Wizz Air Holdings PLC · LSE:WIZZ
Wizz Air — Investor Day (September 2023)
56 slides from Wizz Air's investor day presentation, September 2023
Slide 1: Wizz Air Analyst Event
WIZZ AIR ANALYST EVENT BUDAPEST 25-26, SEPTEMBER 1
Slide 2: Business & Strategy
BUSINESS & STRATEGY JOZSEF VARADI – CEO 1. 20 years in milestones 2. Investments & returns 3. Update on engine inspections 4. Near & long-term growth 2
Slide 3: Wizz Air Snapshot
WIZZ AIR SNAPSHOT POSITIONED FOR PROFITABLE LONG-TERM GROWTH Investments are delivering Fastest growing airline in An ultra- low-cost base and a results. Europe, targeting a fleet of strong financial position. 500 aircraft by 2030. Utilisation and load factors are In Q1 F24, returned to up, and in A
Slide 4: Our 20 Years in Milestones
OUR 20 YEARS IN MILESTONES FASTEST GROWING AIRLINE IN EUROPE WITH AMBITIOUS AND SUSTAINABLE EXPANSION STRATEGY 200 million passengers ‘Most carried sustainable low- cost airline’ Listing on the LSE A321neo Largest ever Wizz Air route World Finance aircraft 100 million UK is announcement Award for th
Slide 5: Wizz Air Has Built a Scalable Business
WIZZ AIR HAS BUILT A SCALABLE BUSINESS …AROUND A SIMPLE PURPOSE 345M PEOPLE FLOWN TO DATE… …FOR PLEASURE 70m +65.0 Business 60m 2% Holiday 50m CAGR 22% 45.6 +28% 41.7 COVID-19 impact 40m 30m Calendar years 22.8 21.7 20m 16.6 12.0 76% 10m 5.8 Family 0.6 0m 5 ‘04 ‘08 ‘12 ‘16 ‘20 ‘22 ’23E Average passe
Slide 6: We Invested During the Downturn
WE INVESTED DURING THE DOWNTURN TO BENEFIT FROM THE POST-COVID RECOVERY 45 43 LTM^ vs F20 40 40 36 35 BASES 34 Seats 60.5m (+42%) 30 in CEE, Italy, UAE, UK 25 24 24 24 20 Passengers 54.2m (+35%) 20 16 15 14 11 12 12 Bn ASKs 104.0 (+49%) 10 8 9 7 4 5 5 3 3 0 Revenue 4.3Bn (+57%) ‘04 ‘05 ‘06 ‘07 ‘08 ‘
Slide 7: ... and We Are Delivering Results
… AND WE ARE DELIVERING RESULTS WITH MORE TO COME… RASK Growth (€cent) CASK and Ex-Fuel CASK (€cent) 4.19 5.22 3.95 3.98 3.85 4.58 1.36 3.98 4.02 2.89 2.99 2.07 2.33 2.16 3.40 3.43 2.00 2.27 1.17 1.51 1.27 1.32 1.11 1.16 3.86 2.81 2.58 1.91 1.86 2.29 2.27 2.51 1.58 1.79 1.62 1.67 F19 F20 F21 F22 F23
Slide 8: Update on Engine Performance
UPDATE ON ENGINE PERFORMANCE NEO GTF ENGINE LONG-TERM PROGRAM UNAFFECTED • Safe operation of the • Safefleet is the key operation is apriority key Powder metal inspections GTF hot section durability priority • Preliminary assessment using • Block D Combustor – mature • Long • Long termterm growth gr
Slide 9: Strategic Direction
STRATEGIC DIRECTION PROFITABLE GROWTH REMAINS KEY OBJECTIVE Continued Maintain strong Operational investments in balance sheet excellence growth • € 1.8b cash • Utilization • Recruitment and • € 2.0b EMTN • Regularity training program • Productivity • Share of NEOs • PDP facility • Digital • New Tra
