Game-changer

posted on 14th May 2019
Game-changer

Diederik Pen, executive vice president at Wizz Air, brings Megan Ramsay up to speed with the Hungarian low-cost carrier’s rapid development so far – and its plans for the future

Wizz Air reported an increase of 18% in passenger numbers during 2018 compared to 2017, with the load factor rising by 1 percentage point to 92.4% for the year.

That trend continued in the early months of 2019. This year will see the addition of 14 new routes to the network. Examples include London Gatwick–Gdansk, and Birmingham–Krakow. Just recently, the carrier announced it would start flying between Kiev and Leipzig in July.

Also in March, Wizz Air took delivery of its first new A321neo, on a Budapest–London Luton routeing. The airline has five A321ceo and 256 A321neo/A320neo aircraft on order, including 110 A321neos, making it the largest Airbus customer in the world for aircraft of this type.

You’ve obviously been very busy expanding your operations lately. What are some of the highlights in Wizz Air’s recent development?

In the last few years we have seen quite a shift in the way we develop, not just in terms of additional routes but also in terms of how swiftly we are growing.

Adding a second aircraft is a big step; you can increase frequencies and destinations and it helps with crew rostering, ground handing, maintenance, catering and training, for example. All of that is a big investment when you’re just operating one aircraft, but it’s more economical when you have two. We used to stick with one aircraft in the past but now, we try to get to three quickly. As soon as we see maturity and the yields and load factor rising in a particular market, we add aircraft

We have increased our presence rapidly in different markets. At Vienna we have five aircraft now whereas we had none based there just last year. At Luton, we only had one aircraft last year but now we have nine, and we’re registered as a British airline (Wizz Air UK). We recently announced that two more aircraft would be joining our Luton fleet.

In order to grow sustainably, we are focusing on our core markets such as Budapest and Warsaw. At these airports we are offering a mix of routes, with cities like Nice or Bordeaux for passengers taking weekend trips, as well as holiday destinations like Tenerife, added to the network to create a more balanced mix. In addition, business people are offered five flights a day to London Gatwick; with that, plus leisure destinations and city pairs for weekend breaks, there is a certain level of maturity in our network now.

The changes we have made are partly in response to requests from passengers, but they are also part of our deliberate strategy. This is driven, to some extent, by market trends: economic growth leads to more demand for flights, and this requires growth in the network. But our own growth has driven the expansion too: when you’re small you can’t diversify as much but now, we have more bases with more aircraft, so we can increase frequencies and the diversity of destinations we serve.

What are your plans for the network and the fleet going forward?

We intend to balance the network and the portfolio we offer. There will be more aircraft for Poland, Romania and Bulgaria, for instance, as we plan to build on our strengths.

Bulgaria is a core market for us; it treats us well, and we’ve gone from strength to strength there. We’re adding flights to destinations such as Copenhagen, Cologne, Berlin, Paris… a total of 14 routes in nine countries.

We’re not expanding as aggressively now as we did in 2018, but there will be substantial growth nonetheless, with 14 more aircraft joining the fleet this year. That includes three aircraft for our new base in Krakow, plus another one for Varna.

We will receive eight A321neos in total this year.

Why did you choose the A321neo over other options?

We have a strong partnership with Airbus and Pratt & Whitney; moving to the A321neo is a natural progression.

The efficiency of the A320s and A321neos is a step up for Wizz Air, in terms of the improved economics they offer. The A321neo works like a dream and is highly efficient. Noise is reduced by 50-75% and pollution is down 20-25%, so that’s a massive improvement for both the environment and our neighbours. Plus, it has nine more seats [than the A321].

So the A321neo’s reliability and efficiency make it a game-changer.

The benefits of choosing an efficient aircraft are clearly significant. How else does Wizz Air mitigate its impact on the environment?

Fuel consumption is always important, both economically and environmentally speaking. We consider things like optimal descent, take-off, thrust and flap settings, for instance. Proper engine maintenance also leads to serious savings.

On top of that, we have a high load factor – a high seat density. This means that fuel usage per passenger is very efficient. In fact, we are the greenest in Europe, and with the A321neo even more so.

What other investments are you making, besides those relating to your fleet?

We opened a new, €30 million training centre in Budapest in November last year. This was set up in partnership with Hungarian real estate company WING and Canadian flight simulator manufacturer CAE. CAE supply the simulators and run the centre, but we use Wizz Air trainers. The centre offers training based on the A321neo – including courses for pilots and cabin crew as well as fire training, for instance. With this training centre we are ready for the next 5-10 years.

Are airlines and handlers receiving enough support from airports to enable them to operate smoothly?

In general, airports and air traffic control are not keeping up with the growth in aviation. There are more and more aircraft, more and more airlines, bigger aircraft/airlines – all of which is causing increased congestion. There is a lack of parking stands, and a lack of storage for ground equipment. Better alignment between airports and handlers would benefit passengers: less congestion means fewer delays, for a start. Airports need to keep up with passenger growth.

There has been an improvement in oversight at Eastern European airports, with new regulations representing a step forward in professionalising ground operations.

Our handling processes are all outsourced, generally on three-year contacts. We use a mix of partners including larger handlers as well as smaller agents, depending on where we are. We use audits, standard operating procedures, reports and ‘mystery shopper’ exercises to check that things are being done the way we want them. But at the end of the day we are good at running an airline! We invest in our aircraft (which have an average age of four years), and in training our crew and pilots to ensure they have the right capabilities.

How supportive is the government in your home market when it comes to aviation’s role as a driver of economic growth?

We use local labour, and we work in the local language. Our training academy in Budapest has links with the university there. Overall, we are supportive of the local community and we work hard to build relationships. We are seen very much as the ‘hometown airline’. We provide connections with other places, and enable tourists to visit our country, as well as providing jobs, so the government is supportive of what we’re doing.

How do you see the future panning out for airlines?

Compared to 10 years ago a few things have changed. Turn times are shorter – as little as 25 minutes at some airports. Of course, there are differences between business class, first class and economy: an airline is a diverse product, and different passenger needs in each class mean that the product offer must be tailored.

Low-cost carriers have a simpler product. They have quicker turns than the legacy carriers, with no catering or cleaning taking place during turns. The cabin crew can get rid of rubbish, check the water, safety and security – all fully in compliance with the regulations.

Legacy airlines are trending in the same direction now – they have to. Aircraft used to have 75% load factors but now they’re at 90% or more. Aircraft are very full nowadays. Ground handlers must facilitate efficient boarding, pre-boarding, as well as bussing in/out to remote aircraft – we’re not just using airbridges anymore.

Another change is that more and more passengers are using self-bag drop with bag tag kiosks. Even Lufthansa has smooth boarding doors – you just scan your boarding pass and walk through with no bags and no passport. There is no human intervention. Facial recognition technology is being used more and more.

In fact, automation is increasing throughout the whole travel chain and it is becoming more sophisticated. One example is auto-rebooking if a passenger misses a connection with another flight. On the one hand, levels of safety and security will keep increasing, and at same time these systems will try to make travel as seamless as possible.