Jul 29, 2020
Wizz Air to accelerate jet deliveries after talks with Airbus
Wage subsidy changes could please investors as airlines, rails may benefit: The Globe's Willis
Wizz Air Holdings Plc will speed up the rate of new-plane deliveries from Airbus SE, taking advantage of deferrals from other customers to feed its own expansion.
The Hungarian low-cost airline will receive about 30 A321neo jets in 2021, five more than it previously expected, Chief Executive Officer Jozsef Varadi said in an interview Wednesday. Talks with Airbus have included commercial arrangements, he said, an indication that the airline may be getting sweetened terms.
Wizz has sought to steal a march on rivals by adding back flights as coronavirus lockdowns ease, operating 77 per cent of its usual capacity last week compared with a European average of 40 per cent. For Airbus, the confidence of a customer with more than 200 narrow-body jets on order is a relief. Airlines across the globe have almost universally pulled back on deliveries to save cash during the historic drought in flying caused by the pandemic.
“We have not been deferring or canceling orders,” Varadi said by telephone. “In fact, we are doing quite the reverse.”
Airbus may be prepared to offer better terms to airlines that take up so-called distressed delivery slots vacated by other carriers, according to a person familiar with the situation.
A spokesman for the planemaker said the company is always in contact with customers regarding fleet requirements.
Wizz, which expanding westward from its Eastern Europe base, also expects to get 12 A321neos still due this year as other customers change their order plans, Varadi said. The carrier had anticipated that the planes would be delayed after Airbus temporarily shut production earlier this year.
Airbus CEO Guillaume Faury has already slashed monthly jetliner build rates, saying output will be 40 per cent lower than expected for two years because of depressed demand.
Boeing Co. is due to report first-half results on Wednesday, followed by Airbus on Thursday. Investors are watching for changes in the production outlook after the International Air Transport Association this week pushed its prediction for a full recovery in air travel to 2024.
Wizz posted a loss of 57 million euros (US$67 million) for the quarter through June. It has added 200 new routes and redeployed 22 planes to new markets as other airlines are slower to resume flights. The carrier’s low cost base will make it a “structural winner” from the crisis, Varadi said.
Wizz traded 3.9 per cent higher as of 11:04 a.m. in London, where the Budapest-based carrier is listed. Its 9.3 per cent decline this year is the best performance in the six-member Bloomberg EMEA Airlines Index.