Slide 10: Wizz 500
**Indicative** WIZZ 500 BY 2030 170M+ 500 PAX/YEAR AIRCRAFT 20,000 2,000 EMPLOYEES NEW HIRES/YEAR 10 1.6B RECRUITS EVERY WEB DAY VISITORS/YEAR €15B 1M 10 SALES/YEAR FLIGHTS PER YEAR PAGE 10
Slide 11: Commercial Team
COMMERCIAL TEAM ROBERT CAREY – PRESIDENT SILVIA MOSQUERA –CHIEF COMMERCIAL OFFICER ANDREA LUSSO – NETWORK OFFICER JANOS PAL – REVENUE OFFICER ZSUZSA POOS – CUSTOMER & MARKETING OFFICER 11 PAGE 11
Slide 12: The Structure and the Team
THE STRUCTURE AND THE TEAM DIVERSE TEAM WITH 70+ YEARS OF AIRLINE EXPERIENCE • French/American President • Joined 2021 Robert Carey • Previous experience at easyJet, Delta, America West, McKinsey (20+ airlines) • Wizz Hungary • Spanish CCO COO • Wizz Malta • Joined July 2023 • Wizz UK Silvia Mosquer
Slide 13: Wizz Air Today
WIZZ AIR TODAY FLEET • 185 A320ceo, A321ceo, A320neo, A321neo • +20 vs last year, +61 vs pre-pandemic • WAH 85, WAM 74, WUK 16, WAAD 10 • 205 by April 2024 ROUTES ON SALE • 950+ routes • Nearly 200 destinations • 50+ countries OPERATING MODEL 34 bases in 16 countries WAH 17, WAM 14, WUK 2, WAAD 1 CA
Slide 14: Network Planning & Fleet Allocation
NETWORK PLANNING & FLEET ALLOCATION ROBERT CAREY – PRESIDENT SILVIA MOSQUERA – CHIEF COMMERCIAL OFFICER ANDREA LUSSO – NETWORK OFFICER 1. Leadership position in core markets 2. Strong fundamentals 3. Unmatched orderbook 4. Growth potential markets 5. Competitive landscape 6. Wizz Air Abu Dhabi & Eas
Slide 15: Wizz Today: Leader in Our Core Markets
WIZZ TODAY: LEADER IN OUR CORE MARKETS #1 or #2 POSITION IN 10 OUT OF 14 WIZZ AIR BASED COUNTRIES Market Share by Country 70% 64% 61% 59% 60% 55% 50% 40% 38% 35% 33% 31% 32% 32% 30% 25% 25% 23% 23% 21% 19% 18% 17% 20% 14% 14% 12% 11% 8% 10% 4% 4%5% 5% 3%4% 3% 0% ALB AUT BIH BUL CYP GEO GBR HUN ITA L
Slide 16: Focused on ULCC Fundamentals
FOCUSED ON ULCC FUNDAMENTALS 15.0 14.0 Utilization: 13.0 12.0 Year round 12:30h 11.0 10.0 9.0 8.0 Utilization returning to pre-COVID 7.0 JAN MAR MAY JUL JUN OCT NOV FEB AUG APR SEP DEC levels, driving reduction of seasonal capacity variation and maintaining 2017 2018 2019 2022 2023 low CASK levels y
Slide 17: Unmatched Orderbook to Drive Growth
UNMATCHED ORDERBOOK TO DRIVE GROWTH UNIQUE AMONGST PEERS TO HAVE CONFIRMED ORDERS AT LOW COST • Unmatched fleet – the A321neo is the most efficient, most environmentally friendly aircraft of the entire industry • Between F25 and F28 more than 130 aircraft are expected to be delivered to Wizz Air, wh
Slide 18: Wizz 500: Our Future
