WIZZ AIR HOLDINGS PLC
ANNUAL REPORT AND ACCOUNTS 2022
WIZZ AIR
AT A GLANCE
Wizz Air is the fastest growing ultra-low cost carrier and one of the most sustainable European airlines,
operating a fleet of 153 Airbus A320 and A321 family aircraft, and connecting 194 destinations across 50
countries. A team of dedicated aviation professionals delivers superior service and very low fares, making
Wizz Air the preferred choice of over 27 million passengers. Wizz Air is listed on the London Stock Exchange
under the ticker WIZZ.
At Wizz, our vision is to liberate lives through affordable travel. We operate among the lowest unit cost and
at the lowest carbon intensity footprint in the European airline 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
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
2
6
9
13
15
60
62
68
70
78
82
85
Report of the Chairman of the Audit and Risk Committee
95
Report of the Chairman of the Nomination and Governance Committee
Directors’ remuneration report
Directors’ report
Company information
100
102
123
128
Statement of Directors’ Responsibilities in respect of the financial statements
129
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
131
132
133
135
136
185
References to “Wizz Air”, “Wizz”, “the Company”, “the Group”, “we” or “our” in this report are references to Wizz Air Holding s
Plc, or to Wizz Air Holdings Plc and its subsidiaries, as applicable.
F22 in this document refers to the financial year ended 31 March 2022. Equivalent terms are used for prior/future financial
years.
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1
HIGHLIGHTS
€1.7B REVENUE
€1.4B TOTAL CASH*
€465.3M OPERATING LOSS
€642.5M NET LOSS
2.99 €CENTS RASK*
2.81 €CENTS EX-FUEL CASK*
* For definition refer to the Glossary of technical terms on page 68. Total cash comprises cash and cash equivalents (€766.6 million), short-
term cash deposits (€450.0 million), and current and non-current restricted cash(€162.2 million).
The Company has a policy of rounding each amount and percentage individually from the fully accurate number to the figure
disclosed in the information presented. As a result, some amounts and percentages do not total – though such differences are all
small.
Wizz Air Holdings Plc Annual report and accounts 2022
2
GEOGRAPHIES
We offer tickets for 1,000 routes across Europe and
the Middle East
Number of routes operated and on sale as at 31 March 2022:
From Central and Eastern Europe (CEE) countries
Poland
Romania
Hungary
Bulgaria
Albania
Bosnia and Herzegovina
North Macedonia
Lithuania
Serbia
Moldova
Ukraine*
Georgia
Kosovo
Latvia
Montenegro
Slovenia
Estonia
From other European countries (to non-CEE countries)
Italy
United Kingdom
Austria
Cyprus
From Gulf Cooperation Council (GCC) and Middle-East countries
United Arab Emirates
Israel
* Routes operated to Ukraine and Russia were taken off sale after 31 March 2022.
Wizz Air Holdings Plc Annual report and accounts 2022
181
167
76
60
42
37
36
25
25
20
14
14
4
3
2
1
1
145
83
29
9
22
4
3
WHY INVEST IN WIZZ
ULTRA-LOW COST BY DESIGN
The European short-haul market is supplied by full service carriers and a generally younger group of low-
cost airlines. Low-cost airlines such as Wizz Air benefit from relatively simple business models, higher aircraft
utilisation and staff productivity rates and therefore lower costs than their legacy rivals. Wizz Air’s ultra-low-
cost model gives it a clear cost advantage versus most of its rivals, including many other low-cost airlines,
and as a result it is able to stimulate the market with very low fares.
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
twelve hours per day in normal times, operating a point-to-point network, in a single-class cabin
configuration and 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. Today, our growth is also coming from markets where a void has
been left by airline operators grounding their fleets in the wake of the COVID-19 crisis. Our geographic
exposure to Central Eastern Europe and our expansion in Abu Dhabi hold tremendous potential for the future
as the propensity to fly, calculated as a number of seats per head of population, is significantly lower
compared to Western Europe.
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
€1,378.8 million of total cash (including short-term deposits and restricted cash balances) at the end of
March 2022, one of the stronger liquidity positions in the industry. In January 2022 the Company raised
€500 million under its Euro Mid Term Note Programme securing even more attractive interest rates compared
to its debut offering in January 2021. As we mention frequently, our focus is on cost and we have relied on
our strong credit and scale to optimise our vendor agreements and make the cost structure more variable
to asset utilisation. All of this has enabled us to keep our cash burn low, even in the worst of times, and
continue to protect the strength of the balance sheet, which is a key ingredient for full participation in the
recovery of the travel sector.
DESIGNED FOR PROFITABLE GROWTH
A key strength of Wizz Air is its attractively priced and timely orderbook of Airbus A321neo aircraft, featuring
the most fuel efficient Pratt & Whitney GTF engines and the widest single-aisle cabin configuration with 239
seats. With a backlog order of 328 aircraft and the lowest cost base enabled by our disciplined ultra-low-cost
model, we have the strong basis to deliver consistent profitable growth. We target 20 per cent growth of
seat capacity every single year and aspire to deliver a net income margin between 13–15 per cent as the
trading environment normalises. Our pre-COVID-19 track record shows we can deliver on these growth rates
at attractive levels of profitability.
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THE MOST SUSTAINABLE CHOICE OF
AIR TRAVEL
At Wizz Air we strive to serve more and more passengers every day, in the most sustainable way. Our motto
is: “When you don’t need to fly, please, don’t. But when you do, fly the greenest.” Here are seven reasons
why Wizz Air is your greenest choice:
A passenger travelling with us will have a CO2 footprint of only 57.2 grams per kilometre on average (pre-
COVID-19). If every airline were as efficient as us, European CO2 emissions from aviation would reduce by
34 per cent overnight.
This comparison is based on the 2019 statistics from The International Council on Clean Transportation,
looking at the difference between the European Union’s average CO2 per passenger kilometre.
We don’t fly half-empty planes to avoid unnecessary pollution.
Pre-COVID-19, 94 per cent of our seats were occupied on average. In comparison, the industry average in
the same period was between 70-85 per cent, and sadly, empty seats still have a CO2 footprint.
We don’t have business class seating, another example of needless emissions.
Leaving seats empty to make room for somebody to spread out and read the newspaper more comfortably
just doesn’t make sense.
We only fly direct routes. One take-off, one landing, no connecting flights, no extra fuel-burn.
Because, as you might have heard, 15-20 per cent of the fuel consumption of the average short-haul flight
happens during take-off and landing.
We use world-class engines and aircraft, crucial for low emissions.
The Airbus A320neo family engines are the most efficient in the industry, because they can produce a greater
amount of thrust while consuming the same amount of fuel, ensuring the lowest fuel consumption when
compared to other engines used in commercial aircraft.
We have the youngest, most modern fleet among European competitor airlines with 100+ aircraft.
We mostly fly Airbus A321neos, and the average age of our fleet is currently five years. That’s unparalleled
among major airlines, and leads to less emissions.
On top of all this, none of our routes have a direct train alternative under four hours.
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5
STRATEGIC REPORT
CHAIRMAN’S STATEMENT
Dear fellow shareholders, colleagues, customers and partners,
The last two years have been unlike any other in living memory in terms of uncertainty for our customers
and colleagues, as we fought through a second year of the COVID-19 pandemic and witnessed the suffering
from the outbreak of the war in Ukraine and its impact on the Eastern part of our network, including the key
markets of Poland, Hungary and Romania.
The pandemic hit the airline industry hard and its impact on our Company was material, with overall revenue
down 40 per cent versus pre-pandemic, resulting in a second year of a significant financial loss, totalling
€642.5 million for the year ended 31 March 2022 (F22).
Sadly, the outbreak of the war in Ukraine affected some of our closest colleagues, their families and
livelihoods. And, it added volatility to global markets, especially with regard to the price of jet fuel.
Despite the global crisis, in F22 we focused on building the foundation of the business to win disproportionally
and sustainably in the next decade, balancing on the one hand the crisis, while on the other hand focusing
on strategic decisions impacting the Company’s future.
Sustainable, profitable and organic growth with an industry-leading cost-base has been core to our strategy
since the start of Wizz Air’s operations. We know that, in order to continue to deliver that strategy
successfully, we need to ensure strong leadership, to which our Chief Executive Officer remains key. We
were therefore pleased that, at our 2021 Annual General Meeting, our Shareholders supported a new
incentive scheme for senior management, which strongly incentivises the delivery of that strategy with
meaningful and testing financial, sustainability and diversity targets.
In F22, there were three key areas underpinning our ambitious strategic plan:
First, there was a further diversification in the Company’s footprint during F22, which allows us to absorb
events and adversity better in any one part of the network. As a result, the Company’s business is now split
65 per cent Central and Eastern Europe, 30 per cent Western Europe and 5 per cent Middle East, and as at
31 March 2022 we operated 37 bases compared to 25 bases as at 31 March 2020, competing on both
international and domestic markets. Significantly, we have grown our business across a number of faster
GDP-growth markets with low flight-penetration, where the Company’s ultra-low cost base allows it to deliver
on its promise of making flying affordable for more people than ever before.
Second, we have continued to invest in our fleet, adding the newest-technology Airbus A320neo-family
aircraft and retiring our older aircraft from service. As a result, today we have the youngest and most cost-
efficient fleet of any large airline in Europe, with the lowest carbon intensity footprint. We continue to plan
for the future, announcing a supplemental order for up to 192 Airbus A321neo aircraft, comprising firm
orders for 75 Airbus A321neo and 27 Airbus A321XLR aircraft, with the bulk of this order to be delivered
between 2025 and 2027, and the possibility to add a further 90 aircraft to the order book. The order was
strongly supported and approved as a Class 1 transaction by our Shareholders during an Extraordinary
General Meeting in February 2022. The order is critical to support the Company’s growth objectives and to
underpin both its cost leadership and industry leadership on environmental sustainability, as we progress
towards a net zero community.
Third, we continue to invest in our people and in our Leadership Team. We are focused on building leadership
and bench strength to ensure we can execute against our plan to more than double the business by 2026.
I remain confident that targets the Board has set and the actions we have taken to meet those targets have
made Wizz Air a 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 it maintains an appropriate balance
of skillset, background and experience to enable the Board to oversee the execution by the Leadership Team
of the Company’s strategy.
In November 2021, we welcomed Ms Anna Gatti to the Board as an independent Non-Executive Director.
She is a global technology and business leader with robust corporate governance experience built over years
of board membership in international public and private companies. She currently serves as an independent
non-executive director at Intesa Sanpaolo Bank, Fiera Milano and WiZink Bank in Spain. As a seasoned
digital sales and operations executive, she drove customer success at scale for companies such as Google,
YouTube and Skype. Anna is also an active angel investor and co-founded two start-ups leveraging artificial
intelligence applied to big data. Prior to her career in technology, Anna spent years in research and public
Wizz Air Holdings Plc Annual report and accounts 2022
6
policy, working at the World Health Organization and at the University of Berkeley, California, Goldman
School of Public Policy.
In June 2021, we created an additional Board Committee by dividing the responsibility of the Audit and
Sustainability Committee into, on the one hand, the Audit and Risk Committee, and, on the other hand, the
Sustainability and Culture Committee, allowing for more specialised and dedicated governance for Audit and
Risk and for Sustainability and Culture.
In January 2022, Mr Simon Duffy, Senior Independent Non-Executive Director retired from the Board of
Directors after eight years of service. Simon was an exemplary Director and we thank him for his service.
Customers
In this complex and volatile world, I would like to thank our customers for their trust in Wizz Air. The fiscal
year that ended 31 March 2022 continued to be marked by changing restrictions on passenger mobility that
impacted passenger travel schedules and increased the cost and comfort of travel. Added tests, airport and
airplane passenger administration plus additional steps in the travel journey became daily events. Wizz Air
tried to operate as many flights as it could during the ever-changing pandemic restrictions and did its best
to simplify and automate key passenger touch points like: payments, refunds, and customer service through
the introduction of chatbots. Wizz Air remains committed to not only offering the lowest fares and a safe,
reliable service, but to making the user experience superior to its industry peers. We want to inform, assist
and help passengers in reaching their destinations in a simple and worry-free manner.
Employees
Our people are the heartbeat of our Company. More than 90 per cent of our people interact with our
customers face-to-face on a daily basis and our highly engaged workforce is synonymous with a positive
Wizz Air travel experience. In the second year of the pandemic, the dedication and enthusiasm of our teams
of flight and cabin crew, front-line and office employees continued to underpin our ability to navigate the
crisis.
It is in these difficult times that the quality of Wizz Air employees and their commitment and character have
been highlighted. When the war broke out in Ukraine, our people across the network stepped up with
donations for affected colleagues and their families, offering their homes to refugees and helping them settle
in a new-found country. The Company also stepped up with donations for employees, by offering the
Ukrainian community 100,000 free flights to safer havens, and by offering jobs to the displaced at Wizz Air.
We take pride in the actions of our employees and the Company.
Throughout these difficult times our employees remained engaged and, through our Employee Survey, voted
Wizz Air as their employer of choice. We want to thank each and every employee for their commitment and
enthusiasm during this very difficult period.
The future is bright for our Wizz Air colleagues. We are committed to them, to their career and their work-
life balance. We remain focused on continuing to improve the diversity of our workforce and building a strong
and diverse bench for the Wizz Air team.
I would like to thank Wizz Air’s People Council for its efforts and its help in creating an efficient communication
channel between employees, the Leadership Team and the Board, which in these turbulent times has been
critically important.
Environment
Our focus on lowering emissions is an airline industry benchmark. We expect to accelerate our progress
toward our net zero objective. Our fleet renewal plan is focused on ensuring we have the best in class
technology, entering our fleet as early as possible, in order to further decrease emission intensity, with an
objective to reduce by 25 per cent before the end of the decade. With a longer-term view, the Company is
engaging with manufacturers and other industry players in looking at new technologies that would deliver a
huge step-change in the industry’s environmental credentials. We continue to work to align with the
recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). It is important that our
stakeholders understand where Wizz Air is in its journey to meet its sustainability priorities. We encourage
stakeholders to suggest initiatives they feel the Company should consider in support of its ambition to remain
the most sustainable airline in the region.
Communities
We are conscious of the many economic, social and environmental developments impacting our
communities. Overseen by the Board’s Sustainability and Culture Committee, we aspire through our focus
on four critical pillars (people, environment, community and governance) to have an active role in the
communities we serve.
Wizz Air Holdings Plc Annual report and accounts 2022
7
Looking ahead
For the first time in two years, we are near full utilisation of our fleet and our crew, flying one of the youngest
and most efficient fleets and having a well-defined, proven business model. This translates into the lowest
cost in the industry, allowing us to offer the best value – new, safe and clean technology at the lowest fares
– to customers who reward us with their trust. We believe that this in turn will create significant shareholder
value.
The investments we have made in people and assets ensure the Company remains well-positioned for a
return to more normal operations, superior growth and industry-leading margins. We are nearly there.
Thank you for your support.
William A. Franke
Chairman of the Board of Directors
8 June 2022
Wizz Air Holdings Plc Annual report and accounts 2022
8
STRATEGIC REPORT
CHIEF EXECUTIVE’S REVIEW
Although the past two years have been the most challenging in our 18-year history, they have demonstrated
the resilience of the Wizz Air business model and the passion of our people as we work together to deliver
for our customers every day, even in these times of extreme adversity.
The aviation industry globally has faced severe restrictions due to COVID-19, with airlines around the world
being limited in their ability to operate and many required to seek significant financial support from
governments or shareholders or both.
Wizz Air has faced these same restrictions but has managed to navigate the pandemic from a position of
strength, with an investment grade balance sheet, a strong liquidity position and an unwavering focus on
continuing to widen our competitive cost advantage. The Company continued to deal with the crisis at hand
and, at the same time, laid the foundation that would allow us to emerge from this cycle as a more diversified,
stronger business; with a younger, more efficient and more sustainable fleet; and with a workforce eager to
deliver against our ambitious “Wizz 500” strategy – a vision that will more than triple our fleet and size by
the end of the decade.
As a result of the pandemic, Wizz Air is closing F22 with revenue down 40 per cent versus F20 (our pre-
COVID-19 financial year), but with revenue up 125 per cent compared to last year. Our net loss for the year
was €642.5 million as the uncertain and ever-changing nature of COVID-19 impacted the core principles of
our low-cost model – maximising the utilisation of our fleet, the optimal utilisation of our workforce, and
sufficient time to commercialise our routes driving the maximum revenue per aircraft. Several times during
the year we had to adjust our plans downwards to deal with the next wave of COVID-19 or upwards to ramp
up the operation when infections seemed to decrease, supported by increasing vaccination levels.
Following the severe challenges of the pandemic, on the second anniversary of the COVID-19 outbreak in
Europe, a war started in Ukraine, impacting our customers, colleagues and operations in Ukraine, Moldova
and Russia. Our people showed great resilience and generosity beyond anything I could have imagined,
working together to help those customers and colleagues affected by the war. The WIZZ team worked
tirelessly to help them to start to rebuild their lives in a new country by providing support, meals, transport
and, in some cases, accommodation in their own homes.
From an operational perspective, the impact on the business was quickly mitigated, helped by the
diversification of the network, which we have been focused on expanding over the last number of years. We
continue to work to repatriate four stranded aircraft in Ukraine.
As we move on from the COVID-19 pandemic we are focused on the business model and strategy that have
made Wizz Air so successful. Operational efficiency, cost and price leadership, innovation, and service
excellence remain the core principles of how we operate. These are the cornerstones of our success and are
the basis of how we will achieve Wizz 500. In doing so we believe we will provide 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, all while setting high benchmarks for safety, customer experience and sustainability.
A focused ultra-low-cost business model
In the post-pandemic environment, and in light of the low levels of operation due to travel restrictions, our
total cash balance has been the single most important performance indicator of the health of the Wizz Air
business. With a total cash (including short-term deposits and restricted cash balances) balance at €1,378.8
million at the end of March 2022 and an investment grade balance sheet, we remain one of the strongest
airlines in the industry.
Maintaining this strong cash position was only possible through our ultra-low-operating cost base, which has
allowed us to persevere through periods of severe business interruption and allowed us to operate cash-
positive flights, serving our customers and supporting our cash position even during periods of restricted
demand.
Nonetheless, we were not immune to all challenges, especially as the crisis entered its second year without
interruption. During F22, we raised €500 million from a 1.00 per cent Eurobond maturing in January 2026,
used in large part to repay a £300 million Commercial Paper Facility from the Bank of England under the UK
Government's COVID Corporate Financing Facility (CCFF).
We also focused on widening our competitive cost advantage by continuing to invest in the network (securing
new attractive long-term 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 212 seats per
aircraft), and working with our partners to get better cost and payment terms going forward.
Wizz Air Holdings Plc Annual report and accounts 2022
9
Our geographic footprint as sustainable competitive advantage
Our growth model is centred around making mobility affordable for more people. In Central and Eastern
Europe flight penetration is still well below Western European markets. As GDP in the region has grown, so
has demand for air travel and, historically, 75 per cent of our growth has come from market growth. In
Western Europe, we make flying more affordable as we disrupt legacy carriers who operate in fragmented
markets.
Our focus has been – and remains – to continue to grow and diversify our footprint. While doing so we have
enhanced our ability to recover faster once restrictions lifted and have also improved our structural cost as
we locked in a cost structure at a time when there was depressed demand for airport capacity. This allowed
us to reinvest these lower costs in lower fares for our passengers.
We have further strengthened our business in our core CEE region, including new bases in Albania and Bosnia
and Herzegovina, in order to consolidate our market leadership, with an overall market share close to 21 per
cent and a low-cost segment share of over 38 per cent in CEE.
We have also strengthened historic positions in select markets in the West, notably in the UK and Italy. We
have expanded our presence in London through our continued market leadership in Luton and expansion in
Gatwick and, additionally, we have started operations at a new base in Cardiff, bringing the UK base network
to four airports, including Doncaster. In Italy we opened new bases in Rome, Naples and Venice, bringing
our Italian bases to seven. The UK and Italy are markets where we have been operating with a strong brand
and product for more than 15 years and where COVID-19 has redrawn the competitive landscape allowing
for a disproportionate level of growth.
As part of our “Go East” strategy, Wizz Air Abu Dhabi has now been operating for 18 months. As we emerge
from the pandemic, we believe it can become a 50 aircraft operation towards the end of the decade, serving
a potential market of 5 billion people within five-hours’ flying from Abu Dhabi. On 10 May 2022 Wizz Air
signed a memorandum of understanding with the Kingdom of Saudi Arabia to explore the country’s airline
market development opportunities.
Market
Romania
Bulgaria
Albania
North Macedonia
Bosnia and Herzegovina
Hungary
Ukraine
Lithuania
Slovakia
Serbia
Moldova
Poland
Latvia
United Kingdom
Italy
Austria
United Arab Emirates
CEE
Market share
Low-cost segment share
Low-Cost Market position
37.8%
29.0%
41.0%
61.5%
40.6%
29.1%
12.6%
16.6%
17.4%
14.6%
28.5%
20.2%
4.8%
4.2%
8.7%
7.2%
0.6%
20.7%
52.6%
52.6%
53.6%
82.3%
58.8%
40.4%
27.5%
26.6%
21.6%
58.9%
58.3%
33.6%
16.4%
6.8%
12.6%
19.7%
2.4%
38.1%
1
1
1
1
1
2
2
2
2
2
2
3
3
5
3
2
4
1
Wizz Air Holdings Plc Annual report and accounts 2022
10
Our fleet as a driver of competitiveness and sustainability
Operating the most competitive aircraft technology is critical for a low-cost carrier, particularly one which
plans to operate its aircraft for around 13 hours per day. State-of-the-art aircraft with the latest engine
technology consume less fuel, have lower noise emissions, are more efficient not only to fly but also to
maintain and to handle at the airport and accommodating more passengers in still very comfortable seating.
