Váradi (Wizz Air): 'Temporary lack of jet fuel at three Italian airports'

"We are not an oil company. We cannot store fuel. Of course, we are talking to different suppliers, we have different contracts. So if there is a shortage of fuel at an airport, we could reduce the supply at that airport. We are monitoring the market every day, every single day. So we have our finger on the pulse of the situation.

No plans to cancel or ground aircraft?

If there is no fuel, there is no fuel. I think we have to be ready for this scenario when it arises. We are ready for anything. But this is simply a scenario that cannot be predicted. What would happen if there was a truce in the Middle East? Or if the Strait of Hormuz reopened and the flow of oil began to flow normally again? We do not know. And yet, despite all these black clouds that have been described by many people, in fact fuel is being supplied and we do not have a single flight in danger of being cancelled at this time. If the situation changed, we would first consider tankering. I think tankering would be our first action to mitigate the fuel shortage at the airports. Clearly if there were no alternative suppliers because nobody has fuel, obviously, then flights would have to be cancelled, but it's a borderline situation. I mean, I don't think there are any magic solutions, but it can be managed.

What would you recommend to those who have to decide to book a flight these days?

At the moment I think the situation in Europe is not so alarming, there are more serious problems in Asia than in Europe. I think we will also get through this crisis and it won't be too damaging. Clearly I cannot predict every single scenario. What I can say is that, given the way the world is going today, I would encourage people to book. Without hesitation because I think demand will be very strong in Europe this summer. That's why I think that booking in advance is better, the longer you wait, the more expensive it will be.

In this confusing scenario, how are Wizz Air's bookings going?

At the moment the demand is hesitant, people are waiting to see what will happen. As far as the peak summer season is concerned, however, we are ahead. We are stronger and more people are booking than last year. We are at a crucial stage to decide what to do in the summer. What I can say is that Europe could become too crowded and too expensive.

Many airlines, especially low-cost carriers, are increasing flights in Europe because strong demand is expected. Wizz Air even plans to increase capacity by 37% in the summer months when other carriers are not exceeding 10%. Can you confirm this?

Yes, it is true, this year will be special because several factors will add up: firstly, the deliveries of new aircraft, plus the aircraft that had been parked due to engine problems and which are now back in operation: this year only 20 aircraft will remain on the ground compared to 35 last year. In addition, we reduced our presence in the Middle East with the closure of the Abu Dhabi base and halved operations from 10% to 5% in the region. All this capacity has been relocated to Europe. So we are ready to absorb the strong demand not only from Europe, but also from Asia and the Middle East forced to look for other holiday destinations: we expect to carry 80 million passengers this year from 68.6 million in 2025, more than Lufthansa and British Airways in Europe. We have 40 operating bases in 19 countries and cover around 200 destinations in more than 50 countries.

Has excess capacity in the Middle East also been relocated to Italia?

Yes, but there is no conflict involved. 2026 represents a big leap for Wizz Air in Italia, we are adding planes and capacity, practically in every single airport, opening new operating bases, at the moment there are seven (Catania, Milan Malpensa, Naples, Palermo, Rome Fiumicino, Venice and Turin, ed) with 41 aircraft based there. This year we expect to transport 30 million passengers from 21 million in 2025, a growth of 30%. Today we are the second largest airline in the country with 12% of the market and Italia represents the first market for Wizz Air ahead of Romania, UK and Poland, the largest market in the Wizz Air network by passengers carried. We are investing and hiring, as evidenced by the group's second training centre with three flight simulators employing 40 million euros.

Your aggressive growth plans come up against the cost of fuel which has doubled since the start of the conflict, with an inevitable impact on air tickets. Have you assessed the impact on demand?

The most worrying aspect of this crisis is the rising cost of fuel. European airlines, especially the low cost ones more than the traditional carriers, protect themselves with hedge contracts. In our case we are 70% hedged for 18 months, so until the contracts expire we are protected against fuel cost increases. We have another advantage over our competitors: our 262 aircraft all from the Airbus 320 family, 70 per cent of them with neo technology, consume 17 per cent less fuel. So all of a sudden we are faced with higher demand and a significant competitive advantage over our competitors. This allows us to offer competitive fares for a market, that of air travel, which is still resilient.

In fact there are airlines, such as the Scandinavian Sas, which are without cover and have already announced massive cancellations. The fact is that since the beginning of the conflict on 28 February, you are the company that has lost more on the stock exchange than the other carriers (-19%) and investment bank analysts predict three years of losses. How do you respond?

The problem is that we operate in a very unstable environment. We are also vulnerable because we have too many problems. We are exposed to geopolitics, first Ukraine then the Middle East. We are exposed to the supply chain. We are exposed to everything. But if you think about it, this high fuel price environment is actually benefiting us this time because we are in a better position than our competitors. I cannot anticipate the financial results, but I can say that we have EUR 2 billion of cash on hand, so we are very liquid compared to any other airline and we are very focused on costs. At the same time, we continue to grow the business, as you can see, but we have to overcome this problem that has been affecting us for five years now of the Pratt & Whitnei engines. It will take another two years, we have to finish the cycle. It is frustrating, yes, because we were on the road to recovery and here comes another obstacle. We still have two years ahead of us to overcome the engine stall. Then we will shine much brighter on everything, the network, market positions, aircraft, financial performance, everything.

Have you ever thought of quitting or forming an alliance with other airlines?

No, not at all. Why should we sell? At the current prices it doesn't benefit anyone. The investment banks are trying to do it to earn commissions, but that doesn't interest me.

You have obtained the rights to fly to the US from London, are you thinking of opening a new front?

Absolutely not, these are special rights for charter flights which we will use for the World Cup and other sporting events. Nothing more: after having withdrawn from the Middle East, we are now focused on developing our network in Europe especially in the Central and Eastern region such as Armenia, Georgia. We abandoned long-haul by handing back some of the Airbus A321XLRs we had ordered. The 11 XLRs we have retained we will use to cover the destinations in our network.

Hungary had a radical political change after the elections. You had a good relationship with outgoing Prime Minister Orbán. Does this change anything for you?

Hungary accounts for about 7-8% of our business. We are not politically tied to any government. We are pro-government, regardless of political colour, because we cooperate with state institutions. We had good relations with the outgoing administration and I am quite sure that we will have good relations with the next government as well.