Grounded Ambitions: Can Spirit and Wizz Soar Again?
hello and welcome to the Airline Weekly Lounge I’m your host Gordon Smith and I’m joined as usual by co-host Jay Shabet In part one we’re talking all things WhizAir And in part two we turn our attention to the latest developments at Spirit Airlines Hey Jay how’s it going what’s up Gordon doing very very well Your headline this week for the airline weekly issue was a masterclass It even people in the wider sort of skiff ecosystem who aren’t necessarily in the weeds of aviation like we are Jay they appreciate it It was if anyone hasn’t read it yet Le Wizarab which is actually good practice because I’m off to Paris on Sunday for the air show So thank you Thank you for the uh the crash course in all things French Yeah I hope I hope everybody got a little chuckle out of that Either that or or or nausea You want one or the other one of the two Yeah But uh yeah this week’s show a bit of a double bill of ultra- lowcost carriers Uh we’re going to be talking about Spirit Airlines in part two But part one let’s kick things off with WhizAir J because we had the results last week as we are recording here on June the 9th Whiz Air pre- pandemic produced Ryan like profit margins What has gone so wrong and bonus points Jay if you can answer the question without using the letters G T or F Can’t do it I I I failed your criteria already It’s uh that is a very big chunk of the problem The gear to turboan engines GTF those letters that uh Gordon is referring to Uh if you do you remember uh Gordon I think we we talked about it on the on the lounge podcast We certainly have written about it in the issue uh in the airline weekly newsletter Um we talked about how if there was one airline in the world that was most adversely affected by the Boeing aircraft delivery delays I think we said it was Lufanza right lufanza was definitely up there Yeah for sure Yeah Yeah We talked about how you know they just really need those bad wide those wide bodies really badly Um so if there is one airline in the world that’s arguably most adversely impacted by the Prattton Whitney geared turbo fan engine groundings that airline would be fill in the blank for me Whiz Air would certainly be up there as well I I I would I would argue that Whiz Air is is probably is probably number one or real close to it They actually have the most uh air airplanes grounded for that reason Um other than Indigo in India has has has some more but Indigo has they they’ve managed through it relatively with I don’t want to say unscathed but but they’re but they’re still a very profitable airline Whizair on the contrary uh it’s been a really really difficult situation for them Um they have and I have it the numbers in front of me here somewhere but it’s um they have a very large something like 20% of their fleet was recently looks like 42 planes um as of the end of last quarter that were on the ground That’s a lot of planes Uh and remember this is a lowcost airline an ultra- lowcost airline that really depends on uh you know intense aircraft utilization and you know constant expansion to to to get those economies of scale to keep their unit costs low Uh so this it’s really uh just just throw throws a big wrench into their whole business model and that’s uh that’s shown in in their you know really lousy profit figures or or lo loss margin figures really over the past couple quarters they um are um getting compensation from Pratt and Whitney but they talk about it openly that it’s not even remotely close to uh offsetting the losses that are associated with the groundings So you know even if we stopped right there we can uh see why WhizAir is struggling Uh there are other reasons however Um that’s not the only reason Um they did experience um they did have a large explo exposure to the Ukrainian market which they had to exit for uh obvious reasons We know there’s a war going on there and the same is true of the Israeli market Whizair is is a large has a large presence or had a large presence in Tel Aviv and they were forced to exit there as well for security reasons So that becomes another kind of layer of uh trouble for them Now they say that we’ll talk about some of their growth prospects in a moment Uh but few in the future they do say that Ukraine in particular remains uh a market with even more potential now than it did before the war So we’ll see if they can get the uh you know things calm down there Whizair does believe that has a bright future in that Ukrainian market Um now on the other hand I’ve talked about some of the negative things uh that are afflicting WhizAir their cost inflation um in terms of like think about labor uh it it hasn’t been nearly as bad as what you’ve seen in the US That’s more of a US phenomenon There’s like really lucrative labor contracts those those those very expensive labor contracts that carriers like Southwest really all the US carriers sign Um a little bit less of a problem for for a European airline like Whiz Uh now so that’s a plus Now back back on the the negative side they didn’t specifically say that their joint venture in Abu Dhabi is losing money but I think if you read between the lines it doesn’t sound good They they talk about how you know they’ve really expanded a lot in some of these Gulf Arabian Gulf markets and the um these are desert climates and I’m not an engineer and engine expert by any means so don’t take my word for it but apparently in geographies where you do have a lot of uh sand that gets into the engines