Wizz Air doubled at Abu Dhabi Venture despite a slow start

Wizz Air doubled at Abu Dhabi Venture despite a slow start

Wizz Air Holdings Plc plans to twofold the size of its transporter in Abu Dhabi, after the Gulf operation got off to a more slow than-anticipated beginning because of the Covid pandemic. The new aircraft, co-owned by state-upheld holding organization ADQ, ended its first year in operation with four planes situated in the capital of the UAE. The fleet will extend to eight this year, adding connections to objections including Vienna, Bari, Italy, and Krasnodar, Russia, as the venture employs another 200 individuals locally, CEO Jozsef Varadi said in a meeting. It right now employs around 200 individuals in Abu Dhabi.

Wizz, based in Budapest, is on a growth tear powered by its low-cost model after other carriers were weakened during the pandemic. The Abu Dhabi venture is at the heart of its eastward push while Wizz also builds its presence in Western European markets like the U.K. and Italy.

“With that, we would be at least doubling or tripling the passenger numbers we carry in and out of Abu Dhabi,” Varadi said.

Looking Up
The venture’s first year was impacted by tough Covid restrictions in Abu Dhabi, Varadi said.

“Now we are seeing significant improvement in the market,” Varadi said. “We are seeing less restrictions imposed by government, and clearly we are seeing a lot more demand on the consumer side.”

In the past three months, travel rules were loosened and the Expo 2020 event kicked off. Wizz Air Abu Dhabi operated 506 flights in the fourth quarter, almost half of its total for all of 2021.

Load Factor, Debt
Wizz Air Abu Dhabi’s load factor is also improving. It is nearing 85 percent, which is close to the 90 percent the airline is used to operating in normal times, Varadi said. “Now the operation is cash positive,” he said.

The main airline, which sold its first-ever bond last year, will be in “cash building mode” as the business normalises and it seeks to reduce its leverage, he said.

Wizz raised 500 million euros ($573m) in last year’s bond issue to help fund operations in a tough market. It’s in the process of issuing another 500 million-euro bond to repay 300 million pounds ($412m) of Covid-relief financing from the U.K. “As business gets normalised, the cash flow cycle changes dramatically and we will be again in cash-building mode,” Varadi said. “We will be able to reduce the leverage significantly going forward,” he added.

The CEO said he expects the current omicron wave to mark the end of the Covid-19 crisis. By the end of this decade, the Abu Dhabi venture should have 55 aircraft, he said. “My personal expectation is that we have a lot better year in front of us than the years behind us,” he added.

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