Wizz Air: ultra-LCC poised to take Ryanair's European CASK crown as it raises FY2016 profit target
Wizz Air's trading update for 3Q2016 paints a picture of an airline enjoying robust health. The number one airline between Central/Eastern Europe and Western Europe is growing rapidly, increasing its profit margins, raising its FY2016 profit target, and generating cash.
Moreover, Wizz Air may now be Europe's lowest cost airline, defined by its CASK over 12 months, although a lack of comparable data from current CASK king Ryanair means it's not currently possible to confirm this. Falling fuel prices (and its lower levels of fuel hedging) have helped Wizz Air's cost position, but it has shown consistent ex fuel cost control for many years.
Wizz Air's first two Airbus A321ceo aircraft joined its previously all-A320 fleet during the quarter, which also witnessed shareholder approval of its A321neo order. It will add 97 aircraft over the nine years from the end of FY2015 and the combination of larger aircraft with newer technology should help to take unit costs even lower. This will be crucial in its ongoing competition with Ryanair, the biggest airline in Europe and second biggest in Wizz Air's markets.
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