Increased ancillary revenue offers hope for Wizz Air

Wizz Air has benefitted from providing ‘flexible tickets’ to mitigate ever-changing travel restrictions

Increased ancillary revenue offers hope for Wizz Air

After posting Q3 2021 financial results that showed a year-on-year revenue fall of 76.5% but increased ancillary revenue, Wizz Air has, once again, proven its ability to drive ancillary revenues: the lifeblood of the airline.

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The company has proved it is resilient and reactive in its recovery approach, managing to achieve increases in ancillary revenue per passenger despite traffic levels being at an all-time low.

Pandemic-concerned passengers are more likely to purchase packages that include baggage and seat selection to ensure a safer journey. Further, flexibility is now expected, and Wizz Air has benefitted from providing ‘flexible tickets’ to mitigate ever-changing travel restrictions.

People who are eager to travel during the pandemic are often doing so to visit friends and relatives – a clear shift away from the idea of travelling for a ‘short break’. These pandemic travelers are more likely to purchase extras because they tend to travel with additional baggage such as gifts and food to take home. This could be a key market for the airline in the coming months. Even though Wizz Air’s reported total ancillary revenues decreased by 72.9% year-on year, there was a bright spot in these uncertain times as ancillary revenue per passenger increased by 19.5%.

The airline’s ambitious expansion plan remains very much in motion and could pay dividends. Since March 2020, the airline has opened a further 14 bases – in stark contrast to its competitors Ryanair and easyJet, who have both pulled out of some markets. This move could put the airline in a stronger position to rapidly expand post-COVID-19, and will help it become a more recognizable brand. The agile approach it has deployed is likely to benefit Wizz Air going forward.