Our strong balance sheet enabled us to maintain our fleet delivery programme in F22. 25 A321neos joined
the fleet, taking the total number of aircraft to 153 at the end of March 2022. Today, 38 per cent of the
Company’s total seat capacity is with the A321neo family of aircraft, probably the highest renewal rate of
any fleet in Europe.
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)
A321neo XLR with winglets (239 seats)
Fleet size
Proportion of seats on A321
Average number of seats per aircraft
March 2022
Actual
22
28
9
6
41
47
–
153
64%
211.7
March 2023
Planned
7
28
9
6
41
91
–
182
78%
221.9
March 2024
Planned
4
21
9
7
41
125
6
213
85%
226.1
The new neo aircraft are powered by Pratt & Whitney GTF engines, which reduce fuel burn by 16 per cent,
nitrogen oxide emissions by 50 per cent and deliver 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 in fleet innovation ensures we maintain a strong
edge versus any competitor.
During F21 and F22 our emission intensity was affected by COVID-19 travel restrictions given the impact on
passenger load on our flights. Nevertheless, we have delivered on the plan disclosed in the F21 Annual
Report as we remain highly committed to lowering our emission intensity and achieving the transition to a
net-zero future.
Creating the leading digital platform
A digital customer experience and operation is core to the business model of an ultra-low-cost-carrier. It
drives costs out of the system, it allows the airline to scale the Company, and it drives immediacy instead of
dependency on lead times. Our digital programme is centred around four pillars:
1. An exceptional digital customer journey: our customers’ journey remains a key focus area for us, with
digital experience as key to making travel as frictionless, safe, and easy as possible in a cost-effective
manner. We target all key touchpoints with our customers. Our distribution is nearly fully digital today.
We digitalise communications by further streamlining communication channels with customers. We
digitalise customer service via the introduction of our Chatbot platform, increasing traffic quarter on
quarter, and are nearing an automation rate of 95 per cent.
2. Digital powered operations: Wizz Air is deploying new technology to drive efficiencies into its operations
and improve decision making. Not only are we automating existing processes but we are re-imagining
our operations with digital being the catalyst for improving key performance metrics like on-time
performance, utilisation of fleet and crew, and ultimately to drive a lower CASK. One of the key enabling
platforms for this is the roll-out of our Electronic Flight Book (EFB) and the launch of an Electronic
Technical Log Book (ETLB) to replace the paper-based communication and records managed by pilots
and third parties. New equipment allows for a much greater connectivity, faster decisions and
adjustments to how we operate, which, in the end, will lead to a better service at a lower cost.
3. Scaling without boundaries: to support our growth, Wizz Air is working on standardising and automating
the core process across support functions like Finance and Accounting and Human Resources, with the
focus on automation of transactions, reduction of lead times and higher pixelation of data to allow for
more data-driven decision making.
4. Strong digital foundations are a prerequisite for scaling efficiently and operating with the highest levels
of reliability. The Company continues to invest in hardware and network connectivity to ensure it can
maintain a productive workforce and stable and secure operations.
Wizz Air Holdings Plc Annual report and accounts 2022
11
Focus on our people
Our people are at the core of our business. More than 90 per cent of our employees engage with our
customers face-to-face on a daily basis.
During F22 our employee engagement score was 7.0, broadly aligned with the industry average, with a
participation rate of 67 per cent. Our Employee Feedback Survey, together with the surveys in the industry,
showed a small reduction in overall satisfaction rate, which is understandable given the duration of the
pandemic and the impact it had on our operations. Nevertheless, our employees have shown tremendous
resilience during unprecedented times of adversity and personal hardship, changing schedules because of
COVID-19 and loss of income, as the number of hours they could fly was reduced. Their continued strong
engagement even during the toughest of times is a true testimony to the Wizz spirit, and it is their dedication
and passion that is at the root of our success. That success allowed us to ramp-up operations as restrictions
eased and, as the business recovered, we were proud to be the first major airline in Europe to restore salaries
to their pre-COVID-19 levels. 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. We are also focused on driving a better gender
balance within the organisation. We improved Board gender diversity further from 27 per cent to 30 per
cent, just shy of our 33 per cent target. Our Management Team diversity increased from 27 per cent to 34
per cent. Our commitment is reflected in our long-term incentive targets for our Executives, to reach 40 per
cent female representation at managerial level by 2026.
We are also determined to make a step-change in the under-representation of women in the flight deck – a
long-standing issue within the aviation 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 and, this year, we exceeded
this goal by filling 54 per cent of open positions. We believe that Wizz Air offers the best career progression
opportunity in the industry, irrespective of whether you are a pilot, cabin crew or an office employee. Wizz
Air opens up opportunities for diverse talents to learn, develop and succeed.
Outlook
During F22 we improved our trading performance and now look forward to what we hope will be a world
without COVID-19 disruptions and where peace is quickly restored in Ukraine. While new challenges will
emerge, we know that our strategic priorities and progress will help us to thrive in the industry as long as
we are focused on executional excellence – excellence in product and service at the lowest cost – allowing
us to deliver low fares and superior shareholder returns.
F23 will be a year marked by high inflation across cost lines. This is where our investments in network, in
fleet and in people will bear fruit and will help us not only to return to F20 ex-fuel CASK cost levels, but
equally to widen the gap versus the rest of the industry on cost competitiveness.
In our industry, lowest cost prevails. Being able to combine the lowest cost with excellence in service and
the lowest emission intensity will allow us to reach our value creation targets for all our stakeholders –
shareholders, employees, and the passengers and communities we serve.
József Váradi
Chief Executive Officer
8 June 2022
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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:
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 70-77.
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 46-59.
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 54-55.
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 page 60.
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.
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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 27-59.
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 84.
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STRATEGIC REPORT
REPORT OF THE CHAIR OF THE SUSTAINABILITY AND CULTURE
COMMITTEE
I am delighted to present to you Wizz Air’s Annual Sustainability Report which outlines in detail how firmly
our Group-wide sustainability strategy is embedded in the Company’s core business, harmonising
environmental, social, governance and economic aspects.
We have made significant progress over the past year in strengthening our initiatives that contribute to our
ambitious decarbonisation objectives, while also remaining focused on our commitment to our culture and
people. As a responsible airline, Wizz Air recognises the impact and the essential role our sector needs to
play in delivering sustainable growth and long-term value for our stakeholders, making sure to protect our
climate by decreasing our environmental footprint; supporting and caring for our employees; and creating
value for the communities we serve with affordable travel opportunities for all and significant job creation.
We are continuously working towards the path to a net zero economy, and although there are some verified
voluntary offsetting schemes out there (like the carbon offsetting service we offer to our customers via our
partner CHOOOSE), we do not believe that this option by itself provides a long-term solution for aviation to
achieve net zero emissions by 2050. Wizz Air is focused on using the latest and most innovative technology
available and delivering highly efficient operations that will have a greater impact on tackling carbon
emissions. As part of this, we have been continuously adding new A321neo aircraft to our fleet and replacing
older aircraft.
The Airbus A321 family aircraft is the most efficient single aisle aircraft with the lowest fuel consumption per
seat-kilometre in its category today. A key project for our flight operations in financial year 2022 was the
introduction of the Mobile Electronic Flight Bag, which is a considerable step-change for in-flight optimisation
and will help our pilots to make more accurate fuel planning decisions, based on instantly updated data. This
digital solution is not just replacing printed manuals, but it also helps improve fuel and operational efficiencies
in numerous ways. Efficiency, a key principle of our business model, is enabling us to minimise resources,
energy consumption and emissions while delivering a great customer experience on board one of the
youngest fleets globally.
Climate change is one of the greatest global challenges facing society today, and the aviation sector must
play its part in tackling this important issue. Climate change can impact the airline’s operations in various
ways which may have a material operational and financial impact. At the same time, new technologies,
reporting requirements, geopolitical questions and environmental regulations are evolving rapidly in
response to the global transition to a net zero economy.
The purpose of Wizz Air’s sustainability strategy is to have a clear overview of where we are today and what
actions need to be taken to achieve our environmental targets and to stay financially and operationally
resilient in the face of climate change and its inherent physical and transitional risks. In financial year 2022,
Wizz Air partnered with Risilience (a company applying the risk research pioneered by the Centre for Risk
Studies at the University of Cambridge Judge Business School) to further improve the Company’s climate
risk analysis framework. This is the first year the Company is reporting its Scope 3 greenhouse gas
emissions, and we also submitted our first disclosure to the Carbon Disclosure Project and to S&P Global. In
October, Wizz Air’s Commitment Letter to the Science Based Target initiative (SBTi) was accepted and as
such we are aligning to an ambitious decarbonisation roadmap.
While we are continuously working on improving our strategy and operations, the past year has been a
remarkable success in many aspects. To name a few, Wizz Air was recognised as the most sustainable low-
cost airline in 2022. The Company’s Sustainalytics Environment, Social and Governance (ESG) risk rating
improved significantly, putting us in a leading position among our competitors in the sector. We received an
award from ch-aviation for the third youngest fleet in the world among airlines with 100+ aircraft in their
fleet (we also have the youngest fleet among our European competitor airlines above 50 aircraft in
their fleet).
Over the past year the Board has realigned its Committees’ structure to ensure proper Board oversight of
key areas of focus. The creation of a separate Sustainability and Culture Committee on 2 June 2021 allowed
the Board to dedicate a separate committee to focus on ESG matters. I am proud to have been appointed
as Chair to this Committee with the task at hand to oversee and heighten the Company’s impact on
sustainability and culture. In the Committee I am joined by Andrew Broderick, and Dr Anthony Radev, the
appointed Non-Executive Director overseeing engagement with employees (as of 13 April 2021) including
regular engagement with the Wizz Air People Council. This initiative regularly brings together employees
from all areas of the business, to facilitate a two-way communication between management and employees,
so that Wizz Air can continue to improve, both as an airline, as well as an employer. Ensuring the proper
oversight and management for our ESG vision is crucial to achieve our objectives, so we need to keep
Wizz Air Holdings Plc Annual report and accounts 2022
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developing our sustainability governance. I strongly believe that this will help to further build Wizz Air’s
competitive advantage, whilst delivering leading financial returns for our Shareholders.
Despite the implications of COVID-19 on operational priorities and working environment, Wizz Air has
remained strongly focused on the development of its employees. In addition to the already existing talent
and performance management process and standard class-room training, numerous new initiatives were
introduced to provide further learning and development opportunities: i. WIZZ Academy, which allows
selected employees to gain knowledge about WIZZ strategic approaches and aspirations from the CEO and
Chief Officers and creates a forum for employee-Leadership Team interaction; ii. dedicated leadership
training programme for Cabin and Flight Operations Management to increase leadership self-awareness
necessary to lead and motivate others; iii. the online LinkedIn Learning platform was rolled out to office
employees and local crew management, granting access to 10,000+ expert-led courses; iv. Management
Trainee Programme to bring in and develop young talents with a strong potential to become Managers and
Senior Managers in their future at WIZZ; and v. Crew to Office Programme to accommodate crew employees
in office positions.
To further strengthen the Company’s diverse and inclusive culture, Wizz Air has reached 48-52 per cent
female-male gender ratio and a total of 75 nationalities Company-wide, and implemented diversity targets
for the Management Team, together with other recruitment policies to ensure a strong pipeline of female
professionals to office and flight crew positions.
Wizz Air designates senior management and direct reports as Management Team. This term corresponds
with the code requirement of senior management and direct reports, in a way that it includes Officers and
Heads of Function, however not inclusive of e.g. executive assistants, to ensure that diversity targets are
reached for those people that have a formal leadership role in the Company.
Apart from the numerous improvements due to the Company’s developing ESG strategy, we had to face
some critical challenges as well. As the COVID-19 pandemic is not yet over, we needed to maintain a strong
focus on the related health and safety procedures to develop further our protective and preventive measures
throughout last year. Wizz Air led the industry by introducing vaccination policy in September 2021, in order
to ensure smooth and sustainable operations, as well as secure the safety of our passengers and crew.
When it comes to our world-class, dedicated flight and cabin crews, I absolutely cherished the opportunity
to join the Company’s Management Team on several base visits where Dr Anthony Radev and I could
personally engage with WIZZ employees in Poland, Lithuania, and Ukraine – just shortly before the crisis. In
response to the war between Ukraine and Russia and the subsequent refugee crisis, the People Council
immediately launched a solidarity initiative to support our Ukraine-based crew, together with their families.
Apart from the coordinated actions of the Company to evacuate Ukrainian colleagues from the country, the
solidarity project aimed to give a helping hand to those employees who already left Ukraine and needed
accommodation, transportation, and other support. The WIZZ Employee Solidarity Fund was also set up for
Ukraine-based employees in need. While we are deeply concerned for the Wizz Air employees, we did not
draw the line there and stayed committed to the entire Ukrainian community. To support Ukrainian refugees
displaced due to the war, we offered 100,000 free seats from the country’s bordering countries and special
rescue fares on all other flights across our network. As the situation is ongoing, we continue to follow
developments and evolve our action plan to address the situation. There is simply nothing more important
than ensuring the health and safety of our people and their loved ones.
Looking into the future, the Company’s vision to achieve WIZZ 500 by 2030 goes hand-in-hand with the
roadmap of achieving a net zero economy. Wizz Air’s business growth is a key step towards sustainable
aviation, as the airline’s efficient business model and low carbon intensity operations help to gradually replace
unsustainable airlines’ operations across our ever-expanding network. A plane will never be greener than a
train or an electric vehicle. But we are and will continue to be the greenest choice of flying.
Charlotte Pedersen
Chair of the Sustainability and Culture Committee
8 June 2022
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EMBRACING SUSTAINABILITY AS A FORCE FOR GROWTH
Wizz Air has an ambitious growth plan and we have sustainability at the centre of our plan. Wizz Air together
with its stakeholders is increasingly demanding on the environmental, social and governance aspects of our
business. Wizz Air wants to have a basis to aspire to be the leading airline on sustainability. By doing so, we
believe we will do good for the people and their communities, lower our cost structure, win the hearts and
minds of our consumers and improve access to capital over the long run.
Wizz Air is highly committed to transparency. Transparency enables us to hold ourselves accountable for the
continued progress we need to achieve on our sustainability priorities. As a sustainable airline, we want to
create value through our core business, while also harmonising environmental, social, governance, and
economy aspects – the essential components of our Group-wide sustainability strategy.
Sustainability awards and ESG rating
World Finance – Most Sustainable Low-Cost Airline 2022
Wizz Air was recognised as the most sustainable low-cost airline in 2022, award winning is yet to be publicly
announced by World Finance Magazine. Wizz Air has been adjudged the winner in 2022 for its ESG credentials
and the airline’s leading emission intensity results (CO2 per passenger/km) even in the post-pandemic
environment. The judging panel took into consideration the strong financial fundamentals.
ch-Aviation – Youngest Fleet Award
In January 2022, Wizz Air received an award from ch-aviation for the world’s third youngest aircraft fleet, in
the category of airlines with 100 or more aircraft in their fleet. Keeping a modern fleet and portfolio by using
new generations of aircraft contributes significantly to the decrease of CO2 within the aviation industry and
helps achieve better fuel efficiency. This represents a huge step forward for sustainability, and ch-aviation
has decided to give the best performing airlines the recognition they deserve.
Sustainalytics ESG Risk Rating
Wizz Air received the lowest ESG Risk Rating from Sustainalytics among its competitors in Europe in January
2022. The Sustainalytics Risk Ratings measure how well a company proactively manages the environmental,
social and governance (ESG) issues that are the most material to their business. Based on a structured,
objective, and transparent methodology, the Sustainalytics ESG Risk Ratings provide an assessment of a
company’s ability to mitigate risks and capitalise on opportunities.
As of April 2022 the Company has the second lowest ESG risk score among its competitors. Wizz Air has
significantly improved its sustainability rating over the past years and aims to continue this trend further into
F23 to get back into the lead position.
S&P Global Corporate Sustainability Assessment
The Corporate Sustainability Assessment of Wizz Air by S&P Global was published in March 2022. The
Company received a score of 31 points, which placed it ahead of many of its competitors and all low-cost
competitors in Europe that are participating in the S&P assessment. The assessment looked at all functions
within the Company. As Wizz Air met the market capitalisation threshold to be eligible for Dow Jones
Sustainability Indices (DJSI) the Company has been invited to complete the assessment questionnaire in the
first group of companies in 2022, so another assessment will be available later this year.
Carbon Disclosure Project (CDP)
In F22 the Company submitted its disclosure to CDP for the first time. Wizz Air received a C rating after its
debut disclosure and is currently analysing the scores across different metrics to ensure disclosure further
aligns with CDP requirements supported by the actions and goals the Company has in place. Extending our
greenhouse gas emissions reporting to Scope 3 from F22 and continuously implementing new environmental
initiatives (e.g. supply chain decarbonisation policy) will support our progress towards enhancing
environmental stewardship.
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Our Sustainability Strategy
Wizz Air is focused on continuous improvement on our four sustainability pillars – environment, people,
governance and economy. Our sustainability strategy is integrated with the Company’s vision and plan to
achieve WIZZ500 by 2030. We aspire to become Europe's undisputed price leader airline whilst providing
excellent customer experience, to become the employer of choice and lead good corporate citizenship.
On our way to WIZZ500 and to net zero by 2050 we have set 15 objectives to deliver on Wizz Air’s
sustainability ambition.
ENVIRONMENT
PEOPLE
GOVERNANCE
ECONOMY
Our ultimate goal is
to ensure that by
choosing to fly with
Wizz Air, our
customers are
making the most
sustainable choice of
air travel available.
We are continuously
working on reducing
our overall
environmental
footprint on our way
to a carbon neutral
industry.
Our people pillar
includes colleagues
and customers. Our
aim is to develop our
services to further
enhance customer
experience, to
support our
communities and to
empower our people
to reach their full
potential.
Our sustainability
agenda is governed
by the Sustainability
and Culture
Committee. The
Committee helps to
ensure management
focus on the task at
hand, bringing our
sustainability
strategy and vision to
life via the work
every Wizz Air
employee does day in
day out.
Our Company’s
mission is to provide
affordable travel and
give opportunity for
air travel to those
who were not able to
use air transport
before, having a
direct and material
impact on the
economies we
connect.
Our sustainability objectives across ESG pillars
Environment: Continue to decrease our environmental footprint and maintain the lowest CO2 (grams)
emitted per revenue passenger kilometre in the industry.
Reduce carbon emission intensity from flight operations by 25% until 2030 (CO2 grams/RPK)
Qualify as a SAF supply chain as of 2025
Drive noise reduction through increased Chapter 14 emission standard compliance from the current 70%
to 100% by 2028
Qualify future technology building blocks and industry partnerships to enable a net zero by 2050
commitment
People: Become an employer of choice and set an example for good corporate citizenship. Retain and develop
talent within the organisation, help our people to fulfil their potential and provide excellent customer
experience.
Continue to put safety first, in everything we do
Continue to improve gender diversity in the Board, management, and flight deck workforce
o 33 per cent female gender diversity in the Board of Directors (in accordance with the Hampton-
Alexander review)
o 40 per cent female gender diversity in the Management Team by F26
o 7 per cent female gender diversity in the flight deck by F30
Develop and sustain employee engagement in the top 25 per cent of the industry benchmark
Improve customer experience each year as measured by various customer satisfaction metrics
Governance: Ensure the proper organisational structure of management, systems, and people in place to
support our strategy and vision.
Ensure effective Board oversight of all elements within the sustainability strategy
Continue to improve our climate-related disclosures including the alignment of our decarbonisation
roadmap to the SBTi and submit the Company’s targets to SBTi for approval, by the end of 2022. Report
on all scopes of GHG emissions as of F22
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Our environmental target has been integrated into the incentive scheme for the CEO and the entire
Management Team (Officers and Heads of Function) as of F22
Our gender diversity target for management has been integrated into the incentive scheme for the CEOs
and Officers as of F22
Economy: Contribute to the GDP growth of WIZZ destinations by enabling affordable connectivity, which in
turn will create new jobs, drive tourism and opportunities to do business.
Increase the number of aircraft to 500 by 2030
Increase the number of customers from 40 million in 2019 to 170 million by 2030
Employ over ~20,000 directly and 125,000k indirectly across the network*
* ACI studies show 750 jobs per 1m passenger and ICAO studies show 6 indirect jobs per 1 directly employed job
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.”
Company 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.
Key objective - Deliver leading shareholder and stakeholder value in aviation
Our goals
1 Deliver average 20 per cent annual growth in capacity
2 Deliver 13 to 15 per cent net income margin
3
Reduce our CO2 emission intensity to 43g per RPK by F30
Increasing and diversifying our geographical footprint
Our strategic priorities
1 A focused ultra-low-cost low fare business model
2
3 Delivering leading sustainability in accordance with the Company’s ESG strategy
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. Leading on cost
3. Leading
sustainability
1/1 CASK performance
1/2 Ancillary PAX revenue
1/3 Cash
3/1 CO2 emission intensity
3/2 Gender diversity
5. A highly engaged
organisation
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
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Our mission is brought to life through our culture. Our culture is what empowers our people to live and work
by the core values of Wizz Air, allowing us to create opportunities and find solutions to business challenges.
Our core values are:
Integrity – doing what is right for passengers and stakeholders, holding ourselves to the highest possible
standards in everything we do.
Dedication – we have an entrepreneurial, “can-do” attitude, taking individual and collective ownership
and are accountable for everything we do.
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 greenest 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.
Our Sustainability Manifesto
“We launched Wizz Air with the strong belief that air travel should not be a privilege. That we will create a
world of opportunity for all through affordable travel. And we are delivering on that promise. And while we
gave the freedom to travel to more and more people, we have also proven that growth and sustainability
can be achieved hand in hand. While breaking down barriers between people and air travel, we’ve also shown
a whole industry how aviation can be more sustainable.
