Q1 2027 Wizz Air Holdings PLC Earnings Call

August 6, 2026

Speaker #1: Good morning, ladies and gentlemen, and welcome to the Wizz Air Q1 results call. The presentation will commence shortly. After the presentation, we will conduct a Q&A session.

Operator: Good morning, everyone. Thank you.

József Váradi: Good morning, everyone. Thank you for joining.

Operator: Welcome to the Wizz Air Q1 results call. The presentation will commence shortly. After the presentation, we will conduct a Q&A session. If you wish to ask a question, you will be able to either through the Zoom webinar link provided separately or by submitting written questions using the Ask a Question button on the SparkLive Webcast page. Please note this call is being live-streamed to a webcast for a wider audience and will be recorded. I would now like to hand over to József Váradi, Chief Executive Officer, to open the presentation. Please go ahead.

Speaker #1: If you wish to ask a question, you'll be able to either through the Zoom webinar link provided separately or by submitting written questions using the Ask a Question button on the Spark Live webcast page.

Speaker #1: Please note, this call is being livestreamed to a webcast for a wider audience and will be recorded. I would now like to hand over to József Váradi, Chief Executive Officer, to open the presentation.

Speaker #1: Please go ahead.

Speaker #2: Good morning, everyone. Thank you for joining. This presentation is for reporting the first quarter of fiscal '27, the April–June period. If I were to title this quarter, I would say it is all about observing post-pressure and high growth.

József Váradi: Good morning, everyone. Thank you for joining this presentation. We are reporting the Q1 of fiscal 2027, the April-June period. If I would want to title this quarter, I would say this is all about observing cost pressure and high growth. I think we have done actually a pretty good job going through this period. We believe that what we are reporting is pretty much what we have said, what we have told you, so there should not be any surprise. As far as we are concerned, this is totally in line with guidance we have provided to you previously. Let me pick a few highlights on the quarter. Well, first of all, capacity growth. This is a high-growth period.

Speaker #2: And I think we've actually done a pretty good job going through this period. We believe that what we are reporting is pretty much what we have said, what we have told you, so there shouldn't be any surprise.

Speaker #2: As far as we are concerned, this is totally in line with the guidance we have provided to you previously. But let me pick a few highlights from the quarter.

Speaker #2: First of all, capacity growth. This is a high-growth period. You recall, we told you a good year ago when we renegotiated the Airbus delivery agreement that this is the last period—the first half of fiscal 2027—when we are still getting the originally scheduled aircraft deliveries.

József Váradi: You recall, we told you a good year ago when we renegotiated the Airbus delivery agreement that this is the last period, the H1 of fiscal 2027, when we are still getting the originally scheduled aircraft deliveries. After that, this is all going to be moderated down to around 10% to 12% growth. This agreement is in place, this is kind of last period. In the H1, you are seeing fleet growth more delivering to 20% growth rate as opposed to a 10% growth rate. On top of that, we are, and I think that's a good development for the company, we are tremendously increasing our sector productivity as a result of our strategic decision to enter domestic markets, especially in Italy, and later on we will do that in Spain, too. That gives us a lot better platform, especially in terms of economic efficiency.

Speaker #2: After that, this is all going to be moderated down to around 10% to 12% growth. This agreement is in place, so this is kind of the last period in the first half you are seeing fleet growth more delivering to 20% growth rate as opposed to the 10% growth rate.

Speaker #2: On top of that, we are—and I think that's a good development for the company—we are tremendously increasing sector productivity as a result of our strategic decision to enter domestic markets, especially in Italy, and later on we will do that in Spain too.

Speaker #2: That gives us a much better platform, especially in terms of economic efficiency—the same asset delivering more seats to the market at lower cost at the end of the day.

József Váradi: The same asset delivering more seats to the market at lower cost at the end of the day. You are seeing that coming through. While ASK capacity is 15% up, seat capacity is more like 25% up. Obviously, this is a transition. It's not always going to be a deviation like this. For so long as we are ramping up domestic production, you're going to be seeing this kind of a distortion. I think this is a very good thing for the company in terms of long-term economic efficiency. You look at load factor. Load factor is flat. You can certainly argue that we have been able to deliver this business for 25% growth at load factor neutral. We have not been jeopardizing our load factor production.

Speaker #2: So you are seeing that coming through. So while ASK capacity is 15% up, seat capacity is more like 25% up. Obviously, this is a transition.

Speaker #2: It's not always going to be a deviation like this, but for so long as we are ramping up domestic production, you're going to see this kind of distortion.

Speaker #2: But I think this is a very good thing for the company in terms of long-term economic efficiency. Then you look at load factor. Load factor is flat.

Speaker #2: So you can certainly argue that we have been able to deliver this growth at load factor neutral. So we have not been jeopardizing our load factor production.

Speaker #2: Of course, you get some penalty when you are creating that degree of new capacities through prematurity. So we have this 8% deficiency on fairs.

József Váradi: Of course, you get some penalty when you are creating that degree of new capacity through prematurity, so we have this 8% deficiency on fares effectively. Now, if you put that in context, you look at the market in Europe. I mean, the market is suggesting that intra-European traffic is down probably 3% to 5%. The 8% should be measured against that. We are delivering five, six times higher growth than what the rest of the market is achieving, and I think that's a very good revenue resilience that we are seeing over here. We have been much focused on the cost side of the business. We think we have a very clear path to cost leadership in the industry in Europe, and that we previously elaborated on. We believe that a couple of years down the line, we are going to become the cost leader.

Speaker #2: Effectively. Now, if you put that in context, and you look at the market in Europe, I mean, the market is suggesting that intra-European traffic is down probably 3% to 5%.

Speaker #2: So the 8% should be measured against that. But what we are delivering is 5 to 6 times higher growth than what the rest of the market is achieving.

Speaker #2: And I think that's a very good revenue resilience that we are seeing over here. We have been much focused on the cost side of the business.

Speaker #2: We think we have a very clear path to cost leadership in the industry in Europe, and that's as previously elaborated on. We believe that, a couple of years down the line, we are going to become the cost leader, and that cost leadership is essentially established on four key pillars.

József Váradi: That cost leadership is essentially established on four key pillars. One is the ungrounding of the GTF. We have made tremendous progress. A year ago, we had 41 aircraft on the ground. This time around, 27. We have the plan in place that is now pretty intact, and we believe is going to get delivered by the end of calendar 2027, when the entire GTF grounded fleet will be ungrounded. Secondly, we are in the process of returning the ceo fleet. That's a major change. Obviously, it comes with some cost penalty at the time of returning the fleet, putting the aircraft back into a return condition. Once it is done, we will clearly and fully benefit from the economic efficiencies, the unique cost advantages of the A321neo aircraft.

Speaker #2: One is the ungrounding of the GTF, where we have made tremendous progress. A year ago, we had 41 aircraft on the ground. This time, around 27.

Speaker #2: And we have the plan in place that is now pretty intact, and we believe it is going to get delivered by the end of calendar 2027, when the entire GTF grounded fleet will be ungrounded.

Speaker #2: Secondly, we are in the process of returning the CO fleet. That's a major change. Obviously, it comes with some cost penalty at the time of returning the fleet.

Speaker #2: Putting the aircraft back into a written condition. But once it is done, we will clearly and fully benefit from the economic efficiencies and unit cost advantages of the new aircraft.

Speaker #2: And in the meantime, this is not only the renewal of the aircraft, but also the upgrading of the aircraft. So, and especially in a higher fuel price environment, you are seeing the benefit on fuel burn.

József Váradi: In the meantime, this is not only renewal of the aircraft, but also the upgauging of the aircraft. Especially in a higher fuel price environment, you are seeing the benefit on fuel burn by being converted into that fleet type. That is happening, and it is really done major in the next two years or so. With all of that, we are ramping utilization back up to standards. We have made significant progress, but we got interfered by the war in Ukraine. We had to pull capacity out last minute, and we were unable to reallocate that capacity overnight. That takes some time to allow lead time for sales, we got a detrimental impact on that. Structurally speaking, utilization is improving in the company. I think you're going to see some of it in Q2 and the rest of the financial year.

Speaker #2: By being converted into that fleet type. So that is happening. And it will be done majorly in the next two years or so. Obviously, with all of that, we are ramping utilization back up to standards.

Speaker #2: We have made significant progress, but we were interfered with by the war in Iran. We had to pull capacity out at the last minute, and we were unable to reallocate capacity overnight.

Speaker #2: Obviously, that takes some time to allow lead time for sales, so we got a detrimental impact on that. But structurally speaking, utilization is improving in the company.

Speaker #2: And I think you're going to see some of it in Q2 and the rest in the financial year. Now, we are back into growth.

József Váradi: Now we are back into growth. That gives us a leverage for lowering our airport costs. We have made significant progress on that. Airport cost is coming down. You may not see that in the numbers because at the same time as we are putting navigation, handling, and airports all together, monopoly infrastructure charges are up. Navigation charges are up, and they offset the good work and progress we have made on airports. Nevertheless, we are in a position now to leverage growth for lowering airport costs. Operational efficiency remains very strong in the company. We are at the top of the list of European airlines completing schedules. We actually fly what we sell, and we sell what we fly. We are uniquely better than the rest of the industry. On-time performance has improved quite significantly.

Speaker #2: And that gives us a leverage for lowering our airport cost. We have made significant progress on that. Airport cost is coming down. You may not see that in the numbers because at the same time, as we are putting navigation, handling, and and airports all together, navigation charges are up and they offset the good work and progress we have made on airports.

Speaker #2: Nevertheless, we are in a position now to leverage growth for lowering airport cost. Operational efficiency remains very strong in the company. We are at the top of the list of European airlines completing schedules.

Speaker #2: We actually fly what we sell, and we sell what we fly. We are uniquely better than the rest of the industry. On-time performance has improved quite significantly.

Speaker #2: We are really in the kind of the upper pack of the airline industry in Europe. So it's a very solid operation, with a lot less disruption and a lot less disruption cost, like EC261.

József Váradi: We are really in the kind of the upper pack of the airline industry in Europe. It's a very solid operation with a lot less disruption cost, like EC261, than before, and we are clearly benefiting from that. I also think that it kind of flows through into revenue resilience, because you build a lot more confidence in the market with the customers to book Wizz Air. Cash remains very strong. Liquidity is, as we speak today, EUR 2.3 billion. We are holding up the level very well. That translates into close to 40% liquidity ratio. That's one of the strongest in the industry globally.

Speaker #2: Than before. And we are clearly benefiting from that. And I also think that it kind of flows through into revenue resilience. Because you build a lot more confidence in the market with the customers to book reserve.

Speaker #2: Cash remains very strong. Liquidity is, as we speak today, $2.3 billion. So we are holding up the lever very well. That translates into close to a 40% liquidity ratio.

Speaker #2: That's one of the strongest in the industry globally. So we are running the business at very high liquidity, and with significant cash. We believe that gives us an opportunity to not just better weather the storm of challenging circumstances arising from the war, spiking fuel prices, et cetera.

József Váradi: We are running the business with very high liquidity, and with significant cash that we believe gives us an opportunity to not just how to weather the storm of challenging circumstances arising from the war, spiking fuel price, et cetera, but also that gives us strategic opportunities should there be significant market opportunities arising, especially in the winter period, when we're going to be seeing more capacity adjustments by other airlines. Maybe just a commentary on fuel hedge. We are well-hedged. We continued our hedging activities during the past period, except for the very short term when fuel was hyped up. For the interim period, for midterm period, we continue to place hedges both on fuel and FX. We think we are well covered, and if this war continues to unfold for a longer period, we are well protected versus the rest of the industry.