it does affect the engine performance rather significantly And they talked about that they call these uh the hot and harsh markets was uh Whiz’s term for the for these kind of uh places And it’s uh they they really talked a lot about how um all this new exposure to these desert markets has really affected their their engine uh performance and and in turn their their overall operations So they’re starting to kind of pull back on a lot of that Now uh it does make you wonder you know they’re out of Ukraine they’re out of Israel they’re reducing their exposure to to to some of these other Middle Eastern desert markets Uh are there and they do have you know hundreds of planes still on order large planes A321 Neos with you know more seats than I was looking Whizair can has more seats on its A321 Neos than American does on its B7878 So there’s a lot of seats to fill Yeah a lot of seats to fill So the question is you know will they ultimately have uh opportunities to uh to deploy all these planes and they say yes you know they say that uh I already mentioned one of them Ukraine They think that’s going to be a uh you know a big market in the future Well going back in in six weeks uh they say I should clarify that six weeks of getting the regulatory green light after the end of the war or at least a lasting ceasefire of sorts But yeah they they were very bullish in the investor presentation Jay which I’m so s I’m sure you saw last week as well Um they said within six weeks they would uh get aircraft back in 30 routes inbound Uh they won’t be basing aircraft there initially but uh yeah by the end of year 1 after coming back into the market wants to see locally based aircraft with up to 60 routes on sale from the country uh providing around 5 million seats per year And then by year three of re-entering the market Wes is aiming for 150 routes providing around 15 million seats annually That’s if you believe the uh the PowerPoint deck Yeah that’s a it’s a big opportunity if if what they say uh like you said if if you if you believe what they say Now Ryan Air is also pretty bullish on on Ukraine Uh and they say you know it’s interesting comparison they made Whizair they said was uh or Whizair said that Ukraine uh was sort of like Poland was 20 years ago You know Poland was a market when Whizair first entered uh where you had a lot of migrant labor traffic flowing to London for example Uh Poland is now has matured a lot I mean Poland has has their economy has has just grown enormously in the past 20 years and there’s now whizzer is is enjoying more of a uh sort of that middle class outbound leisure demand um from a place like Poland whereas Ukraine they say look it’s going to be you know there’s going to be a lot of people moving out in and out as the country reconstructs itself you know builds re rebuilds infrastructure after the war So they uh you know they they really think that it could be sort of another another poll in so to speak Um and yeah that remains to be seen but for what it’s worth you know Ryan Air believes essentially the same thing Uh so yeah there is that they do have um of that very large uh order book they have of all A321 Neos by the way almost 400 of them Uh they do have 47 of those are supposed to be the extra long range XLR versions Now they they they int it seems like they intend to cut that back a little bit And one reason is that a lot of those XLRs were intended for some of these Middle Eastern routes that they’re you know less perhaps keen on nowadays uh however they are still very keen on reaching India and they won’t be able to do it so much from you know kind of western Europe London but they they do uh want to serve India very much from Eastern/ Central Europe and maybe even turn a market they didn’t mention one but you know what comes to mind from me would be a market like maybe Warsaw or or Budapest kind of turn that into a connecting gateway between Western Europe and India We’ll see if that works out for them But in their mind that is an opportunity for growth They do say also just more generally that central Europe Eastern Europe uh just has a lot of room to grow These economies are still not as mature as some of those in Western Europe And they just see a lot of uh they they say they’re performing well right now uh and they’ll you know continue to grow in the future So that’s you know they they remain bullish They they’ll admit now um and they didn’t you know they weren’t saying this until recently but they’ll admit now that things with the you know the GTF issues and you know sort of the financial situation getting back to uh strong profits that it it’ll still be another year or two before that happen They’re talking 2027 before whizair uh you know looks like the whiz air of the past U they’ll they’ll admit that if it ever does but um you know eventually if they’re right then they’ll uh you know they they do say that the the opportunities are there to grow And Jay just looking at some of the Western European markets they’re very big in the UK and um Italy they’re pretty big parts of Iberia as well not so big in France and Germany Um did we get any color from them during the the investor call last week about why they’re pulling out of some of these big German markets for example yeah Well it seems like everybody’s pulling out of Germany Um it’s just a market that uh and and while you’re talk here I’m just pulling up some of their uh their I’m looking at Serium Dio and I’m pulling up some of their their uh capacity trends