Wizz Air is aiming to operate no wet-leased aircraft by the end of October after Pratt & Whitney achieved faster-than-expected turnarounds of some of the PW1000G engine inspections that have been grounding a significant proportion of its fleet.
The European low-cost carrier has been using eight wet-leased aircraft as part of a suite of measures to overcome groundings relating to the inspections. Those measures – including extending the leases of existing jets and continuing to take delivery of new aircraft – are enabling the growth-minded carrier to guide for flat capacity in the fiscal year beginning April.
Speaking during the airline’s fiscal first-quarter earnings briefing on 1 August, Wizz chief executive Jozsef Varadi explained that the airline had been expecting groundings to peak at around 55 aircraft this year, but that instead the number was likely to be 47, out of fleet of around 220 jets.
“We ended up with 46 aircraft on the ground at the end of the reporting period and we are expecting that number to peak at 47,” he says.
“Back in the days when we were looking at wet-lease as a solution to bridging the capacity gap… the prediction was 55 aircraft.”
While noting that the situation with P&W-related groundings is “very complicated… and very difficult to model” and that Wizz’s working assumption is still that each engine turnaround will last 300 days, Varadi says the engine-maker has been achieving some quicker-than-expected shop visits in some cases.
“Pratt has been able to identify some quick-turn opportunities,” he states. “Quick-turn means we get the engine into the shop, it takes 50-60 days to get through the shop visit and we can put the engine back on the airplane.”
Varadi notes, however, that those quick-turnaround aircraft will “reach the next cycle of maintenance fairly quickly”, making another shop visit necessary.
“So over three or four years you are not really saving anything in terms of time… you are just shifting the balance from one place to another, but we think this is still a better solution given where we are today,” he says.
Amid that development, three of Wizz’s wet-leased jets were due to be returned to their owners at the end of the summer season, Varadi explains. But five were due to be kept for the entire fiscal year, meaning the carrier is currently negotiating with lessors to hand them back early, in light of fewer of its own jets being on the ground.
“We are looking at phasing out wet-lease operations completely at the end of October,” Varadi says.
The Wizz chief was speaking as the carrier announced a fall in its April-June net profit to €1.2 million ($1.3 million), from €61.1 million a year earlier.
Revenue was up by 2% at €1.3 billion, with operating profit down 44% at €45 million.
Alongside the cost of wet-leasing aircraft – and the impact their small gauge has had on yields – Wizz also says its profitability was hit by negative foreign exchange impacts.
Revenue per available seat kilometre (RASK) was up 3.1% in the quarter, but Wizz notes some softness in demand and yields in the July-September period, describing this as a “moderation of the upside on the yield environment”.
It continues to guide for RASK to be up “mid-single digit” for the full fiscal year and for a net profit of €350 million to €450 million, down from €500 million to €600 million.