Speaker #2: But also, that gives us strategic opportunities should there be significant market opportunities arising, especially in the winter period, when we're going to be seeing more capacity adjustments by other airlines.

Speaker #2: Maybe just a commentary on fuel hedge. We are well hedged. We continued our hedging activities during the past period, except for the very short term when fuel was hived up.

Speaker #2: But for the interim period, for the midterm period, we continue to place hedges, both on fuel and FX. So we think we are well covered.

Speaker #2: And if this board continues to unfold for a longer period, we are well protected versus the rest of the industry. I would say that you probably have a lot of interest in what is happening in Q2.

József Váradi: I would say that you probably have a lot of interest in what is happening in Q2. In terms of capacity, it is fairly similar to the Q1 situation with one change that by Iran war made us ground some capacity that was originally allocated to the Middle East. That capacity is entirely recycled either back into Israel, especially, or into other European markets. We don't have grounded capacity as a result of that. I think that's an improvement. In terms of the trading environment, we are also seeing an improvement on fares. We are holding load factors. I don't think you should be expecting any change. We are continuing to deliver the business at a flat load factor. While we had 8% fall on fares in the Q1 period, we are only seeing low single digits in the Q2 period.

Speaker #2: In terms of capacity, it is fairly similar to the Q1 situation, with one change: the Biden board made us ground some capacity that was originally allocated to the Middle East.

Speaker #2: That capacity is entirely recycled either back into Israel, especially, or into other European markets. So, we don't have grounded capacity as a result of that.

Speaker #2: So that's an improvement. And in terms of the trading environment, we are also seeing an improvement on fares. We are holding load factors. I don't think it should be expecting any change.

Speaker #2: So we'll continue to deliver the business at a flat load factor. While we had an 8% fall on fares in the Q1 period, we are only seeing a low single-digit decrease in the Q2 period.

Speaker #2: So we're seeing that our resilience continues to hold. And, effectively, some of the newly invested capacity measures are very quickly giving us better room to maneuver against the market.

József Váradi: We're seeing that our resilience continues to hold and effectively some of the newly invested capacity matures very quickly, giving us a better room to maneuver against the market. We are closing on the gap notwithstanding that we are still delivering 25% seat growth in this period. Maybe with these remarks, I would hand over to Veronika to comment on the financial performance. Thank you.

Speaker #2: So we are closing on the gap. Notwithstanding that, we are still delivering 25% seat growth in this period. And maybe with these remarks, I would send over to Veronica to comment on the financial performance.

Speaker #2: Thank you.

Speaker #1: Thank you, Joe. Good morning, everybody. If we can go to the next page, please. I would like to show and make a couple of points about our Q1 numbers, which are very much in line with what Joe has commented.

Veronika Spanarova: Thank you, Joe. Good morning, everybody. If we can go to the next page, please. I would like to show and to make a couple of points about our Q1 numbers, which are very much in line with what Joe has commented. I would also reiterate three points that have been in focus and that have been as previously said. We are growing the capacity and deploying it across the key markets, and we see that supported in the numbers in the growth of the ASK by 15% and by seats in the passengers by the 25%. We also see the lower stage lengths, which is as per deployment of the capacity. There is a focus on the cost and operational excellence, and operational performance, which I will go through when we speak about the costs.

Veronika Špaňárová: Thank you, József. Good morning, everybody. If we can go to the next page, please. I would like to show and to make a couple of points about our Q1 numbers, which are very much in line with what József has commented. I would also reiterate three points that have been in focus and that have been as previously said. We are growing the capacity and deploying it across the key markets, and we see that supported in the numbers in the growth of the ASK by 15% and by seats in the passengers by the 25%. We also see the lower stage lengths, which is as per deployment of the capacity. There is a focus on the cost and operational excellence, and operational performance, which I will go through when we speak about the costs.

Speaker #1: I would also reiterate three points that have been in focus, and that have been, as previously said. We are growing the capacity and deploying it across the key markets.

Speaker #1: And we see that supported in the numbers, in the growth of the ASKs by 15%. And by seating the passengers by 25%. We also see the lower stage lengths, which is as per deployment of the capacity.

Speaker #1: There is a focus on the cost and operational excellence. And operational performance, which I will go through when we speak about the costs. And as said, that we have delivered in Q1 the numbers as per guidance, as guided previously in terms of the capacity, in terms of the load factor risk, and we have delivered minus 2% of the ex-fuel cost.

Veronika Spanarova: As said, that we have delivered in Q1 the numbers as per guidance, as guided previously in terms of the capacity, in terms of the load factor RASK, and we have delivered -2% of the CASK ex-fuel. What I would like to point out on this slide, we are finishing the quarter with the profit after tax of -198. As you can see, this is largely about EUR 100 million of impact of that is on the fuel cost. An increase in the cost, which is impacting the whole industry. I would like to again point out that we have a hedging program in place, which is mitigating the fuel prices to a high extent.

Veronika Špaňárová: As said, that we have delivered in Q1 the numbers as per guidance, as guided previously in terms of the capacity, in terms of the load factor RASK, and we have delivered -2% of the CASK ex-fuel. What I would like to point out on this slide, we are finishing the quarter with the profit after tax of -198. As you can see, this is largely about EUR 100 million of impact of that is on the fuel cost. An increase in the cost, which is impacting the whole industry. I would like to again point out that we have a hedging program in place, which is mitigating the fuel prices to a high extent.

Speaker #1: What I would like to point out on this slide, we are finishing the quarter with the profit after tax of negative 190, 98. This is, as you can see, this is largely about 100 million of impact of that is on the fuel cost.

Speaker #1: And increase in the cost, which is impacting the whole industry. I would like to again point out that we have a hedging program in place, which is mitigating the fuel prices to a high extent.

Speaker #1: We have 82% of the Q2 fuel needs hedged. 62% of the H2F27. And we are already hedging into the F28, where we have a 39% of the first half of the expected consumption covered.

Veronika Spanarova: We have 82% of the Q2 fuel needs hedged, 62% of the H2F27, and we are already hedging into the F28, where we have 39% of the H1 of the expected consumption covered. This is as per the hedging program which we are implementing, which we have implemented, and we continue delivering on that. That would be on this page. If I can ask to move to the next page, please. Yes. Here I would like to focus on some of the cost lines. You see as I said previously, the fuel cost is up on the year-on-year basis. We have seen the improvement of the ex-fuel costs. I would say that this is attributed to the several factors. We can see the staff costs, which are going down, and this is in line with the crew efficiency.

Veronika Špaňárová: We have 82% of the Q2 fuel needs hedged, 62% of the H2F27, and we are already hedging into the F28, where we have 39% of the H1 of the expected consumption covered. This is as per the hedging program which we are implementing, which we have implemented, and we continue delivering on that. That would be on this page. If I can ask to move to the next page, please. Yes. Here I would like to focus on some of the cost lines. You see as I said previously, the fuel cost is up on the year-on-year basis. We have seen the improvement of the ex-fuel costs. I would say that this is attributed to the several factors. We can see the staff costs, which are going down, and this is in line with the crew efficiency.

Speaker #1: This is as per the hedging program, which we are implementing. Which we have implemented and we continue delivering on that. That would be on this page.

Speaker #1: I would, if I can, ask to move to the next page, please. Yes. And here I would like to focus on some of the cost lines you see, as I said previously.

Speaker #1: The fuel cost—the fuel cost is up on a year-on-year basis. But we have seen an improvement of the ex-fuel cost.

Speaker #1: And I would say that this is attributed to several factors. We can see the staff costs, which are going down, and this is in line with the crew efficiency.

Speaker #1: We are seeing improvement in the airport unit costs, which is also in line with the redeployment of the network capacity, very efficiently.

Veronika Spanarova: We are seeing improvement of the airport unit costs, which is also in line with the redeployment of the network, of the capacity very efficiently. What we see is an improvement of the other costs as well. Now, when we take a look at the other costs, what I would like to point out is that the two factors which were quoted previously. We have a benefit of the sale and leasebacks Q1 2026 and 2027. If you can see, this is basically offset by the decrease in credits and compensation. Really the improvement of the other costs and income is in delta attributed to the decrease of the disruption cost, which is in line with the improvement of the operational performance, and the decrease or non-existence of the wet leases.

Veronika Špaňárová: We are seeing improvement of the airport unit costs, which is also in line with the redeployment of the network, of the capacity very efficiently. What we see is an improvement of the other costs as well. Now, when we take a look at the other costs, what I would like to point out is that the two factors which were quoted previously. We have a benefit of the sale and leasebacks Q1 2026 and 2027. If you can see, this is basically offset by the decrease in credits and compensation. Really the improvement of the other costs and income is in delta attributed to the decrease of the disruption cost, which is in line with the improvement of the operational performance, and the decrease or non-existence of the wet leases.

Speaker #1: And what we see is an improvement of the other costs as well. Now, when we take a look at the other costs, what I would like to point out is that the two factors, which were quoted previously, we have a benefit of the sale and lease tax quarter one to quarter one, 26 and 27.

Speaker #1: If you can see, this is basically offset by the decrease in credits and compensation. So really, the improvement of the other costs and income is, in delta, attributed to the decrease of the disruption costs, which is in line with the improvement of the operational performance.

Speaker #1: And the decrease or non-existence of the wet leases. On the sale and lease tax, what I would like to comment on is that we see a bigger benefit if we compare Q1 2026 and Q1 2027.

Veronika Spanarova: On the sale and leasebacks, what I would like to comment, we see a bigger benefit if we compare Q1 2026 and Q1 2027 on the full year basis. We expect a smaller benefit coming in this year than last year. Okay. With that, I would turn to the next page, please. Okay. On this slide, we can see that the quarter has resulted in the positive free cash flow, combined of the useful components. On the net CapEx, what I would like to point out is that we have seen 7 aircraft and 8 engines which were part of the SLB program this quarter, as opposed to 7 aircraft only in the same period as the last year. This is what I was also commenting on the previous slide. Looking forward for the full year, we expect about 21 aircraft and 19 engines to be under this program.

Veronika Špaňárová: On the sale and leasebacks, what I would like to comment, we see a bigger benefit if we compare Q1 2026 and Q1 2027 on the full year basis. We expect a smaller benefit coming in this year than last year. Okay. With that, I would turn to the next page, please. Okay. On this slide, we can see that the quarter has resulted in the positive free cash flow, combined of the useful components. On the net CapEx, what I would like to point out is that we have seen 7 aircraft and 8 engines which were part of the SLB program this quarter, as opposed to 7 aircraft only in the same period as the last year. This is what I was also commenting on the previous slide. Looking forward for the full year, we expect about 21 aircraft and 19 engines to be under this program.

Speaker #1: On a full-year basis, we expect a smaller benefit coming in this year than last year. Okay, and with that, I would turn to the next page, please.

Speaker #1: Okay. And on this slide, we can see that the quarter has resulted in positive free cash flow, comprised of the usual components. On the net capex, what I would like to point out is that we have seen seven aircraft and eight engines, which were part of the SLB program this quarter, as opposed to seven aircraft only in the same period last year.

Speaker #1: This is what I was also commenting on in the last, on the previous slide. Looking forward to the full year, we expect about 21 aircraft and 19 engines to be under this program.

Speaker #1: So the forecast receipts will be around €200 million, as I was also commenting, based on the full year, based on the full-year projection. What is important, as Joe has mentioned, we are ending the quarter with €2.2 billion of cash.