Crucial business model and design decisions, from pricing to seat density, make sure we fly with high load
factors. We’ve never even thought about business class seats. Or a hub-and-spoke model. Or substituting
train rides below four hours for flights. We’ve instead focused on flying with the youngest, most efficient fleet
and the most modern engines possible, to consume less fuel. This all delivers the lowest CO2 emissions per
passenger kilometre in the industry, beating not just legacy carriers, but also low-cost airlines operating in
a similar way as us.
A plane will never be greener than a train or an electric vehicle. But we are and will be the greenest choice
of flying. Because when it comes to a crucial issue like sustainability, we believe in the facts of today. Not
the promises of the future.”
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 over 1,600 km. That means our services
are connecting cities and destinations where alternative forms of travel are often unavailable, impractical or
have a higher environmental impact. We connect these points in a direct way – which lowers emissions.
We do not operate a higher carbon footprint business class and none of our routes have a direct train
alternative under four hours. We are connecting these points in a way that is affordable for all income levels
in society. Large proportions of our passengers are travelling with us to reconnect with friends or family after
having migrated mainly for employment reasons.
At Wizz Air, low cost and low fares do not mean low quality of service. We operate the youngest and most
carbon-efficient fleet in Europe, and the third youngest fleet in the world (among airlines with more than
100 aircraft in their fleet) and we have an ambitious fleet renewal plan. We offer great choice and value, a
pay-for-what-you-use approach (instead of unnecessary services and extra waste generated), a welcoming
service, brought to our passengers by a well-trained, highly motivated, engaged and positive-spirited
workforce, and all enabled by our highly digitised and scalable operations. We are continuously working to
understand the path to a net zero economy, with a clear focus on technology and innovation and the most
efficient operations achievable.
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Our Sustainability Governance
Our sustainability agenda is governed by our Sustainability and Culture Committee. The Committee shall
assist the Board in reviewing the Company’s policies and practice on sustainability. It ensures that the
Company promotes long-term value creation and thus takes environmental issues into account in defining
the Company’s strategy by submitting recommendations to the Board.
In particular, the Committee shall:
(a) review the Group’s sustainability strategy and its implementation;
(b) examine the extra-financial risks and specifically those relating to environmental, social and societal
issues; and
(c) co-ordinate non-financial and diversity reporting processes in accordance with applicable legislation and
international benchmarks.
The Committee needs to also assist the Board in reviewing the Company’s policies and practice on culture.
It ensures that the Company promotes diversity in all areas and enables an effective two-way communication
between the management and employees thus taking social issues into account in defining the Company’s
strategy by submitting recommendations to the Board.
The Committee shall:
(a) review the Group’s diversity strategy and targets and their implementation; and
(b) review the Group’s employee relations, in particular the effectiveness of the People Council.
The Audit and Risk Committee has a crucial role in overseeing the Company’s risk assessment processes.
The climate related physical and transition risks impacting aviation and Wizz Air will be playing an
increasingly important role during the net zero transition, depending on the progress and path to
decarbonisation.
By continuously integrating sustainability into its business and operations (see below), the Company
contributes significantly to the UN Sustainable Development Goals that are within its scope of influence.
In F22, the Audit and Risk Committee, then the Sustainability and Culture Committee reviewed sustainability
during six of their meetings. The main agenda items during the financial year focused on but were not limited
to:
target setting for the Company’s sustainability strategy as well as aligning it with the WIZZ500
ambitions;
embedding the gender diversity and carbon intensity targets in leadership incentives;
committing to SBTi through the submission and acceptance of our Commitment Letter to the Science
Based Targets initiative (SBTi);
committing to the Hampton-Alexander gender diversity target; and
continuing to improve ESG information disclosure for external stakeholders.
Going forward, as of F23, the Sustainability and Culture Committee will continue to review the execution of
the Company’s sustainability strategy during each of its meetings (six times per annum), in a review led by
the ESG Officer. The Company-wide, fully cross-functional Sustainability Council will continue to meet on a
monthly basis, and will debrief the full Leadership Team including the CEO on the progress it is making
versus its strategic priorities. Where needed, during these meetings amendments to goals and strategies
will be aligned. Subsequently, progress and future strategies will be aligned with the Sustainability and
Culture Committee.
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21
Our sustainability priorities
To identify sustainability priorities that matter most to our stakeholders and 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) 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 (lll = most material issues). We will provide
further perspective below with regards to our goals, strategies, results on the most material issues and
opportunities.
Materiality matrix
Higher Wizz Air materiality
E - Emissions standards met
E - Product footprint
E - Climate change position
E - Product H&S
G - Ethical conduct
S - Employee relations
S - Equal opportunities
S - GDPR
E - Noise emissions
S - Employee H&S
Medium Wizz Air materiality
E - Emissions management
E - Renewables
S - Supplier standards
S - Social impact of services
S - Human rights
S - Training
G - ESG reporting
G - Political transparency
S - Employment security
G - Shareholder representation
S - Payment practices
G - Board composition
S - Complaints management
S - Community involvement
Lower Wizz Air materiality
E - Energy management
E - Fleet disposal
S - Work/life benefits
S - Accessibility of service
S - Responsible marketing
E - Freshwater use
Stakeholder
importance
Wizz Air
materiality
lll
lll
lll
lll
lll
lll
lll
lll
ll
ll
lll
lll
lll
ll
ll
l
l
l
l
l
l
l
l
l
lll
l
l
l
l
l
lll
lll
lll
lll
lll
lll
lll
lll
lll
lll
ll
ll
ll
ll
ll
ll
ll
ll
ll
ll
ll
ll
ll
ll
l
l
l
l
l
l
Wizz Air Holdings Plc Annual report and accounts 2022
22
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 even
more ambitious in setting and achieving targets that are meaningful.
During a period like the COVID-19 pandemic and the Ukrainian war in 2022 our principal stakeholders have
sought even more guidance from the Company and their feedback has been good – they appreciated our
proactive action in addressing those elements that are of most importance to them.
Stakeholder
Our customers
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.
Our investors
Our people
Our investors’ 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 whilst delivering leading
shareholder returns.
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 offered.
Our partners
Our communities
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 most difficult
times and rewards them with security
and growth prospects.
Wizz Air brings prosperity and
happiness to the communities it
serves. It connects communities into
economies and connects people with
opportunities.
What matters to them
Our customers value the relationship
Wizz Air is building with them. They are
for a reliable, safe and
looking
environmentally
travel
responsible
experience, low prices, great service,
more choices, and a friction-less digital
experience.
Our investors value results delivered in
a sustainable and responsible manner.
Our investors see Wizz Air as a
disruptor in the industry not only in
terms of our low-cost business model
but our environmental
leadership
position.
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 people want their voice
to
the
opportunities we offer to engage via
face to face base visits, through the
People Council or via the Peakon©
engagement surveys the Company is
conducting.
Our partners expect a
trusting
relationship where both sides add and
retain value.
leveraging
heard
be
Our communities expect Wizz Air to
enable opportunities and progress, in a
responsible manner for their people,
and expect us to contribute to the
growth and prosperity of the economies
we operate in.
Environment – Wizz Air cares for our planet
Wizz Air aspires to be the greenest and most efficient airline on the planet. Today this is a key competitive
advantage. However, in light of climate change, our responsibility is to create a pathway towards being an
even greener airline. We remain committed to our 2030 goal of reducing emission intensity by 25% versus
our F20 baseline, we are committed to aligning our decarbonisation goals with the SBTi and are currently
working with SBTi to complete this assessment by the end of 2022, and we continue to work on our net zero
commitment for 2050 (while our aspiration is clear, today we cannot credibly state that we have all building
blocks defined that will allow for us to achieve a net zero target by 2050 given the uncertainty around future
technological innovation such as zero emission aircraft, sustainable aviation fuels or direct air carbon capture
technologies, and, as such, the Company, together with the Board of Directors is working to complete our
long-term, end-to-end plan prior to any further market communication on 2050 targets).
Emission intensity glide path
CO2 in g/RPK
F20 (baseline)
57.2
F25 target
47.9
F30 target
43.0
In F21 we aligned our disclosure with the TCFD-recommendations, and we will continue to improve our
disclosures every year, as the transparency it brings challenges us to deliver on a more sustainable business
year in year out.
Some of the key improvements on environmental governance this year include:
Wizz Air Holdings Plc Annual report and accounts 2022
23
1. Our Sustainability and Culture Board Committee was carved out of the Audit and Risk Committee
(previously Audit and Sustainability Committee). This level of dedication to sustainability governance
underlines the commitment of the Company to deliver against our ESG objectives. Carbon Trust provided
a full day training to the Board Directors to ensure they would be even more effective for this
Board mandate.
2. Wizz Air is constantly seeking out cooperation with leading experts and consultants that can support the
company’s work with valuable insights on sustainability, particularly on climate change and
decarbonization developments and best practices. The Sustainability and Culture Committee is regularly
engaged in or is receiving information about industry and sustainability consultancy cooperation on ESG
matters, to ensure they remain current and well-informed when it comes to sustainability.
A comprehensive training, including greenhouse gas emissions, climate change policies, and industry
best practices on decarbonization was provided to the Sustainability and Culture Committee members
as well as Wizz Air’s executive team by the Carbon Trust in 2021, to further build their knowledge and
skills around sustainability.
3. Avieco, a UK-based company providing sustainability consultancy services, has worked with Wizz Air to
validate its greenhouse gas emissions data collection and reporting, and they also assessed all current
processes connected to decarbonization and recommended process optimization and improvement
opportunities for the future. Through their valuable insights and acumen, they have contributed to the
company’s Sustainable Procurement Policy, which was recently implemented.
4. We established a strategic partnership with Risilience to analyse Wizz Air’s ERM framework and previous
climate risk assumptions capitalizing on their best-in-class scientific risk analysis framework. Through
our collaboration we gain an exhaustive, relevant and sector-based knowledge on how to improve the
company’s risk analysis by reviewing more climate pathways and risk types, helping the business
risks.
become more
related physical and
face of climate
transition
resilient
the
in
5. In October 2021, Wizz Air’s Commitment Letter to the Science Based Targets initiative (SBTi) was
accepted. The Company has reviewed its emissions reduction glidepath towards 2035, taking into
consideration the currently available technology, the Company’s fleet renewal, fuel efficiency projects
and the projected sustainable aviation fuel mandates, and it is fully aligned on the targets to be set. The
Company is currently in the process of collecting and assembling all data and making all the meticulous
calculations for its decarbonisation roadmap, as required for the SBTi target setting process. The
the 2022 calendar year.
submission
to be completed by
the end of
is projected
6. Our work with Risilience, a company that is applying the risk analysis framework pioneered by the
Cambridge Centre for Risk Studies (CCRS), was aimed at assessing the physical and transition risks to
our operation. Risilience confirmed the necessity of increased attention to physical and transition risks
identified in last year’s assessment across different climate pathways. They helped to put more focus on
certain physical risks e.g. due to the disruption in the supply chain (e.g. future SAF supply chain) or
failure.
potential
from historical and continued emissions, or compliance
liability
risks
7. Inclusion of Scope 2/3: Wizz Air is disclosing the data on its Scope 3 greenhouse gas emissions for the
first time in this F22 annual report. While Scope 2 indirect emissions occur at the facility where electricity
is generated, Scope 3 includes indirect greenhouse gas emissions and allows for the treatment of all
other indirect emissions that occur in a company’s value chain. They are a consequence of the activities
of the company, but occur from sources not owned or controlled by the company. Wizz Air was supported
by Avieco UK Ltd for the data collection and emissions measurement process, for Scope 1, 2, and 3.
(Scope 1, and 2 emissions have already been part of greenhouse gas emissions tracking and reporting
since F20.) Increased visibility and oversight regarding indirect emissions, especially in the supply chain
will enable Wizz Air to assess indirect emissions more accurately and to implement new procedures to
start the decarbonisation of its supply chain via engagement with its contracted partners. The new
sustainable procurement policy implemented in April 2022 is a part of this process. The carbon footprint
has been calculated in line with the World Resource Institute’s (WRI’s) internationally recognised
reporting standards: Greenhouse Gas (GHG) Protocol - A Corporate Accounting and Reporting Standard
(2015 revised edition); GHG Protocol: Scope 2 Guidance (amendment to GHG Protocol) (2015), GHG
Protocol Corporate Value Chain (Scope 3) Accounting (2011); and GHG Protocol Technical Guidance for
Calculating Scope 3 Emissions (version 1.0).
8. Net zero by 2050 commitment: we have identified the key building blocks necessary to achieving net
zero emissions by 2050, which include on short-term continued investments in fleet renewal, fuel and
Wizz Air Holdings Plc Annual report and accounts 2022
24
operational efficiency, on medium-term sustainable aviation fuels and valuable offsetting alternatives,
and on long term zero emission technology and air traffic management modernisation. The direction and
the crucial elements on the path to achieve this have been clear, however there is much uncertainty
around external circumstances outside of our control, such as future technological innovation (e.g.
hydrogen aircraft) and the relevant ecosystems in our network, and the availability of sustainable
aviation fuels or direct air carbon capture technologies, so we cannot at the present time issue an official
net zero commitment. Wizz Air, together with the Board of Directors is continuously working on assessing
the potential pathways and alternatives that will enable Wizz Air to reach net zero emissions by 2050.
Wizz Air Holdings Plc Annual report and accounts 2022
25
Governance
Disclose the organization’s governance around climate-related risks and
opportunities.
Responding to TCFD recommended disclosures
Recommended Disclosure a)
Describe the board’s oversight of climate-
related risks and opportunities.
Recommended Disclosure b)
Describe management’s role in assessing
and managing climate related risks and
opportunities.
Board level oversight is with the Chief Executive and the Chair of the Board, as
well as the Sustainability and Culture Committee. See page 27-28.
Management defines strategies and drives progress through the Chief People and
ESG Officer and the cross-functional Sustainability Council. See page 27-28.
Our disclosure is consistent with the TCFD framework.
Strategy
Recommended Disclosure a)
Describe the climate-related risks and
opportunities the organization has
identified over the short, medium, and
long term.
Recommended Disclosure b)
Describe the impact of climate-related
risks and opportunities on the
organization’s businesses, strategy, and
financial planning.
Recommended Disclosure c)
Describe the resilience of the
organization’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower
scenario.
Disclose the actual and potential impacts of climate-related risks and opportunities
on the organization’s businesses, strategy, and financial planning where such
information is material.
The ongoing development of our risk register including climate-related risk and
opportunities is fully integrated in the ERM process (see page 70), but
independently challenged via Risilience/ the Cambridge Centre of Risk Studies, as
outlined further on page 29.
Addressed through our comprehensive climate strategy, see page 33, where we
have outlined our key strategic priorities, and, embedded in our financial planning
for the short and medium-term risks and opportunities.
Our climate strategy integrates climate risk assessments and is embedded in our
short, medium and long-term planning process. Our climate scenario modelling
processes will continue to evolve as we move towards a net zero pathway for Wizz
Air. In 2022, Wizz Air partnered with Risilience, a company using the research
frameworks produced by the Cambridge Centre of Risk Studies (CCRS), in order
to assess objectively transition and physical risks under four different climate-
related scenarios and will integrate learnings to our operation to achieve corporate
targets set. Please refer to page 29.
Our disclosure is consistent with the TCFD framework. Future priorities include working on a quantitative climate risk analysis on
top of a qualitative assessment.
Risk Management
Recommended Disclosure a)
Describe the organization’s processes for
identifying and assessing climate-related
risks.
Recommended Disclosure b)
Describe the organization’s processes for
managing climate-related risks.
Recommended Disclosure c)
Describe how processes for identifying,
assessing, and managing climate-related
risks are integrated into the organization’s
overall risk management.
Disclose how the organization identifies, assesses, and manages climate-related
risks
Climate related risks are identified as part of our ERM process (page 70) and
independently verified by a third party risk assessment expert (page 29).
By integrating sustainability and climate as the key focus area within this into one
of our four corporate strategies, we intend to be and become a pioneer on all
relevant climate related areas for the Company. See page 32.
We manage climate related and ESG risks through our corporate ERM framework.
See page 70.
Our disclosure is consistent with the TCFD framework. We are constantly working on further developing our ERM framework and
the applicable internal risk management processes, to ensure heightened resilience in the face of climate change.
Metrics and Targets
Disclose the metrics and targets used to assess and manage relevant climate-related
risks and opportunities where such information is material
Recommended Disclosure a)
Disclose the metrics used by the
organization to assess climate-related risks
and opportunities in line with its strategy
and risk management process.
Recommended Disclosure b)
Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
Recommended Disclosure c)
Describe the targets used by the
organization to manage climate-related
risks and opportunities and performance
against targets.
See page 41 for our environmental metrics and targets.
We report extensively on Scope 1, Scope 2 and Scope 3 emissions on page 41-42.
See page 103 of the Directors’ Remuneration Report on the inclusion of CO2
emission intensity target in the Leadership Team’s award conditions and page 41
for other targets on key climate related metrics.
Our disclosure is consistent with the TCFD framework. We will continue to improve our greenhouse gas disclosure with increased
data granularity and location-based emissions reporting on short and medium term.
Wizz Air Holdings Plc Annual report and accounts 2022
26
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 Sustainability and Culture Committee as well as the Sustainability Council.
With the growing business complexity throughout the Company and the need to ensure heightened and
proper Board oversight of the key areas of focus, in June 2021 the Sustainability and Culture Committee
was established in order to allow the Board to dedicate a separate committee to ESG and culture with an
appointed member responsible for employee engagement (including engagement with the Wizz Air People
Council).
The Board of Directors continues to be committed to Wizz Air maintaining its position as the greenest choice
for air travel, and supports projects, innovation, and investments that contribute to reducing the impact of
Wizz Air’s operations on the environment in the short, medium, and long term. The Committee has played
a crucial advisory role in the creation of the Company’s new Group-wide sustainability strategy, aiming to
harmonise the essential components of Wizz Air’s environmental, social, governance, and economy pillars.
The Sustainability and Culture Committee and the Sustainability Council continuously cooperate in the
calibration with best-in-class practices, the setting of challenging, progressive decarbonisation targets, and
the execution of the entire strategy across all ESG pillars, through well-defined strategic priorities.
The Board of Directors, based on the proposal of the CEO, examines, and approves the key objectives and
strategy on the business including those related to Environmental, Social and Governance factors. The Board
of Directors also approves – as part of the Enterprise Risk Management (ERM) process (outlined on page 70)
– the climate related opportunities, physical and transition risks on short, medium and long term, as well as
the risk appetite and they review the action plans proposed by management.
The Sustainability Council – led by the Chief People and ESG Officer, meets for monthly reviews to discuss
the sustainability agenda, new developments, the status of ongoing projects and to discuss and analyse
further plans regarding the Company’s decarbonisation pathway. The Sustainability Council, led by the
Group’s Sustainability Manager, comprises key internal stakeholders such as the Chief People and ESG
Officer, Chief Corporate Officer, Chief Financial Officer and Chief Customer and Marketing Officer. The
meetings are also regularly attended by the leaders and working level experts of strategic functions like
Operations, Fleet Acquisition, Supply Chain, Organisational Development, Human Resources and others. The
Council’s main task is to drive the Company’s sustainability strategy and cascade the related actions into the
organisation.
In October 2021, the members of the Sustainability and Culture Committee and the Leadership Team
participated in an additional, comprehensive and interactive Sustainability Training run by Carbon Trust to
further build their knowledge base and skills around global decarbonisation, aviation sector regulation
updates, and the net zero pathway. The Sustainability and Culture Committee met six times throughout the
year and reviewed the Company’s environmental plan, placing significant emphasis on the new sustainability
strategy, the greenhouse gas reporting related data collection improvements, the commitment to the Science
Based Targets initiative (SBTi), and the Company’s analysis of various pathway scenarios to reach net zero
by 2050. The Committee has also closely reviewed the outcome of the two employee engagement surveys
in F22 and has been supporting the Company with insight and actions to improve engagement after the
challenging two-year period following the COVID-19 outbreak. The Board was subsequently informed on the
key outcomes. The Committee is also supporting the sustainability team in ensuring continued alignment
with the recommendations of the TCFD. Beyond F22, emission intensity is fully integrated into the reward
structure of executives.
Wizz Air Holdings Plc Annual report and accounts 2022
27
Company governance
Board of Directors
Sustainability and Culture Committee
Sustainability governance
Approval and supervision of
strategic objectives
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.
Meets at least six times per year with at least one session dedicated to
in-depth training on sustainability and climate related matters.
Audit and Risk Committee, Board of Directors
Approval of the climate-risk universe (including the physical and
transition risk analysis), risk appetite and action plan to address these
risks.
Leadership Team
Sustainability Council
Development and execution of
strategies
Supports the Leadership Team in the development of sustainability
objectives and the corresponding strategies. Drives the execution
through the organisation via prioritisation and resourcing. Centre of
expertise on ESG, sustainability and climate matters. Oversees and
coordinates a number of initiatives on sustainability, and 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 innovation partnerships,
climate regulation related advocacy, sustainable aviation fuels and non-
fuel related emissions and waste.
Meets for updates each month of the year with quarterly CEO reviews.
Sustainability Governance – Organisational Structure
Board of Directors
Sustainability & Culture Committee
Audit Committee
Group CEO
Chief People &
ESG Officer
Executive Team
Head of
Government &
Public Affairs
Sustainability Council
cross-functional team
(Group)
Sustainability
Manager
Ensuring the proper oversight and management for our ESG ambition is crucial to achieve our objectives. As
part of this we will maintain a strong focus on further developing our sustainability governance including
trainings to ensure environmental acumen and a growing level of expertise in understanding climate-related
developments, risks and opportunities. Building and continuously strengthening our sustainability strategy
and governance is the first step towards sustainable aviation, supporting the Company’s vision to i) achieve
WIZZ500 by 2030 ii) be Europe's undisputed price leader iii) be Europe’s greenest airline.
Wizz Air Holdings Plc Annual report and accounts 2022
28
Environmental Strategy/Climate Risk Scenario Analysis
We are aware of our impact on the environment and the actions we need to take to decrease our
environmental footprint while providing the most affordable air travel for our customers and the communities
we serve.
