WIZZ AIR
AT A GLANCE
Wizz Air is the leading ultra-low-cost airline in Central and Eastern Europe with a fleet of 137 Airbus aircraft,
connecting 166 destinations across 44 countries. At Wizz, our vision is to liberate lives through affordable
travel. We operate among the lowest unit cost and at the lowest carbon footprint in the European aviation
industry and drive profitable growth to create leading shareholder and stakeholder value.
CONTENTS
Highlights and Company overview
Strategic report
Chairman’s statement
Chief Executive’s review
Section 172 Statement
Our response to the COVID-19 PANDEMIC
Report on sustainability
Modern Slavery Act Disclosure Statement
Financial review
Key statistics
Emerging and principal risks and uncertainties
Governance
Corporate governance report
Compliance with the UK Corporate Governance Code
Management of the Company
Report of the Chairman of the Audit and Sustainability Committee
Report of the Chairman of the Nomination Committee
Directors’ remuneration report
Directors’ report
Company information
Statement of Directors’ Responsibilities in respect of the financial statements
Accounts and other information
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes forming part of the financial statements
Independent auditors’ report
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References to “Wizz Air”, “Wizz”, “the Company”, “the Group”, “we” or “our” in this report are references to Wizz Air Holdings Plc,
or to Wizz Air Holdings Plc and its subsidiaries, as applicable.
F21 in this document refer to the financial year ended 31 March 2021. Equivalent terms are used for prior/future financial years.
Wizz Air Holdings Plc Annual report and accounts 2021
1
HIGHLIGHTS
€0.7B REVENUE
€1.6B TOTAL CASH*
€482M UNDERLYING NET LOSS*
€576M NET STATUTORY LOSS
2.89 €CENTS RASK*
3.86 €CENTS EX-FUEL CASK*
* For definition refer to the Glossary of technical terms on page 49.
Wizz Air Holdings Plc Annual report and accounts 2021
2
GEOGRAPHIES
We fly 824 routes across Europe and the Middle
East
Number of routes operated as at 31 March 2021:
From Central and Eastern Europe (CEE) countries
Poland
Romania
Hungary
Bulgaria
Ukraine
North Macedonia
Lithuania
Albania
Moldova
Serbia
Bosnia and Herzegovina
Latvia
Kosovo
Montenegro
Estonia
Slovakia
Croatia
Georgia
Slovenia
Czech Republic
From other European countries (to non-CEE countries)
Austria
United Kingdom
Italy
Germany
Norway
Cyprus
From Gulf Cooperation Council (GCC) countries
United Arab Emirates
Wizz Air Holdings Plc Annual report and accounts 2021
167
161
70
51
45
36
28
23
20
19
16
11
7
4
3
3
2
1
1
1
39
36
33
16
14
14
3
3
WHY INVEST IN WIZZ
ULTRA-LOW COST BY DESIGN
Our obsession and compulsion are to operate at the lowest cost in the industry. We drive efficiencies across
every part of our operations to continue to decrease our unit cost and deliver on our mission of retaining our
position as Europe's undisputed price leader airline.
Make no mistake. At Wizz Air, low cost does not compromise on value offered to the customer/passenger.
We operate the newest fleet of aircraft with the lowest emission intensity. We utilise our aircraft more than 12
hours per day in normal times operating point to point, in a single-class configuration, leveraging airports with
low departure fees. Our flights are sold through our own digital channels wizzair.com and the Wizz app to
avoid unnecessary distribution costs.
STIMULATING DEMAND
We can make flying affordable for more people by offering the lowest fares. Historically 75 per cent of our
growth has come through market growth. Our geographic exposure to Central Eastern Europe and our future
expansion in Abu Dhabi holds tremendous potential for the future as the propensity to fly in those regions is
65–75 per cent lower than in the West.
Whilst we operate the lowest ticket fares, we allow passengers to opt in for additional services. Our ancillary
revenue is globally one of the highest in the industry as passengers are signing up to enjoy some of the
additional services Wizz Air offers.
BALANCE SHEET STRENGTH
We are one of the few airlines that is investment-grade rated by Moody’s (Baa3) and Fitch (BBB-). We have
€1,617 million of total cash at the end of March 2021, one of the strongest liquidity positions in the industry.
Because of our low cost model and agile DNA we have a very low cash burn rate even in the worst of times,
and, during the past twelve months of the pandemic the strength of our balance sheet and our resolute actions
have positioned Wizz Air as an even stronger player coming out of the pandemic, also supported by continued
investments in fleet and in network. Our relentless focus on cost is a significant competitive advantage and
ensures we remain a stable business, even in challenging times.
DESIGNED FOR PROFITABLE GROWTH
As the market leading airline in Central and Eastern Europe with a total market share of 20.9 per cent and a
45.9 per cent market share amongst low-cost carriers, with the lowest cost base, and a strong orderbook of a
further 248 A320 neo-family aircraft, featuring the widest single-aisle cabin with 239 seats, we have a strong
basis to deliver consistent profitable growth. We target 15 per cent growth of seat capacity every single year
and aspire to deliver net income margin between 13–15 per cent as the environment normalises. Our pre-Covid
track record shows we can deliver on these growth rates at attractive levels of profitability.
Wizz Air Holdings Plc Annual report and accounts 2021
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THE MOST SUSTAINABLE CHOICE OF
AIR TRAVEL
Supported by our investment in the most modern fleet, Wizz Air continues to operate at the lowest CO2
emission intensity (measured as CO2 per revenue passenger/km) amongst all competitor airlines.
CO2emissions for F20 were 57.2 grams per RPK. In F21 CO2 emissions increased to 77.3 grams per RPK due to
lower load factors caused by the pandemic. Our target and plan is to achieve 43 grams per RPK emission by
F30.
Next to environmental sustainability, social sustainability is a key priority programme for Wizz Air. Read all
about our sustainability programme in our sustainability section on page 28.
Wizz Air is expecting to be recognised as the most sustainable company in airline industry in 2021, yet to be
awarded by World Finance Magazine. The recognition highlights Wizz Air’s emission intensity results (CO2 per
passenger/km) and a potential to be the leader in short-medium-haul transport segment. Behind our relentless
focus on being the undisputed leader on sustainability and our enhanced disclosure in this year’s report we
expect to win the hearts and minds of all the Wizz Air stakeholders. Nevertheless, we would be happy to hear
more from you on how we can do better.
Wizz Air Holdings Plc Annual report and accounts 2021
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STRATEGIC REPORT
CHAIRMAN’S STATEMENT
Dear Shareholders,
The COVID-19 pandemic is unlike any other event in the last 75 years in terms of its impact on the global
economy and societies around the world. The airline industry has been hit especially hard. As a result of the
pandemic a wide range of restrictions were implemented throughout our key markets, we experienced our
largest decline in passenger numbers in April 2020, down 98 per cent, year over year, impacting our
passengers, our communities and our colleagues. It is no surprise that consequently we are reporting a record
net financial loss of €576 million for the year ended 31 March 2021 (F21), also our first annual loss since 2012.
Nevertheless, despite this global crisis from a health, humanitarian and economic point of view, F21 was a year
of exceptionally strong differentiation for Wizz Air. The Company remained resilient and agile, dealing with
the challenge at hand while, unlike many of our competitors, at the same time focusing on leveraging these
unique circumstances to further widen our competitive edge and set ourselves apart from the rest of the airline
industry by setting a very clear objective to emerge from this prolonged crisis as a structural winner.
While dealing with the crisis exceptionally well, with a relentless focus on minimising cash burn, the Company
also invested time and energy in three key areas:
1.
Investment in the expansion and diversification of the network, expanding from 25 to 43 operating or
announced bases. This diversification has been a core strategic objective in this period of uncertainty that
will allow for a quick and strong recovery. We saw this during the temporary rebound during the summer
of 2020 and, as restrictions lift as vaccination programmes reach critical population thresholds, we
anticipate a similar recovery. This network expansion included the commencement of our Wizz Air Abu
Dhabi operation as a national airline of the United Arab Emirates, which holds significant potential for the
future. It will operate in one of the most populous regions in the world, and one underserved by low-cost
carriers, with flight penetration 75 per cent lower than in Western Europe.
2. Continued investment in our fleet, focused on the newest A320-family aircraft. We have the youngest and
most cost-efficient fleet of any large airline in Europe, with the lowest carbon intensity footprint.
3. Focus on Board and Leadership Team to even better prepare the airline in its journey to double the
business in the next five years.
I hope and expect that the progress made with inoculation programmes within Europe and the rest of the
world will mark the beginning of the end of this pandemic. While F22 will be a transition year for Wizz Air, I
am confident the actions we have taken have made Wizz Air an even stronger force to reckon with.
Board changes
As a Board, we are committed to the highest standards of governance and effective oversight to protect and
create shareholder value as well as promote the interests of the many stakeholders in Wizz Air’s business. The
composition of the Board is subject to regular review to ensure that the Board maintains the appropriate
balance of skill set, background and experience to enable the Board to oversee the execution of the Company’s
strategy by the Leadership Team.
In June 2020, we welcomed Ms Charlotte Pedersen as independent Non-Executive Director to the Board of
Wizz Air. She has more than 30 years of experience in the aviation sector. A joint Danish and Luxembourgish
national, Ms Pedersen was President Helicopter Services and Chief Executive Officer of Luxaviation
Helicopters, a global VVIP helicopter organisation and part of Luxaviation Group.
At the same time, Ms Susan Hooper retired from the Board after four years of service. As a highly valued Non-
Executive Director, Ms Hooper helped to shape Wizz Air’s growth and vision and we are grateful for her
contribution.
In November 2020, we welcomed Ms Charlotte Andsager and Mr Enrique Dupuy de Lome Chavarri as
Independent Non-Executive Directors to the Board of Wizz Air.
Ms Andsager has held multiple regulatory and public affairs roles within the Ministry of Transport and
Communications of Norway as well as Telenor, SAS Group and Rolls-Royce Plc. Her expertise in regulatory
affairs across various industries will be a key asset to Wizz Air.
Mr Dupuy de Lome Chavarri has had an extensive career at Spain's national carrier Iberia. After joining the
company in 1990 as Financial Director, he ultimately rose to become Chief Financial Officer. After the merger
of Iberia with British Airways in 2011 he became Chief Financial Officer at IAG, a position he held until he retired
in June 2019. His broad industry experience and personal network will be valuable to Wizz Air.
In March 2021, Mr Peter Agnefjäll resigned as a Director of the Company.
Wizz Air Holdings Plc Annual report and accounts 2021
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In April 2021, we announced the appointment of Dr. Anthony Radev to the Board as Independent Non-
Executive Director. Dr. Radev presently serves as president of Corvinus University at Budapest, Hungary, is a
member of the Board of Directors at MOL Hungarian Oil and Gas Public Limited Company, a member of the
Board at Hungary Football Federation and at the DSK bank in Bulgaria. For over twenty years, Dr. Radev has
been involved with McKinsey & Co., in various roles, last one culminating in a Senior Partner from 2001 until
2013. Dr. Radev will be responsible for overseeing engagement with employees, replacing Mr. Barry Eccleston
who assumed the Chairmanship of the Remuneration Committee.
Customers
I would like to thank our ccash ustomers for their trust in Wizz Air. The year to 31 March 2021 was a turbulent
one where passengers saw their flight schedules altered or cancelled and flight refunds faced delays. Wizz Air
tried to operate as many flights as it could during this pandemic and has spared no efforts to automate key
passenger touch points like payments in the airplane or refunds to ensure safe and frictionless travel even in
very uncertain times. Wizz Air remains committed not only to offering the lowest fares and a safe, reliable
service, but also committed to inform, assist and help passengers in this current environment of ever-changing
restrictions, and run our service deploying superior health protocols.
Employees
Our people are the core of our business. More than 90 per cent of our people interact with our customers face-
to-face on a daily basis and a highly engaged workforce is synonymous for a positive Wizz Air travel
experience. In this difficult past year, the dedication and enthusiasm of our team of flight and cabin crew, front-
line and office employees was the single biggest driver of our ability to manage the business throughout this
very tough year.
Our latest Employee Feedback Survey showed that our employees are highly engaged, and that Wizz Air is
their employer of choice. We want to thank each and every one of our employees for their commitment and
enthusiasm during what has been a very difficult period. Their positivity and energy have been key to
supporting our customers and each other. The future is bright for Wizz Air colleagues, and we are committed
to them by investing in our workforce training programmes such as the Wizz Air Cadet Programme and the
Pilot Academy. We continue to improve the diversity of our workforce with the launch of “Cabin Crew to
Captain” and “Cabin Crew to Office” programmes. We continue to build a strong and diverse bench for the
Wizz Air Executives of the future.
I would also like to thank Wizz Air’s People Council for its efforts and its help in creating an efficient channel
between employees and the Board and Leadership Team, which in these turbulent times has been ever more
important.
Environment
Whereas today our low emission intensity is the airline industry benchmark, we know there is more to do. We
are focused on further fleet renewal to decrease emission intensity by a quarter within the next ten years. We
are also continuing to work on bold plans for the future, leveraging new technology and sustainable aviation
fuels. And we have worked diligently to align with the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD) so that our stakeholders can understand where Wizz Air is in its journey in
meeting its strategic sustainability priorities. We want to encourage stakeholders to suggest initiatives they
feel the Company should consider in order to deliver on its ambition to become the most sustainable airline in
the region.
Communities
We are conscious of the many economic, social and environmental developments impacting our communities.
We do not want to stay on the side-line. We have unveiled our sustainability programme Wizz Cares, which
rests on three pillars to address the environmental, the social and the people (including diversity and inclusion)
aspects of our business. It is overseen by Wizz Air’s Audit and Sustainability Committee and will be further
developed in the years to come.
Since the breakout of the coronavirus, we are making use of our aircraft assets in a different way to serve our
communities. Starting in March 2020, we have initiated over 130 repatriation and cargo flights and transported
several tonnes of protective equipment for local hospitals and healthcare workers. We are also operating an
A330 cargo aircraft for the Hungarian government which brings much needed vaccines to the Hungarian
people allowing to put the pandemic hopefully largely behind us during calendar year 2021.
Wizz Air Holdings Plc Annual report and accounts 2021
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Looking ahead
We started F22 well-prepared with one of the few investment-grade balance sheets in the airline industry,
flying one of the youngest and most efficient fleet and having a well-defined, proven business model. Our
agility and relentless focus on cost and cash are significant competitive advantages. Maintaining the strength
of our balance sheet and investment-grade credit rating remain top priorities.
The investments we have made this year in operating assets and people will ensure the Company responds
swiftly and efficiently to further changes in the industry. We are well-positioned for a return to more normal
operations and growth. I believe we are well-positioned to be a structural winner in the European airline sector.
William A. Franke
Chairman of the Board of Directors
2 June 2021
Wizz Air Holdings Plc Annual report and accounts 2021
8
STRATEGIC REPORT
CHIEF EXECUTIVE’S REVIEW
Dear Shareholders,
F21 was unprecedented in the 17-year history of Wizz Air. The aviation industry was heavily impacted by
COVID-19 related regulations, with passenger airlines around the world going into prolonged hibernation to
survive whilst calling upon extensive financial support. Wizz Air’s F21 revenue was down 73 per cent for the
year and we incurred a net loss of €576 million.
This said, Wizz Air proved to be very resilient during F21. Wizz Air entered the pandemic from a position of
strength, with an investment grade balance sheet and strong liquidity position, with the lowest cost business
model, and strength from its culture of entrepreneurship, agility and can-do mentality personified in each and
every one of our employees. This not only allowed us to better weather the storm, but positioned Wizz Air for
even bigger wins in the future.
Within a separate section, we have included the COVID-19 year in review, including the interventions that Wizz
Air has undertaken during the past twelve months. Outlining these events and our actions reminded us of what
a difficult year this has been, yet at the same time we have positioned ourselves to emerge from the crisis as
a structural winner.
Operational efficiency, cost leadership, innovation and service excellence are the cornerstone of Wizz Air’s
success, and to this day continue to inspire Wizz Air’s future growth. Our mission is very singular. At Wizz Air,
we believe that air travel provides opportunities that can enhance lives and make the world around us better,
bringing people and businesses together. We’re committed to making sure that everyone, everywhere can
benefit from air travel at the lowest possible prices, whilst setting high benchmarks for safety, customer
experience and sustainability.
For the year in review we run through the progress on our strategic priorities, to close with our view on the
industry, an industry that will not look like anything we have known before the pandemic.
A focused ultra-low-cost business model
In the current environment, and in light of the low levels of operation due to widespread travel restrictions, our
total cash balance is the single most important performance indicator. With our total cash balance at €1,617
million and an investment grade balance sheet, we remain one of the strongest players in the industry.
Maintaining this strong cash position has only been possible through our ultra-low-cost base, which has
allowed two things: 1) to sustain periods of severe business interruption significantly longer than other airlines
in terms of cash burn, moreover 2) to operate cash-positive flights serving our customers and helping the cash
position of our Company even during periods of restricted demand. Nonetheless, we were not immune to the
crisis. During F21, we strengthened our liquidity position by raising £300 million from the Bank of England
under the UK Government's COVID Corporate Financing Facility (CCFF), maturing in February 2022, and
€500 million proceeds from a Eurobond maturing in January 2024. Both financing facilities were issued on
highly competitive terms without burdening our cost structure materially.
Whilst we secured a strong position to weather the crisis, we also focused on widening our competitive cost
advantage by continuing to invest in the network (securing new attractive long-termed airport contracts as
we opened new bases and routes), continuing to invest in our fleet (securing an even lower cost base by
further up-gauging our fleet, now at an average of 205 seats per aircraft), and working with our partners to
get better cost and payment terms going forward.
Strong balance sheet and lowest-cost in this industry prevails, and, with our ultra-low cost business model we
will have the ability to take advantage of opportunities which may arise as competitors are withdrawing
capacity.
A stronger geographical footprint
The strength of our balance sheet and fleet order allowed us to grow our footprint – even during this crisis.
While doing so, we not only improved our odds for a faster recovery once restrictions lift, we also improved
our structural cost. In total we increased our number of announced or operating bases from 25 pre-COVID-19
to 43 point in time.
First and foremost, we improved our position in our core CEE region and consolidated our undisputed market
leadership, with a market share of 45.9 per cent in the low-cost sector and 20.9 per cent of the total CEE
market, up from 39.6 per cent and 17.5 per cent last year respectively. Within CEE, we made big strides forward
in certain markets where competition retrenched. In total we announced or opened seven new bases in CEE
with St. Petersburg, Lviv, Bacau, Larnaca, Sarajevo, Tirana and Burgas.
Wizz Air Holdings Plc Annual report and accounts 2021
9
Second, we strengthened historic positions in the West, with more base openings and routes in the UK and
Italy, markets where we have been operating for more than 15 years, and markets where the competitive
landscape is changing significantly in the wake of COVID-19. In total we announced or opened 10 new bases
in Western Europe (London Gatwick, Doncaster and Cardiff, Oslo, Milan Malpensa, Catania, Palermo, Bari,
Rome and Dortmund).
Thirdly, we opened our operation in Abu Dhabi, paving the way to replicate the success of Wizz Air Hungary
in the Middle East and surrounding markets, a total of 5 billion people within a five hour flight radius. Wizz Air
Abu Dhabi has received an Air Operator Certificate issued by the General Civil Aviation Authority of the United
Arab Emirates and started operations in the Middle East in January 2021.
The table below illustrates Wizz Air’s market leadership in the low-cost sector, which grew to 45.9 per cent,
an increase of 6.3 per cent year on year. We are the number one carrier in nine out of 13 CEE countries.
Market
Carrier
Share Airline
Share Airline
Number 1
Number 2
Number 3
CEE
Poland
Romania
Hungary
Bulgaria
Ukraine
Lithuania
Latvia
Slovakia
Albania
Serbia
Moldova
North
Macedonia
Bosnia and
Herzegovina
Wizz Air
Wizz Air
Wizz Air
Wizz Air
Wizz Air
SkyUp
Ryanair Group
Ryanair Group
Ryanair Group
Wizz Air
Wizz Air
Wizz Air
Wizz Air
45.9% Ryanair Group
48.2% Ryanair Group
66.8% Blue Air
52.2% Ryanair Group
64.1% Ryanair Group
28.6% Wizz Air
49.3% Wizz Air
62.3% Wizz Air
58.4% Wizz Air
29.6% Blue Panorama
67.1%
flydubai
76.2% FlyOne
77.1% Pegasus
26.0% Easyjet
47.3% Easyjet
20.1% Ryanair Group
34.6% Easyjet
23.6% Easyjet
26.6% Ryanair Group
46.7% Norwegian Group
31.2% Norwegian Group
37.7% SkyUp
27.3% Air Albania
12.5% Pegasus
23.8%
11.3% Chair
Wizz Air
61.7% Pegasus
13.0%
flydubai
Share
3.6%
1.9%
9.6%
5.2%
2.5%
16.2%
4.0%
6.0%
1.5%
23.8%
11.4%
11.1%
11.9 %
Taking into account all airlines operating to CEE, we kept our position as the number one carrier with 20.9 per
cent market share, up from 17.5 per cent in F20.
Number 1
Number 2
Number 3
Market
CEE
Poland
Romania
Ukraine
Hungary
Bulgaria
Latvia
Serbia
Lithuania
Albania
Moldova
Slovakia
Carrier
Wizz Air
LOT Polish
Airlines
Wizz Air
Ukraine
International
Wizz Air
Wizz Air
airBaltic
Air Serbia
Ryanair Group
Wizz Air
Air Moldova
Ryanair Group
North
Macedonia
Bosnia and
Herzegovina
Wizz Air
Wizz Air
Share Airline
20.9% Ryanair Group
27.7% Wizz Air
Share Airline
11.8% LOT Polish Airlines
25.3% Ryanair Group
Share
7.3 %
24.9%
42.6% TAROM
30.4% SkyUp
17.1% Blue Air
10.9% WizzAir
31.5% Ryanair Group
34.9% Bulgaria Air
66.7% Ryanair Group
44.8% Wizz Air
26.6% Wizz Air
23.5% Blue Panorama
34.6% Wizz Air
32.8% Travel Service
Group
56.5% Austrian Airlines
20.8% Lufthansa
13.4% Ryanair Group
13.6% Wizz Air
15.0% Lufthansa
25.2% airBaltic
21.6% Air Albania
33.2% FlyOne
26.0% Wizz Air
5.4% Pegasus
38.1% Austrian Airlines
10.1% Pegasus
12.8%
10.1%
7.3%
12.9%
6.8%
5.0%
16.8%
18.8%
10.4%
21.2%
8.3%
8.0%
(Source data for both tables: Innovata adjusted with Eurocontrol analysis, April 2020 – March 2021.)
Wizz Air Holdings Plc Annual report and accounts 2021
10
Our fleet as a driver of competitiveness and sustainability
Despite the prevailing uncertainty, we committed to investing into our future by continuing with our fleet
delivery programme. In F21, 14 A321neos joined the fleet, taking the total number of aircraft to 137 at the end
of March 2021. Today, 52 per cent of the Company’s total seat capacity is on the A321 family of aircraft.
A320ceo without winglets (180 seats)
A320ceo with winglets (180 seats)
A320ceo with winglets (186 seats)
A320neo with winglets (186 seats)
A321ceo with winglets (230 seats)
A321neo with winglets (239 seats)
Fleet size
Proportion of seats on A321
Average number of seats per aircraft
March 2021
Actual
31
28
9
6
41
22
137
52%
204.7
March 2022
Planned
17
26
9
6
41
49
148
67%
213.6
March 2023
Planned
6
23
9
6
41
82
167
78%
221.5
The new neo aircraft are powered by Pratt & Whitney GTF engines, featuring the widest single-aisle cabin with
239 seats in a single class configuration. The combination of these technologies reduces fuel burn by 16 per
cent, nitrogen oxide emissions by 50 per cent and delivers close to a 50 per cent reduction in noise footprint
compared to previous generation aircraft.
Our emission intensity, measured by CO2 per Revenue Passenger Kilometre (CO2/RPK), was already the lowest
in the industry in F20 and our continued investment into fleet innovation ensures we maintain a strong edge
versus any competitor. During F21, while Green House Gases (GHG) emissions were significantly lower than
F20 in absolute terms, our emission intensity was higher due to the lower load factors on our flights.
Nevertheless, this is indisputably of transient nature as we remain highly committed to lowering our emission
intensity and a low-carbon future, hence our disclosed targets, strategic priorities and actions on sustainability
(see page 19).
Creating the leading digital platform
Our customers’ digital journey remains a key focus area for us. Digital is the key to making travel as frictionless,
safe and easy as possible in a cost-effective manner. Today, over 94 per cent of our distribution is done directly
to customers through our digital channels.
This number increases each year as we continue work to deliver exceptional online products and services to
each customer in every country we serve. Today we are Europe’s fourth most visited airline website and within
the next two years we aim to leap into the number two spot.
Over the past year, Wizz Air delivered in the following areas:
1. Mobile-first experience. Our ratio of mobile traffic has increased significantly over the past twelve months
and our mobile platforms continue to account for greater share of total revenue. We have focused on
making our app easier and faster to use in order to continue to enhance mobile-first customer engagement.
2. Customer self-service and automation. Wizz Air was among the first airlines in Europe to offer automated
refunds for cancelled flights due to the pandemic, now handling 95 per cent of cash conversion refund
requests within a week. We also launched the Travel Planning Map, an interactive tool designed to help
passengers to stay informed on coronavirus-related travel restrictions. We also recently implemented our
very first chatbot, that will be serving our customers with speed, at scale.
Despite the pandemic, Wizz Air continued to execute its digital roadmap. Wizz Air is building a better
understanding of its customers so it can offer them new products and services based on their preferences. In
addition, we continue to improve our speed of innovation by adopting new infrastructure and architectures.
This enables us to not only stay a leader on cost efficiency but enables better scalability and responsiveness
to customers’ needs. Within all of this, cyber security remains a top priority as nothing is more important than
protecting our customers’ data.
Focus on our people
Our people are at the core of our business. More than 90 per cent of our employees face our customers on a
daily basis. We strive to maximise employee engagement, increase the quality of service, bring novel solutions
to complex problems, and to become a more agile organisation to survive during a crisis and, more
importantly, thrive coming out of it.
During F21 employee engagement score was at 8.1, slightly ahead (+0.2 points), versus industry average with
a participation rate of 79 per cent. As we outlined during our COVID-19 timeline of events on page 15, our
employees have endured a lot of hardship, and to see engagement at these levels is a testimony of their
dedication to Wizz Air’s success.
Wizz Air Holdings Plc Annual report and accounts 2021
11
We aspire for our workforce at Wizz Air to reflect our broad customer base. As such, we are proud to have a
diverse team of passionate aviation professionals. Our team includes more than 50 different nationalities at all
levels in the organisation, and we continue to make strides on more balanced gender representation. While
we improved Board gender diversity by nine per cent to a total 27 per cent, Management Team diversity by
10 per cent to 27 per cent, we will continue to do more, as also reflected in our strategic sustainability targets.
We are also determined to effect a step-change the underrepresentation of women in the flight deck – a long-
standing issue within the industry – with the help of our Cabin Crew to Captain programme.
To preserve the Wizz Air culture and offer more meaningful career opportunities, we have set ourselves a goal
to fill vacancies with internal talent in at least 50 per cent of these positions. During this year, we were
successfully able to achieve this in 67 per cent of the open positions, while continuing to deliver world-class
training to our people and giving them the right tools so that they can own their development and progress
in their career. We believe that Wizz Air offers the best career progression opportunity in the industry,
irrespective if you are a Pilot, Cabin Crew or an Office employee Wizz Air opens up opportunities for diverse
talents to learn, develop and succeed.
Outlook
F21 brought significant challenges to the entire airline industry and F22 foresees the continued impact of
COVID-19 related travel restrictions. We expect 2022 to be a transition year where we will experience a slow
but gradual recovery, mostly subject to the pace of vaccinations globally including in Europe.
Wizz Air Group performance in F22 is largely dependent on the capacity flown throughout the summer period,
as well as the revenue performance in the second half of F22, a period over which we, and other airlines, have
limited visibility.
Nevertheless, we remain confident that once travel will resume, Wizz Air will emerge as a structural winner.
We will become an even more formidable company, that will continue to create shareholder value and top of
the class profitability through cost and cash discipline, organisational and operational agility, and sustainable
and diversified growth.
József Váradi
Chief Executive Officer
2 June 2021
Wizz Air Holdings Plc Annual report and accounts 2021
12
STRATEGIC REPORT
SECTION 172 STATEMENT
The UK Companies Act 2006, section 172(1) provides that “a director of a company must act in the way he
considers, in good faith, would be most likely to promote the success of the company for the benefit of its
members as a whole, and in doing so have regard (amongst other matters) to
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
the likely consequences of any decision in the long term,
the interests of the company's employees,
the need to foster the company's business relationships with suppliers, customers and others,
the impact of the company's operations on the community and the environment,
the desirability of the company maintaining a reputation for high standards of business conduct, and
the need to act fairly as between members of the company.”
The Company has multiple stakeholders. The Board considers the most significant stakeholder groups to be
employees, customers, shareholders and investors, suppliers, governments and regulators including the
European Union institutions. As part of their induction, the Directors of the Company are briefed on their duties
and can access professional advice about them as appropriate.
The following paragraphs summarise how the Directors fulfil their duties, by reference to the relevant sections
of the Annual Report.
Decision-making, governance, risk
The Directors fulfil their duties partly through a governance framework that delegates day-to-day decision-
making to employees of the Company. The Company’s management governance structure reflects the highly
regulated environment in which the Company operates.
The Board needs assurance that the Company’s financial reporting, risk management, governance and internal
control processes are operating effectively.
For details of the Company’s risks and uncertainties and how the Company manages its risk environment see
pages 51-56.
People
The Company is a people business. Our employees are the face of the Company towards our customers. We
strive to have highly engaged people as it will lead to a more efficient and customer-centric service offering.
There are several key pillars on how the Directors engaged our employees, the key ones being our People
Council, our People Engagement Survey, the floor talks hosted by the CEO and our Base Visits.
For details on Board oversight of employee engagement see pages 33-38.
Customers
Customers are at the heart of every decision the Company makes. We strive to meet their needs whilst keeping
our cost structure competitive. The Company’s strategy is to provide a reliable, safe and environmentally
responsible travel experience, low prices, great service, more choices, and a frictionless digital experience.
For further details on customer experience see pages 22-23.
Suppliers
Wizz Air is a focused operation and we partner with many companies to deliver a “lowest-cost-done-right”
service. The Company values the agility of our partners even in the most difficult times and rewards them with
security and growth prospects.
For further details on supplier experience see pages 33 and 39.
Regulators and governments
An important objective, as the Company keeps expanding its diverse network, is establishing good
relationships with stakeholders and policy-makers by introducing the ultra-low-cost and low-fare model, the
Wizz Air brand promise and strengths in the Company’s key markets. Wizz Air aims for creating bridges
between the Company and local government bodies in order to achieve good co-operation and ensure
benefits to both sides and the local communities, while also minimising risks and bringing new opportunities
for the Company. Wizz Air is also continuously building connections with EU institutions and key industry
groups, and is assessing the effect of public policy changes on the Company such as initiatives regarding
taxation and sustainable aviation.
Wizz Air Holdings Plc Annual report and accounts 2021
13
In the context of the regulatory environment, Wizz Air has always paid close attention and dedicated various
resources within the Company to ensure compliance with the applicable regulations, such as but not limited
to the national enforcement bodies and customer protection authorities.
Community and environment
The Company is committed to making sure that everyone, everywhere can benefit from travel at the lowest
prices, while keeping in mind the social, economic and environmental impact of our operations. The Company’s
strategy is built on low fares and a diverse network, supported by efficient and sustainable operations and
high-quality customer service.
For further details on corporate responsibility see pages 21 and 33.
Shareholders and investors
The Board is committed to openly engaging with Shareholders as we recognise the importance of effective
dialogue. It is important that Shareholders understand the Company’s strategy and objectives.
For further details on Board engagement with Shareholders refer to page 63.
Wizz Air Holdings Plc Annual report and accounts 2021
14
STRATEGIC REPORT
OUR RESPONSE TO THE COVID-19 PANDEMIC
The COVID-19 pandemic has been unprecedented in scale and impact for people, communities and companies.
The aviation industry was pushed into the deepest crisis in its history and Wizz Air Management Team had to
take important decisions in a fast and resolute way to secure the continuity of the Company at first, and
subsequently to create an even stronger position for the Company as it was seeking to turn this crisis into one
of the biggest opportunities since its inception.
We used the following principles to guide our interventions:
(cid:1) Health and safety first, introducing a range of enhanced hygiene measures in the face of COVID-19, among
the first in the industry, to ensure the health and safety of crew and customers.
(cid:1) Cash and cost focus - minimising cost and cash burn, while continuing to invest into the future, by taking
20 new aircraft deliveries and announcing the opening of 18 new bases – both improving structural costs
once operations are fully resumed.
(cid:1) Customer centricity – our customers were going through turbulent times as well and faced a lot of
uncertainty as they were trying to plan and go from point A to B. In the beginning of the pandemic there
was an unprecedented scale of cancellations and, throughout the pandemic a constant unclarity on where
restrictions would hit next. It was clear that automating key touchpoints (e.g. refunds, travel-restrictions
map) was the right way forward.
(cid:1) Agility in everything we do – expanding bases, realigning capacity to the daily reality of the virus-related
restrictions, ramping up to 80 per cent capacity in the span of weeks to ramp down to 20 per cent of
capacity only weeks later, at all times following new cash-positive customer demand, and reallocating
against these opportunities.
(cid:1) Providing job security – we decided to provide clarity to our colleagues early on and then stick to our
decision to protect every remaining job since. Still, many sacrifices were made by our teams to help Wizz
Air through this pandemic.
(cid:1) Help those in need – we offered many repatriation and cargo flights well beyond the original boundaries
of our network, finding ourselves in Asia and in the Americas repatriating medical supplies, vaccines and
European citizens and building with this life-long loyalty to the brand.
Sequence of events since the outbreak of COVID-19
24 February 2020. The Crisis Management Center (CMC) was activated, based on the Emergency response
plan (ERP), instituting daily 7/7 meetings with the aim of managing the standard operations and customer
impact. Immediate actions to preserve liquidity and minimise costs were reviewed. A cross-functional team of
commercial, operations, communication and customer care employees would meet daily to ensure the latest
restrictions and guidelines are aligned, shared and implemented across the network.
Throughout F21 approximately 200 CMC meetings and COVID-19 forums were held, the Board meetings
number doubled in occurrence and Board updates were submitted daily until summer 2020 followed by
weekly frequency afterwards. Wizz Air held frequent Leadership Team meetings and increased the frequency
of employee calls including CEO Floor talks. All gave employees the opportunity to address their concerns
and help the Leadership Team to better understand the voice of the team and make the right decisions.
11 March 2020. The World Health Organization declared the COVID-19 outbreak a pandemic. As a result, a total
of 148 countries closed their borders, completely or partially, imposing entry bans, quarantines, or other
restrictions for travellers to the most affected areas. Consequently, by the end of the month, Wizz Air had
around 85 per cent of its fleet grounded. Following flight cancellations, throughout F21, communication on
day-to-day changes of travel restrictions, as well as health and safety measures reinforcement was sent to
customers prior to travel in 26 languages, doubling the communication from the previous year. To help
passengers and crew travel safely and worry-free, Wizz Air introduced several additional security measures to
support physical distancing during boarding and enhanced cleanliness on board. As part of the measures to
protect the health of customers and crew, customers check-in and make purchases online to reduce non-
essential interaction at the airport. Throughout the flight, cabin crew is required to wear masks and gloves and
distributes sanitizing wipes to each passenger. On-board purchases are allowed and suggested to be made
by contactless payments, to minimise physical contact. Wizz Air continued its stringent daily cleaning
schedule, with the entire aircraft being disinfected overnight, following official guidelines.
Following government announcements, a mandatory home office was introduced for all Wizz Air office
employees with a gradual return during May and June 2020.
Wizz Air Holdings Plc Annual report and accounts 2021
15
13 March 2020. Wizz Air formed the Cargo and Repatriation team for the launch of humanitarian flights,
repatriation of citizens, and transportation of essential medical equipment from China. Wizz Air deployed 10
per cent of its fleet and 200 staff in the effort, which included its first-ever transatlantic flights to the United
States and Canada. By the end of July, the team had successfully operated a total of 176 humanitarian cargo
and repatriation flights, including to airports in Asia and North America. Whereas these operations required
heroic efforts from the teams, they built lifetime loyalty with many of the people rescued and safely brought
back home.
15 March 2020. An active aircraft parking programme was initiated, whereby Wizz Air sealed and parked
aircraft to re-use them once it would operate higher capacity levels. By the end of F21, 48 aircraft (out of 137
aircraft) were parked with a peak number of 100 sealed at the height of the crises during winter 2020/2021.
April 2020. The impact of COVID-19 on life in general and aviation in particular was felt very significantly, with
over five million people infected and aviation coming almost to a complete halt. Wizz Air was heavily impacted,
operating 7 per cent of its capacity for a couple of weeks. Wizz Air was forced to reduce its workforce by 19
per cent and reduce salaries for Board members, Leadership Team, flight crew, cabin crew and office staff,
becoming one of the first airlines to right-size the organisation during COVID-19 pandemic. The measure aimed
at protecting in the long run the remainder of organisation’s roles, an action maintained until today. Contracts
with suppliers were reviewed. Capital expenditure was reassessed and stopped or deferred as appropriate.
May 2020. Wizz Air was the first European airline to roll out a number of safety measures tailor-made for the
customer needs during travel, including social distancing and contactless travel, hygiene and wellbeing,
branding and awareness campaigns, aircraft, crew and passenger protection. At the same time, Wizz Air
sought a faster return than competitors, to a sense of normalcy by adjusting the route network and increasing
the number of operating bases. Therefore, the Company announced four new operating bases: Lviv in Ukraine,
Larnaca in Cyprus, Milan Malpensa in Italy and Tirana in Albania. In the meantime, a cross-functional project to
develop a new health and safety protocol for Wizz Air flights was launched.
1 May 2020. Following the unprecedented number of flight amendments, Wizz Air was the first mover in the
industry to introduce an automated refund process to address customer expectations following flight
cancellations caused by the ongoing COVID-19 pandemic restrictions. Wizz Air would become one of the most
responsive companies in the industry in terms of speed of clearing out refunds, offering customers the benefit
of receiving within five minutes 120 per cent credit value with just one click and completing 95 per cent of the
cash refunds within seven days from the request.
15 May 2020. The Cargo & Repatriation team celebrated an extraordinary and unexpected milestone in Wizz
Air’s history – the arrival of Wizz Air’s 100th cargo flight. Wizz Air records broken include the longest direct
flight – Irkutsk to Budapest – with over eight hours’ flight time and a 5,800km distance, and the farthest aircraft
from its base (Los Angeles, being 10,000 km from Budapest).
June 2020. As Europe was slowly opening up, Wizz Air began revamping the business, emerging as the front
runner in the industry. During June and July, Wizz Air focused on the swift implementation of the network
redesign by opening five, previously announced new operating bases and announcing new operating bases:
Dortmund in Germany, Bacau in Romania and St. Petersburg in Russia. On top of these, nine new destination
airports were opened and numerous new routes announced. As a result, in July 2020 Wizz Air operated 74
per cent of its July 2019 capacity.
August 2020. Wizz Air Hungary became the first airline in Europe, to obtain an Air Operator Certificate (AOC)
from the European Union Aviation Safety Agency (EASA). During this period, Wizz Air was flying 80 per cent
of the previous year’s capacity, clearly outperforming the industry. Wizz Air opened three new stations, on top
of the eleven opened in the previous two months, enabling the start of numerous new routes. Two new
operating bases were announced in Gatwick and Doncaster, UK.
September 2020. Most governments advised against non-essential travel abroad, while closing borders again.
Most of the European countries required mandatory PCR tests or quarantine upon arrival. Hungary closed its
borders for foreigners for one month and, as a result, the Debrecen base was suspended, while the Budapest
network was reduced to two out of eleven operating aircraft. The number of parked aircraft gradually
increased from September until the end of November, with up to 72 aircraft parked.
September 2020. Following international restrictions, Wizz Air entered the domestic Italian market and, at the
end of the month, announced a new operating base in Catania, Italy.
September 2020. Wizz Air introduced the Travel Planning Map, an innovative and interactive website search
tool designed to help passengers determine which destinations in the Wizz Air’s network they can fly to at
that precise moment in time, and helpfully inform them of coronavirus-related travel restrictions in place. The
tool is updated daily.
Wizz Air Holdings Plc Annual report and accounts 2021
16
Wizz Air Interactive Travel Map introduced in September 2020 (illustrating possible destinations for a
passenger departing from London, Luton (LTN)) on 15 April 2021 (green indicating no restrictions, yellow
partial restrictions and red a full or partial entry ban via air).
25 September 2020. Due to the escalation of COVID-19 infections across all countries in Europe Wizz Air
activated home office for all office employees until the 11 October 2020.
October 2020. New restrictions were imposed, heavily impacting operations around the network. At the same
time, Wizz Air continued to invest efforts into positioning the Company for stronger performance coming out
of the crisis. Wizz Air Abu Dhabi officially received its AOC and completed the last step in the proceedings of
starting the airline in the United Arab Emirates. Further new operating bases were announced: Bari in Italy, and
Oslo and Trondheim in Norway to enter the Norwegian domestic market (these two bases will get suspended
in 2021 as Wizz Air suspends its domestic Norway program whilst maintaining a large international flight
schedule in and out of Norway).
October 2020. A cross-functional team of commercial, operations, public affairs, communications and cabin
crew members from different bases was formed to search for new charter flight opportunities. The team
succeeded in contracting over 30 flights, mainly for sporting associations across the Romanian, Hungarian and
Austrian markets, with a few charters serving stranded passengers in the UK. Some of the charters were flying
to new destinations for Wizz Air, such as Platov and Bern, at very short notice, once again proving Wizz Air’s
agility and flexible approach to seizing opportunities. Whilst this brought revenue and cash to the airline, most
importantly it built strong brand awareness and loyalty in our region with key influencers – as we transported
sports teams attending championships across Europe and beyond, along with workers travelling home for
Christmas.
November 2020. The number of COVID-19 infections began to increase significantly across Europe and, as a
result, the number of travel restrictions increased across the network. Consequently, Wizz Air was operating
at 21 per cent of capacity compared to the same month in previous year.
December 2020. The first vaccine was administered in the UK and by the end of March 2021, more than 590
million doses have been administered across 135 countries.
Wizz Air Holdings Plc Annual report and accounts 2021
17
In the following months, the number of COVID-19 infections continued to rise, with a new virus variant
developing in the UK and leading to many new restrictions and flight bans across Europe, especially on flights
to and from the UK. During November, 21 per cent of capacity was flown, while the first half of December
increased to approximately 50 to 60 per cent around the festive season. At the beginning of December, Wizz
Air announced its 40th base in Cardiff, UK. With the opening of the Cardiff base, Wizz Air UK’s fleet grew to 14
aircraft, operating 132 routes from 11 UK airports. As the second wave continued, and a third wave began in
many countries, further travel restrictions were imposed across Europe.
December 2020. The Leadership Team decided to pay all employees other than the Leadership Team a
Christmas bonus of €500 as a recognition of the hard work and great team spirit in managing the pandemic.
14 December 2020. Wizz Air signs an operator agreement with the Hungarian government to operate the
state-owned Airbus A330-200F aircraft, carrying humanitarian cargo. At the end of December, the first flight
to China was operated, carrying 1.5 million antigen rapid tests to Hungary.
January 2021. The Leadership Team revoked the salary reductions put in place in April 2020 for cabin crew
and office staff.
January 2021. Wizz Air Abu Dhabi’s inaugural flight took off from Abu Dhabi to Athens on 15 January. At the
same time, Wizz Air postponed the opening of the St. Petersburg base in Russia.
25 January 2021. Weekly PCR testing for office employees was introduced, as part of the new health and safety
protocols, aiming to further protect employees and prevent the spread of the virus.
14 February 2021. Wizz Air transported the first COVID-19 vaccine shipment on behalf of the Hungarian
government. By the end of F21, Wizz Air shipped 1.1 million vaccines and Hungary managed to become one of
the top ten countries in the world having the highest percentage of its population vaccinated against COVID-
19.
February/March 2021. Wizz Air added new operating bases in Burgas, Bulgaria (seasonal base), Sarajevo,
Bosnia and Palermo, Italy.
March 2021. Management decided to maintain a 7.5 per cent salary cut for Executives and pilots during 2022.
8 March 2021. Following the announcement by the Hungarian government to tighten the restrictions in
Hungary, Wizz Air activated a mandatory Home Office until 7 April 2021. During this period, the office remained
open for those employees whose presence in the office is essential, following the Health and Safety protocols
(presenting a negative PCR test, organised by the Company on a weekly basis).
By the end of F21, Wizz Air had announced 17 new bases, over 380 new routes, 25 new stations, it operated
186 cargo and repatriation flights, 32 charter flights and 6 cargo flights on behalf of the Hungarian government.
Over 450 cabin and flight crew changed base and moved to newly opened locations, displaying
professionalism, dedication and enormous resilience. The agility and herculean efforts of the Wizz Air team
will enable a quicker recovery during F22.
Wizz Air Holdings Plc Annual report and accounts 2021
18
STRATEGIC REPORT
REPORT ON SUSTAINABILITY
At Wizz Air, we are committed to transparency. We firmly believe that being transparent in everything we do
has the power to hold us accountable for the continued progress we need to make to deliver across our
sustainability objectives, be it on environmental, social or governance matters.
Wizz Air has a singular mission and purpose.
“We believe that air travel provides opportunities that can enhance lives and make the world around us better,
bringing nationalities, cultures and businesses together. That is why, at Wizz Air, we’re committed to making
sure that everyone, everywhere can benefit from air travel at the lowest possible prices, whilst setting high
benchmarks for safety, service, customer experience and reliability.”
Our mission is brought to life through our Culture
Our Culture is what empowers our people to live and work by the five important values of Wizz Air, allowing
us to create opportunities and find solutions to the challenges that our business may face. They are:
(cid:1)
Integrity – doing what is right for passengers and stakeholders, holding ourselves to the highest possible
standards in everything we do.
(cid:1) Dedication – we have an entrepreneurial, “can-do” attitude, taking individual and collective ownership,
ensuring that we are accountable for everything that we do.
(cid:1)
(cid:1)
(cid:1)
Positivity – we are an inspired and inspiring team, passionate about what we offer, using a positive
mindset to unlock new ways to do things better and more efficiently.
Inclusivity – we embrace diversity, engaging and collaborating with all key stakeholders to achieve our
goals.
Sustainability – we strive to be the most sustainable choice of air travel and work hard on continuously
decreasing our environmental footprint.
These values underpin Wizz Air’s identity and ambition. These values make Wizz Air unique and now more
than ever, will help Wizz Air to realise its long-term strategic goals.
Sustainability is the lens through which we create long-term opportunities and growth, manage risk and ensure
that we deliver the best and most environmentally sound services to:
(cid:1)
(cid:1)
(cid:1)
our passengers, the communities they live in or visit;
our planet, as we want to respectfully borrow its scarce resources and restore them gradually; and
our people, who enable it all.
In combination, we strongly believe that this will help to further build Wizz Air’s competitive advantage whilst
delivering leading financial returns to our shareholders.
Wizz Air’s ultra-low-cost focus as a quintessential sustainability strategy
Our ultra-low-cost operations have been the most important strategic priority in delivering on the mission of
the Company “to provide opportunities to all the customers it serves”. A highly efficient, ultra-low-cost
operation enables Wizz Air to provide air travel to more people in the world in an affordable, safe and reliable
way.
Wizz Air connects points on the map with an average travel length of just over 1,600km. That means our
services are connecting cities and destinations where alternative forms of travel are generally impractical or
have a higher environmental impact. We connect these points in a direct way – which lowers emissions. We
do not operate business class, which has had a higher carbon footprint. We are connecting these points in a
way that is affordable for all income levels in society. Large proportions of our passengers travel with us to
reconnect with friends or family.
Low cost does not mean low quality of service. We operate the youngest and most carbon-efficient fleet in
Europe. We offer great choice and value, a welcoming service which is delivered to our passengers by a well-
trained, highly motivated, engaged and positive-spirited workforce. This service is all enabled by our digitised
and scalable operations.
Our business model: our mission, goals, strategies and measures
Opportunity, efficiency and service are the cornerstone of Wizz Air’s success, and, today this still inspires Wizz
Air’s mission and its key strategies.
Deliver average 15 per cent annual growth in capacity.
Our objective – deliver leading shareholder and stakeholder value in aviation
Our goals
1
2 Deliver 13 to 15 per cent net income margin.
Reduce our CO2 emission intensity to 43g per RPK by F30.
3
Wizz Air Holdings Plc Annual report and accounts 2021
19
Our strategic priorities
1 A focused ultra-low-cost business model.
2
Increasing our geographic footprint.
3 Delivering leading sustainability.
4 Enable our business by creating the leading digital platform.
5 Continue to run a highly engaged, agile and entrepreneurial organisation.
Our key performance measures
1. A focused ultra-
low cost model
3. Leading
sustainability
5. A highly engaged
organisation
1/1 CASK performance
1/2 Ancillary PAX
revenue
1/3 Cash
3/1 CO2 emission
intensity
3/2 Diversity
5/1 Employee
engagement
5/2 Staff attrition
5/3 Promotion from
within
2.
Increasing our
footprint
2/1 Market penetration
2/2 Market share
4. Leading digital
platform
4/1 Brand awareness
4/2 Web/app visitors
4/3 Conversion
Our sustainability governance
Our sustainability agenda is governed by our Audit and Sustainability Committee. In November 2019, the remit
of the Audit Committee was extended to include the oversight of the Company’s sustainability strategy. The
Audit Committee was renamed as the Audit and Sustainability Committee and its terms of reference were
amended accordingly. Consequently, in the context of sustainability, the Audit and Sustainability Committee
is responsible for:
(cid:1)
reviewing the Group’s sustainability strategy and its implementation;
(cid:1) examining financial and non-financial risks, specifically those relating to environmental, social and societal
issues; and
(cid:1)
co-ordinating non-financial reporting processes in accordance with applicable legislation, international
benchmarks and best practice.
By continuously integrating sustainability across its business and operations (see below), the Company
contributes significantly to the UN Sustainable Development Goals that are within its scope of influence.
In F21, the Audit and Sustainability Committee reviewed sustainability during six of their meetings, of which
two meetings were fully dedicated to sustainability. The Board was subsequently apprised of the key
outcomes during the six Board meetings in F21. Deloitte Hungary has been advising the Company on best
practise Task Force on Climate-related Financial Disclosures (TCFD) reporting as detailed on page 23.
Sustainability was integrated into one of the five key strategic priorities of the Company’s strategic framework
and the Leadership Team will now formally report on the progress against sustainability actions and the KPIs
set out above.
During the March Board meeting, the Board nominated Johan Eidhagen as Chief People and ESG Officer. Mr
Eidhagen will lead the Sustainability Council, which was founded in 2018, and now meets at least monthly to
discuss the sustainability agenda for the Company and implementing relevant initiatives across the
organization. The Sustainability Council is led by the Senior Manager of Sustainability, is sponsored by the
Chief People and ESG Officer and attended by the Chief Financial Officer and Chief Marketing Officer, together
with the leaders of several strategic priorities in Operations and HR. In F21 the Sustainability Council met ten
times. It is intended that the Council will meet monthly but two meetings during the period April to June 2020
were cancelled due to the COVID-19 pandemic).
Going forward, the Audit and Sustainability Committee will continue to review the Company’s sustainability
agenda and progress during each of its meetings (six times per annum), in a review led by the ESG Officer,
and is planning at least two in depth engagement meetings during the year dedicated solely to sustainability.
The Sustainability Council will continue to meet monthly and will debrief the full Leadership Team including
the CEO on the progress it is making versus its strategic priorities. Amendments to goals and strategies will
be aligned. Subsequently, progress and future strategies will also be aligned with the Audit and Sustainability
Committee.
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20
Our mission as a force for growth
Offering opportunity for all without compromising our planet is our inspiration for growth. It is the raison d'être
of Wizz Air and covers the elements most relevant for the sustainability of our success: 1) our role in society,
2) our responsibility towards the environment, 3) diversity driving our success.
Our role in society
75 per cent of our historical growth has been through making travel more accessible to all. Wizz Air’s entry
into markets has been synonymous with prosperous development of communities and economies.
Throughout the COVID-19 pandemic, Wizz Air continued to invest into the integration and economic
prosperity of communities , announcing the opening of an additional 18 bases which will contribute to the
economic growth in these locations and communities by promoting tourism, generating employment
opportunities and increasing tax revenues.
Our role in society – testimonials
CEO Hermes Airports, Ms Eleni Kaloyirou:
“We are very proud for the opening of a Wizz Air base at Larnaca airport, a move that will yield mutual
benefits for the airline, for the airports and for the island of Cyprus. Wizz Air has proven its resilience during
the pandemic by showing agility to the new conditions of travelling, but also staying true to its vision of
growth, whilst embracing the initiatives for a more sustainable aviation environment.”
COO Tirana Airport, Mr Volker Wendefeuer:
“The 1st of July was an important and sunny day at Tirana International Airport. Wizz Air announced a new
base which provides new destinations for many Albanians and means economic growth and new
opportunities for the country and its citizens. Such good news was really encouraging and a delight in the
middle of the unforgettable year of 2020.”
Our responsibility towards the environment
Wizz Air aspires to be the most sustainable airline on the planet, and we believe that this is a key strength and
contributor to our competitive advantage. However, in the context of continuing impact of global warming,
our responsibility towards the environment is our single biggest opportunity in creating a clear pathway
towards being an even greener airline. Therefore we have set ourselves a 2030 goal of reducing emission
intensity to 43 grams per RPK.
Emission intensity
CO2 in g/RPK
F20 (baseline)
57.2
F25
47.3
F30
43
We did not take the work on our long-term target lightly and we believe that we have identified a number of
operational initiatives that will help reduce emission intensity materially by 2050 versus F20, the year we have
used our baseline as we introduced TCFD in F21. The Company, together with the Board of Directors, are
working to complete our long-term end-to-end plan prior to any further market communication on our 2050
targets.
Our diversity is driving our success
Wizz Air is an ethnically diverse professional organisation with over 50 nationalities within its employees’ base.
Despite this, we are conscious that we have much to do in terms of gender diversity. We have identified the
diversity of our flight crew as a major opportunity for Wizz Air and we want to be an industry leader. In
recognition of this, we launched a Cabin Crew to Captain programme in July 2020, which helps support cabin
crew members in transitioning to the flight deck via a comprehensive financial, travel and accommodation
support, as well as a tailored work and study schedule. We believe that this programme will help break down
gender barriers to the flight deck and will support ambitious crew members on their journey to the flight deck
and pioneer gender equality in aviation. We are now having a positive bias for training opportunities to a
capable workforce of talented women and by the end of the decade we expect 20 per cent of our flight crew
to be women, up from less than four per cent today.
Wizz Air knows it will make faster progress on gender diversity if its leadership is more diverse than today. We
have a strong commitment to close the diversity gap in our Board room and at leadership level, and we plan
to include Management Team gender diversity in our reward structure as part of our 2021 AGM remuneration
policy renewal.
Our sustainability priorities
To identify sustainability priorities that matter most to our stakeholders and that are most material to Wizz
Air, we have used a materiality assessment method that considers a wide range of environmental (E), social
(S) and governance (G) factors and issues. Each of these issues has been identified as representing a significant
risk or opportunity to our business. The results are shown in the table below. The most material issues to Wizz
Air and to our stakeholders can easily be identified by this analysis ( = most material issues). We will
Wizz Air Holdings Plc Annual report and accounts 2021
21
provide further perspective below with regards to our goals, strategies, results on the most material issues and
opportunities.
Materiality matrix
Stakeholder importance Wizz Air materiality
Higher Wizz Air materiality
E - Emissions standards met
E - Product footprint
E - Climate change position
E - Product H&S
G - Ethical conduct
E - Noise Emissions
S - Employee H&S
S - Employee Relations
S - GDPR
Medium Wizz Air materiality
E - Emissions management
S - Supplier standards
S - Social impact of services
S - Training
G - ESG reporting
G - Political transparency
S - Employment security
G - Shareholder representation
S - Equal Opportunities
S - Payment practices
G - Board composition
S - Complaints management
S - Community involvement
S - Human rights
Lower Wizz Air materiality
E - Energy management
E - Renewables
E - Fleet disposal
S - Work/life benefits
S - Accessibility of service
S - Responsible marketing
E - Freshwater use
Stakeholder engagement
We engage with our principal stakeholders on a continuous basis to sharpen our sustainability strategies.
Blending our vision and strategies with their views on Wizz Air, our operations and our industry have allowed
us to ensure we focus on what matters most and to be more ambitious in setting and achieving targets that
are meaningful and that will have a lasting impact.
During COVID-19 our principal stakeholders have sought even more guidance from the Company and their
feedback has been positive – they appreciated our proactive action in addressing those elements that are of
most importance to them.
Stakeholder
Our Customers
Our Investors
Why they matter to us
Our customers are the
foundation of our success. We
strive to meet their needs whilst
keeping our cost structure
competitive.
Investors’ continued support is
key to sustaining our business
model and our strategy. Their
support allows us to support our
customers through investment in
the growth of our business while
helping deliver leading
shareholder returns.
What matters to them
Our customers value the relationship Wizz
Air is building with them. They are looking
for a reliable, safe and environmentally
responsible travel experience, low prices,
great service, more choices, and a
frictionless digital experience.
Our investors value results delivered in a
sustainable and responsible manner. Our
investors see Wizz Air as a positive
disruptor in the industry not only in terms of
our low-cost business model, but also in
taking an environmental leadership position.
Wizz Air Holdings Plc Annual report and accounts 2021
22
Our People
Our Partners
Our Communities
Above all, Wizz Air is made of the
many loyal employees we have. They
are the face of the Company towards
our customers. We strive to have
highly engaged people as it will lead
to a more efficient and customer-
centric service offering.
Wizz Air is a focused operation and
we partner with many companies to
deliver a “lowest-cost-done-right”
service. Wizz Air values the agility of
our partners even in the most difficult
times and rewards them with security
and growth prospects.
Wizz Air brings prosperity and
happiness to the communities it
serves and operates in. It connects
communities into economies and
connects people with opportunities.
Our people want a safe environment to
work in where they are nurtured and
respected. Our people find reward in
the interaction with our customers and
find reward in realising their career
aspirations.
Our partners expect a trusting
relationship where both sides add and
retain value.
Our communities expect Wizz Air to
enable opportunities and progress, in a
responsible manner to the people,
society and the environment where we
operate in.
Environment – Wizz Air cares for our planet
Wizz Air is committed to aligning our climate change-related disclosures to the TCFD recommendations.
Governed by a dedicated Board Committee, the Leadership Team has identified goals and strategies and
tested these against different climate scenarios. We have outlined our plans in view of the different climate
risks and opportunities, and have put in place a rigorous tracking framework against these key performance
metrics that were identified.
Responding to TCFD requirements
1
Describe the board’s oversight of climate-
related risks and opportunities
2 Describe management’s role in assessing and
managing climate-related risks and
opportunities
3 Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium and long term
4 Describe the impact of climate-related risks
and opportunities on the organisation’s
business strategy, and financial planning
5 Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario
6 Describe the organisation’s processes for
identifying and assessing climate-related risks
7 Describe the organisation’s process for
managing climate-related risks
8 Describe how processes for identifying,
assessing and managing climate-related risks
are integrated into the organisation’s overall
risk management
Board level oversight is with the Chief Executive
and the Chair of the Board. See page 24
Leadership Team defines strategies and drives
progress through the Chief ESG Officer and the
Sustainability Council. See page 24
Integrated in the ERM process (see page 51) and
outlined further on page 25
Addressed through our comprehensive climate
strategy, see page 24, where we have outlined our
key strategic priorities
Our climate strategy integrates climate risk
assessments and is embedded in our mid-term
planning and management processes. Climate
scenario work will continue to evolve and improve.
Please refer to page 24.
Climate related risks are identified as part of our
ERM process (page 51). Our climate strategy
responds to short- and medium-term risks (page
24).
By integrating sustainability and climate as a key
focus area within one of our five corporate
strategies, we intend to improve focus and make
strong progress on key climate related priorities for
the Company. See page 28.
We manage climate-related risks through our
corporate ERM framework. See page 51.
9 Disclose the metrics used by the organisation
See page 31.
to assess climate-related risks and
opportunities in line with its strategy and risk
management
10 Disclose Scope 1, Scope 2 and if appropriate
Scope 3 GHG emissions, and the related risks
11 Describe the targets used by the organisation
to manage climate-related risks and
opportunities
We report extensively on Scope 1 and Scope 2
emissions on page 31. We will be working to report
Scope 3 in the future
See page 31 for other targets on key climate-
related metrics
Wizz Air Holdings Plc Annual report and accounts 2021
23
Environmental governance
Wizz Air’s climate strategy is governed by the Board of Directors and the Leadership Team, and in this effort
is supported and advised by the Audit and Sustainability Committee and the Sustainability Council. The Board
of Directors is very committed to being a leader with regards to reducing the impact of Wizz Air’s operations
on the environment and has historically been guiding the Leadership Team to invest in aircraft with the leading
technology in terms of emission efficiency. The Board of Directors continues to be highly committed to further
reducing and/or avoiding the impact of climate change in the short, medium and long term.
The Board of Directors examines and approves, based on the proposal of the CEO, the objectives and
strategies on the business and this includes climate change. The Board of Directors approves – as part of the
Enterprise Risk Management (ERM) process outlined on page 51 – the climate related risks, the risk appetite
and reviews the action plans proposed by the Leadership Team. The Sustainability Committee and the
Sustainability Council play a key role in the proposal of the strategy, the calibration with best-in-class practices,
and the execution of this strategy through well-defined strategic priorities.
In F21, the Audit and Sustainability Committee reviewed the environmental plan during six meetings, of which
one session has been an in-depth training session by an external provider. The Board was subsequently
informed on the key outcomes. The Audit and Sustainability Committee was key to the integration of carbon
emission intensity into the new Director and Leadership Team reward criteria.. The Committee also agreed to
the proposal from the Leadership Team to be an early adopter of the TCFD framework within the industry.
Deloitte Hungary has been advising on best practises of TCFD related to the F21 Sustainability report of the
Group . The F22 operating plan includes clear perspective on key environmental metrics with a plan towards
our F30 targets.
Company governance
Board of Directors
Approval and supervision of strategic objectives
Leadership Team
Development and execution of strategies
Sustainability governance
Audit and Sustainability Committee
Alignment of the Company’s sustainability strategic
objectives with the compelling need and calibration
of the goals and strategies with the best-in-class
standards in the industry. Approval of the climate-
risk universe, risk appetite and action plan to
address these risks.
Meets at least six times per year with at least one
session dedicated to in-depth training and
discussion on sustainability and climate-related
matters.
Monitors progress against targets.
Sustainability Council
Supports the Leadership Team in development of
sustainability strategies. Drives the execution
through the organisation via prioritisation and
resourcing. Centre of expertise on sustainability.
Oversees around 60 initiatives on sustainability,
responsible for organisational training and
development. Integrates key functional leaders to
deploy guidance and swift action into the operation
on key priorities e.g. fuel efficiency initiatives,
aircraft technology partnerships, sustainable
aviation fuels and non-fuel related emissions and
waste.
Meets at least twelve times per year with at least
quarterly CEO reviews.
Further, the Company has provided training to its Leadership Team and Board to ensure environmental
acumen will move to the same level of expertise as business acumen. This will ensure that Wizz Air stays well
informed of the most recent developments and needs in Environmental Governance, allowing us to benchmark
and reassess our targets, our strategies and our actions so we can ensure that we are making effective progress
in achieving our aspiration to be the undisputed leader on the environmental agenda within our industry.
Environmental strategy
Wizz Air acknowledges the fact that the aviation industry has a responsibility to minimise its effects on the
environment. Whereas we have several work streams within the environmental pillar, it is clear that the
reduction of greenhouse gases emission intensity is the #1 priority for Wizz Air. We have a clear strategic plan
driven by our goal to reduce emission intensity to 43g CO2 per RPK by F30 (down from 57.2g CO2 per RPK in
F20). This plan is based on building blocks and annual targets for every year up until F30, and, the Company
is working equally hard on developing its 2050 plan. Our F30 plan is outlined in more detail below. Wizz Air
has the KPIs defined to measure progress of our strategies, allowing us to correct course should we need to
or, alternatively, accelerate ahead of our initial targets.
Wizz Air Holdings Plc Annual report and accounts 2021
24
Climate change has been identified as a principal risk to Wizz Air as part of the ERM process (see page 51) and
it may impact our business over the short, medium and long term. We have outlined the impact that climate
change could have on our business via a high-level assessment of the impact of 2°C and 4°C global warming
scenarios, constructed on the basis that average global temperatures will have increased by 2°C and 4°C latest
by the year 2100. We have looked at the impact on our business in F30 projecting the size of our business
based on our current fleet plan.
In the 2°C assumption scenario, we assumed that in the period to F30 there is a broad-based and well-co-
ordinated action plan to rapidly limit and discourage greenhouse gas emissions in line with the Paris
Agreement’s objective of “holding the increase in the global average temperature to well below 2°C above
pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels”.
Based on existing and announced policies the world is not on course to achieve the outcomes of the United
Nations Sustainable Development Goals (UN SDG) most closely related to energy and the airline industry: to
reduce health impacts of air pollution (part of SDG 3) and to tackle climate change (SDG 13). This is in line with
the Net Zero by 2050 (NZE2050) scenario as outlined in the World Energy Outlook 2020 by the International
Energy Agency.
In the 4°C assumption scenario, which is consistent with the Stated Policies Scenario (SPS) as outlined in the
World Energy Outlook 2020 by the International Energy Agency, we see policies in line with today’s stated
policies, insufficiently ambitious and with high levels of emission. The impact of this scenario to the climate
change will be increasingly apparent by 2030.
