Wizz Air Holdings Plc said expansion into India will become possible with its new long-range Airbus SE A321 models, potentially opening up a lucrative vein of future growth as demand for air travel surges in the world’s most populous nation.
“There’s great potential in India, as the country has seen an immense development,” Wizz Chief Executive Officer Jozsef Varadi said in an interview in Budapest today. “I think it may help Europe tackle its employment issues, while its emerging middle class will boost tourism. We’re looking into opportunities there, but this is more a medium-term issue.”
Wizz Air has 47 of the long-range Airbus A321 XLR on order, with deliveries set to start sometime in 2024. The aircraft will allow the budget carrier to expand its operating parameter further east to markets including the Middle East, where Varadi said there’s also greater demand.
Varadi said the low-cost airline has seen growth in all its key markets, including western Europe as well as the eastern part of the European Union and the Middle-East. Predicting a busy summer and return to higher capacity, the CEO said he doesn’t expect a slump into the latter part of the year during the seasonal downturn. Business travel is also rebounding as conferences pick up again and people resume face-to-face meetings after the pandemic.
One of the factors holding back Wizz is a “slight lag” in Airbus deliveries, Varadi said. The European planemaker has struggled with output, a combination of parts shortages and a lack of skilled workers. Airbus CEO Guillaume Faury said this week that supply-chain snags may extend into next year, while he’s confident he can maintain the company’s annual delivery goal of 720 jets.
By region, Varadi expects to see growth in the Middle East particularly in the United Arab Emirates and Saudi Arabia. Wizz, which traditionally connected destinations in Eastern Europe, has expanded to the Middle East with a local unit in Abu Dhabi and is exploring options for a venture in Saudi Arabia.
“There is a much bigger demand than what we can fulfill, but we need airplanes and staff for that, these are more of the restricting factors,” Varadi said.
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Learning from a difficult last year, the company is now hedging its fuel costs, while the environmentally friendlier alternative, dubbed sustainable aviation fuel, is poised to burden the industry in coming years, the CEO predicted.
“There are two issues: it’s expensive and unavailable,” Varadi said of SAF fuel, adding it’s unclear which entity would pay for the higher cost of the green option.