Saturday, 22 July 2017

Wizz To Have A Fleet Of 120 By 2020, Cathay Pacific Disappointing Says CEO

Low-cost operator Wizz Air expects to have 15% more aircraft in its fleet by March 2020 than it had indicated a year ago.

The airline’s latest fleet schedule, disclosed during its first-quarter results presentation, shows it will have a fleet of 120 aircraft by the end of the 2019-20 fiscal year.

This figure is a substantial increase on the 104 aircraft – equally split between Airbus A320s and A321s – listed in the fleet plan in July last year. Wizz Air says it expects to receive 13 new aircraft, including 10 A321s, in the current fiscal year.

Chief executive Jozsef Varadi says this will give the airline 26 A321s, accounting for a third of the carrier’s planned seat capacity.

He says this will give the airline a “clear cost advantage” against most of its rivals. The airline recently opted to order another 10 A321s.

Wizz will take 15 A321s, including its first three A321neos, in 2018-19, and the expansion will continue with 20 A321s – all but three of them A321neos – over 2019-20.

Cathay Pacific chief executive Rupert Hogg says the airline’s operating performance during the first half of the year was “disappointing” due to the challenging competitive environment.

“When we announced our results for 2016 in March, we said we expected the operating environment in 2017 to remain challenging. This has been the case,” says Hogg in Cathay’s June traffic statement, which also covered the operations of its Cathay Dragon regional unit.

“Our airlines’ performance in the first half of 2017 continued to be disappointing. In particular, strong competition from other airlines put intense and increasing pressure on passenger yield and revenue.”

In the six months to the end of June, Cathay’s group ASKs increased by 1.1%, while RPKs climbed 1.4% despite passengers carried falling 0.5% to 17.2 million. Load factor climbed a marginal 0.2 points to 84.7%.

Passenger yield continues to come under pressure in the face of strong competition. The overall load factor remains high, with front-end traffic showing a pick-up, although the back-end, particularly on short-haul routes, has been sluggish, says Cathay’s general manager of revenue management Navin Chellaram.

Cargo and mail tonnage however jumped 11.5%, against a 2.3% capacity increase and an 8.9% climb in RTKs. That saw freight load factor rise four points to 66.2%

The airline adds that the two Boeing 747-8 Freighters wet-leased from Atlas Air are operating at full capacity and generating good revenues on North American routes. It expects the air freight market to remain strong.

Tourism Observer

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