Veronika Spanarova: The forecast receipts will be around EUR 200 million, as I was also commenting based on the full year projection. What is important, as Joe has mentioned, we are ending the quarter with EUR 2.2 billion of the cash and most recent figure is EUR 2.3 billion, which is bringing the liquidity ratio of 37%, which is one of the best in the industry and more than adequate in terms of the required liquidity levels. That would be on the nutshell on the financials. I would like to turn to Ian to comment on the Q1 unit revenue.

Veronika Špaňárová: The forecast receipts will be around EUR 200 million, as I was also commenting based on the full year projection. What is important, as József has mentioned, we are ending the quarter with EUR 2.2 billion of the cash and most recent figure is EUR 2.3 billion, which is bringing the liquidity ratio of 37%, which is one of the best in the industry and more than adequate in terms of the required liquidity levels. That would be on the nutshell on the financials. I would like to turn to Ian to comment on the Q1 unit revenue.

Speaker #1: And the most recent figure is 2.3, which is bringing the liquidity ratio to 37%, which is one of the best in the industry and more than adequate in terms of the required liquidity levels.

Speaker #1: That would be, in a nutshell, the financials. And I would like to turn to Jan to comment on the Q1 unit revenue.

Speaker #2: Thank you very much, Veronica. Could we please go to the next slide? So, in terms of the revenue performance this quarter, there was a lot that was happening in the period.

Ian Malin: Thank you very much, Veronika. Could we please go to the next slide? In terms of the revenue performance this quarter, there was a lot that was happening in the period. I think it's important to put some of the issues on the table so you can understand the business in the medium term once these issues are resolved. We obviously have the fuel price, the maintenance cost, and the depreciation cost that Veronika talked about. Those will diffuse when the fuel price comes down and the legacy fleet leaves the business. In terms of the revenue side of things, we also have some, I would say, temporal factors that we're dealing with, and dealing with it as best as we can. Last year's Q1 RASK was at EUR 441.

Speaker #2: I think it's important to put some of the issues on the table so you can understand the business in the medium term once these issues are resolved.

Speaker #2: We obviously have the fuel price and the maintenance costs and the depreciation costs that Veronica talked about. Those will diffuse when the fuel price comes down and the legacy fleet leaves the business.

Speaker #2: But in terms of the revenue side of things, we also have some, I would say, temporal factors that we're dealing with, and we're dealing with it as best as we can.

Speaker #2: Last year's Q1 RASC was at 441, and I think it's important to point out that the numbers this year are flattered by the shorter stage length.

Ian Malin: I think it's important to point out that the numbers this year are flattered by the shorter stage length. We decreased stage length of roughly 8% year-on-year as a result of the reallocation of a lot of our capacity in March from the Middle East and Israel to our European strongholds. We did so in a short period of time, and that changed the shape of the network dramatically. We've never seen that dramatic of a shift in our network. Of course, we were compelled to under the circumstances. The numbers do enjoy a bit of flattery here from that stage length. The next impact then was the growth impact. We're growing dramatically. We're growing 25% in ASK terms this quarter, and that growth will continue for the next few quarters. That is what it is. It's something that we have to deal with.

Speaker #2: We increased or sorry, we decreased stage length roughly 8%. Year on year, as a result of the reallocation of a lot of our capacity, in March, from the Middle East and Israel, to our European strongholds.

Speaker #2: And we did so in a very short period of time. And that changed the shape of the network dramatically. We've never seen that dramatic of a shift in our network.

Speaker #2: Of course, we were compelled to, under the circumstances. And so, the numbers do enjoy a bit of flattery here from that stage length. The next impact, then, was the growth impact.

Speaker #2: So, we're growing dramatically. We're growing 25% in ASK terms this quarter, and that growth will continue for the next two quarters. And that is what it is.

Speaker #2: I mean, it's something that we have to deal with. It's something we knew was happening. The growth wind-down got delayed a little bit by virtue of some of these impacts.

Ian Malin: It's something we knew was happening. The growth wind down got delayed a little bit by virtue of some of these impacts, that too will subside. We have to digest the growth and we have to deploy it because the alternative of parking capacity is not acceptable because we're paying for the aircraft, we need to make sure that we deploy them properly. Growth has always been one of the strengths of this company. Growth equals value, and growth today is value tomorrow. In terms of this, once we get through deploying it and deploying it sensibly, which is what we're in the process of doing, that will then allow immature capacity to convert into mature capacity. To put it in perspective, last year this time we had roughly 70 to 80 routes that were less than 1 year old.

Speaker #2: But that too will subside. But we have to digest the growth, and we have to deploy it because the alternative of parking capacity is not acceptable, because we're paying for the aircraft.

Speaker #2: And so we need to make sure that we deploy them properly. Growth has always been one of the strengths of this company. Growth equals value.

Speaker #2: And growth today is value tomorrow. And so, in terms of this, once we get through deploying it and deploying it sensibly—which is what we're in the process of doing—that will then allow immature capacity to convert into mature capacity.

Speaker #2: So, to put it in perspective, this time last year we had roughly 70 to 80 routes that were less than one year old. Now, we have just under 300 routes that are less than one year old.

Ian Malin: Now we have just under 300 routes that are less than 1 year old. Four times the number of routes that are new now. Some of them are new because of the reallocation from Middle Eastern capacity back to Europe. Some of them are new just due to organic growth. We've also embarked on some additional domestic flying in Italy and now with Spain coming online. That will, within less than 1 year, become more mature capacity, which means that you will see margin expansion coming from that. There is a cost to putting that growth into the system, and that's what you see there in terms of Q1. You have the April impact. April was compounded by the fact that you had a shift in Easter, plus you had the impact of basically full ramp-up of the 2026 Iran war.

Speaker #2: So, four times the number of routes that are new. Now, some of them are new because of the reallocation from Middle Eastern capacity back to Europe.

Speaker #2: Some of them are new just due to organic growth. We've also embarked on some additional domestic flying in Italy, and now, with Spain coming online, that will, within less than a year, become more mature capacity, which means that you will see margin expansion coming from that.

Speaker #2: But there is a cost to putting that growth into the system, and that's where you see it—in terms of Q1. Then you have the April impact.

Speaker #2: April was compounded by the fact that you had a shift in Easter, plus you had the impact of basically the full ramp-up of the 2026.

Speaker #2: Iran war. So we had a lot of uncertainty around fuel supplies. You can remember there was a lot of consumer sentiment. There were people that were changing their travel plans.

Ian Malin: We had a lot of uncertainty around fuel supplies. You can remember there was a lot of consumer sentiment. There were people that were changing their travel plans. In fact, we showed you a slide last period that talked about the change in behavior of the consumer from booking more in advance to booking last minute, waiting to see what was happening. We have seen that that trend was reversing when we did the last quarter's results, and that we were going back to more normal patterns in May and June. However, we have seen now since, as we get into peak summer, that that's shifting back. July and August are seeing more late booking, and we're actually seeing some of that behavior come through our July and August numbers. There's some encouragement here.

Speaker #2: In fact, we showed you a slide last period that talked about the change in behavior of the consumer, from booking more in advance to booking last minute, waiting to see what was happening.

Speaker #2: We have seen that that trend was reversing when we did the last quarter's results, and that we were going back to more normal patterns.

Speaker #2: In May and June, however, we have seen now, as we get into peak summer, that that's shifting back. So June, July, and August are seeing more late booking.

Speaker #2: And we're actually seeing some of that behavior come through in our July and August numbers. So there's some encouragement here. But we still have the rest of August and September to get through for Q2.

Ian Malin: We still have the rest of August and September to get through for Q2. Lastly, there's an element of market pricing having to stimulate again, driven by, I would say, competitive reaction into the region as we concentrate more our capacity into our core Central Eastern European stronghold, our historical diaspora flows, as well as moving into new markets where we can drive this productivity that Joseph mentioned earlier. What we're doing as a result of the shorter stage length is driving significantly more seats out of our assets. We pay for the planes whether we fly them or not. Our ambition, my ambition, is to create as many seats as possible out of those aircraft so that we have more product to sell to give customers more choice, more options, and ultimately become more of a preferred airline.

Speaker #2: And then lastly, there's an element of market pricing having to stimulate again, driven by, I would say, competitive reaction into the region as we concentrate our capacity into our core Central and Eastern European stronghold, our historical diaspora flows, as well as moving into new markets where we can drive this productivity that Jozsef mentioned earlier.

Speaker #2: So what we're doing, as a result of a shorter stage length, is driving significantly more seats out of our assets. So we pay for the planes.

Speaker #2: Whether we fly them or not. And so our ambition, my ambition, is to create as many seats as possible out of those aircraft so that we have more product to sell, to give customers more choice, more options, and ultimately become more of a preferred airline.

Speaker #2: We have a bunch of new initiatives that we put forward this year, this quarter. We announced Starlink, as you know, just right before the last quarter, but then we have also added some interesting new winter options for the business that we haven't had to do before.

Ian Malin: We have a bunch of new initiatives that we put forward this year, this quarter. We announced Starlink, as you know, just right before the last quarter. We have also added some interesting new winter options for business that we haven't had to do before. We've expanded our program to North Africa, out of Poland in particular. We've introduced some new opportunities for skiing in Northern Italy, which we encourage everyone to check out. Ultimately, we're balancing this growth, which we still see and will always see as an opportunity with sensibility around where we fly in the summer and where we fly in the winter. That's how we're going to get through this period and get to that ultimate profitability perspective where you see the cost excellence coming through.

Speaker #2: So we've expanded our program to North Africa, out of Poland in particular. We've introduced some new opportunities for skiing in Northern Italy, which we encourage everyone to check out.

Speaker #2: And so ultimately, we're balancing this growth, which we see as an opportunity, with sensibility around where we fly in the summer and where we fly in the winter.

Speaker #2: And that's how we're going to how we're going to get through this period and get to that ultimate profitability perspective where you see the cost excellence coming through.

Speaker #2: In fact, the cost side, I think, is probably the easy part now because you can see the path to that. The revenue side will come with that maturity that I talked about.

Ian Malin: In fact, the cost side, I think, is probably the easy part now because you can see the path to that. The revenue side will come with that maturity that I talked about. Ultimately, that's how the medium term comes together. I'll wrap up at this point and hand it back to Joseph to talk about any final remarks and the outlook.

Speaker #2: So ultimately, that's how the medium term comes together. I'll wrap up at this point and hand it back to Jozsef to talk about any final remarks and the outlook.

Speaker #1: Thank you, Jan. Could you please move the slide? Okay, thank you. So, with regard to Q2 outlook, with regard to capacity, the period continues to be high growth.

József Váradi: Thank you, Ian. Could you please move the slide? Okay, thank you. With regard to Q2 outlook, with regard to capacity, the period continues to be high growth. We are expecting to deliver around 20% ASK growth, higher on seats as a result of stage length reduction. Load factor is expected to be flat year-on-year. RASK, as said, is going to be slightly down on the back of this high-growth capacity. At the same time, we are seeing quite a significant improvement to Q1. As you recall, Q1 was 8% down. We are really expecting only a couple of percentage points down here. With regard to cost for the period and H1 in total, we are expecting a slight increase on ex-fuel cost. I think we are working hard to mitigate that and keep it flat.

Speaker #1: We are expecting to deliver around 20% ASK growth, with higher growth on seats as a result of reduced stage lengths. The load factor is expected to remain flat.

