Wizz Air profits decline in Serbia and Bosnia
Low cost carrier Wizz Air recently posted a record first half profit for the 2020 financial year (April - September) amounting to 371.5 million euros. The Budapest-based company could soon take over from Ryanair as Europe's most profitable airline group by operating margin. However, while Wizz was profitable on all of the markets it served during the first half of the financial year, with exception to Morocco, it saw its profits decrease in six countries compared to H1 2018, with two of them being Serbia and Bosnia and Herzegovina. The biggest profit growth was recorded in Moldova, with margins increasing 72%, while the largest increase in profits was on routes to/from the United Kingdom, where they grew by eleven million euros. However, overall, Romania was the most profitable country market where route profits totalled 58 million euros.
According to the airline performance analysis platform Apex, Wizz registered an operating profit of some 3.6 million euros in Serbia between April and September, where it maintains a base in Belgrade. The figure represents a decrease from four million euros during the same period last year, or a decline of 8%. In Bosnia and Herzegovina, where it boasts a base in Tuzla, profits on routes totalled 2.4 million euros, down from 2.5 million euros or a decrease of 5%. During the said period, Wizz Air launched a new seasonal service from Belgrade to Lyon and increased frequencies and capacity on several routes from the Serbian capital. At the same time, it maintained a similar number of flights from Tuzla as last year.
Wizz Air’s CEO, Jozsef Varadi, previously said that high airport costs and government protectionism of Air Serbia are preventing the company from developing at its Belgrade base. “The significant issue in Belgrade that has hindered our development there is the cost of the airport relative to its peers. It is a high price airport and we need to see costs coming down. As we are bringing in more passengers and operations to the airport, we need to be at least in line with what we are paying at similar places”. He added, “I think the Serbian government has taken steps towards protecting Air Serbia's business and I think they are trying to put some pressure on competitors like ourselves. These two factors are really holding us back in Belgrade”. On the other hand, the carrier is in the process of renegotiating its contract with Tuzla Airport, which the latter hopes will result in new routes in 2020. “I think it is in the interest of Tuzla and the region to see our continuous operations and them improving their infrastructure. I'm pretty sure Tuzla Airport will be business-minded in that regard", Mr Varadi previously said.
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