Risk/opportunity
Transition 2°C scenario
Policy & legal
Risk discussion
Carbon taxation: carbon price
schemes are likely to be introduced
reflecting the true cost of carbon
emissions and with this increasing
the cost of our service to the
passenger.
Sustainable Aviation Fuels: from a
policy point of view we expect
biofuels blending mandates for a
small part or possibly up to 62 per
cent of fuel by 2050 as drafted by
the “ReFuelEU Aviation” initiative,
which, due to limited feedstocks and
higher costs of biofuel would lead to
an overall increase in jet fuel prices.
These blending mandates are
expected to be more common as of
2025 and as such this is a medium to
long-term risk for the Company.
Technology obsolescence:
disruptive engine and aircraft
technology may get introduced like
hydrogen or electric aircraft, which
could potentially make the
obsoleting existing technology, but
also materially reshape the
environmental footprint of the
industry. This is a longer-term risk
for the Company.
Technology
Market
Public opinion may shame certain air
services like business class flights,
long-haul operations, <1000km
flights. This is a short-, medium-, and
long-term risk for the industry.
Opportunity discussion
Materiality
High
Given the industry profitability, it
is likely that increases in carbon
taxes or fuel prices will be passed
on to customers. Given the
emission intensity of Wizz Air is
significantly below our
competition, the relative cost
advantage of the lowest intensity
airlines like Wizz Air would
improve. At the same time, Wizz
Air will continue to work on
efficiency initiatives to lower
emissions. More perspective on
our fleet programme and our fuel
initiatives can be found on page
29 respectively.
High
Low
As technology comes on stream
during the next decade (e.g.
hydrogen aircraft by 2035), there
will be an opportunity to
potentially renew the fleet with
these new aircraft types. Wizz
Air’s position with a
predominantly leased fleet with an
average lease length of ten years
will allow us to renew technology
with reduced financial impact. We
are proactively engaging in
discussions regarding this next
generation aircraft.
Flying single economy class and
an average stage length of
1,604km and only 13% of flights in
F21 below 1,000km (some of
which can be replaced with rail),
Wizz Air’s model is more resilient
than other competitors in the
industry.
Wizz Air Holdings Plc Annual report and accounts 2021
25
Reputation
Airline services in general may be
shamed by public opinion or banned
in part or in full by authorities. This is
a medium and long-term risk for the
industry.
It is key for Wizz Air to continue
to embrace and take action on
reducing carbon emissions whilst
being an early adopter of new
technologies.
Investors may divest from high-
emitting industries and, over time,
this may affect the cost of capital for
Wizz Air. This is a medium and long-
term risk for the industry.
Physical 4°C scenario
Acute
Severity of weather disruptions.
Climate change will lead to more
frequent extreme weather situations
such as heat waves and large
storms. As aviation depends on
meteorological conditions it may be
disrupted more frequently leading to
increased incidences of delays,
diversions or cancellations. Such
events may have a material
operational and financial impact.
Chronic
Chronic change in weather patterns
may lead to reduced activity levels
during extreme weather conditions
which may impact willingness to
travel.
We aspire to continue to be an
industry disruptor not only on
low-cost of operation but equally
on carbon intensity of our
operation. This over time should
result in an even more competitive
cost of capital.
Wizz Air has and will continue to
invest in disruption management
to ensure safe travel conditions for
our passengers and our goal is to
always maintain or re-establish a
safe operation in the fastest and
most agile way possible. At the
same time, we have diversified our
operation geographically to avoid
reliance on certain geographies
should such an adverse natural
event occur in a certain region
within our network. The Group has
also revised its hedging strategy
to avoid incurring financial losses
during these disruptions.
Wizz Air will continue to evolve its
network to ensure its services stay
relevant to the communities it
serves.
Medium
Medium
Medium
Medium
Environmental risk and opportunity management
Wizz Air has outlined several climate scenarios and has integrated climate risk management into its Enterprise
Risk Management (ERM) process. We have attributed the lowest risk tolerance on our climate risks (the same
lowest risk appetite as applied to safety risks) to ensure there was additional attention on driving the action
plans for these risks.
The output to all this is diligent, long-term action planning, of which you will be able to find the outcome
outlined below as disclosed in our integrated annual report.
This risk management process feeds into the Risk Council, into the Audit and Sustainability Committee and
into the Board of Directors and as such has strong support and priority in terms of integrating into our business
plans and actions to mitigate the risks.
Detailed analysis of the potential financial impact of climate change risks
To help us understand the potential impact of climate change on our business and operation, we have
completed a more detailed analysis on the three key risks outlined: 1) market and reputation risk leading to a
loss of revenue as certain passengers would no longer be interested in our services; 2) a polluter-pays tax
policy geared at reflecting the true cost of travel; and 3) a new disruptive technology which renders the
existing technology obsolete.
The assessment looked at: 1) the impact on our commercial plan, i.e. our ability to generate revenue; 2) the
impact on our structural economics, i.e. the impact on our cost structure and/or the yield environment driven
behind the ability to potentially pass-through certain costs to the end customer; and 3) the impact on our
balance sheet.
While the two different climate scenarios (2°C and 4°C scenarios) outlined above identified the financial risks
to our business, we concluded that the majority of the risks outlined will guide our longer term strategy , and
we have concluded that Wizz Air, within the industry, is well-positioned to deal with short- and medium-term
adversities relatively better than peers.
Wizz Air Holdings Plc Annual report and accounts 2021
26
Market and reputation risk
What we modelled. We have modelled that passengers opt-out to a material extent from less-essential travel
services. The way we have modelled this is by looking at our different traffic types i.e. visiting friends and
relatives (VFR or essential travel), leisure (less-essential travel), business (less-essential travel). We assumed a
severe 30 per cent decline in leisure and business travel to reflect travellers who opt for alternatives, whilst,
we have maintained our forecast for VFR traffic as it is the most essential traffic flow as also evidenced during
COVID-19. We have assumed this would be a “gradual” trend over time and would transpire in Wizz Air markets
over a period of ten years.
Impact on revenue. Based on pre-COVID-19 traffic flows, 45 per cent of our business would be impacted seeing
a 30 per cent decline, meaning a 13.5 per cent revenue loss over ten years or a 1.3 per cent loss of revenue
annually.
Impact on structural economics. Without actions this would have a (minor) impact on aircraft utilisation and
our structural costs; however, given the growth momentum of Wizz Air, the impact on structural economics
can be mitigated. Furthermore, the impact on industry demand with higher exposure to, for example, leisure
and business travel, would lead to a slower growth rate and lower demand in the industry for newer capacity.
Given this would be a gradual trend and not a demand shock, we would expect industry capacity to adjust to
this potential trend and to the lower market growth.
Impact on balance sheet. Wizz Air’s worst-case scenario would shift one year of growth over a ten-year period.
We could adjust the order book in case this risk would materialise and phase this growth in capacity to better
match the new demand environment. As such, we deemed the impact is negligible.
Risk profile. This is a likely risk as COVID-19 has raised awareness in society that a new way of living and working
should be considered. This is however a medium- and longer-term risk as we know these lifestyle trends take
an extended period of time to become established and materially change societal habits.
Mitigating actions. Wizz Air has chosen to become a leading carrier in substance on sustainability aspiring to
have the lowest carbon emission intensity, along with offering the lowest fares, as a point of difference for the
brand. Our transition strategy is to simply have the lowest emission intensity in the industry, and to offer
customers a way to offset their carbon emissions until truly carbon neutral flights become a viable option in
the future. As Wizz Air becomes synonymous with lower emissions and a sustainability focused brand, we
expect to continue to increase our traffic with more environmentally conscious customers and this will further
benefit our market share. We believe that attracting this new cohort of customers will also help to offset the
reduced market growth.
Tax policy risks
What we modelled. We have modelled that current tax policies are reformed to incentivise carbon-efficient
technologies, and, that the overall level of taxation in the mid-term (five-year horizon) doubles. The form of
taxation can be multiple 1) blending mandates for sustainable aviation fuels to stimulate the development of
alternative fuels 2) general taxation where tax revenue does not flow back specifically to the development of
new technology (like e.g. hydrogen-powered aircraft) instead is used for general purposes. We have modelled
with an assumption that all carbon generated by the industry would be taxed at a rate of €50 per tonne (for
perspective, in F20 56 per cent of carbon was taxed at an average rate of €21 per tonne) and that this tax
charge would get implemented in the next five years.
Impact on revenue. There would be an indirect impact on revenue (we assume that this tax charge would be
recognised as a cost from an accounting point of view). The revenue impact would be driven behind the
actions taken by airlines to pass on the increased cost of doing business to the passenger. Given near perfect
price elasticity of air services we would expect to see an equivalent revenue decline and a partial offset as the
industry as a whole would pass on the increased cost of travel to the revenue line.
Impact on structural economics. Structural economics would not get materially affected as the absolute cost
increase would be passed on in revenue, assuming price pass-through by the industry.
Impact on balance sheet. Wizz Air would not see a material impact on its balance sheet.
Risk profile. We believe we will see increasing blending mandates of sustainable fuels with conventional fuels
and taxation for more polluting technologies will occur more frequently (e.g. Sweden taxation on older aircraft
technology). This is a medium- to longer-term risk as blending mandates for the EU are expected to start to
come into effect by 2025 at two per cent (to possibly increase to a much higher percentage by 2050).
Mitigating actions. Whereas Wizz Air will not be immune to this increase, our strategy to have the lowest
carbon footprint and lowest emission intensity will give us a competitive advantage as it will get less affected
by this tax burden on a relative basis (versus competitors). This will allow Wizz Air to further improve its cost
leadership position and will allow us to have lower price increases to offset this increased cost of doing
business. Increased taxation may slow overall industry growth, especially in business segments with higher
emission intensity.
Wizz Air Holdings Plc Annual report and accounts 2021
27
Technology risk
What we modelled. Technology change is a longer-term risk, while the direction is clear the technical challenge
is material thus making the timelines harder to project. We are very supportive of the developments in this
area and are playing an active role in discussions with OEM’s on what would be the “top level aircraft
requirements” for future technology to be successful. The key technology example is the hydrogen-powered
aircraft, but this is a long-term development as the earliest these aircraft will go into production will be post-
2035.
Impact on revenue. There should not be an immediate impact on revenue nor a longer-term impact on revenue.
At this point the economics of such technology are unclear so is whether the structural economics of such an
aircraft would fit a ultra-low-cost provider
Impact on balance sheet. Our current balance sheet is not affected, however our balance sheet in the future
could incur increased cost as we would have to renew our fleet base over time as these aircraft become
available. Given the length of our leases (at 8 to 12 years) and a likely transition period to the new fleet, we
believe the balance sheet exposure will be limited. Looking at electrical vehicle adoption, we should assume
that introduction will happen but only on a gradual basis in the medium term.
Risk profile. We believe this is an important risk that eventually will happen, but gradually over an extended
period of time.
Mitigating actions. Wizz Air is partnering with Airbus on the development of the top-level requirements to
ensure that 1) Wizz Air learns from the challenges and directions being taken by the development team 2)
Wizz Air can feed into the development team what it believes is a sustainable business model. Sustainability
is defined in the broadest sense of the term with sustainability not only referring to environmental sustainability
but also to business model sustainability.
Environmental priority programmes
We have five priority programmes on environment.
1 CO2/RPK reduction – our core programme to reduce emission intensity of our services
2 Fleet renewal – a key cornerstone of the emission intensity reduction, driving most of the targeted
reduction by F30
3 Fuel savings initiatives – as an important add-on to drive a further reduction
4 Offset programme – to beyond intensity continue to reduce the impact of our operation on our planet
5 Noise reduction programme – with focus on technology and noise emissions in vicinity of airports
1 CO2 per revenue passenger kilometre (CO2/RPK) reduction
This is the key environmental metric for Wizz Air as it is the most significant element of our carbon footprint
with CO2 at 99% of our total GHG (CO2e) emissions. 1 tonne of fuel burn emits 3.15 tonnes of CO2 (as per
international conversion standards). In F20, Wizz Air had the lowest emissions in the industry expressed in
CO2 per RPK as it operates the youngest fleet at the highest seat load factors. Wizz Air declared a target
reduction to 43g CO2/RPK emissions by fiscal 2030 versus its fiscal 2020 baseline of 57.2g CO2/RPK. The
progress versus target is also part of the incentive scheme as of fiscal F22 for CEO and Officers.
CO2/RPK
Pre-C19 results
Wizz Air
57.2
Ryanair
66.0
EasyJet
70.8
AF-KLM
79.0
IAG
89.8
LH
92.2
SAS
95.0
Source: Annual and quarterly reports and presentations: (1) Latest available information; (2) Latest FY results
During F21, where total GHG emissions were significantly lower and this intensity metric was adversely affected
due to the enforced Government restrictions introduced due to the COVID-19 pandemic. It impacted the
efficiency of the operations of Wizz Air as passenger load factors on aircraft were significantly below pre-
COVID-19 levels. Passenger load factors are expected to recover through calendar year 2021 and calendar
year 2022, hence lowering our CO2/RPK. As we continue to renew our fleet, we are projecting to be back on
track from F24 onwards.
CO2per RPK glidepath
F20
57.2
F21
F22
77.3 62.9
F23
F25
F24
51.1 48.9 47.0
F26
45.1
F27
44.1
F28
F30
F29
43.1 43.0 43.0
Source: Annual and quarterly reports and presentations: (1) Latest available information; (2) Latest FY results
The key actions to deliver on our CO2/RPK glidepath are outlined below: fleet renewal (contributing to 22 per
cent reduction with the current orderbook); fuel savings initiatives (contributing 1 per cent reduction) and
Sustainable Aviation Fuels (contributing 2 per cent reduction). Offset programmes are targeted to deliver
additional benefits.
Wizz Air Holdings Plc Annual report and accounts 2021
28
2 Fleet renewal
Since its very first flight in 2004, Wizz Air has always operated the Airbus A320-family of aircraft and currently
operates one of the youngest fleets in Europe with an average age of 5.4 years.
Years
Average Aircraft Age
Wizz Air
5.4
Ryanair
8
EasyJet
8.0
AF-KLM
11.6
IAG
10.6
LH
12.5
SAS
9.0
Wizz Air does not only have one of the youngest fleets, but also one of the most efficient. The Airbus A321neo,
which Wizz Air introduced in March 2019, is the most efficient single aisle aircraft with the lowest fuel
consumption per seat-kilometre in its category. The new generation Airbus A321neo aircraft is powered by
two Pratt & Whitney geared turbofan engines and features the widest single-aisle cabin with 239 seats in a
single class configuration, offering Wizz Air maximum flexibility, fuel efficiency and low operating costs. The
A321neo delivers exceptional fuel economies by reducing fuel consumption by 16% compared to the A321ceo.
Fleet efficiency
Avg. seat count
NEO seats share
F20
201
8%
F21
205
23%
F22
214
41%
F23
221
56%
F24
226
67%
F25
226
77%
F26
229
87%
F27
229
93%
F28
231
99%
F29
231
100%
F30
231
100%
3 Fuel savings initiatives
We continue to focus on initiatives that reduce our impact on the environment by consuming less fuel. In total,
during F21, we launched initiatives that on a going basis are reducing consumption by 1.1 per cent. We continue
to work on the ideation and qualification of other optimisation projects to deliver a reduction of 20bps of
consumption every year.
Initiative
Differentiated Cost Index
CONF 3 landing
Cost Index Optimisation – Speed Compliance
Performance/Idle Factors
ZFW Optimisation
Reduced take-off configuration
Start date
Jun-18
Aug-19
Jun-20
Jun-20
Jun-20
Oct-20
% Efficiency
0.4%
0.2%
0.4%
0.1%
0.3%
0.3%
Differentiated Cost Index: Considering that the cost index represents the cost of time over the cost of fuel, a
differentiated cost index is applied to the CEO and the NEO fleet which better represents the different time-
related costs for each aircraft type and allows to maximise the cost reduction (and fuel burn) of our operations;
Cost Index Optimisation – Speed Compliance: During the last months (starting in June 2020), a non-standard
speed policy was introduced to further optimise fuel consumption;
Performance/Idle Factors: We are constantly measuring and monitoring (through an external provider) flight
data, recorded for each flight by the aircraft itself. This data is used to create individual performance models
for each one of our aircraft, which are then compared to an expected book-level performance. The resulting
performance factor is used to lower fuel burn, increasing the accuracy of the operational flight plan and
reducing the need for discretionary fuel on board. Idle factors are used by the on-board flight management
system to better estimate top of descent (T/D), reducing the need to apply engine thrust during descent;
ZFW Optimisation: Operational flight plans created by the Flight Planning System used to be calculated with
an estimated Zero Fuel Weight (ZFW), based on standard and fixed weight of passengers and their luggage.
Around a year ago, we introduced a new model to better estimate ZFW and at the same time, to reduce the
number of underestimations. Using machine learning algorithms, a model was trained with actual data over a
period of two years to estimate ZFW based on different factors such as: city pair, time of the day, period of
the year, etc. The resulting estimated ZFW was around one tonne lower than using the simpler method;
Reduced Take-off Configuration: Last year we harmonised in our operations manual the recommendation for
take-off flap configuration for A320 and A321. Lowering the recommendation to CONF 1 for A321 (same as for
A320) has a significant fuel saving potential (of course when it’s feasible for application and the captain has
the final say on this) of around 15kg of fuel;
CONF 3 Landing: A reduced landing flap configuration (vs full flap) allows for around 10kg of fuel savings per
approach, due to the decrease in induced drag, meaning that a lower thrust setting is required. As with take-
off configuration, this is just a recommendation for fuel efficiency and should always be performed under
captain’s discretion, and is currently achieved at around 60 per cent of flights.
Wizz Air Holdings Plc Annual report and accounts 2021
29
4 Offset programmes
In November 2020, Wizz Air started a voluntary CO2 emission offset programme as part of its wider
commitment to reducing emissions. The programme enabled passengers to calculate their flight’s
environmental impact and provide choice to offset the carbon emissions of their travel. The programme, which
is run in partnership with climate-focused technology company, CHOOOSE, provides passengers with the
option to offset their journey by supporting trusted, high-quality and high impact climate projects around the
world. We are working with CHOOOSE because they offer offsets from projects that are currently aligned with
the Oxford Principles for Net Zero Aligned Carbon Offsetting (the “Oxford Offsetting Principles”) and we
intend to shift our efforts from high-quality offset projects to long-lived storage projects in the long run. To
account for their carbon emissions, passengers simply make a payment supporting a verified carbon offset
and receive a certificate in return that officially recognises the emissions they have offset.
Wizz Air is currently supporting two verified carbon-reducing projects: The International Small Group and Tree
Planting Program (TIST) in Uganda, an award-winning and longstanding reforestation project; and The
Pichacay Landfill Gas to Renewable Energy Project in Ecuador, which recovers and repurposes landfill methane
to produce clean electricity.
Both projects are certified by the Verified Carbon Standard to measurably reduce emissions. Since the start of
the programme, only a very small percentage of bookings have elected to offset carbon. Wizz Air continues
to build and improve this platform to ensure that it can play a more meaningful role going forward e.g., by
bringing this within the booking flow over time in a way that should significantly increase its uptake by our
customers.
The total offsets funded by Wizz Air are now covering 67 per cent of emissions (ETS offsets excluding free
credits, voluntary offsets). The average price during F21 of an EU ETS credit was €37.23 (compared to €21.42
in F20).
Scope 1 CO2 emissions with EU/UK ETS offsets (excluding free credits)
Scope 1 CO2 emissions with CORSIA offsets (excluding baseline credits)
Scope 1 CO2 emissions with voluntary offsets
F20
2,093,245
F21
863,180
—
—
—
105
Scope 1 CO2 emissions without offset (free credits, baseline offsets)
1,655,686 427,467
5 Noise reduction
At Wizz Air, we are also strongly focused on noise reduction given their positive impacts on the communities
we depart from or arrive to.
(cid:1) Our fleet renewal programme delivers strong noise reduction benefits. The A321neo delivers an almost 50
per cent reduction in noise footprint versus the previous A321 aircraft (A321CEO).
(cid:1) The number of aircraft in our fleet meeting the ICAO Chapter 4 noise emissions standard is at 100 per
cent and meeting Chapter 14 emission standard is at 70 per cent (only the 41 A321CEO aircraft do not
meet the Chapter 14 noise emission standard) with a projection to get to 100 per cent during 2028. ICAO’s
Chapter 4 standard for aircraft noise applies to aircraft certified from 31 December 2005, and Chapter 14
applies to aircraft certified from 31 December 2017. Chapter 14 requires aircraft to be at least 7 EPNdB
(Effective Perceived Noise in Decibels) quieter than Chapter 4. We do not operate contracted aircraft for
passenger transport.
Fleet
compliance
Chapter 14
Mar-20
66%
Mar-21
70%
Mar-22
72%
Mar-23 Mar-24
79%
75%
Mar-25 Mar-26
90%
83%
Mar-27 Mar-28 Mar-29 Mar-30
100%
94%
100%
99%
For reference, table below shows (in EPNdB) that Airbus NEO aircraft delivers a strong margin versus the
Chapter 14 ICAO requirements. Our A321NEO EPNdB levels are like those of Boeing 737-8 with LEAP engines
EPNdB, even with the A321NEO transporting 42 passengers more per trip.
EPNdB
A320NEO
A321NEO
Boeing 737-8
Lateral
87.0
88.2
88.5
Flyover
79.6
83.4
82.6
Approach
92.2
94.8
94.2
Vs Chapter 4
-19.8
-14.6
-14.9
Vs Chapter 14
-12.8
-7.6
-7.9
Wizz Air Holdings Plc Annual report and accounts 2021
30
All environmental metrics and targets
Our climate strategy includes challenge goals to address climate risks and opportunities across our operation.
All these metrics are key for our operation. For the first time during F22, CO2 as measured in gram per RPK,
will be included in the annual remuneration targets for all Officers.
Area
Unit
Note
F21
F20
F19
2030 Target
CO2 / RPK
g/RPK
Priority/1
77.3
57.2
58.8
43
Emissions
CO2e Scope 1 (a + b + c)
CO2e Scope 2
CO2e Scope 3
CO2 Scope 1 (a)
CH4 Scope 1 (b)
N20 Scope 1 (c)
N2O Scope 1
SO2 Scope 1
NMVOC Scope 1
CO Scope 1
Particulate Matter Scope
1
t
t
t
2
2
3
1,303,398
2,197
n.m.
3,783,901
4,670
n.m.
3,310,219
n.m.
t
t
t
CAEP/8
t
t
t
t
Priority/4
5
6
6
7
8
9
10
1,290,647
459
12,292
20%
406
205
2,663
61
3,746,884
1,332
35,685
7%
1,178
595
7,732
178
3,277,836
1,165
31,217
2%
1,030
520
6,764
156
100%
Noise
Waste-to-landfill
Chapt.14
%
Priority/11
12
70%
98.3
66%
n.m.
66%
n.m.
100%
Natural resource use
Freshwater use per sales
Energy use per sales
Kerosine use per sales
l/EUR
GJ/EUR
m3/EUR
13
0.0058
14 0.000034
15 0.000695
0.000015
0.000540
0.000560
Management
Booked load factor
Stage length
Sustainable aviation fuel
Offsets
Aircraft age
Notes:
16
%
17
Km
%
18
% Priority/19
Years Priority/20
64.0
1,604
0.0007
67
5.5
93.5
1,635
0.0002
56
5.3
92.7
1,618
33
4.9
(1). CO2/RPK. See page 28, Environmental Priority Programmes.
(2). Scope 1 and scope 2 CO2e emissions are emissions we control directly. Scope 1 emissions are linked to sources we own,
lease or control, whereas scope 2 emissions relate to purchased energy. Given very high levels of outsourcing in the Wizz Air
business model (third-party airport ground handling, maintenance contracts, no owned office contracts) scope 1 emissions
relate purely to the kerosene used in the aircraft, whereas for example fuel used in ground handling transport is a scope 2
emission. Scope 2 emissions include electricity consumption or heat consumption in offices or facilities (excluding smaller
locations used by local crews at airports where electricity and heating consumption is starting to be tracked) and electricity
consumption at airports due to ground power to aircraft. Given 99 per cent of scope 1 and 2 emission is driven behind jet fuel
consumption it underlines the importance of the efforts the Company is taking to reduce jet fuel emissions as a strategic
priority. We have decided in agreement with the Sustainability Council and the Audit and Sustainability Committee for those
reasons both the scope 1 emissions and the key fuel initiatives as priority programmes for Wizz Air.
(3). Scope 3 CO2e emissions are emissions that we can influence but that do not occur directly in our value chain. They relate to
employee commutes to/from work or other business-related travel, emissions due to production or distribution of electricity
used in Wizz Air leased or owned facilities, upstream emissions of fuel companies, jet fuel consumption of maintenance
providers, emissions related to airport operations, emissions related to waste management operations and emissions related
to the production and logistics of capital goods purchased (e.g. aircraft). Scope 1 and scope 2 emissions have been to the
focus of our reduction efforts and Wizz Air will work with its vendors and partners on how to bring visibility to and drive
reductions in scope 3 emissions.
(4). Scope 1 CO2 emissions (Carbon Dioxide) by our operations was 1,290,647 tonnes (based on our jet fuel consumption of
409,729 tonnes multiplied by the standard 3.15 multiplier to convert jet fuel kerosine into CO2 emissions). Under our priority
programmes outlined above we have detailed the key actions the Company has undertaken to continue to be industry leading
on reducing carbon emissions. Further, we do not utilise contracted fleet from third parties. Emission factor verified in
Eurocontrol European Aviation Fuel Burn and Emissions Inventory System for the European Environment Agency (for data
from 2005) Version 2018.01 (20 July, 2018).
(5). Scope 1 CH4 emissions (Methane) by our operation is negligible, at a multiplier of 0.00004 relative to the tonnage of jet fuel
kerosine. Adjusting for the GWP (Global Warming Potential for 100-year time horizon) of 28/1 relative to Carbon, we derive
its contribution to CO2e tonnage (0.001 per tonnage of jet fuel kerosine). It should be noted that for Methane, any emissions
above 3,000 feet (914 metres) can be disregarded. Therefore, Wizz Air uses the assumption that on average 18 per cent of
total fuel used during a flight contributes to Methane emission. Emission factor verified in Eurocontrol European Aviation Fuel
Burn and Emissions Inventory System for the European Environment Agency (for data from 2005) Version 2018.01 (20 July
2018).
(6). Scope 1 N2O emissions (Nitrous Oxide) by our operation is at a multiplier of 0.0001 relative to the tonnage of jet fuel
kerosine. Adjusting for the GWP (Global Warming Potential for 100 year time horizon) of 265/1 relative to Carbon, we derive
its contribution to CO2e tonnage (0.030 per tonnage of jet fuel kerosine). As we are industry leading, it will not be a surprise
Wizz Air Holdings Plc Annual report and accounts 2021
31
that we have 100 per cent of our fleet meeting the ICAO NOx CAEP/6 standards and 20 per cent of our fleet meeting the
ICAO NOx s CAEP/8 standards (essentially, our NEO-powered aircraft are meeting the ICAO CAEP/8 standard so by late
2028 Wizz Air will also have 100 per cent of the fleet meeting ICAO CAEP/8 standard). Emission factor verified in Eurocontrol
European Aviation Fuel Burn and Emissions Inventory System for the European Environment Agency (for data from 2005)
Version 2018.01 (20 July 2018).
% of fleet
CAEP-8
Mar-20
7%
Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26 Mar-27 Mar-28 Mar-29 Mar-30
100%
100%
99%
20%
93%
63%
53%
85%
37%
75%
Our NEO fleet has a wide margin in terms of NOx emissions versus CAEP/8 standards, ahead of the Boeing 737-8200 with LEAP
engines.
Wizz Air A320neo
Wizz Air A321neo
Wizz Air A320ceo
Wizz Air A321ceo
Boeing 737-8200
NOx Margin to CAEP/6 (%)
56
55
7.4
1.3
16
NOx Margin to CAEP/8 (%)
49
49
-10.6
-13.9
6
There are no emissions of HFCs, PFCs, SF6 as part of the services delivered by Wizz Air.
(7). Scope 1 SO2 (Sulphur Dioxide) while not regarded as a direct greenhouse gas like carbon dioxide, methane or nitrous oxide,
it is considered an indirect greenhouse gas as, when coupled with elemental carbon, it forms aerosols. The average annual
emission of SO2 is a factor of 0.00099 times the tonnage of jet kerosine. Scientists are today unclear whether SO2 has a net
cooling or warming effect on the planet. Emission factor is verified in Eurocontrol European Aviation Fuel Burn and Emissions
Inventory System for the European Environment Agency (for data from 2005) Version 2018.01 (20 July 2018).
(8). Scope 1 NMVOC (Non-Methane Volatile Organic Compound) while not a greenhouse gas may contribute to the formation
of ground level ozone and certain species may be harmful to human health. The average annual emission of NMVOC is a
factor of 0.0005 times the tonnage of jet kerosine. Emission factor is verified in Eurocontrol European Aviation Fuel Burn
and Emissions Inventory System for the European Environment Agency (for data from 2005) Version 2018.01 (20 July 2018)
in combination with ICAO Aircraft Engine Emission Databank (EEDB) issue 28 with last update as of 23 December 2020.
Further, the factor is reflecting the weighted average of the Wizz Air’s fleet composition of CEO and NEO as of F21.
(9). Scope 1 CO (Carbon Monoxide) whereas not a greenhouse gas, itis best known for the lethal effects that it can have in-
house, but outdoor it does not cause climate change directly and concentration has been on a decline since 2000. The
average annual emission of CO is a factor of 0.0065 times the tonnage of jet kerosine. Emission factor is verified in ICAO
Aircraft Engine Emission Databank (EEDB) issue 28 with last update as of 23 December 2020. Further, the factor is reflecting
the weighted average of the Wizz Air’s fleet composition of CEO and NEO as of F21.
(10). Scope 1 Particulate Matter or the sum of all particles suspended in air whether hazardous or not, organic or inorganic, an
important metric to measure air pollution, is a factor of 0.00015 times the tonnage of jet kerosine. Studies have shown that
primary soot particles from kerosine combustion in aircraft turbine engines can cause damage to lung cells and can trigger
inflammatory reaction if the solid particles are inhaled in the direct vicinity of the engine. Emission factor is verified in ICAO
Aircraft Engine Emission Databank (EEDB) issue 28 with last update as of 23 December 2020. Further, the factor is reflecting
the weighted average of the Wizz Air’s fleet composition of CEO and NEO as of F21. The PW1100G (NEO fleet) and V2500
(CEO fleet) engines are required to comply with the In-Production nvPM regulatory limits and at the end of F21 both engines
comply with margin.
(11). Noise emissions. See page 30, Environmental Priority Programmes.
(12). Waste is generated in the aircraft and in the office. In the aircraft we have galley waste and tank waste, with 1 hour of flying
causing around 30kg of waste (5kg of galley waste and 25kg of tank waste), or a total of 5,174 tonnes during F21. Office
waste for Wizz Air was 64.2 tonnes. Office waste is segregated at 24 per cent recycling rate. Large portion of aircraft waste
does not end up in landfill (83.3 per cent) but gets processed via purifying stations. We have started a test programme with
Vienna and Budapest airport to understand how we can eliminate waste-to-landfill/incineration of galley waste. Further, we
have reduced galley waste-to-landfill issues enabled by our elimination of single-use plastics and elimination of cups and lids
(as of July 2021). Other initiatives have included reduced office paper consumption via initiatives such as e-signature and
digitisation of procure-to-pay processes.
(13). Water use intensity. Wizz Air consumes water in its offices, training centres, hangars (where also engine wash events are
conducted), and for de-icing of aircraft where needed. In F21 we used 677,000 litres were used for de-icing, while hangers
in total consumed 692,000 litres.
(14). Energy use intensity. Wizz Air does not directly use electricity other than through leased contracts in its offices, bases or
maintenance operations. There is also usage of ground power to aircraft while on ground at various airports around its
network.
(15). Kerosene use per sales. This is consistent with scope 1 kerosene consumption, divided by the sales for the respective
period.
(16). Passenger load factor. This is a key operational metric, as Wizz Air always operates a load factor-active business model
trying to maximise load factor to maximise value creation.
(17). Stage length for Wizz Air is on average 1,604km with flights below 1,000km accounting for less than 13 per cent of flights.
Our stage length is significantly higher than our key competitors (see below the comparison for F20, pre-COVID-19).
Km
Stagelength F20
Wizz Air
1,635
Ryanair
1,409
EasyJet
1,132
(18). Sustainable aviation fuels have been adopted by Wizz Air to ensure compliance with regulatory requirements. E.g. in
Norway there is a 0.5 per cent blending mandate and our fuel uptakes are in line with the Norwegian requirements. We will
continue to be compliant with what we believe will be an increasing number of blending mandates over the region we
operate in (e.g. as of 1 July Sweden is introducing a 1 per cent blending mandate). This will allow the cost of sustainable
fuels to come down and over time allow the industry to adopt renewable fuel over and above blending mandates as part of
their carbon reduction strategies, and at the same time reduce carbon emissions by 80 per cent.
(19). CO2 emissions offset programme see page 30, Environmental Priority Programmes.
(20). The average age of aircraft is 5.4 years, see also page 29, Environmental Priority Programmes. Additionally, Wizz Air’s
average lease length is 10.2 years, after which the aircraft is returned in the contractually determined condition to the lessor.
Wizz Air Holdings Plc Annual report and accounts 2021
32
Calculations and benchmarking for energy use and water consumption have been consulted with MN6 Energy
Agency who is Wizz Air’s energy auditor since 2015 and forms part of energy management team since 2017
for all of Wizz Air Hungary’s fleet and installations.
Social – Wizz Air cares for the people and communities around us
Three-quarters of our historical growth has been through making travel more accessible. As an international
business, we see more clearly than most the inequalities that exist across societies and within countries. We
believe that inequality will continue to increase and will fundamentally impact the way millions of people live
and work. At Wizz Air we recognise that we have an important role in bridging this disparity, helping
communities to access resources, jobs and opportunities in a way that would not have been feasible without
our low-priced travel service.
Wizz Air’s entry into markets has been synonymous with the prosperous development of communities, be it
people traveling to and from those communities, the people we employ directly in those communities or the
indirect jobs we support in those communities through partnerships and other supplier relationships.
Wizz Air’s employment has risen from 1,184 in 2010 to 4,440 in F20, and, with an average employee age of 33
years, offering employment opportunities to young professionals across a variety of locations. Our role
becomes ever more important in an economic environment where some find it difficult to find a rewarding,
professional career path. Moreover, Wizz Air prides itself on the educational initiatives it provides to
employees, delivering opportunities to achieve their career aspirations.
Wizz Air is focused on action not words. We spend very little money on marketing the brand. Instead, Wizz
Air builds and lives its brand through the airline services its enthusiastic employees offer at the lowest price in
the market. Our actions speak louder than words.
Fiscal Year
F21
F20
Countries
21
16
Passengers
10,186,077
40,028,000
Employees
3,960
4,440
Indirect employment*
7,650
30,021
* ACI guidelines suggest that 750 on-site jobs need to be created for every 1 million passengers carried per year. Based on this,
Wizz Air supported the creation of 7,650 local jobs in F21, by carrying 10.2 million passengers on its low-fare routes,
compared to 30,021 local jobs in F20, by carrying 40.0 million passengers.
Social governance
Governance of our social agenda and ensuring that we make progress against our targets that we have set for
ourselves, are discussed on a regular basis with the Leadership Team of Wizz Air led by our Chief Executive
Officer. This important topic is also discussed and monitored during our Audit and Sustainability (Board)
Committee meetings as outlined on page 75.
Our Culture is what empowers our people to live and work by the five important values of Wizz Air, allowing
us to create opportunities and find solutions to the challenges that our business may face. They are:
(cid:1)
Integrity – doing what is right for passengers and stakeholders, holding ourselves to the highest possible
standards in everything we do.
(cid:1) Dedication – we have an entrepreneurial, “can-do” attitude, taking individual and collective ownership,
ensuring that we are accountable for everything that we do.
(cid:1)
(cid:1)
(cid:1)
Positivity – we are an inspired and inspiring team, passionate about what we offer, using a positive
mindset to unlock new ways to do things better and more efficiently.
Inclusivity – we embrace diversity, engaging and collaborating with all key stakeholders to achieve our
goals.
Sustainability – we strive to be the most sustainable choice of air travel and work hard on continuously
decreasing our environmental footprint.
Every Wizz Air employee is aware of the impact they have on stakeholders, 92 per cent of our Wizz Air
employees are servicing stakeholders face to face every single day and by elevating our values it allows us to
bring our best selves every day.
Social strategy and priority programmes
Wizz Air has a clear strategic plan on communities, passengers, people and suppliers, rooted in our conviction
that Wizz Air’s operations can positively enhance many people’s lives – those of our colleagues, our passengers
and the residents of the communities we serve. We stay loyal to our mission that “We will break down every
barrier between people and air travel”. Whilst we cover a broad spectrum of actions through our Social
Strategy, we cover in more detail how we:
Put safety first, in everything we do.
1
2 Recruit and develop our employees to have, beyond a successful role, a successful career with Wizz Air.
Focus on improving and leveraging the diversity of our employees.
3
4
Engage our employees.
5 COVID-19 employee impact.
Wizz Air Holdings Plc Annual report and accounts 2021
33
We provide more colour on a wider set of metrics in the next section “Social Metrics and Targets”.
1 Putting safety first, in everything we do
At Wizz Air, our number one priority is the safety of our passengers, crew and aircraft. Our aircraft fleet is
young and reliable, we use the services of world-class maintenance organisations to maintain them, and we
have a strong safety culture deeply embedded across the business. A cross-functional safety council meets
four times a year, involving both the Management Team as well as operational staff, and reviews any issues
which have arisen in the previous three months and the actions taken consequently. In addition to this, we
collect detailed data from all aspects of our operations to identify trends, and relevant personnel from our
Operations department meet twice a year to discuss any trends identified in their area of operation and how
they are being dealt with. We also operate an anonymous safety reporting system, to enable our flight and
cabin crew to report safety issues which may be a concern to them. The entry standards for our operating
crew are high and our own Approved Training Organisation (ATO) ensures that all our pilots are trained to the
highest standards. Wizz Air is a registered International Air Transport Association’s Operational Safety Audit
(IOSA) programme operator, which helps us to ensure that we have best-in-class airline safety management
and control systems and processes.
Our experienced security team has an ongoing programme to ensure that the security of our operations and
the airports which we serve meet high standards. Our security team also maintains close contact with relevant
authorities to assess any potential security or other threats to our operations. Any serious threat will be
escalated to the Management Team in a timely and efficient manner. We have in the past suspended
operations to destinations where the safety of our passengers, crew and aircraft could not be guaranteed.
Wizz Air Hungary Ltd. is classified as a company of strategic importance by the Hungarian Parliament and, as
such, the Company now enjoys enhanced security information and protection under the auspices of the
Hungarian Constitution Protection Office. Wizz Air has also joined the campaign launched by the European
Union Aviation Safety Agency’s (EASA) aiming to reduce the number of unruly passengers on all European
flights and protect the passenger’s right to a peaceful travel experience.
In September 2019, Wizz Air was named ‘The Best Low-Cost Carrier of the Year’ in 2019. The award was
handed over at the Aviation Industry Awards Europe gala, part of Air Convention Europe 2019 and the award
is among the most important and prestigious prizes in the aviation industry.
In November 2019, Wizz Air was named ‘The Best Low-Cost Airline – Europe 2020’ in the annual ranking of
AirlineRatings.com, the world’s only safety and product rating website. This rating is considered one of the
most important and respected in the world of aviation, with outstanding airlines amongst past winners.
In 2020, Wizz Air was awarded the highest 7-star safety ranking from the world’s only one-stop airline safety
and product rating agency AirlineRatings.com.
Wizz Air was awarded ‘2020 Airline of the Year’ by Air Transport World in F21, the most coveted honour an
airline or individual can receive, recognising the organisations that have distinguished themselves through
outstanding performance, innovation and superior customer service. This made Wizz Air the first ULCC to win
the award in the ATW Awards’ 46-year history.
On 22 April 2021 Wizz Air received the ‘Greenairport Partner of the Year Award’ from Budapest Airport
recognising the Company’s efforts in making progress towards becoming the most sustainable airline in
Europe.
2 Recruiting and developing our employees
Wizz Air is continuously recruiting people who are passionate about the aviation industry. The Company
ensures full and fair consideration of applications for all candidates, and offers continuing training and career
development for all employees, promoting diversity and inclusion in all areas. Since 2010, the employee base
of Wizz Air grew from 1,184 to 3,960 by the end of March 2021. During F21, a period of downturn, Wizz Air still
recruited 151 employees.
We invest extensively in the recruitment of talented pilots, via the Wizz Air Cadet Programme, in partnership
with BAA Training, which offers young, passionate candidates the required training and a letter of engagement
after successful completion. Wizz Air has also launched and is successfully running its own Pilot Academy in
Poland, Romania, Bulgaria and Hungary. The Academy provides financial support, including partial
sponsorship, to motivated cadets during their initial training. Pilot Academy cadets who successfully graduate
from the programme can begin their employment at Wizz Air as Pilot Trainees.
Wizz Air has launched a “Cabin Crew to Captain” programme as a platform that post-COVID-19 will help to
support aspiring cabin crew members financially and structurally on their journey to becoming Wizz Air pilots.
80 per cent of the people participating in the programme are female which is intended to over time help us to
rebalance a male-dominated pilot profession. Furthermore, Wizz Air leveraged its “Cabin Crew to Office”
programme and was able to meet 3 per cent of its office roles with Cabin Crew talent.
Wizz Air Holdings Plc Annual report and accounts 2021
34
Flight and cabin crew training is organised by a dedicated in-house training team, which consists of over 360
trainers across Wizz Air’s network, including standardisation and safety instructors and CRM and CC Line
trainers. Training is undertaken in the modern, state-of-the-art training facility in Budapest, equipped with two
Airbus A320 CAE 7000XR Series full-flight simulators, a cutting-edge Cabin Emergency Evacuation Trainer,
as well as a V9000 Commander Next-Generation Fire Trainer. This training centre is a significant investment
by Wizz Air in developing world-class talents and enabling them to achieve their dreams of becoming pilots
or cabin crew. During F21, even in a period of downturn, Wizz Air held more than 60,000 operational unique
training sessions, or more than 12 per person for the year.
Wizz Air uses a standardised Training and Development programme and Talent Management process for its
office employees, allowing for an improved formal, systematic evaluation process based on agreed
performance goals and a greater focus on each employee’s potential to develop their career with Wizz Air. In
the past 12 months, even during COVID-19, there have been 28 per cent of our office population rewarded with
internal career moves and progression at both employee and Management Team level. These promotions
reflect Wizz Air’s principle that talent, commitment and results should result in career progression.
In 2018, Wizz Air introduced its WIZZdom Journey Training Programme, which offers training in leadership
and soft skills in a classroom setting to both office employees and to crew who are stepping into managerial
and office positions. The aim of the programme is to provide our employees with the right tools and
development opportunities to excel in their career. Our leadership training programme had a 45 per cent
female participation showing our commitment to groom the next generation of leaders.
In addition to the classroom training Wizz Air implemented a new Learning Management System (SAP
SuccessFactors), which serves as a self-service portal, allowing employees to request training, view e-learning
content and complete the mandatory new hire online training. Wizz Air has also introduced a revised office
on-boarding process, which allows all new hires to benefit from an intensive first week in the Company and to
familiarise themselves with Wizz Air’s culture, policies, practices and procedures. This revised on-boarding
process aims to improve new joiner engagement and increase productivity from day one.
3 Improving and leveraging the diversity of our employees
Since Wizz Air’s foundation in 2003, the Company has treated existing and potential employees fairly,
irrespective of their race, culture, gender, religion or age. During the recruitment and selection process, we
evaluate professional factors including experience and qualifications considering the relevant job requirements
and this principle remains throughout the employment with Wizz Air.
We expect all our colleagues to adhere to our diversity and inclusion principles, which are set out in The Wizz
Way, our Policy for Good Conduct, along with the expected standards of behaviour for every member of the
Wizz Air team.
Wizz Air has initiated a Cabin Crew to Captain programme as it will ensure a strong pipeline of female Flight
Crew professionals, further highlighting how leadership diversity is now a key element of our Long-term
Incentive Programme.
We value diversity and inclusion and are focused on doing even better.
Our international team brings together more than 50 different nationalities. At Board level, ten current
Directors are from six different countries and the Company’s twelve Officers are from ten different countries.
Within Wizz Air, the overall male to female ratio is balanced, with 49 per cent of staff being female; however
we have set out a target to further improve diversity by F26 and have put in place actions to achieve these
targets as part of our diversity initiative, Women of Wizz.
In this past financial year, we improved Board gender diversity by 9 per cent to 27 per cent, while the
Leadership Team’s gender diversity improved by 10 per cent to 27 per cent. Office female gender diversity
remained at 37 per cent. Flight crew gender diversity reached 4 per cent and cabin crew gender diversity 75
per cent.
Recruitment is focused to ensure that there is always at least one female candidate on the short list for
positions and recruitment panels need to have female interviewees.
Our Ambassadors programme, which will select pilots to represent the Company at public events, and our
“Cabin Crew to Captain” initiative are key building blocks to support our flight crew transformation over the
next years.
4 Engaging our employees
Our employees are Wizz Air’s most important assets. Over 90 per cent of our employees have direct
interaction with our passenger base, probably the largest percentage in any industry, and we want to ensure
the safety of these employees as they travel generally with joy and anticipation to their destination. There are
several key pillars on how we engage our employees, the key ones being our People Council, our People Survey
(and the forthcoming actions), the floor talks hosted by the CEO and our Base Visits.
Wizz Air Holdings Plc Annual report and accounts 2021
35
The Wizz Air People Council was established in 2018 and brings together employees representing all areas of
the business. It is a community of Wizz Air staff representing employees from Cabin Operations, Flight
Operations and Office. The goal of the People Council is to:
(cid:1) Facilitate an effective two-way communication between Leadership Team and employees.
(cid:1) Support the decision-making process on matters which affect all within the Company.
All actions and decisions from the monthly People Council meetings are reported back to the employees by
their representatives at the end of each month. In F21 the People Council had bi-weekly meetings with Senior
Leadership to talk a variety of topics to help create a better work environment to increase employee
engagement and deliver enhanced organisational and business results. The key recurring topics on the agenda
are:
(cid:1) Work-life balance.
(cid:1) Company policies and process changes.
(cid:1) Working environment.
(cid:1) Salary principles and policies.
(cid:1) Company events.
(cid:1) Trends effecting safety.
(cid:1)
Initiatives enhancing diversity and inclusion.
As a result of the interactions between People Council and Leadership Team, several initiatives were launched
during the year.
Few examples include: 1) introduction of a new Flight Crew Internal Grading System to drive a clear and
transparent performance evaluation process, 2) a new Base Change Policy, allowing applicants a more
streamlined manner go through the process, 3) a focus group of employees across the organisation involved
in addressing the results from the Company employee engagement survey and 4) well as several Health and
Safety measures and protocols in the aftermath of the COVID-19 pandemic.
This effective two-way communication is also facilitated by our People Engagement Survey, the floor talks
hosted by Wizz Air CEO, and Base Visits, as they provide quantitative and qualitative insights into work and
life for our employees.
Employee engagement survey
Wizz Air is now taking bi-annual employee engagement surveys. For the first time, we have leveraged to get
quantitative and qualitative insights on the engagement of our employees. Overall, survey scores were 2 per
cent above the industry average (source: Peakon, analytics and employee engagement software), at 81 per
cent engagement rate (eNPS 46) versus an industry average of 79 per cent, with a participation rate of 79 per
cent which was a good result given the Peakon technology was used for the first time. Employees in cabin
crew had an engagement of 83 per cent (eNPS 54), in flight crew 79 per cent (eNPS 41) and in office 68 per
cent (eNPS -5). The results of the survey were, overall, in line with expectations and show the resilience of our
employees after surveying them nine months into the hardship associated with COVID-19 which saw role and
salary reductions. By gender the engagement of female colleagues was at 83 per cent (eNPS 51), whereas the
engagement of male colleagues at 79 per cent (eNPS 40). The engagement survey questions are following
the methodology of eNPS (employee Net Promoter Score). eNPS is a variant of NPS, a metric of customer
loyalty. Therefore, it is possible to present the engagement results in the eNPS format, with the result ranging
from -100 to 100.
Several specific company-wide actions, taken following the employee engagement survey, were the following:
(cid:1) Employees up to Head level received Christmas bonus in recognition of hardships endured during the year
in December 2020;
(cid:1) Company reinstated base salaries for cabin crew and non-executive office employees effective 1 January
2021;
(cid:1) New Office Health and Safety Guidelines were introduced including weekly PCR testing for the office
employees. In addition, temporary office spaces was created while a permanent office area extension has
started in order to be able to meet the requirements of social distancing; and
(cid:1) As part of Workplace Wellbeing, Wellbeing Wednesdays were introduced in order to support physical,
cognitive and emotional wellbeing of employees.
Cabin Operations are working on three key priorities based on the Survey result:
(cid:1) Support (Wizz Air really cares about my mental wellbeing)
(cid:1) Learning (My job enables me to learn and develop new skills)
(cid:1) Peer Relationships (I can count on my co-workers to help-out when needed).
Wizz Air Holdings Plc Annual report and accounts 2021
36
The results were shared during local base meetings and regional meetings. In addition, regional focus group
discussions were organised where the crew could suggest actions for improving those three key priorities
identified. The following network-wide initiatives were suggested and agreed:
(cid:1) HR and Payroll Support – providing a monthly HR update to the cabin crew, base managers and associate
base managers.
(cid:1) Mental wellbeing – leveraging our existing Employee Assistance Programme more among the crew.
(cid:1) Roster flexibility – implementing a preferential bidding system.
(cid:1) Development of language and cultural awareness programme.
(cid:1) Upgrade of the existing performance evaluation platform in order to have more reliable and data driven
platform.
(cid:1) Workshops on Communication and Peer Relationship, where the crew is co-training the materials.
At the same time, other departments and functions are also holding discussions with their employees and
implementing actions accordingly and since the start of February 2021 the Leadership Team have been
bringing their teams to an offsite in Hungary working with them to improve team satisfaction and any actions
from the engagement survey.
Base Visits are occasions for Leadership Team to spend time with employees in the market, both formally
during town halls and informally when celebrating the achievements of the team since the last visit. Despite
COVID-19, during F21 we held 21 face to face base visits with Executives engaging face to face and 60 virtual
base visits, further demonstrating the strength of commitment we have to our people and listening to their
ideas and on occasions, their concerns.
Results of employee engagement survey are reviewed by the Board which offers an opportunity to assess any
changes in the Company culture. We also have a dedicated Board member who is responsible for overseeing
engagement with employees.
Engagement survey results are reviewed by the Board. It offers an opportunity for the Board to assess and
monitor progress towards cultural objectives, identify priorities and set measurable goals for achieving the
vision. We also have a dedicated Board member, Dr. Anthony Radev, who is responsible for overseeing
engagement with employees.
5 COVID-19 and our employees
We are very proud of how our employees have proven to be resilient throughout the twelve months since
COVID-19 affected their work and their lives. Our employees were affected immediately.
(cid:1) Regretfully, to ensure the viability of our operations, employees were experiencing reduced
compensation. For example, the average reduction in flying was 62 per cent. This affected employee
remuneration as our flight and cabin crew have a portion of their pay variable on servicing flights.
(cid:1) The Company also reduced base salaries on average 14 per cent effective 1 April 2020. Salaries of
Leadership Team were reduced by 22 per cent during F21, pilot salaries were reduced by 15 per cent and
cabin crew salaries were reduced by 11 per cent.
(cid:1) The Company reinstated base salaries for cabin crew and Non-Executive office employees effective 1
January 2021. The Company maintains 7.5 per cent compensation reduction for pilots and the Leadership
Team for F22.
(cid:1) The Company reduced 19 per cent roles and these were completed by the end of May 2020. The
reduction in roles affected all employee groups (cabin, flight, office employees, including Leadership
Team). Cabin and flight crew employees participated in unpaid leave programmes as only few
jurisdictions of operation had programmes to support employees during technical unemployment. We
are grateful for their support and commitment in these difficult times.
(cid:1) The airline continued to operate with our cabin and flight crew service passengers mostly for, “essential
travel” services, and our dedicated team did this all the time reassuring the highest health and safety
standards.
(cid:1) During April 2020 and parts of January/February 2021, certain elements of our office staff were on
mandatory home office, in line with applicable local regulations.
Despite the hardship brought on by COVID-19, Wizz Air employees continued to be very strongly engaged
during COVID-19, displaying dedication and commitment to the Company and the passengers it serves and
demonstrating a sense of urgency and agility that allowed the Company to build out its competitive advantage
during this year full of adversity.
Wizz Air Holdings Plc Annual report and accounts 2021
37
Social metrics and targets – our team members
Our employees are our greatest asset. We target to provide an environment for our people where they can be
fully engaged and excel in what they love to do and what they do best. We use our annual employee survey
powered by Peakon to have an open dialogue with our people and get valuable input and feedback on how
we can do better. Our Leadership Team – even in times of COVID-19 – undertook quarterly base visits and we
leverage our People Council meetings – 50 meetings per year – to discuss business and organisational
challenges and opportunities. We hold monthly CEO webcasts with all employees allowing employees to hear
about the progress of Wizz Air against its goals and strategies, and, to ask any question they wish. Below we
have outlined our most critical employee health metrics, our KPIs on the supplier partnerships we nurture and
the communities we serve.
People
Unit
Note
F21
F20
F19
Work-related accidents
Fatal accidents
Contractor accident rate
Contractor fatal accident rate
#
#
%
%
Priority/1
Priority/2
Priority/3
Priority/4
Number of employees
Staff costs
Revenue/employee
Staff costs/revenue
Survey scores
Survey participation
Average Attrition
Gender diversity
Leadership diversity
Flight crew gender diversity
Cabin crew diversity
Office diversity
FTE
m EUR
k EUR
%
%
%
%
Priority/5
Priority/6
7
% female
% female
% female
% female
% female
Priority/8
Priority/9
Priority/10
11
Priority/12
Ethnic diversity
Leadership ethnic diversity
# nationalities
# nationalities
Part time ratio
Training per employee
%
Hours
13
14
15
16
0
0
0
0
3,960
133
187
18
81
79
24
49
27
4
75
37
53
15
6
45
5
0
0
0
4,440
231
622
8
—
—
13
52
17
4
76
37
54
15
1
n.a.
5
0
0
0
4,261
198
546
9
78
71
13
51
16
3
77
34
51
13
0.5
n.a.
Notes:
(1).
(2).
(3).
Accidents: measures work-related accidents (excluding travel to/from work) involving occurrences where employee has
taken at least one day-off from work.
Fatal accident: number of accidents, as defined in note 1, that result in fatality.
Contractor accident rate: measures work-related accidents involving occurrences where contracted employee has taken
at least one day-off from work.
(4).
Contractor fatal accident rate: number of accidents, as defined in note 3, that result in fatality.
(5 and 6). Survey scores: based on methodology of eNPS (employee Net Promoter Score). eNPS is a variant of NPS, a metric of
customer loyalty. eNPS of 46 translates into 81 per cent engagement rate. Participation rate was 79 per cent of all
employees.
(7).
(8).
(9).
(10).
(11).
(12).
(13).
(14).
(15).
(16).
Attrition (average): the reduction in staff numbers across the organisation that occurs as employees resign, retire or are
dismissed.
Gender diversity: percentage of total roles, including direct and indirect employment, occupied by women;
Leadership diversity: percentage of leadership roles, heads of function and above, occupied by women;
Flight crew gender diversity: percentage of flight-deck staff, including direct and indirect employment, occupied by
women;
Cabin crew gender diversity: percentage of cabin crew staff, including direct and indirect employment, occupied by
women.
Office gender diversity: percentage of office staff, including direct and indirect employment, occupied by women.
Ethnic diversity: number of different nationalities compiled based on declarations by employees at the time of hire.
Leadership ethnic diversity: number of different nationalities compiled based on declarations by heads of function and
above.
Part time ratio: percentage of total employees who have reduced working time arrangements (not full-time employees).
Training hours: number of training hours per employee, calculated based on all the training sessions divided by average
annual headcount, not including outsourced nor online training hours.
Wizz Air Holdings Plc Annual report and accounts 2021
38
Supplier Code of Conduct – our suppliers
The Wizz Air Group is devoting special attention to environmental, social and economic responsibility during
its operations and has introduced its renewed Supplier Code of Conduct as of April 2021. Wizz Air is committed
to doing business with suppliers and partners who supply products and/or services to Wizz Air Group and
share Wizz Air`s commitments towards an environmentally and commercially sustainable operation and
operate with high social and labour standards. The Supplier Code of Conduct applies to all suppliers of Wizz
Air as well as their suppliers and sub-contractors and it forms integral part of all contracting packages and
processes. Compliance checks are introduced on a yearly basis via online questionnaire and compliance
statement request. The code of conduct can be found on our website.
Social metrics and targets – our communities
We have previously outlined the role we see for the Company towards the communities where we operate.
Our key metrics include:
Communities
Passengers
Kms run
Paid taxes
Government debt
Furlough support
Cash refunds due
Notes:
Unit
M
Km
m EUR
m EUR
m EUR
m EUR
Note
1
2
3
4
5
6
F21
10.2
17,730
107
350
7.1
1.8
F20
40
7,830
340
0
0
36.7
F19
35
4,060
305
0
0
n.a.
(1). Wizz Air transported 10,186,077 passengers in F21, of which 20 per cent were passengers with newly created accounts. As
outlined previously, our agility allowed us to open new markets which accounted for 1.9 million passengers.
(2). Wizz Air running events are encouraged by Wizz Air and events are sponsored for its employees to join one of its network
running events, including in normal times the Wizz Air Budapest Half Marathon, Wizz Air Bucharest International Half Marathon,
Wizz Air Skopje Marathon, Wizz Air Kyiv Marathon, Wizz Air Cluj-Napoca Marathon, Wizz Air Sofia Marathon, Wizz Air Katowice
Half Marathon and Wizz Air Debrecen Airport Run. Unfortunately, due to COVID-19 most events were cancelled or postponed;
however we were happy to still be able to participate on the Budapest, Sofia and Skopje running events. To keep the running
spirit alive during COVID-19, we launched interdepartmental running competitions, in the last WIZZ Running Club campaign
16,000km were ran altogether in the span of five weeks with 83 per cent of bases and 69 per cent of office departments
participating, allowing us to more than double our km-performance of last year.
(3). Wizz Air contributes to the communities it operates in through the payment of taxes. In total €107 million taxes were paid in
the form of airport related taxes, corporate income tax, local taxes in Hungary, payroll taxes, social security and other
contributions (yet excluding carbon credit related fees), or a total of 15 per cent of revenues. Wizz Air advocates for a level
playing field on taxation as many jurisdictions favour national airlines and unfortunately promote tax schemes that are not
based on carbon emission intensity, instead taxes would be based on historical emission levels regardless of how polluting the
aircraft technology is that an aircraft flies or how noisy the engines are. We are engaging with authorities and environmental
agencies to ensure environmental taxes incentivise the right behaviour in the industry.
(4). Wizz Air issued £300 million commercial paper with the Bank of England (as part of the CCFF) with maturity in February 2022.
(5). Wizz Air benefited from a total of €7.1 million in furlough schemes with the key scheme being the UK furlough support scheme.
(6). Wizz Air immediately after COVID-19 hit put together a team to automate cash refunds. Since late summer 2020, Wizz Air has
been current with the level of cash refunds of those passengers who did not elect to rebook their flights or wanted to convert
their flights into Wizz Discount credits (where Wizz Air gave a 20 per cent free bonus for conversion).
Wizz Air Holdings Plc Annual report and accounts 2021
39
STRATEGIC REPORT
MODERN SLAVERY ACT DISCLOSURE STATEMENT 2021
This statement is made pursuant to section 54(1) of the UK Modern Slavery Act 2015 and pertains to the fiscal
year ended 31 March 2021. This statement is made by Wizz Air Holdings Plc, the parent of all three operating
airlines, Wizz Air Hungary Ltd., Wizz Air UK Limited and Wizz Air Abu Dhabi LLC. on behalf of the group
(together, "Wizz Air", "we").
Wizz Air is committed to acting ethically and with integrity in our business dealings. It is Wizz Air's expectation
that our suppliers also conduct themselves in this manner. Wizz Air is committed to improving its practices to
combat slavery and human trafficking and seek out where it exists in our dealings with third parties, suppliers,
and in our supply chain in order to meet our commitments. As defined by the UK Modern Slavery Act 2015,
"modern slavery" includes the offences of "slavery, servitude and forced or compulsory labour", as well as
"human trafficking".
Business and Organisational Structure
Wizz Air offers low-cost, low-fare passenger air transportation services on scheduled short haul and medium-
haul point-to-point routes across Europe and to a number of destinations in the Middle East, as well as North
Africa and North-West Asia. Wizz Air had in financial year 2020 40+ million passengers annually and flies 137
aircraft on more than 800 routes across 44 countries. Wizz Air employs over 4000 people across a network
of 43 bases. Our company is incorporated in Jersey and managed from Switzerland. Wizz Air Holdings Plc has
three airline subsidiaries: Wizz Air Hungary Ltd.,Wizz Air UK Limited and Wizz Air Abu Dhabi LLC. For further
details of Wizz Air's subsidiaries and corporate structure, please see page 143 (Annual revenue of €2,761.3
million in F20).
Our Supply Chain
Wizz Air expects its suppliers to adhere to the highest standards of business internally and in relation to their
respective supply chains, and comply with their own human rights regimes and Modern Slavery Act
obligations. Wizz Air operates in a highly regulated sector and our supply chain is predominantly service based
within Europe. Our suppliers have to conform to the necessary aviation safety standards and certification.
However we recognise that we play a part in making a contribution to reduce the occurrence of modern
slavery and human trafficking. To this end, and to ensure the organisations from whom we procure goods and
services conduct their business ethically, we have commenced work on mapping our existing supply chain,
with focus on our critical suppliers. We aim to complete these tasks within the current financial year.
Whilst we have received no reports of incidents, we are taking steps to identify and detect human trafficking.
We recognize that we need to update our processes to detect such incidents. Our new Anti-Slavery Policy will
assist us in doing this.
Polices
We are committed to assessing any instance of non-compliance regarding modern slavery or human
trafficking on a case by case basis. We are proud to announce that we have introduced our new Anti-Slavery
Policy which is soon to be rolled out to all our staff. This will inform staff on the key issues around modern
slavery and human trafficking, and how they can report such incidents to us. As well as this, our Code of Ethics,
"The Wizz Way", applies to every company employee regardless of seniority. These, along with our
Whistleblowing Procedure and Anti-Corruption Policy, help us to maintain an effective compliance
environment across our supply chain.
Training
Wizz Air delivers online compliance training relating to its Code of Ethics to every staff member. In addition
we will be adding anti-slavery training to every crew member as part of their annual security training sessions.
Furthermore, employees are encouraged to raise legal or ethical concerns through various channels, such as
their managers, any member of Management Team or Human Resources. This is a key feature of our new Anti-
Slavery Policy.
Wizz Air Holdings Plc Annual report and accounts 2021
40
Our effectiveness in combating slavery and human trafficking
We are committed to ensuring that collectively these measures will help to assist us in combating modern
slavery and human trafficking. However we recognise that we need to measure our effectiveness through the
use of KPIs, and we will be looking to use indicators such as vetting procedures, supplier screening measures,
sub-contractor inspections (particularly in known at-risk countries), whistleblowing reports, percentage of
staff trained, any remedial action taken following reports or incidents of slavery or human trafficking, in the
near future.
As part of our ongoing commitment to combating modern slavery and human trafficking, we will continue to
review and develop our processes.
The above statement has been approved by the Board of Wizz Air Holdings Plc.
József Váradi
Chief Executive Officer
2 June 2021
Wizz Air Holdings Plc Annual report and accounts 2021
41
STRATEGIC REPORT
FINANCIAL REVIEW
Wizz Air’s results have been strongly impacted by the COVID-19 pandemic. The ensuing regulatory restrictions
in various jurisdictions affected nearly all aspects of our operation and necessitated Wizz Air to respond swiftly.
Wizz Air intervened on all income statement and balance sheet lines in order to reduce cost, lower cash burn
and maintain our investment grade balance sheet.
Wizz Air carried ten million passengers during F21, a decrease of 75 per cent compared to the previous fiscal
year. Revenues declined by 73 per cent to €739 million. Passenger and revenue figures reflect the sharp cut
back in capacity throughout the year, as a result of mobility restrictions imposed by policy makers across
Europe.
Notwithstanding this challenge and thanks to our swift and decisive actions, our financial position remained
one of the strongest in the aviation industry.
Wizz Air reported a net loss of €576.0 million and an underlying net loss of €482.4 million (compared to
€344.8 million underlying net profit in F20).
The unit revenue measured in terms of ASKs declined by 26.7 per cent to 2.89 Euro cents, while unit costs
grew by 41.3 per cent to 4.85 Euro cents in F21 from 3.44 Euro cents in F20. CASK excluding fuel expenses
increased by 69.8 per cent to 3.86 Euro cents in F21 from 2.27 Euro cents in F20. The increase in CASK in large
part was driven behind cost lines that are more fixed in nature even after incisive cost actions, which, as a
result of lower ASKs, resulted in higher unit costs.
Our interventions during the financial year to reduce the dramatic impact of COVID-19 included:
From a cost point of view
(cid:1) We have intervened on all cost lines, reducing roles by 19 per cent in April 2020 and compensation on
average by 14 per cent;
(cid:1) We renegotiated discretionary unit cost rates with all suppliers next to cutting back on consumption to
match lower transaction volumes;
(cid:1) We renegotiated the costs of operating at existing airports whilst locking in beneficial long-term deals on
new bases and airports; and
(cid:1)
Hot and cold parking of parts of our fleet, to further reduce costs.