Speaker #1: Year on year, ROSC has said it's going to be slightly down on the back of this high growth capacity. But at the same time, we are seeing quite a significant improvement to Q1. Q2, as you recall, Q1 was 8% down.

Speaker #1: We are really expecting only a couple of percentage points down here. With regard to cost, for the period and H1 in total, we are expecting a slight increase on ex-fuel cost.

Speaker #1: I think we are working hard to mitigate that and keep it flat. But to be on the safe side, that would be our best guidance to you today.

József Váradi: To be on the safe side, that would be our best guidance to you today. If I just wrap it up, I would say that you should really focus on two avenues here. One is the efforts of the company on the cost side of the business to get to cost leadership. I think we have a pathway. I think we've got the building blocks very clear, and we have associated actions to make sure that in the foreseeable future, next 18 to 24 months, indeed, Wizz Air becomes the cost leader of Europe. Those building blocks are around the GTF on grounding, the ceo aircraft returns, leveraging airport cost, and really ramping utilization fleet decision back up to our previous standards.

Speaker #1: So, if I just wrap it up, I would say that you should really focus on two avenues here. One is the efforts of the company on the cost side of the business to get to cost leadership.

Speaker #1: I think we have a pathway. I think we've got the building blocks very clear. And we have associated actions to make sure that, in the foreseeable future—next 18 to 24 months—indeed, Wizz Air becomes the cost leader of Europe.

Speaker #1: And those building blocks are around the GTF, on-grounding, the CO aircraft returns, leveraging airport costs, and really ramping utilization and fleet utilization back up to our previous standards.

Speaker #1: I think we are well on the way, and this is what you are seeing in the improvements on ex-fuel cost, which I think makes us already a positive outlier in the industry.

József Váradi: I think we are well on the way, and this is what you are seeing in the improvements in ex-fuel cost, which I think makes us already a positive outlier in the industry. Two, as we have been elaborating on the revenue side, this year is high capacity growth. Once we are through the year, you should be seeing a lot more moderated growth pattern coming through the business benefiting from the negotiated act of delivery seen with Airbus, the ungrounding of GTF, business becomes more normalized, a lot more palatable in terms of stretch to the business. I would highlight that while you may feel a bit of a short-term pain delivering that capacity growth currently, but that is an investment into the future. Once you go through the maturity curve, you're going to see substantial benefits coming through that maturity.

Speaker #1: And two, as we have been elaborating on the revenue side, this year is high capacity growth. And once we are through the year, you should be seeing a lot more moderated growth pattern coming through, the business benefiting from the negotiated act of delivery stream with Airbus.

Speaker #1: The on-grounding of GTF, so business becomes more normalized—a lot more palatable in terms of stretch to the business. But I would highlight that while you may feel a bit of a short-term pain delivering that capacity growth currently, that is an investment into the future.

Speaker #1: And once you go through the metric curve, you're going to see substantial benefits coming through that metric. And we believe that we have adequate liquidity to do that—to execute against that.

József Váradi: We believe that we have adequate liquidity to do that, to execute against that. Even beyond that, I think that we will see how the winter plays out in Europe, what happens to the industry and each of the players on the industry. That period may represent more strategic opportunities for the company. With that, I would turn it over to questions and answers. Thank you.

Speaker #1: Even beyond that, I think that we will see how the winter plays out in Europe, what happens to the industry, and each of the players in the industry.

Speaker #1: But that period may represent more strategic opportunities for the company. And with that, I would turn it over to questions and answers. Thank you.

Speaker #3: We will now begin the Q&A session. If you wish to ask a question, please use the Raise Hand function at the bottom of your Zoom screen, or use the Ask a Question button on the Spark Live page.

Operator: We will now begin the Q&A session. If you wish to ask a question, please use the raise hand function at the bottom of your Zoom screen, or use the Ask a Question button on the SparkLive page. We ask that you limit your questions to a maximum of two. The first question is from Harry Gower at JP Morgan. Please unmute yourself and begin with your question.

Speaker #3: We ask that you limit your questions to a maximum of two. The first question is from Harry Gowess at JP Morgan. Please unmute yourself and begin with your question.

Harry Gower: Hey. Good morning, everyone. I've got two questions. First one, you talk about wanting to take advantage of market opportunities in the release, I think that means if other airlines potentially cut back on capacity this winter. Do you know, or have you done any kind of analysis on what % of your competitors are unhedged, or what % of capacity out there you're competing with is unhedged on fuel? The second question on a similar line. If the fuel price stays at current levels, would you still expect to deploy the same level of capacity growth this winter as compared to the summer? Sort of 25% to 30% seats growth? Does fuel at the current level kind of change the equation in terms of deploying capacity? Thanks a lot.

Harry Gowers: Hey. Good morning, everyone. I've got two questions. First one, you talk about wanting to take advantage of market opportunities in the release, I think that means if other airlines potentially cut back on capacity this winter. Do you know, or have you done any kind of analysis on what % of your competitors are unhedged, or what % of capacity out there you're competing with is unhedged on fuel? The second question on a similar line. If the fuel price stays at current levels, would you still expect to deploy the same level of capacity growth this winter as compared to the summer? Sort of 25% to 30% seats growth? Does fuel at the current level kind of change the equation in terms of deploying capacity? Thanks a lot.

Speaker #4: Yeah, good morning, everyone. I've got two questions. First one, you talk about wanting to take advantage of market opportunities in the release, and I think that means if other airlines potentially cut back on capacity this winter.

Speaker #4: So do you know, or have you done any kind of analysis on what percentage of your competitors are unhedged, or what percentage of the capacity out there you're competing with is unhedged on fuel?

Speaker #4: And then the second question, on a similar line: if the fuel price stays at current levels, would you still expect to deploy the same level of capacity growth this winter as compared to the summer?

Speaker #4: So, sort of 25% to 30% seat growth? Or does fuel at the current level kind of change the equation in terms of deploying capacity?

Speaker #4: Thanks a lot.

Speaker #1: Thank you. Maybe I'll start with the second question and leave the first one to Ian. So, I think our baseline expectation is that yield stays high.

József Váradi: Thank you. Maybe I'll start with the second question and leave the first one to Ian. I think our baseline expectation is the fuel stays high because anything else is speculative. We don't know. The current reality is that there is a war dragging in Iran. It keeps wobbling. One day it's peace, the other day it's war. God knows what's going to happen there. We ought to assume that this is not going to get resolved any time soon. If it gets resolved sooner, great, we will take the benefits of that. We are planning baseline on a prolonged war with continuous distress coming through the fuel pricing environment. I think before you ask the question, what we are going to do, I think you also need to look at the context of the industry.

Speaker #1: Because anything else is speculative. I mean, we don't know. The current reality is that there is a war dragging on in Iran. It keeps wobbling.

Speaker #1: One day it's peace, the other day it's war. I mean, God knows what's going to happen there. So, we ought to assume that this is not going to get resolved.

Speaker #1: And anytime soon, if it gets resolved sooner, great. Then we will take the benefits of that. But we are planning our baseline on a prolonged war with continuous distress coming through the fuel pricing environment.

Speaker #1: And I think before you ask the question of what we are going to do, I think you also need to look at the context of the industry.

Speaker #1: We have €2.3 billion of liquidity, which translates into close to a 40% liquidity cover. I mean, that stands probably as the best of any airline in Europe, and even globally, or certainly amongst the best.

József Váradi: We have EUR 2.3 billion of liquidity that translates into close to 40% liquidity cover. That stands probably the best of any airlines in Europe and even globally, or certainly among the best. You have a lot of other airlines with basically no liquidity, unhedged on fuel, flying an old fleet of airplanes, burning fuel like hell. Those airlines will get distressed in an off-peak demand environment, like going into the winter period. Yes, you manage your own capacity on the one hand, at the same time, you would also need to look at the market and see how opportunities arise from that. I think this is to be seen. Of course, we are screening the industry. We are screening the performance of airlines. We have a pretty good understanding where the weak spots are, where the opportunities may arise.

Speaker #1: You have a lot of other airlines with basically no liquidity, unhedged on fuel, flying an old fleet of airplanes burning fuel like hell. I mean, those airlines will get distressed in an off-peak demand environment, like going into the winter period.

Speaker #1: So yes, I mean, you manage your own capacity on the one hand, but at the same time, you would also need to look at the market and see how opportunities arise from that.

Speaker #1: So I think this is to be seen. Of course, we are screening the industry. We are screening the performance of airlines. We have a pretty good understanding where weak spots are, where the opportunities may arise.

Speaker #1: But I think you can never take it as definite. We say that the entry barrier to the airline industry is high, but I think the exit barrier is probably ten times higher. Airlines tend to find money, good or bad, to continue to stay alive, to get built.

József Váradi: I think you can never take it definite. We say that the entry barrier to the airline industry is high, but I think the exit barrier is probably 10 times higher. Airlines tend to find money, good or bad, to continue to stay alive, to get bailed, either governments or private investors. We don't know that exactly. We're seeing that given the scenario of a continuously stressed macro environment, that will force changes in the industry. I think we want to be ready for the opportunities coming. As far as we are concerned, we are doing a lot of good work in terms of de-seasonalizing the business. Last year, last winter, we grounded capacity to make sure that we manage capacity adequately to demand to avoid cash negative flying.

Speaker #1: Either governments or private investors, so we don't know that exactly. But what we're seeing is that, given the scenario of a continuously distressed macro environment, that will force changes in the industry.

Speaker #1: And I think we want to be ready for the opportunities coming. As far as we are concerned, we are doing a lot of good work in terms of deseasonalizing the business.

Speaker #1: Last year, last winter, we grounded capacity to make sure that we manage capacity adequately to demand, to avoid cash-negative flying. This time around, I think we will try to be smarter, and we are altering capacity by bringing a set of network opportunities for the customer actually in line with their expectation—where they want to fly.

József Váradi: This time around, I think we try to be smarter. We are adding capacity by bringing a set of network opportunities for the customer actually in line with their expectation where they want to fly. That is a concept of winter sun, and I think that is very strong. It has been gaining a lot of traction in Santo Nino, especially with the vast creation, growing GDP. People have money to spend, not only in summer, but also in the winter period. Skiing is popular. We think we can create opportunities for the network to serve the customer needs better. We want to be a lot more balanced seasonality-wise coming into this winter. You have this unknown at the moment, but I think that unknown will get clarified sooner or later, what market opportunities we may have.

Speaker #1: So that is the concept of winter sun, and I think that is very strong. It has been gaining a lot of traction in Central East Europe.

Speaker #1: Especially with the vast creation and growing GDP, people have money to spend not only in summer but also in the winter period. Skiing is popular.

Speaker #1: And we think we can create opportunities for the network to serve the customer needs better. So, we're going to be a lot more balanced, seasonality-wise.

Speaker #1: Coming into this winter, and then you have this unknown at the moment. But I think that unknown will get clarified sooner or later, and we'll see what market opportunities we may have.

Speaker #1: So I think we are planning on operating the fleet. As we said, we fly what we sell, we sell what we fly. And I think we will be sticking to that, even if it feels like a stretch at this point in time.

József Váradi: I think we are planning on operating the fleet. As we said, we fly what we serve, we serve what we fly. I think we will be sticking to that even if it feels like a stretch at this point in time. That will create tremendous benefits going into next years.

Speaker #1: But that will create tremendous benefit going into the next years.

Speaker #2: Yeah, I think you covered that. I wouldn't read too much into that statement, Harry. I mean, we've always taken advantage of market opportunities as a company.

