RE: Interview with CEO8 Jan 2026 09:06
Interesting and detailed comments by CEO about how analysts made misinformed judgements on the grounding issue:
Varadi: "I think analysts have failed to understand the complexity of the system. On the one hand, there is no compensation for our total loss of revenue or profitability. The compensation is largely limited to our direct costs associated with the grounding of the engines. No one is talking about the secondary costs or the opportunities lost because of this problem. It is the new GTF engines and the aircraft that go with them that are being grounded, which represent the highest level of technology and have the lowest operating costs on a per-unit basis. If I lose that capacity, I have to bring in older CEO aircraft, which consume 17 percent more fuel and are, say, 10-12 years old, and their maintenance costs are higher than those of a brand new NEO aircraft, which I may have bought only two months ago but it is now grounded due to engine problems.
It was precisely these skyrocketing maintenance costs that caused a major uproar when the quarterly report was released last summer, causing Wizz Air's stock price to fall by 27 percent in a single day. Analysts assumed that the return of the CEO aircrafts was related to old contracts that the management must have known about but failed to disclose.
No, that's not true. When the engine problem arose, at first we didn't know exactly how much of our capacity we would be losing, nor what kind of deals we would be able to make to replace it. We had to manage our costs and our capacity simultaneously, as competitors were attacking from all sides. We started negotiating all kinds of solutions, such as extending the leases on certain aircraft or returning old aircraft from operation as soon as possible because they were putting too much pressure on the expense structure, given that they were not being compensated for at fleet level by the new technology, which was sitting on the ground. When you return an aircraft early, you are bringing future maintenance costs forward. When you extend a lease, you may enter a cycle where you have to incur a large maintenance cost and must immediately amortize that cost. So it is not true that these were included in previous contracts."
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