From a revenue point of view
(cid:1) We established a clear principle of cash-positive flying;
(cid:1) We aligned pricing algorithms with more inelastic demand; and
(cid:1) We continued to leverage our strong capabilities in ancillary revenue – posting record growth month in
month out via higher conversion of core products, dynamic pricing and a more relevant product portfolio
(e.g. flexibility product offerings).
From a cash point of view
(cid:1) We embarked on an ambitious “payment days” extension programme with suppliers, leveraging the
strength of our balance sheet and credit rating which allowed suppliers to better differentiate Wizz Air
from other airlines, supported by our ability to offer true long-term partnerships;
(cid:1) We optimised key elements of our investment cash flow by focusing on optimised fleet deliveries, early
lease returns (where contractually feasible); and
(cid:1) We reduced capital expenditure with regards to aircraft orders.
From investment and financing point of view
(cid:1) We extended, at competitive terms, the aircraft financing window to about twelve months, covering
expected fleet deliveries up until the end of calendar year 2021, to lock in financing for future orders and
eliminate financing uncertainty going forward;
(cid:1) We enhanced our liquidity position with a €500 million three year bond issued in January 2021 on
favourable terms which reflected our investment grade credit rating; and
(cid:1) We extended the £300 million facility from the Bank of England under the UK Government's CCFF until
February 2022.
Wizz Air Holdings Plc Annual report and accounts 2021
42
The macro variables with significant influence on the financial performance of the Group developed during the
year as follows:
Average jet fuel price ($/metric tonne, including into-plane
premium and impact of effective hedges)
Average USD/EUR rate (including impact of effective hedges)
Year-end USD/EUR rate
F21
F20
Change
674
1.17
1.21
729
1.16
1.10
(7.5%)
0.9%
10.0%
Financial overview
Summary statement of comprehensive income
€ million
Total revenue
Fuel costs (including exceptional expense)
Operating expenses excluding fuel
Total operating expenses
Operating (loss)/profit
Comprising:
– Operating profit excluding exceptional expense
– Exceptional expense
Operating profit margin (excluding exceptional expense)
Net financing expense
(Loss)/Profit before income tax
Income tax expense
(Loss)/Profit for the year
Exceptional expense net of income tax
Underlying (loss)/profit after tax
*
n.m.: not meaningful as a variance is more than (-)100 per cent.
F21
739.0
(347.4)
(919.7)
(1,267.1)
(528.1)
F20 Change in results
(73.2%)
(60.4%)
(40.5%)
(47.7%)
n.m.*
2,761.3
(876.5)
(1,546.5)
(2,423.0)
338.3
(434.5)
(93.6)
(58.8%)
(38.4)
(566.5)
(9.5)
(576.0)
(93.6)
(482.4)
402.0
(63.7)
14.6%
(44.2)
294.1
(13.1)
281.1
(63.7)
344.8
F20
3.76
2.22
2.72
n.m.*
46.9%
n.m.
(13.1%)
n.m.*
(27.5%)
n.m.*
+47.0%
n.m.*
Change
n.m.**
n.m.**
n.m.**
Earnings per share
Earnings per share, EUR (Note 13)
Basic earnings per share
Diluted earnings per share
Underlying earnings per share*
F21
(6.73)
(6.73)
(5.64)
* Excluding the impact of exceptional items, as explained in Note 11 to the financial statements.
** n.m.: not meaningful as a variance is more than (-)100 per cent.
Return on capital employed and capital structure
Return on capital employed (ROCE) is a non-statutory performance measure commonly used to measure the
financial returns that a business achieves on the capital it uses. ROCE for the F21 was (19.4) per cent, compared
to 20.8 per cent for the previous year.
The Company maintained its investment grade credit rating by Moody’s (Baa3) and Fitch (BBB-).
The Company’s leverage ratio is (19.2) at the end of the 2021 financial year, while Liquidity* increased to 195.9
per cent from 47.5 per cent at the end of the 2020 financial year.
ROCE*
Leverage ratio*
Liquidity*
F21
(19.4%)
(19.2)
195.9%
F20
20.8%
0.9
47.5%
Change
n.m.**
n.m.**
n.m.**
See the definition of these non-statutory measures and their calculation under Key statistics on page 49.
*
** n.m.: not meaningful as a variance is more than (-)100 per cent.
Financial performance
Revenue
The following table sets out an overview of Wizz Air’s revenue items for F21 and F20 and the percentage
change in those items:
Passenger ticket revenue
Ancillary revenue
Total revenue
F21
F20
Total
(€ million)
325.7
413.3
739.0
Percentage
of total
revenue
44.1%
55.9%
100%
Total
(€ million)
1,508.5
1,252.8
2,761.3
Percentage of
total revenue
54.6%
45.4%
100%
Percentage
change
(78.4%)
(67.0%)
(73.2%)
The decline in passenger ticket revenue was driven by a 74.6 per cent decline in passengers. Similarly, ancillary
(or “non-ticket”) revenue declined, although to a smaller extent due to the strong performance of ancillary
products, as a result its share of the total revenue increased to 55.9 per cent.
Wizz Air Holdings Plc Annual report and accounts 2021
43
Average revenue per passenger improved by 5.2 per cent from €69.0 in F20 to €72.5 in F21. Average ticket
revenue per passenger decline from €37.7 in F20 to €32.0 in F21 (by 15.2 per cent), while average ancillary
revenue per passenger increased to €40.6 from €31.3 (by 29.6 per cent).
Operating expenses
Total operating expenses excluding exceptional expense decreased by 50.3 per cent to €1,173.4 million in F21
from €2,359.3 million in F20.
The following table sets out for F21 and F20 the expenses relevant for the CASK measure (thus excluding
exceptional expense), and the percentage changes in those expenses:
Staff costs
Fuel costs (excluding
exceptional expense)
Distribution and marketing
Maintenance, materials,
repairs
Airport, handling,
en-route charges
Depreciation and amortisation
Net other expenses
Total operating expenses
(excluding exceptional
expense)
Net cost from financial
income and expense
Total
F21
Percentage
of total
operating
expenses
11.3%
Total
(€ million)
132.9
Unit cost
(€cts/ASK)
0.52
Total
(€ million)
231.8
F20
Percentage
of total
operating
expenses
9.8%
Unit cost
(€cts/ASK)
0.33
Percentage
change of total
cost
(42.7%)
253.8
19.6
21.6%
1.7%
0.99
0.08
812.8
44.1
34.5%
1.9%
1.16
0.06
(68.8%)
(55.5%)
165.7
14.1%
0.65
176.4
7.5%
0.25
(6.1%)
254.9
345.3
1.2
21.7%
29.4%
0.1%
1.00
1.35
0.00
641.6
381.4
71.2
27.2%
16.2%
3.0%
0.92
0.55
0.10
(60.3%)
(9.5%)
(98.3%)
1,173.4
100%
4.59
2,359.3
100.0%
3.37
(50.3%)
66.8
1,240.2
0.26
4.85
44.2
2,403.5
0.06
3.44
(51.1%)
(48.4%)
Staff costs were €132.9 million in F21, down by 42.7 per cent from €231.8 million in F20, driven primarily by
headcount reduction, salary reduction for crew and office employees in addition to decrease in variable pay
elements.
Fuel expenses (excluding exceptional expense) decreased by 68.8 per cent to €253.8 million in F21, down from
€812.8 million in F20. The main driver for this decrease was an ASK decline of 63.5 per cent as well as lower
fuel prices. The average fuel price, including hedging impact and into-plane premium, paid by Wizz Air in F21
was $674.0 per tonne, a decrease of 7.5 per cent from the previous year’s figure of $729.1 per tonne. The
average Euro/US Dollar exchange rate, including the impact of hedging, was 1.17 in F21 compared to a rate of
1.16 in F20. The impact of effective fuel hedges was a €93.6 million loss in F21 (compared to a €43.5 million
gain in F20).
The decrease in distribution and marketing costs of 55.5 per cent to €19.6 million in F21 from €44.1 million in
F20 is driven by ASK decline of 63.5 per cent in F21.
Maintenance, materials and repair costs declined by 6.1 per cent to €165.7 million in F21 from €176.4 million in
F20. Maintenance costs are largely driven by size of the fleet, pre-determined maintenance schedules and
aircraft utilisation.
Airport, handling and en-route charges decreased by 60.3 per cent to €254.9 million in F21 from €641.6
million in F20. This decrease is primarily driven by the decrease in both capacity and passenger numbers,
which declined by 62.8 per cent and 74.6 per cent respectively.
Depreciation and amortisation charges decreased by 9.5 per cent to €345.3 million in F21, down from
€381.4 million in F20 due to reduction in variable element of the depreciation that is based on number of
hours flown.
Net other expenses include primarily (i) office overhead and crew-related costs other than direct staff costs,
(ii) passenger welfare and compensation costs, (iii) aviation and other insurance costs, and (iv) credits that do
not classify as revenue from customers. The decrease in net other expenses to €1.2 million was primarily driven
by income in F21, when compared to F20, relating to various aircraft asset sale and leaseback transactions.
Wizz Air Holdings Plc Annual report and accounts 2021
44
Net financing income and expense
The Group’s net financing expense was €38.4 million in F21 after an expense of €44.2 million in F20. This
aggregate change was driven by foreign exchange impacts partly offset by increase in net financial expense
mainly due to lower interest income earned by the Group on its term deposits, as shown in the table below:
€ million
Net financial expense
Net foreign exchange gains/(losses)
Net financing income/(expense)
See also Note 10 to the financial statements.
F21
(66.8)
28.4
(38.4)
F20
(44.2)
0.1
(44.2)
Change
(22.6)
28.3
5.8
Taxation
The Group recorded and income tax expense of €9.5 million in F21 compared to the €13.1 million in F20.
The effective rate for the Group in F21 was (1.7%) compared to 4.4% in F20. The main components of the tax
charge in F21 were local business tax and innovation tax paid in Hungary and change in deferred tax balances.
Profit for the year
The Group generated an underlying net loss of €482.4 million in F21, compared to the underlying net profit of
€344.8 million in F20.
Other comprehensive income and expenses
In F21 the Group had other comprehensive income of €240.3 million compared to an expense of €254.5 million
in F20. This change was driven primarily by the movements in the fair value of open hedge instruments, as
reflected in the balance of the cash flow hedging reserve in equity. It excludes the open fuel hedges that were
classified as discontinued at 31 March 2021 and were therefore recognised as an exceptional expense already
in F21.
Cash flows and financial position
Cash burn
The monthly average cash burn rate of Wizz Air was €61 million during F21.
Summary statement of cash flows
The following table sets out selected cash flow data and the Group’s cash and cash equivalents for F21 and
F20:
€ million
Net cash (used in) / generated by operating activities
Net cash used in investing activities
Net cash generated by / (used in) financing activities
Effect of exchange rate fluctuations on cash and cash
equivalents
Cash and cash equivalents at the end of the year
F21
(224.6)
(146.5)
624.6
(30.9)
F20
(restated)
751.6
(1,110.1)
(93.7)
14.3
Change
(976.2)
963.6
718.3
(45.2)
1,100.7
878.0
222.7
Cash flows from operating activities
The majority of Wizz Air’s cash inflows from operating activities are derived from passenger ticket sales. Net
cash flows from operating activities are also affected by movements in working capital items.
Operating cash flows decreased from €751.6 million in F20 to €(224.6) million in F21 primarily due to the
following factors:
(cid:1) Operating cash flows before adjusting for changes in working capital deteriorated by €1,058 million year
on year. This was driven primarily by the significantly impaired underlying profitability of the business due
to the COVID-19 pandemic (see earlier).
(cid:1)
The positive contribution of working capital changes to operating cash flows was €49.9 million in F21,
compared to €(23.2) million in F20, being an improvement of €73.1 million year on year. The main driver
behind this improvement was the significantly lower drop in deferred income and receivables related to
forward bookings, partially offset by only modest increase in liabilities towards suppliers at the end of F21
compared to end of F20, when certain actions were already implemented to protect the liquidity of the
Company.
Cash flows from investing activities
Net cash used in investing activities decreased to €(146.5) million in F21 from €(1,110.1) million in F20. The
significantly lower investment in F21 is due to the following factors:
(cid:1) Advances paid for aircraft (pre-delivery payments, PDPs): The net PDP payments to Airbus net of refunds
received were an outflow of €33.8 million in F21 compared to a net outflow of €298.2 million in F20. The
decrease in net outflow was the result of a favourable renegotiation of the Company’s delivery schedule
and associated PDP commitments with Airbus.
Wizz Air Holdings Plc Annual report and accounts 2021
45
(cid:1)
(cid:1)
Purchase of tangibles and intangibles, net of proceeds from the sale of tangible assets: The net outflow
was €110.8 million in F21 compared to €273.5 million in F20. The key drivers of this significant decrease in
F21 are: a) the purchase of less new aircraft (see Note 14 to the financial statements), refinanced through
JOLCO lease contracts (see below under financing activities) and b) the postponement of the purchase
of non-essential spare parts in F21.
In agreement with the Corporate Reporting Review Team of the Conduct Committee of the Financial
Reporting Council the Company has decided to separate from cash and cash equivalents deposits with a
maturity of longer than three months. The Company has restated its F20 balance sheet and cash flow
statement for this change.
Cash flows from financing activities
The net cash from financing activities was €624.6 million inflow in F21 and a €93.7 million outflow in F20. The
cash inflow in F21 was the net of the following two factors:
(cid:1)
(cid:1)
Proceeds from new loan: this was an inflow of €195.6 million in F21 and €297.7 million inflow in F20,
relating to the JOLCO financing raised on several new aircraft. Additionally, we also received proceeds
of €836.2 million from the bond issue and commercial paper issuance under the CCFF facility.
Repayment of loans plus interest paid on loans: The cash outflow from these items was €410.2 million in
F21 compared to €392.8 million in F20, which is €17.4 million higher than in F20. These were primarily
related to aircraft and spare engine leasing fees paid, under IFRS 16.
Summary statement of financial position
The following table sets out summary statements of financial position of the Group for F21 and F20:
€ million
ASSETS
Property, plant and equipment
Restricted cash*
Derivative financial instruments*
Trade and other receivables*
Short term cash deposits
Cash and cash equivalents
Other assets*
Total assets
EQUITY AND LIABILITIES
Equity
Equity
Liabilities
Trade and other payables
Borrowings (incl. convertible debt)*
Deferred income*
Derivative financial instruments*
Provisions*
Other liabilities
Total liabilities
Total equity and liabilities
F21
F20
2,878.2
169.1
5.1
135.3
346.8
1,100.7
87.3
4,722.6
2,553.0
185.9
18.2
189.7
432.5
878.0
101.0
4,358.1
Change
325.2
(16.8)
(13.1)
(54.4)
(85.7)
222.7
(13.6)
364.5
903.7
1,234.8
(331.1)
465.7
3,137.3
111.5
9.0
88.9
6.5
3,818.9
4,722.6
469.6
2,039.4
185.4
307.8
121.1
–
3,123.3
4,358.1
(3.9)
1,097.9
(73.9)
(298.8)
(32.2)
6.5
695.7
364.5
*
Including both current and non-current asset and liability balances, respectively.
Property, plant and equipment increased by €325.2 million as at 31 March 2021 compared to 31 March 2020,
primarily driven by the investment made in JOLCO-financed aircraft and sale and leaseback financed right-of-
use assets (see also Notes 14 and 15 to the financial statements).
Restricted cash (current and non-current) decreased by €16.8 million as at 31 March 2021 compared to the
year before. The great majority of this balance is linked to Wizz Air’s aircraft lease contracts, being cash
deposits behind letters of credit issued by Wizz Air’s banks related primarily to lease security deposits and
maintenance reserves.
Derivative financial assets (current and non-current) decreased by €13.1 million as at 31 March 2021 compared
to 31 March 2020 (see also Notes 3 and 21 to the financial statements). In 2021 these hedge receivable balances
are mainly related to fuel hedge instruments.
Trade and other receivables decreased by €54.4 million as at 31 March 2021 compared to 31 March 2020. This
was primarily driven by decrease in trade receivables as a result of COVID-19, and decrease in maintenance
reserve receivables due to maintenance events performed during the financial year.
Cash and cash equivalents amounted to €1,100.7 million at 31 March 2021 (2020: €878.0 million), and short
term cash deposits to €346.8 million at 31 March 2021 (2020: €432.5 million).
Wizz Air Holdings Plc Annual report and accounts 2021
46
Borrowings (including convertible debt) increased by €1,097.9 million as at 31 March 2021 compared to 31
March 2020. The increase was primarily driven besides the bond issue and commercial paper issuance under
the CCFF facility by lease liabilities recognised during the fiscal year (see Note 23 to the financial statements).
Deferred income decreased by €73.9 million as at 31 March 2021 compared to 31 March 2020 (see Note 26 to
the financial statements). This was primarily driven by the lower business activity and shorter booking windows
during and towards the end of the fiscal year, both due to the coronavirus pandemic.
Derivative financial liabilities (current and non-current) decreased by €298.8 million as at 31 March 2021
compared to 31 March 2020 (see Notes 3 and 21 to the financial statements). The €9.0 million liability at 31
March 2021 was related to foreign currency and fuel hedges. The losses associated with discontinued hedges
were fully recognised in F21.
Provisions decreased by €32.2 million as at 31 March 2021 compared to 31 March 2020 (see Note 30 to the
financial statements). The reduction is due mainly to the utilisation of some maintenance provisions in 2021 as
the respective maintenance events were performed during the year.
Hedging strategy
Following the COVID-19 outbreak, the activity level and consequently the fuel consumption was significantly
lower in F21 than that on which the Group hedging programme was originally based. As a consequence, hedge
accounting for certain derivatives has been discontinued and the associated loss on these instruments of €93.6
million (2020: €63.7 million) was charged to the statement of comprehensive income as exceptional expense.
In light of ongoing travel restrictions as a result of the COVID-19 pandemic and the subsequent uncertainty in
demand for travel, a decision was taken in September 2020 to cease until further notice US Dollar and jet fuel
hedging in order to reduce the risk of over-hedging.
In June 2021 the Board of Directors approved the Company’s ‘no hedge’ policy for the post-COVID period
with respect to US dollar and jet fuel price risk after carefully evaluating the economic costs and benefits of
the company’s hedging programme.
Going forward, the intent of the Company is to no longer engage in cash-flow hedging of US dollar
denominated expenses and jet fuel price risk:
(cid:1)
(cid:1)
(cid:1)
The Group’s has a significantly stronger balance sheet compared to when the hedging programme was
launched, which positions the Company well to absorb the financial impact of potential increases in input
costs from stronger US dollar or higher jet fuel prices;
The Group is less vulnerable to input price inflation relative to certain of its industry peers due to the
shorter booking window;
The Group has a more limited competitive overlap of operated routes compared to those competitors;
(cid:1) Material liquidity risk can be introduced by hedging activities especially during times of volatile trading
environment;
(cid:1)
Hedging activities come at substantial additional cost in terms of spreads, yields and management time,
which may provide greater income statement stability but does not evidently create shareholder value.
Among other things, the Group will be fully exposed to fluctuations in fuel prices in periods after September
2021.
The treasury department, under the supervision of the Audit and Sustainability Committee, will continue to
monitor the Company’s risk environment, market and business opportunities to reduce or transfer its exposure
to market risks.
Details of the current hedging positions (as at 31 March 2021) are set out below:
Foreign exchange (FX) hedge coverage of Euro/US Dollar
Period covered
Exposure (million)
Hedge coverage (million)*
Hedge coverage for the period*
Weighted average ceiling*
Weighted average floor*
Fuel hedge coverage
Period covered
Exposure in metric tonnes ('000)
Coverage in metric tonnes ('000)*
Hedge coverage for the period*
Blended capped rate*
Blended floor rate*
*
Including discontinued hedges.
Wizz Air Holdings Plc Annual report and accounts 2021
F21
12 months
$474
$130
27%
$1.1621
$1.1164
F21
12 months
890
370
42%
$554
$503
47
Excluding discontinued hedges, the Company`s foreign currency and fuel hedge coverage for F22 is 22 per
cent and 28 per cent respectively.
Jourik Hooghe
Chief Financial Officer
2 June 2021
Wizz Air Holdings Plc Annual report and accounts 2021
48
STRATEGIC REPORT
KEY STATISTICS
CAPACITY
Number of aircraft at end of period
Equivalent aircraft
Utilisation (block hours per aircraft per day)
Total block hours
Total flight hours
Revenue departures
Average departures per day per aircraft
Seat capacity
Average aircraft stage length (km)
Total ASKs (’000 km)
OPERATING DATA
RPKs (revenue passenger kilometre) (’000 km)
Load factor (%)
Number of passenger segments
Fuel price (US$ per tonne, including hedging impact and
into-plane premium)
Foreign exchange rate (US$/€ including hedging impact)
FINANCIAL MEASURES (for the airline only)
Yield (revenue per RPK, € cents)
Average revenue per seat (€)
Average revenue per passenger (€)
RASK (€ cents)
CASK (€ cents)**
Ex-fuel CASK (€ cents)**
F21
F20
Change*
137
129.7
4.13
195,601
172,469
80,820
1.71
15,927,709
1,604
25,551,625
16,691,569
64.0%
10,186,077
674
121
117.4
12.02
516,478
452,043
214,207
4.98
42,788,903
1,635
69,972,524
65,680,231
93.6%
40,027,914
729
1.17
4.43
46.4
72.5
2.89
4.85
3.86
1.16
4.20
64.5
69.0
3.95
3.44
2.27
13.2%
10.4%
(65.6%)
(62.1%)
(61.8%)
(62.3%)
(65.7%)
(62.8%)
(1.9%)
(63.5%)
(74.6%)
(29.6ppt)
(74.6%)
(7.5%)
0.1%
5.3%
(28.1%)
5.2%
(26.7%)
41.3%
69.8%
* Percentage changes in this table are calculated by division of the two years’ KPIs also when the KPIs are expressed in
percentage.
** Excluding the impact of exceptional items, as explained in Note 11 to the financial statements.
Glossary of technical terms
Available seat kilometres (ASK): available seat kilometres, the number of seats available for scheduled
passengers multiplied by the number of kilometres those seats were flown.
Block hours: each hour from the moment an aircraft’s brakes are released at the departure airport’s parking
place for the purpose of starting a flight until the moment the aircraft’s brakes are applied at the arrival airport’s
parking place.
CASK: cost per ASK, where cost is defined as operating expenses and financial expenses net of financial
income, excluding exceptional items.
Ex-fuel CASK: cost per ASK, where cost is defined as operating expenses and financial expenses net of fuel
expenses and financial income, excluding exceptional items.
The definition of cost applied in the CASK measures until the 2019 financial year was based only on operating
expenses. Financial income and expenses are now incorporated into the definition of cost because following
the adoption of IFRS 16 this results in a more appropriate measure of cost development for the Company.
Equivalent aircraft: the number of aircraft available to Wizz Air in a particular period, reduced on a per aircraft
basis to reflect any proportion of the relevant period that an aircraft has been unavailable.
Flight hours: each hour from the moment the aircraft takes off from the runway for the purposes of flight until
the moment the aircraft lands at the runway of the arrival airport.
JOLCO (Japanese Tax Lease) and French Tax Lease: special forms of structured asset financing, involving
local tax benefit for Japanese and French investors, respectively.
Load factor: the number of seats sold divided by the number of seats available.
PDP: the pre-delivery payments under the Group’s aircraft purchase arrangements.
Revenue passenger kilometres (RPK): revenue passenger kilometres, the number of seat kilometres flown by
passengers who paid for their tickets.
RASK: total revenue divided by ASK.
Underlying net profit (from continuing operation): profit after tax for the year as per IFRS excluding the
impact of exceptional items.
Utilisation: the total block hours for a period divided by the total number of aircraft in the fleet during the
period and the number of days in the relevant period.
Wizz Air Holdings Plc Annual report and accounts 2021
49
Yield: the total revenue per RPK.
Cash and cash equivalents comprise bank balances on current accounts and on deposit accounts that are
readily convertible into cash without there being significant risk of a change in value to the Group. Cash and
cash equivalents do not include restricted cash.
Short term cash deposits comprise deposits maturing within three to twelve months of inception.
Total cash comprises cash and cash equivalents, short term cash deposits and restricted cash.
Definition and reconciliation of non-statutory financial performance measures
Return on capital employed (ROCE) is operating profit after tax (excluding exceptional items) divided by
average capital employed, expressed as a percentage.
Average capital employed is the sum of annual average equity and interest-bearing borrowings (including
convertible debt), less annual average cash and cash equivalents.
€ million
Operating profit (excluding exceptional expense)
Effective tax rate for the year
Operating profit after tax (excluding exceptional expense)
Average shareholders’ equity
Average borrowings
Average cash and cash equivalents
Average short term cash deposits
Average capital employed
ROCE (%)
F21
(434.5)
(1.7%)
(441.8)
1,069.3
2,588.4
(989.3)
(389.7)
2,278.6.0
(19.4%)
F20
402.0
4.4%
384.3
1,220.5
1,940.4
(1,097.1)
(216.2)
1,847.6
20.8%
Leverage ratio: net debt divided by EBITDA (excluding exceptional items).
Net debt is interest-bearing borrowings (including convertible debt) less cash and cash equivalents.
Earnings before interest, tax, depreciation and amortisation (EBITDA) is profit (or loss) before net financing
costs (or gain), income tax expense (or credit), depreciation, amortisation and exceptional items.
€ million
Operating profit (excluding exceptional expense)
Depreciation and amortisation
EBITDA (excluding exceptional expense)
Borrowings
Cash and cash equivalents
Short term cash deposits
Net debt
Leverage
F21
(434.5)
345.3
(89.2)
3,137.3
(1,100.7)
(346.8)
1,689.8
(18.9)
F20
402.0
381.4
783.4
2,039.4
(878.0)
(432.5)
728.9
0.9
Liquidity is cash and cash equivalents and short term cash deposits divided by the last twelve months’ revenue,
expressed as a percentage.
€ million
Cash and cash equivalents
Short term cash deposits
Revenue
Liquidity
F21
1,100.7
346.8
739.0
195.9%
F20
878.0
432.5
2,761.3
47.6%
Wizz Air Holdings Plc Annual report and accounts 2021
50
STRATEGIC REPORT
EMERGING AND PRINCIPAL RISKS AND UNCERTAINTIES
This section of the annual report sets out our risk management process and provides an overview of the
emerging and principal risks that could, if not appropriately dealt with, affect Wizz Air’s future success. Risk
management is a dynamic and ever-evolving area and the Group is committed to proactively identifying and
managing risks effectively. Compared to F20 the Company has put more attention on the pandemic and
climate-related risks as further detailed below.
Our risk management process
The Board is responsible for the Group’s risk management and it has delegated to the Audit and Sustainability
Committee the task of monitoring the adequacy and effectiveness of the Group’s risk management systems.
The Group has a comprehensive enterprise risk management (ERM) process to support the achievement of
business and strategic goals. As part of our ERM process, risks are identified and collected in our Risk Universe
and Individual Risks are organised into Risk Categories. Risks are analysed for likelihood and impact using the
qualitative approach. A risk response is determined depending on the Risk Category and the risk appetite
which can range from “averse” to “actively seeking” depending on how much risk the Group assesses to be
appropriate within our industry and business model.
The majority of the Wizz Air Risk Categories have “averse” risk appetite due to their safety/compliance/
regulatory nature. In F21, we have also assessed Environmental, Social, and Corporate Governance (ESG)
related risks with an “averse” risk appetite in order to drive a deliberate agenda on sustainability - with respect
to climate and communities served by Wizz, and corporate governance – as it is becoming increasingly
important to the Company. Those risk categories where our risk appetite is cautious/open are mostly
commercial where a healthy level of risk taking is part of the DNA of the Group to further our commercial
agenda and deliver against our shareholder value creation goals (e.g. major strategic initiatives, network
management or our aircraft programme).
As part of this process, the internal Risk Council, including the Group’s Leadership Team as the final risk owners
and decision makers and the Senior Internal Audit Manager, meets regularly (minimum three times per year),
to consider and update the emerging and principal risks identified and the status of the response plans. The
resulting risk report is then reviewed with the Audit and Sustainability Committee and presented to the Board.
The Board is therefore satisfied that it has carried out a robust assessment of the emerging and principal risks
facing the Group, including those that would threaten its business model, future performance, solvency or
liquidity.
Risks relating to the Group
Introduction
The principal risks identified by the Risk Council fall into nine broad groupings which are consistent with the
groupings of F20 and include a deeper assessment on global pandemic risks based on the experience of
COVID-19, and a separation of climate risks from social and governance risks to ensure better risk and
opportunity identification and action planning in both areas:
(cid:1)
information technology and cyber risk, including website availability, protection of our own and our
customers’ data, ensuring the availability of operations-critical systems in an increasingly complex system
landscape;
(cid:1) external factors, such as the default of a partner financial institution, fuel cost, foreign exchange rates,
competition, general economic trends and geopolitical risk;
(cid:1) network development, making sure that we are making the best use of our capacity, driving maximum
utilisation and ensuring that we have access to the right airport infrastructure at the right price so that we
can keep on delivering the superior Wizz Air service at low fares across an expanding network;
(cid:1)
(cid:1)
fleet development, ensuring that the Group has the right number of aircraft available at the right time to
take advantage of commercial opportunities and grow in a disciplined way;
regulatory risk, making sure that we remain compliant with regulations affecting our business and
operations and that we remain agile to react to the changing travel restrictions and governmental actions
taken due to COVID-19;
(cid:1) operations, including safety events and terrorist incidents;
(cid:1) global pandemic, which has been the reality not just only a risk during 2020 and beyond and may continue
to impact the Group and its interests in the near future;
(cid:1) human resources, ensuring we are able to recruit the right quality and the right number of colleagues to
support our ambition to grow and, once recruited, that they remain engaged and motivated and that the
Group has appropriate succession management in place for key colleagues, even in the context of a global
pandemic;
Wizz Air Holdings Plc Annual report and accounts 2021
51
(cid:1)
(cid:1)
climate risk, ensuring that we are able to answer the growing need of environmental protection and
consciousness and create a sustainable, climate-friendly service for our customers at all times respecting
the planet; and
social and governance risks, making sure we are at all times guided through our core values, our value of
integrity, all stakeholders are respected throughout our business processes and deals and provided
transparency through responsible reporting and disclosure.
Information technology and cyber risk
During the 2021 financial year, over 90 per cent of bookings were made through wizzair.com and mobile apps.
Refunds in view of COVID- 19 travel disruptions are mostly handled through digital channels. Soon aircraft will
be connected via a connected Electronic Flight Bag. We are therefore dependent on our information
technology systems to enable and manage ticket reservations and other payments. We need to handle and
protect data compliant with industrial standards and GDPR. We check in passengers, manage our traffic
network, perform flight operations and engage in other critical business tasks leveraging technology. Our
website and our mobile app is our shop window and therefore it is critical that it is functional, reliable and
secure.
While we outsource the hosting and operation of some of these systems to external IT suppliers, we retain an
experienced internal team to oversee the operation of these systems and manage the service level. We will
continue to review our business-critical systems to ensure that the appropriate level of back-up and reliable
recovery procedures are in place. Beyond Wizz Air, we focus on supplier processes and practices to ensure all
possible gaps are adequately identified and addressed where needed.
The Group has continued to employ business continuity processes since its beginning and during the 2021
financial year. The Group’s business continuity plan was comprehensively reviewed and updated to ensure
that it remained appropriate and sufficient for the Group’s continued growth even against the backdrop of a
pandemic. The up-to-date state and the operability of the business continuity plan are ensured through regular
testing and maintenance.
Cyber risk is a hugely important consideration for our business and is one of the areas closely monitored by
the Board. Our systems could be attacked in a number of ways and with varying outcomes – for example,
unavailability of wizzair.com or operations-critical systems or theft of our customers’ data that could result in
considerable loss of customer confidence. In 2018, leading up to the implementation of the General Data
Protection Regulation (GDPR) we completed a comprehensive review of the Group’s data systems
architecture and launched a combination of new processes, policies and technological solutions resulting in
increased data protection at Wizz Air. Regarding customer card data handling, we successfully passed again
the PCI DSS accreditation audit in January 2021.
During the 2021 financial year, we have continued to invest in and strengthen our processes, systems and
policies and have closely worked together with the Data Protection Officer. Cyber security is a constantly
evolving challenge and one of the key issues related to cyber security is our colleagues’ awareness of the risk
and of the possible ways in which our business could be attacked and, therefore, a comprehensive and
compulsory e-learning training programme for all colleagues is maintained. The digital team trained more than
500 staff in cyber awareness in F21. Our in-house IT Security department continues to review emerging threats
and the Board will be kept up to date on the actions being taken to safeguard the Group and our customers.
The pandemic further changed the cyber security landscape. The cyber security threat level increased in all
industries around the world. Threats include website attacks, end-user phishing, ransomware attacks,
compromises via a trusted third party and many others. Facing these challenges, Wizz Air was successfully
blocking over 1.7 million attacks per month through deployment of technical improvements.
With the new regulations during the pandemic regarding social distancing, pressure on the IT infrastructure
increased and its reliability became more important than before in ensuring business continuity.
External factors
The airline industry suffered one of the biggest hits due to COVID-19. It did recover during the summer of F21
but the second and third waves of the pandemic caused the re-introduction of restrictions. Mass vaccination
started at the end of 2020; providing a good basis for the industry to recover. The IATA forecast of the industry
is to make net losses of $118 billion in CY2020, and $38 billion in 2021.
During the pandemic hedging transferred from being a risk mitigation tool to the risk/cause of loss itself. The
hedging policy is continuously discussed by management and the Board in order to provide reasonable
protection against price shocks while being consistent with a minimum level of capacity utilisation during the
pandemic.
We are an international business and, while we report in Euros, we transact in over 20 currencies. We make a
large number of payments in US Dollars. Appreciation of the US Dollar against the Euro may negatively impact
results and margins. In all cases, hedging transactions are subject to the approval of the Audit and
Sustainability Committee.
Wizz Air Holdings Plc Annual report and accounts 2021
52
During the 2021 financial year fuel accounted for 21.8 per cent of our total Group operating costs (each
excluding exceptional expenses) and a rise in fuel prices could significantly affect our operating costs.
Financial counterparties. We believe that a strong cash position is a vital foundation for the Group’s financial
resilience and its ability to capture commercial opportunities as they arise. Therefore, we actively manage the
safeguarding of our financial assets and monitor the viability of our banking, card acquiring and hedging
counterparties. In fact, all of the Group’s cash is invested in accordance with a Board-approved counterparty
risk policy which assigns investment limits to each counterparty based upon its credit rating.
Competition is one of the key risks to our business. Our competitors continuously strive to protect or gain
market share in markets in which we operate, perhaps by offering discounted fares or more attractive
schedules. During COVID-19, a unprecedented amount of state support has benefited our competitors. States
are again large and often majority shareholders in competitive airlines. Competition can adversely affect our
revenues and so we constantly monitor our competitors’ actions and the performance of our route network
to ensure that we take both reactive and proactive actions in a timely manner. Ultimately, our key competitive
strength is our commitment to driving our costs ever lower while delivering a superior service and building a
loyal customer base. We firmly believe that in tough market conditions lowest cost ultimately wins and
therefore we are relentlessly committed to the strictest cost discipline day in and day out.
We are exposed to global political, economic and epidemic events and trends. An economic downturn
affects demand for air travel. Our business extends beyond the borders of the EU and into countries such as
Russia and Ukraine and regions including the Caucasus, North Africa and the Middle East. Some of the regions
we operate in have in the past experienced, and may also in the future be subject to, further potential political
and economic instability caused by changes in governments, political deadlock in the legislative process,
contested election results, tension and local, regional or international conflicts, corruption among government
officials, social and ethnic unrest and currency instability. Certain countries may be more affected by COVID-
19 than others and may have a longer path to recovery, requiring us to diversify our network and approach.
We maintain close relationships with local authorities and, as an organisation, we are able to react quickly to
adverse events.
Whereas Brexit is behind us there continues to be a level of uncertainty on how the UK and the EU will foster
commercial relationships going forward. We continue a dialogue with various authorities to ensure that there
is a general understanding of the need to maintain access to the liberalised market.
Regardless of the future discussions, we believe diversification of our network and markets is a key part of a
sustainable business strategy and we remain confident that CEE is a large addressable market which will
continue to provide opportunities for profitable growth.
Network development
During the pandemic one of the key strategies of Wizz Air was to diversify its network, allowing us to better
deal with risks caused by travel restrictions as they arose in parts of the network whereas other parts of the
network were not or less impacted. While international travel was restricted, we successfully opened new
domestic routes and bases in several countries. Improving the network allowed us to improve costs through
long-term agreements with airports. We compete not just for customers but also for affordable access to
infrastructure. To meet our ambitious growth plans we require additional space in airport terminals and
additional take-off, landing and airport slots. Certain airports in which we operate may already be or become
congested, meaning we may not be able to secure access to those airports at our preferred times. We are also
making sure that, to retain the slots we already have, we maintain close working relationships with the relevant
airport authorities and slot co-ordinators and continuously improve our scheduling and slot management
systems and processes.
Fleet development
In order to support our growth plans, we require additional aircraft. We put emphasis on new aircraft – we
currently operate one of the youngest fleets in Europe with an average age of just 5.4 years. Having a modern
and reliable fleet means we can utilise it for over twelve hours a day in normal circumstances. For the business
it means lower unit operating costs and, for our customers, lower prices. Since early 2019 the Group started to
take delivery of the A321neo aircraft and currently operates these narrow body aircraft which are the most
efficient technology today and likely to remain that way over the next few years. Our order book with Airbus
as at 31 March 2021 comprised 34 A320neo, 194 A321neo and 20 A321XLR aircraft with deliveries scheduled
to take place between 2021 and 2027.
Aircraft deliveries materially continued during the pandemic which will allow Wizz Air to gain advantage in the
post-pandemic near future. A large aircraft order is a significant financial commitment and requires financing.
To date, we have predominantly financed our A320-family’s aircraft through sale and leaseback arrangements.
In the upcoming few years, Wizz Air will take delivery of a record number of aircraft per year and as a Group
we are focused on multiple possibilities to finance our future fleet to ensure we secure the most cost
competitive terms. We are confident that, given both the A320 family’s desirability as a result of its superior
operating economics and Wizz Air’s established strong financial track record, financing will be readily available
on competitive terms for the foreseeable future.
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53
With the advance of technology, aircraft computer technology intended to make flight operations safer is
becoming more sophisticated and may sometimes fail, leading to aircraft being grounded. Similarly, design
flaws of aircraft components may lead to costly delays of aircraft delivery. We are in constant dialogue with
our key suppliers, Airbus and Pratt & Whitney, to ensure we have sufficient capacity to deliver our planned
growth and that crews are trained to the highest standard possible and are adept at using the latest aircraft
technology innovations in order to avoid such failures and delays.
Regulatory risks
Today regulatory risks are driven by fast changing mobility restrictions as a result of the non-standardised
governmental approaches in key markets. Wizz Air has strengthened a dedicated internal team.
Considering current trends in fast changing travel restrictions, the amount of flight schedule changes may lead
to higher operational inefficiency and possibly passenger compensation may continue to be a concern as well.
Beyond COVID-19, aviation remains a highly regulated industry. Wizz Air Hungary relies on an air operator’s
certificate (AOC) and operating licence issued by Hungary, Wizz Air UK relies on an AOC and operating licence
issued by the United Kingdom and Wizz Air Abu Dhabi relies on a licence issued by Abu Dhabi. In each case,
the licences allow the airline to operate air services both within Europe and to and from countries with which
it has air traffic agreements. Each operating licence requires the Group to meet ownership and control
requirements. If the Group ceases to be majority owned and effectively controlled by Qualifying Nationals,
then its operating licence – and, so, its right to operate its business – could be at risk. The Group on a periodic
basis, but at least before voting events, suspends proportionally voting rights on Ordinary Shares held by Non-
Qualifying Nationals such that the airline is effectively majority controlled by EEA holders.
From 1 January 2021 the Group treats as Restricted Shares certain Ordinary Shares held by Non-Qualifying
Nationals and issued to such Shareholders Restricted Share Notices. This decision was made by the Board
because from 1 January 2021 UK nationals are no longer to be treated as Qualifying Nationals.
The Group's Board of Directors will continue to monitor the ownership level of Ordinary Shares by Non-
Qualifying Nationals and will take actions as allowed by its articles if deemed necessary.
Operational risks
An accident or incident, or terrorist attack, can adversely affect an airline’s reputation and customers’
willingness to travel with that airline. With the pandemic, protection of the health of our employees and
customers became a key focus. To be able to implement standardised, central measures a new Group Health,
Safety and Wellbeing Manager position was created in early F21 prior to COVID-19.
Furthermore, during COVID-19 the possibility of sudden airport closures and ground handling stops became a
significant risk. Political decisions may lead to significant financial loss and temporary operational disruption in
case of a potential airport closure and/or ground handling operations suspension. To mitigate this risk, our
operational teams are keeping close contact with all relevant airports to understand the risk potentials and
diversion airports or contingency airports have been defined.
At Wizz Air, our number one priority is the safety of our passengers and crew. Our aircraft fleet is young and
reliable, we use the services of world-class maintenance organisations and we have a strong safety culture. A
cross-functional safety council meets four times a year, involving both senior management as well as
operational staff, and reviews any issues which have arisen in the previous three months and the actions taken
as a consequence. In addition to this, we collect detailed data from all aspects of our operations in order to
identify trends, and relevant personnel from our Operations department meet twice a year to discuss any
trends identified in their area of operation and how they are being dealt with. We also operate an anonymous
safety reporting system, to enable our flight and cabin crew to report safety issues which are a concern to
them. The entry standards for our operating crew are high and our own Approved Training Organisation (ATO)
ensures that all of our pilots are trained to the highest standards. Wizz Air is a registered International Air
Transport Association’s Operational Safety Audit (IOSA) programme operator, which helps us to ensure that
we have best-in-class airline safety management and control systems and processes.
Our experienced security team has an ongoing programme to ensure that the security of our operations and
the airports which we serve meet high standards. Our security team also maintains close contact with relevant
authorities in order to assess any potential security or other threats to our operations. Any serious threat will
be escalated to senior management. We have in the past suspended operations to destinations where the
safety of our passengers, crew and aircraft could not be guaranteed.
Wizz Air Hungary Ltd. is classified as a company of strategic importance by the Hungarian Parliament and, as
such, the Company now enjoys enhanced security information and protection under the auspices of the
Hungarian Constitution Protection Office. Wizz Air has also joined the campaign launched by the European
Union Aviation Safety Agency (EASA) aiming to reduce the number of unruly passengers on all European
flights and protect passengers’ right to a peaceful travel experience.
Wizz Air Holdings Plc Annual report and accounts 2021
54
Global pandemic
COVID-19 turned into a worldwide pandemic. Although mass vaccination is in progress, COVID-19 may still
impact us in the near future.
The Group’s crisis management centre has been activated since February 2020. The epidemic was
characterised as a pandemic by the World Health Organization on 11 March 2020. The situation has been
followed up on a daily basis by senior management and the Group’s Board of Directors has been receiving a
daily update on the operational, commercial and financial situation of the Group. In addition, extraordinary
Board of Directors meetings have been organised monthly since February 2020. Structural measures have
been taken by the Group to ensure the health and safety of its passengers and staff and to protect liquidity
(including cost savings, workforce cost reductions and working capital interventions). In April 2020 the
Group’s operations were reduced by more than 95 per cent. Since 1 May 2020 the Group had resumed
operations from a number of bases, supported by a new health and safety protocol aimed at minimising the
risk of infection of customers, staff and partners. These protocols include regular PCR testing of our employees,
providing the necessary protective equipment, implementing home office for office workers if necessary and
re-organising the office spaces to be able to keep social distancing. The testing results and the local
governmental restrictions are continuously monitored and transparent communication to the employees is
established.
Human resources
Wizz Air is a people business. We know our people are the backbone of our business and it is their dedication,
day in, day out, that allows us to deliver our low-cost, quality service. We also know we cannot take our people
for granted and that competition for the high-quality people we seek is keen and may become even more so.
(cid:1) Flight, cabin crew and office colleagues were affected by the impact of the pandemic on aviation and saw
their income decline in F21. Wizz Air tried to maintain maximum employment during this period.
(cid:1) We are proud that, to date, we have maintained a good relationship with our employees and we have not
experienced industrial unrest. We strive to make sure this will remain the case, but we realise that there
can be no guarantee. We know we need to ensure we continue to motivate our colleagues, even more so
in current times. Feedback is an essential part of this process – both giving and receiving – and we consider
direct communication between senior management and other employees as the best way of listening to
our employees’ concerns. The Wizz Air People Council, established in 2018, regularly brings together
employees representing all areas of the business and is designed to facilitate an effective two-way
communication between the management and employees and to support the decision-making process
on matters that affect all of us within the Group, so that Wizz Air can continue to improve both as an airline
and as an employer. This effective two-way communication is also facilitated by regular base visits, which
are occasions for senior management to spend quality time with employees, both formally and informally.
(cid:1) Our success to date has been driven also by our key personnel. Our continuing success will depend on
having the right people in the key positions. Succession of key personnel is a matter which we take
extremely seriously and we shall continue to develop our succession planning processes to ensure that
we have colleagues of the right calibre to lead the Group in the future.
(cid:1) To mitigate risks of the challenges faced by the industry and the implications in terms of employer
attractiveness, Wizz Air introduced a number of measures including closely monitoring recruitment and
attrition rates, annual salary reviews and annual engagement surveys amongst staff. The results are
reviewed by the Leadership Team and are cascaded down on department level for action.
Environment, Social and Governance
As an airline, we recognise the risk related to oil consumption and CO2 emissions, which are considered a cause
of climate change. Sustainability has become an even more important focus for our Group. This includes
creating and implementing environmental and socially responsible strategies, centralising data collection in
order to increase our reporting capabilities and transparency and a continued commitment to the highest
ethical standards.
Greenhouse gas emissions and their potential impacts relating to climate change are under increasing global
regulatory focus. Aviation is already included in the EU Emissions Trading System (EU ETS) and the Group
expects to be part of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) when
effective. In October 2016, the International Civil Aviation Organisation (ICAO) adopted CORSIA with the
intention to create a single global market-based measure to achieve carbon-neutral growth for international
aviation after 2020, which can be achieved through airline purchases of carbon offset credits. CORSIA is
expected to increase operating costs for airlines that operate internationally.
While the precise impacts of climate-related requirements continue to evolve, the Group takes its responsibility
towards the climate very seriously and is undertaking various measures that are expected to help reduce its
CO2 emissions over time, such as improving fuel efficiency through operational measures and fleet renewal.
Wizz Air Holdings Plc Annual report and accounts 2021
55
In June 2019, Wizz Air announced that it operated at the lowest CO2 emissions per passenger amongst all
competitor airlines. With 57.2g CO2 per passenger/km in the 2020 financial year, Wizz Air was the airline with
the smallest environmental footprint per passenger. Wizz Air took a proactive step to include the emissions
figure in its monthly statistics, adding transparency to allow passengers to have all the necessary information
to make responsible choices. During F21, emission intensity did not continue the historic declining trajectory
as the airline operated routes with fewer passengers per aircraft versus F20. This is a temporary set-back and
the Group is confident to return to its emission intensity glide path driven by its strong fleet order of more
than 250 Airbus A321neo.
Until new environmental regulations come into force and/or until pending regulations are finalised, future costs
to comply with such regulations remain uncertain but are likely to have a significant financial impact on our
operating costs and on the aviation industry as a whole over time. We continue to monitor these
developments; however, the precise nature of future requirements and their applicability to the Group are hard
to predict.
József Váradi
Chief Executive Officer
2 June 2021
Wizz Air Holdings Plc Annual report and accounts 2021
56
GOVERNANCE
Wizz Air Holdings Plc Annual report and accounts 2021
57
GOVERNANCE
CORPORATE GOVERNANCE REPORT
A COMPANY COMMITTED TO HIGH STANDARDS OF CORPORATE GOVERNANCE
Chairman’s Statement on corporate governance
After years of record traffic growth and unprecedented profitability, the airline industry has been facing a
sharp and sustained fall in demand as the COVID-19 pandemic has brought international travel to a virtual
standstill.
Wizz Air outperformed the industry during the 2021 financial year, carrying 10.2 million passengers at 64.0 per
cent load factor against an ever-shifting backdrop of travel restrictions across all markets. At the same time,
Wizz Air’s disciplined cost management allowed the Company to sustain its investment grade balance sheet
with a total cash balance at year end of €1.6 billion.
The Directors recognise the importance of ensuring that the Company’s corporate governance remains of a
high standard, to maintain the trust that our investors have placed in the Company.
As Chairman, I am pleased to see the commitment of our Directors to the Company’s business, with several
spending time outside formal Board meetings interacting with the Company’s management.
During the course of F21, a certain number of directorate changes or re-appointments occurred:
On 3 June 2020, Ms Charlotte Pedersen was appointed to the Board of the Company as an independent Non-
Executive Director. At the same time, Ms Susan Hooper resigned as a Director of the Company. A joint Danish
and Luxembourgish national, Ms Pedersen is currently the Chief Executive of Luxaviation Helicopters, a global
VVIP helicopter organisation and part of Luxaviation Group. She has more than 30 years of experience in the
aviation sector.
Mr Guido Demuynck, who was appointed to the Board in February 2014, did not seek re-election to the Board
at the annual general meeting and retired effective from 28 July 2020.
On 4 November 2020, Mr Enrique Dupuy de Lome Chavarri was appointed to the Board of the Company as
an independent Non-Executive Director. Mr Dupuy de Lome Chavarri was also appointed as an additional
member of the Audit and Sustainability Committee. A Spanish national, Mr Dupuy de Lome Chavarri has had
an extensive career at Spain's Iberia. After joining the Company in 1990 as Financial Director, he ultimately
rose to become Chief Financial Officer, a position which he held for several years. He also played a key role in
the merger of Iberia with British Airways in 2011 and the creation of the International Airlines Group (IAG). He
became Chief Financial Officer at IAG, a position he held until he retired in June 2019. During his time at IAG,
he led the financial strengthening and expansion of IAG, driving a significant improvement in its market
capitalisation, profitability and returns. He also played a critical role in the group's acquisitions of BMI, Vueling
and Aer Lingus and the creation of Level.
On 4 November 2020, Ms Charlotte Andsager was appointed to the Board of the Company as an independent
Non-Executive Director. Ms Andsager was also appointed as an additional member of the Remuneration
Committee. A Danish national, Ms Andsager has held multiple regulatory roles within the Ministry of Transport
and Communications of Norway as well as Telenor, the Norwegian majority state-owned multinational
telecommunications company. In 2005, Ms Andsager was recruited to serve as Vice President, European and
US Public Affairs for SAS Group. In this capacity, Ms Andsager advised SAS Group on European & US public
affairs and maintained contacts with the European institutions and the US Administration. In 2010, Ms
Andsager was recruited to Rolls-Royce Plc as Vice President EU Affairs. Prior to joining the Wizz Air Board,
Ms Andsager served six years as an Independent Director on the board of Avinor Flysikring AS, the state-
owned air navigation services provider in Norway.
On 28 January 2021, Mr Simon Duffy’s appointment to the Board of the Company as an independent Non-
Executive Director, Chairman of the Audit and Sustainability Committee and Senior Independent Non-
Executive Director was extended by one year.
On 1 March 2021, Mr William A. Franke’s appointment to the Board of the Company as a non-independent Non-
Executive Director, Chairman of the Board and Chairman of the Nomination Committee was extended by one
year.
On 1 March 2021, Mr Stephen L. Johnson’s appointment to the Board of the Company as a non-independent
Non-Executive Director was extended by one year.
On 14 March 2021, Mr Peter Agnefjäll resigned as an independent Non-Executive Director of the Company with
effect from 13 April 2021.
Wizz Air Holdings Plc Annual report and accounts 2021
58
On 13 April 2021 Dr Anthony Radev was appointed to the Board of the Company as an independent Non-
Executive Director. Dr Radev is responsible for overseeing engagement with employees, replacing Mr Barry
Eccleston who has been in that role since 1 January 2019. A citizen of Hungary, Germany and Bulgaria, Dr
Radev has had an extensive career in academia and business. Presently, he serves as a President of Corvinus
University at Budapest, Hungary, is a member of the Board of Directors at MOL Hungarian Oil and Gas Public
Limited Company and is a member of the Board at Hungary Football Federation and at the DSK bank in
Bulgaria. For over 20 years, Dr Radev has been involved with McKinsey & Co. in various roles, the last one as
a Senior Partner from 2001 until 2013. His engagement has spanned many sectors of the economy and included
leading McKinsey's financial institutions practice in Central and Eastern Europe as well as being a member of
the senior leadership team in European banking practice. Today, Dr Radev is a Director Emeritus of McKinsey
(honorary membership).
One of the keys to the Company’s success to date has been its agility in responding to challenges and
opportunities and, more specifically, to the issues that developed during the COVID-19 pandemic. However, it
is important that this agility is matched by a robust governance process over significant decisions. I believe
that one of the strengths of the Company’s Board is the willingness and ability of the Directors to be involved
in strategic discussions and support the Company’s management with their decisions in often challenging
timeframes.
During F21, the Wizz Air fleet grew to 137 aircraft including 22 additional game-changing Airbus A321neo. The
Airbus A321neo is powered by Pratt & Whitney GTF engines, features the widest single-aisle cabin with 239
seats in a single class configuration and offers Wizz Air maximum flexibility, fuel efficiency and the lowest
possible operating costs.
On 13 July 2020, the Company announced that Wizz Air Abu Dhabi, a national airline of the United Arab
Emirates and a joint-venture established between ADQ, one of the region's largest investment holding
companies, and the Company, had received national carrier status from the UAE government. On 15 January
2021, Wizz Air Abu Dhabi launched its operations at Abu Dhabi International Airport.
During F21, the Board continued to address possible outcomes of the United Kingdom’s decision to exit the
European Union, or Brexit. As from 1 January 2021 UK nationals would no longer be treated as Qualifying
Nationals with regard to ongoing European airline ownership requirements, and notwithstanding the UK-EU
Trade and Cooperation Agreement, on 28 December 2020 the Board resolved to exercise its power under the
Articles to serve Restricted Share Notices on Non-Qualifying National Shareholders specifying that, from 1
January 2021, in respect of their Restricted Shares they can no longer attend or speak or vote at any general
meetings of the Company.
On 8 January 2021, the Board approved the successful issuance by the Company of a €500 million Eurobond
under the €3,000 million Euro Medium Term Note programme as described in the base prospectus dated 4
August 2020.
In the face of significant developments in the Company’s business, it is important the Board continues to
understand risks that have the potential to adversely affect the achievement of the Company’s strategic
objectives. The Company’s more structured enterprise risk management system has now been in place for
several years, under the oversight of the Audit and Sustainability Committee. The Company’s Risk Council
reports to the Audit and Sustainability Committee on a quarterly basis, with the risk report being updated
following meetings, between the Company’s Senior Internal Audit Manager and individual risk owners, with
periodic updates then being given to the full Board.
The Board also recognises that the role of aviation and its environmental impact are now the subject of greater
public scrutiny, most notably in relation to carbon emissions. While climate change has had a high profile in
Europe, the entry into force of the Paris Agreement contributed to pushing this to the top of the political
agenda. The Board is committed to connecting sustainability with corporate purpose and strategy.
The Board thanks each and every one of our investors for the faith they have shown in the Company’s business
and also recognises the trust that the Shareholders have placed in the Board and senior management. Over
the course of the last year, a large number of meetings with investors were organised by senior management
and, in addition, I have also spoken to a number of Shareholders. Any concerns or comments raised were then
relayed to the Board.
In 2021, Wizz Air engaged Lintstock to facilitate an evaluation of the performance of the Board of Directors.
Lintstock is an advisory firm that specialises in Board Reviews and provides no other services to the Company.
The first stage of the Review involved Lintstock engaging with the key project sponsors to set the context for
the evaluation and to tailor the survey content to the specific circumstances of the Company. All Board
members were then invited to complete surveys addressing the performance of the Board and the Chair. The
anonymity of the respondents was ensured throughout the process in order to promote open and candid
feedback.
Wizz Air Holdings Plc Annual report and accounts 2021
59
The exercise was designed to ensure that development areas identified in previous Board Reviews were
followed up, and had a particular focus on the following themes:
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
the ongoing response of the organisation to COVID-19, including the flow of information from
management to the Board during this period, and new practices that ought to be retained;
the level of the Board’s focus on ESG, and specifically the extent to which ESG factors are incorporated
into discussions and decision making;
the consideration of the succession plans in place for key leadership positions, including at Board level
and amongst the senior management team;
the management of risk, and specifically the level of focus on risk at Board level;
the information provided to the Board on key stakeholders and the Company’s engagement with various
parties, including investors, customers, employees and regulators;
the composition of the Board, and the relationships amongst the members, including the manner in which
the dynamic has developed under remote working conditions;
the management of meetings, and ways in which the use of videoconferencing can be maximised for the
benefit of the Board; and
the monitoring of the competitive environment, and technological opportunities and risks facing the
Company.
It is anticipated that the observations and recommendations resulting from the review will be considered at a
Board meeting to be held in June 2021, at which point the Board will agree key objectives to take forward.
Lintstock remains available to the Chair of the Board to discuss the outcomes of the evaluation and to provide
further clarification on any of the points raised during the exercise, if necessary.
Once again, I would like to stress that the trust that both investors and other stakeholders have placed in the
Board is not taken for granted. We will continue to develop our processes to ensure that our policy of ensuring
high standards of governance appropriate for the Company is maintained in the future and in a manner which
is appropriate for the Company’s continued fast rate of growth.
Wizz Air Holdings Plc Annual report and accounts 2021
60
GOVERNANCE
COMPLIANCE WITH THE UK CORPORATE GOVERNANCE CODE
The Directors support high standards of corporate governance and it is the policy of the Company to comply
with current best practice in UK corporate governance to the extent appropriate for a company of its size. The
Company welcomed the publication by the FRC of its new UK Corporate Governance Code in July 2018 and
its focus on the themes of corporate and board culture, stakeholder engagement and sustainability, which are
critical factors for us as we partner with our stakeholders to build an enduring business.
The Corporate Governance Code is available for review on the Financial Reporting Council's website:
www.frc.org.uk.
The Board complied with the requirements of the Corporate Governance Code (July 2018) during the financial
year, except as set out below:
(cid:1) William A. Franke, the Chairman, does not meet the independence criteria set out in the Corporate
Governance Code (Provision 10), given that he is the managing partner of Indigo. In addition, he has also
exceeded the nine-year limit imposed by the Code (Provision 19). However, given the benefits to the
Company of his recognised experience in the airline industry, the Board believes that Mr Franke should
continue as Chairman.
(cid:1) The Board acknowledged at the time of appointing Barry Eccleston as Remuneration Committee Chair
that it did not comply with the requirements of the Code in this respect, as Mr Ecclestone had no previous
experience on a remuneration committee. The Board saw Mr Eccleston as a professional with the
experience and expertise to effectively manage the Committee. It should be noted that over two years,
Mr Eccleston had also been serving as an independent Non-Executive Director overseeing engagement
with employees and has ensured that the workforce voice has reached the boardroom. Having reviewed
his appointment, the Board confirms that Barry Eccleston has since displayed the skills, experience and
time commitment required for the role and has the full support of the Board.
(cid:1) The post-cessation shareholding policy has been included in the Remuneration Policy changes for the
current year, however these are yet to be approved by the Shareholders at the next AGM therefore were
not yet in place during the reporting period.
Our key Shareholders
As at 31 March 2021, the Company had been notified pursuant to DTR 5 of the Financial Conduct Authority’s
Disclosure Rules and Transparency Rules (DTRs) that the following Shareholders held more than 3.00 per cent
of the Company’s issued Ordinary Shares:
Shareholder
Capital Research Global Investors
Baillie Gifford & Co.
Fidelity Management & Research Company
Indigo Hungary LP
BlackRock Investment Management (UK) Ltd.
Jupiter Asset Management Ltd.
Reported shareholding
14.5 per cent
8.3 per cent
7.3 per cent
6.6 per cent
3.6 per cent
3.1 per cent
Reported number of shares
12,375,442
7,100,749
6,212,657
5,610,120
3,096,348
2,646,919
Between 1 April and 14 May 2021 Capital Research Global Investors bought 84,715 shares, Fidelity Management
& Research Company LLC 187,600 shares, and BlackRock Investment Management (UK) Ltd. 104,358 shares,
while Baillie Gifford & Co. sold 2,747 shares, Jupiter Asset Management Ltd. sold 37,709 shares.
Changes in interests that have been notified to the Company pursuant to DTR 5 of the DTRs since 1 May 2019
can be found in the Regulatory News section of the Investor Relations page of the Company’s corporate
website: http://corporate.wizzair.com/en-GB/investor_relations/news/press_releases.
Our relationship with Indigo
On 31 March 2021, Indigo (Indigo Hungary LP and Indigo Maple Hill LP together) held 8.53 per cent of the
Company’s issued Ordinary Shares, as well as 17,377,203 convertible shares of £0.0001 each in the capital of
the Company (“Convertible Shares”). The Convertible Shares do not have any right to participate in the
Company’s profit and are, save in very limited circumstances, non-voting. These limited circumstances include
the consideration of a resolution for the winding-up of the Company or the variation of the rights attaching to
the Convertible Shares or any variation of the rights attaching to the Ordinary Shares into which the
Convertible Shares may be converted.
Wizz Air Holdings Plc Annual report and accounts 2021
61
Each Convertible Share may be converted into one Ordinary Share, as long as the ownership of the Company
remains compliant with applicable EU ownership and control rules. Indigo also holds a number of convertible
notes which may be converted into Ordinary Shares, again provided that the Company’s ownership remains
compliant with EU ownership and control rules. The terms of these convertible notes are governed by a note
purchase agreement dated 24 February 2015 and entered into between the Company, Wizz Air Hungary Ltd.
and Indigo. Our Chairman, William A. Franke, is the managing partner of Indigo.
According to the Financial Conduct Authority’s Listing Rules (the “Listing Rules”), any person who exercises
or controls the exercise, on their own or together with any person with whom they are acting in concert, of
30 per cent or more of the votes able to be cast on all or substantially all matters at general meetings of a
company are known as “controlling shareholders”. During its preparation for its initial public offering in
February 2015, the Company discussed with the UK Listing Authority that, in the circumstances, Indigo would
be treated as a controlling shareholder of the Company for these purposes. The Listing Rules require
companies with controlling shareholders to enter into a written and legally binding agreement, which is
intended to ensure that the controlling shareholder complies with certain independence provisions. The
agreement must contain undertakings that:
a) transactions and arrangements with the controlling shareholder (and/or any of its associates) will be
conducted at arm’s length and on normal commercial terms;
b) neither the controlling shareholder nor any of its associates will take any action that would have the
effect of preventing the listed company from complying with its obligations under the Listing Rules; and
c) neither the controlling shareholder nor any of its associates will propose or procure the proposal of a
Shareholder resolution which is intended or appears to be intended to circumvent the proper application
of the Listing Rules.
Wizz Air entered into a relationship agreement with Indigo dated 24 February 2015. The key terms of this
relationship agreement are set out below.
Independence
Indigo has undertaken to exercise its voting powers in relation to the Company to ensure that the Company is
capable of operating and making decisions for the benefit of the Shareholders of the Company as a whole and
independently of Indigo at all times. In addition, Indigo has undertaken that it will not, and will procure that
none of its associates will: (a) take any action that would have the effect of preventing the Company from
complying with its obligations under the Listing Rules; and (b) propose or procure the proposal of a
Shareholder resolution which is intended or appears to be intended to circumvent the proper application of
the Listing Rules.
Board
Indigo may nominate: (a) three Directors to the Board if Indigo and its associates hold in excess of 30 per cent
of the fully converted share capital of the Company (i.e. assuming the conversion in full of all Convertible
Shares and Convertible Notes); (b) two Directors to the Board if Indigo and its associates hold in excess of 20
per cent of the fully converted share capital; or (c) one Director to the Board if Indigo and its associates hold
in excess of 10 per cent of the fully converted share capital (each an “Indigo Director”). If Indigo and/or its
associates no longer hold at least 30, 20 or 10 per cent, respectively, of the fully converted share capital of the
Company, then Indigo has agreed to procure, insofar as it is legally able to do so, that the appropriate number
of Indigo Directors resigns from the Board unless a majority of the independent Directors resolve that any
Indigo Director should remain on the Board.
Indigo may not nominate any person to be an Indigo Director whose re-election has been proposed to, but
not approved by, the holders of Ordinary Shares in a general meeting, or who has been removed from office
by a resolution of the holders of Ordinary Shares.
The Board shall manage the Company independently of Indigo in accordance with the articles of association,
the Listing Rules and applicable law. The parties have also agreed that at least half of the Board (excluding the
Chairman) shall comprise independent Non-Executive Directors, the Nomination Committee shall consist of a
majority of independent Directors and the Remuneration and Audit and Sustainability Committees shall consist
only of independent Directors.
Arm’s length transactions
All transactions and relationships between the Company and Indigo or any of their associates shall be
conducted at arm’s length, on a normal commercial basis and in accordance with the related party transaction
rules set out in Chapter 11 of the Listing Rules.
Wizz Air Holdings Plc Annual report and accounts 2021
62
Provision of information and confidentiality
Indigo shall, subject to the Company’s obligations under all applicable laws (including, without limitation, the
Listing Rules and the DTRs), be provided with financial, management and/or other information relating to any
member of the Group as Indigo (or any of its associates) may reasonably require for the purposes of any
internal or external reporting requirements which the relevant party is required by internal compliance, law or
regulation to make. Indigo may disclose any such financial, management and/or other information to its
associates provided that: (a) Indigo will (and will procure that any associate to whom any information is passed
will) keep confidential any such information; (b) such information does not include information relating to any
transaction between the Company and Indigo or any of their associates obtained as a result of an Indigo
Director’s position as a Director; (c) disclosure would not result in the breach by the Company of the DTRs or
require the Company to make a public announcement; and (d) the name of such persons to whom information
is disclosed is added to the Company’s insider list.