Ian Malin: Yeah, I think you covered that. I wouldn't read too closely into that statement, Harry. I mean, we've always taken advantage of market opportunities in this company. We saw opportunities in the past when airlines had to reprioritize or repivot. That's how we entered into Romania, for example, a few years ago. There will be capacity allocation changes going into the winter, especially if the fuel price stays high. Our peer group in the low-cost space, as you well know, Harry, is hedged, but not everybody is or can. It requires a level of sophistication. It requires relationships with credit institutions. It requires cash to be able to collateralize in case you don't have the credit lines. We also know that there's a lot of activity happening in this space in Europe. You have a transaction underway in Portugal.

Speaker #2: We saw opportunities in the past when airlines had to reprioritize or re-pivot. That’s how we entered into Romania, for example, a few years ago.

Speaker #2: There will be capacity allocation changes going into the winter, especially if the fuel price stays high. Our peer group in the low-cost space, as you well know, Harry, is hedged, but not everybody is, or can be.

Speaker #2: It requires a level of sophistication. It requires relationships with credit institutions. It requires cash to be able to provide collateral in case you don't have the credit lines.

Speaker #2: And we also know that there's a lot of activity happening in this space in Europe. You have a transaction underway in Portugal. You know that ITA is now being absorbed into the Lufthansa Group and looking at long-haul South America.

Ian Malin: You know that ITA is now being absorbed into the Lufthansa Group and looking at long-haul South America. We're now the second-largest airline in Italy. We see something happening tomorrow, right? We just don't know what tomorrow will bring, but we know that there will be change. We are in a position where we have capacity to be able to take advantage of gaps. Where we operate right now, we still have 60-plus% of our network uncontested, where we have the ability to pass costs into the fares. As costs rise, we're going to have to do so. One thing we can be sure with our cost leadership is that those increases will be lower with Wizz than anybody else. That will create opportunity for customers to choose us based upon price.

Speaker #2: We're now the second-largest airline in Italy. We see something happening tomorrow, right? We just don't know what tomorrow will bring, but we know that there will be change.

Speaker #2: And we are in a position where we have capacity to be able to take advantage of gaps. And where we operate right now, we still have 60-plus percent of our network uncontested.

Speaker #2: We have the ability to pass costs onto our fares. As costs rise, we're going to have to do so. But what we can be sure of with our cost leadership is that those increases will be lower with Wizz than anybody else.

Speaker #2: And that will create opportunities for customers to choose us based on price. And we are in the process of delivering opportunities for customers to choose us based on preference.

Ian Malin: We are in the process of delivering opportunities for customers to choose us based upon preference because we have a better aircraft. We have a newer aircraft. We have a more comfortable aircraft. It's more environmentally efficient. It's more silent. We know that ultimately that combination of experience as well as financial performance and operational performance is what will drive consumer preference.

Speaker #2: Because we have a better aircraft. We have a newer aircraft. We have a more comfortable aircraft. It's more environmentally efficient. It's more silent. And we know that ultimately, that combination of experience, as well as financial performance and operational performance, is what will drive consumer preference.

Speaker #3: Cool. Thank you guys.

Harry Gower: Cool. Thank you both.

Harry Gowers: Cool. Thank you both.

Speaker #4: Cool.

József Váradi: Cool.

Operator: The next question is from Jarrod Castle at UBS. Please unmute yourself and begin with your question.

Speaker #5: The next question is from Jared Castle at UBS. Please unmute yourself and begin with your question.

Speaker #6: Good morning, everyone. First question: you obviously have very high levels of liquidity, but if you look at your net debt to EBITDA, you were making progress on that front.

Jarrod Castle: Morning, everyone. First question. You've obviously got very high levels of liquidity, but if you look at your net debt to EBITDA, I mean, you were making progress on that front. It's now kind of flat year over year. I guess the question is, what level would you get nervous? Is it 4.5? Is it 5? Over time, you want to get it down to 2. Just how you're thinking about that, given also seasonally, you would have got a lot of cash in at the back of the quarter. Just coming back a little bit to kind of changes happening in terms of stage length and the adjustments of this year. How should we think about it going forward, so March 2028? Is that a very much more normal year in terms of ASKs matching seats? Any color on that? Thanks.

Speaker #6: It's now kind of flat year over year. I guess the question is, at what level would you get nervous — as 4.5, as 5?

Speaker #6: Over time, you want to get it down to two. But just how you're thinking about that, given also seasonally, you would have got a lot of cash in at the back of a quarter.

Speaker #6: And then, just coming back a little bit to the changes happening in terms of stage length and the adjustments this year—how should we think about it going forward?

Speaker #6: So, March 28—is that a much more normal year in terms of ASKs matching seats? Any color on that? Thanks.

Speaker #7: I would be the second one, and you're asking the first one. So, with regard to stage length, I think you should see it as not necessarily like an overnight adjustment.

József Váradi: I will pick the second one, and you ask me to address the first one. With regard to stage lengths, I think you should see it as a, not necessarily like an overnight adjustment of the business, but you see the ramp-up of domestic operations. I mean, we have reallocated a lot of long Middle Eastern capacity to a shorter-haul European capacity. That's not going to reverse meaningfully. Maybe a little, but not dramatically. We will continue to expand domestic operations in Europe. If you want to take kind of good planning assumption, I would say that if you assume 1,500 kilometers as a baseline for Wizz Air, once this capacity evolution gets consolidated, and I think in a good year from now, you will see a more consolidated platform when ASK and seat will get aligned again at around the 1,500-kilometer mark.

Speaker #7: ...of the business. But you see the ramp-up of domestic operations. I mean, we have reallocated a lot of long Middle Eastern capacity to a shorter-haul European capacity.

Speaker #7: That's not going to reverse meaningfully—maybe a little, but not dramatically. And we will continue to expand domestic operations in Europe. But if you want to take kind of good planning, subsequently, I would say that if you assume 1,500 kilometers as a baseline for Wizz 1, once this capacity evolution gets consolidated—and I think in a good year from now, you will see a more consolidated platform when ASK and seat will get aligned again.

Speaker #7: At around the 1,500-kilometer mark, that would be a good assumption. Obviously, there might be some variation to that, but it's not going to be—it's not going to be that great.

József Váradi: That would be a good assumption. Obviously, there might be some variation to that, but it's not going to be that great. We are deliberately descaling medium haul, like Middle Eastern operation. Those are flights of thousands of kilometers, and we are deliberately scaling up domestic flying. They are a few hundreds of kilometers. There is this rebalancing of stage length. I would plan on 1,500 fairly stable as of the next financial year, allowing some degree of variation, but not huge.

Speaker #7: I mean, we are deliberately descaling medium-haul, like Middle Eastern operation. Those are flights of thousands of kilometers—thousands of kilometers. And we are deliberately scaling up domestic flying at around a few hundreds of kilometers, so that is rebalancing of stage length.

Speaker #7: But I think, I mean, I would plan on 1,500, fairly stable as of the next financial year, allowing some degree of variation but not huge.

Speaker #5: Jared, on the question of net debt to EBITDA, it's the same as it was in Q1 '26. This is at a slightly more elevated level than what it was last year.

Veronika Spanarova: Jarrod, on the question to net debt to EBITDA, it's the same as it was Q1 2026. This is at the slightly more elevated level than what it was at the last year. There are two factors. One is the new aircraft and the financing, which is relevant to that. We expect the net debt to EBITDA leverage to stay slightly elevated for this year and then going down from next year, also with the redeliveries and also with the growth of the EBITDA.

Veronika Špaňárová: Jarrod, on the question to net debt to EBITDA, it's the same as it was Q1 2026. This is at the slightly more elevated level than what it was at the last year. There are two factors. One is the new aircraft and the financing, which is relevant to that. We expect the net debt to EBITDA leverage to stay slightly elevated for this year and then going down from next year, also with the redeliveries and also with the growth of the EBITDA.

Speaker #5: There are two factors. One is the new aircraft and the financing, which is relevant to that. We expect the net debt-to-EBITDA leverage to stay slightly elevated for this year.

Speaker #5: And then going down from next year also, with the redeliveries, and also with the growth of the EBITDA.

Speaker #2: Yeah, if I might just quickly jump in on that point to clarify. So the gross debt number, Jared, and everyone, is going to go up as this business grows.

Ian Malin: Yeah. If I might just quickly jump in on that point to clarify. The gross debt number, Jarrod and everyone, is going to go up as this business grows. It is just simple mathematics based upon more aircraft coming, the total size of the fleet growing, and the way that those aircraft get financed end up creating more debt. What did not happen this period is the EBITDA growth. As we explained, we had a war where we were more exposed than others to, and we had a fuel price spike, which created a 21% increase in our unit costs on that. I think it is important to point out that this debt does not have a sort of bullet maturity where we are facing a wall that we are going to run into. This debt matches the lease terms of our aircraft.

Speaker #2: It's just simple mathematics: based upon more aircraft coming, the total size of the fleet is growing. And the way that those aircraft get financed ends up creating more debt.

Speaker #2: What didn't happen this period is the EBITDA growth. But as we explained, we had a war where we were more exposed than others to.

Speaker #2: And we had a fuel price spike, which created a 21% increase in our unit costs on that. So I think it's important to point out that this debt does not have a sort of bullet maturity where we are facing a wall that we are going to run into.

Speaker #2: This debt matches the lease terms of our aircraft. We have experienced a lot of recent aircraft lease growth, which means that we have 12 years to pay it off.

Ian Malin: We have a lot of recent aircraft lease growth happening, which means that we have 12 years to pay it off. The maturity profile of this, on average, in 10, 12 years in terms of our leases. While the debt coming out of the balance sheet is instantaneous, the repayment profile is over 12 years. We do need to be able to recognize that there are going to be periods where things happen, like a shock again, but that this business is resilient and will ride through this much like it has. That number that you asked for is at what point do we get nervous? Sure, we are monitoring and we are nervous about every financial metric of this company, but that number is going to be changing. It is going to be going down, not up.

Speaker #2: The maturity profile of this, on average, is 10–12 years in terms of our leases, so while the debt coming out of the balance sheet is instantaneous, the repayment profile is over 12 years.

Speaker #2: And so, we do need to be able to recognize that there are going to be periods where things happen, like a shock again. But this business is resilient and will ride through this, much like it has before.

Speaker #2: So, that number that you asked for is: at what point do we get nervous? I mean, sure, we're monitoring, and we're nervous about every financial metric of this company.

Speaker #2: But that number is going to be changing. It's going to be going down, not up. And so we're confident that as we continue to see this cost excellence, and we get these routes matured and this capacity deployed, and that we're able to build the presence and market share that we want in terms of profitable market share, that will then ultimately drive the EBITDA number up and that ratio down.

Ian Malin: We are confident that as we continue to see this cost excellence, and we get these routes matured and this capacity deployed, and that we are able to build the presence and market share that we want in terms of profitable market share, that will then ultimately drive the EBITDA number up and that ratio down.

Speaker #6: Great, thanks. Thanks for the clarity.

Jarrod Castle: Great. Thanks. Thanks for the clarity.

Speaker #5: The next question is from Ruri Kallinen at RBC Capital Markets. Please unmute yourself and begin with your question.

Operator: The next question is from Ruairi Cullinane at RBC Capital Markets. Please unmute yourself and begin with your question.

Speaker #8: Yes, good morning. First question is on other income in the full year, given you may have some visibility there. So, should we expect other income to moderate from €107 million in the first quarter?

