Wizz Air Signs Agreement For The Purchase Of 146 Airbus A320neo And A321neo Aircraft
Further to its announcement of the entry into a memorandum of understanding on 15 November 2017, Wizz Air Holdings Plc (the “Company” and, together with its subsidiaries, “Wizz Air”), the largest low-cost airline in Central and Eastern Europe, announces that it has completed and signed documentation with Airbus which, amongst other things, provides for the purchase of 146 Airbus A320neo Family aircraft (the “New Airbus Agreement”). This purchase will enable Wizz Air to deliver on its fleet replacement and expansion plans and to continue delivering strong growth for the next decade.
At current list prices, the order for 146 Airbus A320neo Family is valued in excess of US$17.2 billion, although Airbus has granted significant discounts from list prices to Wizz Air. The Company will retain flexibility in determining the most favourable method of financing the aircraft under the New Airbus Agreement.
Given the size of the commitments under the New Airbus Agreement relative to the Company, the purchase constitutes a “class 1 transaction” under the Listing Rules and therefore entry into the New Airbus Agreement is conditional upon Wizz Air shareholder approval. This approval will be sought at a General Meeting to be held in due course.
New Aircraft Order Providing Flexibility to Wizz Air
Wizz Air has an outstanding commitment to purchase a further 135 aircraft from Airbus, comprising 8 A320ceo aircraft and 17 A321ceo aircraft (the “Existing CEO Order”) and 110 A321neo aircraft (the “Existing NEO Order”). All aircraft under the Existing CEO Order are scheduled for delivery by 2019 and all aircraft under the Existing NEO Order are scheduled for delivery by the end of 2024.
The New Airbus Agreement includes the purchase of 72 Airbus A320neos and 74 Airbus A321neos for delivery between 2021 and 2026 (inclusive). These aircraft will enable Wizz Air to renew its existing fleet and provide additional capacity for further growth. Airbus’ A320neo Family aircraft provide additional efficiencies that will enable Wizz Air to offer even lower fares to the market and will ensure Wizz Air maintains its young, efficient, industry leading fleet.
Wizz Air has also negotiated a significant amount of flexibility with Airbus to ensure the aircraft delivery stream matches its operational needs, including the ability to convert a certain number of A321neo aircraft to the same number of A320neo aircraft and vice versa.
The New Airbus Agreement maintains Wizz Air’s current strategy of operating a single fleet type - the Airbus A320 family. The advantages of a single fleet include one standard for pilot and crew training, no requirement for multiple crew reserve pools and a simpler support infrastructure for the fleet. Pilots and cabin crew will be easily interchangeable between A320ceo and A320neo family aircraft.
Under the terms of the New Airbus Agreement, the Company is required to select the engines to be installed on the new aircraft by 30 June 2019.
József Váradi, Wizz Air Chief Executive said:
“We are pleased to confirm this order with Airbus to purchase a further 146 A320neo Family aircraft. This further order of latest-technology aircraft will help us to continue to drive our operating costs even lower as we aim to become the absolute cost leader in Europe, which in turn will enable us to continue to offer the lowest fares and so stimulate travel by air throughout Europe while our customers enjoy great service on board one of the youngest fleets in Europe. It also provides significant flexibility to match our fleet to our growth requirements. The new aircraft will enable us to sustain our cost advantage through cabin innovations, the latest engine technology and other efficiency improvements, while enhancing our customer offering and experience.
Airbus is a key partner for us and we believe they have the best aircraft to serve our markets and we are happy to be continuing our longstanding relationship with them”.