Confirmation regarding compliance
The Board confirms that, since the entry into the relationship agreement, on 24 February 2015, until 31 May
2021, being the latest practicable date prior to the publication of this report:
a) the Company has complied with the independence provisions included in the relationship agreement;
and
b) so far as the Company is aware, the independence provisions included in the relationship agreement
have been complied with by Indigo.
Engaging with our Shareholders
Wizz Air recognises the need to engage with its Shareholders.
Over the course of the past year, the Company’s Investor Relations department has arranged a number of
roadshows, timed around the release of financial results, as well as other meetings with investors. Ahead of
the 2020 annual general meeting, attended by all of the Directors, both the Chairman and the Senior
Independent Non-Executive Director, along with the Chairman of the Audit and Sustainability Committee and
the Remuneration Committee, were available to answer questions from investors. The Chairman, the Senior
Independent Non-Executive Director and the Chairman of the Audit and Sustainability Committee and of the
Remuneration Committee will again be available to answer questions from investors.
A report on investor relations is presented by the Chief Financial Officer at each Board meeting, during which
feedback from meetings held by senior management with investors is provided. The Board is supplied with
copies of analysts’ and brokers’ briefings as they are received.
At the Company AGM held on 28 July 2020, the resolution to approve the Directors' Remuneration Report
was supported by 48 per cent of Shareholders. Since then, the Board has welcomed new Directors and a fully
refreshed Remuneration Committee with two new members, Ms Andsager and Mr Agnefjäll, along with a new
Remuneration Committee Chairman, Mr Eccleston. In his new role, the Remuneration Committee Chairman
engaged with key Company Shareholders to listen to their views. The Company has received feedback from
Shareholders who voted against the 2020 Remuneration Report resolution that the main concerns at the time
of voting related to discretion used to award the F20 Short-term Incentive Plan payment to Senior
Management and the total time horizon of the Company's Long-term Incentive Plan. While the Board remains
satisfied that the Short-term Incentive Plan outcome for Senior Management was fair as outlined in the
Company’s 2020 Remuneration Report, it acknowledges and respects the views expressed by Shareholders
in their opposition to the resolution. Key feedback, together with other governance initiatives the Company
will be undertaking, has been incorporated in the Remuneration Policy.
The Board would like to thank all Shareholders that took part in the engagement process and values the
feedback and insight it has gained.
Wizz Air Holdings Plc Annual report and accounts 2021
63
GOVERNANCE
MANAGEMENT OF THE COMPANY
The Board of Directors
Effective oversight of Wizz Air’s business is the key function of the Board. Key to this oversight is the approval
of the Company’s long-term strategy and commercial objectives and these matters are reserved to the Board,
along with the approval of annual operating and capital expenditure budgets and any changes thereto. Other
key areas also reserved to the Board include financial reporting and controls, internal controls, the review and
approval of key contracts, Board membership, the remuneration of Directors and senior executive employees,
corporate governance including ESG matters and the review of safety issues.
Since January 2020 all Directors’ appointments and re-appointments are effective for a period of one year
instead of three years and all Directors, except for those choosing not to put themselves forward for re-
election, stand for election or re-election by the Company’s Shareholders at each annual general meeting.
Board membership
Wizz Air’s Board currently comprises one Executive and eleven Non-Executive Directors. The current Directors
bring a wealth of experience from both the worldwide aviation industry as well as other international industries
and so together bring to the Company an appropriate breadth, depth and balance of skills, knowledge,
experience and expertise. The Directors who have served during the 2020 financial year and since year end
are:
Position
Committee membership (as at 31 March 2021)
Name
Executive Director
József Váradi
Non-Executive Directors
William A. Franke
Guido Demuynck*
Simon Duffy
Susan Hooper**
Chief Executive Officer
Chairman
Non-Executive Director
Non-Executive Director,
Senior Independent Director
Non-Executive Director
Stephen L. Johnson
Charlotte Pedersen***
Barry Eccleston
Non-Executive Director
Non-Executive Director
Non-Executive Director
Peter Agnefjäll*****
Non-Executive Director
Maria Kyriacou
Andrew Broderick
Charlotte Andsager****
Enrique Dupuy de Lome
Chavarri****
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Dr Anthony Radev******
Non-Executive Director
Nomination Committee
Remuneration Committee
Audit and Sustainability Committee,
Nomination Committee
Audit and Sustainability Committee,
Remuneration Committee
Audit and Sustainability Committee
Nomination Committee, Remuneration
Committee
Audit and Sustainability Committee,
Remuneration Committee
Audit and Sustainability Committee
Remuneration Committee
Audit and Sustainability Committee,
Remuneration Committee
Overseeing employee engagement
*
**
***
****
Did not stand for re-election at the 28 July 2020 annual general meeting.
Resigned effective as of 3 June 2020.
Joined effective as of 2 June 2020.
Joined effective as of 4 November 2020.
*****
Resigned effective as of 13 April 2021.
******
Joined effective as of 13 April 2021.
When recruiting for Board members, the Company engaged independent external search agencies, such as
Korn Ferry and Heidrick & Struggles.
William A. Franke, Chairman
Mr Franke has been Chairman of Wizz Air since 2004. The Chairman’s role is to lead the Board and ensure that
it operates effectively. Mr Franke is the founder and managing partner of Indigo Partners LLC, a private equity
fund focused on air transportation. He is currently chairman of Frontier Airlines, Inc, a United States airline,
JetSMART SpA, a Chilean airline, EnerJet, a Canadian start-up airline and APiJET LLC, a software company
focused on providing real-time cost saving analytics to airlines, and currently serves on the board of directors
of Concesionaria Vuela Compania de Aviacion, S.A. de C.V., a Mexican airline that does business as Volaris.
1998 to 2001, Mr Franke was a managing partner of Newbridge Latin America, a private equity fund focused
on Latin America. Mr Franke was the chairman and chief executive officer of America West Airlines from 1993
to 2001. He served as chairman of Spirit Airlines Inc., a United States airline, from 2006 to 2013 and Tiger
Aviation Pte. Ltd, a Singapore-based airline, from 2004 to 2009, and held directorships in Alpargatas S.A.I.C.,
an Argentina-based footwear and textiles manufacturer, from 1996 to 2007, and Phelps Dodge Corporation,
Wizz Air Holdings Plc Annual report and accounts 2021
64
a mining company, where he served as the lead outside director for several years, from 1980 to 2007. He has
in the past served on a number of publicly listed company boards of directors including ON Semiconductor,
Valley National Corporation, Southwest Forest Industries and the Circle K Corporation. Mr Franke has both
undergraduate and law degrees from Stanford University and an honorary PhD from Northern Arizona
University. Mr Franke was the 2019 recipient of the Excellence in Leadership Award at the 45th ATW Airline
Industry Achievement Awards.
József Váradi, Chief Executive Officer
Mr Váradi was one of the founders of Wizz Air in 2003. Mr Váradi worked at Procter & Gamble for ten years
between 1991 and 2001, and became sales director for global customers where he was responsible for major
clients throughout eleven EU countries. He then joined Malév Hungarian Airlines, the Hungarian state airline,
as chief commercial officer in 2001, before serving as its chief executive officer from 2001 to 2003. He is
currently a non-executive director of JetSMART Airlines SpA in Chile and he also held board memberships
with companies such as Lufthansa Technik Budapest (Supervisory Board, 2001–2003) and Mandala Airlines in
Indonesia (Board of Commissioners, 2007–2011). He has been serving on the Board of Directors of Wizz Air
Holdings Plc as Executive Director since 2003 and he chairs the Board of Directors of Wizz Air UK Ltd and
Wizz Air Abu Dhabi. Mr Váradi won the Ernst & Young Hungary “Brave Innovator” award in 2007 and the
“Entrepreneur Of The Year” award in 2017. Mr Váradi holds a master’s degree in economics from the Budapest
University of Economic Sciences and a master’s degree in law from the University of London as well as an
international directorship degree from INSEAD.
Guido Demuynck, Non-Executive Director
Mr Demuynck joined the Board in February 2014. Mr Demuynck spent more than 25 years with Koninklijke
Philips N.V., holding various roles including general manager, portable audio business line, general manager,
audio business group and Marantz, and chief executive, consumer electronics (as a member of the group
management committee of Royal Philips Electronics and senior vice president). He then held the positions of
board member, responsible for the mobile division, at KPN (Koninklijke) N.V. and chief executive of Kroymans
Corporation B.V. and Liquavista B.V. Mr Demuynck was a member of the supervisory board and chairman of
the remuneration committee of TomTom N.V. and of Divitel Holding B.V.. He was a member of the board of
directors, member of the remuneration committee and chairman of the audit committee of Proximus N.V.
(previously Belgacom), and a member of the supervisory board of Teleplan International N.V. and Aito B.V. Mr
Demuynck has a master’s degree in applied economics (magna cum laude) from the University of Antwerp
and a master’s degree in marketing and distribution (magna cum laude) from the University of Ghent.
Simon Duffy, Non-Executive Director
Mr Duffy joined the Board in January 2014. Mr Duffy started his career at NM Rothschild & Sons Ltd and has
held positions at Shell International Petroleum Co, Bain & Co, Consolidated Gold Fields Plc, Guinness Plc, Thorn
EMI Plc (where he held the position of deputy chairman and group finance director), World Online International
B.V. (where he held the position of deputy chairman and chief executive), End2End AS (where he held the
position of chief executive), Orange SA (where he held the position of chief financial officer), NTL:Telewest
Inc. (where he held the position of executive vice chairman) and Tradus Plc (where he held the position of
executive chairman). Mr Duffy has extensive London Stock Exchange non-executive director experience. He
has sat on the board of, amongst others, Gartmore Plc, HMV Group Plc, GWR Group Plc and Imperial Tobacco
Plc. He is currently chairman of Telit Communications Plc, a leading company in the IoT (internet of things)
sector listed in London. He is a non-executive director of Nordic Entertainment AB (NENT), one of Europe’s
largest broadcasting companies, and Modern Times Group AB (MTG), a leading esports company. Both NENT
and MTG are listed on the Stockholm Exchange. He is chairman of the audit committee at both companies. Mr
Duffy has a BA in philosophy, politics and economics from Oxford University and an MBA from Harvard
Business School.
Susan Hooper, Non-Executive Director
Ms Hooper was appointed to the Board of Directors as a Non-Executive Director in March 2016 and served on
Wizz Air's Audit and Remuneration Committees till June 2020. A UK national, Ms Hooper was managing
director of British Gas Services, leading the service and repair, central heating installations, electrical services
and Dyno-Rod business units until November 2014. She joined British Gas from the Acromas Group, where she
was chief executive of the travel division, responsible for Saga holidays and hotels, Saga cruises, Spirit of
Adventure cruises, Titan Travel and the travel division of the AA. Previously, Ms Hooper held senior roles at
Royal Caribbean International, Avis Europe, PepsiCo International, McKinsey & Company and Saatchi & Saatchi.
During her time with PepsiCo International, Ms Hooper spent over five years based in Central and Eastern
European countries. Ms Hooper is currently a non-executive director of Moonpig plc, Uber UK, The Rank Group
PLC and Affinity Water Ltd and is a founding Director of ChapterZero.org.uk. From 2011 to 2014 she was a
non-executive director of Whitbread PLC and has held several other non-executive directorships, including at
First Choice plc, Transcom SA, Royal and Sun Alliance Group PLC and Courtaulds Textiles Plc.
Wizz Air Holdings Plc Annual report and accounts 2021
65
Stephen L. Johnson, Non-Executive Director
Mr Johnson joined the Board in 2004, left the Board in 2009 and was re-appointed as a Non-Executive Director
in 2011. Mr Johnson is executive vice president, corporate affairs for American Airlines Group Inc. and its
principal subsidiary, American Airlines, Inc. Previously, Mr Johnson served as executive vice president,
corporate and government affairs for US Airways. Prior to joining US Airways in 2009, Mr Johnson was a
partner at Indigo from 2003 to 2009. Between 1995 and 2003, Mr Johnson held a variety of positions with
America West Holdings Corporation prior to its merger with US Airways Group, including executive vice
president, corporate. Prior to joining America West, Mr Johnson served as senior vice president and general
counsel at GPA Group plc, an aircraft leasing company, and as an attorney at Seattle-based law firm Bogle &
Gates, where he specialised in corporate and aircraft finance and taxation. Mr Johnson earned his MBA and
Juris Doctor from the University of California, Berkeley, and a bachelor of arts in economics from California
State University, Sacramento.
Peter Agnefjäll, Non-Executive Director
Mr Agnefjäll joined the Board in July 2018, and resigned effective 13 April 2021. A Swedish national, Mr Agnefjäll
was the president and chief executive officer of IKEA Group from 2013 to 2017. Following his graduation as a
Master of Business Administration from the University of Linköping in 1995, Mr Agnefjäll joined IKEA's trainee
programme in 1995 and he was subsequently promoted a number of times within the group, including to roles
acting as the assistant to former chief executive officers as well as the founder of IKEA, Ingvar Kamprad, before
finally being promoted to president and chief executive officer. Mr Agnefjäll serves on the board of directors
of Orkla ASA, a leading supplier of branded consumer goods listed on the Oslo Stock Exchange. In addition
to that he serves on the advisory board of Deichmann Group, a family owned European footwear retailer, and
on the supervisory board of Ahold Delhaize, a Dutch retail group listed on Euronext.
Andrew S. Broderick, Non-Executive Director
Mr Broderick joined the Board in April 2019. Mr Broderick is a Managing Director of Indigo Partners LLC, a
private equity fund focused on air transportation, which he joined in July 2008. He has served on the board of
directors of Frontier Airlines Holdings, Inc., an airline based in the United States, since January 2018; JetSMART
Airlines SpA, an airline based in Chile, since September 2018; and APiJET, LLC, a software company focused
on providing real-time cost saving analytics to airlines, since November 2020. Additionally, he has served as
an alternate on the board of directors for Concesionaria Vuela Compañía de Aviación, S.A.B. de C.V., an airline
based in Mexico doing business as Volaris, since July 2010. Prior to joining Indigo, Mr Broderick was employed
at a macroeconomic hedge fund and a stock-option valuation firm. Mr Broderick holds a BS in Economics and
a BA in Spanish from Arizona State University and a Master of Business Administration from the Stanford
Graduate School of Business.
Barry Eccleston, Non-Executive Director
Mr Eccleston joined the Board in May 2018. A dual US and British national, Mr Eccleston recently retired as
Chief Executive Officer of Airbus Americas Inc., where he was responsible for all aspects of Airbus' commercial
aeroplanes business in North America, a position he held since 2005. Prior to this, Mr Eccleston was VP/GM
for Honeywell's Propulsion Systems Enterprise and had earlier served as Honeywell's VP Commercial
Aerospace for Europe, Middle East and Africa. Before joining Honeywell in 2002, he was Executive VP of
Fairchild Dornier Corporation, a provider of Regional Aircraft. He started his career with Rolls-Royce where he
held several senior positions, culminating as CEO of International Aero Engines, a joint venture with Pratt &
Whitney. Mr Eccleston holds a bachelor's degree in Aeronautical Engineering from Loughborough University
and completed the International Executive Program at the IMD in Lausanne. He holds Honorary Doctorates
from Loughborough University and Vaughn College of Aeronautics. He is past Chairman of the British-
American Business Association in Washington DC., and past President of The Wings Club of New York, and
has served on the Boards of other industry Associations. He is currently Chairman of FLYHT Aerospace
Solutions Ltd, a Canadian public company, and a past outside director at Vector Aerospace Corporation in
Canada. In Her Majesty the Queen's New Year 2019 Honours List, Mr Eccleston was appointed an OBE.
Maria Kyriacou, Non-Executive Director
Ms Kyriacou joined the Board as an independent Non-Executive member in September 2018 and was
appointed as an additional member of the Audit and Sustainability Committee with effect from 28 July 2020.
Ms Kyriacou started her career with PwC in its audit and advisory division, before joining the finance team at
The Walt Disney Company. She held a number of positions with The Walt Disney Company over a 15-year term
culminating in the role of Senior Vice President Digital Media Distribution EMEA. In 2010, Ms Kyriacou was
recruited by ITV Studios as Managing Director of Global Entertainment, becoming Managing Director of Global
Entertainment and Rest of World Studios before being promoted to President International ITV Studios, part
of ITV plc. In February 2020, Ms Kyriacou became President, Viacom International Media Networks U.K., where
she oversees the broadcast, streaming and related businesses in Australia, Israel and the UK including Channel
5 in the UK and Network 10 in Australia.
Charlotte Pedersen
Ms Pedersen joined the Board in June 2020. She has more than 30 years of experience in the aviation sector.
A joint Danish and Luxembourgish national, Ms Pedersen has been President Helicopter Services and Chief
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66
Executive Officer of Luxaviation Helicopters, a global VVIP helicopter organisation and part of Luxaviation
Group between 2016 and 2021. Ms Pedersen was selected as the first female pilot candidate for the Royal
Danish Air Force in 1989 and graduated from her helicopter flight training in the US Navy on the Commodore’s
List with Distinction. After her military officer services, she joined the Civil Aviation Authority (CAA) in
Luxembourg as a Flight Operations Inspector. Ms Pedersen joined Luxaviation in 2012 and was appointed Chief
Operating Officer of the Luxaviation Group in 2014, before becoming the President Helicopter Services and
Chief Executive Officer of Luxaviation Helicopters. Ms Pedersen holds a Master’s degree with honours in
Business Administration from Sacred Heart University and was awarded the Dean’s Leadership Award. Ms
Pedersen is an Elected Fellow of the Royal Aeronautical Society in the UK.
Charlotte Andsager
A Danish national, Ms Andsager has held multiple regulatory roles within the Ministry of Transport and
Communications of Norway as well as Telenor, the Norwegian majority state-owned multinational
telecommunications company. In 2005, Ms Andsager served as Vice President, European and US Public Affairs
for SAS Group. In this capacity, Ms Andsager advised SAS Group on European and US public affairs and
maintained contacts with the European institutions and the US Administration. In 2010, Ms Andsager joined
Rolls-Royce Plc as Vice President EU Affairs where she served until 2014. Prior to joining the Wizz Air Board,
Ms Andsager served six years as an Independent Director on the board of Avinor Flysikring AS, the state-
owned air navigation services provider in Norway. Ms Andsager holds a Master’s Degree in Law from Aarhus
University.
Enrique Dupuy de Lome Chavarri
Mr Dupuy de Lome Chavarri has had an extensive career at Spain's national carrier IBERIA. After joining the
company in 1990 as Financial Director, he ultimately rose to become Chief Financial Officer, a position which
he held for several years. He also played a key role in the merger of Iberia with British Airways in 2011 and the
creation of the International Airlines Group (IAG). He became Chief Financial Officer at IAG, a position he held
until he retired in June 2019. During his time at IAG, he led the financial strengthening and expansion of IAG,
driving a significant improvement in its market capitalisation, profitability and returns. He also played a critical
role in the Group's acquisitions of BMI, Vueling, Aer Lingus and the creation of Level. Mr Dupuy de Lome
Chavarri holds an MBA from IESE Business School, as well as a Master's Degree in Mining and Mineral
Engineering from Universidad Politécnica de Madrid.
Dr Anthony Radev
Dr Radev joined the Board in April 2021 as an independent Non-Executive Director. A citizen of Hungary,
Germany and Bulgaria, Dr Radev has had an extensive career in academia and business. Presently, he serves
as a president of Corvinus University at Budapest, Hungary, is a member of the Board of Directors at MOL
Hungarian Oil and Gas Public Limited Company, a member of the Board at Hungary Football Federation and
at the DSK bank in Bulgaria. For over 20 years, Dr Radev has been involved with McKinsey & Co., in various
roles, last one culminating in a Senior Partner from 2001 until 2013. His engagement has spanned many sectors
of the economy and included leading McKinsey's financial institutions practice in Central and Eastern Europe
as well as being a member of senior leadership team in European banking practice. Today, Dr Radev is a
Director Emeritus of McKinsey (honorary membership). In 2014, Dr Radev founded the School for Executive
Education and Development (SEED) in Budapest to serve the needs of Central and Eastern European
companies. Dr Radev holds a Master's Degree in Economics from Marx Karoly University of Economics in
Budapest, a PhD Degree in Economics from the Institute of Contemporary Social Sciences in Sofia, Bulgaria,
and a Post-graduate programme in International Studies from Bologna Center, School for Advanced Studies
at the John Hopkins University, Bologna, Italy.
Independence
The UK Corporate Governance Code recommends that at least half the members (excluding the chairman) of
the board of directors of a company with a premium listing should be non-executive directors, determined by
the board to be independent in character and judgment and free from relationships or circumstances which
are likely to affect, or could appear to affect, their judgment.
The Board has considered the independence of the Company’s Non-Executive Directors and has concluded
that:
a) William A. Franke, the Chairman, does not meet the independence criteria set out in the Corporate
Governance Code, given that he is the managing partner of Indigo (a significant Shareholder). However,
given the benefits to the Company of his recognised experience in the airline industry, the Board
believes that it is in the Company’s best interest that Mr Franke should continue as Chairman of Wizz Air.
b) Stephen L. Johnson is not considered to be an independent Non-Executive Director given his past
position with Indigo.
c) Andrew Broderick, who was appointed effective from 16 April 2019, is not considered to be an
independent Non-Executive Director as he is a director of Indigo.
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67
Other than William A. Franke, Andrew S. Broderick and Stephen L. Johnson, the Company regards all of its
Non-Executive Directors who are currently serving or have served on the Board during F21, namely Guido
Demuynck, Simon Duffy, Susan Hooper, Barry Eccleston, Peter Agnefjäll, Maria Kyriacou, Charlotte Pedersen,
Charlotte Andsager and Enrique Dupuy de Lome Chavarri as independent Non-Executive Directors within the
meaning of “independent” as defined in the Corporate Governance Code and free from any business or other
relationship which could materially interfere with the exercise of their independent judgment. Accordingly, as
an absolute majority of the Directors are independent Non-Executive Directors, the Company complies with
the requirement of the Corporate Governance Code that at least half of the board (excluding the chairman)
of a company with a premium listing should comprise independent non-executive directors.
Senior Independent Non-Executive Director
The Corporate Governance Code recommends that the Board should appoint one of its independent
Non-Executive Directors as the Senior Independent Non-Executive Director. The Senior Independent
Non-Executive Director should be available to Shareholders if they have concerns that contact through
the normal channels of the Chairman or Chief Executive Officer has failed to resolve or where such contact
is inappropriate. In July 2018, Simon Duffy was appointed as the Company’s Senior Independent
Non-Executive Director and has been in this position since then.
Independent Non-Executive Director overseeing engagement with employees
In order to strengthen workforce engagement, Wizz Air had decided to appoint an Independent Non-
Executive Director to oversee engagement with employees. Mr Barry Eccleston, who joined the Board of Wizz
Air Holdings Plc on 1 June 2018, was appointed as an independent Non-Executive Director overseeing
engagement with employees effective from 1 January 2019.
In his role, Mr Eccleston has been ensuring that the employee voice reaches the boardroom. As at 31 March
2021, Mr Eccleston has engaged with the workforce either directly or via the Wizz People Council members
and has regularly reported back to the Board.
Senior management team
Effective from 1 July 2020, Ms Poos was appointed as Chief Customer and Marketing Officer, based in
Budapest.
On 9 December 2020 the Company announced a further enhancement to the senior leadership capacity by
appointing a President and an EVP Group Chief Operations Officer to its Leadership Team. Accordingly, Mr
Delehant joined Wizz Air in April 2021 as Executive Vice President and Chief Operations Officer.
Mr Carey joined Wizz Air in June 2021 as President.
Mr Sebok, Chief Supply Chain Officer, was appointed to the newly created Chief Central Operations Officer
position based in Budapest reporting to Michael Delehant, EVP Group Chief Operations Officer, effective from
1 June 2021. The role aims at maximising cost focus, operational efficiencies and synergies across the Group’s
airline subsidiaries.
Mr Jones, Managing Director of Wizz Air UK, was appointed Chief Supply Chain and Legal Officer based in
Budapest reporting to the Group Chief Executive Officer effective from 1 June 2021.
Ms Geoffroy, Chief Corporate Officer, was appointed to Managing Director of Wizz Air UK based in Luton
reporting to the Executive Vice President and Group Chief Operations Officer and to the Group Chief Executive
Officer effective from 1 June 2021.
Mr Eidhagen, Chief People Officer, was appointed to Chief People and ESG Officer based in Geneva reporting
to the Group Chief Executive Officer effective from 1 June 2021.
The Group Chief Executive Officer and the senior management team are responsible for the management of
the Group’s business and implementation of the Group’s strategy on a day-to-day basis.
As at 2 June 2021, the Group’s senior management team, in addition to the Group Chief Executive Officer, is:
Wizz Air Holdings Plc:
Name
Diederik Pen*
Michael Delehant**
Jourik Hooghe
*
**
In this position until 31 March 2021.
In this position effective from 1 April 2021.
Position
Executive Vice President and Group Chief
Operations Officer
Executive Vice President and Group Chief
Operations Officer
Executive Vice President and Group Chief
Financial Officer
Wizz Air Holdings Plc Annual report and accounts 2021
68
Wizz Air Hungary Limited:
Name
Heiko Holm
George Michalopoulos
Joel Goldberg
Owain Jones
Zsuzsa Poos
Johan Eidhagen
Andras Sebok
Wizz Air UK Limited:
Name
Marion Geoffroy
Position
Chief Operations Officer
Chief Commercial Officer
Chief Digital Officer
Chief Supply Chain and Legal Officer
Chief Customer and Marketing Officer
Chief People and ESG Officer
Chief Central Operations Officer
Position
Managing Director
Robert Carey, President (from June 2021)
Mr Carey joined Wizz Air in June 2021 as President. Mr Carey is an American and French citizen who has a
Bachelor of Science degree in Industrial engineering from Arizona State University as well as a Master in
Business Administration degree from Harvard Business School. Mr. Carey started his career in aviation 20 years
ago with America West Airlines, followed by Delta Airlines, after which he has spent over a decade at McKinsey
& Company, where he was a Partner prior to joining easyJet as Chief Commercial and Strategy Officer in 2017.
Michael Delehant, Executive Vice President and Group Chief Operations Officer (from 1 April 2021)
Mr Delehant joined Wizz Air in April 2021 as Executive Vice President and Chief Operations Officer. Mr Delehant
is an American citizen who has a Bachelor in Psychology from the University of Michigan and obtained his
MBA from Southern Methodist University in Dallas. He brings two decades of executive airline experience and
a long track record of leadership, strategy and corporate transformation. After a long career at Southwest
Airlines in the US, he joined Wizz Air from Vueling in Europe. In his last role at Vueling, Mr Delehant has been
the Chief Strategy and Network Officer.
Diederik Pen, Executive Vice President and Group Chief Operations Officer (until 31 March 2021)
Mr Pen joined Wizz Air in January 2013 as Chief Operations Officer, becoming Accountable Manager in
September 2013. He was promoted to Executive Vice President and Chief Operations Officer in April 2017 and
to Executive Vice President and Group Chief Operations Officer in January 2019. Prior to joining Martinair
Holland in 2006, Mr Pen worked for Virgin Blue Airlines in Australia from 2002 to 2006 as head of ground
operations, for Brisbane Airport Corporation in Australia as general manager of commercial services and for
Amsterdam Airport Schiphol as manager of commercial services. Mr Pen has a master of business
administration in business economics from the University of Amsterdam.
Jourik Hooghe, Executive Vice President and Group Chief Financial Officer
Mr Hooghe joined Wizz Air in February 2020 as Executive Vice President and Group Chief Financial Officer.
He has 20 years of experience in strategy, operations and finance for consumer goods and retail businesses.
He worked for 18 years at Procter & Gamble (P&G), a world-leading consumer goods company, where his
responsibilities covered various roles in finance, including head of global strategy and regional CFO of multi-
billion dollar businesses across Europe, India, the Middle-East and Africa and Greater China. In January 2018,
he joined the Adecco Group as senior vice president, group strategy, finance and accounting, where he led
the evolvement of the company's strategy, step-changed the performance framework and transformed the
finance and accounting team into a high-impact data and technology-driven organisation.
Johan Eidhagen, Chief People and ESG Officer
Mr Eidhagen joined Wizz Air in January 2015 as Head of Brand and Marketing and was appointed Chief
Marketing Officer effective 1 February 2016 and Chief People Officer effective 1 April 2019. On 1 June 2021, Mr
Eidhagen was appointed Chief People and ESG Officer. Before joining Wizz Air, Mr Eidhagen built an extensive
sales and marketing career at Nokia, holding several senior global and regional marketing positions. He joined
Nokia in 1998 from a background in retail and was head of marketing for the Nordic region until 2004, when
he moved to Nokia HQ in Finland to run global marketing services for the entertainment category. Between
2005 and 2007 he was based in New York as the director of marketing for Nokia Multimedia in North America
before returning to Finland where he was director and head of marketing for the Nokia Nseries Category. In
2009 he became country manager for Nokia in Sweden and was appointed as managing director for the
Scandinavian region in 2011. Mr Eidhagen is a native of Stockholm and is a DIHM marketing graduate from the
IHM Business School in Stockholm.
Heiko Holm, Chief Operations Officer
Mr Holm joined Wizz Air in 2015 as Head of Technical Services. Mr Holm graduated from the University of
Applied Sciences in Hamburg, Germany, as an engineer specialising in aircraft construction and design and
went on to build a successful career with Lufthansa Technik, ultimately becoming the director of operations
for Lufthansa Technik in Shenzhen, China, from where he joined Wizz Air.
Wizz Air Holdings Plc Annual report and accounts 2021
69
Owain Jones, Chief Supply Chain Officer
Mr Jones joined Wizz Air as General Counsel in 2010, was promoted to Chief Corporate Officer in June 2014,
and was appointed as Managing Director of Wizz Air UK in September 2018 and as Chief Supply Chain and
Legal Officer in June 2021. Mr Jones is a solicitor of the Supreme Court of England and Wales. Having trained
at Nicholson Graham & Jones (1994 to 1996), Mr Jones joined Wilde Sapte (now Dentons LLP) in 1996 as a
solicitor in its aviation group, specialising in finance and regulatory matters. He spent time in the firm’s Paris
and Hong Kong offices before being appointed a partner in 2006, following which he spent three years in the
firm’s Abu Dhabi office, becoming acting managing partner of the office. He left the firm in 2009 to spend 18
months training for a frozen air transport pilot’s licence with CTC Aviation Training. Mr Jones holds a bachelor
of laws degree from University College London.
George Michalopoulos, Chief Commercial Officer
Mr Michalopoulos joined Wizz Air in 2010 as Head of Pricing and Revenue Management and was then
promoted to Head of Network Development, Scheduling and Sales in May 2015. Prior to Wizz Air,
Mr Michalopoulos built an extensive commercial and revenue career at Flybaboo and Blu-Express.
Mr Michalopoulos holds both bachelor and master of science degrees in management science and engineering
from Stanford University.
András Sebők, Chief Central Operations Officer
Mr Sebők was one of the first employees of Wizz Air, joining in 2004 as Head of Treasury and Controlling and
spending 15 years building an extensive career with the airline, overseeing various financial functions such as
Treasury, Financial Planning and Controlling, Fleet Acquisition and Corporate Finance. Mr Sebők was
promoted to Chief Supply Chain Officer on 1 April 2019 responsible for fleet acquisition, airport development,
purchasing and facility management. On 1 June 2021, Mr Sebők was appointed to the newly created Chief
Central Operations Officer position. In this role Mr Sebők aims at maximising cost focus, operational efficiencies
and synergies across the Group’s airline subsidiaries. Before joining Wizz, Mr Sebők worked in various positions
in finance including being the CFO of Aeroplex Central Europe. Mr Sebők is Hungarian and holds a degree in
banking, corporate finance and securities law from Eötvös Loránd University.
Joel Goldberg, Chief Digital Officer
Mr Goldberg joined Wizz Air in October 2018 as Chief Digital Officer, a newly created position. Mr Goldberg is
responsible for Wizz Air’s E-commerce, Data Analytics and Automation, IT Innovation and IT Infrastructure
and Services functions reporting to the Company’s Deputy Chief Executive Officer. Mr Goldberg was formerly
senior director technology, Europe for Nike. Prior to this role, Mr Goldberg worked in executive IT roles at
various multinational companies including G4S, APMaersk and DHL Express.
Zsuzsa Poós, Chief Customer and Marketing Officer
Ms Poós joined Wizz Air in April 2017 as Head of Marketing and moved to the role of Head of Retail and
Customer Experience in April 2019. Ms Poós was appointed Chief Customer and Marketing Officer in July 2020.
Prior to Wizz Air, Ms Poós built an extensive career at Procter & Gamble and strengthened the management
capacity of Hungarian Telekom. Ms Poós is a Hungarian national and holds a Master’s degree in Business,
Management and Marketing from Corvinus University of Budapest.
Marion Geoffroy, Managing Director, Wizz Air UK
Ms Geoffroy joined Wizz Air as Head of Legal and General Counsel in March 2015. She was appointed Chief
Corporate Officer in September 2018 overseeing the Legal, Data Protection, Public Affairs, Sustainability and
Health and Safety departments and also assumed the responsibility of Corporate Secretary. Ms Geoffroy was
appointed as Managing Director of Wizz Air UK in June 2021. Ms Geoffroy holds a master of law (LL.M.) from
Paris XI University (France), a lawyer-linguist master from ISIT (Paris, France), a law degree from Philipps
University (Marburg, Germany) and a master of laws (LL.M.) from McGill University Institute of Air and Space
Law (Montreal, Canada). Between 2000 and 2011, Ms Geoffroy held senior leadership roles in the legal
department of Air France-KLM. In 2011, she joined Verlingue Insurance Brokers where she served as general
counsel for four years.
Board Committees
The Directors have established an Audit and Sustainability Committee, a Remuneration Committee and a
Nomination Committee. The terms of reference of the Committees have been drawn up in accordance with
the provisions of the Corporate Governance Code. A summary of the terms of reference of the Committees is
set out below.
Each Committee and each Director has the authority to seek independent professional advice where necessary
to discharge their respective duties, in each case at the Company’s expense.
Audit and Sustainability Committee
The Audit and Sustainability Committee’s duties, as set out in its terms of reference, include:
a) monitoring the integrity of the financial statements of the Company, including its annual and half-year
reports, interim management statements, preliminary results announcements and any other formal
announcement relating to its financial performance;
Wizz Air Holdings Plc Annual report and accounts 2021
70
b) reviewing significant financial reporting issues and judgments which they contain having regard to
matters communicated to it by the auditors;
c) reviewing the content of the annual report and accounts and advising the Board on whether, taken as a
whole, it is fair, balanced and understandable and provides the information necessary for Shareholders
to assess the Company’s position, performance, business model and strategy;
d) keeping under review the adequacy and effectiveness of the Company’s internal financial controls and
internal control and risk management systems;
e) reviewing the adequacy and security of the Company’s arrangements for its employees and contractors
to raise concerns, in confidence, about possible wrongdoing in financial reporting or other matters. The
Audit and Sustainability Committee shall ensure that these arrangements allow proportionate and
independent investigation of such matters and appropriate follow-up action and that they are reported
to the Board as appropriate;
f) monitoring and reviewing the effectiveness of the Company’s Internal Audit function in the context of
the Company’s overall risk management system;
g) considering and approving the remit of the Internal Audit function and ensuring it has adequate
resources and appropriate access to information to enable it to perform its function effectively and in
accordance with the relevant professional standards. The Audit and Sustainability Committee shall also
ensure the Internal Audit function has adequate standing and is free from management or other
restrictions;
h) meeting the Company’s Senior Internal Audit Manager at least once a year, without management
present, to discuss its remit and any issues arising from the internal audits carried out. In addition, the
Audit and Sustainability Committee shall ensure that the Company’s Senior Internal Audit Manager has
the right of direct access to the Chairman, the Audit and Sustainability Committee Chairman and the rest
of the Audit and Sustainability Committee, and is accountable to the Audit and Sustainability
Committee;
i) considering and making recommendations to the Board, to be put to Shareholders for approval at the
annual general meeting, in relation to the appointment, re-appointment and removal of the Company’s
external auditors. The Audit and Sustainability Committee shall oversee the selection process for new
auditors and if auditors resign the Audit and Sustainability Committee shall investigate the issues leading
to this and decide whether any action is required;
j) overseeing the relationship with the external auditors including (but not limited to):
I.
II.
assessing annually their independence and objectivity taking into account relevant UK professional
and regulatory requirements and the relationship with the external auditors as a whole, including the
provision of any non-audit services; and
satisfying itself that there are no relationships (such as family, employment, investment, financial or
business) between the external auditors and the Company (other than in the ordinary course of
business) which could adversely affect the auditors’ independence and objectivity;
k) meeting regularly with the external auditors, including once at the planning stage before the audit and
once after the audit at the reporting stage. The Audit and Sustainability Committee shall meet the
external auditors at least once a year, without management being present, to discuss their remit and any
issues arising from the audit;
l)
reviewing and approving the annual audit plan and ensuring that it is consistent with the scope of the
audit engagement having regard to the seniority, expertise and experience of the audit team; and
m) reviewing the findings of the audit with the external auditors. This shall include but not be limited to
the following:
I.
II.
III.
IV.
a discussion of any major issues which arose during the audit;
any accounting and audit judgments;
levels of errors identified during the audit; and
the effectiveness of the audit process;
n) reviewing the Group’s sustainability strategy and its implementation;
o) examining the extra-financial risks and specifically those relating to environmental, social and societal
issues; and
p) co-ordinating non-financial and diversity reporting processes in accordance with applicable legislation
and international benchmarks.
Wizz Air Holdings Plc Annual report and accounts 2021
71
The Corporate Governance Code recommends that the Audit and Sustainability Committee (ASC) should
comprise at least three members, who should all be independent Non-Executive Directors, and that at least
one member should have recent and relevant financial experience. During the financial year ended 31 March
2021, the membership of the Company’s ASC comprised three members, namely Simon Duffy, Susan Hooper
and Peter Agnefjäll, and, following the re-composition of the ASC, four members, namely Simon Duffy, Maria
Kyriacou, Charlotte Pedersen and Enrique Dupuy de Lome Chavarri, all of whom are independent Non-
Executive Directors, have appropriate knowledge and understanding of financial matters, and have
commercial expertise gained in industries with similar characteristics, giving the ASC as a whole competence
relevant to the sector in which the Group operates. No members of the ASC have links with the Company’s
external auditors. The Company therefore considers that it complies with the Corporate Governance Code
recommendation regarding the composition of the ASC.
The Audit and Sustainability Committee formally meets at least three times per year and otherwise as required.
The Chief Executive Officer, other Directors and representatives from the Finance function of the Company
may attend and speak at meetings of the Audit and Sustainability Committee. The Company’s external
auditors and the Chief Financial Officer are invited to attend meetings of the Audit and Sustainability
Committee on a regular basis. The Company’s Senior Internal Audit Manager, along with the external firm of
internal auditors when applicable, also attends the Audit and Sustainability Committee’s meetings to report
on internal audit matters. The Company’s Head of Accounting also attends the Audit and Sustainability
Committee’s meetings to report on accounting matters. Following each meeting, the Chairman of the Audit
and Sustainability Committee reports to the Board on the significant items discussed during the Audit and
Sustainability Committee’s meeting. The Audit and Sustainability Committee held seven meetings during the
2021 financial year. In addition to the formal meetings, the Audit and Sustainability Committee is in regular
contact with relevant management in connection with, for example, the implementation of the Group’s
hedging strategy, or the Group’s ESG strategy.
Remuneration Committee
The Remuneration Committee is responsible for setting the Remuneration Policy for all Executive Directors
and the Chairman, including pension rights and any compensation payments, and recommending and
monitoring the remuneration of the senior managers. Non-Executive Directors’ fees are determined by the full
Board.
The objective of the Company’s Remuneration Policy is to attract, retain and motivate Executive management
of the quality required to run the Company successfully without paying more than necessary, having regard
to the views of Shareholders and other stakeholders.
The Remuneration Committee is also responsible for making recommendations for the grants of awards under
the Company’s share option schemes. In accordance with the Remuneration Committee’s terms of reference,
no Director may participate in discussions relating to their own terms and conditions of remuneration.
The Corporate Governance Code provides that the Remuneration Committee should comprise at least three
members, all of whom should be independent Non-Executive Directors. During the financial year ended 31
March 2021, the membership of the Company’s Remuneration Committee comprised three members, namely
Guido Demuynck, Susan Hooper and Maria Kyriacou, and, following a re-composition, by Barry Eccleston,
Peter Agnefjäll and Charlotte Andsager, all of whom are independent Non-Executive Directors. Effective April
13th, 2021, Peter Agnefjäll resigned as Non-Executive Director and was replaced by Enrique Dupuy de Lome
Chavarri. The Chairman of the Remuneration Committee was Mr Demuynck until 28 July 2020 and is Mr
Eccleston since 28 July 2020.
The Company therefore considers that it complies with the Corporate Governance Code recommendations
regarding the composition of the Remuneration Committee.
The Remuneration Committee meets formally at least twice each year and otherwise as required. There were
ten meetings of the Remuneration Committee during the 2021 financial year as well as regular contact with
management and the Company’s advisers.
Nomination Committee
The Nomination Committee assists the Board in discharging its responsibilities relating to the composition of
the Board. The Nomination Committee is responsible for evaluating the balance of skills, knowledge and
experience on the Board, the size, structure and composition of the Board, and retirements and appointments
of additional and replacement Directors, and will make appropriate recommendations to the Board on such
matters. While a number of Directors were initially appointed to the Board under investor appointment rights,
the most recent appointments were mostly conducted through Korn Ferry and Heidrick & Struggles, which
has no other connections with the Company.
The Nomination Committee gives full consideration and is formulating plans to succession planning for
Directors and other Senior Executives in the course of its work, taking into account the challenges and
opportunities facing the Company, and what skills and expertise are therefore needed on the Board in the
future. The Nomination Committee is also responsible for identifying and nominating, for the approval of the
Board, candidates to fill Board vacancies as and when they arise. Before an appointment is made by the Board,
Wizz Air Holdings Plc Annual report and accounts 2021
72
the Nomination Committee evaluate the balance of skills, knowledge, experience and diversity on the Board,
and in the light of this evaluation prepare a description of the role and capabilities required for a particular
appointment.
The Corporate Governance Code provides that a majority of the members of the Nomination Committee
should be independent Non-Executive Directors. The Company’s Nomination Committee is comprised of three
members, namely William A. Franke, Simon Duffy and Barry Eccleston. The Chairman of the Nomination
Committee is Mr Franke. The Company therefore considers that it complies with the Corporate Governance
Code’s recommendations regarding the composition of the Nomination Committee.
The Company recognises the importance to the Company of diversity, including gender equality. The
Company’s Code of Ethics is unequivocal that discriminatory practices will not be tolerated and that people
will be judged on the basis of their performance and ability to do their jobs and not on any other basis. The
Nomination Committee will work further to ensure that, when the opportunity presents itself, diversity is
properly reflected in the Board and in the Company’s senior management. The Company believes that this
commitment is demonstrated by recent appointments at both Director and senior management level.
The Nomination Committee is scheduled to meet formally at least twice a year and otherwise as required.
There were six meetings of the Nomination Committee during the 2021 financial year and, in between these
meetings, members of the Nomination Committee advised senior management on the appointment of Non-
Executive Directors and on various senior management appointments, including the President and the EVP
and Group Chief Operations Officer. Interviews of candidates for each of these positions were also conducted
by the members of the Nomination Committee. Candidates for the Non-Executive Directors were interviewed
by the members of the Nomination Committee.
Attendance at Board meetings
The following table sets out the attendance by Director at the Board and Committee meetings held during the
2021 financial year. For completeness, the total for each Director represents the total number of meetings
during the term of appointment.
Executive Director
József Váradi
Non-Executive Directors
William A. Franke
Guido Demuynck**
Simon Duffy
Susan Hooper***
Stephen L. Johnson
Barry Eccleston
Peter Agnefjäll
Maria Kyriacou
Andrew S. Broderick
Charlotte Pedersen****
Charlotte Andsager*****
Enrique Dupuy de Lome Chavarri*****
Board
attended/total
Audit and
Sustainability
attended/total
Remuneration
attended/total
Nomination
attended/total
12/12
12/12
5/5
12/12
5/5
12/12
12/12
12/12
12/12
12/12
8/8
5/5
5/5
7/7*
9/10*
6/6*
—
—
7/7
2/2
—
—
3/3
4/4
—
4/4
—
2/2
—
3/3
—
1/1
–
7/7
7/7
3/3
—
—
4/4
—
6/6
—
6/6
—
—
6/6
—
—
—
—
—
—
*
**
***
****
*****
The Executive Director was invited to attend these various Committee meetings in order to discuss certain matters but
did not have a vote. Occasionally Non-Executive Directors also attend meetings of Committees that they are not a
member of – these cases are not reflected in this table.
Did not stand for re-election at the 28 July 2020 annual general meeting.
Resigned effective as of 3 June 2020.
Joined effective as of 2 June 2020.
Joined effective as of 4 November 2020.
Board procedures
At least five Board meetings are scheduled during each financial year. At these meetings, the Directors meet
with Senior Executives to receive detailed updates on Wizz Air’s business and operations and to discuss the
Company’s strategy.
Since the outbreak of COVID-19 in the early months of 2020, the Board has first been provided with a daily
update and later on a weekly update from senior management describing the measures taken by the Company
from a financial, operational, commercial and safety perspective.
Seven extraordinary telephonic Board meetings have taken place between the beginning of April 2020 and
the end of March 2021.
As a result of the COVID-19 pandemic, all Board and Committee meetings held during the financial year had
to be conducted through videoconferencing.
Prior to Board meetings, each Director receives an information pack containing a comprehensive review of
the Company’s business as well as detailed proposals for approval of transactions and developments falling
within the Board’s remit. The Company believes that this enables each Director to properly discharge his or
Wizz Air Holdings Plc Annual report and accounts 2021
73
her responsibilities. At each Board meeting, Directors who have a conflict of interest in any agenda item
declare that interest and are not entitled to vote on that agenda item.
A number of key strategic and commercial decisions require Board approval and, as and when any such
decision is needed outside the scheduled meeting cycle, an ad hoc Board meeting may be arranged. In general,
therefore, it is anticipated that there will be approximately ten Board meetings in total during each financial
year.
Directors are encouraged to attend all Board and Committee meetings, but in certain circumstances meetings
are called at short notice and due to prior business commitments and time differences Directors may be unable
to attend. If a Director is unable to attend a meeting because of exceptional circumstances, they continue to
receive the papers in advance of the meeting and have the opportunity to discuss with the relevant Chairman
or the Company Secretary any matters on the agenda which they wish to raise.
Newly appointed Non-Executive Directors meet with the Company’s senior management and visit Wizz Air’s
operational headquarters to ensure that they have a thorough understanding of the Company’s business.
Wizz Air maintains directors’ and officers’ liability insurance. This insurance covers any claim that may be
brought against the Directors in the exercise of their duties.
The Company has adopted a Share Dealing Policy. As a consequence, the Directors as well as certain
designated employees must obtain clearance from the Company’s Chairman before dealing in the Company’s
shares and are prohibited from dealing at all during certain periods.
Finally, it is proposed that, in accordance with the recommendations of the UK Corporate Governance Code,
all Directors will offer themselves for re-election at the 2021 annual general meeting.
Wizz Air Holdings Plc Annual report and accounts 2021
74
GOVERNANCE
REPORT OF THE CHAIRMAN OF THE AUDIT AND SUSTAINABILITY
COMMITTEE
The past year has been exceptional and extraordinary for most companies and industries, but few have been
more affected than the airline industry, making the year just completed the most challenging in the Company’s
history. The demands and pressures created by the pandemic have demonstrated the value of the Company’s
existing agility and resilience but have also required the Company and its management to develop them even
further. Over the past year, Wizz Air has had to re-examine all aspects of the way it operates to ensure the
business continues to be run to the highest possible standards regardless of the external operating
environment.
The challenge for the Audit and Sustainability Committee has been to ensure that risk management systems,
internal controls and financial policies and practices have remained robust and effective during this period of
rapid change. To this end, and to help ensure the Company is well-positioned to achieve its growth ambitions
as we emerge from the pandemic, the Committee has continued to focus on liquidity management, hedging
strategy, aircraft financing, counterparty risk and overall enterprise risk management, as well as its oversight
of the Internal Audit function and the Company’s relationship with its external auditors.
In addition, as sustainability grows in significance and begins to permeate all aspects of the Company’s
operations, the Committee has worked with management to ensure that it is fully integrated both into
governance processes at all levels within the Company, including at the Board, and into day-to-day operations.
Having set the Company’s sustainability strategy off to a strong start, the Committee will pass responsibility
for this critical area to a newly formed Sustainability and Culture Committee in the course of the current
financial year.
Main activities of the Audit and Sustainability Committee during F21
Risk management
The Committee is tasked with ensuring that the Board maintains effective oversight of financial reporting and
risk management and that it deems the internal controls to be sufficient and effective, ensuring the long-term
integrity and viability of the business.
As the framework for risk management activities, the Company’s ERM programme operated effectively during
F21 in line with the established process and standards in place in previous years. Each risk identified was
considered in detail in terms of the inherent risk, existing mitigating measures and residual risk, along with a
determination of how each risk should be dealt with in accordance with the Company’s risk appetite. The
resulting risk register was then used to prepare a principal risk report. Each risk owner is required to review
each risk at least semi-annually. The Company’s internal Risk Council, comprised of key members of the
Company’s senior management team, also reviews the risk register and the principal risk report at least semi-
annually. The Risk Council reports to the Committee on, among other things, proposed changes to the principal
risk report, including any consequent mitigating actions. The principal risk report, once approved by the
Committee, is delivered to the Board as a whole for consideration.
During F21 the Company’s established risk management programme improved significantly in respect of
addressing a potential “Black Swan” event, such as COVID-19, which prevented the business from operating
in a normal way for a sustained period. In what was a once-in-a-lifetime operating environment, the Company’s
embedded risk management culture helped management respond with agility to the pandemic, identifying
the emerging and principal risks it created and taking appropriate and timely action.
In addition, during F21, in line with TCFD recommendations, the Company and the Committee integrated
climate risk into the risk register and principal risks. While the Company’s emission intensity is among the
lowest in the industry, the Board recognises that more progress needs to be made to work towards a net zero
carbon economy. The Company has established a target to reduce emission intensity by at least 25 per cent
by F30 through a combination of new technology adoption, fuel savings initiatives and sustainable aviation
fuels.
The Committee continually reviews the Company’s risk register and risk oversight process and, during F21,
again considered whether existing risk management systems accord with the Financial Reporting Council’s
(FRC’s) Guidance on Risk Management, Internal Control and Related Financial and Business Reporting. After
careful consideration, the Committee concluded that the Company’s risk management and internal control
systems are in accordance with the guidance. No significant failings or weaknesses were identified in the
review process.
In addition to the ERM programme, the Company’s Internal Audit function prepares a plan of internal audits
for the upcoming year, which is approved by the Committee. This Internal Audit Plan also covers internal
controls over financial reporting.
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75
Internal audits are led by the Senior Manager of Internal Audit, who has direct responsibility to the Chairman
of the Committee as well as an administrative reporting line to the Company’s Chief Financial Officer. Following
completion of an Internal Audit, a report is compiled which sets out findings, makes recommendations for
control improvements and presents the improvement actions undertaken by management. Internal audit
reports are submitted and presented to the Committee for approval. The Chairman then provides the full
Board with detail of the internal audit reports completed in a particular period including any recommendations
or findings.
Internal Audit then verifies that actions have been taken and controls implemented to address any
recommendations and reports back to the Committee on the status of such implementation. Based on all the
interactions with the Senior Internal Audit Manager and the reviews of the internal audit reports, the
Committee concluded that the Company’s Internal Audit function is effective in the context of the Company’s
overall risk management system.
More information on risk management within the Company is set out on pages 51 to 56 of this Annual Report.
Reporting controls
Management is responsible for internal controls over financial reporting for the Group. Each week, the Board
receives a weekly update on key performance metrics and each month an outline of the Group’s financial
results (actuals and forecast) are shared. The controls over the preparation of financial reports include
amongst others reconciliations of key balances, variance analysis to forecast and prior year results, review
meetings within the finance and accounting team and with the respective business owners including the
Leadership Team. The Annual Report and Accounts are produced by the Group Accounting team based on
the reports from several departments across the Company, including Investor Relations, Financial Planning
and Controlling, Treasury, Internal Audit, Legal, HR, Corporate Office, Commercial and Customer Experience,
Sustainability and Operations team. Their submissions are thoroughly reviewed prior to inclusion and
independently validated by the Corporate Finance Team and reviewed by the respective Officers. The
Committee reviews and approves all interim and annual financial statements, as well as the content of the
Company’s Annual Report. The Company’s external auditors provide the Committee with a briefing on any
issues arising during their audits. The Committee also reviews and approves any regulatory announcements
that are made in connection with such financial information. It is only after the Committee’s approval that
statements are put to the Board as a whole for approval. In the context of the year in review, in addition to the
Company’s normal cycle of results’ announcements, the Committee carefully considered announcements
made relating to the impact of COVID-19 on the business, as well as the Company’s financial guidance.
Relationship with external auditors
As Chairman of the Committee, I have regular correspondence and discussions with the engagement partner
of the Group’s external auditor, Mr Richard Porter, of PricewaterhouseCoopers LLP (PwC), outside the formal
cycle of Committee meetings.
The Committee approved the fees to be paid and the external audit plan for the F21 financial year and reviewed
the reports of the auditors on the half-year review and annual results. The audit of the F21 financial statements
and of this Annual Report, and the review of the half-year financial report, were all completed on time and to
a high standard and addressed the key issues arising from the Company’s business that could have an impact
on the financial statements.
With the completion of the 2021 audit PricewaterhouseCoopers LLP have been the auditors of the company
for 14 years uninterrupted, covering the years ended 31 March 2007 to 31 March 2021. The Committee carefully
considered the performance of the external auditors and the effectiveness of the external audit process. It
noted that the external auditors were willing to challenge management, robustly but constructively, during the
audit process to ensure that all material issues were analysed rigorously, resolved appropriately and presented
transparently. In line with the FRC's Audit Quality Practice Aid for audit committees, the Committee reviewed
materials from independent sources, including the Adviser Rankings Guide, to gain additional insights into the
effectiveness and quality of the external auditors.
A primary focus of the Committee is to ensure the independence of the Company’s external auditors. The
Committee reviewed the independence letter of the auditors and considered in particular the non-audit
services taken from and the non-audit fees paid to the external auditors during the year (see Note 7 to the
financial statements). The Audit and Sustainability Committee was satisfied that non-audit services and fees
did not compromise the objectivity and independence of the auditors, mainly because: (i) the engagement
leaders from the relevant advisory departments are not part of the audit team; and (ii) no such services were
ordered by the Company that carried self-review threat for the auditors. Furthermore, non-audit fees have
been on a declining trend for several years, both in terms of their absolute amount and as a proportion to audit
fees. As a result, non-audit fees earned by PwC in F21 were materially less than the audit fees. Detail on non-
audit fees paid to the auditors are set out on page 137.
Wizz Air Holdings Plc Annual report and accounts 2021
76
Audit fees (including fees for audit-related services, such as the review of the interim financial information)
significantly increased in F21 compared to prior years. The increase reflects the costs of carrying out additional
external audit work in the UK, which has increased substantially in recent years. Key examples of regulatory
developments that drive external audit effort include: (i) more regular and more demanding external quality
reviews on audits by the UK regulator (the Audit Quality Review Team of the Financial Reporting Council);
and (ii) new requirements for the scope of audits, coming from revisions to auditing standards ISA 220 and
ISA 600 and to the UK Corporate Governance Code. The Committee is committed to ensuring a high-quality
audit service and shares the view of PwC that a properly resourced and priced audit is the best way to ensure
quality.
The last external audit services tender was conducted in the summer of 2017, when PricewaterhouseCoopers
LLP was reappointed to perform the external audit services for five years (2018-2022), and as such is compliant
with the UK Competition & Markets Authority Order on mandatory tendering and audit committee
responsibilities for FTSE 350 companies. In light of the changes in the external audit environment described
in the previous paragraph, the Committee decided to conduct a mid-term tender. After following a thorough
process, the Committee unanimously confirmed its previous decision and elected to re-appoint PwC.
Significant matters relating to the Annual Report
In the course of the preparation of the Company’s financial statements, the following issues, among others,
were considered by the Committee, relying on its professional experience and industry best practice, and
constantly challenging management’s judgment:
(cid:1)
Impact of COVID-19: The pandemic and the consequent prolonged grounding of the Group’s fleet followed
by low levels of operation impacted preparation of the Annual Report in two ways. First, it had a direct
impact on the financial statements, resulting in: (i) a historic financial loss as revenue declined 73 per cent;
and (ii) higher leverage compared to pre-COVID-19 levels as the Company issued commercial paper and
an EUR bond to secure liquidity while successfully maintaining an investment grade balance sheet. Second,
the continued uncertainty around future trading prospects required a more robust review of the going
concern assumption and the viability statement. The Committee participated in rigorous reviews and
analyses of the assumptions and methodologies used by management in undertaking the work required
to provide the forecasts to underpin the going concern and viability statements. At the conclusion of this
process, which included frequent interaction with the engagement partner of the external auditors, the
Committee determined that the positions adopted by management on these issues were appropriate.
(cid:1) Sustainability: The Committee oversaw the development of the Company’s sustainability strategy and
decided on the early adoption of the TCFD recommendations to ensure transparency in disclosure. After
consulting with the external auditors and other subject matter experts, the Committee elected to prepare
an integrated report, i.e. a sustainability report integrated into the Annual Report. The Committee believes
that alignment with the TCFD framework will help better inform the Company’s future business and
investment decisions and enhance reporting on sustainability issues, which are of growing importance to
the business and all the Company’s stakeholders.
(cid:1) Capital commitments and financing: The Committee undertook a detailed review of the Company’s capital
commitments and their associated financing. It noted that management had made some revisions in its
fleet plan and agreed that the commitments were appropriate and necessary to allow the Company to
achieve its ambitious growth plans. It also analysed management’s financing strategy and noted that
management either had already secured or, over the term covered by the viability statement, as evidenced
by continued strong interest from lessors, had clear plans to secure financing on attractive terms that
optimised flexibility and minimised costs.
(cid:1) The Corporate Reporting Review (CRR) team of the Financial Reporting Council reviewed the F20 Annual
Report and Accounts of the Company and shared its questions with the Company in February 2021. It
requested further information on the following: (i) the basis for, and presentation of, gains and losses on
sale and leaseback transactions; (ii) the basis for concluding that the Company acts as an agent, rather
than as principal, in respect of on-board catering services and consequently recognises only the
commission on these sales; and (iii) the treatment of financial assets with an original maturity of between
three and twelve months as “cash equivalents”. Based on the responses from the Company, the FRC
closed the review, and in agreement with the FRC the Company has decided to separate from cash and
cash equivalents its deposits with a maturity of between three and twelve months at inception even if
these deposits (€432.5 million in F20) are accessible in around three months at insignificant cost. A key
aspect of CRR’s view was the fact that the deposits were being held for purposes other than meeting
short-term cash commitments. The Company has restated its F20 statement of financial position and
statement of cash flows for this change and also amended its definition of total cash (a non-GAAP
alternative performance measure) to integrate these deposits within this alternative performance
measure. The FRC also asked for two matters to be considered in the F21 Annual Report and Accounts:
(i) the extent to which the sources of uncertainties in critical accounting estimates and judgments
identified in Note 4 might have a significant risk of resulting in a material adjustment to the carrying
amounts of assets and liabilities within the next financial year; and (ii) provision of greater clarity in the
Wizz Air Holdings Plc Annual report and accounts 2021
77
disclosure of judgments made in the application of hedge accounting and in the disclosure of the effects
of hedge accounting on the financial position and performance of the Company. The Company has
addressed these suggestions when preparing the F21 Annual Report and Accounts. In respect of the scope
and limitations of the review, the FRC informed us that their review was based on our annual report and
accounts and did not benefit from detailed knowledge of our business or an understanding of the
underlying transactions entered into. It was, however, conducted by staff of the FRC who have an
understanding of the relevant legal and accounting framework. The communication and findings of the
FRC are not relied upon by the Company nor should be relied upon by third parties, including but not
limited to investors and shareholders, for assurance purposes on the correctness in all material respects
of the Annual report or accounts.
The Committee also considered whether the Annual Report taken as a whole was fair, balanced and
understandable and whether it provided the necessary information for Shareholders to assess the Company’s
position, performance, business model and strategy. In reaching its judgment the Committee reviewed all the
issues that had been raised by both management and the external auditors during the audit process and at
other times during the year and debated whether they had been fully, fairly and clearly disclosed and discussed
in the Annual Report. The Committee also considered whether appropriate emphasis was placed on each issue.
At the conclusion of this process the Committee determined that the Annual Report taken as a whole is indeed
fair, balanced and understandable and recommended it to the Board for approval.
Other matters considered during the year
(cid:1) The Committee reviewed and supported the establishment of a £1 billion commercial paper programme
on date 17 April 2020, and, subsequently, the raising of a £300 million commercial paper via the Bank of
England’s CCFF programme, with an initial maturity of March 2021 and a final maturity of February 2022.
(cid:1) The Committee reviewed and supported the establishment of a €3 billion medium-term note programme
on date 27 July 2020, and, subsequently, of the issuance of a three-year 1.35 per cent bond maturing in
January 2024.
(cid:1) Changes in the fuel hedging programme during F21: Following the near-full grounding of the Company’s
fleet due to COVID-19, a decision was taken in April 2020 to suspend the IFRS 16-related fair value hedges
on the basis that the Company’s focus is to protect shareholder value and liquidity rather than reported
earnings. This led to the suspension of the fair value hedges as they mitigate primarily unrealised FX
impacts whilst creating cash exposure for the Company due to potential margin calls. The Committee
supported management’s recommendations for these changes. Furthermore, the Committee supported
the suspension of the US Dollar and jet fuel hedging programme post COVID-19 and the extension of the
suspension in December 2020 and in March 2021.
(cid:1) Cyber security: The Committee continued to regularly review updates from management on the
Company’s position with respect to cyber security and on the actions implemented or planned to mitigate
cyber risks.
Simon Duffy
Chairman of the Audit and Sustainability Committee
Wizz Air Holdings Plc Annual report and accounts 2021
78
GOVERNANCE
REPORT OF THE CHAIRMAN OF THE NOMINATION COMMITTEE
Wizz Air’s Nomination Committee is comprised of three members, namely Simon Duffy, our Senior
Independent Non-Executive Director, Barry Eccleston and me.
The Nomination Committee assists the Board in discharging its responsibilities relating to the composition of
the Board and Senior Management. The Nomination Committee is responsible for evaluating the balance of
skills, knowledge and experience on the Board, the size, structure and composition of the Board, and
retirements and appointments of additional and replacement Directors, and makes appropriate
recommendations to the Board on such matters.
The Company’s success to date has been achieved by ensuring that it appoints people of the highest calibre,
whether as Directors, management or employees. While the key selection criterion is to ensure that people are
appointed on their ability to do their jobs, the Company and the Nomination Committee recognise the
importance of diversity, including gender equality.
Main activities of the Nomination Committee during the 2021 financial year
During the 2021 financial year, the Nomination Committee worked on a number of key appointments for the
Company.
On 3 June 2020, Ms Pedersen was appointed to the Board of the Company as an independent Non-Executive
Director and as a member of the Audit and Sustainability Committee.
On 4 November 2020, Mr Dupuy de Lome Chavarri was appointed to the Board of the Company as an
independent Non-Executive Director and as an additional member of the Audit and Sustainability Committee.
On 4 November 2020, Ms Andsager was appointed to the Board of the Company as an independent Non-
Executive Director and as an additional member of the Remuneration Committee.
Effective from 1 July 2020, Ms Poós was appointed as Chief Customer and Marketing Officer, based in
Budapest.
On 9 December 2020, the Company announced a further enhancement to the senior leadership capacity by
appointing Mr Delehant and Mr Carey to its Leadership Team. Accordingly, Mr Delehant joined Wizz Air in April
2021 as Executive Vice President and Chief Operations Officer and Mr Carey joined Wizz Air in June 2021 as
President.
Mr Sebők, Chief Supply Chain Officer, was appointed to the newly created Chief Central Operations Officer
position based in Budapest reporting to Mr Delehant effective from 1 June 2021. The role aims at maximising
cost focus, operational efficiencies and synergies across the Group’s airline subsidiaries.
Mr Jones, Managing Director of Wizz Air UK, was appointed to Chief Supply Chain and Legal Officer based in
Budapest reporting to the Group Chief Executive Officer effective from 1 June 2021.
Ms Geoffroy, Chief Corporate Officer, was appointed to Managing Director of Wizz Air UK based in Luton
reporting to the EVP and Group Chief Operations Officer and to the Group Chief Executive Officer effective
from 1 June 2021.
Mr Eidhagen, Chief People Officer, was appointed to Chief People and ESG Officer based in Geneva reporting
to the Group Chief Executive Officer effective from 1 June 2021.
The Nomination Committee’s ongoing work
The Nomination Committee will continue to work with the Board to ensure that it has the appropriate balance
of skills, knowledge and experience and that, where the opportunity presents itself, appointments are made
which reflect not only the Company’s requirement to retain the best people for particular roles but also to
support the Company’s values, including ensuring diversity within the Board and the Company’s senior
management.
The Nomination Committee and the Board also recognise the importance of ensuring that succession of
Directors and senior management is properly managed, to ensure that the Company has the right people
available as needed. The Nomination Committee will continue to work with the Board and the Company’s
senior management to develop and refine succession plans, encouraging and facilitating internal talent
development where necessary.