Ruairi Cullinane: Yes, good morning. First question is on other income in the full year, given you may have some visibility there. Should we expect other income to moderate from EUR 107 million in Q1? Would a range of EUR 300 to 400 million be a reasonable expectation? You show in slide eight that depreciation costs will fall in full year 2028 due to ceo retirements. Should we expect that to continue into full year 2029? Thank you.

Speaker #8: Would a range of $300 million to $400 million be a reasonable expectation? And then you show in slide 8 that the depreciation costs will fall in full year ’28 due to CO retirements.

Speaker #8: Should we expect that to continue into full year '29? Thank you.

Speaker #5: So, I'll take it in the reverse order, if I may. The depreciation—yes, expect this to fall down. And as we mentioned previously, the depreciation, and in fact also the maintenance line, are elevated and are impacted by the redelivery of the CO aircraft.

Veronika Spanarova: I'll take it in the reverse order. If I may, the depreciation. Yes, expect it to fall down. As we mentioned previously, the depreciation and in fact also the maintenance line are elevated and are impacted by the redelivery of the ceo aircraft. What we have seen is that last year we had 16 redeliveries. We expect 24 this year, that has an impact on the depreciation and also on the maintenance for two factors, is that the aircraft before it is returned, there is an increased maintenance which is needed to be done. Also in the last stages of the aircraft before being redelivered, the depreciation is elevated. These are the factors which are impacting the depreciation line this year. As we will see the ceos exiting the fleet, we expect the decline on the depreciation line. On the other income.

Veronika Špaňárová: I'll take it in the reverse order. If I may, the depreciation. Yes, expect it to fall down. As we mentioned previously, the depreciation and in fact also the maintenance line are elevated and are impacted by the redelivery of the ceo aircraft. What we have seen is that last year we had 16 redeliveries. We expect 24 this year, that has an impact on the depreciation and also on the maintenance for two factors, is that the aircraft before it is returned, there is an increased maintenance which is needed to be done. Also in the last stages of the aircraft before being redelivered, the depreciation is elevated. These are the factors which are impacting the depreciation line this year. As we will see the ceos exiting the fleet, we expect the decline on the depreciation line. On the other income.

Speaker #5: What we have seen is that last year we had 16 redeliveries. We expect 24 this year, and that has an impact on the depreciation.

Speaker #5: And also on the maintenance for two factors. Is that the aircraft before it is returned, there is an increased maintenance which is needed to be which is needed to be done.

Speaker #5: And also, in the last stages of the aircraft before being redelivered, the depreciation is elevated. So these are the factors which are impacting the depreciation line.

Speaker #5: This year, as we will see the CO's exiting the fleet, we expect the decline in the depreciation line. And on the other income, so what we expect as mentioned on the sale and leasebacks, there is an increased there is an increased benefit in the Q1.

Veronika Spanarova: What we expect, as mentioned on the sale and leasebacks, there is an increased benefit in Q1 2027 which is compared to Q1 2026, that on the full year basis, that will be lower than the last year because of the profile of the sale and leasebacks, especially in Q4 where it was higher last year than what we expect this year. It was around EUR 260 last year. We expect that to be around EUR 200 this year.

Veronika Špaňárová: What we expect, as mentioned on the sale and leasebacks, there is an increased benefit in Q1 2027 which is compared to Q1 2026, that on the full year basis, that will be lower than the last year because of the profile of the sale and leasebacks, especially in Q4 where it was higher last year than what we expect this year. It was around EUR 260 last year. We expect that to be around EUR 200 this year.

Speaker #5: 27, which is compared to Q1 26, that on the full year basis, that will be lower than the last year because of the profile of the sale and leasebacks, especially in the fourth quarter where it was higher where it was higher last year than what we expect than what we expect this year.

Speaker #5: So it was around 260 last year. We expect that to be around 200 this year. The next question is from W. Shanley at Goodbody.

Operator: The next question is from Dudley Shanley at Goodbody. Please unmute yourself and begin with your question.

Speaker #5: Please unmute yourself and begin with your question.

Dudley Shanley: Good morning, everyone. Two questions, if I may. The first one's for Ian. It's just a clarification on the comments you made about the booking curve. I thought you said it was elongating previously and had shifted back a little bit, but maybe I picked it up the wrong way. If we could just get a bit more detail on that. Thinking longer term, you've mentioned investing future growth today, sector productivity is increasing, utilization's increasing. As we look forward beyond the GTF issues, do you think you have a structurally stronger business now? Thank you.

Speaker #6: Good morning, everyone. Two questions, if I may. The first one is for Ian. It's just a clarification on the comments you made about the booking curve.

Speaker #6: I thought you said it was elongating previously and had shifted back a little bit, but maybe I picked it up the wrong way. So if we could just get a bit more detail on that?

Speaker #6: Thinking longer term, you've mentioned investing for future growth today. Sector productivity is increasing. Utilization is increasing. As we look forward, beyond the GTF issues, do you think you have a structurally stronger business now?

Speaker #6: Thank you.

József Váradi: Let me take the second one first. Definitely. We have done quite a lot of analysis internally to understand how the business has been affected over the last few years and what drove those affections. The single biggest issue is the GTF grounding. If you really think about the level of disruption to the business and to what extent it has been affected the financial performance on the cost side, on the revenue side, on the balance sheet, it's been hugely disruptive. In 18 months from now, we are out of it. I think that one on its own merit will kind of reset the business back to where we used to be. Let's not forget that next year, next financial year, we're going to be hitting the 100 million mark on passenger numbers. That will make us a very large-scaled business in Europe.

Speaker #2: Let me take the second one first. So, definitely—I mean, we have done quite a lot of analysis internally to understand how the business has been affected over the last few years and what drove those effects.

Speaker #2: I mean, the single biggest issue—the single biggest issue—is the GTF grounding. If you really think about the level of destruction to the business and to what extent it has affected the financial performance, on the cost side, on the revenue side, on the balance sheet, it's been hugely, hugely disruptive.

Speaker #2: And in 18 months from now, we are out of it. I think that one, on its own merit, will kind of reset the business back to where we used to be.

Speaker #2: And let's not forget that next year, next financial year, we're going to be hitting the 100 million mark on passenger numbers. I mean, that will make us a very large-scale business in Europe.

József Váradi: This is pretty close to the current size of EasyJet. This is a lot bigger than any of the legacy carriers. We are already bigger with Wizz Air. You have the major disruption to the business eliminated by that time at a different scale versus when that happened and that started affecting the business. I think that will make us structurally a lot better airline than what we are today. On top of that, I think you should also kind of appreciate what is happening in the fleet renewal side of the equation. We are converting fully into A321neo. We are up-gauging pretty much fully into A321s, with a few exceptions, but 95% of fleet is going to be A321s. Those are huge structural benefits arising from the fleet side.

Speaker #2: This is pretty close to the current size of easyJet. This is a lot bigger than any of the legacy carriers. We are already bigger in that regard.

Speaker #2: So you have the major disruption to the business eliminated by that time, at a different scale versus when that happened and that started affecting the business.

Speaker #2: I think that will make us, structurally, a lot better airline than what we are today. And, on top of that, I think you should also kind of appreciate what is happening in the fleet, the newer side of the equation.

Speaker #2: So we are converting FOD into NEO. We are upgrading pretty much FOD into A321s with a few exceptions, but 95% of the fleet is going to be A321s.

Speaker #2: I mean, those are huge structural benefits arising from the fleet side. And I think you can expect us you should expect us to be able to ramp up the assets what we are dealing with airplanes as well as labor to an optimum level of productivity, fleet utilization, crew productivity, etc.

József Váradi: I think you should expect us to be able to ramp up the assets that we are dealing with, airplanes as well as labor, to an optimum level of productivity, fleet utilization, group productivity, et cetera. Absolutely, we're going to be a lot better business, structurally speaking. Yeah, of course, at the moment, the revenue line is hit by the high level of capacity growth. Again, and this can be mathematically proven, what you invest today is going to benefit you tomorrow through maturity, and you're going to see that maturity ramp up happening very quickly going into the next financial years, which will also ramp up the revenue line.

Speaker #2: So, absolutely, we're going to be a lot better business, structurally speaking. And, yeah, I mean, of course, at the moment, the revenue line is hit by the high level of capacity growth.

Speaker #2: But again, and this can be mathematically proven, what you invest today is going to benefit you tomorrow through maturity. And you're going to see that maturity ramp-up happening very quickly.

Speaker #2: Going into the next financial years, we should also ramp up the revenue line. So, you have this elevation of your spending, relatively industry on the coastline too—we call it the pathway to cost leadership.

József Váradi: You have this elevation of your spending relative to the industry on the cost side to record the pathway to cost leadership, at the same time, you will benefit from the maturity of the revenues that you are investing into today. Yes, definitely.

Speaker #2: But at the same time, you will benefit from the maturity of the revenues you are investing into today. So, yes, definitely.

Speaker #1: And then, Dudley, hi. Thank you. So, on that booking curve comment, I was referring to the chart from last quarter, where we saw this shift post-war onset to short-term behavior.

Ian Malin: Dudley, hi. Thank you. On that booking curve comment, I was referring to the chart from last quarter where we saw this shift post-war onset to short-term behavior, our numbers were indicating that it was shifting back following April. May and June were showing more normal behavior, similar to what we saw in January and February. What I said is that actually that has flipped again. In going into July and now into August, we're seeing moderate short-term behavior, and we saw that with a bit of a pickup at the end of July, and we're seeing that that activity in August is still continuing. I guess the way to read into that is that there's some late summer activity building for people doing their travels.

Speaker #1: And then our numbers were indicating that it was shifting back following April to May and June, which were showing more normal behavior similar to what we saw in January and February.

Speaker #1: What I said is that, actually, that has flipped again. And going into July, and now into August, we're seeing moderate short-term behavior, and we saw that with a bit of a pickup at the end of July.

Speaker #1: And we're seeing that that activity in August is still continuing. So I guess the way to read into that is that there's some late summer activity building for people doing their travels.

Speaker #6: That's great. Thank you.

Dudley Shanley: That's great. Thank you.

Speaker #4: That's great. Thank you.

József Váradi: That's great. Thank you.

Speaker #5: There are no further questions via the webinar. We will now move to written Q&A. The first few questions are from Connor Dwyer at City.

Operator: There are no further questions via the webinar. We will now move to written Q&A. The first two questions are from Conor Dwyer at Citi. The first one is, Should we be modeling no groundings by end of FY 2028, and if not, when? The second question is, No need to answer if already answered by point this is reached. CASK ex-fuel -2% in Q1 2027, H1 guided to be up LSD%. Am I right that this implies a run rate for Q2 back to +MSD%?

Speaker #5: The first one is, should we be modeling no groundings by end of FY28? And if not, when? And the second question is—no need to answer if it's already been addressed by that point.

Speaker #5: This is reached. CASK ex-fuel minus 2% in Q1 2027, H1 guide to be up, LSD percent. Am I right that this implies a run rate for Q2 back to plus MSD percent?

Speaker #2: Yeah, I think, let me kick it off with the grounding question. So the current plan is to on-ground the entire GTF forward fleet by the end of calendar year 2027.

József Váradi: Yeah. Let me kick it off with the grounding question. The current plan is to unground the entire GTF-powered fleet by the end of calendar year 2027. Now, you also have to know that there is some yet minor degree of distress coming through the V2500-powered fleet. The market is running dry on spare engines. Of course, Pratt & Whitney is congested on maintenance work and shop capacity and parts availability with that regard. Being the largest customer of Pratt & Whitney effectively, we're seeing that the plans they are having in place to be fully ungrounded on engines by the end of calendar 2027, has been tracked accordingly to plan. I don't think that the risk is huge to that plan. You cannot guarantee it until you are through the cycle.

