Wizz Air’s plan to buy planes will reduce costs, says CEO

LOW-COST carrier Wizz Air believes its plan to move to larger planes and own some of its fleet will propel earnings further after it reported record first-quarter profits.

The Central and Eastern European-focused airline currently leases its entire fleet of 84 aircraft but said it was planning to buy planes in the next few years as it grows the number of craft it operates. József Váradi, the chief executive, said it had secured 10 additional 185-seater A321ceo aircraft for delivery in the next three years, which are larger than the 150-seater A320ceos that make up the bulk of its fleet.

Mr Váradi said that by March 2020, he expected the airline to have 120 planes, of which it would own 20. He suggested the lower cost of ownership compared to leasing, as well as the fact the newer planes on order were more efficient to run, would mean more costs could be cut from the business.

The comments come after the airline saw adjusted earnings rise nearly 44pc to €155.9m (£138m) on the back of revenues of €469.3m, up 28.6pc on the comparable period.

The airline enjoyed a steep rise in passenger numbers of a quarter, to 7.2m, helped by Easter falling in the period under review. Mr Váradi said this rate of growth was ahead of the 23pc rate the company had predicted for the full financial year, which ends in March. In an attempt to attract more passengers, the airline will get rid of the fee it charges for hand baggage from Oct 29.

Mr Váradi claimed ticket prices would not rise as a result of the lost revenue and that instead new initiatives, such as priority boarding, would be launched to encourage passengers to spend more with the airline.

The company has also strengthened its executive team after promoting Iain Wetherall, currently head of financial planning, and control and investor relations, to the position of chief financial officer from next month.

Broker Panmure Gordon called the move “reassuring” and said that investors would regard him as a “solid successor” to the former finance chief.

Separately, Stephen Jones, who had been chief strategy officer at Air New Zealand, has been appointed deputy chief executive officer.

At the company’s annual general meeting on Wednesday, 27.5pc of investors voted against agreeing the remuneration for auditor Pricewaterhousecoopers (PWC). Mr Váradi said some investors had raised issue with the fact PWC was carrying out audit and non-audit related work but that separate contracts would be put out for tender next year.

Shares in Wizz Air rose 3.2pc to

£26.71 yesterday.