William A. Franke
Chairman of the Nomination Committee
Wizz Air Holdings Plc Annual report and accounts 2021
79
GOVERNANCE
DIRECTORS’ REMUNERATION REPORT
Report of the Chairman of the Remuneration Committee
I am pleased to present the Directors’ Remuneration Report for the financial year ended 31 March 2021, which
is my first as Chair of the Remuneration Committee. I would like to thank Guido Demuynck for his contribution
as Remuneration Committee Chair since joining the Wizz Air Board in 2014. I would also like to thank Peter
Agnefjäll, who stepped down from the Committee and the Board following the year-end for his contribution
during the past year and welcome Enrique Dupuy de Lome Chavarri who joined the Committee alongside
Charlotte Andsager and myself.
Resilience through COVID-19
Despite the impact of COVID-19 on the industry, Wizz Air has placed a relentless focus on pursuing its strategic
aims. Wizz Air is positioned as one of the true ultra low-cost carriers in the world, and the strength of the
business model and management team has positioned the Company well during the pandemic and protected
value for Shareholders. The Company’s share price increased during calendar year 2020, exceeding the price
at the outbreak of the pandemic and hitting an all-time high in early 2021. The strength of our liquidity position
also ensures we remain at the forefront of European airlines in our ability to prosper as economies open.
However, as expected during these challenging times, the Company declared a net loss for financial year
ending March 2021.
The business has maintained investment in the fleet and continues to prepare for recovery with 14 new
A321neos in F21 ensuring a total fleet of 137 aircraft. The average age of the fleet is only 5.4 years, one of the
youngest and most environmentally efficient in Europe.
In contrast to years of exceptional growth, during F21, the business focused on preserving cash (meaning total
cash, comprising cash and cash equivalents, short term cash deposits and restricted cash) and looking for
further cost saving opportunities. As part of protection of the business, the Company availed of certain
government support schemes in a number of countries in which it operates. In line with a commitment to cost
restriction and alignment with stakeholder experience, the Chief Executive Officer voluntarily accepted a 22
per cent reduction in base salary for F21 and the Company’s Non-Executive Directors took no fees for the
month of April 2020 and reduced all fees by 15 per cent between 1 May 2020 and 31 March 2021, while similar
pay cuts were taken by the wider employee population. The salaries of Cabin Crew and Office employees
(Heads of Function and below) were restored to pre-reduction levels in January 2021. The Board fees, CEO
and Senior Management pay and pilot salary reductions remained in place throughout the full financial year.
In addition to the salary reinstatements in January 2021, the Company’s Management also took the decision in
November 2020 to pay a one-time bonus as a token of appreciation for the hard work and dedication of the
entire Wizz Air team. Each employee below the Heads of Function received €500 on top of their November
salary which was paid out in early December 2020.
F21 performance and remuneration outcomes
The strong leadership of the Board, the Chief Executive Officer and the management team during F21
underpinned the Company’s ability to address the impact of the pandemic. While the Company recorded a
statutory net loss of €576.0 million, Wizz Air preserved its financial strength and is well positioned to return
to growth as the effect of the pandemic and travel restrictions recede.
Throughout F21, the CEO’s focus was on preserving cash and protecting the business’ future success. Based
on uncertain and fluctuating demand driven by lockdowns across Europe, the Committee’s ability to set goals
for the full annual cycle was severely restricted. However, based on the critical need to preserve liquidity, the
Remuneration Committee took the decision to approve and implement Short-term Incentive Plan (STIP)
performance targets on a quarterly basis. Those measures were based on cash targets as a measure of cost
savings and business liquidity through the crisis.
To further recognise the cash constraints of the pandemic, the F21 STIP was capped at only 100 per cent of
target (rather than the typical 200 per cent of target) and it was agreed that any payment would be deferred
fully into shares rather than immediate cash outlay. During the financial year, the quarterly cash objectives
were achieved in three out of four quarters, resulting in an overall STIP award for the CEO of 75 per cent of
target, i.e. 75 per cent of base salary to be paid in shares. However, due to the significant and prolonged impact
of the pandemic on the industry and the Company’s revenue, and the experience of employees across the
wider business, the Chief Executive Officer and the management team recommended to the Remuneration
Committee that there be no STIP pay-out for F21. The Remuneration Committee agreed and determined that
no STIP should be paid.
Under the Long-term Incentive Plan (LTIP), the award vesting at the end of F21 will pay-out at 50 per cent of
maximum. The EPS condition under the award was not achieved but due to the strong performance of the
Wizz Air share price beyond that achieved at competing airlines, the relative total shareholder return (TSR)
condition was achieved in full – resulting in an award payment of 50 per cent of maximum. As a Board and a
Wizz Air Holdings Plc Annual report and accounts 2021
80
Committee, we remain satisfied that the TSR performance of the Company, which exceeded that of the peer
group during both the performance period and since our IPO, is an accurate reflection of individual
contribution and Company performance.
Shareholder feedback from F21 AGM
At the annual general meeting (AGM) held on 28 July 2020 the resolution to approve the Directors'
Remuneration Report was supported by only 48 per cent of our voting Shareholders. Upon appointment, the
newly constituted Remuneration Committee engaged with key Shareholders to understand the rationale
behind voting last year. The Company received feedback from Shareholders that the main concerns at the
time of voting related to discretion used to award the F20 STIP payment to Senior Management and the total
time horizon of the Company’s LTIP.
While the Board remains satisfied that the F20 STIP outcome for Senior Management was an equitable one
that was designed to reflect the underlying performance of the business and the experience of our
Shareholders, it acknowledges and respects the views expressed by Shareholders in their opposition to the
resolution. This feedback has been considered and the Committee took the decision to delay payment of the
F20 STIP award by a year to May 2021.
The Remuneration Committee remains committed to recommending Executive remuneration proposals that
serve to support the business in retaining key talent and delivering superior returns to Shareholders, while
remaining conscious of the wider stakeholder experience and business performance.
Remuneration Policy review
Over the course of F21, the Committee has undertaken a thorough review of the current Remuneration Policy
and the accompanying contract of our Chief Executive Officer, both of which have been in place since IPO in
2015 with the Policy having been renewed unchanged in 2018.
At Wizz, we are fortunate enough to have an Executive team which has driven a performance since IPO which
is among the strongest of any airline in the world. As a Remuneration Committee, we are in the process of
designing a Remuneration Policy that provides a framework that is not only designed to retain those
individuals, but to continue to drive a superior level of performance and value creation for our stakeholders
and the countries in which we operate. During the first half of calendar 2021, the Remuneration Committee has
engaged extensively with Shareholders as part of designing the revised Remuneration Policy that will be
proposed to Shareholders at the 2021 AGM. At the core of our review were the following factors:
(cid:1)
(cid:1)
(cid:1)
(cid:1)
the importance of retaining one of the highest performing CEOs in the world;
clear and simple alignment with Shareholders’ interests;
integration of sustainability factors that are central to our ability to create value over the long-term;
flexibility in policy for future succession and fast-moving business strategy in reaction to COVID-19; and,
(cid:1) ensuring incentives are aligned throughout the organisation.
We have a unique and world class leader in our CEO, József Váradi, who has led the business through a period
of strong growth since IPO and created one of the strongest and most profitable airlines in the world. As the
business enters a crucial juncture, the Committee believes his leadership is central to delivering Wizz Air’s next
phase of growth over the next five-year period.
In designing the new Policy, we continue to consult with our Shareholders. I have been fortunate enough to
meet Shareholders representing 50 per cent of the Company’s Ordinary Shares, as well as proxy advisers, to
discuss our proposals. While our discussions are continuing as our financial results are published, as a
Committee, we were satisfied that our approach to ensuring the retention of the CEO, and the broader changes
to incentivisation of employees, were met with broad support among our major Shareholders.
While we will present supplementary information in our Notice of AGM on the proposed incentive framework
for our CEO, the updated Remuneration Policy included in this document is intended to provide further
flexibility for the business going forward. Notably we are proposing to:
(cid:1)
adapt the performance conditions under our incentive plans to evolve as the business continues to grow
and recover from the impact of the COVID-19 pandemic; and
(cid:1) provide an ability to award STIP payments in shares to further save on cash cost to the business and
incentivise share ownership on the part of STIP participants.
To facilitate this we will put forward a new set of Omnibus Plan rules at our AGM that include the flexibility to
deliver the above.
Wizz Air Holdings Plc Annual report and accounts 2021
81
In addition, the Remuneration Committee is considering alternative structures for the CEO compared to the
LTIP presented in this Directors Remuneration Policy. If the Remuneration Committee does proceed with an
alternative structure the precise parameters of a new incentive plan including quantum and performance
criteria for our current CEO will be detailed in full in the Notice of Meeting for the 2021 AGM, as Shareholder
consultation on the matter is on-going. We can commit that the alternative framework under discussion will
focus on building sustainable value in the business; place an emphasis on financial and non-financial
performance measures; and, align with the principles of simplicity and transparency.
We would like to take this opportunity to thank all those who took part in the consultation process for their
constructive engagement and for their support in helping us shape the proposals which will be put forward in
our Policy and detailed in full in the Notice of our AGM.
Next steps
The Remuneration Committee is proud of the resilience demonstrated by all our people during the last financial
year when faced with unforeseen and unprecedented challenges. We remain committed to ensuring that our
Remuneration Policy continues to reward and incentivise the delivery of outstanding results and appropriately
aligns the interests of the Directors and senior management with those of the Company’s Shareholders.
The resolutions at the AGM will reflect the Remuneration Committee’s aims of designing an incentive
framework that continues to drive one of the world’s leading CEOs as well as an employee base that continues
to generate value for all our stakeholders in a sustainable manner.
We hope that you find this Remuneration Report clear in explaining the implementation of our Remuneration
Policy during the last financial year and we look forward to shortly providing our detailed Remuneration
proposals for your consideration at July 2021 AMG.
Barry Eccleston
Chair of the Remuneration Committee
2 June 2021
Wizz Air Holdings Plc Annual report and accounts 2021
82
Remuneration at a glance
Base salary
Short-term
incentive
(STIP)
Long-term
incentive
Maximum
opportunity
Performance
metrics
(weightings)
Maximum
opportunity
F21 Earnings
€664,050
Note: Due to COVID-19 impact,
the CEO agreed to a 22 per cent
reduction from the above salary
for F21
100 per cent of base salary
Note: Based on the
Remuneration Committee’s
decision there is no STIP payout
for F21
Cash preservation (100 per cent)
Targets set on quarterly basis
250 per cent of base salary
F22 Looking ahead
€664,050
Note: Due to COVID-19 impact,
the CEO agreed to a 7.5 per cent
reduction from the above salary
for F22
100 per cent of base salary
Cash preservation and other
measures as appropriate (100 per
cent)
Targets set on quarterly basis
Details to be included in Notice
of AGM
What our CEO earned
How our CEO is aligned with Shareholders
Number of Ordinary Shares held by the CEO (%
of base salary)
€1,969
CEO
400%
13610%
€2,798
0%
5000%
10000%
15000%
Share ownership
guideline (%)
Actual holding in
excess of share
ownership
guideline(%)
Performance remains strong for Wizz Air (TSR)
We are continuing to focus on our people
(cid:1) We are proud to employ aviation
professionals of 54 different nationalities and
deliver a superior service across our network.
(cid:1) Our latest Employee Feedback Survey
showed that our employees are highly
engaged and that Wizz Air is their employer
of choice.
(cid:1) The engagement survey participation rate
was 79 per cent with a general satisfaction
within the WIZZ Team at 81 per cent.
Wizz Air Holdings Plc Annual report and accounts 2021
83
Remuneration Policy
Introduction
This Directors’ Remuneration Policy will be put forward for approval by Shareholders at the Company’s AGM
in July 2021 and is intended to be in place for a period of three years from the AGM.
The existing Remuneration Policy has been in place since IPO and was renewed unchanged at our AGM in
2018.
The objective of our review has been to ensure that changes to the Policy provide:
(cid:1)
(cid:1)
(cid:1)
(cid:1)
a remuneration structure that supports the retention of key Executive talent, and in particular our CEO,
who is integral to the Wizz Air growth strategy;
a design where variable pay is only received where extraordinary returns are achieved for Shareholders;
introduction of features in our pay programmes that ensure alignment with the wider stakeholder
experience – both Shareholders and other stakeholders; and
continued alignment with our low-cost business model – no pension arrangements for Executives and very
limited Executive benefits with a focus on performance-based pay.
As described in our Chairman’s letter, the Remuneration Committee has and continues to undertake extensive
Shareholder engagement before arriving at the final proposals put forward for Shareholder approval at the
AGM. Core messages of engagement include:
(cid:1)
(cid:1)
(cid:1)
(cid:1)
the importance of retaining one of the highest performing CEOs in the world;
clear and simple alignment with Shareholders’ interests;
integration of sustainability factors that are central to our ability to create value over the long-term;
flexibility in policy for future succession and fast-moving business strategy in reaction to COVID; and,
(cid:1) ensuring incentives are aligned throughout the organisation.
While we will present supplementary information in our Notice of AGM on the proposed incentive framework
for our CEO, the updated Remuneration Policy included in this document is intended to provide further
flexibility for the business going forward. Notably we are proposing to include greater flexibility to:
(cid:1)
adapt the performance conditions under our incentive plans to evolve as the business continues to grow
and recover from the impact of the COVID-19 pandemic; and
(cid:1) provide an ability to award STIP payments in shares to further save on cash cost to the business and
incentivise share ownership on the part of STIP participants.
To facilitate this, we will put forward a new set of Omnibus Plan rules at our AGM that include the flexibility to
deliver the above.
Additional details on the plan to incentivise the CEO over the next critical five-year period will be included in
the Notice to the 2021 AGM as consultations with Shareholders are still continuing.
Executive Director remuneration
The Chief Executive Officer is currently the Company’s sole Executive Director. The Remuneration Committee
believes that the Company’s Remuneration Policy supports the Company’s ultra-low cost, high growth
business model by incentivising senior management, including the Chief Executive Officer, to continue to strive
to increase the Company’s cost advantage while improving customers’ experience.
In deciding appropriate remuneration levels, the Remuneration Committee takes into account, among other
things, the levels paid at UK FTSE-listed companies, competitor global low-cost carriers and selected fast-
growing companies across Europe. The Remuneration Committee also continues to be cognisant of wider
employee pay in the organisation – particularly during the last year with COVID-19 impact. In the past year the
management has increased its engagement with employees through scheduled floor talks, local base visits
and through the regular scheduled meetings with the People Council, who represent all employees throughout
the company. In these meetings topics on remuneration are regularly discussed and as a result of this,
engagement management and employees have been aligning on Remuneration principles in the company.
Management and employees have aligned on salary reductions principles throughout the year as a result of
these meetings, the decision to bring back salaries to office employees and Cabin Crew earlier than planned.
To ensure that the employees’ concerns are raised and addressed, the People Council has met with the
responsible Management Team members on 25 occasions and the minutes from the meetings are shared with
the Director responsible for employee engagement. The Director has also had a regularly scheduled call every
four to six weeks with the People Council and has during a separate session in the Board of Directors Meeting
brought up the main topics discussed. The CEO has also had 25 sessions with the People Council throughout
the year where he has been updated on the topics of discussion. the regular structured approach to
engagement with employees, the Company carried out a company-wide engagement survey in November
with a (79%) response rate. Amongst other topics the employees gave their scores within the category of
Wizz Air Holdings Plc Annual report and accounts 2021
84
Reward and provided 14,269 open comments. The results of the employee engagement scores were reviewed
by the Management Team, the Board of Directors and in the individual organisations.
Future policy table: Executive Director
Element
Base
salary
Purpose and link to strategy
To provide the core reward for
the role.
To attract, retain and motivate
high-calibre Executive
management.
Benefits
To attract, retain and
motivate Executive management
without paying more than
necessary.
Pension
Not applicable.
Framework used to assess
performance and provisions
for the recovery of sums paid
The Remuneration
Committee will
consider the individual
salary of the Executive
Director at a meeting
each year.
Not applicable.
Operation and opportunity
Salaries are reviewed
annually, with any increase
being awarded at the
discretion of the
Remuneration Committee.
The Remuneration
Committee may take into
account a number of factors
in deciding whether an
increase should be made,
including benchmarking
against selected comparator
companies, the individual’s
skills and experience, internal
relativities, and the
Executive’s personal
performance contribution.
The benefits to the Executive
Director are in line with those
provided to employees and
those deemed necessary for
the role or job to be taken.
They include the following:
Executive Directors are
covered by the Company’s
group personal accident and
life assurance cover, which is
in place for all employees (2x
salary).
Free return tickets usable on
the route network of the
Group, consistent with the
number of free tickets made
available for all employees.
At its discretion, the
Committee may provide
reasonable support for costs
associated with relocation
where required at Company
request and other benefits as
deemed necessary by the
Remuneration Committee.
Not applicable. The Company
does not provide a pension
scheme for the Executive
Director (unless contributions
are required by law).
Wizz Air Holdings Plc Annual report and accounts 2021
85
Element
Short-
term
Incentive
Plan
(STIP)
Purpose and link to strategy
To incentivise the successful
execution of the Company’s
business strategy.
To reward the achievement of
annual financial and operational
goals.
Operation and opportunity
Payments under the Short-
term Incentive Plan are made
in cash and/or shares, subject
to certain specified
performance requirements as
determined by the
Remuneration Committee
being met and up to a
maximum STIP set as a
percentage of base salary by
the Remuneration
Committee. The maximum
pay-out is 200 per cent of
base salary. A threshold level
of performance is
specified in 50 per cent of
base salary; if performance
falls below this level, there
will be no pay-out for that
proportion of the award.
Framework used to assess
performance and provisions
for the recovery of sums paid
Performance
requirements
are determined by the
Remuneration
Committee. They are
intended to align the
performance of the
Executive Director with
the Group’s near-term
objectives of delivering
against its strategy. The
Committee may use its
discretion to ensure
that a fair and balanced
outcome is achieved,
taking into account the
overall performance of
the Company and the
experience of
Shareholders.
The STIP is based on a
combination of
financial and non-
financial measures as
selected by the
Committee in any given
year. Financial
measures would
typically represent no
less than 50 per cent of
weighting.
The annual STIP is
subject to malus
and/or clawback in the
event of serious
misconduct which
could have served as a
reason for termination
of the employment for
cause, or if the
employee was involved
in fraud, dishonesty or
other types of illegal
activity. The policy
does not determine the
time frame of the malus
and/or clawback.
Element
Long-term
Incentive
Plan (LTIP)
Purpose and link to strategy Operation and opportunity
To align the Executive
Director’s long-term
interests with those
of Shareholders.
To reward strong
financial performance.
Each year, performance shares
may be granted. Awards vest
over a three-year period,
subject to the achievement of
performance targets over
those three years. The
maximum face value of annual
awards will be 250 per cent of
base salary. Typically 25 per
cent of award value will vest for
threshold performance with
straight-line vesting to
maximum performance.
Framework used to assess performance
and provisions for the recovery of
sums paid
Performance targets are
determined by the
Remuneration Committee and
vesting of the performance
shares is subject to
performance targets being met
over the performance period.
The LTIP is based on a
combination of financial and
non-financial measures as
selected by the Committee in
any given year. Financial
measures would typically
represent no less than 50 per
cent of weighting.
Wizz Air Holdings Plc Annual report and accounts 2021
86
The Committee may use its
discretion to ensure that a fair
and balanced outcome is
achieved, taking into account
the overall performance of the
Company and the experience of
Shareholders.
If a participant’s employment
ends before the end of the
performance period, any vested
and unvested options will
normally lapse, save in certain
“good leaver” scenarios
although the Committee retains
discretion to allow some
proportion of shares to vest in
specific circumstances.
Long-term incentive awards are
subject to malus and/or
clawback in the event of serious
misconduct which could have
served as a reason for
termination of the employment
for cause, or if the employee
was involved in fraud,
dishonesty or other types of
illegal activity.
Notes to the policy table: target setting and the selection of performance measures
Targets for the STIP and LTIP are continually reviewed to ensure they are appropriate and stretching. The Remuneration
Committee takes into consideration the expected performance of individuals, the current business environment and other
external reference points. The measures used in the STIP are set quarterly and are selected to reflect the Group’s near-term
objectives of delivering against its strategy. With regard to the LTIP, performance targets are determined regularly by the
Remuneration Committee to ensure that they align well with the Company’s strategy and Shareholder interests.
Difference in Remuneration Policy for Executive Director and employees
Remuneration for the Company’s senior management team is broadly aligned to that of the Executive Director.
The amounts of the components and vehicle of which any long-term awards are granted vary for the
individuals and the levels of the position. Management positions in the Company receive remuneration based
on market benchmarks that vary between function and local market practices.
The remuneration policy for the Executive Directors and Senior Leadership team is more heavily weighted
towards variable and share-based pay than for other employees. This makes a larger proportion of the overall
total pay package conditional on the successful delivery of our business strategy and aligned with shareholder
value delivery through using shares. This approach ensures a keen incentive to deliver results and aligned with
our business strategy, in line with market practice for senior employees. All Heads of Function, Officers, and
the CEO are under the same remuneration structure.
Non-Executive Director remuneration
The Non-Executive Directors are only paid fees.
Framework used to assess performance
and provisions for the recovery of
sums paid
Not applicable; there are no
provisions for the recovery of
sums paid or the withholding of
any payment relating to fees.
Element
Fees
Purpose and link to
strategy
To remunerate Non-
Executive Directors
to reflect their level
of responsibility.
Operation and opportunity
Non-Executive Directors are paid a
basic fee, plus an additional amount
for each Board meeting attended.
Additional fees are paid for the roles
of Chairmen of the Audit and
Sustainability Committee, the
Remuneration Committee and the
Board and the Senior Independent
Director. Fees for Non-Executive
Directors, other than the Chairman,
are determined by the Board. Fees
for the Chairman are determined by
the Remuneration Committee
without the Chairman being present.
The Remuneration Committee, in
relation to the Chairman, and the
Board, in relation to the other Non-
Executive Directors, retain the
flexibility to increase fee levels to
Wizz Air Holdings Plc Annual report and accounts 2021
87
ensure that they appropriately
reflect the experience of the
individual, time commitment of the
role and fee levels in comparable
companies.
Fees are made in cash and/or shares
which are not subject to
performance.
Illustration of the application of the Remuneration Policy
The bar chart below sets out the annual remuneration package of the Chief Executive Officer for the 2022
financial year at minimum, expected and maximum levels, on the basis of the LTIP included in this policy.
Should an alternative proposal be presented in the Notice of AGM a new remuneration scenario illustration of
that proposal along with full details will be presented.
Notes to table: The Chief Executive Officer has voluntarily accepted a temporary 7.5 per cent average
reduction in base salary for F22 from his contracted base salary of €664,050. This reduction will also impact
the base for the F22 annual STIP. Fixed remuneration is base salary, being €614,246. The annual STIP amount
is zero at minimum and €614,246 at the expected level (100 per cent of salary). As the organisation has capped
the STIP payment at 100 per cent of salary to mitigate cash flow concerns, there is no possibility for
overachievement of the STIP and therefore the maximum pay-out and target are the same: €614,246. The
long-term incentive amount is zero at minimum, €767,808 at the expected level (50 per cent of normal
maximum opportunity of 250 per cent) and €1,535,615 at maximum (250 per cent of base salary). Were Wizz
Air’s share price to increase by 50 per cent, total remuneration would increase to €3,531,915 under the
maximum scenario – driven by the increased value of the LTIP awards.
Recruitment remuneration
On the recruitment of a new Executive Director, the Committee seeks to pay no more than is necessary to
attract and retain the best candidate available, within the limits of the approved Remuneration Policy, up to a
maximum variable pay of 450% as the current policy. The remuneration package for an incoming Executive
Director would reflect the principles set out above, although the Committee believes that it is in the interests
of Shareholders for it to retain an element of flexibility in its approach to recruitment to enable it to attract the
best candidates; however, this flexibility is limited.
The Committee may find it necessary to compensate a new recruit for forfeiture of payments for leaving prior
employment. There is no limit to the value of such a buy-out award; however, the Committee will seek to link
rewards to performance wherever possible and mirror the award being forfeited by the new recruit. The
Committee may introduce a one-off arrangement as permitted under Listing Rule 9.4.2.
For the appointment of a new Chairman or Non-Executive Director, fee arrangements will be made in line with
the policy as set out above.
Policy on payment for loss of office
In the event of termination of a service contract or letter of appointment of a Director, contractual obligations
will be honoured in accordance with the service contract or letter of appointment. There are no fixed terms on
the service contracts. The Remuneration Committee will take into consideration the circumstances and
reasons for departure, health, length of service and performance. Under this policy, the Remuneration
Committee will make any statutory payments it is required to make. In addition, the Remuneration Committee
may agree to payment of outplacement counselling costs and disbursements (such as legal costs) if
considered to be appropriate and depending on the circumstances of departure.
There are no pre-determined contractual provisions for Directors regarding compensation in the event of loss
of office save for those listed in the table below.
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88
Details of provision
Notice period
Executive Director
Six months’ notice by either party.
Termination payment
Post-termination
covenants
The employing company may terminate the
Executive Director’s employment with immediate
effect by payment in lieu of notice.
The Executive Director will be paid a sum equal to six
months’ base salary if the employing company
chooses to enforce the restrictive covenants
referenced below.
Upon termination of employment other than for
cause, the Executive Director is entitled to a
severance payment equal to six months’ base salary
in addition to any notice pay or payment in lieu of
notice.
Post-termination restrictive covenants apply for a
period of one year following termination of
employment.
Non-Executive Directors
One month’s notice by
either party.
Fees and expenses
accrued up to
termination only.
Not applicable.
Under the LTI and STI if an executive director leaves, the Board, after considering the recommendation of the
Remuneration Committee, the default position is that no payment will be made or any outstanding share
awards will lapse except in certain circumstances. In order to receive a payment under the STIP or unvested
LTI awards the Board needs to exercise its discretion, within the rules of each plan to grant Good Leaver status.
This can be granted in certain circumstances including for example the director leaving for reasons of ill-health,
redundancy, retirement or death and other circumstances as determined by the Committee. Executive
directors leaving with Good Leaver status will receive a bonus payment as determined under the STI scheme,
and, subject to performance conditions, a pro-rata amount of their LTI shares. The pro-ration is calculated
according to what proportion of the performance period the executive director spent in company service. If
Good Leaver status is not granted to an executive director, all outstanding awards made to them under the
STI and LTI will lapse.
Discretion, flexibility and judgment of the Remuneration Committee
The Remuneration Committee operates under the Remuneration Policy, which includes flexibility in a number
of areas. These include:
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
the timing of awards and payments;
the size of an award, within the maximum limits;
the participants of the plan;
the performance requirements and maximum percentages of salary to be used for the Short-term
Incentive Plan and the Long-term Incentive Plan from year to year;
the performance conditions, performance periods and vesting periods for awards under the Long-term
Incentive Plan from year to year;
the assessment of whether performance requirements and/or conditions have been met;
the treatment to be applied for a change of control or significant restructuring of the Group;
the determination of a good/bad leaver for incentive plan purposes and the treatment of awards
thereof; and
the adjustments, if any, required in certain circumstances (e.g. rights issues, corporate restructuring,
corporate events and special dividends).
Legacy arrangements
In approving this policy, authority will be given to the Company to honour commitments paid, promised to be
paid or awarded to: (i) current or former Directors prior to the date of this policy being approved; and (ii) to
an individual (who subsequently is appointed as a Director of the Company) at a time when the relevant
individual was not a Director of the Company and, in the opinion of the Remuneration Committee, was not in
consideration of that individual becoming a Director of the Company, even where such commitments are
inconsistent with the provisions of this policy.
Outstanding vested awards under the Company’s previous 2009 international employee share option plan
remain eligible for exercise in accordance with their terms.
Shareholder approval of share plans
This policy includes any new employee share plans or amendments to existing share plans approved by
Shareholders which may be applicable to this policy period.
Consideration of Shareholder views
The Remuneration Committee and the Board will consider Shareholder feedback received in relation to the
AGM each year at a meeting immediately following the AGM and any action required will be incorporated into
Wizz Air Holdings Plc Annual report and accounts 2021
89
the Remuneration Committee’s business plan for the ensuing period. This, and any additional feedback
received from Shareholders from time to time, will then be considered by the Remuneration Committee and
as part of the Company’s annual review of remuneration arrangements.
Specific engagement with major Shareholders may be undertaken when a significant change in Remuneration
Policy is proposed. During the year the Committee consulted with shareholders to understand the vote from
last year’s remuneration report and has engaged with shareholders to discuss the future remuneration policy
for our CEO, the senior leadership pay and all employees. As stated in the chairman’s letter we have met with
over 50% of Ordinary Shareholders to discuss changes in our policy and specifically in respect of arrangements
to retain and incentivise our CEO. The feedback from our discussions has been taken into account and we
remain in discussion to confirm our final proposals.
Annual Report on Remuneration
The members of the Remuneration Committee during F21 were Barry Eccleston (Chairman) and Peter
Agnefjäll (both in September 2020) and Charlotte Andsager who joined in November 2020. Following the
year-end, Peter Agnefjäll stepped down from the Committee and the Board and was subsequently replaced
by Enrique Dupuy de Lome Chavarri on the Committee, effective from 30 March 2021.
The Remuneration Committee is responsible for setting the Remuneration Policy for all Executive Directors
and the Chairman, including pension rights and any compensation payments, and recommending and
monitoring the remuneration of the senior managers. Non-Executive Directors’ fees are determined by the full
Board. A summary of the Remuneration Committee’s terms of reference can be found on our corporate
website, corporate.wizzair.com. Further details about the Remuneration Committee are set out on pages 72
to 73 of the Corporate Governance Report.
In order to monitor the consistency between the remuneration of the CEO and his direct reports, the
Remuneration Committee is frequently updated and consulted on any remuneration changes. All external hires
and internal promotions to senior-level positions require the prior approval of the Remuneration Committee
on their future remuneration package. Only after the approval is received can the offer be extended to the
candidate. The Remuneration Committee is also consulted on and needs to approve remuneration changes
for existing senior Executives. This includes salary revisions linked to new market benchmark information as
well as revisions arising from internal organisational changes.
József Váradi, the Chief Executive Officer, Johan Eidhagen, the Chief People Officer, and Marion Geoffroy, the
Chief Corporate Officer and Company Secretary, and Stephen L. Johnson, Non-Executive Director attend
meetings by invitation and assist the Remuneration Committee in its deliberations as appropriate, though they
are not present when their own compensation is discussed.
The Remuneration Committee is advised by Willis Towers Watson, as appointed by the Remuneration
Committee. Willis Towers Watson were re-contracted as remuneration consultant following a competitive
tender process in 2020. They attend Committee meetings as and when required. During F21, Willis Towers
Watson received fees based on time and materials totalling £334,079 for advice to the Remuneration
Committee related to the Remuneration Policy, governance, developments in Executive pay, benchmarking
and performance analysis. Besides support on remuneration advice, no other services were provided by Willis
Towers Watson to the Company in F21.
Willis Towers Watson is a member of the Remuneration Consultants Group and, as such, voluntarily operates
under the Remuneration Consultants Group Code of Conduct in relation to Executive remuneration consulting
in the UK. The Remuneration Committee is satisfied that Willis Towers Watson offers independent, impartial
and objective advice and brings a high degree of expertise to the Remuneration Committee’s discussions.
Shareholders’ vote on remuneration
At the 2020 AGM the Annual Report on Remuneration and the Chairman's Statement were put forward for an
advisory vote which was supported by 48.37 per cent of the Shareholders. Upon appointment, the newly
constituted Remuneration Committee engaged with key Shareholders to understand the rationale behind
voting last year. The Company received feedback from Shareholders that the main concerns at the time of
voting related to discretion used to award the F20 STIP payment to Senior Management and the total time
horizon of the Company’s LTIP. While the Board remains satisfied that the F20 STIP outcome for Senior
Management was an equitable one that was designed to reflect the underlying performance of the business
and the experience of our Shareholders, it acknowledges and respects the views expressed by Shareholders
in their opposition to the resolution. This feedback has been considered and the Committee took the decision
to delay payment of the F20 STIP award by a year to May 2021.
Wizz Air Holdings Plc Annual report and accounts 2021
90
Details of the voting outcomes are provided in the table below:
Votes for
Votes against
Total votes
Votes withheld
Annual Report on Remuneration
(2020 AGM)
Annual Report on Remuneration
(2019 AGM)
34,412,174
36,735,491
71,147,665
108,709
48.37%
51.63%
46,567,891
6,661,874
53,229,765
490,550
87.48%
12.52%
Executive Directors’ remuneration
Full details of the Chief Executive Officer’s remuneration for F21 are set out below (in Euros):
Single total figure of remuneration table – audited
Fees and
salary
€
517,980
Benefits
€
STIP
€
LTIP
€
—
—
1,102,429
2021
József Váradi
Pensio
n
€
—
Total
€
Total fixed
remuneration
€
517,980
Total variable
remuneration
€
1,102,429
1,620,409
2020
656,389
533
532,714
1,451,030
—
2,640,666
656,922
1,983,744
The Chief Executive Officer has voluntarily accepted a 22 per cent average reduction of base salary for F21
from his contracted base salary of €664,050 in response to COVID-19 resulting in a total of €517,980 salary.
There were no benefits provided to the Chief Executive Officer in 2020 other than four free return tickets
usable on the route network of the Group, the value of which is estimated to be €533 in total. The LTIP for F20
reflects the award with performance period ending in March 2020 and has been calculated using a closing
share price of £36.56 on 3 June 2020 and an FX GBP/EUR rate of 0.89. The LTIP for F21 reflects the award
with performance period ending March 2021 and has been calculated on the 20,052 shares that are to vest in
June 2021 using the Q4 average share price of €54.98, to be amended upon vesting in the summer of 2021.
The value of the LTIP for F21 which is attributable to share price appreciation is €383,765.
The 2021 financial year was fully dominated by the global COVID-19 pandemic which significantly affected the
entire aviation industry. As a consequence, the Management team of the Company had to act in crisis mode.
This new reality made it impossible to predict accurately over a one-year period what the business would look
like given the unprecedented decline in demand due to travel restrictions and lack of willingness to travel in
continually changing circumstances. Therefore, the Remuneration Committee took the decision to approve
targets for the annual STIP on a quarterly basis rather than on a yearly basis. Those targets have aggregated
over the year into a short-term incentive pay-out of the four quarters combined according to the normal
schedule for the financial year. Due to the ongoing crisis, STIP consisted of stricter targets than in a normal
financial year with a cap at 100 per cent target achievement for the quarter versus the regular cap of 200 per
cent. The bottom range also went down to 50 per cent; hence, the range on each target has been between 50
per cent and 100 per cent. The threshold target for 50 per cent was set as a 5 per cent downward collar on
the target for 100 per cent achievement. The Chief Executive Director has been measured for his STIP pay-out
against one performance KPI: total Company’s cash. More information on the target and achievement result
can be found in the table below. No payment is made below target level of achievement.
Cash target (in € million)
Actual (in € million)
Achievement %
Q1
1,540
1,563
100%
Q2
1,200
1,231
100%
Q3
1,263
1,202
—%
Q4
1,557
1,617
100%
Although targets were achieved in three out of the four quarters based on the cash targets above,
management’s recommendation and the discretionary decision of the Remuneration Committee was to pay
no STIP for F21 to the Chief Executive Officer or any other employee eligible for the scheme. This voluntary
decision of the Management is in line with the overall industry and Company performance in the last twelve
months which was heavily impacted by the COVID-19 pandemic and the significant drop in air traffic.
In May 2021 the Chief Executive Officer received the deferred STIP pay-out for the prior financial year, F20.
Due to the COVID-19 pandemic the Remuneration Committee decided last year to approve a STIP award of
€532,714 to the CEO but defer it in order to preserve the Company’s cash. Originally the decision envisioned
the pay-out to happen in two instalments: 50 per cent to be paid in November 2020 and the additional 50 per
cent in May 2021. However, as the pandemic continued to evolve throughout 2020 and the business was not
able to recover within the expected timeframe, the Remuneration Committee cancelled the November pay-
out and moved the total compensation of the STIP to May 2021.
The evaluation of the Chief Executive Officer’s personal performance during F21 has been mainly measured
against his response and leadership shown during the COVID-19 pandemic. He has managed the crisis as it has
evolved over the course of the full financial year by winding down operations in an efficient and orderly manner
due to flight restrictions enforced across all markets, and focusing on preserving the Company’s strong cash
position.
At the same time the Company has been successful in identifying the right expansion opportunities and
entered into new markets. Wizz Air opened its Abu Dhabi Air Operator’s Certificate holder (AOC) and started
Wizz Air Holdings Plc Annual report and accounts 2021
91
successful operations in December 2020. In addition to the new AOC, during F21 the Company also expanded
its operations by opening new bases in old and new markets, thus reaching 43 operating or announced bases
in 21 countries. The expansion resulted in delivering cash in these challenging times.
The Chief Executive Officer also dedicated focus and attention throughout the year to listen to the employee
feedback. A Company-wide engagement survey was launched in November 2020 with a record high
participation rate of 79 per cent. The results of the survey showed a strong overall satisfaction of the
employees with Wizz Air as an employer – 81 per cent engagement score (46 employee Net Promoter Score).
Significant progress has been made as well in the area of diversity, especially gender diversity. In this past
financial year, the Company improved Board diversity by 9pp reaching 30 per cent. Leadership diversity
improved 10pp to reach 27 per cent. Office female gender diversity stayed at 37 per cent. Flight crew female
ratio reached 4 per cent and Cabin Crew 75 per cent.
The third award under the LTIP (of 250 per cent of base salary) was made to the Chief Executive Officer during
F18 (in June 2017). This award included 70,698 Performance Options, valued at £22.00 per option share at the
date of grant. Vesting was subject to the following performance criteria:
a) relative total shareholder return (TSR) growth versus selected European airlines (50 per cent weighting)
-
-
25 per cent of the portion of the award subject to TSR will vest for median performance and 100 per
cent of the portion of the award subject to TSR will vest for performance equal to or exceeding the
upper quartile. There will be no vesting of this portion for performance below median and linear
interpolation will apply for performance between the median and upper quartile.
The TSR group consists of the following entities: Ryanair and easyJet (50 per cent. weighting); Air
France-KLM, Air Berlin, Deutsche Lufthansa, Finnair, Flybe, IAG and SAS (50 per cent. weighting). Aer
Lingus has been removed from the group following acquisition by IAG and subsequent delisting in
September 2015.
b) absolute fully diluted earnings per share (EPS) growth of the Company (50 per cent weighting).
-
-
The EPS threshold, target and maximum average annual growth rates were revised versus the June
2016 grant to 25 per cent, 28 per cent and 31 per cent, respectively.
25 per cent of the portion of the award subject to EPS will vest for threshold performance, 50 per
cent of the portion of the award subject to EPS will vest for target performance and 100 per cent of
the portion of the award subject to EPS will vest for maximum performance with straight line vesting
in-between these points.
However, the first criterion (TSR growth) was fully met, Wizz Air measured at 50.2 per cent. The peer group
consisted of easyJet, Ryanair, Air France – KLM, Air Berlin, Lufthansa, Finnair, IAG and SAS. Flybe Group has
been excluded. The peer group median TSR was at -48.3 per cent with the upper quartile at -39.9 per cent.
The second criterion (EPS growth) was not achieved for a second year in a row. The fully diluted EPS in EUR
during F20 was 2.22 while in F18 it was 1.79. As a result the implied EPS CAGR was only 7.5 per cent. 35,349
options vested in June 2020 (being 50 per cent of the total grant).
The fourth award under the LTIP (of 250 per cent of base salary) was made to the Chief Executive Officer
during F19 (in May 2018). This award included 40,103 Performance Options, valued at £31.44 per option share
at the date of grant. Vesting is due in June 2021. The award is subject to the following performance criteria:
a) relative total shareholder return (TSR) growth versus selected European airlines (50 per cent weighting):
-
-
25 per cent of the portion of the award subject to TSR will vest for median performance and 100 per
cent of the portion of the award subject to TSR will vest for performance equal to or exceeding the
upper quartile. There will be no vesting of this portion for performance below median and linear
interpolation will apply for performance between the median and upper quartile.
The TSR group consists of the following entities: Ryanair and Easyjet (50 per cent. weighting); Air
France-KLM, Air Berlin, Deutsche Lufthansa, Finnair, Flybe, IAG and SAS (50 per cent. weighting). Aer
Lingus has been removed from the group following acquisition by IAG and subsequent delisting in
September 2015.
b) absolute fully diluted earnings per share (EPS) growth of the Company (50 per cent. weighting):
-
-
The EPS threshold, target and maximum average annual growth rates were set to 11 per cent, 19 per
cent and 26 per cent, respectively.
25 per cent of the portion of the award subject to EPS will vest for threshold performance, 50 per
cent of the portion of the award subject to EPS will vest for target performance and 100 per cent of
the portion of the award subject to EPS will vest for maximum performance (with straight line vesting
in-between these points).
- Under the Long-term Incentive Plan, the award vesting at the end of F21 will pay-out at 50 per cent
of maximum. As the Company hasn’t been profitable since the beginning of COVID-19, the EPS
Wizz Air Holdings Plc Annual report and accounts 2021
92
condition under the award was not achieved, but due to the strong performance of the Wizz Air share
price beyond that achieved at competing airlines, the relative total shareholder return (TSR) condition
was achieved in full, translating to 46.6 per cent – resulting in an award payment of 50 per cent of
maximum. The median of the peer group was -33.5 per cent and the upper quartile was -14.2 per cent.
The sixth award under the LTIP (of 250 per cent of base salary) was made to the Chief Executive Officer during
F21 (in June 2020). This award included 42,562 Performance Options, nil-cost options, valued at £34.75
(€39.04) per option share at the date of grant – the face value of this award is €1,660,123. Vesting is due in
June 2023 and is subject to only one criteria which is the TSR growth vs selected European airlines. The
performance period will be three years from the grant date. The TSR group will consist of the following entities:
Ryanair and easyJet (50 per cent weighting); AirFrance-KLM, Deutsche Lufthansa, Finnair, IAG and SAS (50
per cent weighting). 25 per cent of the award will vest for median performance and 100 per cent of the award
will vest for performance equal to or exceeding the upper quartile. There will be no vesting for performance
below median and linear interpolation will apply for performance between the median and upper quartile.
The Chief Executive Officer no longer holds any options from the Company’s previous employee share option
plan (ESOP), under which options were issued in the calendar years 2005–2011. The CEO did not exercise any
of his vested options in F20 or F21.
The following performance graph shows the Company’s total shareholder return compared to the FTSE 250
index for the last five financial years following IPO. TSR is defined as share price growth plus reinvested
dividends.
Historical TSR performance1 – Value of hypothetical £100 holding
1 Growth in the value of a hypothetical £100 holding over six years, in comparison with the FTSE 250 and the Airline peer
group used for measurement of relative TSR. Data based on one-month average of trading day values. Source: S&P Capital
IQ.
The graph above compares the TSR performance of the Company since IPO with the TSR of the FTSE 250
Index. This graph is re-based to 100 at the start of the relevant period. As a constituent of the FTSE 250, this
index represents an appropriate reference point for the Company. To provide Shareholders with additional
context we have also included a “TSR Airlines Average” reflecting the TSR of the comparator group used for
the TSR measurement under the LTIP awards including easyJet, Ryanair, AirFrance-KLM, Lufthansa, Finnair,
IAG, SAS. Information is also included on a comparison to the FTSE 100 given Wizz Air’s fully diluted market
capitalisation would place it within the FTSE 100 index.
Wizz Air Holdings Plc Annual report and accounts 2021
93
In the tables below we provide a ten-year overview of the Chief Executive Officer’s remuneration and the
change in the Chief Executive Officer’s remuneration compared to that of all employees.
Ten-year overview of Chief Executive Officer remuneration
Financial year
F12
F13
F14
F15
F16
F17
F18
F19
F20
F21
Single figure
of total
remuneration
Euro
764,460
533,398
1,462,212
1,607,587
1,812,883
1,240,812
1,281,304
4,056,438
2,640,666
1,620,409
Performance
STIP
achieved
against
maximum
possible
100%
0%
97%
91%
95%
48%
58%
26%
40%
0%
LTIP shares
vesting
against
maximum
possible*
100%
n/a
n/a
n/a
n/a
n/a
n/a
100%
50%
50%
* There were no options vesting in F16–F18 under either the old (ESOP) or the new (LTIP) share option plan.
Change in the remuneration of the Chief Executive Officer compared to that of all other employees
The table below shows the year-on-year percentage change in salary, benefits and annual STIP earned
between the year ended 31 March 2021 and the year ended 31 March 2020 for the Directors, compared to the
average earnings of all other Wizz Air employees.
Chief Executive Officer
William A. Franke
Stephen L. Johnson
Simon Duffy
Andrew S. Broderick
Barry Eccleston
Peter Agnefjäll
Maria Kyriacou
Guido Demuynck*****
Susan Hooper******
Charlotte Pedersen***
Enrique Dupuy de Lome Chavarri****
Charlotte Andsager****
Average pay based on all employees**
Salary
(22%)
(20%)
(21%)
(21%)
(14%)
(27%)
(26%)
(26%)
(83%)
(87%)
—
—
—
(42%)
Benefits*
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Annual STIP
(100%)
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
(100%)
*
Benefits represent an insignificant part of the total compensation both for the CEO and the employees. The Non-Executive Directors
do not receive any benefits.
The Average employee figures are based on the average earnings of Group level employees as Wizz Air Holdings Pls has no employees.
Joined as of 2 June 2020.
Joined as of 4 November 2020.
**
***
****
***** Resigned as of 28 July 2020
****** Resigned as of 3 June 2020.
The 22 per cent decrease in the Chief Executive Officer’s base salary reflected the voluntary reduction that he
accepted as a response to the pandemic. The lack of STIP payment for F21 resulted in a 100 per cent decrease
of the Short-term Incentive Plan for the Chief Executive Officer versus the previous financial year.
As part of the COVID-19 cost saving actions, the Non-Executive Directors, in line with the senior management’s
response to the pandemic, have taken no fees for the month of April 2020 and reduced all fees by 15 per cent
between 1 May 2020 and 31 March 2021 which has resulted in an overall drop in their annual compensation. As
part of the Company’s initiative to preserve cash during the COVID-19 pandemic, broad salary reduction
principles were introduced across all employee groups. In addition to the Chief Executive Officer, all members
of the senior management were asked to accept a 22 per cent reduction on their annual salaries. They received
in April 2020 a minimum wage salary in line with the country-specific labour legislation which they all donated
to the Wizz Air Foundation. The remaining eleven monthly salaries were reduced by 15 per cent. At Head of
Function level the April 2020 base salary was reduced by 50 per cent and the subsequent salaries by 15 per
cent. All Office employees had a 33 per cent cut on their April 2020 salary and 13 per cent cut on the base
salaries starting from May 2020. The Cabin Crew compensation was reduced by overall 11 per cent which was
reflected only in the variable compensation and not in the base salary. The pilots received a 15 per cent overall
reduction which has been spread across their base salary as well as variable payment. The senior management
took a decision in December 2020 to restore back to pre-COVID-19 levels of the compensation of the Cabin
Crew and Office employees – Heads of Function and below. Thus, the salary reduction for those groups was
Wizz Air Holdings Plc Annual report and accounts 2021
94
applied in the period between April and December 2020. The reduction for the senior management and the
pilots remained until the end of the financial year.
The decision not to pay-out STIP in F21 was extended beyond the Chief Executive Officer and affected all
employees in scope of the STIP policy. Salary and fees decreased due to the implemented COVID-19 salary
reduction across all employee groups. Total employee remuneration changed from €174 million in F20 to €101
million in F21, being a 42 per cent decrease year on year. This was driven also by the 20 per cent decrease in
employee numbers as a result of the mass redundancy in April 2020.
There were no dividends or share buybacks in either F21 or F20, and therefore disclosure of “relative
importance of spend on pay” has not been included.
Non-Executive Director remuneration
The Chairman and Non-Executive Directors are paid only Directors’ fees. The full details of the annual
compensation of the Non-Executive Directors are set out below:
Single total figure of remuneration table – audited
Fees and salary
€
Benefits
€
STIP
€
LTIP
€
Pension
€
Total
€
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
William A. Franke
Stephen L.
Johnson
Simon Duffy
John R. Wilson*
Guido Demuynck**
Susan Hooper***
Andrew S.
Broderick
Barry Eccleston
Peter Agnefjäll
Maria Kyriacou
Charlotte
Pedersen****
Enrique Dupuy de
Lome Chavarri*****
Charlotte
Andsager*****
Total
183,104
230,104
61,625
78,125
84,026
106,276
—
1,333
14,521
85,365
10,625
83,125
61,625
71,875
69,594
95,625
61,625
61,625
83,125
83,125
55,250
31,663
31,663
—
—
—
726,946
918,078
*
**
***
****
*****
Resigned as of 16 April 2019.
Resigned as of 28 July 2020.
Resigned as of 3 June 2020.
Joined as of 2 June 2020.
Joined as of 4 November 2020.
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
183,104 230,104
—
—
—
—
—
—
—
—
—
61,625
78,125
84,026
106,276
—
1,333
14,521
85,365
10,625
83,125
61,625
71,875
69,594
95,625
61,625
83,125
61,625
83,125
—
55,250
—
—
31,663
31,663
—
—
—
— 726,946 918,078
Total Directors’ remuneration (Executive and Non-Executive) (audited)
Total remuneration of Directors for F21 was €2,695,955 (2020: €3,716,241). This is the sum of the total Chief
Executive Officer’s compensation and the total fees and salaries paid out to the Non-Executive Directors. The
decrease versus F20 was driven by three factors: the voluntary COVID-19 reduction on the Chief Executive
Officer’s base salary (22 per cent reduction) and on the Non-Executive Directors’ fees (15 per cent reduction),
the €nil STIP payout as a result of the overall industry and business performance throughout the year and the
lower amount of 2017 LTIP options of the Chief Executive Officer vesting in F21 (in June 2020) versus 2016
LTIP options vesting in F20 (in July 2019).
Our Conflict of Interest policy prohibits any other employment (for all employees) on top of the employment
at Wizz. Therefore in case of the Chief Executive Officer any additional directorship would require specific
permission of the Chairman of the Board. The Chief Executive Officer joined the board of JetSMART SpA in
March 2018 as a non-executive director, with the approval of the Board. The Chief Executive Officer does not
receive any fee for his role as a non-executive director of JetSMART.
Directors’ shareholdings
The Chief Executive Officer holds a significant shareholding in the Company through a family trust and is also
eligible to participate in the Company’s Long-term Incentive Plan.
Wizz Air Holdings Plc Annual report and accounts 2021
95
The Company therefore believes that the interests of the Directors are well aligned with those of the
Shareholders. Full details of the Directors’ and their connected persons’ interests in the Company’s shares as
at 31 March 2021 are set out below:
Directors and connected persons’ interests in shares – audited
Director1
William A. Franke2
József Váradi3,4
Simon Duffy
Stephen L. Johnson
Guido Demuynck
Barry Eccleston
Direct
ownership
Number of
Ordinary
Shares
112,917
—
7,097
52,750
5,250
5,000
Interests
Number of Ordinary
Shares
7,382,442
1,544,144
831
—
—
—
Number of
Convertible
Shares
17,377,203
—
—
—
—
—
Total Ordinary Share
interests
7,495,359
1,544,144
7,928
52,750
5,250
5,000
1 Directors not included in the table did not have any direct ownership or interest in shares as at 31 March 2021.
2 Mr Franke is deemed to be interested in all of the Ordinary Shares and Convertible Shares held by Indigo Hungary LP, Indigo
Maple Hill LP, Indigo Hungary Management LLC and Bigfork Partners LLC for the purposes of section 96B of the Financial
Services and Markets Act 2000. Indigo Hungary LP and Indigo Maple Hill LP also hold Convertible Notes that, subject to
certain conditions, are convertible to Ordinary Shares of the Company.
3 Mr Váradi has 151,789 LTIP shares vested but not exercised yet, additionally to his 1,544,144 Ordinary Shares.
4 Mr Váradi is deemed to be interested in the Ordinary Shares held by his family trust companies.
There are currently no shareholding requirements to the Non-Executive Directors and there has been no
change to the interests of each of the Directors set out above since 31 March 2021 to the date of the notice of
the 2021 AGM. The CEO already has a significant number of shares over and above the normal requirements
of such shareholding guidelines.
Application of the Remuneration Policy in F22
a) Chief Executive Officer’s base salary
There is no planned increase to the Chief Executive Officer’s base salary for F22. The Remuneration Committee
has reviewed and benchmarked the salary components and kept a positive dialogue with the Chief Executive
Officer in regard to his compensation. The 7.5% reduction will continue to apply but will be reviewed by the
Committee when appropriate but no further increases to base pay are intended until the Company has repaid
its Bank of England loans.
b) Short-term Incentive Plan
As a result of the business uncertainty caused by COVID-19, the Remuneration Committee agreed in F21 to
proceed with quarterly annual STIP targets. The intention is to continue this approach in F22. The
Remuneration Committee has agreed to set a Q1 target for F22 where the actual cash STIP received will
depend on the achievement level of cash at the end of June 2021 as the single criterion. For the balance of F22
the performance criteria will be decided ahead of each quarter and are likely to include a focus on cash but
may also include reference to other metrics as determined by the Remuneration Committee to be appropriate
at that time. Targets for award are not yet disclosed due to commercial sensitivity but will be disclosed
retroactively in next year’s Remuneration Report.
c) Long-term incentive awarded to Chief Executive Officer
As referenced in the Chairman’s letter we are currently in consultation with Shareholders on the most
appropriate long-term incentive offering to retain and motivate our Chief Executive Officer. If the
Remuneration Committee does proceed with an alternative structure the precise parameters of a new
incentive plan including quantum and performance criteria for our current CEO will be detailed in full in the
Notice of Meeting for the 2021 AGM, as shareholder consultation on the matter is on-going. We can commit
that the alternative framework under discussion will focus on building sustainable value in the business; place
an emphasis on financial and non-financial performance measures; and, align with the principles of simplicity
and transparency.
d) Chairman and Non-Executive Directors’ fees
Since the changes made following the review of the Non-Executive Directors’ fees in F19 against external
benchmarks, no change has been made to the fees. The Non-Executive Director fee remains at €30,000 per
annum and the Board attendance fee at €5,000 for each full Board meeting attended, for the financial year
ending 31 March 2022.
Simon Duffy, as Chairman of the Audit and Sustainability Committee, receives an additional fee of €18,750 per
annum for taking on that role. Barry Eccleston, as Chairman of the Remuneration Committee, receives an
additional fee of €12,500 per annum for taking on that role. Simon Duffy, as Senior Independent Director,
receives an additional fee of €10,000 per annum. Barry Eccleston, as Independent Non-Executive Director
overseeing engagement with employees, also receives an additional fee of €2,500 per employee engagement
event attended.
In addition, William A. Franke, as Chairman, will continue to receive a fee of €235,000 (all inclusive) per annum
for taking on that role.
Wizz Air Holdings Plc Annual report and accounts 2021
96
The Non-Executive Directors will also be reimbursed for all proper and reasonable expenses incurred in
performing their duties.
Since the Company’s performance is still significantly impacted by the COVID-19 pandemic, the Board has
taken a decision to continue applying a reduction on the annual fees paid to the Non-Executive Directors. The
reduction is capped at 7.5 per cent for the duration of the full F22 and is aligned with the reduction on the
Chief Executive Officer’s base salary for the same financial period.
Other disclosures
Chief Executive pay ratio
The table below sets out the Chief Executive pay ratios using a years’ worth of remuneration up to and
including March 2021 payroll. The ratios compare the single total figure of remuneration of the Chief Executive
with the equivalent figures for the lower quartile (P25), median (P50) and upper quartile (P75) UK employees.
We have used the Option A methodology which uses actual earnings for the Chief Executive Officer and
employees over the financial year to provide the most accurate comparison. The total FTE remuneration paid
during the year for each employee was calculated on the same basis as the information set out in the ‘single
figure’ table for the Chief Executive on page 91.
In calculating the figures, the following considerations were made:
(cid:1) The single total figure of remuneration of our colleagues was calculated using a years’ worth of
remuneration up to and including March 2021 payroll.
(cid:1) Where employees joined part way through the reporting period, pay was pro-rated to determine the full
year equivalent.
(cid:1) This data then identified those employees at the 25th (lower quartile), 50th (median) and 75th (upper
quartile) percentile points.
Financial year
Ratio
All employees
Quantum (EUR)
All employees
F21
P25 (Lower Quartile)
Total remuneration
P50 (Median)
P75 (Upper Quartile)
80:1
62:1
37:1
€ 24,569
€ 31,587
€ 53,903
F21 is the first time Wizz Air disclose the Chief Executive Pay Ratio; therefore, the year on year comparison is
not available. Unlike the total remuneration for the majority of employees, total remuneration for the Chief
Executive is mostly dependent on business and share price performance over time. As a result, our ratios in
the future may vary from year to year. In the case of the pay ratios for F21, the calculations reflect both the
impact of the reduced total pay levels for employees during the furlough period and the corresponding
voluntary salary decreases and significant total pay opportunity reductions for the Chief Executive Officer and
is consistent with our companies reward policy rewarding senior leadership with greater variable pay and
incentives.
Directors’ service agreements and letters of appointment
Executive Director
The Chief Executive Officer’s service agreement with Wizz Air Holding Plc CJSB Geneva branch has been
extended as of 1 January 2021, subject to earlier termination upon six months’ notice by either party or the
introduction of a new contract to replace the terms of the current one. In addition to the contract extension,
Mr Váradi has been also seconded to Wizz Air UK Limited in the United Kingdom effective as of 1 December
2020. The secondment is for a period of 24 months from the effective date with a principal place of work
being London, the United Kingdom, instead of Budapest, Hungary. During the secondment the employer
continues to be Wizz Air Holdings Plc and specifically its Swiss branch. No further changes were made to the
original service agreement. The Company continues to have the right to terminate Mr Váradi’s employment
with immediate effect by payment in lieu of notice. The service agreement contained post-termination
restrictive covenants preventing Mr Váradi from competing with WAHL or any of its business partners in the
EU as well as those non-EU countries where WAHL operates, for a period of one year following the termination
of his employment. Mr Váradi will be paid a sum equal to six months’ base salary if the Company chooses to
enforce these restrictive covenants. Upon termination of employment other than for cause, Mr Váradi is
entitled to a severance payment equal to six months’ salary in addition to any notice pay or payment in lieu of
notice.
Non-Executive Directors
The Company entered into letters of appointment with Mr William A. Franke, Mr Simon Duffy and Mr Stephen
L. Johnson on 4 June 2014, which became effective on completion of the IPO for a term of three years. This
term was extended for a further three years, effective from 2 March 2018. Mr Barry Eccleston, Mr Peter Agnefjäll
and Ms Maria Kyriacou were respectively appointed on 1 June 2018, 24 July 2018 and 25 September 2018. In
April 2019 Mr Andrew S. Broderick was appointed as a Non-Executive Director for a period of three years. Ms
Charlotte Pedersen was appointed on 2 June 2020 and both Ms Charlotte Andsager and Mr Enrique Dupuy
Wizz Air Holdings Plc Annual report and accounts 2021
97
de Lome Chavarri were appointed on 4 November 2020 as Non-Executive Directors. Mr Peter Agnefjäll
stepped down from the Board post year-end. Dr Anthony Radev was appointed effective 13 April 2021 as Non-
Executive Director.
Each Non-Executive Director’s appointment may be terminated by the Company or the Non-Executive
Director with one month’s written notice. Continuation of the appointment is contingent on continued
satisfactory performance and re-election at the Company’s annual general meetings and the appointment will
terminate automatically on the termination of the appointment by the Shareholders or, where Shareholder
approval is required for the appointment to continue, the withholding of approval by the Shareholders. Re-
appointment will be reviewed annually.
In accordance with the terms of the letters of appointment, each of the Non-Executive Directors is required to
allocate sufficient time to discharge their responsibilities effectively. Each letter of appointment contains
obligations of confidentiality which have effect both during the appointment and after termination.
Regarding the length of appointment, early in 2020, the Board agreed to move all Director contracts to a one-
year term, renewable by Shareholder vote at each AGM.
On behalf of the Board
Barry Eccleston
Chairman of the Remuneration Committee
2 June 2021
Wizz Air Holdings Plc Annual report and accounts 2021
98
GOVERNANCE
DIRECTORS’ REPORT
The Directors present their report and the audited consolidated financial statements for Wizz Air Holdings Plc
(the “Company”) and its subsidiaries (the “Group”) for the year ended 31 March 2021.
Results and dividend
The results for the year are shown on page 107.
The Directors do not recommend the payment of a dividend (2020: nil). The Directors consider that currently
the existing reserves of the Group can be best utilised in supporting the significant planned future growth of
the Group.
Directors
The Directors of the Company who were in office during the year and at the date of signing the financial
statements are listed below:
(cid:1)
József Váradi
(cid:1) William A. Franke
(cid:1) Stephen L. Johnson
(cid:1) Simon Duffy
(cid:1) Guido Demuynck (did not stand for re-election at the 28 July 2020 Annual General Meeting)
(cid:1) Susan Hooper (resigned with effect from 3 June 2020)
(cid:1) Barry Eccleston
(cid:1) Peter Agnefjäll (resigned with effect from 13 April 2021)
(cid:1) Maria Kyriacou
(cid:1) Charlotte Pedersen (appointed with effect from 2 June 2020)
(cid:1) Andrew S. Broderick
(cid:1) Charlotte Andsager (appointed with effect from 4 November 2020)
(cid:1) Enrique Dupuy de Lome Chavarri (appointed with effect from 4 November 2020)
(cid:1) Dr Anthony Radev (appointed with effect from 13 April 2021)
Going concern
Wizz Air’s business activities, financial performance and financial position, together with factors likely to affect
its future development and performance, are described in the Strategic Report on pages 6 to 50. Emerging
and principal risks and uncertainties facing the Group are described on pages 51 to 56. Note 3 to the financial
statements sets out the Group’s objectives, policies and procedures for managing its capital and liquidity and
provides details of the risks related to financial instruments held by the Group.
At 31 March 2021, the Group held cash and cash equivalents of €1,100.7 million (total cash of €1,616.6 million
including €346.8 million of short term cash deposits and €169.1 million of restricted cash), while net current
assets were €327.4 million. In legal terms, the external borrowings of the Group consist of €340.0 million
(£300 million) Commercial Paper with the Bank of England maturing in February 2022, €500 million bonds
maturing in January 2024 and convertible debt with a balance of €26.5 million. In accounting terms a further
€2,247.3 million are presented as borrowings in relation to future commitments from lease contracts.
The Directors have reviewed financial forecasts including available committed financing and plans to finance
future aircraft deliveries. After making enquiries and testing the assumptions against different forecast
scenarios, the Directors have satisfied themselves that the Group is expected to be able to meet its
commitments and obligations for a period of at least the next twelve months from the date of signing this
report.
These enquiries and testing included a base case model of how the operations of the business would gradually
emerge from COVID-19. Wizz Air has been one of the first airlines to restart operations and, whereas the airline
operated in F21 only 37.2 per cent of its capacity compared to F20, the base case assumes a gradual increase
in operation quarter on quarter, with around 35 per cent of its available capacity flying in spring and, a peak
of 75 per cent of capacity flying over summer, to reduce to 70 per cent of capacity flying during the second
half of the financial year.
In addition, the Directors have also modelled a severe but plausible downside scenario based on flying levels
compared to F20 levels of 20 per cent of flying in April, May and June 2021, 50 per cent for summer 2021 and
30 per cent for the second half of the financial year. In this scenario the Group is still forecasting significant
Wizz Air Holdings Plc Annual report and accounts 2021
99
liquidity throughout this period and there are no material uncertainties that may cast doubt on the Group's
going concern status.
Accordingly, the Directors concluded it was correct to retain the going concern basis of accounting in
preparing the financial statements.
Subsequent events
The Company informed Indigo Hungary LP and Indigo Maple Hill, L.P. (together "Indigo") on 1 June 2021 that
the Company has elected to convert Indigo's entire holding of 17,377,203 convertible shares of £0.0001 each
in the capital of the Company ("Convertible Shares") into ordinary shares of £0.0001 each in the capital of the
Company ("Ordinary Shares"), on a one for one basis, in accordance with the Company's articles of association.
Once executed the effect of the Conversion will be to increase the number of Ordinary Shares in issue from
85,635,016 to 103,012,219.
Viability
In accordance with Provision 31 of the UK Corporate Governance Code (2018), the Directors have assessed
the prospects and the viability of the Group over a three-year period to March 2024. The Directors have
determined that a three-year period is appropriate because the Group’s strategic planning process
traditionally covers three years.
Assessment of prospects
The Group’s prospects are assessed by management and the Board primarily through the strategic planning
process. This three-year plan takes into account the current position of the Group, includes a detailed annual
operating plan for the financial year starting in April of that year and then, based on that plan, builds a
sufficiently detailed bottom-up forecast for a further two financial years. The Board reviews and analyses a
base plan and a downside plan scenario and sensitivities which vary key parameters around key principal risks.
The scenarios also take account of the volatility of the current context and competitive dynamics and align on
the most plausible base plan. The scenarios are also used to generate risk mitigation plans to deal with any
downside and acceleration plans to capture the upside.
Assessment of viability
The plan takes into account the existing aircraft order book of the Group. This order book underpins the
Company’s planned growth for several years ahead, which in turn predicates the complete elimination of travel
restrictions and recovery of demand for air travel following the COVID-19 pandemic as of F22. The Directors
believe that the growth in the fleet can be easily absorbed by strong demand in existing and new markets
based on the Company’s strengths in terms of: 1) the majority of the Company’s customers being drawn from
the younger demographic segments in Central and Eastern Europe, where travel for work or to visit family and
friends is becoming an increasingly essential feature of life; 2) a low-cost base offering a sustainable
competitive advantage and allowing the Company to sustain low fares to stimulate demand; and 3) agility of
the business model designed to allow the airline to adapt its operations rapidly and flexibly and to serve the
most financially and strategically attractive point-to-point connections, all supported by a strong balance
sheet. This was evidenced by the expansion strategy of the Company during F21 where it moved from 25 to
43 operating or announced bases.
