People in the US may not think of Wizz Air often, but when they do… they think about having to go to the bathroom. If they pay attention to the airline industry, however, they more likely think about the biggest, shining star of the Indigo Partners portfolio. That may be the reputation, but Wizz has not exactly lived up to its potential as of late. Its recent earnings release did not set the world on fire, and now it’s trying to fix things.
Wizz started in 2003 in Budapest. It was trying to be the Ryanair of Eastern Europe, which wasn’t a bad idea. But over time it grew in all sorts of different ways. It created new subsidiaries in the UK and Malta which are still around today. It had subsidiaries in Bulgaria, Ukraine, and Abu Dhabi which are either gone or going. We’ll talk more about Abu Dhabi later.
Over the last decade, the airline’s performance had been steady until the pandemic. Then, it went off the rails.
Wizz Unit Cost Excluding Fuel and Operating Margin by Fiscal Year
If you forget about the turbulence immediately post-COVID, you can see that the airline finally turned an operating profit again in 2024, but it lost a lot of ground in 2025. (Note that the fiscal year runs April 1 through March 31, so 2025 is actually April 1, 2024 to March 31, 2025.) Not only did its margin sag to a paltry 3.2 percent, but it continues to see unit costs (CASK) climb. They’re up nearly 25 percent compared to 2019.
Now, Wizz has released its results for its most recent quarter, and the concerns continue. The airline’s unit cost climbed 14 percent vs the same quarter in the previous year, from 2.72 to 3.11 euro cents. And its operating margin dropped YoY from 3.5 percent to a mere 1.9 percent. I’m pretty sure I don’t need to say it, but this is not good.
Some of this is, to be fair temporary. Wizz has been hit hard by the Pratt engine problems on its A320neo family aircraft. It had 41 airplanes on the ground at the end of June, that’d down slightly from the 46 on the ground one year earlier. But it’s more than that. There are items that are not one-time spikes, including increased depreciation costs, higher air traffic control costs, and rising airport charges.
A look back shows that the airline has made notable network changes since the pandemic. Just take a look.
Wizz Departure Share by Market Type
Data via Cirium
Wizz has increasingly moved away from smaller and secondary airports in favor of medium-sized airports and big hubs for other airlines. Straying from its proven formula does not seem to have worked to boost profits.
With that backdrop, Wizz can’t just sit around and hope things get better. It says it has a plan… to go back to how things used to be.
First, the airline has shut down its Wizz Air Abu Dhabi subsidiary. Wizz had this grand plan to fly regionally from Abu Dhabi and back into Europe. It was going to be able to use an incoming fleet of A321XLRs to fly many of those routes. But Wizz found out quickly that the desert sands were brutal for the engines, and competition was even tougher. It will shut that subsidiary down on September 1.
It has also quickly soured on the A321XLR platform. It expected to have 47 in its fleet with deliveries starting soon, but it will now pare that back to only 10 to 15. Frankly, I’m not sure why even that number is needed. Wizz will also slow down growth and start retiring its A320ceo family aircraft more quickly. Those will be gone relatively soon, which is kind of strange considering it’s the neo aircraft that have the problem engines. But so be it, they’re looking for ways to simplify.
And then there’s the rest of the network. I’ll let CEO József Váradi explain:
Firstly, to ensure we are operating in so called environmentally benign operating environments and secondly,
in markets where we already have or will have market share. We believe our core Central and Eastern European
(CEE) markets satisfy both these criteria. As such, we have developed initiatives that steer network design to focus
on these markets.
Alright, well, let’s take a look at those in more detail.
Wizz Departures by Region
Data via Cirium
You can see that Central and Eastern Europe accounted for more than half of Wizz’s departures until the pandemic when it dropped down to around 35 percent. That is a significant change, and it’s because growth was redirected elsewhere. Now, Wizz will retrench and focus back on its primary markets.
Will this right the ship? It sounds more like an airline that’s looking to focus on its ability to boost revenue by focusing on markets where it already has high share. That is not the usual plan for an airline that has succeeded thanks to a focus on low costs. The shift from a cost focus to a revenue focus is not easy.
Once again, a formerly high-flying low-cost operator has run into real trouble. If nothing else, this highlights just how good Ryanair is at what it does. While others rise and fall, Ryanair continues to steadily and ruthlessly win the day, taking a wizz on the competition.