WIZZ 500: OUR FUTURE SIGNIFICANT GROWTH POTENTIAL EXISTS ACROSS OUR MARKETS Summer 2023 Potential 2030 Focused Focused West West 47 115-130 West 25% UK 16 35-50 Core CEE 50% Italy 25 50+ Austria 6 30+ Go East 25% Core CEECEE Core 119 250-300 Romania 35 50-75 Poland 29 50-75 Hungary 14 30+ Bulgaria 1
Slide 19: CEE: Room to Grow in Our Home Market
CEE: ROOM TO GROW IN OUR HOME MARKET Core CEE 50% MARKET SHARE DEVELOPMENT IN CORE COUNTRIES New CEE Romania Poland Hungary Albania 23% 20% 17% Other 24% Other 24% 30% 40% Other 7% 10% 18% 51% 8% Air Albania Blue Air 14% 8% 13% 83% 8% 14% Ryanair LOT 38% Other Tarom 15% 36% 26% Ryanair 9% 16% 54% 20
Slide 20: West: A Focused Footprint Opportunity
Focused West 25% WEST: A FOCUSED FOOTPRINT OPPORTUNITY OUR COST ADVANTAGE CREATES AN ADVANTAGED POSITION TO GROW CASK (€ cent)* • Wizz Air increased the number of aircraft based in Italy from 18 Lufthansa 9.45 in 2021 to 25 in 2023 • It is currently operating its largest ever Italian BA 9.01 schedul
Slide 21: East: Growth and Profit for the Future
EAST: GROWTH AND PROFIT FOR THE FUTURE Go East 25% PIONEER ULCC IN UNDERSERVED, HIGH GROWTH MARKETS CREATING NEW ULCC MARKETS: 5 BILLION PEOPLE within an 8-hour radius from Arabian Peninsula UAE ➢39 destinations and growing ➢Brand awareness 50+% ➢Profitability developing in line with other new bases
Slide 22: Revenue, Pricing and Product Management
REVENUE, PRICING AND PRODUCT MANAGEMENT ROBERT CAREY – PRESIDENT SILVIA MOSQUERA – CHIEF COMMERCIAL OFFICER JANOS PAL – REVENUE OFFICER 1. RASK & Capacity Growth 2. Leading Brand 3. Ancillary performance 4. Machine-Learning 5. Pure e-commerce 22 PAGE 22
Slide 23: Today: Delivering Capacity & RASK Growth
TODAY: DELIVERING CAPACITY & RASK GROWTH EXPANDING MARKET POSITION IN A STRONG PRICING ENVIRONMENT ASKs Airline Capacity* RASK* vs RASK vs LY LY Wizz 27% 21% Capacity Ryanair 5% 33% ASKs & RASK € £ easyJet 7% 26% Quarter ending +33% June ’23 vs IAG 20% 14% ‘22 +27% +26% +21% Lufthansa 12% 16% +7% AF
Slide 24: Leading European Airline Brand
LEADING EUROPEAN AIRLINE BRAND YOUNGER DEMOGRAPHIC INTERACTING DIRECTLY VIA DIGITAL CHANNELS #1 ULCC BRAND CEE Above 80% prompted awareness in Central and Eastern Europe GROWING AWARENESS In Italy (50%), London (55%), UAE (48%), Austria (46%), and Saudi Arabia (14%) FUTURE FOCUSED CUSTOMERS 15% Gen
Slide 25: #1 in Ancillary Revenue Performance
#1 IN ANCILLARY REVENUE PERFORMANCE RYANAIR Ancillary as % of total revenue Ancillary as % of total revenue Ancillary as % of total revenue +3 +1 +10 56 56 45 31 Compared to pre-pandemic, 45 48 35 37 35 22 24 Wizz Air’s ancillary share of total revenue grew faster than any FY22 FY23 FY21 FY20 FY20 F
Slide 26: Tomorrow: Expand Use of Machine Learning