Speaker #2: Now, you also have to know that there is some, yet minor, degree of distress coming through the V25 from the powered fleet. So, the market is running dry on spare engines.

Speaker #2: So, and of course, Pratt & Whitney is congested on maintenance work and short on capacity and parts availability in that regard. So, being the largest customer of Pratt & Whitney effectively, we’re seeing that the plans we have in place to be fully ungrounded on engines by the end of calendar '27 have been tracking accordingly to plan.

Speaker #2: So I don't think that the risk is huge to that plan. But you cannot guarantee it until you are through the cycle. And as of then, I think you should pretty much expect no grounding.

József Váradi: As of then, I think you should be pretty much expecting no grounding. There should be no reason to ground, unless there is another event happening in the industry that, or around the industry or geopolitically, that would force you to ground. I think that would come as temporary as opposed to structural. Structural grounding, we should be out in 18 months from now.

Speaker #2: There should be no reason to ground unless there is another event happening in industry, or around the industry or geopolitically, that would force you to ground.

Speaker #2: But I think that would come as temporary, as opposed to structural. So, structurally, grounding should be out in 18 months from now.

Speaker #1: Yeah, by the end of that 28.

Ian Malin: Yeah. By the end of F28.

Speaker #2: Yeah.

József Váradi: Yeah.

Ian Malin: Yeah.

Speaker #5: And I will comment on the ex-fuel cost in H1. As it was mentioned, the H1, and that's what we will see in Q2 as well.

Veronika Spanarova: I will comment on the CASK ex-fuel H1. As it was mentioned, the H1, and that's what we will see in Q2 as well, is impacted by two factors, which are temporary but which we will be incurring. One is the redelivery of the ceo aircraft, and that comes with the higher depreciation and the higher maintenance. These are the factors which will be playing into a temporary cost increase in the Q2 as these events occur. As mentioned, we are very much focused on decreasing the cost, decreasing the CASK ex-fuel. We are making all the efforts to keep the cost down. This is a transitory element which is impacting the cost, and this is what we will see in Q2 as well.

Veronika Špaňárová: I will comment on the CASK ex-fuel H1. As it was mentioned, the H1, and that's what we will see in Q2 as well, is impacted by two factors, which are temporary but which we will be incurring. One is the redelivery of the ceo aircraft, and that comes with the higher depreciation and the higher maintenance. These are the factors which will be playing into a temporary cost increase in the Q2 as these events occur. As mentioned, we are very much focused on decreasing the cost, decreasing the CASK ex-fuel. We are making all the efforts to keep the cost down. This is a transitory element which is impacting the cost, and this is what we will see in Q2 as well.

Speaker #5: It is impacted by two factors, which are temporary but which we will be incurring. One is the redelivery of the CEO aircraft, and that comes with higher depreciation and higher maintenance.

Speaker #5: So these are the factors which will be playing into a temporary cost increase in cost increase in the Q2 as these events occur. As mentioned, we are very much focused on decreasing the cost, decreasing the X fuel cost.

Speaker #5: And we are making all the efforts to keep the cost down. This is a transitory element which is impacting the cost, and this is what we will see in Q2 as well.

Speaker #5: The next questions are from Muneeba Khayani from Bank of America. The first is: What are your thoughts on winter capacity planning?

Operator: The next questions are from Muneeba Kayani from Bank of America. The first is: what are your thoughts on winter capacity planning?

József Váradi: My thoughts on winter capacity planning is that we are, as said, de-seasonalizing the market. We are a lot more skewed towards capacity that is lesser demanded in the period, like winter sun, skiing, et cetera. We will do a lot more of that type of capacity than before, to make sure that we are really converting kind of underperforming capacity otherwise into performing capacity. I think I mined fleet utilization as a concept, because you have to recognize the differences when you lease airplanes, what we do, you have significant fixed cost observed in the business should you decide to ground because of big demand. I mean, that fixed cost would spread across a narrower cost base, that would push your unit cost up. You would create a problem as well, what you are trying to fix.

Speaker #2: My thoughts on winter capacity planning is that we are, as said, deseasonalizing the market. So, we are a lot more skewed towards capacity that is lesser demanded in the period, like winter, sun, skiing, etc.

Speaker #2: So we will do a lot more of that type of capacity than before, to make sure that we are really converting kind of underperforming capacity.

Speaker #2: Otherwise, into performing capacity. I think we mind fleet utilization as a concept, because you have to recognize differences when you lease airplanes, which is what we do.

Speaker #2: You have significant fixed costs observed in the business. Should you decide to ground because of big demand? I mean, that fixed cost would spread across a narrower cost base.

Speaker #2: So that would push your unit cost up, so you would create a problem as well, but you are trying to fix it. And that is quite different versus when you own the plane. I think you have a bit more flexibility for seasonal grounding and adjusting for demand.

József Váradi: That is quite different versus when you own the plane. I think you have a bit more flexibility for seasonal grounding, adjusting for demand. I think we are confident that the program we are putting in place makes a lot of commercial and financial sense. As said before, we expect some opportunities coming up in the winter period, resulting from the weaknesses of other airlines. We are observing that in the market, and we will act accordingly to those opportunities. It will be still a high-growth period, probably the last one, going forward.

Speaker #2: But I think we are confident that the program we are putting in place makes a lot of commercial and financial sense. And, as said before, we expect some opportunities coming up in the winter period, starting from the weaknesses of other airlines.

Speaker #2: So we are observing that in the market, and we would like to act accordingly to those opportunities. So it will still be a high growth period, probably the last one.

Speaker #2: Going forward, and as of fiscal '28, you're going to be seeing this moderated capacity plan, moderated gross plan, because this year really is kind of catching up to standards on many fronts.

József Váradi: As of fiscal 2028, you're going to be seeing this moderated capacity plan, moderated growth plan, because this year really is kind of catching up to standards on many fronts to make sure that the necessary review comes through for the benefit of the business and for the benefit of financial performance going into next financial year.

Speaker #2: To make sure that the maturity will come through for the benefit of the business and for the benefit of financial performance going into the next financial year.

Speaker #1: Was there a second question from Muneeba?

Ian Malin: Was there a second question from Muneeba?

Speaker #5: Yes. The next question is: What is the RASC and fare trends in your bookings for F2Q currently? July had a high 32% traffic growth, so I want to understand the price stimulation needed to achieve this capacity growth.

Operator: Yes. Their next question is, what is the RASK and fare trends in your bookings for Q2 currently? July had high 32% traffic growth, we want to understand the price stimulation needed to achieve this capacity growth.

Speaker #1: Yeah, so we're still seeing strong demand. We're booking ahead in terms of August and September for Q2, so we have a modest buffer there on load factor.

Ian Malin: Yeah. We're still seeing strong demand. We're booking ahead in terms of August and September for Q2. We have a modest buffer there on load factor. The fare trends are in line with what we've been seeing on Q1, which is we're looking at something between mid-single digits to high single digits down on fares. Although, with that close in booking increasing, we're monitoring that closely to see if that ends up more towards the middle of the single-digit range. So far we're seeing, I would say, okay demand and okay pricing given the fact that we're growing 5 times faster than the next competitor in the period. We are roughly 79% and 80% booked for August, and somewhere between 40% and 50% booked in September.

Speaker #1: And the fare trends are in line with what we've been seeing in Q1, which is we're looking at something between sort of mid-single digits to high-single digits down on fares.

Speaker #1: Although with that closing booking increasing, we're monitoring that closely to see if that ends up more on the high end, or towards the middle of the sort of single-digit range.

Speaker #1: So, so far, we're seeing, I would say, okay demand and okay pricing, given the fact that we're growing five times faster than the next competitor in the period.

Speaker #1: And so, we are roughly 79% to 80% booked for August and somewhere between 40% and 50% booked in September. So those, like I said, are trending ahead of last year, and we're now in the process of managing the peak summer period to make sure that we are able to maximize what we can in terms of our RASC performance.

Ian Malin: Those, like I said, are trending ahead of last year. We're now in the process of managing the peak summer period to make sure that we are able to maximize what we can in terms of our RASK performance.

Speaker #5: The next question is, CASK ex-fuel was down 1.9% in F1Q. Why do you expect F1H CASK ex-fuel to be up low single digits?

Operator: Their next question is, CASK ex-fuel was down 1.9% in F1Q. Why do you expect F1H CASK ex-fuel to be up low single digits? Is this related to compensation and sales and leaseback in F2Q?

Speaker #5: Is this related to compensation and sale and leaseback in F2Q?

Speaker #3: I can comment. I believe that I was already referring to this question in one of the previous answers. The main factors here are the increased depreciation and the maintenance, which is related to the redelivery of the aircraft.

Veronika Spanarova: I can comment. I believe that this question I was referring to already in one of the previous questions. The main factors here are the increased depreciation and the maintenance which is related to the redelivery of the aircraft.

Veronika Špaňárová: I can comment. I believe that this question I was referring to already in one of the previous questions. The main factors here are the increased depreciation and the maintenance which is related to the redelivery of the aircraft.

Speaker #1: Yeah, I think it's really more about the increased volume of those sorts of returns happening in this period. Plus, as these aircraft exit, when you have more aircraft at the very end of their period with Wizz, they attract the highest amount of depreciation in their life cycle.

Ian Malin: Yeah. I think it's really more about more volume of those sorts of returns happening in this period, plus as these aircraft exit, when you have more aircraft at the very end of their period of time with Wizz Air, they attract the highest amount of depreciation in their life cycle. You're hit by this compounding effect, which as soon as they're redelivered, those costs drop off. This is why we keep on mentioning that in the near term to medium term, we're seeing strong cost improvement performance. We don't see any reason why that will change, because we can identify where those problems are. In terms of the rest of the cost base, as József mentioned, bundled within the airports and handling and en route line is airports, which is performing better as we always said it would as we get back to growth.

Speaker #1: And so you're hit by this compounding effect, which—as soon as they're redelivered—then, you know, those costs drop off. And so this is why we keep on mentioning that in the near to medium term, we're seeing strong cost improvement performance, and we don't see any reason why that will change, because we can identify where those problems are in terms of the rest of the cost base.

Speaker #1: As Joseph mentioned, bundled within the airports and handling and en route line is airports, which is performing better, as we always said it would as we get back to growth.

Speaker #1: We are seeing efficiency from the crew due to much better operational planning, as well as fewer aircraft unparked. This means that we're now able to deploy the crew efficiently, as opposed to having crew inefficiently waiting for aircraft to come back online.

Ian Malin: We are seeing efficiency from the crew due to much better operational planning, as well as fewer aircraft unparked. Which means that we're now able to deploy the crew efficiently, as opposed to having crew inefficiently waiting for aircraft to come back online. You have this operational excellence that's driving the disruption. Of course, summer's always a period of challenge because we end up flying so much and there's so many different issues that we're dealing with. There was fires and weather and things like that. We're still going to see much better improvement because the operational performance is a financial strategy. It helps us on the cost side and it helps me on the revenue side because people get more confidence in booking. Those are the drivers on the cost side. I think, Vradi, you want to add something as well?

Speaker #1: And then you have this operational excellence that's driving the disruption. Of course, summer is always a period of challenge because we end up flying so much, and there are so many different issues that we're dealing with.

Speaker #1: There were fires and weather and things like that. But we're still going to see much better improvement because the operational performance is a financial strategy.