Whereas we have several work streams within the environmental pillar, the reduction of GHG emission
intensity is the number one priority for Wizz Air. We have a clear strategic plan to deliver 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. Our F30 plan is outlined in more detail below.
Wizz Air has the KPIs defined to measure progress against our strategies, allowing us to correct course
should we need to or accelerate ahead of our initial targets. Climate change continues to be a top priority
and is identified as an emerging risk to Wizz Air as part of the Enterprise Risk Management process (see
page 70) as it may impact our business over the short, medium and longer term. We have outlined the
impact that climate change could have on our business via a high-level assessment of the impact of four
global warming scenarios (see below). We have looked at the impact on our business by F30 projecting the
size of our business based on our current fleet plan and the WIZZ500 ambitions.
To further improve the Company’s climate risk scenario analysis, Wizz Air has worked together with
Risilience, the company applying the research frameworks pioneered by the Centre for Risk Studies (CCRS)
at the University of Cambridge Judge Business School. Building on over a decade of influential research
performed by the CCRS, Risilience sits at the cross section of academia, corporate risk management and
sustainability, and is providing best-in-class climate and enterprise risk management solutions to translate
risk science into business insights and to shape business strategies.
The scope of work included reviewing the Company’s ERM and climate risk analysis framework and
supporting Wizz Air with a gap analysis and scientific external risk identification to enable an improved
climate risk scenario analysis, looking at both physical and transition risks across four different climate
pathways.
The four potential climate change scenarios are covering a broad spectrum of outcomes. This enables the
Company to gain insight into the materiality of the risks and opportunities that may arise as a result of
various possible future climate pathways. These pathways a have crucial socioeconomic narrative with
assumptions about policy change, energy outlooks, and technology (benchmarked on existing published
scenarios, incl. IPCC’s SSPs).
Emission pathway
Global
temperature rise
by 2100
(vs pre-industrial
baseline)
Global reduction in CO2
emissions
Average
annual
emissions
reduction
Description
No policy
>4°C
+200% by 2100
0%
Current policy
3°C
- 50% by 2100
0.85%
Paris Agreement limit
2°C
Net-zero by 2070
5%
Paris aspiration
1.5°C
Net-zero by 2050
7.50%
Assumes policy reversals and
increased energy
consumption and emissions
Continuation of current
trend, without any further or
additional changes in policy
Aligned with Paris
Agreement, requiring rapid
and widespread changes in
energy system, behaviours,
and technology
Radical and urgent policy
response, requiring rapid and
systemic energy and
behaviour shifts and major
technology innovation
Climate change is one of our principal risks and it may impact our business in the short, mid, and long term.
In terms of climate scenario risk analysis, Wizz Air is defining timelines as short term (0–1 years), medium
term (1–5 years) and long term (5–10 years). This risk evaluation of the environmental risk area resulted
in several specifically identified physical and transition risks. In the short- and mid-term transition risks will
be more significant for Wizz Air whereas in the long term, especially in the no policy and current policy
pathway, the physical risks affecting operations may be more serious. The less successful the various climate
policies and regulations will be, the smaller the threat from transition risks will become. On the other hand,
the more successful the policy changes will be, the fewer physical risks will be faced, but this also means
significant impact of transition risks in the mid and long term due to new regulatory requirements and
compliance measures.
Transition risks
The most relevant and impactful risks identified as a result of policy changes will be:
Wizz Air Holdings Plc Annual report and accounts 2022
29
Policy risks
o Change in tax policy and tax compliance – mid and long term
o Carbon pricing – mid and long term
o Sustainable aviation fuel regulations – mid and long term
o Voluntary carbon markets – mid and long term
o Emission reduction regulations – mid and long term
Liability risks
o Emission and climate damage litigation – long term
Technology risks
o Disruptive aviation innovation – long term
Market risks
o Sustainable preferences in aviation – mid and long term
o
Investor sentiment – short, mid and long term
Reputation risks
o Climate activism and consumer stigmatisation – mid-and long term
Policy pathways will have considerable impact on carbon price as regulators will aim to incentivise strong
reductions in GHG emissions enabled by shifts in operations towards green, sustainable solutions. Adverse
movements in the carbon pricing (including ETS) might have a negative impact on Wizz Air’s portfolio. This
is a mid- and long-term risk.
The development of highly effective carbon offsetting technologies can shift the market towards carbon
capture solutions; however, the most promising and valuable solutions are still insufficiently available in the
medium term.
The Fit for 55 “ReFuelEU Aviation” proposal, and other biofuel blending mandates will result in up to 62 per
cent of SAF fuel use by 2050 in the EU. Blending mandates are expected to be more common as of 2025 on
a national level as well. Due to limited feedstocks and the higher costs of biofuel we would see an overall
increase in jet fuel prices. As the Company will continue to grow, increased fuel and SAF cost is a medium
and longer-term risk for the Company as higher costs mean higher fares and in turn lower demand for
our services.
Emission reduction regulations across various jurisdictions would require organisations to adhere to
reductions of emissions or face penalties.
For voluntary carbon markets, acceptance of offsets in GHG reduction targets poses risk of overreliance.
A reform in tax policies to incentivise carbon-efficient technologies would double the overall level of taxation
in the mid-term. Increased taxation will slow the industry growth. Possible revenue decline and/or partial
offset as the industry would pass on the increased cost of travel to the revenue line. Failure to identify or
properly assess (i) new transactions relevant for tax, and/or (ii) changes in tax laws, in an increasingly
complex business.
Environmental related liability risks include the likelihood for emission and climate damage litigations against
the Company. The plaintiffs could target governments and companies that contributed to greenhouse gas
emissions. The probability of a given outcome varies based on the environmental impact of the company in
question; however, in any case, such a process would imply significant legal and other costs to the Company.
An uptake rate of low -carbon aviation technologies affects business competitiveness, operating costs and
asset values. Capex and R&D investments must balance risk and reward, promoting sustainable but
profitable innovations. Technologies such as zero-emission aircraft are not yet commercially viable options
in the short and medium term. Policy may be squeezing the aviation sector at a faster pace than technology
solutions are coming online. To mitigate this risk, Wizz Air has partnered with Airbus to work together on the
future of hydrogen technology and the aircraft ecosystem.
Market and reputation related transition risks include consumer preferences shifting towards sustainable
behaviour, for mid- to longer-term demand dropping for air travel (personal and business), divestment by
investors of carbon-intensive assets and negative shift of public opinion towards carbon-intensive activities.
Physical risks
While the impacts connected to physical risks will have more relevance the further we look into the future
and if policy pathways are not succeeding, the awareness and careful analysis of such risks is key for the
Company to prepare with strong risk mitigation plans and incorporate those in Wizz Air's sustainable growth
strategy. This enables the Company to stay resilient in the face of climate change and the disruptions that
physical risks can cause through various more frequent and more intense extreme weather phenomena.
Wizz Air Holdings Plc Annual report and accounts 2022
30
The four main physical risk types applicable to Wizz Air are:
operational disruption due to climate change;
asset damage due to climate change;
supply chain disruption due to climate change; and
market disruption due to climate change.
Airports’ sites will be varyingly susceptible to various extreme weather events. Damage to assets, including
aircraft, will disrupt the operations of flights and could result in temporary suspension. In a no policy scenario
flight operations will be disrupted more frequently leading to incidences of delays, diversions or cancellations.
Such events may have a material operational and financial impact. With new generation fleets like hydrogen
aircraft, MRO costs may increase in order to repair more technologically advanced aircraft in the event of a
hazard.
Extreme weather events can reduce the productivity of business activities and add costs to operations and
processes by causing operational disruption. Typically, storms and floods are destructive and cause
significant physical capital losses, while extreme temperature waves disrupt productivity. The effects of
extreme weather on business activities include direct physical damage or destruction of physical assets.
Operational disruption results in the loss of productive output, either if the means of production are directly
disrupted, for example through transportation and supply chain interruption, energy and utility outages
which can hinder or stop the ability to fly.
Extreme weather events may not only impact our operation, but could increase the risk of large-scale crop
failures that would heavily impact SAF supply in the longer term. Challenges in crop-based SAF availability
will increase SAF prices on the market and push up synthetic SAF prices. Failure to use recommended
volumes of SAF blend may contribute to higher carbon costs, kerosene tax and slowed emissions reduction.
Extreme weather events can cause short-term disruption to regular revenue streams, particularly when
poorly forecasted, resulting in market disruption. Sales may be affected by changes in demand if consumers
alter their behaviours because of the weather. There is also the risk of reduced flight capacity if customers
can't access airports due to infrastructure damages. Wizz Air’s network is continuously diversifying, and as
such, the Company needs to increase oversight regarding the specific physical risk types relevant to the
different regions of our operation. We will be working on strengthening our risk mitigation framework and
introduce new processes that take the applicable physical risks into account.
Climate related opportunity assessment
Our ambition to be the most sustainable airline on a net zero journey will help us to reduce the impact of
the risks outlined above, and more importantly help us to make our business and offering more resilient.
Becoming a sustainability leader will open many opportunities for the airline, which we have identified and
are trying to accelerate:
Airbus Zero emission aircraft: due to the current cooperation with Airbus on their zero-emission aircraft
project and the analysis of the impact of hydrogen aircraft on Wizz Air’s fleet and business model, the
company will be in a good position to quickly renew its fleet and transition to zero emissions aircraft faster
than other airlines. Fleet leasing will allow us to deal better with technology obsolescence.
Potential pathways to net zero: A cross-functional team has analysed several scenarios for potentially
reaching net zero by 2050 relying on technology solutions only and without air traffic management and other
external economic mechanisms taken into account. The purpose was to evaluate the financial impact in light
of WIZZ500 and to understand the financial impact of environmental legislation. The analysis has shown
that while there will be an exponential cost increase on short and mid-term due to SAF mandate and carbon
cost, if the company invests in zero emission technology and can secure SAF at lower than market cost (e.g.
via offsetting agreements with fuel producers), then the overall cost structure will improve considerably, as
opposed to not having acquired zero emissions aircraft.
As a result of climate change, green bonds and ESG financing are becoming more widespread. Wizz Air has
shown a positive trend in improving ESG ratings due to the company's continued and focused efforts to
become more sustainable. Due to this and our leading carbon intensity performance, ESG and sustainability-
linked loans and aircraft financing could become more available to Wizz Air and provide additional support
in fleet renewal and environmental transition, gaining competitive advantage. Green bonds and similar
initiatives may be a crucial mechanism to help fund the transition to a more sustainable economy.
Sustainable aviation fuels: Due to the proposed policy changes and upcoming blending mandates,
sustainable aviation fuel production will be increasing across the network. New policies and incentives for
SAF should increase supply and availability of the SAFs, supporting Wizz Air’s CO2/RPK reduction targets
and allowing us to stay relevant for our consumers who deeply care about our planet.
Wizz Air Holdings Plc Annual report and accounts 2022
31
Offsetting technologies: With direct air carbon capture technologies becoming more widespread and valuable
offsetting measures more widely available, this will have the potential to support the company’s carbon gap
closure to achieve net zero.
Airports’ net zero plans: renewable energy will become available at an increasing rate at the company's
bases. While this may increase electricity price sourced from renewables at the airports, it will also contribute
to reducing Wizz Air's Scope 2 greenhouse gas emissions due to the airports' own decarbonisation efforts to
achieve net zero. New policy pressure may also contribute to an increasing number for airports implementing
green incentives, rewarding airlines with young, new generation aircraft and low carbon intensity
performance, which would be beneficial for Wizz Air.
Consumer trends: Increased revenues resulting from increased demands for more sustainable products and
services within aviation. As Wizz Air is highly carbon efficient per passenger kilometre, consumers may shift
their airline preferences and favour our services as opposed to more polluting airlines with older aircraft and
higher CO2 footprint per passenger kilometre.
Resource efficiency: Relative cost advantage of the lowest intensity airlines like Wizz Air would improve given
Wizz Air’s competitive emissions intensity. In the airline industry lowest cost wins given airline tickets are
the most price sensitive online service. Therefore, Wizz Air is set to make both financial and commercial
gains from the continuously decreasing CO/RPK performance.
Environmental Risk and Opportunity Management
Wizz Air has outlined four different 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 Risk Committee and into the
Board of Directors and as such has strong support and priority in terms of driving our business plans and
the actions to mitigate the risks.
Wizz Air’s risk governance structure:
Analysis of the potential financial impact of climate change risks:
As part of the going concern and viability work for the Company, Management is mapping principal risks into
the going concern planning horizon and into the viability horizon. These horizons align well with the definition
of short-term risks (going concern) and medium-term risks (viability).
The ten principal risks as identified during our Enterprise Risk Management work are mapped and discussed as
such for their one year and three year and long-term impact. The same approach is used for climate risks, as
one of the ten principal risks. For each of the outlined climate risks – transition risks and physical risks – an
assessment is documented for the short-, medium- and long-term horizon. Where relevant, a quantified
impact of that assessment is then fed into the going concern and viability modelling for the Company.
The most material climate risks are linked to:
tax policies – where Wizz Air assumes for all its planning the Paris aspiration impact with regards to jet
fuel taxation, ETS impacts and phasing out of ETS credits, SAF mandates;
SAF regulation – where the criticality is around the development of the SAF supply chain that is
maximally resistant across different climate scenarios;
longer-term next generation technology – where the Company already today is engaged in several
programmes as disclosed on page 38 to qualify the ULCC model linked to those new technologies; and
improving capabilities for the future on planning and managing operations in a context of potentially less
predictable and more frequent adverse weather events and meteorological conditions.
Wizz Air Holdings Plc Annual report and accounts 2022
32
Environmental priority programmes
We have four priority programmes on environment:
1
2
3
CO2/RPK reduction – our core programme to reduce the emission intensity from flight operations;
qualify a SAF supply chain as of 2025 – a key building block to our F30 emission intensity
glidepath and net zero by 2050;
drive noise reduction through increased Chapter 14 emission standard compliance; and
qualify future technology building blocks and industry partnerships – to enable a Net Zero
4
by 2050 commitment.
CO2 per revenue passenger kilometre (CO2/RPK) reduction
1
This is the key environmental metric for Wizz Air as Scope 1 CO2 emissions from operations are the most
significant contributor to its carbon footprint. One 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 management incentive scheme as of F22 for CEO and Officers.
CO2/RPK
Pre-C19 results 57.2
Wizz Air
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; and (2) latest comparable FY results.
During F22, our carbon intensity metric continued to be adversely affected because of COVID-19 and the
impact it has on our load factor, although to a smaller extent. This is a testament to Wizz Air’s efforts in its
continued fleet renewal which has not ceased even during COVID-19, and the Company’s dedication to
increase operational and fuel efficiency. While load factors on our aircraft were still lower than pre-COVID-
19 levels, there is significant improvement for Wizz Air, which is not present everywhere within the industry.
Passenger load factors are expected to further recover through calendar year 2022 and calendar year 2023,
hence lowering our CO2/RPK and starting to show significant reductions versus our baseline. As we continue
to renew our fleet, we are projecting to be back on track from fiscal F24 onwards.
-
CO2 per RPK actuals
F21
F22
F20
F25
57.2 77.3 62.9 51.1 48.9 47.0 45.1 44.1 43.1 43.0 42.6
57.2 77.3 60.7 —
—
—
—
—
—
—
—
F28
F24
F26
F29
F27
F23
F30
The key actions to deliver on our CO2/RPK glidepath are outlined below: fleet renewal (contributing to 22.5%
reduction with the current order book) and fuel savings initiatives (contributing 1.2% reduction). Sustainable
aviation fuels will contribute 1.8 per cent reduction by F30. Offset programmes are not included in the above
glidepath.
Why it is crucial to use the CO2 per revenue passenger kilometre metric as opposed
to total CO2
Emission intensity (e.g. CO2/RPK) measures the emissions resulting from a given amount of activity. This
metric enables objective comparison as it provides a unit of emissions performance that is comparable
between different sized companies and different business models.
Changes in emissions intensity highlight the changes in the efficiency of the Company, while looking at total
emissions focuses on changes in the economic performance. Reduction in total emissions could simply be
the result of reduced economic activity, without any positive changes in efficiency and the related processes.
Moreover, for passengers who want to reduce their own contribution to the amount of CO2 emitted, this
measurement provides a means of comparison between the various options they can choose from.
“It is beneficial to use emissions performance as a basis of emissions reduction strategies and internal
progress tracking as it reflects the development in operations’ efficiency” (SBTi, 2021).
Emission efficiency reflects the energy efficiency of aviation operations as CO2 and GHG (greenhouse gas)
emissions are directly calculated from the amount of burnt fuel. In the transition towards climate neutrality
and sustainability, it is key to reduce the energy intensity of technologies and processes used, since to this
day there are no energy resources completely free of adverse environmental impact regarding the whole life
cycle.
Wizz Air Holdings Plc Annual report and accounts 2022
33
The importance of efficiency improvements in aviation in the past decade can be seen below. According to
the statistics published by Eurocontrol, while the number of passengers (RPK) increased by 40% between
2009-2014, the CO2 emissions only show an increase of 15% within the same timeframe. This difference
between the rate of increment in economic activity and in its emissions impact is due to development in
efficiency – for instance technological renewal, higher load factors, flight operation optimisation, etc.
(Eurocontrol, 2020).
Wizz Air is reporting monthly traffic statistics and the CO2 emissions per revenue passenger kilometre each
month. Greenhouse gas emissions reporting is included in the annual report and includes Scope 1, 2 and 3.
Fleet renewal is contributing 22.5% reduction by F30
Since its very first flight in 2004, Wizz Air has always operated the Airbus A320/321 family of aircraft and
currently operates one of the youngest fleets in the world with an average age of 5.04 years.
Years
Average aircraft age 5.04
Wizz Air
Ryanair
9.0
EasyJet
8.6
AF-KLM
10.9
IAG
10.6
LH
12.7
SAS
8.4
The Airbus A321neo, which WIZZ introduced in 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 and 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 10% compared to the
A321ceo, which further translates to 20% fuel savings compared to the A320ceo aircraft.
In January 2022, Wizz Air received an award from ch-aviation for the World’s 3rd Youngest Aircraft Fleet, in
the category of airlines with 100 or more aircraft in their fleet (average fleet age was 5.2 years at the time
the awards were judged). The ch-aviation Youngest Aircraft Fleet Award was conceived to honour airlines
and aircraft leasing companies worldwide who maintain young and efficient aircraft. Keeping a modern fleet
and portfolio by using new generations of aircraft contributes significantly to the decrease of CO2 within the
aviation industry and helps achieve better fuel efficiency (to determine which airlines currently operate and
which lessors manage the youngest aircraft fleet, ch-aviation maintains an extensive aircraft fleet database
consisting of more than 4,700 active airlines, more than 65,000 aircraft, and 1,000 lessors worldwide).
The airline operates a fleet currently consisting of 153 Airbus A320/1neo and ceo family aircraft, with an
average age well below the industry average (which is around 10 years). Wizz Air’s average aircraft age will
continue to improve and reduce to 3.2 years by 2027, underpinning the airline’s continued commitment to
sustainability. As Wizz Air announced in November 2021, the Company signed an agreement with Airbus
for the purchase of a further 102 Airbus A321 aircraft, comprising 75 Airbus A321neo and 27 Airbus A321XLR
aircraft, with the bulk to be delivered between 2025 and 2027. Under certain circumstances, Wizz Air may
acquire a further 15 A321neo aircraft. Airbus has also granted Wizz Air 75 A321neo purchase rights for
deliveries in 2028-29, to be converted into a firm order by the end of 2022. As with previous orders, under
the agreement Wizz Air has the right to substitute a number of the Airbus A321neo aircraft with the Airbus
A320neo and/or A321XLR aircraft and vice versa, depending on its future requirements. Completion of the
order remains subject to approval by Wizz Air shareholders.
With the new order, Wizz Air’s delivery backlog comprised a firm order for 34 A320neo, 244 A321neo and
47 A321XLR aircraft, plus the additional order for 15 A321neo and purchase rights for 75 A321neo, a total
of 415 aircraft at 31 March 2022.
After two years in service, Wizz Air’s Airbus A321neo continues to provide market leading aircraft technology
and choice - there is simply no other aircraft that can compete with it. With its next-generation engines, it
has proven to be a game-changer. These are by far the most fuel- and cost-efficient aircraft in their class -
supporting us in maintaining our position as the most sustainable airline in Europe and reaching our
sustainability goals of reducing CO2 emissions per passenger kilometre by 25% by 2030. It is important to
note that if all European airlines switched to a modern Airbus A320/1 fleet like Wizz Air and operated them
as efficiently as Wizz Air, the whole industry’s CO2 emissions would reduce by 34% overnight.
F20
Fleet plan
Avg. fleet age 5.4
Avg. seat
count
Share of neos 7%
F21
5.4
F23
F22
5.04 4.1
F24
4.0
F25
3.6
F26
3.3
F27
3.1
F28
3.4
F29
4.3
F30
5.3
201 205
213 221 226
228
230
232
233
233
233
20% 36% 53% 65%
77%
87%
94%
99% 100% 100%
Wizz Air Holdings Plc Annual report and accounts 2022
34
Despite strong demand for the aircraft, Wizz Air signed very attractive terms with Airbus for the long-term
supply of more aircraft until the end of the decade, catapulting Wizz Air towards our aim of being a 500
aircraft group and putting us in an unassailable position when it comes to sustainability. When it comes to
decarbonising aviation, airlines depend on the technology and innovations available here and now – we are
confident that by investing in the most modern aircraft and engine technology we will be able to continuously
reduce the passengers’ carbon footprint and deliver the targeted CO2 intensity decrease by 2030 and
beyond. In October last year, Wizz Air’s Commitment Letter to the Science Based Targets initiative (SBTi)
was accepted and as such we are aligning to an ambitious decarbonisation roadmap. SBTi is a partnership
between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide
Fund for Nature (WWF) and it drives climate action in the private sector by enabling companies to set science-
based emissions reduction targets.