by market But yeah Germany um it is a market that’s just uh a lot smaller now today than it was pre- pandemic and a lot of that has to do with just much higher air airline taxes airport fees Um Germany was always kind of a big business market and a lot of those business uh you know business type routes suffered as people you know more people worked at home and things like that So it’s it’s just I think that’s a phenomenon that goes beyond just WhizAir Um even Lufansa itself has had to pull pull back a lot in some of some of its you know German roots Uh so I think that that’s the answer there They said more generally that Western Europe uh is kind of a mature market Um doesn’t really need that much more capacity So they’re very much more ve very much uh you know have have their attention more on you know eastern central which is which is their core you know the core of their network Um by the way I I do have the the serium data in front of me here Uh in the upcoming third quarter Whizair’s largest market by seats will be London Luton which uh that’s that’s been true for a long time for them They’ve always big there So they they are big um over there in in very Western Europe However a lot of that London traffic is Eastern Europeans going back and forth to London Um a lot of you know there’s the old uh is the Polish plumber Have you heard that one Gordon the um kind of the uh stereotypical immigrant worker in in England um you know pulling and that’s probably less true than it was in the past but uh a lot of you know workers like those kind of manual jobs like like uh plumbers um the UK sourced a lot of its um labor for that manual labor from areas of Eastern Europe So WhizAir has exploited that But then beyond London you do have Budapest as their second busiest market uh Bucharest then Rome uh and then you have Tana Al Albania which is kind of a upand cominging hot tourist market Then you get into Warsaw and Milan Uh I’ll stop there but you get a sense of you know where WhizAir is is large Yeah And what about Indigo Partners Jay because they’re for those that aren’t familiar they’re an American private equity firm and they’ve got a a controlling interest in quite a few lowcost carriers US listeners probably know Frontier Airlines best but also in South America JetSmart uh Valaris I think uh but also WhizAir Do we know the specifics of the order you know could if if we’re seeing a little bit of softness at Wizair could Indigo Partners or the the controlling firm divert some of those aircraft maybe to to better performing parts of the of of the broader business yeah I suppose that’s possible There’s also Frontier I’m not sure if you mentioned that one but that’s uh one of the bigger airlines in the Indigo uh portfolio of of carriers Uh so I suppose by ordering um jointly like that as they did uh that is an option for them We’ll see if it comes to that WhizAir did say that they are uh re you know adjusting their order book with Airbus to uh not cancel any route any any aircraft deliveries but they are going to change some of the delivery dates push them back a little bit Yes they that is an option that uh they probably have is that they can move some planes around However Gordon uh it’s not as if Frontier is uh bursting with growth opportunities Um and the same is true of Aaris in Mexico which is uh they have uh deep problems of their own The Mexican market is not healthy right now Uh and JetSmart is a very small uh airline so there’s not a whole lot that uh they would be able to absorb So I’m not sure that there would be anything beyond maybe a solution on the margins Let’s say not moving the needle much Jay Not moving the needle much Thank you for that whiz insight a whiz through whiz Um and if anybody does want to go into a bit more detail uh about the various challenges but also the solutions being presented by WhizAir management do check out the uh the most recent issue of Airline Weekly for Jay’s analysis there Uh we’ll be back in part two very shortly discussing Spirit Airlines I’m sure some of the themes that we’ve discussed in part one will come acropper there again Uh before that just a quick reminder to send any questions or comments that you might have for us to podcasts at sciff.com That’s podcastsw with an s at the end And please don’t forget to follow or subscribe to the podcast wherever you are listening or watching And if you are enjoying the show please rate us five stars or leave us a positive review so we can continue to spread the word about the airline weekly lounge Don’t go anywhere We’ll be right back [Music] Hello and welcome back to the airline weekly lounge I’m Gordon Smith joined as usual by co-host Jay Shabet part one We were discussing WhizAir We are whizzing across the Atlantic now to discuss spirit Jay because we finally had uh the financial numbers for the first calendar quarter from them Tell our listeners what they need to know Well I don’t know how the weather is in Lisbon this morning It’s red hot day It’s too hot Too hot Okay Yeah I I would I I would have my air conditioning on but it’s a little bit noisy So I hope all of our listeners are appreciating the the quiet crystal clear ambience that you’re getting cuz I am suffering by not having the AC on in the room I’m recording this But yes uh it’s hot That’s the the short answer Well it’s rainy and gray and chilly here in New Jersey and it’s kind of the perfect backdrop for talking about these two gloomy airline situations one being WhizAir and one being Spirit