Wizz Air Holdings SWOT and PESTLE Analysis

Strength

1. Industry-leading cost base and a young best-in-class fleet: With its continuous efforts and focus on the growing markets in Central and Eastern Europe, Wizz Air has successfully maintained its industry leadership position with respect to cost base and a young, best-in-class fleet. By establishing a base in London Luton, the company has set up its UK operating base and also strengthened its presence in Western Europe. Furthermore, the company has expanded its fleet by investing heavily and adding twelve A321ceo, five A320ceo and two A321neo aircraft, making the fleet size to 121 aircrafts as of December 2019. The world’s only one-stop airline safety and product rating agency, Airline Ratings, has awarded Wizz Air with the highest 7-star safety ranking.

2. Strong resilience against the uncertainties of Brexit outcomes: When other players in the European Air Travel industry struggling to keep up with the impacts of the uncertainties posed by a no-deal Brexit, Wizz Air has positioned itself to make the most out of the worst of the outcomes. The residents of Central and Eastern Europe are preferring to travel via Hungary-based Wizz Air, which is backed by the US private equity firm, Indigo Partners and also is a part of its low-cost carriers, owing to its affordable sales model. Moreover, to enable continuing of the flights from the UK to other non-EU countries irrespective of the Brexit outcomes, the company has received permission grant of a UK route license from the UK Secretary of State for Transport, in October 2018, which future-proofed

3. Strong contribution and growth from ancillary revenues: Since its inception in 2003, Wizz Air’s main strategic focus has been maintaining strong ancillary revenues as well as a lean low-cost operation. Moving along this strategic direction has enabled the company to show consistent growth as well as keep up its healthy net profit margins and achieve favourable cash flows. For the financial year ending on March 31, 2019, the company recognized a revenue increase of 19.6% over 2018 at 2.3 billion euros and an ancillary revenue increase of 18.1% at 953.0 million euros. Moreover, in the report named "2018 Top 10 Ancillary Revenue Rankings", Wizz Air stood at the top in the list of “% of revenue” producers, with a notable market share of 41.1% for Europe & Russia.

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Weakness

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Opportunity

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Threats

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Initiatives towards minimizing carbon and noise footprints: With the companies becoming more responsible towards reducing their environmental footprints by lessening the carbon emissions, Wizz Air has taken measures towards adopting a sustainable approach. For instance, the addition of A321neo aircraft to the company’s fleet will lead Wizz Air towards industry-leading low carbon emissions as well as reduction in noise footprint and nitrogen oxide emissions by 50%, if compared to the previous generation aircraft. Also, the company has undertaken several environmental projects for feature improvements like economic flying speed, descent optimization and zonal drying, which accounts to approximately a reduction of CO2 emissions by 100,000 tons per year, or over 3% per aircraft per year, since 2012.

2. Increase in the environmental efficiency by reduction in fuel consumption by the aircrafts: Nearly all industry sectors are moving towards renewable sourcing or reducing their fuel consumption to become environment friendly. As of 2020, the company is involved in the execution of over 65 fuel saving initiatives, which is proving to be good for the business operations as well as adopting sustainable approaches. For instance, the addition of Airbus A321neo to Wizz Air’s fleet in March 2019 significantly reduced the fuel consumption per seat and with its Pratt and Whitney ‘s GTF engine, the company has been able to enhance its reduction in fuel burn capacity by 16%. Moreover, this new generation aircraft has offered more flexibility, fuel efficiency and operational cost efficiencies with the help of its wide single-aisle cabin of single class configured 239 seats. When compared to the A321ceo aircraft, A321neo projects extraordinary fuel economics with 10% and 20% reduction in fuel consumption and fuel savings respectively