Fuel saving initiatives are contributing 1.2% reduction
We continue to focus on fuel efficiency initiatives that reduce our impact on the environment by consuming
less fuel. In total, in F22, we launched initiatives that on an ongoing basis are reducing consumption by
0.85 per cent. Flight path optimisation options are being explored continuously and further improvements
are expected with the go-live of a leading third party fuel efficiency platform in combination with our Mobile
EFB (Electronic Flight Bag), that will enable aircraft type specific, highly accurate performance models.
We keep working on the ideation and qualification of other optimisation projects to deliver every year 20bps
of consumption reduction.
Initiative
Differentiated cost index
Performance/idle factors
ZFW optimisation
Reduced take-off configuration
CONF 3 landing
Mobile EFB
Fuel efficiency platform
Start date
Jun-18
Jun-20
Jun-20
Oct-20
Sep-19
Dec-21
Apr-22
% efficiency
0.4%
0.1%
0.1%
0.3%
0.2%
0.05%
0.8%
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 us to maximise the cost reduction (and fuel burn) of the
operations. Essentially, this process allows us to operate with a lower cost index, meaning the most
economical way to fly, resulting in saved emissions too.
Performance/idle factors: we are constantly measuring and monitoring (through an external provider)
the flight data, recorded for each flight by the aircraft computer 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. This analysis enables higher optimisation as 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 T/D (top of
descent), 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 ZFW (zero fuel weight), based on standard and fixed weight of passengers and their
luggage. In 2020, Wizz Air introduced a new modelling logic to better estimate ZFW and 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 compared to using the simpler method.
Reduced take-off configuration: we perform reduced take-off configurations. Two years ago, we
harmonised in our OM (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 around 15 kg of fuel. In effect, this means that the pilots are recommended to perform take-offs
with the lowest flap setting when all circumstances are optimal (weather, aircraft weight, runway length,
etc.) - the captain has the final say on this, always ensuring maximum safety of the passengers and the
aircraft.
CONF 3 landing: a reduced landing flap configuration (vs full flap) allows for around 10 kg of fuel savings
per approach, due to the decrease in induced drag, meaning that a lower thrust setting is required. We will
try to focus more attention on this via pilots’ communications.
Electronic Flight Bag (EFB): the Mobile Electronic Flight Bag is a significant step-change for in-flight
optimisation and will help the pilots make more accurate fuel planning decisions based on instantly updated
data. This innovative solution is not just replacing printed manuals and documents with iPads for pilots, but
it also helps improve fuel and operational efficiency in numerous ways.
Wizz Air Holdings Plc Annual report and accounts 2022
35
The tablet devices are equipped with all essential documentation, applications and performance monitoring
that is a prerequisite to prepare for flights. The pilots will remain constantly connected and able to receive
real-time information and changes that affect flight and fuel planning. Having the latest data available on all
factors impacting flight operations, the pilots will be able to make well-informed decisions and optimise fuel
uptake with high accuracy. The new system is expected to help reduce fuel consumption due to more precise
flight planning and weight reduction, which will contribute to the Company’s emissions reduction targets.
The availability of recalculated flight plans and the optimisation before each flight or even during the flight
will save over 4.500 tons of fuel per year, reducing greenhouse gas emissions by over 14.000 tons. This
weight is carried in 180.000 passengers of 80 kilograms each, which is equivalent to the weight of 750 full
A321neo aircraft, with 239 seats. Another benefit of the EFB is the estimated saving of about six million
sheets of paper a year, the equivalent of saving more than six hundred trees. Wizz Air has organized e-
trainings to all pilots to guarantee a smooth transition to the new system. After the go-live at the end of
2021, the mobile EFB has received, in close cooperation with the Aviation Authorities, full approval for all the
anticipated functionality on 19 May 2022. We will be deploying additional functionality in the months and
quarters to follow, leveraging the full potential of the EFB platform.
Fuel efficiency platform: another flagship project for fuel efficiency this year was the preparation for the
integration and implementation of a new leading third party fuel efficiency platform. This new platform has
two key features: the reporting platform helps measure the overall compliance to Wizz Air’s existing fuel
saving initiatives, and the advanced analytical functions support the identification of potential new fuel saving
opportunities. Wizz Air’s fuel data experts will also be able to assess the achieved savings in comparison to
the targets set. Another key functionality will be the customised “pilot’s app”, by which the flight deck crew
will be able to view their own results (as % of compliance, fuel/CO2 saved), and receive individual qualitative
feedback and tips on how to be more fuel efficient. The platform became available to be used in April 2022.
Environmental offset programmes
Wizz Air started a voluntary CO2 emission offset programme in 2020 as part of its wider commitment to
reducing emissions enabling passengers to calculate their flight’s environmental impact and provide a choice
to offset the carbon emissions of their travel. The programme, 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”). 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 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.
The total offsets funded by Wizz Air are now covering 64% of emissions (ETS offsets excluding free credits,
voluntary offsets). The average price of an EU ETS credit during F22 was 60.38 EUR (compared to 37.23
EUR in F21).
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
Scope 1 CO2 emissions without offset (free credits, baseline offsets)
F22
1,746,695
-
1,064
788,777
F21
863,909
-
105
474,358
Wizz Air has not included offsets in our F30 carbon intensity reduction glide path as we are focused on
reduction through innovation and technology, and the most efficient operations that we believe will have a
greater impact on tackling carbon emissions.
Qualifying our SAF supply chain as of 2025
2
Wizz Air is compliant with regulatory requirements with regards to sustainable aviation fuel (SAF) at
European Union and country level. Countries that implemented SAF blending mandates so far are Norway,
Sweden and France.
The supply, quality and price level of SAFs is deemed not sufficient to meet SAF blending mandates as part
of FitFor55 2025 onwards. As such, the Company is working with stakeholders to qualify a SAF supply chain
in line with the ULCC principles whilst meeting ISCC+, RSB and EU Renewable Energy Directive II criteria on
feedstock.
Wizz Air Holdings Plc Annual report and accounts 2022
36
Actions to achieve this include industry engagements, public support of the book-and-claim system in the
EU and establishing offtake agreements that can achieve a strategic advantage for the Company, while
ensuring the necessary SAF volumes, which will enable Wizz Air to deliver on its emission reduction goals.
Commitments above regulatory requirements will depend on cost and environmental benefits. Wizz Air’s
advocacy efforts and position on the ReFuelEU proposal are detailed on page 39.
Wizz Air has conducted a SAF to market deployment assessment considering the dimensions of production
technology readiness, feedstock availability and life cycle GHG emissions reduction potential of the different
SAF pathways with particular focus on identifying the most feasible supply options for its key regions. A key
objective is the selection of technology partners to support Wizz Air's ambitious long-term climate targets
by ensuring a superior production cost profile, reliable and competitive sustainable feedstock source and
advanced engineering capabilities.
While fleet renewal is part of the current orderbook of the Company with Airbus and as such is part of the
Company’s business plan, whereas the Company is working to lock in its SAF supply in the mid-term the
SAF cost is immaterial by F25 given the blending mandates start kicking in as of 2025. After 2025 the cost
will be covered through a combination of price-pass-through and longer term SAF supply contracts below
market price which are being worked by the Company.
Drive noise reduction through increased Chapter 14 emission standard
3
compliance
At Wizz Air, we are also strongly focused on continuous noise reduction given its crucial impact on all
socioeconomic groups in the communities we depart from or arrive to.
Our fleet renewal programme will keep delivering strong noise reduction benefits. The A321neo delivers
an almost 50 per cent reduction in noise footprint versus the previous A321 aircraft (A321ceo).
The number of aircraft in our fleet meeting the ICAO Chapter 4 noise emissions standard is at 100% and
meeting the Chapter 14 emission standard is at 72% currently (only the 41 A321ceo aircraft do not
meet the Chapter 14 noise emission standard) with a projection to get to 100% during 2029. 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
22-Mar
72%
23-Mar
77%
24-Mar
81%
25-Mar
85%
26-Mar
91%
27-Mar
96%
28-Mar
99%
29-Mar
100%
30-Mar
100%
For reference, the table below shows (in EPNdB) that Airbus neo aircraft deliver 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
Qualify future technology building blocks and industry partnerships to enable a
4
Net Zero by 2050 commitment
Wizz Air is committed to driving sustainable change within the aviation industry; thus we are cooperating
with our suppliers, partners and various industry stakeholders in projects concerning technological and
operational innovations.
ALBATROSS
Launched in February 2021, the ALBATROSS project is seeking to implement the most energy efficient flights
in Europe. As part of the initiative, a series of live demonstration flights have been conducted, demonstrating
the feasibility of increased energy-efficient flights, utilising both technical and operational innovations, known
as SESAR Solutions. ALBATROSS is following a holistic approach by covering all flight phases, and, as such,
involving all key stakeholders like airlines, ANSPs, network managers or airports. Wizz Air UK has been
participating in the project’s working group meetings and alignments and will continue to be involved in the
next phase as well.
Airbus – ZEROe Hydrogen Project
Wizz Air has signed a Memorandum of Understanding with Airbus earlier this year on its ZEROe Hydrogen
Project, which will help analyse the evolution of the hydrogen ecosystem globally and the impact of hydrogen
aircraft on Wizz Air’s fleet, operations and infrastructure by taking into account the specific aircraft
characteristics. The agreement will also include common advocacy and communication to advance
awareness for the mutual benefit of Wizz Air and Airbus. Wizz Air is supporting with providing key commercial
and operational input to Airbus to provide ultra-low-cost carrier related insight to the ZEROe Hydrogen
Wizz Air Holdings Plc Annual report and accounts 2022
37
Project team, while Airbus will continuously share information on the expected aircraft performance and
ground operations characteristics to support. Working with Airbus on this project will provide the Company
with a much closer understanding of how a zero-emission aircraft could be put into service and how it will
impact the airline’s infrastructure and processes, as well as its efficient performance.
Green Mobility
In collaboration with Rentalcars.com and Green Motion, Wizz Air launched a car rental reward scheme for
our passengers, offering a 10% cashback reward for choosing an electric or hybrid vehicle. Green Motion not
only operates with an eco-friendly fleet, but they also reduce their environmental footprint by consuming
renewable electricity when available and use sustainable materials. Their services are available in many of
Wizz Air’s bases and destination airports.
EASA Environmental Labelling Programme for Aviation
Wizz Air has entered into a voluntary cooperation with EASA on the operational testing of their environmental
labelling platform. The project aims to collect accurate data from stakeholders (airlines, airports, etc.) and
publicly communicate transparent environmental performance information to consumers in an easily
digestible format.
Important Projects of Common European Interest (IPCEI)
Wizz Air joined the FlyHy Project consortium led by VPP Solar Ltd. and Messer Hungarogáz Ltd. to promote
the use of hydrogen and to accelerate the decarbonisation of the aviation sector. The consortium connects
the expertise from the aviation sector, as well as the renewable energy, hydrogen, and airport industries.
Wizz Air is one of the founding members of the project consortium, along with several other industry
stakeholders (e.g. Debrecen International Airport). The project is led by VPP Solar Ltd. which engages in the
development, construction, and long-term operation of solar systems. In 2019 VPP Solar Ltd. launched a
new business arm for the creation of the full value chain of hydrogen and began the planning and
implementation of its first carbon-free hydrogen production plant project in Hungary in 2021. Messer Group
GmbH is a global producer and supplier of industrial gases, engaging also in the development of applied
technologies. The company has over 15 years’ experience in hydrogen supplies, hydrogen refuelling systems
and support services to major fleets of fuel-cell buses and material-handling vehicles. Messer has recently
extended its portfolio to launch the emissions-free production of hydrogen.
The FlyHy IPCEI Hydrogen Project Proposal, submitted in November 2021, plans the deployment of carbon
free, green hydrogen gas production plants and distribution stations near Hungarian (or also other EU)
airports. Initially these would supply ground vehicles and SAF production and later, the deployment of liquid
hydrogen infrastructure and production, utilised as air fuel. The IPCEI projects represent a key contribution
to economic growth, jobs and competitiveness for the Union industry and economy. The strategic forum on
IPCEI implemented by the European Commission in 2018 identified hydrogen technologies as one of six
strategic value chains as central to competitiveness of the EU economy. Connected to the ambitious goal of
EU carbon neutrality by 2050, the European Commission and Member States have offered to support projects
on hydrogen. IPCEI project grants are funded from the national budget (and are not considered as state
aid), but need to be approved by the European Commission.
Revision of the Energy Taxation Directive
We believe that the European Commission’s “Fit for 55” environmental legislation package can create the
right path for aviation’s future, but only if applied fairly and equally, without distorting the market. A balanced
approach from the EU is crucial to promote the decarbonisation of the industry. The entirety of aviation,
meaning the operators of all flights need to contribute and play their part equally. Net Zero, after all, is
everybody’s responsibility, without exception. This is the only way polluters will embrace more efficient
technology and more efficient business models. When implementing such measures, connectivity in the CEE
and peripheral Europe has to be taken into account. Increasing the cost of flying without such a balanced
approach would impact the periphery and CEE countries far more.
Wizz Air’s position on kerosene tax is the following:
it shall be introduced on all air transport (including long-haul and air cargo);
kerosene tax should be applied on all flights departing from, arriving to, or operating within the territory
of the European Economic Area; and
the possibility of double taxing CO2 emissions needs to be avoided.
Revision of the EU Emission Trading System (ETS) Directive
Wizz Air is supportive of decarbonising the aviation sector by 2050, but the Company is concerned that some
parts of the current plans for the ETS revision would distort the market and create an uneven playing field
within the European aviation sector. We believe that fair and equally applied European policies are essential
to ensure that the entire aviation industry is put on a path to net zero.
Wizz Air would highlight three points that are crucial to the success of the ETS Directive:
applying the ETS on all flights departing from the EU;
Wizz Air Holdings Plc Annual report and accounts 2022
38
avoiding the double taxation of CO2 emissions under different schemes (ETS and kerosene tax); and
utilising ETS tax for sustainable investments in the sector.
ReFuelEU Aviation Proposal
Wizz Air supports the European Commission’s ReFuelEU Aviation Proposal to promote and develop the use
of sustainable aviation fuels (SAF) for all flights in a fair and equal way without distorting the market, as we
believe SAF will play a significant role in enabling the airline industry to meet net-zero emissions by 2050. It
is important to note that SAF is the only viable solution to decarbonise medium- and long-haul flying –
representing over 70% of aviation’s emissions – based on the announced future models by airframe
manufacturers (e.g. smaller electric aircraft, zero-emission concept aircraft, etc.).There are two points that
are fundamental to the success of SAF:
a robust “Book-and-Claim” system to make SAF accessible to the CEE region and the European periphery
with limited transportation costs; and
incentivising SAF investments into production and infrastructure through government support, policy,
and economic initiatives.
SAF availability and production are very uneven across Europe. The ReFuelEU Aviation Proposal needs to
better reflect this. While there are many ongoing projects, there is little prospect of actual industrial scale,
commercial production anytime soon - especially in the CEE region and parts of the European periphery. It
is also of concern that a significant share of the proposed SAF production is firmly contracted before the
plant is even constructed and hence never reaches the open market.
Due to this uneven distribution of SAF, it is vital that a “Book-and-Claim” system is implemented as part of
the ReFuelEU legislation. It would allow for the technologies to reach an economy of scale in locations where
they fit best, also considering the geographical differences, feedstock, and renewable energy sources of the
Member States.
Although SAF can be transported using established infrastructure at relatively low cost – as a “drop-in” fuel
to maximise efficiency and sustainability – minimising both transportation cost and additional transportation-
related emissions – SAF should be used as close as possible to production. Regarding the future of e-fuel, a
few larger SAF production plants with a robust “Book-and-Claim” system can scale up and attract investors
faster than several small ones in each Member State.
Government support, policy and economic incentives for the private sector are critical to enable a transition
to widespread pathways and production of SAF. Effective European policy mechanisms can aid the wider
adoption of SAF across Europe faster, increase production and supply capacity as well as lowering the cost
of sustainable fuel production.
Since November 2021, Wizz Air has been collaborating with Hume-Brophy on advocacy issues in the
European Union, with a special focus on climate or other regulation impacting aviation. Throughout F22, the
Company has paid over EUR 30,000 to Hume-Brophy for their valuable support with on-the-ground advocacy
on behalf of Wizz Air in Brussels.
Wizz Air UK Green Aviation Operations Trial – safely reducing the carbon emissions of the current fleet
Green aviation is the sustainable growth of an operator that tracks a net zero carbon emission trajectory to
achieve the Paris Climate Agreement outcomes. This may involve the optimum utilisation of current
capabilities as well as investment in future, breakthrough technology, and energy sources. The goal of green
aviation operations is to safely reduce carbon emissions of the current fleet as much as possible, and it is
estimated that this could achieve as much as 10% CO2 reduction (total emissions).
Wizz Air UK’s implementation of green operations began in January 2022 and is an important step in
sustainability leadership – it will focus its efforts at its bases at Luton, Gatwick, Doncaster, and Cardiff. Green
operations seek to maximise what can realistically be done within the envelope of flight safety and on-time
performance, as well as against the challenges that UK airspace and weather bring. Wizz Air UK is
approaching these challenges through four pillars:
(1)
Pilots: motivating a mindful approach to fuel efficiency and the way an aircraft is flown can directly
reduce Scope 1 emissions on a daily basis. A Company-wide implementation of the Fuel Efficiency Platform
will enable flight crew to further analyse their own performance for each route flown and identify ways to
reduce their personal fuel burn and emissions.
(2)
Airspace modernisation and coordination: become involved in the CAA Airspace Modernisation
Strategy consultation, which has sustainability as an overarching principle to be applied through all
modernisation activities, including better managing noise and helping achieve government commitments to
net zero emissions. Wizz Air UK seeks to encourage a new design of airspace that allows continuous climbs
and descents – if successful in the London airspace Wizz Air UK could save around 3 per cent on Scope 1
total CO2 emissions. In the meantime, liaison with the UK National Air Traffic Service (NATS) is illuminating
opportunities for flight crew to coordinate the most efficient flight profiles possible.
Wizz Air Holdings Plc Annual report and accounts 2022
39
Information processes: decreased load (weight) reduces fuel burn and Scope 1 emissions. Flight
(3)
crew pre-flight decision making on the amount of fuel to be taken is influenced by the operational flight plan.
The nature of the operation is dynamic and loading of an aircraft may vary considerably. Wizz Air UK moved
to the next generation of Electronic Flight Book in March 2022. This means the most accurate loads (amongst
other critical information) are presented to the flight crew at the time of decision making giving the best
opportunity to reduce the amount of fuel carried and burned.
Ground operations: minimising emissions through procedures and the pursuit of commercially viable
(4)
low emission technology. These fall into Scopes 2 and 3 total emission categories.
United Kingdom – Aviation Decarbonisation – Jet Zero 2050
In 2021 the United Kingdom took the Presidency of the United Nations Framework Convention on Climate
Change (UNFCCC) Conference of Parties (COP) with the aim of keeping alive the hope of limiting the rise in
global temperature to 1.5 degrees Celsius. HM Treasury seeks to make the UK the first net-zero aligned
financial centre, which means that Wizz Air, as a listed company, will implement a robust firm-level transition
plan setting how it will decarbonise as the UK meets its ambitious and legally binding net zero targets.
Wizz Air took part in the UK government consultation on its Jet Zero 2050 strategy – which set out the
principles for delivering aviation net zero carbon emissions by 2050. Wizz Air UK follows this Jet Zero
taxonomy and uses the proposed “high ambition” pathway to net zero as a benchmark with which to plan
its transition. This pathway predicts that up to 35% of total carbon emissions can be reduced through system
efficiencies: improvements in existing engine and airframe design alongside operational improvements. The
growth of the UK operations is making UK air travel greener on a like for like basis as its fleet transitions to
best-in-class Airbus neo airframes combined with high load factors. Wizz Air UK is going one step further
with the implementation of Green Aviation Operations.
In 2021, Wizz Air UK was actively participating in the UK government-backed initiative, called FlyZero. The
project is led by the Aerospace Technology Institute (ATI). Via working groups with experts and consultations
with industry professionals the ATI’s ultimate goal is “to realise zero-carbon emission commercial aviation
by the end of the decade”, assessing the design and viability of a zero-emission aircraft. Wizz Air was
providing valuable operations-related data and information for the scenario-planning in the first phase of the
project, which ended in December 2021.
ELeather - Aircraft Seat Covers Made Sustainably
Wizz Air is not only active in finding ways to deliver net zero by 2050, but also continues to be active to drive
a circular economy that is resource-efficient. An example is with ELeather. Wizz Air has been flying recycled
leather seats by ELeather since 2011. The ELeather manufacturing process is naturally sustainable – recycling
waste leather, which would otherwise be destined for landfill, into a durable material with strong environmental
credentials. The manufacturing of these seat covers is contributing to 65% less CO2 emissions, 77% less land
use, 68% less water consumption, when compared to traditional leather seats’ production. Manufacturing the
seating for one A321neo aircraft prevents in total 478kg of waste leather from going to landfill and saves over
16,000kg of CO2 emissions during the seat cover production process. The annual CO2 emissions avoidance
coming from the use of ELeather’s sustainably made seat covers, for one A321neo, equate to over 66,000kg.
The sustainability innovation journey with ELeather is continuing as they are developing next generation
materials with increased recycled content, as well as end-of-life (EOL) solutions for Wizz Air seat covers to
ensure that these materials have a future life, even when no longer on our aircraft.
Wizz Air Holdings Plc Annual report and accounts 2022
40
All Environmental Metrics and Targets
Our climate strategy includes challenging 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
grams per RPK, will be included in the annual remuneration targets for all Officers.
