Wizz Air CEO deepens schedule cuts to counter travel turmoil

Wizz Air Holdings Plc will deepen cuts to its summer schedule, doubling down on efforts to combat disruption from a staffing squeeze that’s upended Europe’s transport industry.

After announcing a 5% reduction in peak-season seating on July 11, Wizz, the region’s third-biggest discount carrier, will extend the cuts to about 10%, Chief Executive Officer Jozsef Varadi said in an interview on Wednesday.

“We’ve been going through some real pain in terms of staff shortages at airports and air traffic control,” Varadi said. “We decided to trim capacity further to create more contingency and more of a buffer.”

Wizz, the leading discounter in Eastern Europe, had initially held back from slashing capacity as much as some rivals since the airports from which it operates have generally faced less of a staffing squeeze than the biggest hubs. Even after the more severe cuts the airline is still lifting summer seating 30% compared with 2019, one of the biggest hikes in the industry.

Shares of Budapest-based Wizz traded 6.3% higher as of 9:03 a.m. in London, where it has its main listing, trimming their decline this year to 50%.

Varadi said demand for flights remains strong and confirmed Wizz expects to post “a material operating profit” for the fiscal second quarter through September as revenue and pricing momentum continues to improve.

Fleet Growth

Varadi said there are no plans to curtail fleet expansion and Wizz is keen to maintain new jetliner deliveries from Airbus SE on schedule in anticipation that a tougher economic climate will push more customers in its direction.

“We’ve seen this a number of times and we know the cookbook,” he said. “When there’s inflation and pressure on household spending there is a significant shift towards low-cost carriers and we will be ready for that.”

Bernstein analyst Alex Irving said revenue trends at Wizz are strengthening, with occupancy levels climbing above 90% this month. More capacity is also going into the existing network rather than new markets, something that should bolster unit revenue.

UK-based rival EasyJet Plc, Europe’s second-biggest low-cost airline, on Tuesday booked a charge of £133 million for the June quarter amid travel disruption driven by staff shortages and capacity caps. Discount leader Ryanair Holdings Plc said Monday that passengers remain cautious about booking, clouding its prospects beyond the summer.