which was at least as gloomy as as the Whiz situation They during the first quarter they just published their their figures by the way just recently Um little bit later than everyone else but they were they did just come out of bankruptcy after all and their uh operating margin for the first quarter of 2025 was cue up the uh the sad music while I check it here negative 29% Uh so this is real awful quarter and that’s uh stripped out some of the you know any kind of special items related to the bankruptcy restructure That’s that’s pretty clean number Negative 29% Yuck So what is going on with uh with Spirit uh we can start with those same three letters Uh GTF they have those same um Pratt Whitney issues too A lot of their big big portion of their fleet has been grounded uh over the past year or two Um so that’s been real difficult for them And and I would just you know not to beat a dead horse but uh a reminder again that these ultra- lowcost carriers they really depend a ton on just keeping those planes in the air and growing growing growing you know that’s how they get the economies of scale to uh you know to to maintain their their and and and improve their their low unit cost Uh and that’s it becomes especially important for an airline like Spirit which has uh experienced so much nonfuel cost inflation Uh I got some numbers for you Gordon Uh go ahead I love numbers Jay Okay And this this these these numbers alone might uh might uh you could you could you could end we can end the discussion after this You you’ll know why Spirit is having trouble Okay So so between um compared to the first quarter of 2019 Spirit experienced a 53% increase in unit cost So that’s Q19 versus Q1 2025 Now remember they’ve been having a little bit of a fuel holiday of late The fuel prices have been uh nicely down comfortably down Excluding fuel non fuel chasm is up for Spirits 70% over that period So yeah you’re talking about So now now this is not uncommon for US airlines You’ll see you’ll see figures like that for you know United Delta whoever I don’t I don’t know what those figures are off the top of my head but they’re Yeah but there’s everything else that’s going on there Yeah Well they’re in the neighborhood The the the is the difference is that if you’re American or if you’re United or you know Delta you’re getting you’re getting revenue premiums too Your revenues are your unit revenues are increasing a lot as well and in some cases uh I don’t know if by even more but but pretty close um to to matching that non-fuel casm inflation whereas if you’re you know some of these lowcost carriers spirit being being one um it’s just been uh yeah it’s just it’s the the cost inflation is just so far outrun your revenue gains and so they’re going to have to find a way to either get their cost down or look for new ways use to raise revenue Now during bankruptcy frankly they didn’t do a whole lot to address their operating cost They dealt mostly with their financial costs They restructured their you know debts to bond holders to banks wherever but they did not um you know rip up labor contracts They didn’t rip up any you know supplier contracts So they still have what’s probably a relatively you know high cost base and that’s you know depending on what you’re comparing it to But uh they’ll tell you that they still have you know a rather uh healthy cost advantage and unit cost spread with with some of the big guys you know with the Uniteds of the worlds Deltas of the Worlds But um is it enough one thing you know they’re they’re about 23% small The third quarter seats are down 23% year-over-year So they’re a lot smaller now than they used to be Uh so you can imagine what that does for you know negative economies of scale Um they’re also they’re they’re chasing markets at some pretty sorry they’re chasing business in some pretty strange places If you look at and I’m I’m eyeballing the numbers from Serium again If you look at the third quarter pretty much every single airport they serve uh is down Their their seats are down year-over-year The only two exceptions among their bigger airports are Detroit and Atlanta So two Delta mega hubs I don’t know you know if they detect any vulnerabilities with Delta or or what their motivation is there but is this an airline you know no matter how uh despite their changes and their adoption of you know more premium fair products and services is this an airline that can really succeed taking on Delta in their fortress hubs it kind of feels to me like if Spirit is ultimately going to get their groove back they’re going to have to find a way to grow in Florida again I mean Florida is the bottomless pit of airline demand As long as you get I mean the trick is you got to get your unit cost really low because people are not going to pay But if you know if you can get your fairs low enough and still make money then Florida will will you’ll fill your seats So and I say Florida as a metaphor for ALS you know Caribbean Phoenix are also in that category Markets like that Uh so that’s going to but but you know can they do that it’s it’s it’s going to be tough So they have a new a new man in charge um who recruited from Sunountry Interestingly enough Sunountry they Sunountry has been so successful you kind of wonder if uh a lot of their executives won’t be poached over the uh you know the coming years You wonder even if their CEO Jude Bricker has a future you know running Southwest or even American or something like that That’s uh totally just me uh my mind