Area
Unit
Note
F22
F21
F20
F19
2030
Target
CO2*/RPK
g/RPK
Priority/1
60.7
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
2,646,743
1,303,397
3,783,901
3,310,219
2,290
781,467
2,951
—
5,566
—
—
—
t
t
t
CAEP/8
t
t
t
Priority/4
5
6
6
7
8
9
2,620,321
1,631
24,792
34%
823
416
5,407
1,290,647
459
12,292
20%
406
205
2,663
3,746,884
1,332
35,685
7%
1,178
595
7,732
3,277,836
1,165
31,217
2%
1,030
520
6,764
t
10
124
61
178
156
Noise
Waste-to-landfill
Chapt.14
%
Priority/11
12
72%
99
70%
98.3
66%
—
66%
—
Natural resource
use
Freshwater use
per sales
Energy use per
sales
Kerosine use per
sales
Management
Booked load
factor
Stage length
Sustainable
aviation fuel
Offsets
Aircraft age
l/EUR
GJ/EUR
m3/EUR
%
km
%
13
14
15
16
17
18
0.00295
0.0058
—
0.023
0.000034
0.000015
—
—
0.000500
0.000695
0.00054
0.00056
78
1,604
64
1,604
93.5
1,635
0.0002
0.0007
0.0002
92.7
1,618
—
33
4.9
%
Years
Priority/19
Priority/20
64
5.04
67
5.5
56
5.3
—
—
—
—
—
—
100%
—
—
—
—
100%
50
—
—
—
95
1,650
—
5.5
(1). CO2/RPK: see page 33, Environmental Priority Programmes. Further, you can find emissions per FTE
and per m2 below.
GHG emissions
Total emissions
Total FTE
Total floor area
Emission intensity per FTE
Emission intensity per m2
Final year-end emissions (tCO2e)
3,430,500
5,604
15,341
612
224
% of total
100%
FTE
m2
tCO2e/FTE
tCO2e/m2
(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. Scope 1, for
Wizz Air, jet fuel is the only emission source accounted for in this category. Scope 2 includes GHG emissions
emitted from electricity used in the Company’s operated facilities or ground power units. Scope 2 market-
based emissions use the supplier specific emission factors for calculating emissions, as opposed to location
based emissions, which use the national grid average emission factors.
(3). Scope 3 CO2e emissions include all other indirect GHG emissions emitted from a company’s upstream
and downstream supply chain. For Wizz Air, only upstream emissions have been identified as relevant.
(2) and (3). Greenhouse gas emissions: Scopes 1, 2 and 3. Wizz Air had its total GHG emissions across
Scopes 1, 2 and 3 calculated for the first time in F22, in alignment with the WI/WBSCD GHG Protocol. The
total emissions were calculated using a hybrid methodology using actual consumption data for jet fuel, spend
Wizz Air Holdings Plc Annual report and accounts 2022
41
data for various categories and benchmark/proxy data for categories with a low degree of materiality (e.g.
electricity, waste and employee commuting).
Wizz Air’s single most significant emission source is jet fuel, accounting for 93% of total emissions when
accounting for the impacts from fuel production (Scope 3) and combustion in aircraft (Scope 1). The
remaining emissions from Scope 2 (electricity) and Scope 3 (upstream supply chain emissions) account in
aggregate for 7% of total emissions.
WIZZ AIR’S TOTAL GHG
EMISSIONS BY SCOPE F22
23%
0%
77%
Scope 1
Scope 2
Scope 3
GHG emissions by scope
Scope 1: Jet fuel
Scope 2: Electricity, location and
market based
Scope 3: Upstream categories
Total GHG emissions
tCO2e
2,646,743
2,290
781,467
3,430,500
Wizz Air’s remaining emissions (after excluding jet fuel) are concentrated in two key areas: purchased goods
and services, and capital goods. The other emissions, whilst minor from a share of total (7%), are significant
in absolute terms, so Wizz Air’s long-term emissions reduction strategy will consider these categories as well.
Wizz Air’s total carbon footprint make-up is in line with the aviation sector guidance of the Science Based
Targets initiative. The results show that Wizz Air’s jet fuel emissions (upstream emissions and combustion
in aircraft) account for 93% of total carbon footprint, followed by purchased goods and services 6%, business
travel 0.3% and capital goods acquired in the reporting year 0.2%, with the remaining categories being
immaterial and accounting for ~1% of total. Capital goods emissions exclude aircraft leases, as these assets
are not effectively owned by Wizz Air, so the upstream emissions from the acquisition of these assets are
attributed to the third party owner, which Wizz Air leases the aircraft from on a long-term basis. As such, it
will be noted that this category is significantly more material for airlines that own part or the majority of
aircraft, as they include the raw material extraction and manufacturing emissions (cradle to gate).
Considering that jet fuel’s impact is so material to Wizz Air’s total carbon footprint, the main focus should
remain on managing these emissions to achieve efficiencies as the business continues to grow to achieve
WIZZ500. Wizz Air has already developed a strategy to manage and reduce jet fuel emissions through fleet
upgrade, fuel saving initiatives and the use of sustainable aviation fuel; however, given the global urgency
to reduce emissions, the Company’s decarbonisation strategy will also include actions and targets for other
relevant emissions across the supply chain (which are significant in absolute terms). The recently
implemented Sustainable Procurement Policy (discussed in more detail on page 58) is a crucial step to
achieve this.
(4). Scope 1 CO2 emissions (Carbon Dioxide) by our operations was 2,620,321 tonnes (based on our jet
fuel consumption of 831,847.9 tonnes multiplied by the standard 3.15 multiplier to convert jet fuel
kerosene 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.
This includes the fuel consumption of any wet lease aircraft 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 kerosene. 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 kerosene). 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% 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 kerosene. 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
kerosene). As we are industry leading, it will not be a surprise that we have 100% of our fleet meeting the
ICAO NOx CAEP/6 standards and 34% 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% of the fleet meeting ICAO CAEP/8 standard). Emission factor verified in Eurocontrol European Aviation
Wizz Air Holdings Plc Annual report and accounts 2022
42
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 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26 Mar-27 Mar-28 Mar 29 Mar30
7%
70%
100% 100%
97%
59%
44%
34%
20%
81%
90%
Our neo fleet has a very wide margin in terms of NOx emissions versus CAEP/8 standards, significantly ahead
of the Boeing 737-8200 (Max).
Wizz Air A320neo
Wizz Air A321neo
Wizz Air A320ceo
Wizz Air A321ceo
Boeing 737-8200
NOx margin to CAEP/6 (%)
56.0
55.0
7.4
1.3
16.0
NOx margin to CAEP/8 (%)
49.0
49.0
-10.6
-13.9
6.0
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, 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
kerosene. 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), whilst 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 kerosene. 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 Wizz Air’s fleet composition of ceo and neo as of F22.
(9). Scope 1 CO (Carbon Monoxide), whilst not a greenhouse gas, is best known for the lethal effects
that it can have in-house, but outdoors 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
kerosene. 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 F22.
(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 kerosene. Studies have shown that primary soot particles from kerosene combustion in aircraft turbine
engines can cause damage to lung cells and can trigger an inflammatory reaction if the solid particles are
inhaled in the direct vicinity of the engine. The 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 Wizz Air’s fleet composition of ceo and neo aircrafts as of F22.
(11). Noise emissions: see page 33, 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 one hour of flying causing around 30kg of waste (5kg of galley waste and 25kg of tank waste),
or a total of 10,689 tonnes during F22. Office waste for Wizz Air was 88.9 tonnes. Office waste is segregated
at 24% recycling rate. In October 2021 we started an in-flight recycling trial programme with 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, digitisation of procure-to-pay processes and electronic power of attorney
requests.
(13). Water use intensity. Wizz Air consumes water in its offices, training centres, hangars (where engine
wash events are also conducted), and for de-icing of aircraft where needed. In F22, in the Company’s main
offices, hangars and training centre consumed a total amount of 4,915,600 litres of water.
(14). Energy use intensity. Wizz Air uses electricity 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. The calculations for F22 include electricity usage in all leased Company offices, all base
offices, hangars and other leased facilities. The Company’s office headquarters in Budapest received BREEAM
certification due to its energy efficiency. The Company’s training centre has an Energy Certificate level “CC”
– the building is not consuming any natural gas; it has been built with air to air heat-pumps covering the
Wizz Air Holdings Plc Annual report and accounts 2022
43
energy needs for heating and cooling the building. Air to air heat pumps are a low carbon and highly efficient
way of cooling and heating the building. An air curtain was installed to the entrance in 2021, which enables
us to reduce the heat loss during wintertime and the energy need for heating can be reduced.
(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. Our mid to long-term
target is to reach 95% load factor on our aircraft.
(17). Stage length for Wizz Air is on average 1,605km with flights below 1,000km accounting for less than
13% of flights. Our stage-length is significantly higher than our key competitors (see below the comparison
for F20, pre-COVID-19)
km
Stage-length F20
Wizz Air
Ryanair
1,635 1,409
EasyJet
1,132
(18). Sustainable aviation fuels have been adopted by Wizz Air to ensure compliance with regulatory
requirements. In Norway there is a 0.5% blending mandate and our fuel uptakes are in line with the
Norwegian requirements. As of 1 July 2021, Sweden introduced a 0.8% blending mandate, which changed
to 1.7% in January 2022. The mandate in France is applicable from January 2022 and requires 1%
sustainable aviation fuel uptake. We will continue to be compliant with what we believe will be an increasing
number of blending mandates over the region we operate in. 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%.
(19). CO2 emissions offset programme: see page 33, Environmental Priority Programmes.
(20). The average age of aircraft is 5.04 years; see also page 33, Environmental Priority Programmes.
Additionally, Wizz Air’s average lease length is around ten years, after which the aircraft is returned in the
contractually determined condition to the lessor.
Wizz Air Holdings Plc Annual report and accounts 2022
44
In January 2022, our “Fly the Greenest” campaign was launched to raise awareness among our passengers
about Wizz Air’s environmental credentials and to enable them to make the responsible decision when flying.
Wizz Air is proud to be not only Europe’s fastest-growing airline, but also its greenest choice of air travel.
Wizz Air Holdings Plc Annual report and accounts 2022
45
People – Wizz Air cares for its colleagues and customers
Wizz Air’s commitment to its people and to fostering an equal opportunity environment for all has never
been more relevant than it is today – to drive the growth agenda and act as responsible business leaders. It
enables Wizz Air to attract, develop, inspire and reward top talent and it creates an environment that allows
people to perform at their very best and underpins a culture in which everyone feels they have an equal
opportunity to belong and build a career.
Social governance
The governance of our social agenda and progress on the targets 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 Sustainability and Culture (Board) Committee meetings as
outlined on page 80.
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 business challenges. They are:
Integrity – doing what is right for passengers and stakeholders, holding ourselves to the highest possible
standards in everything we do.
Dedication – we have an entrepreneurial, “can-do” attitude, taking individual and collective ownership
and are accountable for everything we do.
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 greenest choice of air travel and work hard on continuously decreasing
our environmental footprint.
Our diversity is driving our success
Wizz Air is an ethnically diverse and inclusive professional organisation with over 75 nationalities within its
employees’ base. Despite this impressive metric on ethnicity, 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. Several one-of-a-kind programmes have been launched to nurture
talent and diversity within the organisation, as well as support Wizz Air’s broader commitment to increase
the number of female representation in the flight deck.
The Internal Cadet Programme is a self-sponsored employee programme – a designated course for WIZZ
employees, Office and Cabin Crew, who have worked for the Company for a minimum of two years and
have completed their pilot training in their own time and on their own cost already. Instead of 300 hours’
flying experience they need to have only 140 hours.
The Cabin Crew to Captain Programme is a Company sponsored programme for WIZZ employees, only
for Cabin Crew to nurture and diversify talent within the organisation. This is the industry’s first
programme to help aspiring cabin crew with no or little flying experience to turn their dreams into reality
and obtain a Commercial Pilot Licence, and kick-start their pilot career while they still remain part of the
WIZZ Team.
The Wizz Air Pilot Academy Programme (WAPA) offers young, passionate candidates the required
training and 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. The Management agreed to keep the programme for our CEE
base countries, with special focus on non-EU bases.
As part of the Self-Sponsored Cadet Programme, three to five designated flight schools will be selected
in F23 for Wizz Air’s growing UK, Italian and UAE bases. Schools to be dedicated WIZZ providers with a
main focus to provide guaranteed 30/50 cadets per year/school to specific requirements of the UK, Italy
and UAE (licensing, nationality, etc.)
University Cooperation - since 2017 Wizz Air has signed cooperation agreements with eight universities
and expects to sign two more in Bulgaria and Georgia. The plan is to approach further CEE countries
(Romania, Albania, Macedonia, etc.) and the UK in order to establish a foundation for the cooperation
with Aviation Universities.
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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:
1
2
3
4
5
put safety first, in everything we do;
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;
engage our employees through the People Council; and
make customer experience developments.
Putting safety first, in everything we do
1
Since the outbreak of the COVID-19 pandemic over two years ago we have made a number of sacrifices to
keep our employees, our loved ones and our passengers safe and healthy. We had to make difficult business
decisions to keep the business sustainable, furthermore successful and to be able to keep as many jobs as
possible.
The health and safety of our employees and our passengers has always been and will remain our top priority.
To make sure we stay committed to our mission the Company has made further protective and preventive
measures.
From early 2021, COVID-19 vaccinations have become more and more widely available and with regards to
employee vaccinations, we were working with local authorities to facilitate and financially support the process
wherever possible. We have been working to make sure we facilitate and support the vaccination process of
our colleagues at all of our offices and bases. We remain dedicated to finding the best approach towards
those cabin and flight crews who cannot take the vaccine due to serious underlying health reasons.
Effective from 10 September 2021 we implemented and continuously updated our Crew COVID-19
Vaccination Policy, to ensure smooth and sustainable operations in the coming months, as well as secure
the safety of our passengers and crew. As a first step we started collecting vaccination related information
from the crew at all bases (guaranteeing to handle this sensitive information in accordance with the strict
data protection laws applicable). As of 1 December 2021, Wizz Air did not allow any crew members (including
both flight and cabin crew) to board a Wizz Air aircraft unless proof of vaccination or a negative antigen or
PCR test is provided, which is not older than seven days. Those who are not eligible to receive the vaccination
due to a medical condition, would need to present the related medical certificate issued by a doctor or medical
unit. The Company is committed to bear the cost of regular antigen or PCR test for those crew members
who are exempted from vaccination based on a medical certificate.
During March 2022, the Health and Safety team was closely monitoring the COVID-19 situation, as well as
its effect on our operations. Based on the public statistics and as an increasing number of countries were
easing their COVID-19 regulations, Wizz Air reviewed its Crew COVID-19 Vaccination Policy and decided to
suspend the Crew COVID-19 Vaccination Policy for an indefinite period, depending on how the pandemic
situation develops.
The health and safety of our employees continues to be of utmost importance. Together with the People
Council, we made significant improvements to workplace wellbeing in the Budapest Office. More floors were
rented, people were re-seated for more space and privacy, while dining and transportation options were also
provided during the months when infections in the region were intensifying.
Recruiting and developing our employees
2
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 continuous 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 5,772 by the end of March 2022. During F22, another turbulent operating
environment due to the COVID-19 pandemic, Wizz Air still recruited 2,491 employees.
Flight and cabin crew training is organised by a dedicated in-house training team, which consists of 351 flight
deck and 255 cabin crew trainers across Wizz Air’s network. During F22 world class initial and recurrent
training was provided for 4,167 cabin crew and 1,959 flight crew members. Training is undertaken in the
modern, state-of-the-art training facility in Budapest, equipped with three 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.
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47
Wizz Air Crew Training has successfully implemented a fully integrated digital Training Management System,
which enables us to manage and control the entire lifecycle of pilot, cabin crew learning and qualifications in
one platform. The system will further enhance training efficiency, organisational flexibility and performance,
while ensuring compliance with regulations.
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, peers’ and management’s feedback, and a greater focus on each employee’s potential
to develop their career with Wizz Air. In the past 12 months, despite the implications of COVID-19 on
operational priorities and working environment, 26 per cent of our office population was rewarded with
internal career moves and progression at both employee and Management Team levels. These opportunities
reflect Wizz Air’s principle that talent, commitment and delivered results should lead to career progression.
In July 2021, Wizz Air introduced its internal training programme called WIZZ Academy, which aims to give
employees the unique opportunity to gain knowledge about WIZZ strategic approaches and aspirations on
a top executive level. Besides giving the employees the chance to learn from the CEO and Chief Officers, the
Academy provides a forum for more interaction between employees and the Leadership Team, as well as
builds a community of potential internal culture/brand ambassadors. Each academic year there is a diverse
group of 40 employees selected (distributed between 10 office, 15 cabin crew, 15 flight crew from different
departments and locations) who have the opportunity to attend the series of 8 bi-weekly, 4-hour long
interactive lectures and accompanying networking sessions led by the CEO and Chief Officers.
We organised a dedicated leadership training programme for Cabin and Flight Operations Management in
order to increase leadership self-awareness necessary to lead and motivate others, as well as to equip
managers with essential leadership skills and techniques such as constructive feedback, effective delegation,
conflict management and impactful leadership communication.
In addition to classroom training, to reach WIZZ500, we need to be digitally savvy and more committed to
digital tools, platforms, and tailored learning solutions.
Wizz Air has partnered with LinkedIn to implement a new online educational platform, LinkedIn Learning,
which will help employees to develop skills through expert led course videos and tailored employee learning
journeys in the future. This will give our employees more opportunities to grow both professionally and
personally, with unlimited access to interactive, engaging courses. The platform as a start was made
available to our WIZZ office employees and local crew management as of April 2022. Employees can select
from over 10,000 different courses relevant to their role in Business, Technology, Marketing plus many more,
as well as pursue other areas of interest supporting their career growth or individual aspirations.
Wizz Air also has an office on-boarding process, which allows all new hires to benefit from an intensive three-
day long programme in the Company and to familiarise themselves with Wizz Air’s culture, policies, various
departments, practices and procedures. This on-boarding process aims to improve new joiners’ entry
experience, engagement and increase productivity from day one.
In August 2021, Wizz Air launched a renewed Management Trainee Programme. The objectives of the
programme are to recruit and develop young talents with strong potential to become Managers and Senior
Managers in the future at WIZZ, to build diverse talent growth opportunities from the bottom end of the
organisation, as well as to expand the WIZZ brand and culture awareness on the market, strengthen our
presence at Top Hungarian Universities. Currently there are eight international trainees employed within the
framework of this Programme.
As part of our Crew to Office Programme, we transferred 19 employees from crew to office positions in fiscal
year 2022. Our goal is to give the opportunity to active flight and cabin operations employees to change the
direction of their career and experience the office environment.
Wizz Air continues to provide new and alternative career opportunities for existing employees to further
develop in their areas of expertise or to try themselves in a new sphere within WIZZ operations. In the office
in F22, 26% of open positions were filled internally: 27 employees were promoted to a higher position level,
whereas 43 employees moved laterally to a different position similar to their recent level in the same or
another department.
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48
Regular performance and talent review
Wizz Air has a yearly People Cycle programme in place to set a framework to make sure we have the right
people, in the right place, at the right time, with the right capabilities, getting the right goals, being rewarded
for the right results. It consists of three stages – goal setting (definition of SMART professional and
development goals for upcoming fiscal year), performance appraisal (mid-year and end-year evaluation of
employees' performance against the set goals by themselves, their peers and managers, and feedback), and
talent review (identifying their aspirations and potential for future promotion or lateral move).
Wizz Air's regular performance review process is completed via a dedicated digital platform. The process is
as follows: a) employees rate themselves against WIZZ capabilities and their goals; b) employees nominate
a minimum of three colleagues to provide feedback on their performance; peers and direct reports evaluate
employees based on the same WIZZ Competency Model. Managers have to modify or approve the 360
Review Forms for their direct reports; and c) all managers provide preliminary performance ratings for each
of their direct reports. Then calibration sessions take place to finalise ratings on function and Company levels.
Final performance ratings and collected feedback are later shared with all employees during face-to-face
discussions.
As part of the talent review process, employees update their career aspirations, geographic mobility, work
experience (outside of WIZZ), educational background and language skills. The managers assign a potential
rating for all of their direct reports and create a succession plan on the employees' talent profiles. Then,
similarly to performance, calibration sessions take place and final talent ratings are also shared during face-
to-face discussions.
Focus on improving and leveraging the diversity of our employees
3
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.
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 several programmes in order to ensure a strong pipeline of female Flight Crew
professionals, further highlighting how leadership diversity is now a key element of our Long-term Incentive
Plan.
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49
Nationalities
We value diversity and inclusion and are focused on doing even better. Our international team brings
together more than 75 different nationalities (52 in cabin and flight crew, 32 in the office). At Board level,
10 current Directors are from six different countries and the Company’s ten Officers are from seven different
countries.
Cabin Crew (CC)
12%
26%
19%
5%
6%
8%
8%
Flight Crew
20%
19%
15%
9%
8%
9%
Office Staff
13%
4%
6%
64%
National diversity (CC)
Romania: 26%
Poland: 19%
Hungary: 8%
Italy: 8%
Bulgaria: 6%
Ukraine: 5%
North Macedonia: 4%
Albania: 3%
Bosnia and Herzegovina: 3%
Serbia: 2%
Moldova: 2%
Lithuania: 2%
Other: 12%
National diversity (FD)
France: 3%
Poland: 19%
Hungary: 15%
UK: 9%
Romania: 8%
Italy: 8%
Bulgaria: 4%
Spain: 3%
Lithuania: 3%
Ukraine: 3%
Serbia: 2%
Germany: 2%
Other: 20%
National diversity (Office)
Hungary: 64%
Bulgaria: 2%
Poland: 7%
Romania: 4%
UK: 3%
Spain: 3%
Ukraine: 2%
Russia: 2%
France: 1%
Other: 13%
Wizz Air Pilot Academy (WAPA)
National diversity (WAPA)
Romania: 41.2%
North Macedonia: 2.7%
5%
11%
16%
20%
41%
Hungary: 15.9%
Moldova: 1.3%
Poland: 19.5%
Serbia: 2.7%
Bulgaria: 11.1%
Germany: 0.4%
Ukraine: 4.9%
Bosnia and Herzegovina:
0.4%
Gender
Wizz Air has also identified that it will make faster progress on gender diversity if its leadership is more
diverse. We have made a strong commitment to close the diversity gap in our Boardroom and at leadership
level; therefore we have included gender diversity of the Management Team (Senior Management and their
Head-level direct reports) in our reward structure as of fiscal year 2022. Wizz Air set a Long Term Target to
deliver 40% gender diversity in the Management Team of the Company (Heads, Officers, EVPs and CEO).