TOMORROW: EXPAND USE OF MACHINE LEARNING CONTINUED DEPLOYMENT OF MACHINE LEARNING FOR REVENUE Additional unit revenue delivered through F24/25 F25/26 ancillary machine learning in F23 F24 F23 Q2 NEW Integrated Pricing Q4 Ancillary and ticket Ticket Pricing Model F23 WIZZ Flex with expanded data tota
Slide 27: Expanding the Product Set: Multipass
EXPANDING THE PRODUCT SET: MULTIPASS Timing Continuous growth on Polish and Italian markets: 1,000+ subscribers Subscription return flight package: Italy: 54% Poland: 82% 27 “Just have fun with it, like a kid who in his imagination goes to a distant world. Do you like Vienna in fall and miss it a bi
Slide 28: Merchandising and Test & Learn
MERCHANDISING AND TEST & LEARN DRIVING OUR DIGITAL ASSETS AS AN E-COMMERCE LEADER “Popular” tag on Positioning Seat Map to the WIZZ Priority left instead of right Shifting mindset towards short test cycles aiming to have quick changes and learnings Focusing on price display experiments, Popular tag
Slide 29: Finance and Cost Management
FINANCE AND COST MANAGEMENT IAN MALIN – CHIEF FINANCIAL OFFICER KEES VAN SCHAICK – HEAD OF CONTROLLING 1. Return to profitability 2. Unit cost performance 3. Fleet advantage Ian Malin • Joined in 2022 • Joined in 2019 • Polish / American • Dutch • Prior experience at • Prior experience at Unical, Se
Slide 30: Strong Return to Profitability in Q1 F24
STRONG RETURN TO PROFITABILITY IN Q1 F24 Group Results Q1 F24 Q1 F23 Change Restricted cash Free cash Revenue (€m) 1,236.6 m 808.8 52.9% +17% 1,792 Fuel costs (€m) (443.7) (508.0) (12.7%) 106 1,583 1,529 Non-fuel costs (€m) (713.0) (585.3) 21.8% 1,379 153 120 162 EBITDA (€m) 236.7 (154.4) n.m. Opera
Slide 31: Q1 F24 | Delivering Unit Cost Reduction
Q1 F24 | DELIVERING UNIT COST REDUCTION ✓ ASKs: +27% YoY More ✓ Load factor: 91.2% (July 94.9%, Aug 94.1%) production ✓ Utilization: c.12 hours ✓ Gauge: 221 average seats (vs 214 LY) ✓ Crew productivity: up vs LY ✓ Fleet age: -12% YoY (4.32 years in June ‘23) Returning to Better cost pre-pandemic ✓
Slide 32: Fuel Advantage
FUEL ADVANTAGE FUEL EFFICIENCY MORE THAN OFFSETS THE ETS IMPACT Key variables: In € cents 1.50 - Fuel price, before and after hedge 0.31 - Into Plane Premium (IPP) 1.12 0.11 - EUR/USD 0.15 0.11 - Aircraft & engines type - Aircraft & engines age - Aircraft gauge - ETS price (EU/UK) - ETS free credits
Slide 33: Industry-Leading CASK
INDUSTRY-LEADING CASK Wizz Air is reducing unit cost YoY amid rising inflation, while peers head in opposite direction. CASK Breakdown (€ cents) (1) (2) 7.77 7.09 7.22 4.57 4.55 4.02 4.19 3.81 3.98 3.85 3.52 3.56 3.56 4.05 1.58 1.52 1.45 1.62 1.57 1.44 1.39 0.62 1.44 0.42 0.64 0.41 0.55 0.38 0.53 0.
