Wizz Air SWOT: ultra LCC builds on profitable growth

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In Jun-2019 Wizz Air signed an MoU with Airbus about the exercise of part of the existing options for the purchase of 20 A321neoXLR aircraft, subject to approval by the airline's shareholders.

Consistent with the airline's strategy to replace its current fleet with neos and with a larger average aircraft seat capacity, the XLR would also allow Wizz Air the option to extend its network beyond existing geographical boundaries.

CEO József Váradi is considering serving Dubai from London (Wizz Air currently only serves the UAE city from eastern Europe) and adding destinations in India to its network from central Europe.

The ultra LCC has developed a strong track record of profitable growth, based on efficient operations, very low costs, market stimulation through low fares, strong ancillary revenue and a focus on routes between Central/Eastern Europe and Western Europe served mainly from bases in C/E Europe. It may even take over from Ryanair as Europe's most profitable airline group by operating margin.

Although pushing its network beyond its core markets may bring some risk - the brand is not well known in India, for example - Wizz Air has proven that it can manage growth and network expansion in the past.

This report considers Wizz Air's strengths, weaknesses, opportunities and threats.

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