Although the strategic plan reflects management’s and the Directors’ best estimate of the future prospects of
the business, they have also tested the resilience of the business to unfavourable deviations of certain key
variables from the base case scenario. In defining these scenarios, the Directors took into account the emerging
and principal risks that could prevent the Group from delivering on its strategy and financial targets, as
summarised on pages 6 to 56 in the Strategic Report. In doing so, they paid particular attention to the potential
impact of COVID-19 on the business over the next three years, to the potential impact of climate scenarios as
outlined on pages 24 to 26, modelling these impacts in terms of revenue impact, structural economics and
balance sheet impact.
The Directors assessed these potential impacts, governmental policies and market attractiveness in key
markets were considered the most important risks in terms of both likelihood and potential impact.
The results of this stress-testing showed that, due to the Group’s strong competitive position, its healthy
operating cash flows and its existing cash reserves, it would be able to withstand the impact of these downside
scenarios over the period of the financial forecasts.
Viability statement
Based on this assessment, the Directors have a reasonable expectation that the Group will be able to continue
in operation and meet its liabilities as they fall due over the period to March 2024.
In making this statement, the Directors have made the following key assumptions:
(cid:1) Wizz Air continues to be able to finance its fleet order and lessor financing markets are resistant to longer
periods of adverse market conditions.
Wizz Air Holdings Plc Annual report and accounts 2021
100
(cid:1) The impact of COVID-19 is not more materially more significant than the severe but plausible downside
scenario testing performed. As such there will not be another year-long grounding of a substantial portion
of the fleet.
(cid:1)
Implausible scenarios do not occur. Implausible scenarios include either multiple risks impacting at the
same time or where management actions do not mitigate an individual risk to the degree assumed.
For further information on emerging and principal risks and longer-term viability please refer to pages 51 to
56.
Financial risks
The exposure of the Company to financial risks is explained in Note 3 to the financial statements. The Group’s
financial risk management objectives and policies are described on pages 126 to 134.
Environmental matters
The aviation industry has a responsibility to take steps to minimise its impact on the environment. The
Company’s ultimate goal is to ensure that by choosing to fly with Wizz Air, our customers are making the
greenest choice of air travel available. The Company’s business model is to continuously assess and implement
innovative technologies that decrease our environmental footprint. Further details on environmental matters
are outlined on pages 23 to 33.
Employee matters
Committing to diversity and equal opportunities
The Company treats its existing and potential employees fairly, regardless of anything not related to their
professional abilities and irrespective of their race, gender or age. During the recruitment and selection
process, we evaluate professional factors including experience and qualifications in light of the relevant job
requirements and this principle remains throughout employment with the Company. We expect all of our
colleagues to adhere to these same principles, which are set out in The Wizz Way and our Code of Ethics,
along with the expected standards of behaviour for every member of the WIZZ team.
Employee involvement
The Company places great value on the contributions of its employees and seeks to promote their involvement
in the business wherever possible. The Company keeps employees informed by written communications and
meetings on matters affecting them as employees and on the various factors affecting the performance of
Wizz Air. Employees are encouraged to share feedback.
Further details of employee matters are set out on pages 33 to 38.
Stakeholder engagement
Details of stakeholder engagement can be found on pages 22 to 23.
Disclosure of information to auditors
The Directors at the date of approval of the financial statements confirm that, so far as they are aware, there
is no relevant audit information of which the Company's auditors are unaware, and that they have taken all the
steps they ought to have taken as Directors to make themselves aware of any relevant audit information and
to establish that the Company's auditors are aware of that information.
Independent auditors
A resolution for the appointment of the auditors of the Company for the financial year ending 31 March 2022
is to be proposed by the Directors at the forthcoming annual general meeting.
Indemnities
The Company maintains Directors’ and Officers’ liability insurance. This insurance covers any claim that may
be brought against the Directors and Officers in the exercise of their duties. The Company has also provided
customary third-party indemnities to its Directors. These indemnity policies were in place through the year
and at the date of this report and it benefits all of the Company’s current and past Directors and is a qualifying
third-party indemnity provision for the purpose of section 236 of the Companies Act 2006 and to the extent
permitted under Jersey law.
Political donations and expenditure
Wizz Air works constructively with all levels of government across its network, regardless of political affiliation.
Wizz Air believes in the right of individuals to engage in the democratic process. However, Wizz Air itself does
not make any political donations and does not incur any political expenditure.
Capital structure
On 29 December 2020, Wizz Air Holdings Plc announced its decision to treat as Restricted Shares certain
Ordinary Shares held by Non-Qualifying Nationals and to issue to such Shareholders Restricted Share Notices
Wizz Air Holdings Plc Annual report and accounts 2021
101
(the "Disenfranchisement"). This is because from 1 January 2021 UK nationals are no longer treated as
Qualifying Nationals with regard to ongoing European airline ownership requirements, notwithstanding the
UK-EU Trade and Cooperation Agreement. Therefore, the Board has resolved to exercise its power under the
Articles to serve Restricted Share Notices on Non-Qualifying National Shareholders specifying that, from 1
January 2021, in respect of their Restricted Shares they cannot attend or speak or vote at any general meetings
of the Company. The rights to attend (whether in person or by proxy), to speak and to demand and vote on a
poll in respect of the Restricted Shares shall vest in the chairman of such meeting, who will be a director who
is a Qualifying National. Each such director will give an irrevocable undertaking not to vote any such Restricted
Shares.
The Board has determined, pursuant to the Articles, that the fairest and most appropriate method to
implement the Disenfranchisement is for the same proportion of each Non-Qualifying National's (including
each UK national's) shareholding to be designated as Restricted Shares.
As at 31 March 2021, the Company had 85,635,016 Ordinary Shares of £0.0001 each in issue, each with one
vote, and 17,377,203 Convertible Shares, which do not entitle the holder to voting rights save in very limited
circumstances. The holders of Convertible Shares are not entitled to participate in distributions made by the
Company. There were no shares held in treasury at that date. The rights and obligations attaching to the
Company’s shares are set out in the articles of association. Holders of Ordinary Shares have the following
rights:
c) subject to any rights or restrictions as to voting attached to any Ordinary Shares, on a show of hands, each
Shareholder present in person shall have one vote, and on a poll each Shareholder present in person or by
proxy shall have one vote for every Ordinary Share of which he/she is the holder;
d) a certificated share may be transferred by means of an instrument in writing, either by the usual transfer form or
in any other form that the Board approves, signed by or on behalf of the person transferring the Ordinary Shares
and, unless the Ordinary Shares are fully paid, by or on behalf of the person acquiring the Ordinary Shares.
Ordinary Shares in uncertificated form may be transferred by means of the relevant system;
e) the right to receive dividends on a pari passu basis; and
f) on a winding-up, the liquidator may divide amongst the members in specie the whole or any part of the
assets of the Company.
During the 2021 financial year 208,586 new Ordinary Shares were allotted for cash, all on a non-pre-emptive
basis. These were allotted pursuant to the exercise of share options by the employees of the Group.
The aggregate nominal value of the Ordinary Shares allotted for cash in the 2021 financial year was £20.86.
The aggregate cash consideration received by the Company for the allotment of the Ordinary Shares was
£477,375.
Ordinary Shares represent 83.1 per cent of total shares (2020: 83.1 per cent) and the remaining 16.9 per cent
of total shares (2020: 16.9 per cent) are convertible shares.
Corporate Governance Statement
The Corporate Governance Statement, prepared in accordance with rule 7.2 of the UK Listing Authority’s
Disclosure Guidance and Transparency Rules sourcebook, can be found in the Wizz Air Holdings Plc Corporate
Governance Report on page 58. The Wizz Air Holdings Plc Corporate Governance Report forms part of this
Wizz Air Holdings Plc Directors’ Report and is incorporated into it by this reference.
Wizz Air Holdings Plc Annual report and accounts 2021
102
Information required by Listing Rule 9.8.4C
In compliance with Listing Rule 9.8.4C, the Company discloses the following information:
Listing Rule
9.8.4(1)
9.8.4(2)
Information required
Interest capitalised by the Group
Unaudited financial information as required (LR 9.2.18)
9.8.4(4)
Long-term Incentive Plans (LR 9.4.3)
9.8.4(5)
Directors’ waivers of emoluments
9.8.4(6)
Directors’ waivers of future emoluments
9.8.4(7)
Non-pro-rata allotments of equity for cash (the Company)
9.8.4(8)
Non-pro-rata allotments of equity for cash (major
subsidiaries)
Contracts of significance involving a controlling Shareholder
9.8.4(10) Contracts of significance involving a Director
9.8.4(11)
9.8.4(12) Waivers of dividends
9.8.4(13) Waivers of future dividends
9.8.4(14) Agreement with a controlling Shareholder (LR
9.2.2.AR(2)(a))
For and on behalf of the Board
József Váradi
Chief Executive Officer
2 June 2021
Registered number: 103356
Relevant disclosure
N/A
Unaudited financial information
was published by the Group in
its interim management
statements (for Q1 and Q3)
and in its half-year results.
There have been no changes
to the unaudited information
previously published.
See Directors’ Remuneration
Report.
See Directors’ Remuneration
Report.
See Directors’ Remuneration
Report.
See paragraph headed “Capital
structure” in this report.
N/A
N/A
N/A
N/A
N/A
See Corporate Governance
Report.
Wizz Air Holdings Plc Annual report and accounts 2021
103
GOVERNANCE
COMPANY INFORMATION
Registered number
103356
Registered office
44 The Esplanade
St Helier
Jersey
JE4 9WG
Secretary
Elian Corporate Services (Jersey) Limited
44 The Esplanade
St Helier
Jersey
JE4 9WG
Independent auditors
PricewaterhouseCoopers LLP, Chartered
Accountants and Statutory Auditors
1 Embankment Place
London
WC2N 6RH
United Kingdom
Principal bankers
Citibank
Citigroup Centre
25 Canada Square
Canary Wharf
London
E14 5LB
United Kingdom
Share registrar
Computershare Investor Services (Jersey)
Limited
Queensway House
Hilgrove Street
St Helier
Jersey
JE1 1ES
Financial public relations
FTI Consulting
200 Aldersgate Street
London
EC1A 4HD
United Kingdom
Joint corporate brokers
Barclays Bank PLC
1 Churchill Place
London
E14 5HP
United Kingdom
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London
E14 5JP
United Kingdom
Wizz Air Holdings Plc Annual report and accounts 2021
104
GOVERNANCE
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE
FINANCIAL STATEMENTS
The Directors are responsible for preparing the financial statements in accordance with applicable law and
International Financial Reporting Standards as adopted by the EU.
Companies (Jersey) Law 1991 requires the directors to prepare financial statements for each financial year,
which give a true and fair view of the state of affairs of the Group and the profit and loss for that year.
In preparing those financial statements the directors should:
(cid:1)
select suitable accounting policies and then apply them consistently;
(cid:1) make judgements and estimates that are reasonable and prudent;
(cid:1) prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Group will continue the business; and
(cid:1)
state whether applicable accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements.
The Directors confirm they have complied with all the above requirements in preparing the financial
statements.
The Directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy
at any time the financial position of the Group and to enable them to ensure that the financial statements
comply with the Companies (Jersey) Law 1991 and the Directors’ Remuneration Report complies with the
Companies Act 2006 as if the company were a quoted company under the United Kingdom Companies Act
2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and other irregularities.
So far as the Directors are aware, there is no relevant audit information of which the Group’s auditors are
unaware, and each Director has taken all the steps that he or she ought to have taken as a director in order to
make himself or herself aware of any relevant audit information and to establish that the Group's auditors are
aware of that information.
Each of the directors, whose names and functions are listed in the Corporate Governance Report on page 99
confirm that, to the best of their knowledge:
(cid:1)
(cid:1)
the Group’s financial statements, which have been prepared in accordance with the International Financial
Reporting Standards as adopted by the EU, give a true and fair view of the assets, liabilities, financial
positions and loss of the Group; and
the Financial Review section in the Strategic Report on page 42 includes a fair review of the development
and performance of the business and the position of the Group. The Emerging and Principal Risks and
Uncertainties section in the Strategic Report contains a description of the principal risks and uncertainties
that the Group faces.
On behalf of the Board
József Váradi
Director
2 June 2021
Wizz Air Holdings Plc Annual report and accounts 2021
105
ACCOUNTS
AND OTHER
INFORMATION
Wizz Air Holdings Plc Annual report and accounts 2021
106
ACCOUNTS AND OTHER INFORMATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2021
Continuing operations
Passenger ticket revenue
Ancillary revenue
Total revenue
Staff costs
Fuel costs (including exceptional expense)
Distribution and marketing
Maintenance materials and repairs
Airport, handling and en-route charges
Depreciation and amortisation
Net other expenses
Total operating expenses
Operating (loss)/profit
Comprising:
- Operating (loss)/profit excluding exceptional expense
-
Exceptional expense (included in fuel costs)
Financial income
Financial expenses
Net foreign exchange gain
Net financing expense
(Loss)/profit before income tax
Income tax expense
Net (loss)/profit for the year
Net (loss)/profit for the period attributable to:
Non-controlling interest
Owners of Wizz Air Holdings Plc
Other comprehensive income/(expense) – items that may be
subsequently reclassified to profit or loss:
Movements in cash flow hedging reserve, net of tax
Net change in fair value
Recycled to profit or loss
Currency translation differences
Other comprehensive income/(expense) for the year, net of tax
Total comprehensive (expense)/income for the year
Total comprehensive (expense)/income for the year attributable to:
Non-controlling interest
Owners of Wizz Air Holdings Plc
Basic earnings per share (€/share)
Diluted earnings per share (€/share)
Note
5,6
5,6
5,6
7
7
11
10
10
10
10
12
29
29
13
13
2021
€ million
325.7
413.3
739.0
(132.9)
(347.5)
(19.6)
(165.7)
(254.9)
(345.3)
(1.2)
(1,267.1)
(528.1)
(434.5)
(93.6)
11.6
(78.4)
28.4
(38.4)
(566.5)
(9.5)
(576.0)
(3.9)
(572.1)
39.2
200.3
0.8
240.3
(335.7)
(4.0)
(331.7)
(6.73)
(6.73)
2020
€ million
1,508.5
1,252.8
2,761.3
(231.8)
(876.5)
(44.1)
(176.4)
(641.6)
(381.4)
(71.2)
(2,423.0)
338.3
402.0
(63.7)
47.3
(91.5)
0.1
(44.2)
294.1
(13.1)
281.1
—
281.1
(187.8)
(66.4)
(0.3)
(254.5)
26.6
—
26.6
3.76
2.22
The Notes on pages 112 to 155 are an integral part of these financial statements.
Wizz Air Holdings Plc Annual report and accounts 2021
107
ACCOUNTS AND OTHER INFORMATION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 MARCH 2021
Note
2021
€ million
2020
(restated*)
€ million
19
20
21
22
14
15
22
16
21
20
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Restricted cash
Deferred tax assets
Derivative financial instruments
Trade and other receivables
Total non-current assets
Current assets
Inventories
Trade and other receivables
Current tax assets
Derivative financial instruments
Restricted cash
Short term cash deposits
Cash and cash equivalents
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital
Share premium
Reorganisation reserve
Equity part of convertible debt
Cash flow hedging reserve
Cumulative translation adjustments
Retained earnings
Capital and reserves attributable to the owners of Wizz Air
Holdings Plc
Non-controlling interests
Total equity
Non-current liabilities
Borrowings
Convertible debt
Deferred income
Deferred tax liabilities
Derivative financial instruments
Provisions for other liabilities and charges
Total non-current liabilities
Current liabilities
Trade and other payables
Current tax liabilities
Borrowings
Convertible debt
Derivative financial instruments
Deferred income
Provisions for other liabilities and charges
Total current liabilities
Total liabilities
Total equity and liabilities
The Notes on pages 112 to 155 are an integral part of these financial statements.
23
24
26
16
21
30
25
23
24
21
26
30
29
29
29
29
29
18
2,878.2
30.4
134.1
1.1
—
21.6
3,065.4
53.7
113.7
2.1
5.1
35.0
346.8
1,100.7
1,657.2
4,722.6
—
381.2
(193.0)
8.3
(2.2)
1.2
712.3
907.7
(4.0)
903.7
2,388.7
26.2
43.5
6.3
—
51.1
2,515.8
465.7
0.2
722.1
0.3
9.0
68.0
37.8
1,303.1
3,818.9
4,722.6
2,553.0
27.2
179.7
3.1
0.9
19.9
2,783.7
70.6
169.8
—
17.3
6.1
432.5
878.0
1,574.4
4,358.1
—
380.6
(193.0)
8.3
(241.7)
0.2
1,280.3
1,234.8
—
1,234.8
1,671.9
26.4
13.1
—
41.3
46.9
1,799.5
469.6
—
340.8
0.3
266.5
172.3
74.3
1,323.8
3,123.3
4,358.1
The financial statements on pages 107 to 155 were approved by the Board of Directors and authorised for issue
on 2 June 2021 and were signed on behalf of the Board.
József Váradi
Chief Executive Officer
Wizz Air Holdings Plc Annual report and accounts 2021
108
ACCOUNTS AND OTHER INFORMATION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2021
Share
capital
Share
premium
€ million € million
29
29
— 380.6
Reorganisatio
n reserve
€ million
29
(193.0)
Equity part of
convertible
debt
€ million
29
Cash flow
hedging
reserve
€ million
29
8.3 (241.7)
Cumulative
translation
adjustment
€ million
29
0.2
Retained
earnings
€ million
29
1,280.3
Total
€ million
1,234.8
Non-
controlling
interests
€ million
18
—
Total
equity
€ million
1,234.8
—
—
—
39.2
—
68.4
—
131.9
—
—
—
—
(572.1)
—
(572.1)
39.2
(3.9) (576.0)
39.2
—
—
68.4
—
68.4
—
131.9
—
131.9
—
—
0.9
—
0.9
(0.1)
0.8
— 239.5
0.9
—
240.4
(0.1)
240.2
— 239.5
0.9
(572.1)
(331.7)
(4.0) (335.7)
Note
Balance at
1 April 2020
Comprehensive
income/(expense):
Loss for the year
Fair value gains in
the year
Losses transferred
to income
statement
Hedge
discontinuation
losses transferred
to income
statement
Currency
translation
differences
Total other
comprehensive
income/(expense)
Total
comprehensive
income/(expense)
for the year
Transactions with
owners:
Proceeds from
shares issued (Note
29)
Share-based
payment charge
(Note 29)
Total transactions
with owners
Balance at
31 March 2021
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
0.6
—
—
—
0.6
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1.1
—
0.6
—
0.6
4.1
4.1
—
4.1
4.1
4.7
—
4.7
712.3
907.7
(4.0)
903.7
— 381.2
(193.0)
8.3
(2.2)
The Notes on pages 112 to 155 are an integral part of these financial statements.
Wizz Air Holdings Plc Annual report and accounts 2021
109
ACCOUNTS AND OTHER INFORMATION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2020
Share
capital
€ million
29
—
Share
premium
€ million
29
379.1
Reorganisation
reserve
€ million
29
(193.0)
Equity part
of
convertible
debt
€ million
29
8.3
Cash flow
hedging
reserve
€ million
29
12.5
Cumulative
translation
adjustment
€ million
29
Retained
earnings
€ million
29
0.5 995.0 1,202.4
Total
€ million
Non-
controlling
interests
€ million
18
— 1,202.4
Total
equity
€ million
—
—
—
—
—
—
281.1
281.1
—
281.1
—
—
—
—
—
—
— (187.8)
—
(4.6)
—
—
— (187.8)
— (187.8)
—
(4.6)
—
(4.6)
—
—
—
—
(61.8)
—
—
(61.8)
—
(61.8)
—
—
—
—
—
(0.3)
—
(0.3)
—
(0.3)
—
—
—
— (254.2)
(0.3)
— (254.5)
— (254.5)
—
—
—
— (254.2)
(0.3)
281.1
26.6
—
26.6
—
1.5
—
—
—
—
—
1.5
—
1.5
—
—
—
—
—
—
4.2
4.2
—
4.2
—
1.5
—
—
—
—
4.2
5.7
—
5.7
— 380.6
(193.0)
8.3 (241.7)
0.2 1,280.3 1,234.8
— 1,234.8
Note
Balance at
1 April 2019
Comprehensive
income:
Profit for the year
Other
comprehensive
income/(expense):
Fair value losses in
the year
Gains transferred
to income
statement
Hedge
discontinuation
gains transferred
to income
statement
Currency
translation
differences
Total other
comprehensive
expense
Total
comprehensive
income/(expense)
for the year
Transactions with
owners:
Proceeds from
shares issued
(Note 29)
Share-based
payment charge
(Note 29)
Total transactions
with owners
Balance at
31 March 2020
The Notes on pages 112 to 155 are an integral part of these financial statements.
Wizz Air Holdings Plc Annual report and accounts 2021
110
ACCOUNTS AND OTHER INFORMATION
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2021
Cash flows from operating activities
(Loss)/profit before income tax
Adjustments for:
Depreciation
Amortisation
Financial income
Financial expenses
Unrealised fair value (gains)/losses on derivative financial
instruments
Unrealised foreign currency gains
Realised non-operating foreign currency losses
Gain on sale of property, plant and equipment
Share-based payment charges
Changes in working capital
Decrease in trade and other receivables
Decrease in restricted cash
Decrease/(increase) in inventory
(Decrease)/increase in provisions
Increase in trade and other payables
Decrease in deferred income
Cash (used in)/generated by operating activities before tax
Income tax paid
Net cash (used in)/generated by operating activities
Cash flows from investing activities
Purchase of aircraft maintenance assets
Purchase of tangible and intangible assets
Proceeds from the sale of tangible assets
Advances paid for aircraft
Refund of advances paid for aircraft
Interest received
Decrease/(increase) in short term cash deposits
Net cash used in investing activities
Cash flows from financing activities
Proceeds from the issue of share capital
Interest paid – IFRS 16 lease liability
Interest paid - JOLCO
Interest paid - other
Proceeds from new loan**
Proceeds from unsecured debt
Transactions with non-controlling interests
Repayment of unsecured debt
Repayment of loans**
Net cash generated by/(used) in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rate fluctuations on cash and
cash equivalents
Cash and cash equivalents at the end of the year
* The prior year was restated – refer to Note 36 for more detail.
** Mostly JOLCO and IFRS16 leases.
Note
2021
€ million
2020
(restated*)
€ million
(566.5)
294.1
14
15
27
14
14
31
31
336.1
8.8
(11.6)
78.4
(65.5)
(69.1)
55.1
(40.7)
4.1
(270.8)
48.3
4.6
16.9
(4.3)
6.4
(22.0)
(221.0)
(3.6)
(224.6)
(80.6)
(169.5)
58.7
(165.1)
131.3
13.2
65.6
374.0
7.5
(47.3)
91.5
79.0
(11.9)
12.3
(16.2)
4.2
787.2
108.4
6.8
(39.0)
8.0
113.4
(220.8)
764.1
(12.6)
751.6
(155.3)
(296.9)
23.4
(383.4)
85.2
44.5
(427.7)
(146.5)
(1,110.1)
0.6
(67.9)
(1.4)
(4.4)
195.6
1,177.0
—
(338.2)
(336.5)
624.6
253.6
878.0
(30.9)
1,100.7
1.5
(85.2)
(1.5)
(1.2)
297.7
—
—
—
(304.9)
(93.7)
(452.3)
1,316.0
14.3
878.0
The Notes on pages 112 to 155 are an integral part of these financial statements.
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NOTES FORMING PART OF THE FINANCIAL STATEMENTS
1. General information
Wizz Air Holdings Plc (the “Company”) is a public company incorporated in Jersey, registered under the
address 44 The Esplanade, St Helier, Jersey JE4 9WG. The Company is managed from Switzerland, under the
address Route François-Peyrot 12, 1218 Le Grand-Saconnex, Geneve. The Company and its subsidiaries
(together referred to as the “Group” or “Wizz Air”) provide low-cost, low-fare passenger air transportation
services on scheduled short-haul and medium-haul point-to-point routes across Europe and the Middle East.
2. Accounting policies
The principal accounting policies applied in the presentation of these consolidated financial statements are set
out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
These consolidated financial statements consolidate those of the Company and its subsidiaries. The
consolidated financial statements have been prepared and approved by the Directors in accordance with
International Financial Reporting Standards as adopted by the EU (“Adopted IFRSs” and IFRS IC
interpretations).
Based on the exemption provided in Article 105 (11) of the Companies (Jersey) Law 1991 the Company does
not present its individual financial statements and related notes.
The financial statements are presented in Euros (€), which is the functional currency of all companies in the
Group other than Wizz Air UK Limited, Wizz Air Abu Dhabi Limited, Wizz Air Abu Dhabi LLC. and two dormant
entities, Dnieper Aviation LLC and Wizz Air Ukraine Airlines LLC.
The Company has a policy of rounding each amount and percentage individually from the fully accurate
number to the figure disclosed in the financial statements. As a result, some amounts and percentages do not
total – though such differences are all small.
The consolidated financial statements have been prepared under the historical cost convention, as modified
by the revaluation of financial assets and financial liabilities (including derivative instruments) at fair value
through profit or loss.
The preparation of the consolidated financial statements in conformity with IFRS legislates the use of certain
critical accounting estimates and requires management to exercise judgments in the process of applying the
Group's accounting policies. The areas involving a high degree of judgment or complexity or areas where
assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4.
New standards and interpretations
a) Standards, amendments and interpretations effective and adopted by the Group
Definition of Material – Amendments to IAS 1 and IAS 8
The amendments provide a new definition of material that states: “information is material if omitting,
misstating or obscuring it could reasonably be expected to influence decisions that the primary users of
general purpose financial statements make on the basis of those financial statements, which provide financial
information about a specific reporting entity”. The amendments clarify that materiality will depend on the
nature or magnitude of information, either individually or in combination with other information, in the context
of the financial statements. A misstatement of information is material if it could reasonably be expected to
influence decisions made by the primary users. These amendments had no impact on the consolidated financial
statements of, nor is there expected to be any future impact to, the Group.
Definition of a Business – Amendments to IFRS 3 Revised
The amended definition of a business requires an acquisition to include an input and a substantive process
that together significantly contribute to the ability to create outputs. The definition of the term “outputs” is
amended to focus on goods and services provided to customers, generating investment income and other
income, and it excludes returns in the form of lower costs and other economic benefits. These amendments
had no impact on the consolidated financial statements of the Group, but may impact future periods should
the Group enter into any business combinations.
Interest Rate Benchmark Reform – Amendments to IFRS 9, IAS 39 and IFRS 7
The amendments made to IFRS 7 “Financial Instruments: Disclosures”, IFRS 9 “Financial Instruments” and IAS
39 “Financial Instruments: Recognition and Measurement” provide certain reliefs in relation to interest rate
benchmark reforms. The reliefs relate to hedge accounting and have the effect that the reforms should not
generally cause hedge accounting to terminate. However, any hedge ineffectiveness should continue to be
recorded in the income statement.
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Interest rate benchmarks (IBORs) are being reformed, and many LIBOR and other benchmark interest rates
are anticipated to no longer be published or supported past the end of 2021. The Group has exposures to
IBORs on its financial instruments in connection with restricted cash balances, floating rate bank deposits and
floating rate leases. Based on the management assessment the IBOR reform will not have significant impact
on the Group’s consolidated results or financial position. Therefore the Group has not adopted the Phase 1
amendments to IFRS 9 and IFRS7.
b) Standards, amendments and interpretations effective and not adopted by the Group
COVID-19 Related Rent Concessions – Amendment to IFRS 16
As a practical expedient, a lessee may elect not to assess whether a rent concession that meets the conditions
in paragraph 46B is a lease modification. A lessee that makes this election shall account for any change in lease
payments resulting from the rent concession the same way it would account for the change applying this
Standard if the change were not a lease modification. The Company decided not to apply the practical
expedient described in the Amendment to IFRS 16 “Leases”.
c) Standards early adopted by the Group
There are no standards early adopted by the Group.
d) Interpretations and standards that are not yet effective and have not been early adopted by the Group
(cid:1)
Interest Rate Benchmark Reform – Phase 2 – Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
(cid:1) Onerous Contracts – Cost of Fulfilling a Contract – Amendments to IAS 37
(cid:1) Annual Improvements to IFRS Standards 2018–2020 Cycle
(cid:1) Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16
(cid:1) Reference to the Conceptual Framework – Amendments to IFRS 3
(cid:1) Classification of Liabilities as Current or Non-current – Amendments to IAS 1
The above new accounting standards and interpretations have been published that are not yet effective and
have not been early adopted by the Group. These standards are not expected to have a material impact on
the entity in the current or future reporting periods or on foreseeable future transactions.
Basis of consolidation
The Company controls an entity when the Company is exposed, or it has rights, to variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity. The
Company controls an entity if the Company has all of the following:
(cid:1) power over the entity;
(cid:1) exposure, or rights, to variable returns from its involvement with the entity; and
(cid:1)
the ability to use its power over the entity to affect the amount of its returns from the entity.
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption
and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an investee, including:
(cid:1)
(cid:1)
(cid:1)
the contractual arrangement(s) with the other vote holders of the investee;
rights arising from other contractual arrangements; and
the Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control.
Non-controlling interests (NCIs) in the results and equity of subsidiaries are shown separately in the
consolidated statement of comprehensive income, statement of changes in equity and balance sheet
respectively. NCIs are measured initially at their proportionate share of the acquiree’s identifiable net assets at
the date of acquisition. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are
accounted for as equity transactions. The Group recognises NCIs in an acquired entity either at fair value or at
the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
Subsidiaries are all entities that from an IFRS perspective are deemed controlled by the Company. The financial
statements of subsidiaries are included in the consolidated financial statements from the date when control
commences until the date when control ceases. The results of all the subsidiaries are consolidated up to 31
March, which is the financial year end of the Company. Intra-group balances, and any unrealised gains and
losses or income and expenses arising from intra-group transactions, are eliminated in preparing the
consolidated financial statements.
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Going concern
Wizz Air’s business activities, financial performance and financial position, together with factors likely to affect
its future development and performance, are described in the Strategic Report on pages 6 to 50. Emerging
and principal risks and uncertainties facing the Group are described on pages 51 to 56. Note 3 to the financial
statements sets out the Group’s objectives, policies and procedures for managing its capital and liquidity and
provides details of the risks related to financial instruments held by the Group.
At 31 March 2021, the Group held cash and cash equivalents of €1,100.7 million (total cash of €1,616.6 million
including €346.8 million of short term cash deposits and €169.1 million of restricted cash), while net current
assets were €327.4 million. In legal terms, the external borrowings of the Group consist of €340.0 million
(£300 million) Commercial Paper with the Bank of England maturing in February 2022, €500 million bonds
maturing in January 2024 and convertible debt with a balance of €26.5 million. In accounting terms a further
€2,247.3 million are presented as borrowings in relation to future commitments from lease contracts.
The Directors have reviewed financial forecasts including available committed financing and plans to finance
future aircraft deliveries. After making enquiries and testing the assumptions against different forecast
scenarios, the Directors have satisfied themselves that the Group is expected to be able to meet its
commitments and obligations for a period of at least the next twelve months from the date of signing this
report.
These enquiries and testing included a base case model of how the operations of the business would gradually
emerge from COVID-19. Wizz Air has been one of the first airlines to restart operations and, whereas the airline
operated in F21 only 37.2 per cent of its capacity compared to F20, the base case assumes a gradual increase
in operation quarter on quarter, with around 35 per cent of its available capacity flying in spring and, a peak
of 75 per cent of capacity flying over summer, to reduce to 70 per cent of capacity flying during the second
half of the financial year.
In addition, the Directors have also modelled a severe but plausible downside scenario based on flying levels
compared to F20 levels of 20 per cent of flying in April, May and June 2021, 50 per cent for summer 2021 and
30 per cent for the second half of the financial year. In this scenario the Group is still forecasting significant
liquidity throughout this period and there are no material uncertainties that may cast doubt on the Group's
going concern status.
Accordingly, the Directors concluded it was correct to retain the going concern basis of accounting in
preparing the financial statements.
Foreign currency
The Group’s presentational currency is the Euro. The functional currency of all the Group entities with the
exception of Dnieper Aviation LLC, Wizz Air Ukraine Airlines LLC, Wizz Air UK Limited, Wizz Air Abu Dhabi
Limited and Wizz Air Abu Dhabi LLC is the Euro. Transactions in foreign currencies are translated into
functional currency at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies at the statement of financial position date are translated into Euros at the
exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the
statement of comprehensive income as net foreign exchange gain/loss within net financing income/expense.
Non-monetary assets and liabilities denominated in foreign currencies and which are recognised at their
historical cost are translated into Euros at the exchange rate at the date of the transaction. Non-monetary
assets and liabilities denominated in foreign currencies and which are stated at fair value are translated into
Euros at exchange rates ruling at the dates the fair value was determined. The functional currency of Dnieper
Aviation LLC and Wizz Air Ukraine Airlines LLC is the Ukrainian Hryvnia (UAH) and the functional currency of
Wizz Air Abu Dhabi Limited is the US Dollar (USD or $) and of Wizz Air Abu Dhabi LLC is the United Arab
Emirates Dirham (AED), while the functional currency of Wizz Air UK Limited is the British Pound (GBP or £).
The Group conducted the analysis on potential functional currencies for the Abu Dhabi Holding (WAAD
Limited) and the Abu Dhabi airline (WAAD LLC) as per IAS 21, considering the primary economic environment
in which entities operate, and the other factors described by the standard. Wizz Air concluded that the
functional currency for WAAD Limited should be USD and for WAAD LLC should be AED.
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The results and financial position of all the Group entities that have a functional currency different from the
presentational currency are translated into the presentational currency as follows:
(cid:1)
assets and liabilities for each statement of financial position presented are translated at the closing rate at
the date of that statement of financial position;
(cid:1) equity is translated at historical rate (except for the cash flow hedging reserve within equity);
(cid:1)
(cid:1)
income and expenses for each statement of comprehensive income are translated at monthly average
exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the rate on the
dates of the transactions); and
all resulting exchange differences are recognised as a separate component of equity (cumulative
translation adjustments).
Financial assets and liabilities
The Group classifies its financial assets and liabilities – in line with IFRS 9 “Financial Instruments” – into the
following categories:
Description in the statement of financial position
Non-current assets
Restricted cash
Derivative financial instruments
Trade and other receivables
Current assets
Trade and other receivables
Derivative financial instruments
Restricted cash
Cash and cash equivalents
Non-current liabilities
Borrowings
Convertible debts
Derivative financial instruments
Current liabilities
Trade and other payables
Borrowings
Convertible debt
Derivative financial instruments
IFRS 9 category
Financial assets measured at amortised cost
Fair value through profit or loss
Financial assets measured at amortised cost
Financial assets measured at amortised cost
Fair value through profit or loss
Financial assets measured at amortised cost
Financial assets measured at amortised cost
Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost
Fair value through profit or loss
Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost
Fair value through profit or loss
The classification of financial assets depends on the business model for managing the financial assets and
contractual cash flow characteristics of the financial assets determined by the management at initial
recognition.
a) Financial assets measured at amortised cost
These are non-derivative financial assets held by the Group in order to collect contractual cash flows and the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
The Group’s financial assets measured at amortised cost comprise trade and other receivables, cash and cash
equivalents and restricted cash in the statement of financial position. They are included in current assets,
except for maturities greater than twelve months after the statement of financial position date, which are
classified as non-current assets. The Group invests excess cash primarily in short-term time deposits.
b) Financial assets measured at fair value through other comprehensive income
These are non-derivative financial assets held by the Group in order both to collect contractual cash flows and
sell the financial assets. The contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding.
c) Financial assets measured at fair value through profit or loss
Financial assets not valued either at amortised cost or at fair value through other comprehensive income are
valued at fair value through profit or loss. Derivatives are measured at fair value through profit or loss.
d) Financial liabilities measured at amortised cost
All financial liabilities are measured at amortised cost unless they are measured at fair value through profit or
loss. The Group’s other financial liabilities comprise trade and other payables and interest-bearing loans and
borrowings (including convertible debt) in the statement of financial position. They are included in current
liabilities, except for maturities greater than twelve months after the statement of financial position date that
are classified as non-current liabilities.
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e) Financial liabilities measured at fair value through profit or loss
Derivatives are measured at fair value through profit and loss by the Group. The recognition and measurement
criteria for each class of asset and liability are described in the relevant accounting policy section.
Derivative financial instruments and hedging
Derivative financial instruments
Derivative financial instruments are recognised initially at fair value. The gain or loss on remeasurement to fair
value is recognised immediately in the statement of comprehensive income within financial income or
expenses. However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss
depends on the nature of the item being hedged (see below). Derivatives can only be entered into with
counterparties with investment-grade credit rating.
Cash flow hedges
Until F21 the Group used zero–cost collar and outright forward contracts to hedge commodity and foreign
exchange risks related to highly probable future cash flows. The spot and forward elements of forward
contracts and the entire fair value (intrinsic and time value) of the option contracts are designated as hedging
instrument.
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised
asset or liability, or a highly probable forecast transaction, the effective part of any unrealised gain or loss on
the derivative financial instrument is recognised directly in the hedging reserve within other comprehensive
income. Any ineffective portion of the hedge is recognised immediately in the statement of comprehensive
income as financial income or expenses.
The associated cumulative gain or loss on the effective part is removed from other comprehensive income
and recognised in the statement of comprehensive income in the respective operating expense line(s) in the
same period or periods as the hedged forecast transaction.
The Group considers a hedge relationship to be effective if:
(cid:1)
(cid:1)
(cid:1)
an economic relationship exists between the hedged item and the hedging instrument, and there is an
expectation that the value of the hedging instrument and the value of the hedged item would move in the
opposite direction as a result of the common underlying or hedged risk;
the effect of credit risk does not dominate the value changes associated with the hedged risk; and
the hedge ratio is aligned with the requirements of the Group’s risk management strategy.
In line with IFRS 9, as long as the risk management objectives are met, the Group does not de-designate and
thereby discontinue a hedging relationship that still meets the risk management objective and continues to
meet all other qualifying criteria (after taking into account any rebalancing, if applicable).
The hedge ratio applied by the Group is always 100 per cent. The hedge ratio is defined as the relationship
between the quantity of the hedging instrument and the quantity of the hedged item.
When a hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss at that point
remains in other comprehensive income and is recognised in accordance with the above policy when the
hedged transaction is recognised in the statement of comprehensive income. If the hedged transaction is no
longer expected to take place, from an accounting point of view the hedging relationship is discontinued and
the cumulative unrealised gain or loss recognised in other comprehensive income is recognised in the
statement of comprehensive income immediately.
Before expiry, the fair value of an option comprises: i) its intrinsic value, being a function of the difference
between contracted and market (or spot) prices; and ii) its time value, being the difference between the fair
value and the intrinsic value at any point in time. Subject to hedge effectiveness, any increase or decrease in
the fair value of the hedging instrument is taken to equity within other comprehensive income or expense.
Accordingly:
(cid:1)
Initial recognition: the open position on the derivative hedging instrument is recorded as an asset or
liability in the statement of financial position at fair value.
(cid:1) Subsequent remeasurement of unexpired options: (i) the effective portion of changes in the fair value is
recorded in other comprehensive income; and (ii) the ineffective or discontinued portions, if any, are
recorded in the statement of comprehensive income.
(cid:1) The realised gains or losses on the hedging instrument, to the extent it was not previously classified as
ineffective or discontinued, are recorded against the respective operating expense line(s) in the statement
of comprehensive income.
The qualitative technique to test the hedge effectiveness of a hedging relationship is the critical terms match
method. Hedge effectiveness testing is performed at inception, at each reporting date, and upon a significant
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NOTES FORMING PART OF THE FINANCIAL STATEMENTS
change in the circumstances affecting the hedge effectiveness requirements. Such significant change can
occur as follows:
(cid:1)
(cid:1)
(cid:1)
(cid:1)
changes in timing of the payment of the hedged item;
reduction in the total amount or price of the hedged item;
location differences; and
a significant change in the credit risk of either party to the hedging relationship.
The ineffective part of changes in fair value, if any, is recorded in the statement of comprehensive income as
financial income or expense in the case of FX hedges and as operating income or expense in the case of
commodity hedges.
Trade and other receivables
(cid:1) Trade and other receivables are initially recognised at fair value when the Group becomes party to the
contractual provisions of the instrument and subsequently measured at their amortised cost using the
effective interest rate method less impairment losses.
(cid:1) The carrying amount of the asset is reduced through recognising the impact of the amortization in the
statement of comprehensive income within other expenses. Subsequent recoveries of amounts previously
written off are credited against other expenses in the statement of comprehensive income.
(cid:1) Other receivables include amounts receivable from aircraft and spare engine lessors (in the form of
security deposits and maintenance reserves paid) and also prepayments, deferred expenses and accrued
income (see Note 20). The accrued income within other receivables also comprises insurance claims
related to events that are covered by insurance contracts. The Group recognises the income in the financial
statements only from those insurance claims which, based on management’s judgment, are virtually
certain to be received by the Group.
Impairment policy of trade and other receivables
Management reviewed the Group’s different customer payment channels and the receivables from these
channels. The most significant component is ticket sales and the various forms of payment for tickets. The vast
majority of tickets are paid either by bank cards or by bank transfer, in any case prior to flight. Based on their
nature, in practice there is no impairment required for these. The other, less significant component involving
credit risk are commissions receivable from non-ticket revenue partners and marketing support receivable
from airports and other parties.
Management reviewed the historical payment and impairment statistics for the transactions in these channels.
The historical loss rates were adjusted to reflect current and forward-looking information on macroeconomic
factors affecting the ability of the customers to settle the receivables and concluded that the impairment of
receivables in these channels does not have a material impact on the financial statements of the Group.
Cash and cash equivalents
Cash and cash equivalents comprise bank balances on current accounts and on deposit accounts that are
readily convertible into cash without there being significant risk of a change in value to the Group. Cash and
cash equivalents do not include restricted cash.
Short term cash deposits
Short term cash deposits comprise cash deposits maturing within three to twelve months of inception, the
balance of which was €346.8 million at 31 March 2021 (2020: €432.5 million).
Restricted cash
Restricted cash represents cash deposits held by the banks that cover letters of credit, issued by the same
bank, to certain suppliers. Restricted cash is split between non-current and current assets depending on the
maturity period of the underlying letters of credit.
Trade and other payables
Trade and other payables are initially recognised at fair value when the Group becomes party to the
contractual provisions of the instrument and subsequently stated at amortised cost using the effective interest
rate method. Trade and other payables comprise balances payable to suppliers, authorities and employees.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less directly attributable transaction costs.
Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference
between cost and redemption value being recognised in the statement of comprehensive income as a financial
expense over the period of the borrowings on an effective interest rate basis. Financial expenses also include
withholding tax paid on the interest if according to the loan agreement the payment of withholding tax is the
liability of the Group.
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Convertible debt
Convertible debt instruments that can be converted to share capital at the option of the holder, where the
number of shares issued does not vary with changes in their fair value, are accounted for as compound
instruments. Transaction costs that relate to the issue of a compound instrument are allocated to the liability
and equity components in proportion to the allocation of proceeds. The liability component is recognised
initially at the fair value of a similar liability that does not have an equity conversion option. The equity
component of the compound instrument is calculated as the excess of the issue proceeds over the value of
the liability component.
Classification of compound instruments issued by the Group
Compound instruments issued by the Group are treated as equity (i.e. forming part of Shareholders’ funds)
only to the extent that they meet the following two conditions:
g) they include no contractual obligations upon the Company (or Group as the case may be) to deliver cash
or other financial assets or to exchange financial assets or financial liabilities with another party under
conditions that are potentially unfavourable to the Company (or Group); and
h) where the instrument will or may be settled in the Company’s own equity instruments, it is either a
non-derivative that includes no obligation to deliver a variable number of the Company’s own equity
instruments or it is a derivative that will be settled by the Company exchanging a fixed amount of cash or
other financial assets for a fixed number of its own equity instruments.
To the extent that this definition is not met the proceeds of issue are classified as a financial liability measured
at amortised cost. Where the instrument so classified takes the legal form of the Company’s own shares, the
amounts presented in these financial statements for called up share capital and share premium account
exclude amounts in relation to those shares.
Where a compound instrument that contains both equity and financial liability components exists these
components are separated by recognising the liability at fair value and accounted for individually under the
above policy. The finance cost on the financial liability component is correspondingly higher over the life of
the instrument.
Finance payments associated with financial liabilities are dealt with as part of finance expenses. Finance
payments associated with compound instruments that are classified in equity are dividends and are recorded
directly in equity.
Impairment of financial assets
A loss allowance is recognised on financial assets carried at amortised cost or fair value through other
comprehensive income for expected credit losses.
At each reporting date the Group measures the loss allowance for financial assets at an amount equal to the
lifetime expected credit losses if the credit risk on a financial asset has increased significantly since initial
recognition.
If at the reporting date the credit risk on a financial asset has not increased significantly since initial recognition,
the Group measures the loss allowance for that asset at an amount equal to twelve-month expected credit
losses.
If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime expected
credit losses in the previous reporting period, but determines at the current reporting date that the credit risk
on a financial asset has not increased significantly since initial recognition, the Group measures the loss
allowance at an amount equal to twelve-month expected credit losses at the current reporting date.
The Group recognises in profit or loss, as an impairment gain or loss, the amount of expected credit losses (or
reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to
be recognised in accordance with IFRS 9.
Current trade and other receivables are discounted where the effect is material.
Non-financial assets and liabilities
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and impairment losses.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items of property, plant and equipment.
Depreciation is charged to the statement of comprehensive income on a straight-line basis to write off cost to
residual value over the estimated useful economic lives of each part of an item of property, plant and
equipment. In the case of certain aircraft maintenance assets, the useful economic life of the asset can be
defined in terms of flight hours or flight cycles, and in this case the depreciation charge is determined based
on the actual number of flight hours or flight cycles.
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The estimated useful lives of the relevant asset categories, reflecting the Group’s intention for the period of
use in the business, are as follows:
Land and buildings – investments made on
leased buildings
Aircraft (A320neo)
Aircraft spare engines (V2500 and GTF)
Aircraft and spare engines – prepaid
maintenance
Aircraft maintenance assets (for leased aircraft
or spare engine)
Aircraft parts (other than engines)
Fixtures and fittings (incl. computer hardware) 3–5 years
Right-of-use assets (from leases)
3–5 years, being the shorter of useful economic life
of the investment and the lease term of the building
14 years
20 years (part of aircraft parts in Note 14)
4–10 years (part of aircraft assets in Note 14)
1–10 years, or 2,000–10,000 flight cycles in case of aircraft
engines, being the shorter of useful economic life and the
lease term
7 years
Between one year and the lease term(typically 8-12 years
for leased aircraft, which is significantly less than its
estimated useful economic life)
The useful lives stated above correspond to nil residual value except in the case of A320neo aircraft where the
14-year life corresponds to 50 per cent residual value on the asset component excluding the maintenance
condition of the aircraft. This aircraft type is otherwise estimated to be capable of flying for 28 years.
The residual values and useful lives are reassessed, if applicable, annually.
Assets received free of charge
In certain cases the Group receives assets free of charge. These are treated as non-cash items in the statement
of cash flows. These assets are recognised as deferred income, and are amortised over the useful life of the
asset.
Leases
The Group leases most of its aircraft and spare engines. Other than aircraft and spare engines the Group has
only a limited number of leases related to offices, flight training simulator buildings (and earlier also
equipment), and maintenance hangars.
The Group elected to use the following practical expedients permitted by IFRS 16:
(cid:1)
(cid:1)
lease payments associated with short-term leases (contracts with a duration of twelve months or less)
and with leases for which the underlying asset is of low value (defined by the Group as below €5,000) are
recognised on a straight-line basis over the lease term;
it did not reassess whether a contract that the Group entered into before the date of initial application
was a lease or contained a lease – that is, IFRS 16 has only been applied to contracts that were previously
classified as leases.
The Group does not have short-term leases. The Group does not apply the Standard to leases of intangible
assets. Some lease contracts contain variable payment terms that are linked to floating market interest rates.
The Group chose to treat compensations expected to be payable to lessors, either in the form of recurring
maintenance reserve payments or compensation payable at lease end, as “non-lease components” under the
Standard. These payments are therefore not included in the measurement of the lease liability. Contractual
maintenance obligations which are not dependent on the use of the aircraft or spare engine are recognised in
full on commencement of the lease.
Lease extension options
Some of the Group’s lease contracts contain lease extension options. The extension option is taken into
account in the measurement of the lease liability only when the Group is reasonably certain that it would later
exercise the option. Such judgment is relevant both at inception, for the initial measurement of the lease
liability, and also for a subsequent remeasurement of the lease liability if the initial judgment is revised at a
later date.
Sale and leaseback transactions after transition
The existing aircraft and spare engine lease contracts were all entered into by the Group through sale and
leaseback transactions.
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Most of these contracts do not include a repurchase option for Wizz Air. On such contracts, where sale
proceeds received are judged to reflect the aircraft's fair value, the gain or loss arising on the disposal is directly
recognised in the statement of comprehensive income to the extent that it relates to the rights that have been
transferred to the lessor, while the gain or loss that relates to the rights that have been retained by the Group
are included in the carrying amount of the right-of-use asset recognised at commencement of the lease. With
regards to gains and losses arising from these sale and leaseback agreements, the determination of the
amounts to be deferred and to be recognised immediately, respectively, requires estimating the fair value of
these assets at the date of the transaction. In determining fair values the Group relies on independent third-
party valuation reports prepared by specialist aircraft and engine valuation experts. The Group has not sold
any aircraft above fair value.
Among the sale and leaseback contracts some include a repurchase option for Wizz Air. These leases relate
to some of the aircraft that arrived after 1 April 2019 and are commonly referred to as JOLCO (special Japanese
tax lease) contracts. Such contracts do not meet the definition of a sale under IFRS 15 “Revenue from Contracts
with Customers”, and therefore are not accounted for as a lease contract under IFRS 16. As a result, the
treatment of such contracts for Wizz Air (as the lessee) is to: (i) retain the asset as PP&E (as if there were no
sale at all); and (ii) recognise a liability under IFRS 9 (as if the sale proceeds received from the lessor were
receipts from debt financing).
Foreign exchange
The lease liability (being a monetary liability) is revalued on a monthly basis to reflect the changes in currency
exchange rates where the currency of the future lease payments differs from the functional currency of the
legal entity having the lease liability. In this respect currently the relevant currency pairs for the Group are the
US Dollar to Euro and the US Dollar to British Pound, as most future payments under the aircraft lease contracts
of the Group are defined in US Dollar while the functional currency of Wizz Air Hungary Ltd. is the Euro and of
Wizz Air UK Limited is the British Pound.
Discount rate
The Group is not able to readily determine the interest rate implicit in its lease contracts; therefore, the Group
applied its incremental borrowing rate for discounting lease liabilities, as required by paragraph 26 of IFRS 16.
The incremental borrowing rate, in turn, was determined with reference to the market rate of interest
observable on financial instruments with appropriate value, term and currency, and adjusted, as required, to
reflect risks specific to the leased asset as well as the risk specific to the entity in the Group leasing the asset.
These rates have been calculated for each identified asset, reflecting the underlying lease terms and based on
observable inputs.
Right-of-use assets and depreciation
With respect to depreciation, the requirements of IAS 16 “Property, Plant and Equipment” are applicable also
to the right-of-use assets recognised under IFRS 16. Therefore, in case of aircraft and spare engines,
component accounting is required for the right-of-use assets, similar to that applicable to owned aircraft or
spare engine assets. The right-of-use assets associated with aircraft and spare engine lease contracts are split
into asset components on the basis of value proportions that could be observed on an owned aircraft of the
same type and age.
The useful economic life of the asset components that represent the maintenance condition of the aircraft and
of its key components is estimated to last until the respective aircraft component no longer meets the return
conditions defined in the lease contract (at which point the lease-related asset component is derecognised
and a maintenance asset is recognised – see also below). The useful economic life of the residual asset
component (which is not related to the maintenance condition of the underlying asset) is the lease term.
The asset components related to maintenance condition are depreciated either straight line or based on usage,
depending on their nature.
Component accounting
For aircraft and for spare engines purchased, on acquisition, an element of the total cost of the asset is
attributed to its service potential, reflecting its maintenance condition. Such “prepaid maintenance” asset is
recognised separately because it has a shorter useful economic life than that of the underlying aircraft or spare
engine. The prepaid maintenance asset is depreciated until the estimated date of the first heavy maintenance
event that will restore the service condition to original level (and thus lend enhancement to future periods).
Such “subsequent costs” are capitalised as aircraft maintenance assets and depreciated over the length of the
period benefiting from these enhancements.
The residual cost of the acquisition of the aircraft or spare engine, representing the part of the total asset value
that is independent from the service condition of the asset, is depreciated until the end of the estimated useful
economic life of the asset.
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Advances paid for aircraft – pre-delivery payments (PDPs)
PDPs are paid by the Group to aircraft and engine manufacturers for financing the production of the ordered
aircraft or spare engine as determined by the contractual terms. Such advance payments for aircraft or spare
engines are recognised at cost and classified as property, plant and equipment in the statement of financial
position. PDPs, when paid, are recorded at historical exchange rate at the date of payment. As these payments
are in USD and the Company’s functional currency is Euro, if PDPs are refunded , it might result in some realised
foreign exchange gain or loss. There are no other gains or losses incurred in relation to PDPs. The amount is
not depreciated.
The Group may enter into sale and leaseback arrangements with lessors to finance future aircraft or spare
engine deliveries. These arrangements are structured such that the right and the commitment to purchase the
aircraft or spare engine are assigned to the lessor only on the date of delivery (“delivery date assignment”); as
such, the recognition and classification of the PDP balance does not change when the sale and leaseback
contracts are signed. On the delivery of the aircraft or spare engine the lessor pays the full purchase price of
the asset to the manufacturer and the Group receives from the manufacturer a refund of the PDPs paid. At
this moment the fixed asset is derecognised from the statement of financial position and any gain or loss
arising is transferred to the statement of comprehensive income as an operating income or expense.
Advances paid for aircraft maintenance assets – engine fleet hour agreements FHAs)
Advances paid for aircraft maintenance assets represent advance payments made in relation to heavy
maintenance scheduled to be performed in the future (for the definition of heavy maintenance see the
accounting policy section on maintenance). Such advance payments are made by the Group particularly to the
engine maintenance service provider under FHAs. Such advance payments are recognised at cost and
classified as property, plant and equipment in the statement of financial position. The amount is not
depreciated.
The balance of such assets is re-categorised into aircraft maintenance assets within property, plant and
equipment at the time when the aircraft maintenance asset is recognised in respect of the same component
and the same heavy maintenance event. This is when the component no longer meets the conditions set out
in the lease agreement. Advances paid for aircraft maintenance are not depreciated.
In the statement of cash flows the FHA payments are shown under the purchase of maintenance assets line
together with other aircraft maintenance asset purchases.
French Tax Leases
The Group started to apply an additional aircraft financing method in F21, namely the French Tax Leases (FTL).
Since these financing arrangements are special forms of structured asset financing, involving local tax benefit
for French investors, from an accounting point of view, they are “in substance purchases” and not leases;
therefore, IFRS 16 lease accounting is not applicable. The related liability is considered as a financial debt under
IFRS 9 and the asset, as an aeronautical asset, according to IAS 16.
Intangible assets
Intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and
impairment losses.
Web development costs are capitalised to the extent they are expected to generate future economic benefits
and meet the other criteria described in IAS 38 “Intangible Assets”.
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future
economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed
as incurred.
Amortisation is charged to the statement of comprehensive income on a straight-line basis over the estimated
useful economic lives of intangible assets, except where the asset is expected to have indefinite useful
economic life. Intangible assets are amortised from the date they are available for use. The estimated useful
lives are as follows:
Software licences
Web and other software development costs
Airport landing rights
3–8 years
3–5 years
Indefinite
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.
Inventories
Inventories (mainly spares) are purchased for internal use and are stated at cost unless impaired or at net
realisable value if any items are to be sold or scrapped. Net realisable value is the estimated selling price in the
ordinary course of the business less the estimated selling expense. Cost is based on the average price method
and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and
condition.
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Emissions Trading Scheme
As of 2012 the scope of the EU Emissions Trading Scheme 2008/101/EC (EU ETS) covers airlines. The Group
is required to formally report its annual actual emissions to the relevant authorities and surrender emission
allowances (EUAs) equivalent to the emissions made during the year. Surrendered allowances are a
combination of the free allowances granted by the authorities and allowances purchased by the Group from
other parties. The Group follows the “cost method” of booking the allowances: the free allowances have nil-
cost value so therefore are not recognised as an asset; allowances purchased in the market are recorded at
the purchase price in inventory. The Group is given free allowances by the competent authorities, and the net
economic impact to the Group is therefore represented by the shortfall between the actual carbon emitted
and the free allowances given to the Group for that period. The shortfall is recorded at purchase prices as a
cost. The amount of the shortfall is determined in line with the Group’s plans with respect to the utilisation of
free allowances. The typical practice of the Group is that in the submission to the authorities it utilises all the
free allowances that are available to it and are allowed to be utilised in that submission based on the applicable
rules.
The application of this accounting treatment means that the statement of comprehensive income and the
statement of financial position reflect the net economic impact and are not grossed up to reflect the full
obligation for the allowances that the Group will have to surrender.
During F20 the Group sold some put (purchase) options linked to emission allowances and, in relation to these,
during F21 the Group recognised net €2.5 million gain (2020: €1.4 million loss) under financial expenses. Under
such contracts at inception the buyer of the option pays a premium to Wizz Air for the option received. If at
the expiry of the option the buyer exercises its option then on such future date Wizz Air is obliged to buy a
fixed amount of allowances at a fixed price. The “own usage” exemption under IFRS 9 cannot be applied to
such instruments and therefore the options are classified as fair value through profit or loss. Accordingly, if
there are changes in the fair value of the options (that by definition can only be negative) the loss is recognised
in the statement of comprehensive income as financial expense. If in a year the Group incurs both income from
option premiums and expense from changes in fair value then it presents the net gain or loss under financial
income or expense, as applicable.
ETS allowances subject of sale and repurchase agreements are recognised as inventory and as a financial
liability in the amount of the consideration received representing the obligation of the Group to repurchase
the allowances. These transactions are considered to be one-off driven by the impact of the pandemic on the
business. The difference between the sales price and the repurchase price is recognised as interest expense
over the period between the sale date and the repurchase date.
Gain or loss on sale of any excess ETS allowances is recognised under other income/expenses.
Impairment of non-financial assets
The carrying amounts of the Group’s assets are reviewed at each statement of financial position date to
determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable
amount is estimated. The recoverable amount is the higher of an asset’s fair value less costs to dispose and
value in use. An impairment loss is recognised whenever the carrying amount of an asset or cash-generating
unit exceeds its recoverable amount. Impairment losses are recognised in the statement of comprehensive
income.
Employee benefits
Share-based payment transactions
The Group operates an equity-settled share option programme that allows Group employees to acquire shares
in the Company. The options are granted by the Company. The fair value of options granted is recognised as
an employee expense with a corresponding increase in equity. The fair value is measured at grant date and
spread over the period during which the employees become unconditionally entitled to the options. The fair
value of the options granted is measured using an option valuation model, taking into account the terms and
conditions upon which the options were granted. The amount recognised as an expense is adjusted at any
measurement date so that the cumulative expense to date reflects the actual number of share options that are
expected to vest (except where the number of shares to vest depends on the share price performance of the
Company, which is a market condition under IFRS 2 and is therefore not updated).
Provisions
A provision is recognised in the statement of financial position when the Group has a present legal or
constructive obligation as a result of a past event, and it is probable that an outflow of economic benefit will
be required to settle the obligation.
If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax
rate that reflects current market assessments of the time value of money and, where appropriate, the risks
specific to the liability (please see further details of aircraft maintenance provisions in the accounting policy
section on maintenance).
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Revenue
Revenues reported by the Company are disaggregated differently versus IFRS 15. It comprises passenger
ticket revenues (being the invoiced value of flight seats) and ancillary revenues.
Passenger ticket revenue arises from the sale of flight seats and is recognised net of government taxes in the
period in which the service is provided, that being when the aeroplane has departed. Where charges levied by
airports or government authorities on a per passenger basis represent a government tax in fact or in substance,
then such amounts are presented on a net basis in the statement of comprehensive income (netted between
revenue and airport, handling and en-route charges lines). Unearned revenue represents flight seats sold but
not yet flown and is included in deferred income. Refunds made to passengers are recorded as reductions in
revenue.
Ancillary revenue arises from the sale of other services made by the Group and from commissions earned in
relation to services sold on behalf of other parties where the Group is an agent rather than principal in the
relationship. Revenues from other services comprise mainly baggage charges, airport check-in fees, fees for
various convenience services (priority boarding, extended legroom and reserved seats) and loyalty
programme membership fees. Commission revenue arises in relation to the sale of on-board catering, where
the Group is an agent, accommodation, car rental, travel insurance, bus transfers, premium calls and co-
branded credit cards. Ancillary revenues are recognised as revenue when performance obligations have been
satisfied (i.e. all the benefits associated with the performance obligation have been transferred to the
customer). This, depending on the type of service, might be either the date of sale, the date of flight or (in the
case of membership fees) over the period when customers take benefit of a paid membership.
The Group considers if it is a principal or an agent in relation to contracts with other partners. Wizz recognises
revenue on a gross basis if it is the principal in the arrangement and on a net basis if it is an agent. The Group
determined to recognise revenue from contracts with other partners as agent if it is the other partner that:
(cid:1) enters into contract with the passengers/customers and bears the liability towards customers for
delivering the products and services;
(cid:1) defines the majority of the product portfolio, manages the inventory, is responsible for product
availability/outage, has title to the inventory and, the effect of the profit share notwithstanding, bears the
risk of loss; and
(cid:1) has the discretion in establishing the prices.
The disaggregation of revenues into passenger ticket revenues and ancillary revenues, as applied in the
statement of comprehensive income, is a non-IFRS measure (or alternative performance measure). The Group
did not change the disaggregation of revenue to that defined under IFRS 15. The existing presentation is
considered relevant for the users of the financial statements because: (i) it mirrors disclosures presented
outside of the financial statements; and (ii) it is regularly reviewed by the Chief Operating Decision Maker for
evaluating financial performance.
Revenues under IFRS 15 are disaggregated into revenues from contracts with passengers and with other
business partners, respectively. These two categories represent revenues that are distinct from a nature, timing
and risks point of view. This split, as required under IFRS 15, is presented in Note 6.
Accounting for membership fees
The Group operates the Wizz Discount Club (WDC) loyalty programme for its customers. Under this
programme customers can pay an annual membership fee, with the key benefit that during most of the twelve-
month membership period they get access to special fares that are lower than the standard ticket prices.
The Group recognises the revenue from the membership fees following the pattern of customers taking
benefits from the programme. This pattern is determined by management once a year, on the basis of the
actual distribution of member flights in the preceding twelve months, and then applied prospectively as an
estimate for the future. It is unlikely that there would be a material change in the pattern within one year,
because the underlying fact patterns (for customers to buy membership, to buy tickets and then to fly those
tickets) are reasonably stable.
Maintenance
Aircraft maintenance provisions
For aircraft held under lease agreements, the Group is contractually committed to either return the aircraft in
a certain condition or to compensate the lessor based on the actual condition of the aircraft and its major
components upon return. If the condition defined in the lease contract can only be met by performing
maintenance, then provision is made for the minimum unavoidable costs of the future maintenance obligation
at the time when such obligation becomes certain. This is when the respective aircraft component no longer
meets the lease re-delivery conditions. The provision is used through the completion of a maintenance event
such that the component again meets the re-delivery conditions. If it is probable that on returning the aircraft
compensation will be payable to the lessor, because performing maintenance is not or not any longer planned,
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then the Group accrues for such obligation in line with the compensation rates defined in the lease contract
and recognises the respective expense within operating expenses (maintenance materials and repairs) in the
statement of comprehensive income.
Aircraft maintenance assets
Heavy maintenance relates to the overhaul of engines and associated components, the replacement of life
limited parts, the replacement of landing gears and the non-routine airframe inspection and rectification works.
Under normal operating conditions heavy maintenance relates to work expected to be performed no more
frequently than every two years.
The cost of heavy maintenance is capitalised and recognised as a tangible fixed asset (and classified as “aircraft
maintenance assets”) at the earlier of: (a) the time the lease re-delivery condition is no longer met (see above
under aircraft maintenance provisions); or (b) when maintenance, including enhancement, is carried out. Other
maintenance costs are expensed as incurred.
Such maintenance assets are depreciated over the period the Group benefits from the asset which is the
shorter of: (a) the estimated period until the next date when the lease re-delivery condition is no longer met;
or (b) the end of the asset’s operational life; or (c) the end of the lease.
For engines and associated components, depreciation is charged on the basis of flight hours or cycles, while
for other aircraft maintenance assets depreciation is charged evenly over the period the Group expects to
derive benefit from the asset.
Components of newly leased aircraft such as life limited parts and engines are not accounted for as separate
assets, and the inherent benefit of these assets which are utilised in the period from inception of the lease until
the time the assets no longer meet the lease re-delivery condition is reflected in the payments made to the
lessor over the life of the lease.
Aircraft maintenance assets are non-monetary items. Non-Euro amounts are translated on inception to Euro
and are not retranslated.
The recognition of aircraft maintenance assets against provisions for other liabilities and charges in the
statement of financial position is a transaction not involving cash flows. In the statement of cash flows the
spending on these assets is presented as “purchase of aircraft maintenance assets” in the period when cash
actually flows out of the Group. This can happen either before or after the recognition of the asset, depending
on the exact facts and circumstances associated with the relevant asset or assets.
Please refer also to the property, plant and equipment section of accounting policies.
