Wizz Air to Speed Up Jet Deliveries After Talks With Airbus

Wizz Air Holdings Plc will accelerate 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 previously planned, Chief Executive Officer Jozsef Varadi said in an interview Wednesday. Talks with Airbus included commercial arrangements, he said, an indication the airline may be getting sweetened terms.

Wizz has sought to steal a march on rivals by adding back flights faster as coronavirus lockdowns ease, operating 77% of its usual capacity last week compared with a European average of 40%. 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 it is always in contact with customers regarding fleet requirements.

Lower Production

Wizz, which is expanding westward from its Eastern Europe heartland, 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 slashed jetliner build rates, saying output will be 40% lower for two years. The European firm reports earnings Thursday, with investors watching for further adjustments after the International Air Transport Association said air travel won’t fully recover until 2024.

U.S. rival Boeing Co. unveiled new measures to cope with the slump on Wednesday, including further production cuts, potentially more job losses, a delay to the 777X wide-body program and the possible shutdown of one of two plants that make the 787 Dreamliner.

Wizz posted a loss of 57 million euros ($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.

Planes are operating between 55% and 70% full depending on the route, Varadi said in the interview. While that’s below the break-even point for most airlines, it’s generating positive cash flow, he said.

Wizz traded 3.8% higher as of 3:06 p.m. in London, where the Budapest-based carrier is listed. Its 9.5% decline this year is the best performance in the six-member Bloomberg EMEA Airlines Index.

©2020 Bloomberg L.P.

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