Slide 34: New Opportunities to Reduce Costs
NEW OPPORTUNITIES TO REDUCE COSTS MAXIMIZE THE UPSIDE OF FORCED CAPACITY REDUCTIONS Focus areas Est. variable vs fixed portion of cost Variable Fixed Airport, handling & en-route • Network mix / optimization 100% 0% • Crew productivity Staff • Spread-out training • Reduce crew re-allocation cost 40%
Slide 35: Airbus A321neo Aircraft
AIRBUS A321NEO AIRCRAFT MOST EFFICIENT, MOST ENVIRONMENTALLY FRIENDLY 239 SEATS 20% LOWER FUEL BURN 50% LOWER NOISE EMMISION 50% LOWER NOX EMMISION LOWEST ENVIRONMENTAL FOOTPRINT PER PASSENGER 35 PAGE 35
Slide 36: Fleet Acquisition & Financing
FLEET ACQUISITION & FINANCING OWAIN JONES - CHIEF CORPORATE AFFAIRS OFFICER ANDRAS SZABO - HEAD OF FLEET ACQUISITION GABOR IVAN - HEAD OF ACCOUNTING & REPORTING • Joined Wizz Air in 1. Aircraft orders Sept 2010 • Leading legal, 2. Fleet Financing government affairs, fleet procurement & 3. Accounting
Slide 37: Secure, Long-Term NEO Plan
SECURE, LONG-TERM NEO PLAN PRE-INFLATION ORDERS SUPPORTING EXPANSION TO 500 FLEET SIZE Aircraft Type Fleet Composition Fleet Average Age On Order ➢ Temporary lease extensions of CEOs CEO 81 AC 7.39 Years 0 AC NEO 104 AC 1.73 Years 349 AC ➢ Attractive financing through calendar-end 2024 Total 185 AC
Slide 38: Fleet Financing - Considerations
FLEET FINANCING - CONSIDERATIONS • Large orderbook with Airbus for 349 A321NEO-family aircraft at very competitive terms. • Strong seat capacity growth year-on-year. • Credit rating and attractive business plan supports aggressive pricing by lessor community. • A321NEO: Most sought-after narrowbody
Slide 39: Accounting for Leases (SLB & JOLCO)
ACCOUNTING FOR LEASES (SLB & JOLCO) Sale and lease-back (operating lease): o Two transactions folded into one o RFP and contracting c.12 months prior to delivery o Sale proceeds settle purchase price with OEM o OEM refunds any difference between sale and purchase price o Lessee pays first rent and m
Slide 40: Sustainability
SUSTAINABILITY OWAIN JONES CHIEF CORPORATE AFFAIRS OFFICER YVONNE MOYNIHAN CORPORATE AND ESG OFFICER 1. Lowest CO2 emissions 2. People Engagement • Joined Wizz Air in July • Joined Wizz Air in Sept 2022 2010 • Leading ESG, • Leading legal, Regulatory, Legal and government affairs, Gov’t affairs func
Slide 41: Leading in Sustainability
LEADING IN SUSTAINABILITY DELIVERING LOWEST CO2 EMISSION INTENSITY TODAY • Winner of CAPA Aviation EMEA and Global Environmental Sustainability Airline Group of the Year • Record low CO2 per RPK emitted in CY 2022 (55.2 g), then F23 (53.8 g) • Artificial intelligence powered fuel efficiency programm
Slide 42: Impact and Mitigation
CLIMATE AND ESG REGULATION PREPAREDNESS IMPACT AND MITIGATION Policy / Risk Type Background Mitigation actions (current & planned) • Global offsetting scheme for aviation with a scope of international flights. • Annual verified emissions Reports • From 2021 until 2026 only flights between states tha
Slide 43: Employee Engagement and Career Development
EMPLOYEE ENGAGEMENT AND CAREER DEVELOPMENT BASE VISITS IN F23 • Special forum where crews meet with Company management • Regular base visits : • monthly or bi-monthly • at least one officer attending CAREER PROGRESSION IN F23 • 46% of office positions filled internally • 15.5% of office employees pr
Slide 44: Digital
DIGITAL JOEL GOLDBERG CHIEF DIGITAL OFFICER 1. Digitally powered ops 2. Automation • Joined Wizz Air in October 2018 • Responsible for automation, IT infrastructure and innovation 44 PAGE 44
Slide 45: Wizz Air Believes the Best ULCC Will Be a Deeply Digital One
WIZZ AIR BELIEVES THE BEST ULCC WILL BE A DEEPLY DIGITAL ONE Exceptional Customer Digitally Powered Journey Operations Elevating key digital touch points Using AI/ML and analytics to step as differentiators alongside being change operational efficiency and cost leaders in the industry. performance.