Other receivables from lessors – maintenance reserve
Payments for aircraft and engine maintenance, as stipulated in the respective lease agreements, are made to
certain lessors as a security for the performance of future heavy maintenance works. The payments are
recorded as receivables from the lessors until the respective maintenance event occurs and the reimbursement
with the lessor is finalised. Any payment that is not expected to be reimbursed by the lessor is recognised
within operating expenses (maintenance materials and repairs) in the statement of comprehensive income.
Other
The Group enters into agreements with maintenance service providers that guarantee the maintenance of
major components at a rate defined in the contract, the prime example being FHAs for aircraft engines. Such
FHAs cover the cost of both scheduled and unscheduled engine overhauls. FHA payments are accounted for
as follows:
(cid:1) Payments for scheduled maintenance work are recognised as advances paid for aircraft maintenance
assets until the maintenance asset for the respective engine overhaul is created. After this point any further
FHA payments are either used to settle previously established aircraft maintenance provisions (to the
extent a provision for the respective FHA contract exists) or, in the absence of a provision, are added to
the amount previously capitalised within property, plant and equipment as advances paid for aircraft
maintenance assets.
(cid:1) Payments that are made to provide guaranteed coverage for the performance of unscheduled
maintenance events are considered as insurance payments and are expensed as incurred.
Please refer to the property, plant and equipment section of accounting policies.
Supplier credits
The Group receives certain assets (cash contributions or aircraft spares) for nil consideration in connection
with its acquisition of aircraft and of major aircraft parts.
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Cash contributions or aircraft spares received are recognised as an asset in the statement of financial position.
The corresponding credits are initially recognised as deferred income but are later, on the delivery of the
aircraft that they are connected to, applied to reduce the acquisition cost of the aircraft. If the aircraft is then
financed with sale and leaseback transaction then the lower acquisition cost will translate into a higher gain
(or smaller loss) on the sale and leaseback transaction.
In certain cases the concessions receivable from a component manufacturer are linked to the Group’s
commitment to purchase a number of new aircraft with the manufacturer’s components installed on those. In
such cases, in substance, the right to the concessions is earned by the Group through the delivery of the
respective aircraft. In certain cases the concessions might be delivered by the component manufacturer later
than the date when the respective aircraft is taken by the Group. If so, then the right earned for the concession
is recognised at the date of the aircraft delivery as part of trade and other receivables, with a corresponding
credit to deferred income.
Net financing expense
Net financing costs comprise interest payable, finance charges on finance leases, interest receivable on funds
invested and foreign exchange gains and losses that are recognised in the statement of comprehensive
income.
Interest income and interest payable are recognised in the statement of comprehensive income using the
effective interest method.
Non-cash elements of financial income and expenses are eliminated from the statement of cash flows as an
adjusting item whereas cash elements, e.g. realised foreign exchange gains and losses, are included in the
statement of cash flows.
Share capital
Ordinary Shares are classified as equity. Qualifying transaction costs directly attributable to the issuing of new
shares are debited to equity, reducing the share premium arising on the issue of shares.
Taxation
Taxation on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the
statement of comprehensive income except to the extent that it relates to items recognised directly in equity,
in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the
statement of financial position date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. The following temporary differences
are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect
neither accounting nor taxable profit other than in a business combination; and differences relating to
investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The
amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying
amount of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial
position date.
A deferred tax asset is recognised to the extent that it is probable that sufficient future taxable profits will be
available against which the asset can be utilised.
Government grants
Grants that compensate the Group for expenses incurred are recognised in profit or loss as other income on a
systematic basis in the periods in which the expenses are recognised, unless the conditions for receiving the
grant are met after the related expenses have been recognised. In this case, the grant is recognised when it
becomes receivable.
Exceptional items
Exceptional items are disclosed separately in the financial statements where it is necessary to do so to provide
further understanding of the financial performance of the Group. They are material items of income or expense
that are shown separately due to the conditions created by COVID-19.
Underlying (loss)/profit after tax is a non-IFRS profit measure introduced by the Company to help investors
better understand the trading performance of the Group. Underlying (loss)/profit excludes the effect of
exceptional items. This measure might occasionally be used by the Company also in determining the variable
remuneration of senior management.
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Segment reporting
Operating and reportable segments
The Group is managed as a single business unit that provides low-cost, low-fare passenger air transportation
services using a fleet of single aircraft type. The Group has only one reportable segment being its entire route
network.
Management information is provided to the senior management team, which (in the context of IFRS 8
“Operating Segments”) is the Group’s Chief Operating Decision Maker (CODM). Resource allocation decisions
are made by the CODM for the benefit of the route network as a whole, rather than for individual routes within
the network. The performance of the network is assessed primarily based on the operating profit or loss for
the period.
3. Financial risk management
Financial risk factors
The Group is exposed to market risks relating to fluctuations in commodity prices, interest rates and currency
exchange rates. The objective of financial risk management at Wizz Air is to minimise the impact of commodity
price, interest rate and foreign exchange rate fluctuations on the Group's earnings, cash flows and equity. To
manage commodity and foreign exchange risks, Wizz Air uses various derivative financial instruments,
including foreign currency and commodity zero-cost collar contracts.
Risk management is carried out by the treasury department under policies approved by the Board of Directors.
The Board provides written principles for overall risk management, as well as written policies covering specific
areas, such as foreign exchange risk, fuel price risk, credit risk, use of derivative financial instruments,
adherence to hedge accounting, and hedge coverage levels. The Board has mandated the Audit and
Sustainability Committee of the Board to supervise the hedging activity of the Group and the compliance with
the policies approved by the Board.
Risk analysis
Market risks
Pre-COVID, Wizz Air hedged a minimum of 50 per cent of the projected US Dollar and jet fuel requirements
for the next twelve months or 40 per cent on an 18-month hedge horizon. Exceeding the 18-month time horizon
was subject to Board approval.
Due to the volatile environment, managing the cash balance of the Company was the key priority. As a result,
in April 2020 the Company suspended its fair value hedging programme with respect to foreign currency
exposures on lease liabilities.
Following the COVID-19 outbreak, the majority of the Group’s fleet was grounded for a period from mid-March
2020. The activity level and consequently the fuel consumption were significantly lower in F21 than that on
which the Group hedging programme was originally based. As a consequence, hedge accounting for certain
derivatives has been discontinued and the associated net loss on these instruments of €93.6 million (2020:
€63.7 million) was charged to the statement of comprehensive income and presented separately as an
exceptional operating expense.
In light of ongoing travel restrictions as a result of the COVID-19 pandemic and the subsequent uncertainty in
demand for travel, fuel hedging was ceased until further notice and only minimal US Dollar hedges were
entered into during the period in order to reduce the risk of over-hedging. As a result the closing cash flow
hedge reserve balance is immaterial, however significant loss was recognized during the period, see at Hedge
transactions during the year.
In June 2021 the Board of Directors approved the Company’s “no hedge” policy for the post-COVID-19 period
with respect to US Dollar and jet fuel price risk after carefully evaluating the economic costs and benefits of
the Company’s hedging programme.
Going forward, the intent of the Company is to no longer engage in cash-flow hedging of US Dollar
denominated expenses and jet fuel price risk:
(cid:1)
(cid:1)
(cid:1)
The Group’s has a significantly stronger balance sheet compared to when the hedging programme was
launched, which positions the Company well to absorb the financial impact of potential increases in input
costs from stronger US Dollar or higher jet fuel prices;
The Group is less vulnerable to input price inflation relative to certain of its industry peers due to the
shorter booking window;
The Group has a more limited competitive overlap of operated routes compared to competitors;
(cid:1) Material liquidity risk can be introduced by hedging activities especially during times of volatile trading
environment;
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(cid:1)
Hedging activities come at substantial additional cost in terms of spreads, yields and management time,
which may provide greater income statement stability but does not evidently create shareholder value.
The treasury department, under the supervision of the Audit and Sustainability Committee, will continue to
monitor the Company’s risk environment, market and business opportunities to reduce or transfer its exposure
to market risks.
Foreign currency risk
The Group is exposed to foreign currency risk on sales, purchases and commitments that are denominated in
a currency other than the functional currency of the operating entities. The foreign currency exposure of the
Group is predominantly attributable to: (i) only a small portion of the Group’s revenues are denominated in or
linked to the US Dollar while a significant portion of the Group’s expenses are US Dollar denominated, including
fuel, aircraft leases, maintenance reserves; and (ii) there are various currencies in which the Group has
significantly more revenues than expenses, primarily the British Pound (GBP) and – to a smaller extent – the
Polish Zloty (PLN).
Euro/US Dollar foreign currency rate is the most significant underlying foreign currency exposure to the Group.
The table below analyses the financial instruments by the currencies of future receipts and payments as follows:
EUR
€ million
USD
€ million
64.3
5.1
495.2
46.8
168.9
780.3
34.8
—
214.1
300.0
—
548.9
At 31 March 2021
Financial assets
Trade and other receivables
Derivative financial assets
Cash and cash equivalents
Short term cash deposits
Restricted cash
Total financial assets
Financial liabilities
Unsecured debts*
IFRS 16 aircraft and engine lease liability
IFRS 16 other lease liability
JOLCO and FTL liability
Loans from non-controlling interests
Convertible debt
Trade and other payables
Derivative financial liabilities
Total financial liabilities
Net (liabilities)/assets
*Unsecured debts represent the European Mid Term Note and the Covid Corporate Financing Facility
—
1,478.1
—
107.6
12.8
—
40.4
9.0
1,647.9
(867.6)
499.2
304.7
8.6
319.6
—
26.5
172.9
—
1,331.5
(782.6)
At 31 March 2020
Financial assets
Trade and other receivables
Derivative financial assets
Cash and cash equivalents
Short term cash deposits
Restricted cash
Total financial assets
Financial liabilities
IFRS 16 aircraft and engine lease liability
IFRS 16 other lease liability
JOLCO and FTL liability
Convertible debt
Trade and other payables
Derivative financial liabilities
Total financial liabilities
Net (liabilities)/assets
EUR
€ million
71.7
—
82.1
100.0
—
253.8
298.7
8.2
177.8
26.7
200.7
—
712.1
(458.3)
USD
€ million
68.3
18.3
743.7
332.5
185.5
1,348.3
1,414.4
—
113.6
—
16.5
307.8
1,852.3
(504.0)
Other
€ million
10.2
—
391.4
—
0.2
401.8
350.3
—
2.5
27.5
—
—
18.4
—
398.7
3.1
Other
€ million
13.3
—
52.2
—
0.3
65.8
—
—
—
—
33.9
—
33.9
31.9
Total
€ million
109.3
5.1
1,100.7
346.8
169.1
1,731.0
849.5
1,782.8
11.1
454.7
12.8
26.5
231.7
9.0
3,378.1
(1,647,1)
Total
€ million
153.3
18.3
878.0
432.5
185.8
1,667.9
1,713.1
8.2
291.4
26.7
251.1
307.8
2,598.3
(930.4)
Trade and other receivables in this table, and also in the other disclosures in this Note, exclude balances that
are not financial instruments, being prepayments, deferred expenses, accrued income, and part of other
receivables (see Note 20). Similarly, trade and other payables in this table, and also in the other disclosures in
this Note, exclude balances that are not financial instruments, being accruals and other payables (see Note
25).
Commodity risks
One of the most significant costs for the Group is jet fuel. The price of jet fuel can be volatile and can directly
impact the Group’s financial performance.
Wizz Air Holdings Plc Annual report and accounts 2021
127
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Interest rate risk
The Group’s objective to reduce cash flow risk arising from the fluctuation of interest rates on financing.
The Group has future commitments under certain lease contracts that are based on floating interest rates. The
floating nature of the interest charges on the leases exposes the Group to interest rate risk. Interest rates
charged on Eurobond, convertible debt liabilities and on short and long-term loans to finance the aircraft are
not sensitive to interest rate movements as they are fixed until maturity.
The Group has not used financial derivatives to hedge its interest rate risk during the year.
The Group has floating rate instruments within restricted cash, but given their short term (within three months)
maturity, the interest rates are not expected to move significantly during this short period.
Hedge transactions during the year
The Group used zero-cost collar instruments and outright forward contracts to hedge its foreign exchange
exposures and used zero-cost collar instruments to hedge its jet fuel exposures.
The gains and losses arising from hedge transactions during the year were as follows:
a) Foreign exchange hedge:
Gain/(loss) recognised within fuel costs
Effective cash flow hedge
Discontinued cash flow hedge expiring in the financial year
Discontinued cash flow hedge expiring in following financial year(s)
Total (loss)/gain recognised within fuel costs
Gain/(loss) recognised within financial income/(expense)
Effective fair value hedge
Effective cash flow hedge
Discontinued cash flow hedge expiring in the financial year
Discontinued cash flow hedge expiring in following financial year(s)
Total gain/(loss) recognised within financial income/(expense)
Gain/(loss) recognised within net foreign exchange gains/(losses)
Effective fair value hedges
b) Fuel hedge:
Gain/(loss) recognised within fuel costs
Effective hedge
Discontinued hedge expiring in the financial year
Discontinued hedge expiring in following financial year(s)
Total loss recognised within fuel costs
2021
€ million
2020
€ million
—
(0.3)
(0.3)
(0.6)
0.4
—
—
—
0.4
5.1
5.1
26.4
—
—
26.4
7.7
0.8
—
1.9
10.4
0.9
0.9
2021
€ million
2020
€ million
(68.4)
(91.7)
(1.2)
(161.3)
(31.8)
(9.9)
(53.8)
(95.5)
Hedge year-end open positions
At the end of the year and the prior year the Group had the following open hedge positions:
a) Foreign exchange hedge with derivatives:
At 31 March 2021
Effective fair value hedge positions
Effective cash flow hedge positions
Discontinued cash flow hedge
positions
Total foreign exchange hedge
Derivative financial instruments
Notional
amount
US$ million
—
104.7
25.0
Non-current
assets
€ million
—
—
—
Current
assets
€ million
—
0.2
—
Non-current
liabilities
€ million
—
—
—
Current
liabilities
€ million
—
(2.2)
(0.4)
Net
asset/(liability)
€ million
—
(2.0)
(0.4)
129.7
—
0.2
—
(2.6)
(2.4)
Wizz Air Holdings Plc Annual report and accounts 2021
128
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
At 31 March 2020
Effective fair value hedge positions
Effective cash flow hedge positions
Discontinued cash flow hedge
positions
Total foreign exchange hedge
Derivative financial instruments
Notional
amount
US$ million
391.0
430.0
88.0
Non-current
assets
€ million
—
0.9
—
Current
assets
€ million
7.1
8.4
1.9
Non-current
liabilities
€ million
—
—
—
Current
liabilities
€ million
—
—
—
Net
asset/(liability)
€ million
7.1
9.3
1.9
909.0
0.9
17.4
—
—
18.3
The total €9.3 million asset related to effective cash flow hedge position as at 31 March 2021 can be analysed
further into €7.4 million intrinsic value and €1.9 million time value components.
For the movements in other comprehensive income refer to the Consolidated Statement of Changes in Equity.
The open foreign currency cash flow hedge positions at year end can be analysed according to the maturity
periods and price ranges of the underlying hedge instruments as follows:
Euro/US Dollar foreign exchange hedge:
At 31 March 2021
Maturity profile of notional amount (million)
Weighted average ceiling
Weighted average floor
At 31 March 2020
Maturity profile of notional amount (million)
Weighted average ceiling
Weighted average floor
b) Foreign exchange hedge with non-derivatives:
F22
12 months
$129.7
$1.1621
$1.1164
F21
12 months
$436.0
$1.1622
$1.1263
F23
6 months
—
—
—
F22
6 months
$82.0
$1.1485
$1.1039
Non-derivatives, such as cash, are existing financial assets that hedge highly probable foreign currency cash
flows in the future and therefore act as a natural hedge.
c) Fuel hedge:
At 31 March 2021
Effective cash flow hedge positions
Discontinued cash flow hedge
positions
Total fuel hedge
‘000
metric tonnes
253.0
117.0
Non-current
assets
€ million
—
—
Derivative financial instruments
Non-current
liabilities
€ million
—
—
Current
assets
€ million
3.6
1.3
Current
liabilities
€ million
(3.8)
(2.6)
Net
asset/(liability)
€ million
(0.2)
(1.3)
370.0
—
4.9
—
(6.4)
(1.5)
At 31 March 2020
Effective cash flow hedge positions
Discontinued cash flow hedge
positions
Total fuel hedge
Derivative financial instruments
‘000
metric tonnes
1,291.0
170.0
Non-
current
assets
€ million
—
—
Current
assets
€ million
—
—
Non-current
liabilities
€ million
(41.3)
—
Current
liabilities
€ million
(210.1)
(53.8)
Net
asset/(liability)
€ million
(251.4)
(53.8)
1,461.0
—
—
(41.3) (263.9)
(305.2)
The total €251.4 million liability at 31 March 2020 can be analysed further into €337.9 million intrinsic value loss
and €85.3 million time value gain components.
For the movements in other comprehensive income refer to the Consolidated Statement of Changes in Equity.
The fuel hedge positions at year end can be analysed according to the maturity periods and price ranges of
the underlying hedge instruments as follows:
At 31 March 2021
Maturity profile (‘000 metric tonnes)
Blended capped rate
Blended floor rate
Wizz Air Holdings Plc Annual report and accounts 2021
F22
12 months
370.0
$554.0
$503.0
F21
F23
6 months
—
—
—
F22
129
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
At 31 March 2020
Maturity profile (‘000 metric tonnes)
Blended capped rate
Blended floor rate
12 months
1,091.0
$632.0
$576.0
6 months
370.0
$554.0
$503.0
Hedge effectiveness
Following the COVID-19 outbreak, the majority of the Group’s fleet was grounded for a period from mid-March
2020. The fuel consumption in F21 was significantly lower than that on which the Group hedging programme
was originally based, resulting in fuel and foreign currency hedge instruments being discontinued for hedge
accounting. As a consequence, hedge accounting for certain derivatives has been discontinued and the
associated net loss on these instruments of €93.6 million (2020: €61.8 million), including hedges expiring
between April 2021 and May 2021, was charged to the statement of comprehensive income and presented as
an exceptional operating expense within the consolidated statement of comprehensive income. No material
hedge positions are outstanding after this maturity date.
Sensitivity analysis
The table below shows the sensitivity of the Group’s profits to various market risks for the current and the
prior year, excluding any hedge impacts.
Fuel price sensitivity
Fuel price $100 higher per metric tonne
Fuel price $100 lower per metric tonne
FX rate sensitivity (USD/EUR)
FX rate 0.05 higher (meaning EUR stronger)
FX rate 0.05 lower
FX rate sensitivity (GBP/EUR)
FX rate 0.03 higher (meaning EUR stronger)
FX rate 0.03 lower
FX rate sensitivity (PLN/EUR)
FX rate 0.15 higher (meaning EUR stronger)
FX rate 0.15 lower
Interest rate sensitivity (EUR)
Interest rate is higher by 100 bps
Interest rate is lower by 100 bps
2021
Difference in
profit after tax
€ million
2020
Difference in
profit after tax
€ million
-35.0
+35.0
+70.2
-76.5
-3.0
+3.3
-0.9
+1.0
+15.4
-15.4
-107.1
+107.1
+99.4
-108.8
-9.2
+10.1
-5.1
+5.5
+13.0
-13.0
The interest rate sensitivity calculation above considers the effects of varying interest rates on the interest
income on bank deposits and floating rate leases.
The table below shows the sensitivity of the Group’s other comprehensive income to various markets risks for
the current and the prior year. These sensitivities relate to the impact of the market risks on the balance of the
cash flow hedging reserve (which includes gains and losses related to open cash flow hedges both for foreign
exchange rates and jet fuel price).
Fuel price sensitivity
Fuel price $100 higher per metric tonne
Fuel price $100 lower per metric tonne
FX rate sensitivity (USD/EUR)
FX rate 0.05 higher (meaning EUR stronger)
FX rate 0.05 lower
Fuel volume sensitivity (metric tonnes)
100,000 metric tonnes reduction in forecast fuel purchases
100,000 metric tonnes increase in forecast fuel purchases
2021
Difference
€ million
2020
Difference
€ million
+22,9
-22,9
+0.1
-0.1
+1.1
-1.1
+117.6
-117.6
+10.5
-10.5
+14.4
-14.4
The sensitivity analyses for 2021 above were performed with reference to the following market rates, as the
base case:
(cid:1) For profits, annual average rates: jet fuel price $582.0 per metric tonne; EUR/USD FX rate 1.17; EUR/GBP
FX rate 0.89; EUR/PLN FX rate 4.50.
(cid:1) For other comprehensive income, year-end spot rates: jet fuel price $512.0 per metric tonne; EUR/USD FX
rate 1.17.
Liquidity risks
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding. In recent
years the Group has been holding a high level of cash funds compared to the needs of the business operations.
Wizz Air Holdings Plc Annual report and accounts 2021
130
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Nevertheless, the unprecedented impact of COVID-19 on the industry is affecting the liquidity of the Group in
2021 especially in light of prolonged travel restrictions. The Group responded to these special challenges with
a number of actions to improve costs and liquidity, the most important ones being as follows:
(cid:1)
(cid:1)
continue to ensure that the flights that are operated deliver positive cash contribution;
securing lease financing for aircraft delivery positions until end of calendar year 2021;
(cid:1) working with suppliers to reduce contracted rates and improve payment terms;
(cid:1)
reducing discretionary spending and suspending non-essential capital expenditure;
(cid:1)
(cid:1)
issuance of a three-year €500 million bond in January 2021 that pays an annual fixed coupon of 1.35 per
cent; and
raising £300 million through the Covid Corporate Financing Facility (CCFF) that was extended by twelve
months in February 2021.
As a result of these measures, Wizz Air is confident in its ability to survive, even in case of potential prolonged
restrictions. For further notes, refer to the going concern assessment under Note 2.
The Group paid €232.6 million in F21 to settle hedging transactions. Liquidity risk from derivative financial
liabilities is not material at 31 March 2021 due to almost no hedging activity since the start of the pandemic.
The Group invested excess cash primarily in USD, EUR and GBP denominated short-term time deposits with
high quality bank counterparties.
The table below analyses the Group’s financial assets and liabilities (receivable or payable either in cash or net
settled in case of certain derivative financial assets and liabilities) into relevant maturity groupings based on
the remaining period at the statement of financial position date to the contractual maturity date.
The amounts disclosed in the table below are the contractual undiscounted cash flows except for derivatives
where fair values are presented. Therefore, for certain asset and liability categories the amounts presented in
this table can be different from the respective amounts presented in the statement of financial position.
At 31 March 2021
Financial assets
Trade and other receivables
Derivative financial assets
Cash and cash equivalents
Short term cash deposits
Restricted cash
Total financial assets
Financial liabilities
Unsecured debts
IFRS 16 aircraft and engine lease
liability
IFRS 16 other lease liability
JOLCO and FTL lease liability
Loans from non-controlling
interests
Convertible debt
Other payables
Derivative financial liabilities
Financial guarantees
Total financial liabilities
Within three
months
€ million
Between three
months
and one year
€ million
Between one and
five years
€ million
More than five
years
€ million
79.9
2.0
1,100.7
—
22.2
1,204.8
—
107.4
0.4
7.0
—
—
206.3
6.4
0.7
328.2
9.1
3.1
—
346.8
12.8
371.8
358.8
292.3
1.3
25.1
—
—
25.4
2.6
—
705.5
20.3
—
—
—
119.4
139.7
513.5
1,137.6
6.2
128.5
—
26.5
—
—
—
1,812.3
—
—
—
—
14.6
14.6
—
454.4
3.4
315.8
12.8
—
—
—
—
786.4
Total
€ million
109.3
5.1
1,100.7
346.8
169.0
1,730.9
872.3
1,991.7
11.3
476.4
12.8
26.5
231.7
9.0
0.7
3,632.2
Wizz Air Holdings Plc Annual report and accounts 2021
131
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
At 31 March 2020
Financial assets
Trade and other receivables
Derivative financial assets
Cash and cash equivalents
Short term cash deposits
Restricted cash
Total financial assets
Financial liabilities
IFRS 16 aircraft and engine lease
liability
IFRS 16 other lease liability
JOLCO and FTL lease liability
Convertible debt
Trade and other payables
Derivative financial liabilities
Financial guarantees
Total financial liabilities
Within three
months
€ million
Between three
months
and one year
€ million
Between one and
five years
€ million
More than five
years
€ million
118.3
10.5
878.0
—
0.5
1,007.3
15.1
6.9
—
432.5
5.6
460.1
19.9
0.9
—
—
146.6
167.4
—
—
—
—
33.1
33.1
Total
€ million
153.3
18.3
878.0
432.5
185.8
1,667.9
104.2
292.8
1,222.1
325.0
1,944.1
0.3
3.8
—
251.1
93.5
0.7
453.7
0.9
13.6
2.1
—
173.0
—
482.4
3.0
72.4
28.7
—
41.3
—
1,367.5
2.4
220.1
—
—
—
—
547.5
6.7
309.9
30.8
251.1
307.8
0.7
2,851.1
The Group has obligations under financial guarantee contracts as detailed in Note 32. The most significant
financial guarantee contracts relate to aircraft leases, hedging and convertible notes. For these items the
respective underlying liabilities are reflected under the appropriate line of the financial liabilities part of the
table above (for leases the liability is presented under borrowings). Since the liability itself is already reflected
in the table, it would not be appropriate to also include the financial guarantee provided by another Group
entity for the same obligation. The only guarantee separately disclosed in this table relates to a contract for
the provision of public services in Hungary, with respect to which there is no liability recognised in the
statement of financial position. This possible obligation is disclosed in the table above within financial
guarantees.
Management does not expect that any payment under these guarantee contracts will be required by the
Company.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations. The Group’s exposure to credit risk from individual customers is limited as
the large majority of the payments for flight tickets are collected before the service is provided.
However, the Group has significant banking, hedging, aircraft manufacturer and card acquiring relationships
that represent counterparty credit risk. The Group analysed the creditworthiness of the relevant business
partners in order to assess the likelihood of non-performance of liabilities due to the Group. The credit quality
of the Group’s financial assets is assessed by reference to external credit ratings (published by Standard &
Poor’s or similar institutions) of the counterparties as follows:
At 31 March 2021
Financial assets
Cash and cash equivalents
Short term cash deposits
Restricted cash
Derivative financial assets
Trade and other receivables
Total financial assets
At 31 March 2020
Financial assets
Cash and cash equivalents
Short term cash deposits
Restricted cash
Derivative financial assets
Trade and other receivables
Total financial assets
A
€ million
A-
€ million
Other
€ million
Unrated
€ million
899.1
346.8
168.8
2.1
—
1,416.8
A
€ million
601.1
291.4
185.6
10.2
—
1,088.2
50.9
—
0.1
0.1
—
51.1
150.3
—
0.2
2.9
—
153.4
0.4
—
—
—
109.3
109.7
A-
€ million
Other
€ million
Unrated
€ million
271.4
—
0.1
1.0
—
272.5
4.6
141.1
0.2
7.0
—
152.9
0.9
—
—
—
153.3
154.2
Wizz Air Holdings Plc Annual report and accounts 2021
Total
€ million
1,100.7
346.8
169.0
5.1
109.3
1,730.9
Total
€ million
878.0
432.5
185.8
18.3
153.3
1,667.9
132
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
From the unrated category within trade and other receivables the Group has €35.3million (2020: €60.9 million)
receivables from different aircraft lessors in respect of maintenance reserves and lease security deposits paid
(see also Note 20). However, given that the Group physically possesses the aircraft owned by the lessors and
that the Group has significant future lease payment obligations towards the same lessors (see Note 33),
management does not consider the credit risk on maintenance reserve receivables to be material. Most of the
remaining balance in this category in both years relates to ticket sales receivables from customers and non-
ticket revenue receivables from business partners. These balances are spread between a significant number
of counterparties and the credit performance in these channels has historically been good.
Within cash and cash equivalents in 2021, out of the €150.3 million in the category “other” €48.5 million (2020:
€45.6 million) relates to cash deposits held with BBB+ rated banks. In 2020 the short term cash deposits in
the other category relates to cash deposits held with BBB+ rated banks.
Based on the information above management does not consider the counterparty risk of any of the
counterparties being material and therefore no fair value adjustment was applied to the respective cash or
receivable balances.
Fair value estimation
The Group classifies its financial instruments based on the technique used for determining fair value into the
following categories:
Level 1: Fair value is determined based on quoted prices (unadjusted) in active markets for identical assets
or liabilities.
Level 2: Fair value is determined based on inputs other than quoted prices that are observable for the asset or
liability, either directly or indirectly.
Level 3: Fair value is determined based on inputs that are not based on observable market data (that is, on
unobservable inputs).
The following table presents the Group’s financial assets and liabilities that are measured at fair value at
31 March 2021:
Assets
Derivative financial instruments
Liabilities
Derivative financial instruments
Level 1
€ million
Level 2
€ million
Level 3
€ million
Total
€ million
—
—
—
—
5.1
5.1
9.0
9.0
—
—
—
—
5.1
5.1
9.0
9.0
The following table presents the Group’s financial assets and liabilities that are measured at fair value at
31 March 2020:
Assets
Derivative financial instruments
Liabilities
Derivative financial instruments
Level 1
€ million
Level 2
€ million
Level 3
€ million
Total
€ million
—
—
—
—
18.2
18.2
307.8
307.8
—
—
—
—
18.2
18.2
307.8
307.8
The Group measures its derivative financial instruments at fair value, calculated by the banks involved in the
hedging transactions that fall into the Level 2 category. The banks are using generally accepted valuation
techniques, principally the Black-Scholes model and discounted cash flow models.
All the other financial assets and financial liabilities are measured at amortised cost.
Capital management
The Group’s objectives when managing capital are: (i) to safeguard the Group’s ability to continue as a going
concern in order to provide returns for Shareholders and benefits for other stakeholders; (ii) to secure funds
at competitive rates for its future aircraft acquisition commitments (see Note 33); and (iii) to maintain an
optimal capital structure to reduce the overall cost of capital.
The current sources of capital for the Group are equity, bonds and other borrowings (see Note 23), as well as
to a smaller extent, convertible debt (see Note 24).
Wizz Air’s strategy is to hold significant cash and liquid funds to mitigate the impact of potential business
disruption events and to invest in opportunities as they come along in an increasingly volatile market
environment. Accordingly, the Group has so far retained all profits and paid no dividends and financed all its
aircraft and most of its spare engine acquisitions through sale and leaseback agreements. In addition Wizz Air
Wizz Air Holdings Plc Annual report and accounts 2021
133
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
diversified further its financing options through the establishment of a €3.0 billion European Mid Term Note
(EMTN) programme and issuance of its debut bond by Wizz Air Finance Company B.V., unconditionally and
irrevocably guaranteed by Wizz Air Holdings Plc.
The existing aircraft orders of the Group create a need for raising significant amounts of capital in the following
years. The strategy of the Group is to ensure that it has access to various forms of long-term financing, which
in turn allows the Group to further reduce its cost of capital and the cost of ownership of its aircraft fleet.
4. Critical accounting estimates and judgments made in applying the Group’s accounting policies
a) Maintenance policy
The estimations and judgements applied in the context of the maintenance accounting policy of the Group
impact the balance of (i) property, plant and equipment (and, within that, of aircraft maintenance assets, as
detailed in Note 14) and (ii) aircraft maintenance provisions (as detailed in Note 30).
Estimate: For aircraft held under lease agreements, provision is made for the minimum unavoidable costs of
specific future maintenance obligations created by the lease at the time when such obligation becomes certain.
The amount of the provision involves making estimates of the cost of the heavy maintenance work that is
required to discharge the obligation, including any end of lease costs. A 10% increase in the planned costs of
heavy maintenance works at the 31 March 2021 year end would increase the balance of both aircraft
maintenance assets and aircraft maintenance provisions by €7.8 million.
Estimate: The cost of heavy maintenance is capitalised and recognised as a tangible fixed asset (and classified
as an “aircraft maintenance asset”) at the earlier of: (a) the time the lease re-delivery condition is no longer
met; or (b) when maintenance, including enhancement, is carried out. The calculation of the depreciation
charge on such assets involves making estimates primarily for the future utilisation of the aircraft. A 43%
decrease in the F22 forecast aircraft utilisation would result in the same average utilisation as in F21. This would
cause €9.9 million decrease in the balance of aircraft maintenance assets.
The bases of these estimates are reviewed annually, and also when information becomes available that is
capable of causing a material change to an estimate, such as renegotiation of end of lease return conditions,
increased or decreased utilisation of the assets, or changes in the cost of heavy maintenance services.
Judgment: On a lease by lease basis the Group makes a judgment whether it would perform future
maintenance that would impact the condition of the respective aircraft or spare engine asset in a way that
eliminates the need for paying compensation to the lessor on the re-delivery of the leased asset. When such
maintenance is not expected then accrual is made for the compensation due to the lessor in line with the terms
of the respective lease contract.
Judgment: The policy adopted by the Group, as summarised above, is only one of the policies available under
IFRS in accounting for heavy maintenance for aircraft held under lease agreements. A principal alternative
policy involves recognising provisions for future maintenance obligations in accordance with hours flown or
similar measure, and not only when lease re-delivery conditions are not met. In the judgment of the Directors
the policy adopted by the Group, whereby provisions for maintenance are recognised only when lease re-
delivery conditions are not met, provides the most reliable and relevant information about the Company's
obligations to incur major maintenance expenditure on leased aircraft and at the same time it best reflects the
fact that an aircraft has lower maintenance requirements in the early years of its operation. The average age
of the Group’s aircraft fleet at 31 March 2021 was 5.4 years (same as a year before).
b) Hedge and derivative accounting
Estimate: The asset and liability balances at year end related to open hedge instruments can be material. The
fair value of derivatives is estimated by the contracting financial institutions as per their industry practice. As
required, the fair values ascribed to those instruments are verified also by management using high-level
models. These estimations are performed based on market prices observed at year end and therefore,
according to paragraph 128 of IAS 1, do not require further disclosure. Such fair values might change materially
within the next financial year but these changes would not arise from assumptions made by management or
other sources of estimation uncertainty at the end of the year but from the movement of market prices. The
fair value calculation is most sensitive to movements in the jet fuel and foreign currency spot prices, their
implied volatility and respective yields. A sensitivity analysis for the jet fuel price and for the FX rate on most
relevant currency pairs is included in Note 3.
The open hedge instrument balances at 31 March 2021 were not material. Due to the increase in jet fuel prices
compared to 31 March 2020 and as a result of limited cash flow hedging activity during 2021, the net carrying
amount of cash flow hedges was only €2.2 million liability at 31 March 2021 (2020: €242.2 million liability). The
carrying value of discontinued hedges was €1.6 million liability at 31 March 2021 (2020: €51.9 million liability).
Estimate and judgment: The effectiveness of hedges is tested both prospectively and retrospectively to
determine the appropriate accounting treatment of hedge gains and losses. Prospective testing of open
hedges requires making certain estimates, the most significant one being for the future expected level of the
Wizz Air Holdings Plc Annual report and accounts 2021
134
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
business activity (primarily the utilisation of fleet capacity) of the Group. Estimating the expected level of
future business activity is particularly critical in periods of high uncertainty like the current COVID-19 pandemic.
Building on these estimations of the future, management makes judgment on the accounting treatment of
open hedge instruments. Hedge accounting for jet fuel and foreign currency cash flow hedges was
discontinued where the “highly probable” forecast criterion was not met in accordance with the requirements
of IFRS 9. The impact of these estimations and judgments was material at 31 March 2020 but is no longer
longer material for the asset and liability balances at 31 March 2021.
None of the hedge counterparties had a material change in their credit status that would have influenced the
effectiveness of the hedging transactions.
c) Net presentation of government taxes and other similar levies
The Group’s accounting policy stipulates that where charges levied by airports or government authorities on
a per passenger basis represent a government tax in fact or in substance, then such amounts are presented
on a net basis in the statement of comprehensive income (netted between the revenue and the airport,
handling and en-route charges lines).
Judgment: Management reviews all passenger-based charges levied by airports and government authorities
to ensure that any amounts recovered from passengers in respect of these charges are appropriately classified
within the statement of comprehensive income. Given the variability of these charges and the number of
airports and jurisdictions within which the Group operates, the assessment of whether these items constitute
taxes in nature is an inherently complex area, requiring a level of judgment.
d) Accounting for aircraft and spare engine assets
Judgment: When the Group acquires new aircraft and spare engines, it applies the following critical judgments
in determining the acquisition cost of these assets:
(cid:1) Engine contracts typically include the selection of an engine type to be installed on future new aircraft, a
commitment to purchase a certain number of spare engines, and lump-sum (i.e. not per engine)
concessions from the manufacturer. Management recalculates the unit cost of engines by allocating lump-
sum credits over all engines ordered and by adjusting costs between installed and spare engines in a way
that ensures that identical physical assets have an equal acquisition cost.
(cid:1) Aircraft acquisition costs are recalculated to reflect the impacts of: (i) any adjustment on the cost of
installed engines (as above); and (ii) concessions received from the manufacturers of other aircraft
components under selection agreements. Such acquisition cost has relevance also for leased aircraft when
calculating the amount of total gain or loss on the respective sale and leaseback agreement.
e) Accounting for leases
Judgment: Some of the Group’s lease contracts contain lease extension options. The extension option is taken
into account in the measurement of the lease liability only when the Group is reasonably certain that it would
later exercise the option. Such judgment is made lease by lease, and is relevant both at inception, for the initial
measurement of the lease liability, and also for a subsequent remeasurement of the lease liability if the initial
judgment is revised at a later date. As at 31 March 2021, there were eight aircraft lease contracts that the Group
is reasonably certain to extend by 2-3 years from their original maturity in 2022. As at 31 March 2020, there
were ten contracts planned to be extended, but during F21 the Group revised its plans due to the impacts of
COVID-19 being more severe and longer lasting than originally estimated, and decided not to extend two of
these leases.
Judgment: The Group takes the view that, as a lessee, it is not able to readily determine the interest rate implicit
in its lease contracts. Therefore, it applies its incremental borrowing rate for discounting future lease payments.
The estimations made by management in accounting for leases do not materially impact the asset and liability
balances of the Group. The majority of aircraft and spare engine assets are leased and as such their period of
depreciation is the shorter of their useful economic lives and lease duration. As these assets are new at the
inception of the lease and typically have a useful economic life of at least twice the duration of the lease no
further estimation has been required.
f) Income taxes
Judgment: A significant judgment has been made by the Group in relation to the position that the Swiss tax
authority would take with respect to the calculation of the income tax base for F18–F21 for one of the legal
entities of the Group. In applying IFRIC 23 the Group applied the “most likely amount method” and, by relying
also on professional advice, took the view that the positions taken by the Group represent the most likely
outcome for the Swiss income tax liabilities.
Wizz Air Holdings Plc Annual report and accounts 2021
135
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
g) Revenue from contracts with other partners
As explained in Note 6, revenue from contracts with other partners relates to commissions on the sale of on-
board catering, accommodation, car rental, travel insurance, bus transfers, premium calls and co-branded
cards.
Judgment: The Group considers that it is an agent (as opposed to principal) in relation to all its contracts with
other partners. Accordingly, Wizz recognises revenue from these contracts on a net (commission) basis.
Out of these contracts, the one for the provision of on-board catering services is the most significant in value
and it is also the most complex from the perspective of making the ‘agent versus principal’ assessment/
judgment. The Company’s judgment was based on the facts that it is the partner that (i) enters into contracts
with the passengers/customers and bears the liability towards them for delivering the products and services;
(ii) defines the majority of the product portfolio, manages the inventory, is responsible for product availability/
outage, has title to the inventory and bears the risk of loss; and (iii) has discretion in establishing prices. The
difference on this contract between gross sales and net commission revenue (as recognised in the statement
of comprehensive income) was €13.6 million (2020: €46.3 million).
5. Segment information
Reportable segment information
The Chief Operating Decision Maker of the Group, as defined in IFRS 8 “Operating Segments”, is the senior
management team of the Group.
During F21 the Group had only one reportable segment being its entire route network. All segment revenue
was derived wholly from external customers and, as the Group had a single reportable segment, inter-segment
revenue was zero.
Reconciliation of reportable segment revenue and operating profit to consolidated profit after income tax:
Segment revenue
Segment operating expenses
Segment operating (loss)/profit
Net financing expense
Income tax expense
(Loss)/profit for the year
2021
€ million
739.0
(1,267.1)
(528.1)
(38.4)
(9.5)
(576.0)
2020
€ million
2,761.3
(2,423.0)
338.3
(44.2)
(13.1)
281.1
Entity-wide disclosures
Products and services
Revenue from external customers can be analysed by groups of similar services as follows:
Airline passenger ticket revenue
Airline ancillary revenue
Total segment revenue
2021
€ million
325.7
413.3
739.0
2020
€ million
1,508.5
1,252.8
2,761.3
These categories are non-IFRS categories meaning that they are not necessarily distinct from a nature, timing
and risks point of view; however, management believes that these categories provide clarity over the revenue
profile of the Group to the readers of the financial statements and are in line with airline industry practice. The
categories as per the definition of IFRS 15 are disclosed in Note 6.
Airline ancillary revenues arise mainly from baggage charges, booking/payment handling fees, airport check-
in fees, fees for various convenience services (priority boarding, extended legroom and reserved seats), loyalty
programme membership fees, commission on the sale of on-board catering, accommodation, car rental, travel
insurance, bus transfers, premium calls, co-branded cards and repatriation and cargo flights.
Geographic areas
Segment revenue can be analysed by geographic area as follows:
EU
UK
Other (non-EU)
Total revenue from external customers
2021
€ million
526.4
128.6
84.0
739.0
2020
€ million
1,992.9
381.1
387.3
2,761.3
Revenue was allocated to geographic areas based on the location of the first departure airport on each
ticket booking.
The Company’s revenue from external customers within the EU is mainly generated by Romania of €106.6
million (2020: €362.7 million) and by Poland of €75.9 million (2020: €291.0 million).
Wizz Air Holdings Plc Annual report and accounts 2021
136
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
The physical location of non-current assets is not tracked by the Group and is therefore not disclosed by
geographic area. This is because: (i) by value most assets are associated either with aircraft not yet received
(pre-delivery payments) or with existing leased aircraft and spare engines (RoU and maintenance assets), the
location of which changes regularly following aircraft capacity allocation decisions; and (ii) the value of the
remaining asset categories (land and buildings, fixtures and fittings) is not material within the total non-current
assets.
The distribution of the non-current assets between the four key operating entities of the Group is as follows:
Hungarian airline
UK airline
Abu Dhabi airline
Wizz Air Leasing Ltd.
Other
Total non-current assets
2021
€ million
2,595.6
311.2
12.4
144.3
1.9
3,065.4
2020
€ million
2,555.0
226.9
—
—
1.8
2,783.7
Major customers
The Group derives the vast majority of its revenues from its passengers and sells most of its tickets directly to
the passengers as final customers rather than through corporate intermediaries (tour operators, travel agents
or similar).
6. Revenue
The split of total revenue presented in the statement of comprehensive income, being passenger ticket
revenue and ancillary revenue, is a non-IFRS measure (or alternative performance measure). The Group did
not change the disaggregation of revenue to that defined under IFRS 15. The existing presentation is
considered relevant for the users of the financial statements because: (i) it mirrors disclosures presented
outside of the financial statements; and (ii) it is regularly reviewed by the Chief Operating Decision Maker for
evaluating financial performance of the (now only one) operating segment.
Revenue from contracts with customers can be disaggregated as follows based on IFRS 15:
Revenue from contracts with passengers
Revenue from contracts with other partners
Total revenue from contracts with customers
2021
€ million
704.1
34.9
739.0
2020
€ million
2,706.1
55.2
2,761.3
These two categories represent revenues that are distinct from a nature, timing and risks point of view.
Revenue from contracts with other partners relates to commissions on the sale of on-board catering,
accommodation, car rental, travel insurance, bus transfers, premium calls and co-branded cards.
The contract assets reported in F21 as part of trade and other receivables amounted to €0.4 million (2020:
€1.2 million) and the contract liabilities (unearned revenues) reported as part of deferred income were €65.0
million (2020: €168.4 million). Of the €704.1 million revenue recognised in F21 (2020: €2,706.1 million), €172.3
million (2020: €395.1 million) was included in the contract liability balance at the beginning of the year (see
unearned revenue in Note 26).
7. Operating profit
Net other expenses
Net other expenses decreased from €71.2 million in F20 to €1.2 million in F21, as there was a significant drop in
other expenses due to the coronavirus, and there were credit items relating to various aircraft asset sale and
leaseback transactions and certain supplier contract negotiations in F21.
Auditors’ remuneration
Fees payable to Company’s auditors for the audit of the consolidated
financial statements
Audit of financial statements of subsidiaries pursuant to legislation
Other services relating to taxation
Audit-related assurance and transaction services
Total remuneration of auditors
2021
€’000
779
112
—
99
990
2020
€’000
586
49
115
32
782
Fees payable to Company’s auditors for the audit of the consolidated financial statements includes amounts
in respect of the interim review, and out of pocket expenses.
Wizz Air Holdings Plc Annual report and accounts 2021
137
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Inventories
Inventories totalling €6.7 million were recognised as maintenance materials and repairs expense in the year
(2020: €11.0 million).
Gain on sale and leaseback
The gain on sale and leaseback transactions was €40.6 million (2020: €11.7 million) due to the sale and
leaseback of aircraft and engines, and the loss on these transactions was €nil (2020: €nil).
8. Staff numbers and costs
The monthly average number of persons employed during the year, including Non-Executive Directors but
excluding inactive employees and subcontracted staff such as rented pilots, analysed by category, was as
follows:
Number of persons
Non-Executive Directors
Crew and pilots
Administration and other staff
Total staff number
The aggregate compensation of these persons was as follows:
Wages and salaries
Pension costs
Social security costs other than pension
Share-based payments
Subtotal
Subcontracted staff costs (rented pilots)
Total staff costs
9. Directors’ emoluments
Salaries and other short-term benefits
Social security costs
Share-based payments
Directors’ services and related expenses
Total Directors’ emoluments
Directors receiving emoluments
The number of Directors who in respect of their services received LTIP share
options under long-term incentive schemes during the year
10. Net financing income and expense
Interest income
Gain on discontinued FX hedges
ETS put option fair value gain
Financial income
Interest expenses:
Convertible debt
IFRS 16 lease liability
JOLCO and FTL lease liability
Unsecured debts
Other
Financial expenses
Net foreign exchange gain
Exceptional financial expense
Net financing expense
2021
9
3,647
304
3,960
2021
€ million
106.5
4.3
11.7
4.1
126.6
6.3
132.9
2021
€ million
1.0
0.3
1.0
2.7
5.0
2021
14
1
2021
€ million
9.0
—
2.6
11.6
(2.0)
(68.1)
(3.0)
(3.7)
(1.6)
(78.4)
28.4
—
(38.4)
2020
9
4,115
316
4,440
2020
€ million
179.8
8.2
16.8
4.2
209.0
22.8
231.8
2020
€ million
1.9
0.5
0.6
0.4
3.4
2020
11
1
2020
€ million
45.4
1.9
—
47.3
(2.0)
(85.2)
(1.3)
—
(3.0)
(91.5)
0.1
—
(44.2)
Interest income and expense include interest on financial instruments (earned on cash and equivalents and in
F20 also on FX forward hedges).
Wizz Air Holdings Plc Annual report and accounts 2021
138
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
11. Exceptional items and underlying profit
Exceptional items
Exceptional items are disclosed separately in the financial statements where it is necessary to do so to provide
further understanding of the financial performance of the Group. They are material items of income or expense
that are shown separately due to the conditions created by COVID-19.
In F21 the Group had exceptional operating expense of €93.6 million (net of €5.7 million gain and €99.3 million
loss) relating to cash flow hedges regarding future fuel purchases that were classified as discontinued (refer
to Note 3) during 2021 as a consequence of the grounding of the majority of the Group’s fleet under the
COVID-19 situation. In F20 the Group had exceptional operating expense of €63.7 million relating to cash flow
hedges regarding future fuel purchases that were classified as discontinued during March 2020 as a
consequence of the grounding of the majority of the Group’s fleet under the COVID-19 situation. These items
were used by management in the determination of the non-IFRS underlying profit measure for the Group –
see below.
Underlying profit
(Loss)/profit from continuing operations
Adjustment for (exclusion of) exceptional items
Underlying (loss)/profit after tax
The tax effects of the adjustments made above are insignificant.
12. Income tax expense
Recognised in the statement of comprehensive income:
Current tax on profits for the year
Adjustment for current tax of prior years
Other income-based taxes for the year
Adjustment for income-based taxes of prior years
Total current tax expense
Deferred tax – increase in deferred tax liabilities
Deferred tax – increase/(decrease) in deferred tax assets
Total deferred tax charge/(benefit)
Total tax charge
2021
€ million
(576.0)
93.6
(482.4)
2020
€ million
281.1
63.7
344.8
2021
€ million
0.1
(0.1)
4.8
(3.1)
1.7
6.3
1.5
7.8
9.5
2020
€ million
4.5
—
10.5
—
15.0
—
(1.9)
(1.9)
13.1
The Company, that is Wizz Air Holdings Plc, has a tax rate of 13.97 per cent (2020: 13.97 per cent). The tax rate
relates to Switzerland, where the Company is tax resident. The income tax expense is fully attributable to
continuing operations. There was no deferred tax asset recognised in relation to the losses incurred by the
Group in 2021 mainly because the losses incurred by the main airline subsidiary of the Group are not eligible
for utilisation against taxable profits in the future.
Reconciliation of effective tax rate
The tax charge for the year (including both current and deferred tax charges and credits) is different to the
Company’s standard rate of corporation tax of 13.97 per cent (2020: 13.97 per cent). The difference is explained
below.
(Loss)/profit before tax
Tax at the corporation tax rate of 13.97 per cent (2020: 13.97 per cent)
Adjustment for current tax of prior years
Adjustment for income-based taxes of prior years
Increase/(decrease) in deferred tax liabilities due to changes in Swiss
effective tax rate
Effect of different tax rates of subsidiaries versus the parent company
Effect of current year losses not being eligible for utilisation against taxable
profits in future years
Other income-based foreign tax
Total tax charge
Effective tax rate
2021
€ million
(566.5)
(79.1)
(0.1)
(3.1)
1.7
76.6
8.8
4.7
9.5
(1.68)%
2020
€ million
294.1
41.1
—
—
(0.1)
(38.4)
—
10.5
13.1
4.4%
The effect of different tax rates of subsidiaries is a composition of impacts primarily in Switzerland and the UK,
relating to the airline subsidiaries of the Group. The Company paid €3.6 million tax in the year (2020: €12.6
million). Substantially all the losses and the profits of the Group in F21 and F20, respectively, were made by
the airline subsidiaries of the Group, and substantially all the tax charges and credits presented in this Note
were incurred by these entities.
Wizz Air Holdings Plc Annual report and accounts 2021
139
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Other income-based foreign tax represents the local business tax and the “innovation contribution” payable
in Hungary in F21 and F20 by the Hungarian subsidiaries of the Group, primarily Wizz Air Hungary Ltd.
Hungarian local business tax and innovation contribution are levied on an adjusted profit basis.
Recognised in the statement of other comprehensive income
Deferred tax related to movements in cash flow hedging reserve
Total tax charge
2021
€ million
(0.5)
(0.5)
2020
€ million
(0.6)
(0.6)
Interpretation 23 “Uncertainty over Income Tax Treatments” (IFRIC 23)
The Group has open tax periods in a number of jurisdictions involving uncertainties of different nature and
materiality, the most important open ones being for F18–F21. The Group assessed the impact of uncertainty of
each of its tax positions in line with the requirements of IFRIC 23. The outcome of this assessment in F2021
was to release €1.9 million of provisions previously made, due to the facts that during the year: (i) some prior
tax periods expired for tax authority examination; or (ii) there was a tax examination that confirmed the
treatment applied by the Company. For all other tax returns the Group concluded that it was probable that
the tax authority would accept the uncertain tax treatment that has been taken or is expected to be taken in
those tax returns and therefore accounted for income taxes consistently with that tax treatment. The final
liabilities, as later assessed by the tax authorities, may vary from the amounts that have been recognised by
the Group.
13. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the
Company by the weighted average number of Ordinary Shares in issue during each year.
(Loss)/profit for the year, € million
Weighted average number of Ordinary Shares in issue
Basic earnings per share, €
2021
(576.0)
85,545,648
(6.73)
2020
281.1
74,685,880
3.76
There were also 17,377,203 Convertible Shares in issue at 31 March 2021 (17,377,203 at 31 March 2020) (see
Note 29). These shares are non-participating, i.e. the profit and loss attributable to them is nil. These shares
are not included in the basic earnings per share calculation above.
Diluted earnings per share
Diluted earnings per share is calculated by adjusting the weighted average number of Ordinary Shares in issue
with the weighted average number of Ordinary Shares that could have been issued in the respective year
as a result of the conversion of the following convertible instruments of the Group:
(cid:1) Convertible Shares (see Note 29);
(cid:1) Convertible Notes (see Note 24); and
(cid:1) employee share options (see Note 27) (vested share options are included in the calculation).
The profit for the year has been adjusted for the purposes of calculating diluted earnings per share in respect
of the interest charge relating to the debt which could have been converted into shares.
(Loss)/profit for the year, € million
Interest expense on convertible debt (net of tax), € million
(Loss)/profit used to determine diluted earnings per share, € million
Weighted average number of Ordinary Shares in issue
Adjustment for assumed conversion of convertible instruments
Weighted average number of Ordinary Shares for diluted earnings per share
Diluted earnings per share, €
2021
(576.0)
—
(576.0)
2020
281.1
2.0
283.1
85,545,648 74,685,880
52,572,127
85,545,648 127,258,007
2.22
(6.73)
—
Wizz Air Holdings Plc Annual report and accounts 2021
140
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Underlying earnings per share
The underlying earnings per share is a fully diluted non-IFRS measure defined by the Company, calculated
as follows:
Underlying (loss)/profit for the year (see Note 11), € million
Interest expense on convertible debt, € million
(Loss)/profit used to determine underlying earnings per share, €
million
Weighted average number of Ordinary Shares for underlying earnings
per share
Underlying earnings per share, €
2021
(482.4)
—
(482.4)
2020
344.8
2.0
346.8
85,545,648
127,258,007
(5.64)
2.72
The calculation of the underlying EPS is different from the calculation of the IFRS diluted EPS measure in that
for earnings the underlying loss for the year was used (see Note 11) as opposed to the statutory (IFRS) loss for
the year. The underlying EPS measure was introduced by the Company to better reflect the underlying
earnings performance of the business.
14. Property, plant and equipment
Land
and
building
€ million
Aircraft
maintenan
ce assets
€ million
Aircraft
assets and
parts
€ million
Fixtures
and
fittings
€ million
Advances
paid
for aircraft
€ million
Advances
paid
for aircraft
maintenanc
e assets
€ million
RoU assets
aircraft and
spares
€ million
RoU assets
other
€ million
Total
€ million
17.9
0.2
—
—
18.1
0.1
—
—
414.3
46.2
(20.0)
22.9
463.4
27.9
(65.7)
4.6
74.1
277.1
(8.4)
12.1
354.9
162.1
(25.3)
54.2
8.3
4.6
(0.2)
—
259.9
383.4
(85.2)
(12.1)
138.6
76.3
—
(22.9)
2,286.0
162.3
(25.8)
—
12.6
0.7
(4.7)
—
546.0
165.1
(129.8)
(54.2)
192.0
41.7
(12.2)
(4.6)
2,422.5
418.4
(40.4)
—
7.9 3,207.0
3.0
953.1
(139.6)
–
—
—
10.9 4,020.5
820.6
4.6
(278.1)
—
—
—
—
18.2
0.1
430.3
—
545.9
—
8.6
—
527.1
0.5
9.1
217.3 2,809.6
—
9.7
15.5 4,572.5
1.6
223.7
26.4
4.8
1.2
(0.7)
82.2
(19.0)
—
2.1
0.1
287.0
1.2
—
77.3
(65.7)
—
3.3
0.3
298.9
16.8
(1.7)
0.2
41.7
25.9
(5.7)
(0.3)
61.5
14.9
16.0
131.4
176.6
484.4
313.4
0.9
(0.2)
—
5.5
0.9
—
—
6.4
2.2
7.1
—
—
—
—
—
—
—
—
—
—
882.1
1.4
1,140.0
—
—
—
—
—
—
—
—
271.7
(25.8)
—
1,128.1
229.4
(40.4)
2.0
1,319.1
1.2
—
374.0
(47.4)
0.6
3.2
0.9
1,467.5
1.8
—
336.5
(111.8)
—
5.0
2.0
1,694.2
527.1
546.0
217.3
192.0
1,490.5
1,294.3
10.4 2,878.2
7.6 2,553.0
Cost
At 1 April 2019
Additions
Disposals
Transfers
At 31 March
2020
Additions
Disposals
Transfers
FX translation
effect
At 31 March 2021
Accumulated
depreciation
At 1 April 2019
Depreciation
charge for the
year
Disposals
FX translation
effect
At 31 March 2020
Depreciation
charge for the
year
Disposals
FX translation
effect
At 31 March 2021
Net book amount
At 31 March 2021
At 31 March 2020
The Group entered into various financing arrangements in order to finance aircraft including Sale and
Leaseback, Japanese Operating Lease with Call Option (JOLCO) and French Tax Lease (FTL) structures.
Certain of these arrangements include Special Purpose Vehicles (SPV) in the financing structure and in
accordance with IFRS 10, where the Group has control of these entities, these are consolidated in the Group
balance sheet. Aircraft assets and parts leased under JOLCO as part of sale and leaseback arrangements are
not classified as leases under IFRS 16.
Other Right-of-Use (RoU) assets include leased buildings and simulator equipment. Please refer to Note 23 for
details on lease liabilities.
Wizz Air Holdings Plc Annual report and accounts 2021
141
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Additions to aircraft maintenance assets (€27.9 million in F21 and €46.2 million in F20) were fixed assets
created primarily against provision, as the Group’s aircraft or their main components no longer met the
relevant return conditions under lease contracts.
Additions to “advances paid to aircraft maintenance assets” reflect primarily the advance payments made by
the Group to the engine maintenance service provider under FHAs.
Additions to “advances paid for aircraft” represent PDPs made in the year, while disposals in the same category
represent PDP refunds received from the manufacturer where the respective aircraft or spare engine was
leased (i.e. not purchased) by the Group. During F21 in the statement of cash flows the cash inflow was €131.3
million “refund of advances paid for aircraft” and the cash outflow was €165.1 million “Advances paid for
aircraft”.
The gross carrying amount of fully depreciated property, plant and equipment is €20.0 million.
Due to COVID-19 and the consequential low level of asset utilization an impairment review was performed.
The Group's aircraft fleet was considered a single cash generating unit, the carrying value of which includes
virtually all Property, plant and equipment and intangible assets, of which recoverable amount was estimated
according to its value in use. The calculation is based on the cash flow projections in the operating plans
approved by the Board for the following three financial years up to and including 2024, which take into
account expectations of increased costs to address climate change. The values assigned to the key
assumptions represent management’s assessment of future trends, including its view of trading (such as,
passenger number expectations, capacity utilisation, and average revenue per passenger kilometer) based on
market data and internal expectations. Jet fuel price and USD exchange rate were estimated as per the
following:
Jet fuel price (EUR per metric tonne)
USD/EUR exchange rate
2022
475
1.21
2023
600
1.21
2024
600
1.21
A growth rate of 1.7% was used to extrapolate cash flow projections beyond F24, which is the end of our
normal three year forecasting period, through to F33, being the end of the lease term of the existing aircraft
fleet. A pre-tax discount rate of 8.0% was derived from the weighted average cost of capital of the Group.
Analysis was performed to model the possibility that travel restrictions remain in place during 2022, and other
adverse changes in underlying assumptions and their impact on the headroom. As a result management did
not identify a need for impairment. As a result management did not identify a need for impairment and there
were no reasonable possible changes in assumptions that would cause an impairment.
15. Intangible assets
Cost
At 1 April 2019
Additions
At 31 March 2020
Additions
Disposals
At 31 March 2021
Accumulated amortisation
At 1 April 2019
Amortisation charge for the year
At 31 March 2020
Amortisation charge for the year
At 31 March 2021
Net book amount
At 31 March 2021
At 31 March 2020
Software
€ million
Licences
€ million
CIP intangible assets
€ million
Total
€ million
33.2
14.1
47.3
7.5
—
54.8
17.2
7.3
24.5
8.8
33.4
21.5
22.8
4.7
—
4.7
—
—
4.7
0.2
0.1
0.3
—
0.3
4.4
4.4
—
—
—
12.1
(7.5)
4.6
—
—
—
—
—
4.6
—
37.9
14.1
52.0
19.6
(7.5)
64.1
17.4
7.4
24.8
8.8
33.7
30.4
27.2
Out of the licences, €4.4 million relates to landing slots at London Luton Airport, purchased from Monarch
Airlines. As these landing slots have no expiry date and are expected to be used in perpetuity, they are
considered to have indefinite life and accordingly are not amortised.
The impairment review for intangible assets was performed together with Property, plant and equipment, as
described in Note 14.
Wizz Air Holdings Plc Annual report and accounts 2021
142
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
16. Tax assets and liabilities
Deferred tax assets and liabilities recognised
RoU assets and
lease liabilities
€ million
2.8
(0.2)
—
Provisions for
other liabilities
and charges
€ million
(0.5)
Property,
plant and
equipment
€ million
(0.9)
Advances paid
for aircraft
maintenance
assets
€ million
(0.6)
Tax loss
carry
forward
€ million
—
Other
€ million
(0.2)
Total
€ million
0.6
—
—
0.5
—
0.2
—
2.6
(0.5)
(0.4)
(0.4)
(2.4)
—
0.2
—
0.2
(2.3)
—
(2.8)
—
(2.8)
(0.9)
—
(1.3)
—
(1.3)
(1.8)
—
(2.2)
—
(2.2)
1.0
—
1.0
0.1
—
1.1
—
1.1
0.4
0.6
0.8
(0.5)
(0.5)
(0.2)
(0.2)
—
1.9
0.6
3.1
(7.8)
(0.5)
(5.2)
(0.2)
(5.0)
At 1 April 2019
(restated)
Charged/(credited) to:
Profit or loss
Other comprehensive
income/(expense)
At 31 March 2020
Charged/(credited) to:
Profit or loss
Other comprehensive
income/(expense)
At 31 March 2021
Less than one year
Greater than one year
Assets: + / Liabilities: -
The €0.2 million deferred tax asset recognised in relation to IFRS 16 RoU assets and lease liabilities is driven
by the fact that the relevant subsidiaries of the Group are not currently applying IFRS 16 for their statutory
financial statements and therefore they recognise leasing fees in line with contracts, on a straight-line basis.
Under IFRS 16 the lease-related expenses are forward loaded, i.e. throughout the lease the Group IFRS financial
statements cumulatively include more expense and a lower profit than the tax returns.
There was no deferred tax asset recognised in relation to the losses incurred by the Group in F21 mainly
because the losses incurred by the main airline subsidiary of the Group are not eligible for utilisation against
taxable profits in the future. The €0.1 million increase in the asset balance in this category was an adjustment
in relation to losses recognised in prior years.
17. Subsidiaries
The Group has the following principal subsidiaries:
Subsidiary
undertakings
Wizz Air Hungary
Ltd.
Cabin Crew
Professionals Sp.
z.o.o.
Wizz Air Bosnia
Wizz Air Netherland
Holding B.V.
Dnieper Aviation LLC
Wizz Air Ukraine
Airlines LLC
Wizz Tours Kft.
Wizz Aviation
Professionals
WA Pilot Academy
Sp. z.o.o.
Wizz Air UK Limited
Wizz Air Finance
Company B.V.
Wizz Air Leasing Ltd.
Wizz Air Abu Dhabi
Limited
Wizz Air Abu Dhabi
LLC
Country of
incorporation
Registered
address
Principal activity
Class of
shares held
Percentage
held
Financial
year end
Hungary
1 Airline operator Ordinary
100
31 March
Poland
2
Dormant Ordinary
100 31 December
Bosnia and
Herzegovi
na
The Netherlands
Ukraine
Ukraine
Hungary
Moldova
Poland
UK
The Netherlands
Hungary
United Arab
Emirates
United Arab
Emirates
3 Crew company Ordinary
100 31 December
4
5
5
Dormant Ordinary
100
31 March
Dormant Ordinary
Dormant Ordinary
100 31 December
100 31 December
Dormant Ordinary
1
6 Crew company Ordinary
31 March
100
100 31 December
7 Special purpose
compan
y
Ordinary
100 31 December
8 Airline operator Ordinary
Ordinary
Financing
4
compan
y
1 Aircraft leasing Ordinary
Holding entity Ordinary
9
100
100
100
49
31 March
31 March
31 March
31 March
10 Airline operator Ordinary
49
31 March
Wizz Air Holdings Plc Annual report and accounts 2021
143
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Registered offices
1
2
3
1103 Budapest, Kőér utca 2/A. B. ép. II-V, Hungary
ul. Wolnosci 90, 42-625 Pyrzowice, Poland
Tuzla International Airport, Passenger Terminal Building, first floor-room No.12, Gornje Dubrave b.b.,
Živinice
'Luna ArenA, Herikerbergweg 238, 1101 CM Amsterdam, the Netherlands
Bulv. Tarasa Shevchenko 33-B, 3rd floor, 01032 Kyiv, Ukraine
MD-2062, bd. Dacia, 49/8, municipiul CHIŞINĂU, R.MOLDOVA
26 Jasna Street, 00-054 Warszawa, Poland
Main Terminal Building, London Luton Airport, Luton LU2 9LY, United Kingdom
PO Box 35665, 34th & 35th Floor, Al Maqam Tower, Regus Adgm Square, Al Maryah Island, Abu Dhabi,
United Arab Emirates
Business Park 01, Plot P6, Office number 208, Abu Dhabi International Airport, Abu Dhabi, Abu Dhabi,
United Arab Emirates
4
5
6
7
8
9
10
On 26 March 2020 Wizz Air Abu Dhabi Limited was incorporated as a holding company.