As part of the Long Term Target these are broken down into yearly plans and actions, and the Company’s
action plan on diversity is regularly reviewed at Board level and in the nomination committee.
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50
The Hampton-Alexander Review set a target of 33% representation of women on FTSE 350 boards and in
Executive Committee and Direct Reports by the end of 2020. The FTSE 250 index reached 33% in December
2020 – in line with the target date – with 652 women on FTSE 250 boards out of a total of 1,962 directorships.
152 companies in the FTSE 250 have individually met the 33% women on boards target.
In this past financial year, Board gender diversity improved by 3 per cent to reach 30 per cent female ratio,
while the Management Team’s gender diversity improved by 7 per cent to 34 percent female ratio. Office
female gender diversity increased with 3 per cent, to 40 per cent female to male distribution. Flight crew
female gender diversity remained at 4 per cent, whereas female cabin crew number decreased by 5 per
cent to 70 per cent.
Within Wizz Air, the overall male to female ratio is balanced, with 48 per cent 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.
Recruitment is focused to ensure that there is always at least one female candidate on the short list for
positions and recruitment panels are recommended to have female interviewees.
Our Ambassadors Programme, representing the Company at public events, and our Cadet Programme
initiatives are key building blocks to support our flight crew transformation over the next years.
Engaging our employees
4
Our employees are Wizz Air’s most important assets. 94 per cent of our employees are directly interacting
with our passenger base, and are ensuring the safety of these people as they travel generally with joy and
anticipation to their destination. There are several key pillars on how we engage our employees, and make
sure their voices are heard, keeping the WIZZ spirit alive. The backbone of employee engagement is our
People Council, supported by the regular People Survey (and the forthcoming actions), the floor talks hosted
by Wizz Air’s CEO and our Base Visits.
Wizz Air’s People Council
At Wizz Air, we know that a company is only as extraordinary as its people. The Wizz Air team is passionate,
dedicated, kind, and they thrive on the challenges that come with the job. At the same time, it is imperative
that our employees have a say in how their careers are moving forward, and how their professional
development is moving in the right direction along with the Company.
The People Council is more than just another department within the Company, it is a place where the people
of WIZZ feel safe to share their concerns, ideas or suggestions.
People Council Governance:
The Council is led by its president who serves for two years and is appointed by the former president from
among the People Council’s committee chairs. This role is currently filled by Andreea Popa who joined Wizz
Air eleven years ago and has since become Captain, Base Captain, and is a very strong supporter of the Wizz
Air Pilot Academy. The president is aided by the Council’s Secretary General, Nikoletta Zima, who has been
with the Company ever since 2004 as the very first cabin crew and has had a long and successful WIZZ
career with roles such as Cabin Crew Instructor, Cabin Crew Training Manager, and Training Centre
Operations Manager. There are 13 additional members of the Council, making sure that all regions within
Wizz Air’s network, and all business divisions are well represented within the Group. These representatives
are elected for one year, after an all-Company application process, by the President and Secretary General
of the People Council based on a set of clear guidelines to ensure balanced representation of all areas of
business from all regions. The representatives can serve one more year if approved by the President.
The Council’s work is centred around three major areas, and is split into three committees accordingly,
namely Benefit, Wellbeing, and Policy. Committee chairs are appointed for one year, by the President.
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51
Committees meet twice a month to discuss a variety of topics and current challenges and initiatives, while
the entire Council also meets biweekly with the Senior Leadership Team and separately with the Company’s
CEO. This is key to enable the People Council to fulfil its main purpose:
facilitate an effective two-way communication between management and employees; and
support the decision-making process on matters which affect all within the Company.
For the Council members it is crucial to stay in touch with the WIZZ community, so on top of the recurrent
meetings, they have frequent face to face sessions with office employees and they make regular base
visits together with the Wizz Air Leadership Team, to maintain and strengthen open communication
between the employees and the management across the airline’s entire network.
All actions and decisions from the monthly meetings are reported back to the employees by their
representatives at the end of each month.
The key recurring agenda topics are:
work-life balance;
Company policies and process changes;
working environment improvement;
salary principles and policies;
Company events;
trends impacting safety; and
initiatives enhancing employee diversity.
The People Council contributed to various projects throughout the year, supporting the work of other
departments with detailed input on employee groups’ perspectives; a key example of this was their help in
establishing Wizz Air’s industry-leading vaccination policy.
People Council at Base Visits
The People Council is regularly participating in base visits when the Leadership Team spends time with
employees in the market, both formally and informally. During F22, the People Council’s President, Secretary
General and the local Council representative took part in 7 personal base visits.
The Secretary General participated in the Fly Around with the Management, and members of the Wizz Air
Holdings Plc Board of Directors, Dr Anthony Radev and Charlotte Pedersen, in February 2022, visiting all
Polish bases, Vilnius and both Ukraine bases, where the current projects the Council is involved in were
presented for the employees and all crew questions and concerns were addressed.
These events are unique in the industry as they provide a special forum for the local crews to meet with
Company management in person, to voice their opinions or questions about where the business is going,
and they also have the opportunity to raise their concerns. Apart from the top management base visits,
there are line operation base visits as well, as part of which the line management is travelling to each base
once throughout the year. At least one People Council representative must be present at these base visits.
WIZZ Employee Solidarity Fund
There is nothing more important than the safety and health of our people and their loved ones. During the
Ukraine-Russia conflict in February 2022, the People Council launched a solidarity initiative to support Wizz
Air’s Ukraine-based crew, together with their families. Apart from the coordinated actions of the Company,
the solidarity project aimed to give a helping hand to those employees who left Ukraine and needed
accommodation or transportation. On the second day of the crisis, the People Council also set up the WIZZ
Employee Solidarity Fund accessible for employees in need. Any Company employee could volunteer to
donate money to their Ukrainian colleagues and their families affected by the devastating situation in their
home country. The Company also committed to match the raised amount on a weekly basis. The Employee
Solidarity Fund had received over 130,000 EUR in donations until the end of the financial year, thanks to the
generosity of our employees across the network and the Company’s contribution. Out of the sum collected,
two employee groups were supported: those within Ukraine and the Ukrainian nationals no longer located in
the country. The eligible 163 employees received additional financial support on top of their monthly February
salary. The remaining amount of donations will be used to support employees who might require more help
later on. All related actions are to be decided by the responsible People Council committee.
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52
WIZZ Family – Let’s Give a Helping Hand
Another initiative announced by the Council in response to the crisis was connected to Ukrainian evacuated
colleagues. The purpose of the project was to arrange accommodation for them upon their arrival, and giving
them support when arriving to certain countries, or accommodating a crew member or their family for some
time, supporting with transportation if needed. More than 700 Wizz Air employees volunteered to offer
transport, accommodation, clothing, and other essentials to our Ukrainian employees who have crossed the
border and arrived in a neighbouring country.
These initiatives, and the Council’s response with immediate actions, truly demonstrated the values the
Company stands for. The Council does not only need to make sure the WIZZ culture is maintained but at
the same time it is key to embrace the culture of the various countries where we operate – diversity is our
future, and it is essential that we bring the WIZZ spirit to all of our base countries. While the past two years
have been the most challenging in the Company’s history, the People Council will remain the voice of the
employees and will support them to keep the WIZZ spirit alive.
Floor Talks and Management Updates on Workplace
This effective two-way communication is also facilitated by our People Survey, the floor talks hosted by Wizz
Air CEO (available to attend in person or watch and comment live via Workplace, the internal social media
channel available for all employees), and Base Visits, as they provide quantitative and qualitative insights
into work and life for our employees. The CEO, the President, and other chief officers are also issuing updates
via Workplace when events of high importance impact Company operations or when key updates need to be
delivered directly by the management.
Employee Engagement Survey
Wizz Air is taking bi-annual employee engagement surveys. Overall, the latest survey scores were 7 per cent
below the industry average (source: Workday Peakon Employee Voice, analytics and employee engagement
software), at 70 per cent engagement rate (eNPS 9) versus transportation industry average of 77 per cent,
with a participation rate of 67 per cent. Cabin crew employees had an engagement of 74 per cent (eNPS
21), in flight crew 64 per cent (eNPS -11) and in office 64 per cent (eNPS -14).
Results of the 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.
Company projects supporting employee engagement
For our crew colleagues projects are focused on three areas:
Roster stability for Cabin and Flight Crew will be continuously increased to have a more stable and
consistent pattern. We are developing new rules and set of principles to support a healthy work-life
balance.
Admin support provision will be further enhanced at bases for both Flight and Cabin Crew Management
with the introduction of Base Admin roles so that People Leadership can be the primary focus for
local management.
Clear processes for Crew communication will be established to ensure the continuous and smooth
flow of operational and strategic updates and decisions across our network.
For the colleagues in the office key improvement points and actions were focused on succession planning
and career aspiration within Performance and Talent Review. In addition, new features were implemented
in the Vacation Management System in order to provide more flexibility whilst creating a single platform for
transparency on employee whereabouts both for line managers and direct reports.
As social interaction is an important part of our culture, we need to take advantage of the opportunities to
reunite with colleagues and celebrate our culture. For this reason, we will remain dedicated to organising
corporate events and programmes, such as annual Christmas and summer parties, Department Away Days,
and programmes such as the WIZZ Academy, to strengthen Company culture.
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Employee Engagement on Sustainability
To care about the environment we live in, is the responsibility of everyone and Wizz Air is dedicated to
making the world around us better. Following the release of the “Wizz Air – Fly the Greenest” campaign, the
Company launched the 7-Day Sustainability Challenge in February, involving the entire organisation. The 7-
Day Sustainability Challenge was a week-long competition, with the purpose of drawing attention to
sustainability behaviours among WIZZ employees and encouraging everyone at WIZZ to take up eco-friendly
habits to make the world a better and greener place. The WIZZ team was challenged to complete the daily
challenges as per the following agenda: Meatless Monday, Green Transportation Tuesday, Plastic Free
Wednesday, Sorting Waste Thursday, Donation Friday, Buy Local Saturday and Grow Your Own Sunday. By
the end of the campaign the 7-Day Sustainability Challenge Workplace Group had 590 members.
Approximately 200 employees actively participated in the campaign by completing daily challenges and
posting photos and videos to the online Workplace Group. Based on the numerous individuals and teams
across our network who joined the Sustainability Challenge the overall reception of the campaign was
positive especially as it mobilised and united employee groups all across the Wizz Air network.
Leading in Customer Experience
5
As we finally emerge from the COVID-19 pandemic with the recovery of operations and welcome our
customers back on board, we are focused on prioritising and continuously improving our leading customer
experience. In recent years, Wizz Air has continued to prioritise delivering the lowest prices, on-time
performance, and ease of access to air travel for all our passengers via our website and mobile application
platforms, as well as elevating the customer experience with digitalisation and self-service improvements,
empowering customers to be in control of managing their reservations and their travel.
In March 2021, Wizz Air introduced "Amelia", a new virtual assistant chatbot at wizzair.com aimed at
improving our customer experience standards. The airline's new chatbot enables customers to quickly and
conveniently get information about their flights, while also providing useful general information on services,
flight disruptions, special assistance or voluntary flight changes. The online live chat option with agents
remains available free of charge, in case customers have further questions or need additional support. The
chatbot is a real gamechanger in Wizz Air’s customer experience solutions. Automating and digitalising our
processes is key in delivering ever-higher customer satisfaction. Wizz Air is dedicated to broadening Amelia’s
expertise and to supporting our passengers with an expanding array of self-service options to manage their
travel plans.
Since Q3 F22, Amelia has steadily become the primary point of contact for customers when requesting
support – the number of chats handled exceeded the number of calls per month. Now she can provide
support in English, Italian and German languages via the wizzair.com website and official Wizz Air Facebook
Messenger. In addition, Amelia will soon be implemented within the WIZZ mobile app too. The chatbot was
inspired by Amelia Earhart, the first American female aviator to fly solo across the Atlantic Ocean. With this,
Wizz Air aimed to pay tribute to women in aviation and underpin the Company's commitment to a more
gender-equal aviation industry. In F22, Amelia assisted over one million Wizz Air customers.
Wizz Air's customer journey has also been improved on the airport side. The Company introduced a new
feature in its mobile application for the scanning of travel documents in 2021. The Company is now working
on adding this feature to the website check-in process as well. Until the end of March, more than 113,000
travel documents were scanned by Wizz Air customers via the new feature. Customers using this option are
benefitting from a more convenient online check-in process, with no need to manually enter their travel
document details, and they can expect a more seamless passenger journey at the airport because of this.
Linked to this, Wizz Air also introduced scanning capability of the EU Digital COVID-19 Certificate QR code,
and validation was introduced in the online check-in flow to enable customers to proceed directly to the
boarding gate and avoid the need for physical COVID-19 document verification at the airport check-in desks
and queueing. Since its implementation, this development improved the airport experience when the
destination country requires a vaccination certificate at check-in in order to travel without the need for PCR
testing or quarantine.
In order to assist customers during the ever-evolving COVID-19 environment, Wizz Air also introduced the
Travel Planning Map, a dynamic map aimed at providing easy to understand information about travel
restrictions and documentation required by each destination country. For increased customer convenience
and peace of mind, a restriction checklist was added in the online check-in flow as a last preparation step
before each journey.
As we continue to recover from the COVID-19 pandemic, we must do more for our customers in addition to
offering them our lowest fares and the greenest choice of air travel, which is why the airline launched the
“WIZZ Youth Panel”, The Customer Youth Panel which has been created to complement the current
quantitative customer feedback with qualitative feedback and bring the voice of the customer on board the
product development and customer journey planning.
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We have further automated and digitalised customer support services towards increasing scalability,
providing faster resolutions and improved customer convenience by implementing a series of developments
and features. These solutions have included the automatic payment of EU261 compensation claims,
optimised claim forms with flight validation and data pre-collection, and enhanced Interactive Voice Response
(waiting times and number in the queue announcements), which has been especially useful during peak-
traffic periods.
During this period Wizz Air’s Customer Satisfaction score reached approximately 90%, meaning of all the
customers surveyed 90% rated their overall experience on their last WIZZ flight as positive, back in line with
pre-pandemic levels.
Finally in March of this year, we were the first and only airline to react proactively and help Ukrainian nationals
in need to reach safety away from the country, by offering 100,000 free tickets for flights from Ukraine’s
bordering countries and discounted rescue fares on all other routes. We are proud that the airline has been
able to support our Ukrainian passengers during this extremely challenging period.
People Metrics – 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.
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
F22
F21
F20
Work-related accidents
Fatal accidents
Contractor accident rate
Contractor fatal accident
rate
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
#
#
%
%
Priority/1
Priority/2
Priority/3
Priority/4
FTE
m EUR
k EUR
%
%
%
%
Priority/5
Priority/6
7
% female
Priority/8
Priority/9
% female
% female Priority/10
% female
11
% female Priority/12
Ethnic diversity
Leadership ethnic diversity
# nationalities
# nationalities
Part time ratio
Training per employee
%
Hours
13
14
15
16
0
0
0
0
4,709
220.5
288
13
70
67
11.2
48
34
4
70
40
75
16
1
42
0
0
0
0
5
0
0
0
3,960
133
187
18
4,440
231
622
8
81
79
24
49
27
4
75
37
53
15
6
45
—
—
13
52
17
4
76
37
54
15
1
n.a.
(1). Accidents: measures work-related accidents (excluding travel to/from work) involving occurrences
where an employee has taken at least one day off from work.
(2). Fatal accident: number of accidents, as defined in note 1, that result in fatality.
(3). Contractor accident rate: measures work-related accidents involving occurrences where a 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 9 translates into a 70 per cent engagement rate.
Participation rate was 67 per cent of all employees.
(7). Attrition (average): the reduction in staff numbers across the organisation that occurs as employees
resign, retire or are dismissed.
(8). Gender diversity: percentage of total roles, including direct and indirect employment, occupied by
women.
Wizz Air Holdings Plc Annual report and accounts 2022
55
(9). Leadership diversity: percentage of leadership roles, heads of function and above, occupied by
women.
(10). Flight crew gender diversity: percentage of flight-deck staff, including direct and indirect
employment, occupied by women.
(11). Cabin crew gender diversity: percentage of cabin crew staff, including direct and indirect
employment, occupied by women.
(12). Office gender diversity: percentage of office staff, including direct and indirect employment,
occupied by women.
(13). Ethnic diversity: number of different nationalities compiled based on declarations by employees at
the time of hire.
(14). Leadership ethnic diversity: number of different nationalities compiled based on declarations by
heads of function and above.
(15). Part time ratio: percentage of total employees who have reduced working time arrangements (not
full-time employees).
(16). 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.
Economy – Connectivity driving responsible GDP growth
Wizz Air’s mission is to provide affordable travel and give opportunity for air travel to those who were not
able to use air transport before, having a direct and material impact on the economies we connect.
Wizz Air is contributing to the GDP growth of WIZZ destinations by enabling affordable connectivity, which
in turn will create new jobs, drive tourism, and opportunities to do business. By 2030 we aim to serve 170
million passengers, and, through direct and indirect opportunities, we aim to provide employment to 125,000
citizens in our network.
Our role in society
We launched Wizz Air to create a world of opportunity for all through affordable travel, and we are
consistently delivering on that promise. 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 pandemic and during the recovery, resilient and responsible airlines like Wizz Air showed
that they have all the necessary attributes to support the recovery for the tourism industry and even the
broader economy. Wizz Air further invested into the connectivity of communities, following the network
expansion achieved in F21. In F22 an additional 5 bases were opened and 15 new destinations were added
to the WIZZ network. These all contribute to the economic growth by providing for affordable connectivity,
promoting tourism, creating new employment opportunities in and for local communities (Wizz Air is
committed to recruiting people locally at each base and office in its network) and increasing tax revenues in
the given countries.
A key example of Wizz Air’s network investments is Italy. In F21 we started our first bases: Milan Malpensa,
Catania and Bari. We extended our local presence with bases opened in Palermo in June 2021, in Rome
Fiumicino and Naples in July 2021, and in Venice in October 2021. The Company is fully committed to
continue growing Wizz Air’s presence in Italy, to bring more connectivity and lower fares to Italians, generate
additional airport revenues, and create more employment opportunities in the country. By the end of F22,
we were operating from 24 Italian cities with 257 routes, providing connectivity to 67 international
destinations across Europe and the Middle East. Wizz Air is now the fourth largest carrier in the country, and
the biggest airline connecting Italy to the Central Eastern Europe region.
The Company’s recent investment in Albania is another great example of how Wizz Air can enhance growth
in underdeveloped aviation markets. For the first time in the history of Albania, there are more than 40
destinations on offer from Tirana, with nine based aircraft and 3.5 million seats per annum worth of based
capacity, deployed in a timespan of just 20 months. Furthermore, Wizz Air will be flying from Kukës
International Airport Zayed, a greenfield project which we’re confident we’ll make work.
Everything we did and achieved regardless and in spite of the pandemic’s impact is a testimonial to the
agility of our airline and our commitment to maintain air connectivity, to support and lead tourism and
economic recovery in all our networks in Europe and beyond.
Wizz Air Holdings Plc Annual report and accounts 2022
56
Mr Antonio Maria Vasile – President of Aeroporti di Puglia, Italy
Our role in society – testimonials
“The opening of a Wizz Air base in Bari and the expansion of their operations in Brindisi have enabled
an ideal environment to consolidate connections between Apulia region and the domestic and
international markets that are strategic for our economy, in particular for the tourism industry that is
favoured by aviation. We are satisfied that Wizz Air considers Aeroporti di Puglia a reliable commercial
partner able to provide a robust outlook to air traffic recovery.”
Mr Alan Bajić, Managing Director of Sarajevo International Airport, Bosnia and Herzegovina:
“Opening of Wizz Air base at Sarajevo Airport has significantly increased air traffic (number of
passengers and flights) in less than a year. Launching of new and additional flight routes is
tremendously important not just for the airport Sarajevo, but for the entire tourism industry in Bosnia
and Herzegovina and for the economy of our country in general.
Wizz Air base has created new opportunities and numerous advantages, both in terms of economy
and in terms of promoting connectivity of our country, i.e. Sarajevo to the rest of the world.
We are happy and proud that the agreement with Wizz Air on launching the base has been reached
during the term of office of this Management Board. Also, I would like to congratulate you on all of
your successes accomplished and a visionary approach you have. Taking into consideration all positive
impacts of our business cooperation, the airport Sarajevo is going to remain your reliable partner.“
Humanitarian initiatives
Rescue flight – Kabul
In August 2021, following the capture of Afghanistan's capital city, Wizz Air operated a humanitarian flight
to safely rescue over 170 refugees and other personnel from Kabul, in cooperation with the Hungarian Air
Force and in support of a military rescue operation. Wizz Air did not hesitate when it was asked for help and
carried its passengers to Budapest safe and fast. Wizz Air truly believes that in these harsh times cooperation
and working together is the only way to overcome challenges. The safety of our passengers and crew has
always been Wizz Air’s number one priority and we remain true to this principle under any conditions,
especially during such operation.