uh you know running running wild there I I’ll back you in that wild speculation Jay I think kind of kind of feels like there’s potential there He’s got mileage Yeah Yeah Yeah So you know who knows but uh you think those Sunountry execs are kind of a hot hot commodity among head hunters you’d imagine Um certainly true in this case where Spirit recruited uh Dave Davis from from Sunountry So he’ll yeah he’ll have his work cut out for him Um he’ll like I said he’s you know I think it’s going to be very important for them to find any which way uh they can to to grow again to get their unit costs trending downward again They also want to beef up their loyalty program which uh you know that’s one thing that sort of the big the muscular revenue guys like Deltas and United those guys have the you know all that loyalty revenue coming in to offset some of that cost inflation spirit doesn’t really their loyalty pro program is pretty pretty thin pretty weak so uh I think that’s going to be a priority they said before you know during the bankruptcy uh process the prior management and said that they were looking for co-chair partners maybe you know join some kind of I don’t know alliance or who knows but they they’re clearly looking for new ways to to uh to garner new revenue We’ll uh we’ll see if they’re able to do it Uh good news I guess for them is that uh you know again fuel is is pretty pretty cheap right now So uh helpful helpful for sure Jay um just trying to string together our various discussion points in this episode How much of whizzes and spirits current pain and you know separate the two of them if you need to is self-inflicted through over ambitious growth and how much of it it’s just bad luck you know the GTF engines inflation softening demand If you had to weigh up both of these cases what would you what would you what would you say yeah I mean that’s tough to say I mean I think you do have to be fair that the uh the GTF issues uh in both of these cases uh are are very very serious I mean this is not just uh you know one problem of a hundred This is this is a real big one Uh so you know maybe um get cut the cut the management team some slack there Uh in terms of you know did they overexpand did they order too many planes um well I mean those planes are very valuable I mean one thing that Whiz Air has been able to done with able to do with all these plane deliveries is they’ve been able to uh sell them and lease them back and and collect a handsome profit from that That’s you know helped their balance sheet from from being worse than it otherwise would This was a an investment grade airline at one time Um now you know did they is that is that expansion gonna going to cause them problems in the future i mean are they going to We talked about how all those you know Whizar planes can they find enough opportunities for all those planes and and they’re big planes too Uh Spirit has they they have a lot of A321 Neos as well those big planes Um you know maybe time will tell Uh but again you know it is important to note that those the planes that they did order are extremely valuable and they got good prices for them presumably so Um assuredly So they it’s not like they bought an asset that’s you know that that’s like what do I do with this thing you know they could always sell it They could always you know lease it Um so you know I’m I’m kind of beating around around your question but in general I think it’s just a combination of bad luck and you know developments that uh I mean look running an airline is not easy even for even in the even even in in good times So uh you know we won’t um fault anyone Perhaps since since you you got a gun to my head uh you you you won’t let me out of this I know Gordon So uh if you if you you force me to uh cite one quote unquote mistake uh here uh maybe I’ll say that Whiz Air probably shouldn’t have been so aggressive in the Gulf region Would you would you buy that i think it depends on your definition of the Gulf region Jay Specifically I quite like the look of Saudi as a market and they’re putting XLR into some of the secondary cities there I think direct from from London which I I think is is a smart move They’re underserved especially on non-stops uh on a price sensitive market I think that’s that sort of makes sense to me especially if you’ve got the equipment coming the uh various other investments in in that part of the world I’m not privy enough to to know I know the the partnerships and they’re a little complex I I I don’t know enough about the individual profitability of say the the Abu Dhabi joint venture to be able to assess whether that was a a shrewd move or not But yeah I’m going to say no I’m going to say no I I did quite enjoy just the fact that you could do whiz air all the way to the Maldes from say the UK by stopping off in Budapest or Bucharest and then going down to Abu Dhabi and then down to uh the Maldes I I think that I think you probably still can do that Uh if correct me if I’m wrong podcasts.com but um I think a little bit of overexposure to to that market has uh has has hurt them And I think Ryan and EasyJet are also just both very very fortunate in that they haven’t had the same degree of disruption to their their operation Um Ry will will tell you all about the Max and delivery delays and things but it’s not nearly to the same extent An easy jet of course they’ve had some some minor issues with their newest aircraft but not nearly to the same degree So their two largest competitors never