Speaker #1: It helps us on the cost side, and it helps me on the revenue side because people get more confidence in booking. So those are the drivers on the cost side. I think, Veronica, you want to add something as well.

Speaker #5: Yes, and I would add one more point.

Veronika Spanarova: Yes. I would add one more point. As I mentioned, we have to look also at the other cost and income on the sell and leaseback. There was a benefit of EUR 25 million year-on-year. This is due to the timing of the sell and leasebacks throughout the year. That was a bigger difference in the Q1 than it will be in the Q2, that will drive the difference of the other income slower in the Q2.

Veronika Špaňárová: Yes. I would add one more point. As I mentioned, we have to look also at the other cost and income on the sell and leaseback. There was a benefit of EUR 25 million year-on-year. This is due to the timing of the sell and leasebacks throughout the year. That was a bigger difference in the Q1 than it will be in the Q2, that will drive the difference of the other income slower in the Q2.

Speaker #3: As I mentioned, we have to look also at the other costs and income on the sale and leaseback. There was a benefit of €25 million year on year. This is due to the timing of the sale and leaseback throughout the year.

Speaker #3: That was a bigger difference in the Q1 than it will be in the Q2. So that will drive the difference of the other income lower in the Q2.

Speaker #1: Correct. 75 million more in Q1 versus Q2 in that whole basket—25.

Ian Malin: Roughly EUR 75 million more in Q1 versus Q2.

Veronika Spanarova: Yeah

Veronika Špaňárová: Yeah

Ian Malin: in that whole basket. Yeah. 25.

Speaker #5: And then the next question was, where do you see strategic opportunities with the consolidation of the industry?

Operator: Their next question was, where do you see strategic opportunities with consolidation of the industry?

Speaker #1: I think we covered that already, right?

Ian Malin: I think you covered that already, right?

József Váradi: I don't think we would want to add more than what we have said. We are watching the market, observing what is happening, and we'll form a view when we kind of cross that bridge when we come to it.

Speaker #2: I don't think we would want to add more than what we have said in that regard. We are watching the market, observing what is happening, and we form a view when we kind of—let's cross that bridge when we come to it.

Speaker #1: I think this is a written question, so we already covered it in one of the prior questions.

Ian Malin: I think this was a written question, we already covered it on one of the prior questions.

Speaker #5: We now have a verbal question from Steven Furlong at Davey. Please unmute yourself and begin with your question.

Operator: We now have a verbal question from Stephen Furlong at Davy. Please unmute yourself and begin with your question.

Speaker #4: Yeah. Hi there. Okay, just two questions. I was wondering, one maybe for Jozsef, what your assumption is—being that as you reduce the route churn, there would be better airport deals available in that case?

Stephen Furlong: Yeah. Hi there. Okay. Just two questions, I was wondering, one maybe for Jan. With your assumption being, as you reduce the route churn, that there would be better airport deals available in that case, because I think you've had an issue in the last couple of years of massive route churn. The second question, I think this might be more Joe, but in terms of some ramp-up in domestic markets, say Italy, Spain. How are labor relations? Are you happy that, bluntly, there's no threat of unionization, et cetera? Thank you.

Stephen Furlong: Yeah. Hi there. Okay. Just two questions, I was wondering, one maybe for Ian. With your assumption being, as you reduce the route churn, that there would be better airport deals available in that case, because I think you've had an issue in the last couple of years of massive route churn. The second question, I think this might be more József, but in terms of some ramp-up in domestic markets, say Italy, Spain. How are labor relations? Are you happy that, bluntly, there's no threat of unionization, et cetera? Thank you.

Speaker #4: Because I think you've had an issue in the last couple of years with massive route churn. And the second question—I think this might be more for Joe—but in terms of some ramp-up in domestic markets, say Italy and Spain, how are labor relations?

Speaker #4: How are you happy that, bluntly, there's no threat of unionization, etc.? Thank you.

Speaker #1: Maybe I'll start with the second one. Look, I mean, I think contrary to some of the perceptions out there, we are incredibly labor-friendly in the company.

József Váradi: Maybe I start with the second one. Look, I think contrary to some of the perceptions out there, we are incredibly labor-friendly in the company. I think we are the only airline probably on the planet that the CEO goes to see every base we have periodically, twice a year, to talk to the crew. You have your pilots and cabin crew in front of you, and you exchange views. They can tell you whatever they want to tell you. It's a direct dialogue. We have an institution inside the company called the People's Council that is really trying to bridge communications further on between management and people on the ground to make sure that people's voice is heard. We are extremely engaged with labor matters, and we are extremely friendly to our own people.

Speaker #1: I think we are the only airline, probably on the planet, where the CEO goes to see every base we have periodically, twice a year, to talk to the crew.

Speaker #1: So you have your pilots and cabin crew in front of you, and you exchange views. They can tell you whatever they want to tell you.

Speaker #1: It's a direct dialogue. We have an institution inside the company called the People's Council that is really trying to bridge communications further between management and the people on the ground, to make sure that people's voices are heard.

Speaker #1: So, we are extremely engaged with labor matters, and we are extremely friendly to our own people. Yes, we are not unionized, because we think that our model is better than the union model.

József Váradi: Yes, we are not unionized because we think that our model is better than the union model. Clearly, the history of the last 22 years proves it because it is not going to be me who will unionize the company, but it is not going to be the union, an outside union, who will unionize the company either. It is going to be our own people to unionize or not. Notwithstanding their rights, they have opted for maintaining the current culture, which personally I think is a lot more beneficial to the employees and every single constituent in the company. That model works in the UK, that model works in Italy, and you can argue that those countries are more exposed to matters like this, and I think the model will work in Spain as well.

Speaker #1: And clearly, the history of the last 22 years proves it, because it's not going to be me who will unionize the company. But it's not going to be the union and outside union who will unionize the company either.

Speaker #1: It's going to be our own people to unionize or not. And, notwithstanding that right, they have opted for maintaining the current culture, which, personally, I think is a lot more beneficial to the employees than every single constituent in the company.

Speaker #1: And that model works in the UK. That model works in Italy. And you can argue that those countries are more exposed to matters like this.

Speaker #1: And I think the model will work in Spain as well. It is important that people understand what we are doing, how we are doing it, and how they benefit from that.

József Váradi: It is important that people understand what we are doing and how we are doing it and how they benefit from that. I can tell you that I think we are probably the most labor-friendly environment of any airline on the planet.

Speaker #1: But I can tell you that I think we are probably the most labor-friendly environment of any airline on the planet. Thank you. And in terms of your question, Steven, on airport deals and how we're going to continue to see that—

Ian Malin: Thank you. In terms of your question, Stephen, on airport deals and how we are going to continue to see that. Let us be clear. There is always going to be an element of churn for ULCC. Before you think that we are a bunch of pussycats that do not know how to drive negotiations with airports, we approach it from a slightly more benign perspective, but we are still trying to drive the best for our shareholders and for our stakeholders. The churn that we are talking about that we are going to reduce is the own goal, the self-inflicted wounds. Major things like, think about the reaccommodation we did out of the Middle East last year, moving everything back, or the changes required from taking an A321XLR program and then reconverting it into an A321neo program with much different profile of travel.

Speaker #1: So let's be clear—there's always going to be an element of churn in this, for ULCC. And before you think that we're a bunch of pussycats who don't know how to drive negotiations with airports, we approach it from a slightly more benign perspective.

Speaker #1: But we’re still trying to drive the best for our shareholders and for our stakeholders. The churn that we’re talking about, that we’re going to reduce, is the stuff that is sort of the own goal—the self-inflicted wounds.

Speaker #1: Major things, like think about the reaccommodation we did out of the Middle East last year—moving everything back, or the changes that required from taking an XLR program and then reconverting it into a NEO program with a much different profile of travel.

Speaker #1: Looking at what we did in Austria, for example, looking at the capacity that we didn't fly last year in order to manage capacity, which is now compounding the problem this year and giving us this surge that we're digesting.

Ian Malin: Looking at what we did in Austria, for example, looking at the capacity that we did not fly last year in order to manage capacity, which is now compounding the problem this year and giving us this surge that we are digesting, or even just some of the rebalancing we did in other Western markets. What we are trying to do is avoid mass impact with big swaths of change, but constantly calibrating and improving our cost base and being a reliable partner and having airlines understand that it is much better to collaborate and reward us for the capacity than it is to use a stick. More nuance there. I am learning the space because I am new to the role, but I have been involved in some of the discussions with the airports and understanding exactly what their needs are. There is a balance there.

Speaker #1: Or even just some of the rebalancing we did in other Western markets. What we're trying to do is avoid mass impact with big swaths of change.

Speaker #1: But constantly calibrating and improving our cost base, and being a partner—being a reliable partner—and having airlines understand that it’s much better to collaborate and reward us for the capacity than it is to use a stick. There’s more nuance there.

Speaker #1: And I'm learning this space because I'm new to the role, but I've been involved in some of the discussions with the airports and understanding exactly what their needs are.

Speaker #1: So, there's a balance there, but we're not going to shy away from driving the best bargain that we can get. That's the name of the game, and that's where the talent comes from.

Ian Malin: We're not going to shy away from driving the best bargain that we can get. That's the name of the game, and that's where the talent comes from, and we have very talented people who have years and decades of negotiating prowess, which we're going to deploy and we're going to use, especially as we start to de-seasonalize the business and think a bit more about some of the things that we need to do now with the size of this airline compared to the airline before. We are a dramatically different airline today sitting here in 2026 than we were pre-COVID.

Speaker #1: And we have very talented people who have years and decades of negotiating prowess, which we're going to deploy and we're going to use—especially as we start to de-seasonalize the business and think a bit more about some of the things that we need to do now with the size of this airline, compared to the airline before.

Speaker #1: We are a dramatically different airline today, sitting here in 2026, than we were pre-COVID. Irrespective of whatever metric you want to use, whether it's revenue, seat capacity, ASK capacity, or EBITDA, we're more than double on any of those metrics.

Ian Malin: Irrespective of whatever metric you want to use, whether it's revenue, or seat capacity, or ASK capacity, or EBITDA, we're more than double on any of those metrics, and that weight is something that we now have in our favor to be able to deploy in a very sensible and cost-efficient way.

Speaker #1: And that weight is something that we now have in our favor to be able to deploy in a very sensible and cost-efficient way.

Speaker #4: Okay. Thank you. Thanks, Jozsef. Thanks, Ian.

Stephen Furlong: Okay. Thank you. Thanks, Ian. Thanks, Joseph.

Stephen Furlong: Okay. Thank you. Thanks, Ian. Thanks, József.

Operator: That was our final question. I will now hand over to management for closing remarks.

Speaker #2: That was our final question. I will now hand over to management for closing remarks.

József Váradi: Well, thank you for bearing with us. I think you should see how the building blocks, as we were discussing, will come into play in the period. Notwithstanding the challenges we are facing short term, I think you will see how that will evolve structurally over time, and we can elaborate on many of these matters, and I'll be happy to take your market update in a few weeks from now. Thank you.

Speaker #5: Well, thank you for bearing with us. I think you should see how the building blocks, as we were discussing, were coming into play in the period.

Speaker #5: So, notwithstanding the challenges we are facing short term, I think you will see how that will evolve structurally over time. And you can elaborate on many of these matters when we have our Capital Markets Day in a few weeks from now.

Speaker #5: Thank you.

Operator: Thank you for joining. That concludes today's call. Have a nice day. Thank you.

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Q1 2027 Wizz Air Holdings PLC Earnings Call

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