The largest Central and Eastern European low-cost airline, Wizz Air Holdings, took off with high profits today following a successful expansion strategy across the continent.
Total revenue at the airline increased 16 per cent to €1.43bn (£1.1bn) in its full-year 2016 results. The company reported underlying net profit after tax of €224m, an increase of 53 per cent compared to 2015.
Passenger levels increased 21 per cent to 20m and ticket revenue grew 13 per cent to €895m.
In the fourth quarter, the firm registered revenue growth of 20 per cent to €282m. Fourth quarter underlying net profit reached €1m, compared to a loss of €11m in the last quarter of 2015.
Seat capacity was also up 19 per cent and the quarter ended on a high note due to the early Easter this year.
Why it's interesting
Wizz Air's expansion strategy has paid off thoroughly for the airline. It introduced 69 new routes in the 2016 financial year, including routes to three new Central and Eastern Europe destinations and 12 new Western European destinations.
It also opened four new operating bases (OBs) in 2016, in Tuzla (Bosnia and Herzegovina), Kosice (Slovakia), Lublin (Poland) and Debrecen (Hungary), and announced three further OBs in Iasi and Sibiu (Romania) and Kutaisi (Georgia).
The company has emphasised it has the "flexibility to sustain strong growth". Its strong balance sheet with free cash of €646m, deployment of larger 230-seat Airbus A321ceo, which has driven efficiency, and a purchase agreement for 110 Airbus A321neo aircraft are all expected to drive future growth.
Wizz Air launched a new Plus Fare category last June, giving some customers a higher end experience, with priority boarding included.
What Wizz Air said
Chief executive Jozsef Varadi said:
I am delighted to report another remarkable year for us as we delivered a strong operating performance across all key metrics. We continue to build on our market leadership in Central and Eastern Europe and have a strong balance sheet and an attractive order book of existing and new technology aircraft to drive growth.
Notwithstanding the fact that Easter fell one week earlier in 2016 than in 2015 pushing a higher proportion of this high yield traffic into financial year 2016, we currently expect a further significant rise in the group's net profit for the current financial year to 31 March 2017 to a range of between €245m and €255m (excluding exceptional items).
We will continue to expand our route network, drive efficiency in our operating model, and enhance our compelling customer proposition to sustain growth and drive returns for shareholders.