Slide 46: Wizz Air Believes the Best ULCC Will Be a Deeply Digital One
WIZZ AIR BELIEVES THE BEST ULCC WILL BE A DEEPLY DIGITAL ONE Automated Core Processes Strong Digital Foundation Automation everywhere means Security is priority number one. lower cost, more measurable and Digital mindset is the secret sauce. higher reliability. Key Highlights Key Highlights ✓ Over 2
Slide 47: Managing Airline and Central Operations
MANAGING AIRLINE AND CENTRAL OPERATIONS MICHAEL DELEHANT– CHIEF OPERATIONS OFFICER HEIKO HOLM – OFFICER CENTRAL OPERATIONS ROLAND TISCHNER – OFFICER WIZZ AIR HUNGARY 1. Operational improvements 2. Regularity rate 3. Aircraft utilization 4. Crew Recruitment & Cadet Program 5. Training Centers 6. Use
Slide 48: Operational Improvements YoY
OPERATIONAL IMPROVEMENTS YOY Infrastructure People Aircraft ✓Systems scale ✓Hired 3,000+ people in 2021- ✓Additional spare aircraft ✓Process automation 2022 period ✓Fleet renewal and allocation ✓Crew scheduling and ✓Training center has grown five- program onboarding tools fold versus pre-COVID ✓Indu
Slide 49: Regularity / Flight Completion Rate
REGULARITY/ FLIGHT COMPLETION RATE OPERATIONAL CHANGES AND INVESTMENTS DELIVERING RESULTS F24 target: 99.5% 99.84% 100% 99.44% 99.60% Competitor F24 YTD Completion rate 99.06% 99.06% Difference vs 99% Airline Flights Cancelations Completion rate % 98.57% +1.92pp WIZZ LOT - Polish 47,597 263 99.45% 0
Slide 50: Aircraft Utilization
AIRCRAFT UTILIZATION OPERATING GROWING CAPACITY IN UNSTABLE ENVIRONMENT ….AND WINNING AGAINST IT 14 Scheduled hh:mm 13 Actual hh:mm 12:30 hours / F24 12.18 12.00 12.12 12.30 12.18 12 ✓ Reduced ‘W’ pattern flights 11.48 11.24 11.30 11 ✓ Removed daily high sector duties 10.00 10.18 10.00 ✓ Added ‘fire
Slide 51: Crew Recruitment and Cadet Program
CREW RECRUITMENT AND CADET PROGRAM WIZZ PILOT ACADEMY TO SUPPLY 70% OF FIRST OFFICERS BY 2030 PILOT RECRUITMENT IMPROVEMENTS • Captain market competitive globally • New 5/4 fixed & commuting rosters, • Stable First Officer recruitment reverse rosters • Combination of local and global approach • Capt
Slide 52: Training Centers
TRAINING CENTERS SECOND TRAINING CENTER IN ITALY ➢ Securing capacity in Europe: ➢ Budapest: lower cost per training - optimal for initial (long) training Serving recurring and new training events: ➢ Rome: superb base-to-base connection – optimal for recurrent ➢ 2 x Training Centers (BUD & FCO) (shor
Slide 53: Fuel Efficiencies
FUEL EFFICIENCIES AMBITION TO DELIVER 1% LOWER FUEL CONSUMPTION YEAR-ON-YEAR Description Active monitoring in place to maintain achieved efficiency Taxi fuel Use of statistical historical data to optimize taxi fuel ✓ 40+ elements continously Optimize vertical profile and speeds based on In Flight mo
Slide 54: Optimizing Operations Through Technology
OPTIMIZING OPERATIONS THROUGH TECHNOLOGY SYSTEMATIC APPLICATION TO REDUCE COST AND SIMPLIFY PROCESSES • Crew planning • Roster quality & efficiency • Flight operations • Paperless flightdeck • Cabin operations • On-time performance • Ground operations • GoNow • Safety and compliance • IOSA certs, LO
Slide 55: Managing Engine Inspection Logistics
MANAGING ENGINE INSPECTION LOGISTICS HIGH SPARE LEVELS AND MORE INDUCTION SLOTS REDUCE THE TIME OFF-WING Supply-chain constrains: On-going Engine Checks: • Materials & parts; Batch 1 • Shop availability: • Affected 6 x GTF engines were identified, • e.g.: wing-to-wing times over 200 days under proce
Slide 56: Questions
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