On 19 May 2020 the Group established Wizz Air Abu Dhabi LLC, an airline company in the United Arab
Emirates, as a fully owned subsidiary of Wizz Air Abu Dhabi Limited.
On 8 July 2020 Wizz Air Leasing Ltd. and on 22 July 2020 Wizz Air Finance Company B.V. were incorporated
as wholly owned subsidiaries of Wizz Air Holdings Plc.
The Group entered into various financing arrangements in order to finance aircraft including Sale and
Leaseback, Japanese Operating Lease with Call Option (JOLCO) and French Tax Lease (FTL) structures.
Certain of these arrangements include Special Purpose Vehicles (SPV) in the financing structure and in
accordance with IFRS 10, where the Group has control of these entities, these are consolidated in the Group
balance sheet.
Certain subsidiaries have a financial year end different from the Group’s financial year end due to the
requirements of local legislation.
18. Non-controlling interests
The following table summarises the information relating to Wizz Air Abu Dhabi Limited and Wizz Air Abu
Dhabi LLC that has material NCI, before any intra-group eliminations.
2021
€ million Abu
Dhabi LLC
2021
€ million Abu Dhabi
Limited
2020
€ million
Non-current
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Net assets attributable to NCI
Revenue
Profit
OCI
Total comprehensive income
Profit allocated to NCI
OCI allocated to NCI
Cash flows from operating activities
Cash flows from investment activities
Cash flows from financing activities (dividends to
NCI: €nil)
Net increase/(decrease) in cash and cash
equivalents
19. Inventories
174.7
31.4
201.6
15.6
(11.1)
(3.9)
—
(13.2)
(0.2)
(13.4)
(3.9)
(0.1)
(3.9)
(0.2)
34.9
30.8
42.6
—
42.6
—
—
—
—
—
—
—
—
(42.6)
—
42.6
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Aircraft consumables
Emissions trading scheme (EU ETS) purchased allowances
Total inventories
2021
€ million
20.2
33.5
53.7
2020
€ million
19.9
50.8
70.6
During the year remnant stock with the book value of €0.1 million was written off to maintenance expenses
(2020: €0.4 million). There was no write back in either year of any write down of inventory made previously.
Wizz Air Holdings Plc Annual report and accounts 2021
144
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
20. Trade and other receivables
Non-current
Receivables from lessors
Other receivables
Non-current trade and other receivables
Current
Trade receivables
Receivables from lessors
Other receivables
Total current other receivables
Less: provision for impairment of other receivables
Other current receivables net
Prepayments, deferred expenses and accrued income
Current trade and other receivables
Total trade and other receivables
2021
€ million
2020
€ million
12.6
9.0
21.6
63.1
30.2
1.0
31.2
—
31.2
19.4
113.7
135.3
11.0
8.9
19.9
83.9
52.4
0.9
53.3
—
53.3
32.6
169.8
189.7
Trade and other receivables in F21 included financial instruments in the amount of €109.3 million (2020: €153.3
million).
Receivables from lessors (both current and non-current) represent the deposits provided by Wizz Air to
lessors as security in relation to the lease contracts and in relation to the funding of future maintenance events.
Trade receivables included €24.0 million receivables from contracts with customers (2020: €29.2 million). The
decrease in contract assets was driven by the significant decline in sales revenues due to the COVID-19
outbreak.
Impairment of trade and other receivables
Impaired receivables
– other receivables
Allowances on impaired receivables
– other receivables
2021
€ million
2020
€ million
2.6
—
2.6
—
The Group previously recorded €2.1 million receivables from Warsaw Modlin Airport as compensation for
damages which were immediately impaired in full. However, the Group is legally claiming the full amount in
court. The compensation claimed by Wizz Air, plus interest, was awarded by the District Court of Warsaw in
June 2018. However, the airport appealed against the decision and the next hearing is to be scheduled.
21. Derivative financial instruments
Assets
Non-current derivatives
Cash flow hedges
Current derivatives
Fair value hedges
Cash flow hedges
Discontinued hedges
Total derivative financial assets
Liabilities
Non-current derivatives
Cash flow hedges
Current derivatives
Cash flow hedges
Discontinued hedges
Total derivative financial liabilities
2021
€ million
2020
€ million
—
—
3.8
1.3
5.1
0.9
7.1
8.3
1.9
18.2
—
(41.3)
(6.1)
(2.9)
(9.0)
(212.6)
(53.9)
(307.8)
Derivative financial instruments represent cash flow and fair value hedges (see Note 3). The full value of a
hedging derivative is classified as a current asset or liability if the remaining maturity of the hedged item is less
than a year.
The changes in the net position of assets and liabilities in respect of open cash flow hedges are detailed in the
Consolidated Statement of Changes in Equity.
During 2020 the Group used fair value hedges as well in order to mitigate change in lease liability value. The
value of fair value hedge open positions is recorded immediately in the statement of comprehensive income
as financial gain or loss.
Wizz Air Holdings Plc Annual report and accounts 2021
145
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
The mark-to-market gains (derivative financial assets) were generated on gains on call options bought (as part
of zero-cost collar instruments) and FX forward transactions that were in the money at year end.
The mark-to-market losses (derivative financial liabilities) were generated on losses on put options sold (as
part of zero-cost collar instruments) that were out of the money at year end. In F20 losses related almost
exclusively to fuel options and was particularly high as the fuel price dropped significantly at the end of the
year.
22. Restricted cash
Non-current financial assets
Current financial assets
Total restricted cash
2021
€ million
134.1
35.0
169.1
2020
€ million
179.7
6.1
185.8
Restricted cash comprises cash in bank, against which there are letters of credit issued or other restrictions in
place governing the use of that cash, resulting from agreements with aircraft lessors or other business partners.
Restricted cash is excluded from cash and cash equivalents in the cash flow statement.
23. Borrowings
Lease liability under IFRS 16
Unsecured debts
Liability related to JOLCO and FTL contracts
Total current borrowings
Lease liability under IFRS 16
Unsecured debts
Loans from non-controlling interests
Liability related to JOLCO and FTL contracts
Total non-current borrowings
Total borrowings
2021
€ million
341.7
350.3
30.1
722.1
1,452.2
499.2
12.8
424.5
2,388.7
3,110.8
2020
€ million
324.3
—
16.5
340.8
1,397.0
—
—
274.9
1,671.9
2,012.7
The Company issued £300.0 million commercial paper in April 2020 through the Covid Corporate Financing
Facility (CCFF) with the Bank of England that was rolled over by twelve months in February 2021. Further to
that, on 19 January 2021, Wizz Air Finance Company B.V., a 100 per cent owned subsidiary of Wizz Air Holdings
Plc., issued €500.0 million 1.35 per cent Eurobond, fully and irrevocably guaranteed by the Company, under
the €3,000.0 million EMTN programme with a maturity in January 2024.
The maturity profile of borrowings as at 31 March 2021 is as follows:
IFRS 16 aircraft and
engine lease liability
€ million
IFRS 16 other
lease liability
€ million
JOLCO and FTL
lease liability
€ million
Unsecured
debts
€ million
Loans from non-
controlling
interests
€ million
45.3
45.6
0.1
0.7
—
6.4
—
—
248.8
1.1
23.7
350.3
—
—
—
Total
€ million
45.4
52.7
623.9
1,013.9
429.2
1,782.8
5.7
3.5
11.1
122.5
499.2
—
1,641.3
302.0
—
12.8
747.5
454.6
849.5
12.8
3,110.8
Payments due:
Within one
months
Between one
and three
months
Within three
months and
one year
Between one
and five years
More than five
years
Total
borrowings
Wizz Air Holdings Plc Annual report and accounts 2021
146
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
The maturity profile of borrowings as at 31 March 2020 is as follows:
IFRS 16 aircraft and
engine lease liability
€ million
IFRS 16 other lease
liability
€ million
JOLCO and FTL
lease liability Unsecured debts
€ million
€ million
Loans from non-
controlling
interests
€ million
Payments due:
Within one
months
Between one
and three
months
Within three
months and
one year
Between one
and five years
More than five
years
Total
borrowings
31.0
53.4
239.0
1,078.7
311.1
1,713.2
—
0.2
0.7
2.0
5.3
8.2
—
3.6
12.9
69.5
205.3
291.3
—
—
—
—
—
—
—
—
—
—
—
—
Total
€ million
31.0
57.2
252.6
1,150.2
521.7
2,012.7
The total cash outflow for leases during F21 was €405.9 million (2020: €391.6 million). Please refer to Note 14
for details on right-of-use assets.
24. Convertible debt
Non-current financial liabilities
Current financial liabilities
Total convertible debt
2021
€ million
26.2
0.3
26.5
2020
€ million
26.4
0.3
26.7
Convertible debt is Convertible Notes held by Indigo Hungary LP and Indigo Maple Hill LP (“Indigo”).
Principal and any accrued interest on the Convertible Notes are convertible into Ordinary Shares in Wizz Air
Holdings Plc at conversion factors in the range of €1.0–€1.5 for one share. Such Ordinary Shares issued as a
result of conversion in certain cases might be subject to restrictions on voting and dividend rights. Until the
Notes are converted, interest on the Notes is payable in cash with a coupon rate of interest of 8 per cent per
annum, twice a year in February and in August.
Convertible Notes are guaranteed by Wizz Air Hungary Ltd. – see Note 32.
For more information about the Group’s exposure to interest rate risk, see Note 3.
25. Trade and other payables
Current liabilities
Trade payables
Payables to passengers
Other payables
Accrued expenses
Total trade and other payables
2021
€ million
2020
€ million
89.8
116.4
32.5
227.0
465.7
119.1
132.0
12.6
205.9
469.6
In F21 €116.4 million (2020: €132.0 million) payable to passengers includes the refunds made in credits which
can be used by customers for re-booking tickets for later dates or can be requested to be refunded by the
Group in cash and other liabilities towards customers. In F21 other liabilities contain ETS allowances subject of
sale and repurchase agreements, representing the obligation of the Group to repurchase the allowances.
26. Deferred income
Non-current financial liabilities
Deferred income
Current financial liabilities
Unearned revenue
Other
Total deferred income
Wizz Air Holdings Plc Annual report and accounts 2021
2021
€ million
2020
€ million
43.5
65.0
3.0
68.0
111.5
13.1
168.4
3.9
172.3
185.4
147
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Non-current deferred income represents the value of benefit for the Group coming from concessions (cash
credits and free aircraft components) received from aircraft and certain component suppliers that will be
recognised as a credit (an aircraft rentals expenses decreasing item) on a straight-line basis over the lease
term of the respective asset.
Current deferred income represents the value of tickets paid by passengers for which the flight service is yet
to be performed (“unearned revenue”), the value of membership fees paid but not yet recognised and the
current part of the value of supplier credits received. The decrease in unearned revenue was due to the
significant drop in ticket sales due to coronavirus.
The contract liabilities (unearned revenue) of €65.0 million existing at 31 March 2021 (€168.4 million at 31 March
2020) will become revenue during F22 (subject to further cancellations that might happen after the year end).
The decrease in contract liabilities was driven by the lower business activity and shorter booking windows
during and towards the end of the financial year, both due to coronavirus.
27. Employee benefits
Share-based payments
The share-based payment charge in the financial statements for the year relates to employee share options
issued during 2015–2020 under the 2014 Employee Long-term Incentive Plan (LTIP) of the Group. The
expenses (other than social security) recognised in relation to these instruments were €4.1 million (2020: €4.2
million).
The options are classified as equity-settled share-based payments. The Company issues new shares for any
options exercised, irrespective of the method of exercise. The fair value of the awards and options is
recognised as staff cost over the estimated vesting period with a corresponding charge to equity.
Long-term Incentive Plan (LTIP)
Share options issued during the financial year
Terms and conditions:
Number of options
Exercise price
Vesting period
Termination
All
Options
240,927
Restricted
Options
18,525
nil
3 years
10 years
Performance
Options
222,402
nil
3 years
10 years
There are no individual performance conditions set for the employees to exercise their options after the three-
year vesting period other than that the employee must be in employment with one of the Group entities until
and on the date of exercise of the options.
For the Performance Options the performance conditions are set as per the TSR of the Group relative to the
TSR of certain selected European airlines over the three-year period following the award.
The percentage of Performance Options that will vest will be determined on a pro-rata basis (“pay-out rate”)
to the extent that the target levels for the performance conditions will be met by the Group.
The fair value of options granted was determined by using the Black-Scholes model, resulting in €39.00 per
share. The total cost of the grant was determined based on: (i) the fair value of options; (ii) the number of
options expected to be forfeited due to employee turnover; and (iii) the estimated pay-out rate for
Performance Options.
Share options in issue
The number of LTIP share options in issue at year end is as follows:
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Forfeited during the year
Outstanding at the end of the year
Exercisable at the end of the year
All
Options
1,095,738
240,927
(160,586)
(295,736)
880,343
203,296
Restricted
Options
114,010
18,525
(44,599)
(9,494)
78,442
11,400
Performance
Options
981,729
222,402
(115,987)
(286,242)
801,902
191,896
The number of options outstanding at the beginning of the year has been restated compared to the disclosure
in the 2020 Annual Report. There were more options forfeited during the 2020 financial year than originally
reported and consequently the 31 March 2020 total balance of options have been corrected from 1,162,313 (as
in the 2020 Annual Report) to 1,095,738 in this table.
The weighted average remaining contractual life for the LTIP share award at 31 March 2021 is was seven years
and five months (seven years and nine months years at 31 March 2020).
Wizz Air Holdings Plc Annual report and accounts 2021
148
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Employee Share Option Plan (ESOP)
Share options issued during the financial year
There were no share options issued either during the year or in the prior year. The last options under the ESOP
were issued in January 2015 and therefore by January 2018 all open options vested.
There are no individual performance conditions set for the employees to exercise their vested options other
than that the employees must be in employment with one of the Group entities until and on the date of exercise
of the options.
Share options in issue
The number and weighted average exercise prices of share options are as follows:
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Forfeited during the year
Outstanding at the end of the year
Exercisable at the end of the year
2021
Weighted
average
exercise price
€
13.69
—
13.69
—
—
—
2021
Number
of options
47,500
—
(47,500)
—
—
—
2020
Weighted
average
exercise price
€
13.56
—
13.51
—
13.69
13.69
2020
Number
of options
182,000
—
(134,500)
—
47,500
47,500
At the end of the 2021 financial year, there were no outstanding options any more (at the end of the 2020
financial year the outstanding options had a weighted average outstanding contractual life of four years and
nine months).
Taxation
Under the terms of both programmes all taxes payable on share options are the liability of the recipients of
these benefits. However, in certain cases the Company or its subsidiaries have a legal obligation to pay the
employer social security on the income realised by the recipients. To the extent the additional social security
obligations can be estimated, the Group makes a provision for these already during the vesting period of the
instruments.
28. Government grants and government assistance
The Group benefited from paying employer social security contributions in the period from May to December
2020 for both the Hungarian employed crew and the office employees in Hungary. In the United Kingdom,
Wizz Air UK Limited has been able to utilise the government established Coronavirus Job Retention Scheme
(CJRS) commonly referred to as the furlough scheme. Similar schemes have been utilised in Germany and
Italy. Together these schemes resulted in total savings for the business of €7.1 million (2020: €nil).
29. Capital and reserves
Share capital
Number of shares
In issue at the beginning of the year
Issued during the year for cash
In issue at the end of the year – fully paid
Ordinary Shares
Convertible Shares
Value of shares
Authorised
Equity: 170,000,000 (2020: 170,000,000) Ordinary
Shares of £0.0001 each and 80,000,000 (2020:
80,000,000) non-voting, non-participating
Convertible Shares of £0.0001 each
Allotted, called up and fully paid
Equity: 103,012,219 (2020: 102,803,633) shares of
£0.0001 each
Ordinary Shares
Convertible Shares
2021
102,803,633
208,586
103,012,219
85,635,016
17,377,203
2020
102,617,673
185,960
102,803,633
85,426,430
17,377,203
2021
£
2021
€
2020
£
2020
€
25,000
34,415
25,000
34,415
10,301
8,564
1,737
12,092
10,053
2,039
10,280
8,543
1,737
11,623
9,659
1,964
During both F21 and F20 the increase in the total number of issued shares was due to the exercise of certain
employee share options.
Ordinary Shares
The holders of Ordinary Shares are entitled to receive dividends as declared and are entitled to one vote per
share at meetings of the Company.
Wizz Air Holdings Plc Annual report and accounts 2021
149
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Convertible Shares
In March 2015, linked to the listing of the Company’s shares on the London Stock Exchange, certain convertible
loans and notes (including accrued interest) were converted into non-voting, non-participating Convertible
Shares of the Company. There were 17,377,203 Convertible Shares in issue at 31 March 2021, all fully paid (2020:
17,377,203 shares). The Convertible Shares are held by Indigo and can be converted into Ordinary Shares of
the Company by Indigo on the condition of meeting certain criteria post-conversion regarding the overall
shareholding structure of the Company.
Reserves
Share premium
Share premium has two main components. €207.2 million was recognised as a result of the Group
reorganisation in October 2009. It represents the estimated fair value of the Group at the date of the
transaction. The remaining €174.0 million (as at 31 March 2021) was recognised as a result of new share issues
made since October 2009. These new share issues comprised the primary offering on the initial public offering
of the Company’s shares on the London Stock Exchange in March 2015, the conversion of some of the
convertible debt instruments into shares and the conversion of certain employee share options into shares.
Within this, during F21 a €0.6 million (2020: €1.5 million) increase was recorded in the share premium, all
related to conversion of employee share options.
Reorganisation reserve
A reorganisation reserve of €193.0 million was recognised as a result of the Group reorganisation in
October 2009. It is equal to the difference between the fair value of the Group at the date of reorganisation
of €209.0 million and the share capital of the Group at the same date (€16.0 million).
Equity part of convertible debt
The equity part of convertible debt comprises the equity component of compound instruments issued by the
Company. The amount of the convertible debt classified as equity of €8.3 million (2020: €8.3 million) is net of
attributable transaction costs of €8.3 million.
Share-based payment charge
The share-based payment balance of €18.4 million credit (2020: €14.3 million) corresponds to the recognised
cumulative charge of share options and share awards provided to the employees and Directors under
long-term incentive schemes. This balance is recognised directly in retained earnings.
Cash flow hedging reserve
The hedging reserve comprises the effective portion of the cumulative unrealised net change in the fair value
of cash flow hedging instruments related to hedged transactions that have not yet occurred.
The gross amount of cumulative unrealised change in the fair value of cash flow hedging instruments was €2.2
million loss (2020: €241.7 million loss), while the deferred tax effect was €nil (2020: €0.5 million gain).
Retained earnings
There were no dividends paid in F21 or F20. Share-based payments are credited to retained earnings.
30. Provisions for other liabilities and charges
At 1 April 2019
Non-current provisions
Current provisions
Capitalised within property, plant and equipment
Charged to comprehensive income
Used during the year
At 31 March 2020
Non-current provisions
Current provisions
Capitalised within property, plant and equipment
Charged to comprehensive income
Used during the year
At 31 March 2021
Non-current provisions
Current provisions
Aircraft
maintenance
€ million
138.3
45.9
92.4
42.4
—
(74.8)
105.9
44.2
61.7
25.9
—
(53.7)
78.1
49.3
28.8
Other
€ million
10.9
—
10.9
—
24.4
(20.0)
15.3
2.7
12.6
—
5.7
(10.2)
10.8
1.8
9.0
Total
€ million
149.2
45.9
103.3
42.4
24.4
(94.8)
121.2
46.9
74.3
25.9
5.7
(63.9)
88.9
51.1
37.8
Non-current provisions relate to future aircraft maintenance obligations of the Group on leased aircraft and
spare engines, falling due beyond one year from the balance sheet date. Current aircraft maintenance
provisions relate to heavy maintenance obligations expected to be fulfilled in the coming financial year. The
amount of provision reflects management’s estimates of the cost of heavy maintenance work that will be
required in the future to discharge obligations under the Group’s lease agreements (see Note 4). Maintenance
Wizz Air Holdings Plc Annual report and accounts 2021
150
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
provisions in relation to engines covered by FHA agreements are netted off with the FHA prepayments made
to the engine maintenance service provider in respect of the same group of engines. Maintenance provision
decreased due to scheduled maintenance events during F21.
The decrease in maintenance provisions from F19 to F20 and from F20 to F21 both related primarily to engine
Life Limited Part replacements.
Other provisions mainly relate to liabilities for EU Regulation (EC) No. 261/2004 (EU 261) compensation to
customers, refunds made to passengers, and uncertain tax positions. The value of the provision is determined
based on known eligible events and historical claim patterns.
31. Financial instruments
Fair values
The fair values of the financial instruments of the Group together with their carrying amounts shown in the
statement of financial position are as follows:
Trade and other receivables due after more than
one year
Restricted cash
Derivative financial assets
Trade and other receivables due within one year
Cash and cash equivalents
Short term cash deposits
Trade and other payables due within one year
Derivative financial liabilities
Convertible debt
Borrowings
Unsecured debts
Net balance of financial instruments (asset)
Carrying amount
2021
€ million
21.6
Fair value Carrying amount
2020
€ million
19.9
2021
€ million
21.6
Fair value
2020
€ million
19.9
169.1
5.1
113.7
1,100.7
346.8
(465.7)
(9.0)
(26.5)
(2,261.3)
(849.5)
(1,855.0)
169.1
5.1
113.7
1,100.7
346.8
(465.7)
(9.0)
(26.5)
(2,318.5)
(858.0)
(1,920.3)
185.9
18.2
169.8
878.0
432.5
(469.6)
(307.8)
(26.7)
185.9
18.2
169.8
878.0
432.5
(469.6)
(307.8)
(26.7)
(2,012.7) (2,042.4)
—
(1,142.2)
—
(1,112.5)
The fair value of borrowings and some items within trade and other receivables are Level 3 in the fair value
hierarchy. The fair values of all other financial assets and financial liabilities fall into Level 2 category.
Financial assets measured at fair value through profit or loss:
Derivative financial assets
Total
Financial liabilities measured at fair value through profit or loss:
Derivative financial liabilities
Total
Carrying amount
2021
€ million
5.1
5.1
Carrying amount
2020
€ million
18.2
18.2
Carrying amount
2021
€ million
9.0
9.0
Carrying amount
2020
€ million
307.8
307.8
Where available the fair values of financial instruments have been determined by reference to observable
market prices where the instruments are traded. The fair value of financial instruments that are not traded in
an active market (such as long-term deposits among the non-current other receivables) is determined by
estimated discounted cash flows.
The carrying value less impairment provision of trade receivables and payables is assumed to approximate
their fair values due to the short-term nature of trade receivables and payables. Long-term financial assets and
liabilities which are classified as fair value through profit and loss are recognised on fair value.
Trade and other receivables due after more than one year are almost exclusively maintenance reserves, with
an average term of approximately four years. The fair value of these assets is determined by discounting at a
rate of interest of four years’ US Dollar swap rate prevailing on the last day of the financial year. The carrying
value of the level 3 instruments within trade and other receivables considered to be the fair value as
discounting has an immaterial effect.
The fair value of derivative financial instruments is determined by the financial institutions that issued the
respective derivative. The financial institutions are using generally accepted valuation techniques, principally
the Black-Scholes model and discounted cash flow models.
The fair value of lease liabilities is determined by discounting the future lease cash flows with the discount rate
(incremental borrowing rate) prevailing at the year end.
Wizz Air Holdings Plc Annual report and accounts 2021
151
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Gains and losses
The following net gains or losses were recognised in the statement of comprehensive income in relation to
financial assets measured at amortised cost:
(cid:1) during the year €7.5 million interest income (2020: €35.7 million income) on cash and cash equivalents;
(cid:1) during the year €8.1 million unrealised FX loss (2020: €18.8 million gain) on cash and cash equivalents; and
(cid:1) during the year €3.0 million unrealised FX loss (2020: €3.0 million loss) on trade and other receivables.
Effective interest rates analysis
Interest-bearing financial liabilities
The following table indicates the effective interest rate of the interest-bearing liabilities of the Group on the
statement of financial position date and the periods in which they mature. Convertible Notes (see Note 24)
are denominated in Euros, while the lease liabilities are denominated in Euros and US Dollars.
Effective
interest
Above
five
years
rate € million € million € million € million € million
Two to
five
years
Within
one year
Total
2021
One to
two
years
2020
Effective
interest
Above
five
years
rate € million € million € million € million € million
Two to
five
years
One to
two
years
Within
one year
Total
Convertible
Notes
Unsecured
debts
IFRS 16
aircraft and
engine lease
liability
IFRS 16
other lease
liability
JOLCO and
FTL lease
liability
7.4% 26.5
0.3
26.2
—
— 7.4%
26.7
0.3
— 26.4
1.53% 849.5 350.3
— 499.2
—
—
—
—
—
—
—
—
4.3% 1,782.8 339.8 284.2 729.7 429.1
5.8% 1,713.2 323.4 313.4 765.3
311.1
2.78%
11.1
1.9
1.6
4.1
3.5 3.60%
8.2
1.2
0.9
2.4
3.8
0.92% 454.6
30.1
30.3
92.2 302.0 0.78% 291.3
16.5
52.0
17.5 205.3
Interest earning financial assets
The Group invested excess cash primarily in Euros and US Dollars denominated short-term time deposits on
market rate at major banking groups.
Changes in liabilities arising from financing activities
The following table includes changes in net borrowings (including convertible debt) reconciled with their
effects on the consolidated statement of cash flows.
Net borrowings at the beginning of the year
Paid interest
New loans
New unsecured debt
Repayment of unsecured debt
Repayment of loans
Change in net borrowings from cash flows
New non-cash borrowings
Accrued interest
Exchange difference (unrealised FX)
Other non-cash items
Net borrowings at the end of the year
2021
€ million
2,039.4
(72.7)
195.6
1,177.0
(338.2)
(336.5)
625.2
482.2
76.7
(82.6)
(1.0)
3,139.9
2020
€ million
1,841.3
(89.1)
297.7
—
—
(304.9)
(96.3)
193.1
88.8
12.5
—
2,039.4
32. Financial guarantees
The Company has provided a parent guarantees to certain lessors of its aircraft fleet, to guarantee the
performance of its airline subsidiaries under the respective lease contracts.
The Company has provided a parent guarantee to the Hungarian government, to guarantee the performance
of its airline subsidiary in relation to a public services contract for the scheduled transport of passengers
between Hungary and five Western Balkan countries.
The Company has provided a parent guarantee to certain hedging counterparties, to guarantee the
performance of Wizz Air Hungary Ltd., under the respective hedge contracts.
The Company in April 2018 provided a parent guarantee to the UK Civil Aviation Authority, to guarantee the
performance of Wizz Air UK Limited in the context of the UK operating licence application process of Wizz
Air UK Limited.
Wizz Air Holdings Plc Annual report and accounts 2021
152
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
The note purchase agreement (for Convertible Notes) contains a guarantee and indemnity, pursuant to which
Wizz Air Hungary Ltd., inter alia, guarantees to Indigo Hungary LP and Indigo Maple Hill LP the punctual
performance by the Company of its obligations under the note purchase agreement.
The issue of €500.0 million 1.35 per cent Eurobond by Wizz Air Finance Company B.V. is fully and irrevocably
guaranteed by the Company.
33. Capital commitments
At 31 March 2021 the Group had the following capital commitments:
(cid:1)
(cid:1)
a commitment to purchase 248 Airbus aircraft of the A320-family in the period 2021–2027. Of the 248
aircraft 228 relate to the “neo” version of the A320-family (82 from the purchase orders placed in June
2015 and 146 from the purchase order placed in November 2017), while the remaining 20 relate to the
“neo XLR” version (from the purchase order placed in June 2019). The total commitment is valued at
US$34.1 billion (€29.1 billion) based on list prices last published in 2018 and escalated annually until the
reporting date (2020: US$33.5 billion (€30.5 billion), valued at 2018 list prices). As at the date of approval
of this document out of the 248 aircraft 27 are to be delivered in F22 and 22 are covered by sale and
leaseback agreements; and
a commitment to purchase 35 IAE “neo” (GTF) spare aircraft engines in the period 2021–2026. In July 2016
the Group entered into an engine selection agreement with Pratt & Whitney that, among other matters,
included a commitment for the Group to purchase 16 spare engines (of which six were already received).
In September 2019 the Group restated and amended this engine selection agreement with certain other
commitments including a purchase of 25 additional spare engines until 2026. The total commitment is
valued at US$557.4 million (€474.5 million) at list prices in 2020 US$ terms (2020: US$569.1 million (€518.4
million), valued at 2020 list prices). As at the date of approval of this document the 35 engines are not yet
financed. Only a few of these 35 engines will be delivered in F22.
34. Contingent liabilities
Legal disputes
European Commission state aid investigations
Between 2011 and 2015, the European Commission has initiated state aid investigations with respect to certain
arrangements made between Wizz Air and the following airports, respectively: Timişoara, Cluj-Napoca, Târgu
Mureş, Beauvais and Girona. In the context of these investigations, Wizz Air has submitted its legal
observations and supporting economic analyses of the relevant arrangements to the European Commission,
which are currently under review. The European Commission has given notice that the state aid investigations
involving Wizz Air will be assessed on the basis of the new “EU Guidelines on State aid to airports and airlines”
which were adopted by the European Commission on 20 February 2014. Where relevant, Wizz Air has made
further submissions to the European Commission in response to this notification. In relation to the Timişoara
arrangements, the European Commission confirmed on 24 February 2020 that the arrangements did not
constitute state aid. We are awaiting decisions in relation to the other airport arrangements mentioned herein
above. Ultimately, an adverse decision by the European Commission could result in a repayment order for the
recovery from Wizz Air of any amount determined by the European Commission to constitute illegal state aid.
None of these ongoing investigations are expected to lead to exposure that is material to the Group.
Claims by Carpatair
Between 2011 and 2013, Carpatair, a regional airline based in Romania, has initiated a number of legal
proceedings in Romania alleging that Wizz Air has been receiving state aid from Timişoara airport, demanding
that Wizz Air reimburse any such state aid. In addition, Carpatair has initiated an action for damages
demanding recovery from Wizz Air of approximately €93.0 million in alleged damages, which damages claim
was dismissed by the Bucharest court of appeals on the basis of the substantive argument that Carpatair lacks
an interest in the matter. The decision by the Bucharest court of appeals is currently subject to appeal.
Importantly, in light of the favourable European Commission decision on the Timişoara arrangements referred
to above, it is expected that the Romanian courts will eventually rule in favour of Wizz Air dismissing the
respective requests and claims filed by Carpatair.
No provision has been made by the Group in relation to these issues because there is currently no reason to
believe that the Group will incur charges from these cases.
35. Related parties
Identity of related parties
Related parties are:
(cid:1)
Indigo Hungary LP and Indigo Maple Hill LP (collectively referred to as “Indigo” here), because it has
appointed two Directors to the Board of Directors (all in service at 31 March 2021); and
(cid:1)
key management personnel (Directors and Officers).
Wizz Air Holdings Plc Annual report and accounts 2021
153
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Indigo, Directors and Officers altogether held 11.4 per cent of the voting shares of the Company at 31 March
2021 (2020: 20.0 per cent).
Transactions with related parties
There were no transactions with related parties during the financial year except as indicated below.
Transactions with Indigo
At 31 March 2021 Indigo held 7,307,692 Ordinary Shares (equal to 8.5 per cent of the Company’s issued share
capital) and 17,377,203 Convertible Shares of the Company (2020: 15,000,000 Ordinary Shares and 17,377,203
Convertible Shares).
Indigo has interest in convertible debt instruments issued by the Company (see Note 24). The Company’s
liability to Indigo, including principal and accrued interest, was €26.7 million at 31 March 2021 (2020: €26.8
million).
During the year ended 31 March 2021 the Company entered into transactions with Indigo as follows:
(cid:1)
(cid:1)
the Company recognised interest expense on convertible debt instruments held by Indigo in the amount
of €2.0 million (2020: €2.0 million); and
fees of €0.2 million (2020: €0.2 million) were paid to Indigo in respect of the remuneration of two of the
Directors who were delegated by Indigo to the Board of Directors of the Company.
Transactions with key management personnel
Officers (members of executive management) and Directors of the Board are considered to be key
management personnel. The compensation of key management personnel, including Non-Executive Directors,
is as follows:
Salaries and other short-term employee benefits
Social security costs
Share-based payments
Amounts paid to third parties in respect of Directors’ service
Total key management compensation expense
2021
€ million
3.5
0.8
3.1
2.7
10.2
2020
€ million
7.0
1.9
2.9
0.4
12.2
There were no termination benefits paid to any key management personnel in the year or the prior year.
36. Prior period restatements
Short term cash deposits
In agreement with the Financial Reporting Council (FRC), the Company has decided to present deposits with
an original maturity of longer than three months separately from cash and cash equivalents. Please refer to
Note 2 on the revised accounting policy for more details.
Presentation of foreign currency gains and losses in the Consolidated statement of cash flows
The management restated the presentation of foreign exchange gains and losses on cash and cash equivalents
as these amounts were previously reported as part of Changes in working capital of €11.4 million. Further €9.0
million gains on bank deposits were reclassified from operating cash flow to “effect of exchange rate
fluctuations on cash and cash equivalents”. The Statement of Cash Flows for F20 was restated in order for the
corresponding amounts to be presented appropriately.
Interest received in the amount of €44.3 million were previously incorrectly presented within financial expense
and are now presented within financial income. Furthermore, other reclassifications have also been made
within Net cash generated by operating activities to better align the financial expenses and financial income
in the Statement of Cash Flows to the Statement of Comprehensive Income.
Impact of these changes on the F20 Statement of Balance Sheet and F20 Statement of Cash Flows are shown
below. The restatements do not have a significant impact on the opening balances of F20.
The Consolidated statement of financial position for the year ended 31 March 2020 has been restated as
follows:
ASSETS
Current assets
Short term cash deposits
Cash and cash equivalents
2020
As previously
stated
€ million
Impact of
deposit
reclassification
2020
As restated
€ million
—
1,310.5
432.5
(432.5)
432.5
878.0
The Consolidated statement of cash flows for the year ended 31 March 2020 has been restated as follows:
Wizz Air Holdings Plc Annual report and accounts 2021
154
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Cash flows from operating activities
(Loss)/profit before income tax
Adjustments for:
Financial income
Financial expenses
Unrealised fair value losses on derivative financial
instruments
Unrealised foreign currency gains and losses
Realised non-operating foreign currency gains and losses
Changes in working capital (excluding the effects of
exchange differences on consolidation)
Decrease in trade and other receivables
Increase/(decrease) in restricted cash
Increase in trade and other payables
Cash (used in)/generated by operating activities before
tax
Decrease/(increase) in short term cash deposits
Net cash (used in)/generated by investing activities
Net decrease in cash and cash equivalents
Effect of exchange rate fluctuations on cash and
cash equivalents
Cash and cash equivalents at the end of the year
2020
As
previously stated
€ million
Impact of
separating FX
gains and losses
€ million
Impact of
deposit
reclassification
2020
As
restated
€ million € million
294.1
(3.1)
120.6
—
—
115.6
(6.8)
146.5
784.5
—
(682.4)
(4.1)
(1.4)
1,310.5
—
—
294.1
(44.2)
(29.1)
79.0
(11.9)
12.3
(7.1)
13.7
(33.1)
(20.4)
4.7
4.7
(15.7)
—
—
—
—
—
—
—
(47.3)
91.5
79.0
(11.9)
12.3
108.4
6.8
113.4
—
764.1
(432.5) (427.7)
(432.5) (1,110.1)
(432.5) (452.3)
15.7
—
—
14.3
(432.5) 878.0
37. Subsequent events
The Company informed Indigo Hungary LP and Indigo Maple Hill, L.P. (together "Indigo") on 1 June 2021 that
the Company has elected to convert Indigo's entire holding of 17,377,203 convertible shares of £0.0001 each
in the capital of the Company ("Convertible Shares") into ordinary shares of £0.0001 each in the capital of the
Company ("Ordinary Shares"), on a one for one basis, in accordance with the Company's articles of association.
Once executed the effect of the Conversion will be to increase the number of Ordinary Shares in issue from
85,635,016 to 103,012,219.
38. Ultimate controlling party
In the opinion of the Directors there is no individual controlling party in relation to the Company's issued
Ordinary Shares.
As at 14 May 2021 approximately 52.4 per cent of the Ordinary Shares in the Company were owned by
Qualifying Nationals. Shareholders and potential investors are reminded that the Group’s Hungarian operating
licence depends, inter alia, on Qualifying Nationals owning more than 50 per cent of the Ordinary Shares. The
Company’s articles of association enable the Directors to take action to ensure that the amount of Ordinary
Shares held by Non-Qualifying Nationals does not reach a level that could jeopardise the Group’s entitlement
to continue to hold or enjoy the benefit of any operating licence that benefits the Group.
On 29 December 2020, Wizz Air Holdings Plc announced its decision to treat as Restricted Shares certain
Ordinary Shares held by Non-Qualifying Nationals and to issue to such Shareholders Restricted Share Notices
(the "Disenfranchisement"). This is because from 1 January 2021 UK nationals are no longer to be treated as
Qualifying Nationals with regard to ongoing European airline ownership requirements, notwithstanding the
UK-EU Trade and Cooperation Agreement. Therefore, the Board has resolved to exercise its power under the
Articles to serve Restricted Share Notices on Non-Qualifying National shareholders specifying that, from 1
January 2021, in respect of their Restricted Shares they cannot attend or speak or vote at any general meetings
of the Company. The rights to attend (whether in person or by proxy), to speak and to demand and vote on a
poll in respect of the Restricted Shares, shall vest in the chairman of such meeting, who will be a director who
is a Qualifying National. Each such director will give an irrevocable undertaking not to vote any such Restricted
Shares.
The Board has determined, pursuant to the Articles, that the fairest and most appropriate method to
implement the Disenfranchisement is for the same proportion of each Non-Qualifying National's (including
each UK national's) shareholding to be designated as Restricted Shares. Qualifying Nationals include: (i) EEA
nationals; (ii) nationals of Switzerland; and (iii) in respect of any undertaking, an undertaking that satisfies the
conditions as to nationality of ownership and control of undertakings granted an operating licence contained
in Article 4(f) of the Air Services Regulation, as such conditions may be amended, varied, supplemented or
replaced from time to time, or as provided for in any agreement between the EU and any third country
(whether or not such undertaking is itself granted an operating licence).
A Non-Qualifying National is any person who is not a Qualifying National as per with the definition above.
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Report on the audit of the financial statements
Opinion
In our opinion, Wizz Air Holdings Plc’s group financial statements:
(cid:1) give a true and fair view of the state of the group’s affairs as at 31 March 2021 and of its loss and cash flows
for the year then ended;
(cid:1) have been properly prepared in accordance with International Financial Reporting Standards as adopted
in the European Union; and
(cid:1) have been prepared in accordance with the requirements of the Companies (Jersey) Law 1991.
We have audited the financial statements, included within the Annual report and accounts 2021 (the “Annual
Report”), which comprise: the Consolidated statement of financial position as at 31 March 2021; the
Consolidated statement of comprehensive income, Consolidated statement of changes in equity and
Consolidated statement of cash flows for the year then ended; and the notes to the financial statements,
which include a description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit and Sustainability Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and
applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for
the audit of the financial statements section of our report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, which includes the Financial Reporting Council’s (“FRC”)
Ethical Standard, as applicable to listed public interest entities in accordance with the requirements of the
Crown Dependencies' Audit Rules and Guidance for market-traded companies, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical
Standard were not provided.
Other than those disclosed in Note 7, we have provided no non-audit services to the company or its
controlled undertakings in the period under audit.
Our audit approach
Overview
Audit scope
(cid:1) The group financial statements are a consolidation of Wizz Air Holdings Plc, the trading subsidiaries Wizz
Air Hungary Ltd., Wizz Air UK Limited, and Wizz Air Abu Dhabi LLC, a number of insignificant intermediate
holding and small trading companies, and companies that have ceased operations.
(cid:1) The accounting for these entities and the group consolidation is centralised in Hungary where the majority
of our audit work was performed.
(cid:1) Whilst the consolidated results consist of a number of legal entities, due to the internal reporting process,
our audit approach is to audit the consolidated results as one component.
Key audit matters
(cid:1) Accuracy of IFRS 16 'Leases' input data
(cid:1) Aircraft maintenance provisioning
(cid:1) Hedge and derivative accounting
(cid:1) Consideration of the impact of COVID-19
(cid:1) Ability of the group to continue as a going concern
(cid:1)
Impairment of non-financial assets
Materiality
(cid:1) Overall materiality: €17,500,000 (2020: €17,500,000) based on 5% of three-year average profit / loss
before tax adjusted for exceptional items, capped at the level of the prior year materiality.
(cid:1) Performance materiality: €13,125,000.
The scope of our audit
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As part of designing our audit, we determined materiality and assessed the risks of material misstatement in
the financial statements. In particular, we looked at where the directors made subjective judgements, for
example in respect of significant accounting estimates that involved making assumptions and considering
future events that are inherently uncertain.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in
the audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by the auditors, including those which had the
greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters, and any comments we make on the results of our procedures thereon,
were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Accuracy of IFRS 16 'Leases' input data and Impairment of non-financial assets are new key audit matters this
year. Accounting for the adoption of IFRS 16 'Leases', which was a key audit matter last year, is no longer
included because of the fact that this related to the adoption of this accounting standard in the FY20 financial
statements, whilst the on-going risk relates to the accuracy of data for new leases in the year which has been
reported as a new key audit matter this year. Otherwise, the key audit matters below are consistent with last
year.
Key audit matter
Accuracy of IFRS 16 'Leases' input data
The group adopted IFRS 16 from 1 April 2019 using
the fully retrospective method of application
meaning that the changes in accounting were
applied and presented as if IFRS 16 was applicable
for
inception. The group
recognised right-of-use assets of €1,500.9 million
and associated lease liabilities of €1,739.9 million as
at 31 March 2021.
leases since their
The right-of-use assets and lease liabilities are
calculated based on discounted future
lease
payments. These calculations involve assumptions
including, but not limited to, determination of the
lease payments, expected lease term, consideration
of extension options and the discount rate used to
determine the liabilities.
We focused on this area because input data errors
for new leases or a failure to accurately capture
changes in lease contracts in the year could
materially impact the lease accounting given the
value of an individual lease.
Refer to the Accounting policies note (Note 2), Note
4 for the directors’ disclosures of the relevant
judgments and estimates involved in determining
the IFRS 16 balances at 31 March 2021 and Notes 14
and 23 which disclose the right of use assets and
lease liability balances and movements, respectively.
How our audit addressed the key audit matter
We understood and evaluated the process followed
by management to account for its leases under IFRS
16.
We tested the integrity of management's system
used to perform the lease liability and RoU asset
calculations by testing its IT general controls.
We tested the accuracy of the underlying data used
in management’s system and in the discount rate
calculation for new leases in the year to supporting
documentation.
We assessed the process by which variable factors
within the calculation were estimated and re-
performed calculations for a sample of leases.
We also tested the appropriateness of the other
significant assumptions used for lease additions or
modifications in the year. This included the discount
rates used.
We assessed the appropriateness of lease extension
options being used to calculate the value of the lease
liabilities.
We tested the rate used to discount future lease
payments, and the appropriateness of the external
sources of information used for risk-free rates and
credit spread and found that the rates used for new
leases were a reasonable approximation of the
incremental borrowing rate of the group.
leases contained an option for early
Where
termination
considered
management's assessment of the likelihood of the
option being exercised, based on the nature of the
extension, we
or
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HOLDINGS PLC
assets and the terms including changes in the period
under option.
We did not find any significant issues from our
testing of the input data or the calculations of right-
of-use assets and lease liabilities. The basis for these
calculations is consistent with the prior year and in
line with the accounting policy set out in Note 2 and
the critical accounting estimates and judgement
disclosed in Note 4.
We understood and evaluated the process followed
by management to determine its maintenance
provision.
We tested the integrity of the maintenance provision
system used by management by testing its IT general
controls and testing specific automated calculations
therein.
We also assessed the process by which the variable
factors within the provision were estimated by
performing the following procedures:
(cid:1) Comparing
the
maintenance provision system with recent
invoices, inspected and approved maintenance
plans as well as validated current flight hours and
flight cycles to non-financial data sources.
the cost assumptions
in
(cid:1) Testing the input data through agreement to
underlying lease contracts, focussing specifically
on new and amended contracts.
(cid:1) Assessing whether the calculations took into
account the impact, if any, of grounding of the
fleet in the year or aircraft that have been parked.
(cid:1) Re-performing calculations.
(cid:1) Performing a look back test to assess the
accuracy of past estimates.
(cid:1) Testing the short and long-term split of the
provision.
including
related disclosures,
We did not identify any significant issues with the
calculated maintenance provisions and charges nor
significant
the
estimates and
the
calculation, that are
in the financial
statements. The basis for the calculation of the
provision was found to be consistent with the prior
year and in line with the accounting policy set out in
Note 2.
judgements
included
involved
in
We evaluated the processes, procedures and
controls in respect of the group’s treasury and other
management functions which directly impact the
relevant account balances and transactions. The
results of this work allowed us to focus on
substantiating the year-end positions recorded in the
statements. Our audit procedures
financial
comprised:
Aircraft maintenance provisioning
The group operates aircraft which are held under
lease arrangements and
for
maintenance costs in respect of leased aircraft in line
with the terms of its aircraft leases.
liabilities
incurs
lease agreements, the group
Under these
is
contractually committed to either return the aircraft
in a certain condition or to compensate the lessor
based on the actual condition of the aircraft and its
major components upon return.
The group uses the 'strict obligation' method of
accounting for such costs under which provision is
made for the minimum unavoidable costs of specific
future maintenance obligations created by the lease
at the time when such obligations become certain.
Maintenance provisions of €78.1 million for aircraft
maintenance costs in respect of leased aircraft are
recorded in the financial statements at 31 March 2021
(refer to Note 30 to the financial statements).
At each balance sheet date, the calculation of the
maintenance provision includes a number of variable
factors and assumptions including: likely utilisation of
the aircraft; the expected cost of the heavy
maintenance check at the time it is expected to
occur; the condition of the aircraft; and the lifespan
of life-limited parts.
We focused on this area because an inherent level of
management judgement and estimation is required
in determining the above variable factors and
assumptions on an aircraft by aircraft basis. This
includes a judgement on whether to perform future
maintenance based on expected flying hours on
whether to pay compensation to the lessor at the end
of the lease.
Refer to the Accounting policies note (Note 2) and
Note 4 for management’s disclosures of the relevant
judgments and estimates involved in calculating the
maintenance provisions required, as well as Note 30
for specific disclosures relating to the maintenance
provisions.
Hedge and derivative accounting
Given the nature of its business, the group uses
derivatives and financial instruments to hedge
transactional foreign currency and jet fuel price risks.
In light of ongoing travel restrictions caused by the
COVID-19 pandemic and the resulting uncertainty in
demand for travel, management suspended fuel
hedging and only limited new US Dollar hedges were
transacted to reduce the risk of over-hedging.
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As a result the closing cash flow hedge reserve
balance is immaterial, however, a significant loss was
recognized on these derivatives during F21. The
capacity operated in F21 was significantly lower than
the forecast capacity that the hedging programme
was originally based on. As a consequence, hedge
accounting was discontinued, and where the hedging
instruments no longer matched expected future
purchases of jet fuel or, to a smaller extent, foreign
currency purchases, any losses deferred in the cash
flow reserve within other comprehensive income
related to these derivatives were released to the
statement of comprehensive income.
The loss on these instruments totalled €93.6 million
and was treated as an exceptional operating expense
in the current year. At 31 March 2021, derivative
financial assets amounted to €5.1 million and
derivative financial liabilities were €9.0 million.
We focus on these transactions due to the level of
manual input in monitoring open, closed and settled
derivatives and the judgement relating to whether
hedge accounting can be applied.
Refer to the Accounting policies note (Note 2) and
Note 4 for management’s disclosures of the relevant
judgments and estimates involved in the accounting
for hedging arrangements and financial derivatives,
as well as Note 3 for financial risk management and
Note 21 for specific disclosures relating to derivative
financial
instruments. Refer to the Audit and
Sustainability Committee report on page 78.
Consideration of the impact of COVID-19
The COVID-19 pandemic in early 2020 has affected
individuals and business across the globe, and there
has been a significant impact in countries served by
the group’s routes, with differing local limitations on
international and domestic travel being imposed.
Given the unprecedented nature of the pandemic,
the impact on the airline industry is difficult to
predict, but may
include a prolonged global
recession and changes to consumer behaviour which
may impact passenger numbers in both the short
term and longer term.
The directors have considered the potential impact
of the disruptions caused by the COVID-19 pandemic
on the current and future operations of the group. In
doing so, management have made estimates and
judgements that are critical to the outcomes of these
considerations with a particular focus on fuel hedge
effectiveness mentioned in the key audit matter
above and the group’s ability to continue as a going
concern which is addressed in the key audit matter
below.
(cid:1) We independently obtained direct confirmations
from each of the counterparties to test the
completeness of the transactions and the cut-off
at the year end.
(cid:1) We recalculated the year-end fair value of
derivatives to test the accuracy and valuation of
the fair value using independent data feeds.
(cid:1) We assessed the appropriateness of hedge
accounting
financial
instruments and performed testing procedures
over
and
hedge
the
effectiveness testing.
the derivative
documentation
for
(cid:1) We
tested management’s estimate and
judgement on the discontinuance of cash flow
hedge accounting due to COVID-19 and noted
that the impact on future reporting periods is
now immaterial. This involved testing that the
forecast volume of jet fuel hedges identified as
neither highly probable nor expected to occur
was consistent with forecasts used to support
other judgements.
(cid:1) We tested the losses incurred on discontinued
hedges to supporting books and records.
(cid:1) We assessed the disclosures included in the
financial statements in respect of derivative
financial instruments and hedge accounting and
the exceptional expense.
Overall we did not identify any significant issues with
the measurement or presentation of the group’s
derivative
and hedge
accounting.
instruments
financial
In assessing management’s consideration of the
potential impact of COVID-19, we have undertaken
the following audit procedures:
(cid:1) We obtained from management their latest
assessments
the Board’s
assessment and conclusions with respect to the
going concern statement; for the details please
refer to the key audit matter below;
support
that
(cid:1) We discussed with management and the Board
the critical estimates and judgements applied in
their latest assessments in order to understand
and challenge the rationale underlying the
factors incorporated and the sensitivities applied
as a result of COVID-19;
(cid:1) We inspected the impact assessments provided
to evaluate consistency with our understanding
of the operations of the group;
(cid:1) We audited the disclosures included in the
Annual Report in respect of this risk, including
going concern, discontinued hedge accounting
and impairment sensitivities and consider them
reasonable.
fleet assets (covered
Consideration has also been given to the risk of
impairment of
the
'Impairment of non-current assets' key audit matter
below), the accounting for customer credits relating
to cancelled flights, and potential impacts on aircraft
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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WIZZ AIR
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The impact of COVID-19 on the group’s ability to
continue as a going concern is considered in the key
audit matter below.
Our audit places limited reliance on the group’s IT
and control environment. However, in response to
any incremental risk from remote working, we
understood key changes to the group’s IT controls
and processes as part of our assessment of audit risks
to consider where additional testing might be
required. We also met with senior management
responsible for cyber security and considered
whether there were developments in the year that
warranted further procedures to be performed.
Despite undertaking most of our audit work
remotely, we did not encounter any significant
difficulties in performing our audit testing or in
obtaining the required evidence to support our audit
conclusions. We reviewed the disclosures in the
financial statements in respect of the impact of
COVID-19 and concluded that these are appropriate.
Based on the work performed, as summarised above,
we have concluded that the Group’s conclusions in
respect of the impact of COVID-19 are appropriate.
Our procedures and conclusions in respect of going
concern are set out below in the 'Conclusions relating
to going concern' section below.
maintenance provisions (covered in the key audit
matter above) given reduced flying hours.
We have focussed on this risk due the evolving
nature of the pandemic, the uncertainties involved
and the magnitude of any potential impact on the
financial statements.
Management’s way of working,
including the
operation of controls, has been impacted by COVID-
19 as a result of staff working remotely. There is
inevitably an increase in risk due to the remote
accessing of IT systems and potentially heightened
cyber risk.
Refer to Note 2, 3 and 14 of the financial statements.
Refer to the Audit and Sustainability Committee
report on page 77.
Ability of the group to continue as a going concern
The COVID-19 pandemic has had a significant impact
on the airline industry, and had a major impact on the
group's operations and the 'cash burn' that it
experienced in the year ended 31 March 2021.
There is on-going and significant uncertainty over the
shape and speed of potential recovery and the
impact of new variants of the COVID-19 virus. The
group’s cash flow forecasts for the next two financial
years have been reduced as a result by analysts.
Given this uncertainty, management has modelled a
base and downside liquidity headroom position for
its going concern assessment covering the 13 month
period to June 2022. Both scenarios
include
considerations about future capacity levels, the
availability of aircraft financing and the 'cash burn'
rate, including assumptions on fuel costs and
estimated costs relating to the impact of climate
change.
The group’s debt facilities do not contain financial
covenants.
The Directors have concluded that there is sufficient
liquidity available for at least the period of its going
concern assessment to June 2022. As the going
concern assessment is dependent on management’s
future cash flow forecasts there is significant
judgement
in determining these and
concluding that there is not a material uncertainty.
involved
We focused on management’s going concern
assessment due to the significant uncertainty of the
industry’s recovery from the COVID-19 pandemic and
the associated risks in relation to the Group's liquidity
over the next twelve months.
Refer to the Accounting policies note (Note 2) for
the management’s disclosures of the relevant
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judgments and estimates in relation to their going
concern assessment.
Impairment of non-financial assets
At 31 March 2021, the Group had aggregate property,
plant and equipment, intangible assets and right-of-
use assets totalling €2,908.6m.
These carrying amounts should be tested for
impairment if an impairment trigger exists and the
significant fall in forecast cash flows as a result of the
identified by
COVID-19 pandemic has been
management as such an indicator.
Accordingly management has performed an
impairment assessment of these assets as at 31 March
2021. For the impairment assessment, management
has estimated the recoverable value of the
underlying Cash Generating Unit (CGU), which has
been determined to be the group's fleet of aircraft,
in use. To do so.
by determining
management has utilised its three year medium term
cash flow forecasts and extrapolated from the end of
this period to FY33, being the end of the lease life of
the aircraft in the fleet.
its value
Management has reflected the increased uncertainty
from COVID-19 by probability weighting a base case
and downside scenario in order to arrive at expected
future cash flows and discounted these future cash
flows to their present value using a pre-tax discount
rate.
impairment
Management's
indicates
significant headroom exists between the recoverable
amount of the CGU and its carrying value and
accordingly no impairment was booked.
analysis
We focused on the risk of impairment of non-current
assets due to the significance of the balance to the
Group and the significant uncertainty over the shape
and timing of recovery from the COVID-19 pandemic
that the group will experience.
Refer to the Accounting policies note (Note 2) and
Note 14 for the management’s disclosures of the
relevant judgments and estimates involved in
determining the value in use.
We obtained management's impairment model and
tested its logic and mathematical accuracy. We also
agreed the underlying forecasts to the board
approved medium term plan and assessed how these
budgets were compiled.
We evaluated the future cash flow forecasts of the
CGU, being the aircraft fleet, by performing the
following procedures:
(cid:1) we evaluated the reasonableness of the whole
aircraft fleet being treated as one CGU and
tested how the carrying value of this CGU was
determined by management
(cid:1) we assessed the reasonableness of the two
scenarios used by management and the
associated probability given to each
(cid:1) we tested the key assumptions used
in
management’s
considering
supporting evidence, past experience, actuals in
the current year and industry forecasts, where
available
forecasts by
(cid:1) we considered how management had evaluated
the useful economic life of its leased aircraft fleet,
noting the duration of the leases, and also the
need to address the potential impact of new
technology in this period
(cid:1) with the support of our valuations experts, we
assessed the inflation rate and discount rate
applied by management with reference to third
party information and the group's cost of capital
(cid:1) we performed our own sensitivity analysis in
order to understand the impact of changes in key
assumptions (such as passenger numbers, fuel
costs, and capacity) on the available headroom
by replacing key assumptions with alternative
scenarios.
We also adjusted the weighting assumed of the base
and downside case cash flows within management's
model to assess its impact on headroom.
In addition to the above we also considered a high
level enterprise value approach based on the group's
market capitalisation adjusted for cash and debt and
noted that this also exceeded the carrying value of
the CGU by a significant amount.
We also assessed the presentation and disclosure of
the impairment assessment and its results in the
financial statements, including disclosure of key
assumptions and whether no sensitivity disclosures in
respect of ‘reasonable possible changes’ in key
assumptions are appropriate given the significant
headroom in management's model. We found that
suitable disclosure has been given in note 14 of the
financial statements.
How we tailored the audit scope
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We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on
the financial statements as a whole, taking into account the structure of the group, the accounting processes
and controls, and the industry in which it operates.
The group consists of one reporting segment, being the airline business. It includes the results of the legal
entities of Wizz Air Holdings Plc and its trading subsidiaries, Wizz Air Hungary Ltd., Wizz Air UK Limited, and
Wizz Air Abu Dhabi LLC, which include branch operations in base countries. Whilst the consolidated results
consist of a number of legal entities, due to the internal reporting process, our audit approach is to audit the
consolidated results as one component. The accounting for these entities and the group consolidation is
centralised in Hungary.
The audit is largely performed by a single engagement team comprising individuals based in the UK and in
Hungary together with an offshore support function, tax specialists and valuation experts. The operations are
audited by applying their collective knowledge and understanding of the group and its financial reporting
processes and controls.
As a result of travel restrictions, the UK and Hungarian audit team members had regular catch-ups via video-
conference calls. The UK team members also attended local bi-weekly virtual meetings in Hungary with
management and all Audit Committee meetings via video-conference calls. We believe this gave us the
evidence we required for our opinion on the group financial statements as a whole.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds
for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit
and the nature, timing and extent of our audit procedures on the individual financial statement line items and
disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial
statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as
follows:
Overall group materiality
€17,500,000 (2020: €17,500,000).
How we determined it
5% of three year average profit / loss before tax adjusted for exceptional
items, capped at the level of the prior year materiality
Rationale for benchmark applied We believe that adjusted profit / loss before tax is a key measure used by
shareholders in assessing the performance of the Group. For the year
ended 31 March 2021 the group incurred significant losses due to the
COVID-19 pandemic imposing restrictions on flying and impacting
measures of performance. To mitigate this we have used a three year
average of adjusted profit / loss before tax to calculate materiality. In
order to avoid applying a higher materiality for the current year’s reduced
activities we decided to cap the materiality at the prior year level.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance
materiality in determining the scope of our audit and the nature and extent of our testing of account balances,
classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality
was 75% of overall materiality, amounting to €13,125,000 for the group financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements,
risk assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the
upper end of our normal range was appropriate.
We agreed with the Audit and Sustainability Committee that we would report to them misstatements
identified during our audit above €875,000 (2020: €875,000) as well as misstatements below that amount
that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group's ability to continue to adopt the going concern basis
of accounting included:
(cid:1) Testing the model used for management’s going concern assessment which is primarily a liquidity
assessment given there are no financial covenants in its committed debt facilities. Management’s
assessment covers the period to 30 June 2022.
(cid:1) Management’s base case forecasts are based on its normal budget and forecasting process for the next
three years. We understood and assessed this process including the assumptions used for 2021 and 2022
and assessed whether there was adequate support for these assumptions. We also considered the
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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WIZZ AIR
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reasonableness of the monthly phasing of cash flows. A similar assessment was performed of the
downside cash flows, including by comparison of actual monthly cash burn experienced in F21 and by
comparison of assumed flying levels relative to those experienced in F20 and F21.
(cid:1) We read and understood the key terms of all committed debt facilities to understand any terms, covenants
or undertakings that may impact the availability of the facility.
(cid:1) We understood the schedule of committed aircraft deliveries over the next twelve months and assessed
management's assessment of how these would be financed based on their available committed financing
and other plans to finance future aircraft deliveries.
(cid:1) Using our knowledge from the audit and assessment of previous forecasting accuracy, we applied our
own stress test to management's downside cash flow forecasts. We overlaid this on management’s
forecasts to arrive at our own view of management’s downside forecasts.
(cid:1) We considered the potential mitigating actions that management may have available to it to reduce costs,
manage cash flows or raise additional financing and assessed whether these were within the control of
management and possible in the period of the assessment.
(cid:1) We assessed the adequacy of disclosures in the Going Concern statement on pages 99 to 100 and
statements in note 2 of the group financial statements and found these appropriately reflect the key areas
of uncertainty identified.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the group's ability to continue as a
going concern for a period of at least twelve months from when the financial statements are authorised for
issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as
to the group's ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the directors’ statement in the financial statements
about whether the directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements
and our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the
financial statements does not cover the other information and, accordingly, we do not express an audit opinion
or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an
apparent material inconsistency or material misstatement, we are required to perform procedures to conclude
whether there is a material misstatement of the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report based on these
responsibilities.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term
viability and that part of the corporate governance statement relating to the company’s compliance with the
provisions of the UK Corporate Governance Code specified for our review. Our additional responsibilities with
respect to the corporate governance statement as other information are described in the Reporting on other
information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of
the corporate governance statement, included within the Corporate governance report is materially consistent
with the financial statements and our knowledge obtained during the audit, and we have nothing material to
add or draw attention to in relation to:
(cid:1) The directors’ confirmation that they have carried out a robust assessment of the emerging and principal
risks;
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(cid:1) The disclosures in the Annual Report that describe those principal risks, what procedures are in place to
identify emerging risks and an explanation of how these are being managed or mitigated;
(cid:1) The directors’ statement in the financial statements about whether they considered it appropriate to adopt
the going concern basis of accounting in preparing them, and their identification of any material
uncertainties to the group’s ability to continue to do so over a period of at least twelve months from the
date of approval of the financial statements;
(cid:1) The directors’ explanation as to their assessment of the group's prospects, the period this assessment
covers and why the period is appropriate; and
(cid:1) The directors’ statement as to whether they have a reasonable expectation that the company will be able
to continue in operation and meet its liabilities as they fall due over the period of its assessment, including
any related disclosures drawing attention to any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the group was substantially less
in scope than an audit and only consisted of making inquiries and considering the directors’ process supporting
their statement; checking that the statement is in alignment with the relevant provisions of the UK Corporate
Governance Code; and considering whether the statement is consistent with the financial statements and our
knowledge and understanding of the group and its environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the corporate governance statement is materially consistent with the financial statements and our
knowledge obtained during the audit:
(cid:1) The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the information necessary for the members to assess the group’s position,
performance, business model and strategy;
(cid:1) The section of the Annual Report that describes the review of effectiveness of risk management and
internal control systems; and
(cid:1) The section of the Annual Report describing the work of the Audit and Sustainability Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to
the company’s compliance with the Code does not properly disclose a departure from a relevant provision of
the Code specified under the Listing Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of directors' responsibilities in respect of the financial statements, the
directors are responsible for the preparation of the financial statements in accordance with the applicable
framework and for being satisfied that they give a true and fair view. The directors are also responsible for
such internal control as they determine is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the group or to cease operations, or have no
realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance
with laws and regulations related to the UK Listing Rules and the UK Corporate Governance Code, the
regulations of country aviation authorities such as the European Union Aviation Safety Agency, the UK Civil
Aviation and the UAE General Civil Aviation Authority Regulations, health and safety regulations and the
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relevant tax regulations in the jurisdictions in which the group operates, and we considered the extent to which
non-compliance might have a material effect on the financial statements. We also considered those laws and
regulations that have a direct impact on the financial statements such as the Companies (Jersey) Law 1991.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls), and determined that the principal risks were related to
posting inappropriate journal entries and management bias in accounting estimates. Audit procedures
performed by the engagement team included:
(cid:1) Discussions with management, Internal Audit and the Group’s legal advisors, including consideration of
known or suspected instances of non‑compliance with laws and regulation and fraud;
(cid:1) Understanding and evaluating controls designed to prevent and detect irregularities and fraud;
(cid:1) Assessing significant judgements and estimates in particular those relating to impairment, maintenance
provisions, hedge and derivative accounting, lease accounting and EU-261 provisions, and the disclosure
of these items (and as outlined further in the ‘Key audit matters’ section of this report); and
(cid:1)
Identifying and testing journal entries, in particular journal entries posted with unusual account
combinations.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that are not closely related to events and transactions
reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by,
for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly
using data auditing techniques. However, it typically involves selecting a limited number of items for testing,
rather than testing complete populations. We will often seek to target particular items for testing based on
their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion
about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s
website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in
accordance with Article 113A of the Companies (Jersey) Law 1991 and for no other purpose. We do not, in
giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where expressly agreed by our prior consent in
writing.
Other required reporting
Companies (Jersey) Law 1991 exception reporting
Under the Companies (Jersey) Law 1991 we are required to report to you if, in our opinion we have not received
all the information and explanations we require for our audit.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee (now the Audit and Sustainability Committee), we
were appointed by the members on 15 August 2007 to audit the previous parent company of the Wizz Air
group. Following the Company’s incorporation in 2009 we were appointed to audit the consolidated financial
statements of the Company for the period ending 31 March 2010 and subsequent financial periods. We were
reappointed as auditor of the Company following a competitive tendering process by the members on 21 July
2017 to audit the consolidated financial statements for the year ended 31 March 2018 and subsequent financial
periods. Our period of total uninterrupted engagement for the Group (comprising the previous parent
company and now the Company, and their subsidiaries) is 14 years covering the years ended 31 March 2008
to 31 March 2021 and for the Company is 12 years, covering the years ended 31 March 2010 to 31 March 2021.
Other voluntary reporting
Directors’ Remuneration Report
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The company voluntarily prepares a Directors’ Remuneration Report. The directors requested that we audit
the part of the Directors’ Remuneration Report specified by the United Kingdom Companies Act 2006 to be
audited as if the company were a quoted company.
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in
accordance with the United Kingdom Companies Act 2006.
Richard Porter
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Recognized Auditor
London, United Kingdom
2 June 2021
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