Wizz capture a bigger share of the travel rebound when it arrives.

“With EasyJet, there’s some lingering concern that if the summer doesn’t happen they have some question-marks over liquidity. Wizz, with its lower-cost model, is burning very little [cash]," said Davy aviation analyst Stephen Furlong.

"While both [EasyJet and Wizz] are rated the lowest investment grade rating, Wizz has more liquidity runway in a fully grounded scenario but EasyJet is hugely geared to positive working capital from nascent demand," he said.

• Additional reporting Bloomberg

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