LONDON – In a report from Sky News today, Wizz Air’s CEO Jozsef Varadi has been offered a one-off £100m bonus in shares if the airline achieves a 20% growth rate over five years.
With the airline handling over 200 million passengers and offering a £5.1bn valuation, up from £1.7bn four years ago, and even made an offer to take over easyJet at one point, according to sources in the City.
Despite the pandemic taking hold, base numbers have increased from 25 to 43, including the addition of 50 new routes and adding 16 new aircraft to its fleet, bringing the total to 137.
And with their new Airbus A321neos flying as far as Tel Aviv, Almaty, and even the Gulf states, the airline is in a pretty good position at the moment.
Changed Views from Wizz’s Competitor, Ryanair’s Michael O’Leary
According to the Sky News report, back in November 2007, Ryanair CEO Michael O’Leary completely dismissed Wizz Air, especially over the low prices originally offered.
“Basically they can’t compete with us on price. They’re never going to compete with us on price. And it’s only a matter of time before they all fall over.”
Whilst he was right for some carriers, he wasn’t correct on Wizz.
Varadi took advantage completely of operating services at a time where more Eastern European countries joined the EU such as Poland, Hungary, and the Czech Republic, adding around 75 million travelers to the bloc.
From there, the airline has gone to the point wherein in July, it announced it would “become the first major European airline to fully recover the capacity to pre-COVID-19 levels”.
This of course may have been helped by the reliability of the A321neo/ceo families compared to the damages caused by the Boeing 737 MAX program.
So What Can Varadi Do Then?
Bearing in mind the gossip coming from the City, as Ian King stated in that report, Varadi’s eagerness to acquire Western European carriers like EasyJet could prove to be the next step in the battle of low-cost carriers.
Acquiring a carrier of that size, which is struggling due to the pandemic, could be an open opportunity to strip back, rebrand, remarket and reposition a very dangerous and intimidating brand to the likes of Ryanair.
It will be interesting to see how Varadi will maintain the 20% growth rate every year for five years. Maybe acquiring an airline is the way to do that, something that Ryanair haven’t exactly got the grasp on just yet.