mind the legacy players Um really having been able to navigate the the worst of the post-pandemic woes uh without having the same uh extent uh of of troubles as whiz I think has been putting them maybe a very unfair contrast I I agree with all that I think that’s everything you said is fair Fair Okay That’s what we look for Fair and balanced I don’t know whose quote whose tagline that is Maybe a certain Fox News Um but on that note we will uh briefly conclude Jay uh any clues as to what might be in the next issue of Along with for our regular readers we’re uh we got an early start this week Uh work is underway on a feature story about Virgin Australia They are Yeah they are going back to the stock market They’re uh they’re working on an IPO for later this month And uh remember that they only recently sold a big chunk of themselves to Qatar Airways So uh they got nothing left to sell Yeah Well they um yeah they’re going to have like a lot of they’re going to have multiple owners Um which is which is not unusual for them If you’ll remember back uh years ago they were owned by a bunch of different airlines Um what do we have singapore Airlines and Etihad and who else was involved in them a couple different airlines So uh that’s yeah nothing really too new but uh but they do have uh a stake that will be floating uh on the Sydney Stock Exchange I believe uh pretty soon So uh the nice thing about that for us uh us analysts is that uh when an airline goes public they uh throw a whole bunch of information out there uh for investors that uh we can diligently uh pour over and analyze So uh we’ll have a lot to say in our next issue Sounds good Jay Look forward to it Uh and just goes without saying that I will be at the Paris show uh this coming week depending on when you’re listening to the podcast I’ll be there uh Sunday through Wednesday So if you do spot me uh running around depending on it can get very very hot in Paris I seem to remember a couple years ago it was absolutely sweltering Uh if you do see me running around at varying degrees of dehydration then do say hello Uh always always nice to uh to meet the meet the public Um how how do you say I need water in French oh jee uh I I never know how to pronounce I I speak Spanish not French just in case We’re going to turn we’re going to turn this podcast into like a duallinging duallingingo Is that the what’s he call that yeah with the with the talking owl Yeah Okay Yeah I never never used it but I uh Yeah that’s uh we’ll uh come to the airline weekly lounge for your language learning needs I I would take your analysis of the airline market any day over your uh your linguistic uh recommendations Jay But um I I just didn’t want anyone going away I’ll take that as a compliment I didn’t want anyone going away from this episode thinking “Oh my Gordon only speaks English you know sort of classic Brit you just expecting the world to speak his language.” I do speak Spanish and I’m learning Portuguese French I’ve never really uh attempted And you know I know the word jvu for I would like but e au you for water Um I don’t know how that’s pronounced Yeah Yeah Can you help me well well I I embarrassingly lived in France and studied in France and I still don’t speak French Uh I can read it but I can’t I can’t embarrassingly can’t speak it I lived in China I can’t speak Chinese I’ve I’ve lived briefly in in Spain I can’t speak Spanish So I’m just awful awful awful at languages Well you can speak fluent uh investment reports and earnings reports Yes Yes I’m I’m not bad at business English Yeah I do have trouble understanding when you start talking in Scottish but uh I’m working on that Uh we digress Uh thanks uh 2J for that interesting analysis of both Whizer and Spirit More detail as always at airline.com If you’re not already a subscriber go to airlineweekly.com/subscribe And don’t forget you get all the airline news on skiff.com plus skiff uh researchers airline reports So loads uh to get your teeth into Uh and thanks as always to our producers Doug Monica and Cole And wherever you are in the world thanks for listening and we’ll catch you next time Bye for now [Music] Whether you’re listening to us on Spotify Apple or wherever you get your podcasts please make 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In this episode of the Airline Weekly Lounge, hosts Gordon Smith and Jay Shabat tackle the challenges faced by Wizz Air and Spirit Airlines. They discuss Wizz Air’s struggles with engine issues, market exits, and future growth opportunities, particularly in Eastern Europe. The conversation shifts to Spirit Airlines, highlighting its financial difficulties, rising costs, and leadership changes.
Takeaways
• Wizz Air is facing significant operational challenges due to engine issues.
• Spirit Airlines reported a negative 29% operating margin in Q1 2025.
• Non-fuel costs for Spirit Airlines have increased by 70% since 2019.
• Wizz Air’s market strategy is under scrutiny as they exit certain markets.
• Indigo Partners may adjust aircraft orders in response to Wizz Air’s struggles.
• Florida remains a key market for low-cost carriers like Spirit Airlines.
• Leadership changes at Spirit Airlines may influence future strategies.
• Wizz Air’s growth opportunities lie in Eastern Europe and Ukraine.
• The airline industry is experiencing a combination of bad luck and operational challenges.
• Both airlines need to find ways to reduce costs and improve profitability.
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