Csodalámpa Foundation partnership
In early 2022, the WIZZ Foundation partnered with Csodalámpa Foundation. The purpose of the wish
granting foundation is to fulfil wishes of children who suffer from a life-threatening illness. By making their
wish come true, the foundation hopes to strengthen the children's and their families' belief in recovery, to
persevere through times of adversity. As part of the cooperation, Wizz Air will provide 45 flight tickets (and
the applicable services) annually for children and their travelling guardians, to support the foundation's
projects where the surprise involves travelling to another destination by plane.
Free and rescue fare tickets for Ukrainian refugees
In March 2022 Wizz Air announced it would support Ukrainian refugees by offering them 100,000 free seats
on continental Europe flights departing from Ukraine’s border countries (Poland, Slovakia, Hungary,
Romania). This initiative aimed to help refugees reach their final destinations. Wizz Air allocated larger
aircraft and extra flights from border countries to Europe to help support the movement of refugees as
necessary. The tickets could be easily booked online with a valid Ukrainian passport. Discounted rescue fare
tickets were also available at wizzair.com for all other flights in the WIZZ network for any passengers with
Ukrainian citizenship.
Wizz Air also announced in May 2022 that the airline, in partnership with not-for-profit organisations Choose
Love, The Shapiro Foundation, The Steve Morgan Foundation and USPUK, will be offering 10,000 free tickets
for Ukrainian refugees to travel from Ukraine’s neighbouring countries (Bulgaria, Hungary, Poland, Romania
and Slovakia) to the UK, in support of the UK Government “Homes for Ukraine” visa scheme. The main aim
of this initiative is to make free travel available to Ukrainian refugees during this time of crisis. This
cooperation will allow even more Ukrainian families to be welcomed into the UK.
Packed with Hope initiative in the UK
Thousands of backpacks supplied with bi-lingual books and essential items were delivered to Ukrainian
children affected by the Russian-Ukrainian conflict in April 2022. The Packed with Hope project was kicked
off and managed by UK independent publishers. One of the publishers, Gracie Cooper, of Little Toller Books
reached out to Wizz Air to supply free tickets for the staff travelling to Romania and back to distribute the
packs to the children. Wizz Air provided free return tickets to the team travelling to deliver the backpacks to
the Ukrainian children.
Wizz Air Holdings Plc Annual report and accounts 2022
57
Ukraine and Wizz Air’s actions in response to the crisis in Ukraine
Since 24 February 2022 the Company invested significant effort to support our employees and their family
members affected by the crisis in Ukraine. A WIZZ Employee and Family Assistant Package was introduced
to the crew, which provides immediate and long-term help for the employees and their close family members
(up to four people), covering a wide range of medical, transportation, financial and psychological support.
Employees were offered job opportunities and have subsequently been employed at other Wizz Air bases in
the network, and along with their family members they were assisted according to our Relocation and Base
Change Policy.
Since the outbreak of the crisis, Wizz Air has provided services to NGOs and other companies with
transporting aid either as part of cargo operations or on passenger flights.
Company policies reviewed or implemented in F22
Environmental Policy
Over the past year Wizz Air continued to drive change by innovative projects. The Company recently renewed
and published its Environmental Policy, which is focused on integrating sustainability targets across the whole
organisation (e.g. Supply Chain). The policy outlines our commitment to reduce our carbon emissions and
minimise our environmental impact, leading the way to sustainable aviation. Key commitments laid out in
the document are the following: review organisational activities and identify areas with the potential to
minimise environmental impact; follow the highest environmental standards in all operational areas; meet
all applicable regulations regarding sustainability and pollution prevention; set objectives and targets and
put in place sustainability programmes for continuous performance improvement; train and inform
employees on how their work might have an impact on the environment and encourage their involvement
in environmental actions; reduce the impact of our waste through increased recycling and the more efficient
use of resources; use sustainable procurement to improve environmental performance within our supply
chain; monitor and reduce energy and water usage within our premises in order to minimise the consumption
of natural resources; promote agile and digital solutions to drive reductions in paper consumption; where
possible, purchase products and materials which cause less harm to the environment; engage with key
stakeholders to contribute to the development of the pathway to net-zero emissions; encourage innovation
and support programmes for decarbonisation technology; become a sustainability ambassador; and raise
awareness among employees, stakeholders, and suppliers.
Sustainable Procurement Policy
We are committed to minimising the impact of our operations on the environment and to demonstrating
leadership by integrating environmental considerations into our supply chain strategy and business practices.
The policy at this phase primarily focuses on carbon emissions reduction, to have an impact in the most
effective way possible. This policy will be amended with new targets and initiatives as they are identified or
required and once the already set goals are successfully concluded. In addition, the policy introduces the
need for ongoing research and efforts for new sustainability practices, implementing the sustainability criteria
in tender evaluations (next to price and quality factors) with the appropriate weight and requiring suppliers
to include sustainability factors in their own procurement and daily operations. This policy applies to all Wizz
Air Group AOCs and companies, and to all procurement activities.
Extracts of both policies are available at wizzair.com under Sustainability.
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
Unit
Note
F22
F21
F20
F19
Passengers
km run
Paid taxes
Government debt
Furlough support
m
km
m EUR
m EUR
m EUR
1
2
3
4
5
27.1
168*
304
0
1.1
*Wizz Air Run Club activities were impacted by Covid-19
10.2
17,730
107
326
7.1
40
7,830
340
0
0
35
4,060
305
0
0
(1). Wizz Air transported 27,079,918 passengers in F22, showing strong recovery after travel demand
had been heavily impacted by pandemic related restrictions and the appearance of new COVID-19 variants.
(2). We believe that, just like affordable travel, a healthy and active lifestyle should be available to everyone.
Running is the most inclusive and affordable sport as one only needs a pair of running shoes – this sport is
accessible and affordable for all, similarly to the ultra-low-cost low-fare business model. This year we
sponsored several running events across Europe, including the Budapest Half Marathon, our flagship event
and races in Bucharest, Cluj-Napoca, Sofia, Skopje, Kyiv, Debrecen and the newest event of our portfolio in
Cardiff. Despite the negative impact of the COVID-19 pandemic, in F22 we moved a total of 32,000 runners
and attracted a total of 105,000 visitors with all our events.
Wizz Air Holdings Plc Annual report and accounts 2022
58
(3). Wizz Air contributes to the communities it operates in through the payment of taxes. In total
€304 million taxes were paid in the form of airport related taxes, corporate income tax, local business 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 there are environmental taxes to incentivise the right behaviour in
the industry.
(4). Wizz Air repaid £300 million outstanding commercial paper with the Bank of England (as part of the
CCFF) in February 2022.
(5). For F22 Wizz Air benefited from a total of €1.1 million in furlough schemes with the key scheme being
the UK furlough support scheme.
Wizz Air Holdings Plc Annual report and accounts 2022
59
STRATEGIC REPORT
MODERN SLAVERY ACT DISCLOSURE STATEMENT 2022
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 2022. 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 and
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. A team of dedicated aviation professionals delivers superior service, making
Wizz Air the preferred choice of 40 million passengers in the financial year F20 ending 31 March 2020 and
27.1 million passengers in the financial year F22 ending 31 March 2022. Its fleet consists of 153 aircraft and
its network spans more than 1,000 routes across 51 countries. Wizz Air employs over 5,000 people across
a network of 40 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 171 (annual
revenue of €2,761.3 million in F20 and €739 million in F21).
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 which 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 recognise 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 the Management Team or Human Resources. This is a
key feature of our new Anti-Slavery Policy.
Wizz Air Holdings Plc Annual report and accounts 2022
60
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, and 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
8 June 2022
Wizz Air Holdings Plc Annual report and accounts 2022
61
STRATEGIC REPORT
FINANCIAL REVIEW
Over the past year Wizz Air’s results continued to be impacted by the COVID-19 pandemic even as we
witnessed traffic recovery in most of our markets. Wizz Air’s more diversified network has been key in
recovering capacity and dealing with macro events such as conflict in Ukraine. Amid a gradually recovering
demand Wizz Air continued to make investments in people, fleet, its network and systems, all of which lay
the foundation for the Company’s future growth. Our focus continued to be on cost and managing cash and
throughout the year we have maintained our investment grade balance sheet.
Wizz Air carried 27.1 million passengers during F22, an increase of 166 per cent compared to the previous
fiscal year. Revenues increased by 125 per cent to €1,663.4 million. Passenger and revenue figures reflect
the increase in capacity throughout the year, as more people returned to flying encouraged by COVID-19
vaccines and immunity travel certificates.
Throughout the year the underlying focus for the Company has been investment for growth, enabled by
market shifts created due to the COVID-19 pandemic and capacity retrenchment by a number of our industry
peers.
Wizz Air reported a net loss of €642.5 million (compared to €576.0 million net loss in F21).
The unit revenue measured in terms of ASKs increased by 3.1 per cent to 2.98 Euro cents, while unit costs
decreased by 18.0 per cent to 3.98 Euro cents in F22 from 4.85 Euro cents in F21. CASK excluding fuel
expenses decreased by 27.3 per cent to 2.81 Euro cents in F22 from 3.86 Euro cents in F21. A decrease in
CASK is driven behind greater capacity operated during the year, which resulted in a higher number of ASKs.
Supporting the recovery and sustaining the growth of the business, key management actions included:
From an investment and financing point of view:
placing a new aircraft order for a further 102 Airbus A321 aircraft, including purchase rights and optional
units, at very attractive commercial terms, securing a continued supply of best market technology
aircraft;
enhancing liquidity position with a €500 million four-year bond issued in January 2022 on more
favourable terms compared to January 2021 issuance, which was used to pay off a £300 million facility
from the Bank of England under the UK Government's CCFF in February 2022; and
taking delivery of 25 new A321neo aircraft, while returning nine A320ceo aircraft, bringing forward the
benefits of new technology in ownership and operating cost, fuel consumption and lower carbon and
noise emissions.
From a cost point of view:
adjusting capacity in markets and reallocating aircraft to better performing locations in line with the
Company’s historic network optimisation churn rate;
renegotiating key long-term supply agreements covering aircraft component services, engine
refurbishment and base and line maintenance;
deploying new systems and hardware as part of its digital powered operations, including departure
control systems across its stations and launching Electronic Technical Log Book to replace the paper-
based maintenance record managed by pilots and MRO agents; and
applying hot and cold parking of parts of our fleet, to further reduce costs.
From a revenue point of view:
sustaining a clear principle of cash-positive flying; and
continuing to leverage our strong capabilities in ancillary revenue – posting record growth month on
month and rolling out advanced data science tools supporting dynamic pricing of key product streams
(e.g. bags, seats and priority boarding).
From a cash point of view:
continuing to apply our 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;
optimising key elements of our investment cash flow by focusing on optimised fleet deliveries and early
lease returns (where contractually feasible); and
converting advance aircraft payments (pre-delivery payments) to EUR currency significantly reducing
the USD currency exposure in the years ahead.
Wizz Air Holdings Plc Annual report and accounts 2022
62
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
F22
F21
Change
789
1.16
1.11
674
1.17
1.21
16.9%
(0.8%)
(8.3%)
Financial overview
Summary statement of comprehensive income
€ million
Total revenue
Fuel costs (including exceptional income/(expense))
Operating expenses excluding fuel
Total operating expenses
Operating loss
Comprising:
F21
F22
739.0
1,663.4
(347.4)
(649.0)
(1,479.7)
(919.7)
(2,128.7) (1,267.1)
(528.1)
(465.3)
(469.6)
– Operating loss excluding exceptional income/(expense)
– Exceptional income/(expense)
4.3
Operating profit margin (excluding exceptional income/(expense)) (28.2%)
(176.2)
Net financing expense
(641.5)
Loss before income tax
(0.9)
Income tax expense
(642.5)
Loss for the year
4.3
Exceptional income/(expense) net of income tax
(646.7)
Underlying loss after tax
(434.5)
(93.6)
(58.8%)
(38.4)
(566.5)
(9.5)
(576.0)
(93.6)
(482.4)
Change
125.1%
86.8%
60.9%
68.0%
(11.9)%
8.1%
n.m.*
30.6 ppt
358.8%
13.2%
(90.5%)
11.5%
n.m.*
34.1%
* n.m.: not meaningful as a variance is more than (-)100 per cent.
Loss per share
Loss per share, EUR (Note 13)
F22
F21
Change
Basic and diluted loss per share
(6.33)
(6.73)
(6.0%)
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 F22 was (16.8) per cent,
compared to (19.4) 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 (117.7) at the end of the 2022 financial year, while liquidity decreased to
73.1 per cent from 195.9 per cent at the end of the 2021 financial year.
ROCE*
Leverage ratio*
Liquidity*
F22
(16.8%)
(117.7)
73.9%
F21
(19.4%)
(18.9)
195.9%
Change
2.6 ppt
(98.8 ppt)
(122.8 ppt)
* See the definition of these non-statutory measures and their calculation under key statistics on page 68.
Financial performance
Revenue
The following table sets out an overview of Wizz Air’s revenue items for F22 and F21 and the percentage
change in those items:
F22
Percentage
of total
revenue
Total
(€ million)
F21
Total
(€ million)
Percentage of
total revenue
Percentage
change
Passenger ticket revenue
Ancillary revenue
Total revenue
732.1 44.0%
931.4 56.0%
1,663.4 100%
325.7
413.3
739.0
44.1%
55.9%
100%
124.8%
125.4%
125.1%
The increase in passenger ticket revenue was driven by a 166.3 per cent increase in passengers. Similarly,
ancillary (or “non-ticket”) revenue increased in line with the ticket revenue development. The share of
ancillary products in the total revenue increased to 56.0 per cent.
Wizz Air Holdings Plc Annual report and accounts 2022
63
Average revenue per passenger decreased by 15.5 per cent from €72.5 in F21 to €61.3 in F22. Average
ticket revenue per passenger declined from €32.0 in F21 to €27.0 in F22 (by 15.6 per cent), while average
ancillary revenue per passenger decreased to €34.3 from €40.6 (by 15.4 per cent).
Total operating expenses excluding exceptional income/expense increased by 79.0 per cent to €2,133.0
million in F22 from €1,173.4 million in F21.
The following table sets out for F22 and F21 the expenses relevant for the CASK measure (thus excluding
exceptional expense), and the percentage changes in those expenses:
F22
Percentage
of total
operating
expenses
220.5 10.3%
Total
(€ million)
Unit cost
(€cts/ASK
)
Total
(€ million)
0.39 132.9
F21
Percentage
of total
operating
expenses
11.3%
Unit cost
(€cts/ASK
)
0.52
Percentage
change of
total cost
65.9%
653.3 30.6%
1.17 253.8
21.6%
0.99
157.4%
43.4
2.0%
0.08
19.6
1.7%
0.08
120.8%
170.4
8.0%
0.30 165.7
14.1%
0.65
2.9%
545.9 25.6%
0.98 254.9
21.7%
1.00
114.2%
446.3 20.9%
2.5%
53.2
0.80 345.3
1.2
0.10
29.4%
0.1%
1.35
29.2%
0.00 4,328.8%
2,133.0 100%
3.82 1,173.4
100%
4.59
81.8%
86.7
2,219.7
0.16
66.8
3.98 1,240.2
0.26
4.85
29.8%
79.0%
Staff costs
Fuel costs (excluding
exceptional
income/(expense))
Distribution and
marketing
Maintenance,
materials, repairs
Airport, handling,
en-route charges
Depreciation and
amortisation
Net other expenses
Total operating
expenses (excluding
exceptional
income/(expense))
Net cost from financial
income and expense
Total
Staff costs were €220.5 million in F22, up by 65.9 per cent from €132.9 million in F21, driven primarily
by the crew headcount increase, restoration of salaries to pre-COVID-19 levels for crew and office employees
and increased variable compensation for crew in line with the increased flying programme.
Fuel expenses (excluding exceptional expense) increased by 157.4 per cent to €653.3 million in F22, up
from €253.8 million in F21. The main driver for this increase was an ASK increase of 118.3 per cent as well
as higher fuel prices. The average fuel price, including hedging impact and into-plane premium, paid by Wizz
Air in F22 was $789 per tonne, an increase of 16.9 per cent from the previous year’s figure of $674 per
tonne. The average Euro/US Dollar exchange rate, including the impact of hedging, was 1.16 in F22
compared to a rate of 1.17 in F21. The impact of effective fuel hedges was a €13.7 million gain in F22
(compared to a €68.4 million loss in F21).
The increase in distribution and marketing costs of 120.8 per cent to €43.4 million in F22 from €19.6 million
in F21 is driven by the ASK increase of 118.3 per cent in F21.
Maintenance, materials and repair costs increased by 2.9 per cent to €170.4 million in F22 from €165.7
million in F21. Maintenance costs are largely driven by size of the fleet, pre-determined maintenance
schedules and aircraft utilisation.
Airport, handling and en-route charges increased by 114.2 per cent to €545.9 million in F22 from €254.9
million in F21. This increase is primarily driven by the increase in both seat capacity and passenger numbers,
which increased by 118.2 per cent and 166.3 per cent respectively.
Depreciation and amortisation charges increased by 29.2 per cent to €446.3 million in F22, up from €345.3
million in F21 due to the increase in the 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 increase in net other expenses to €53.2 million was primarily
driven by: (i) significantly higher flight disruption costs (2022: €29.5 million; 2021: €6.7 million); (ii)
increase in crew-related costs due to ramping up operations (2022: €32.5 million; 2021: €14.6 million); and
(iii) increase in overhead costs due to higher level of operations compared to F21 (2022: €41.4 million;
2021: €31.8 million). For further details, please refer to Note 7.
Wizz Air Holdings Plc Annual report and accounts 2022
64
Net financing income and expense
The Group’s net financing expense was €176.2 million in F22 after an expense of €38.4 million in F21. This
aggregate change was driven by foreign exchange impacts beside the increase in net financial expense
mainly due to increase of the leased fleet, as shown in the table below:
€ million
Net financial expense
Net foreign exchange (losses)/gains
Net financing expense
F22
(86.7)
(89.5)
(176.2)
F21
(66.8)
28.4
(38.4)
Change
29.8%
n.m.*
358.8%
* n.m.: not meaningful as a variance is more than (-)100 per cent.
See also (Note 10) to the financial statements.
Taxation
The Group recorded an income tax expense of €0.9 million in F22 compared to the €9.5 million in F21.
The effective rate for the Group in F22 was (0.1 per cent) compared to (1.7 per cent) in F21. 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.
Loss for the year
The Group generated an underlying net loss of €646.7 million in F22, compared to the underlying net loss
of €482.4 million in F21.
Other comprehensive income and expenses
In F22 the Group had other comprehensive expense of €1.8 million compared to an income of €240.3 million
in F21. This significant decrease was due to the limited number of hedges in F22 as a result of the “no hedge”
policy in June 2021.
Cash flows and financial position
Summary statement of cash flows
The following table sets out selected cash flow data and the Group’s cash and cash equivalents for F22 and
F21:
€ million
Net cash generated by/(used in) operating activities
Net cash used in investing activities
Net cash used in financing activities
Effect of exchange rate fluctuations on cash and cash
equivalents
Cash and cash equivalents at the end of the year
F22
370.6
F21
(224.6)
Change
595.2
(407.2)
(146.4)
(260.8)
(325.5)
(624.6)
299.1
28.0
(30.9)
58.9
766.6
1,100.7
(334.1)
Cash flows from operating activities
The majority of Wizz Air’s cash inflows from operating activities are derived from the sale of passenger tickets
and ancillary services. Net cash flows from operating activities are also affected by movements in working
capital items.
Operating cash flows increased from €(224.6) million in F21 to €370.6 million in F22 primarily due to the
following factors:
Operating cash flows before adjusting for changes in working capital improved by € 204.7 million year
on year driven by the market recovery from COVID-19 restrictions.
The positive contribution of working capital changes to operating cash flows was €441.6 million in F22,
compared to €49.9 million in F21, being an improvement of €391.7 million year on year. The main driver
behind this improvement was the significant increase in deferred income and in trade and other payables,
partially offset by the decrease in trade and other receivables at the end of F22 compared to the end of
F21.
Wizz Air Holdings Plc Annual report and accounts 2022
65
Cash flows from investing activities
Net cash used in investing activities increased to €(407.2) million in F22 from €(146.4) million in F21. The
significantly higher investment in F22 is due to the following factors:
Advances paid for aircraft (pre-delivery payments, PDPs): The net PDP payments to Airbus net of refunds
received were an outflow of €217.6 million in F22 compared to a net outflow of €33.8 million in F21. This
increase was primarily driven by the Company’s delivery schedule and associated PDP commitments
with Airbus.
The short-term cash deposits increased by €99.2 million in F22 compared to the decrease of €65.6
million in F21.
Cash flows from financing activities
The net cash used in financing activities was a €325.5 million outflow in F22 and a €624.6 million inflow in
F21. The cash inflow in F22 was the net of the following two factors:
Proceeds from new loan: This was an inflow of €16.4 million in F22 and a €195.6 million inflow in F21,
relating to the JOLCO financing raised on new aircraft. Additionally, we also received proceeds of €497.5
million from the bond issue in F22.
Repayment of loans plus interest paid on loans: The cash outflow from these items was €839.3 million
in F22 compared to €410.2 million in F21, which is €429.1 million higher than in F21 mainly as a result
of the repayment of the commercial paper issuance under the CCFF.
Summary statement of financial position
The following table sets out summary statements of financial position of the Group for F22 and F21:
€ 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
F22
F21
Change
3,631.4
162.2
0.7
207.6
450.0
766.6
137.6
5,356.1
2,878.2
169.1
5.1
135.3
346.8
1,100.7
87.3
4,722.6
753.2
(6.9)
(4.4)
72.3
103.2
(334.1)
50.3
633.5
263.9
903.7
(639.8)
615.4
3,964.9
396.8
4.6
107.0
3.5
5,092.1
5,356.1
465.7
3,137.3
111.5
9.0
88.9
6.5
3,818.9
4,722.6
148.2
827.6
285.3
(4.4)
18.1
(1.5)
1,273.2
633.5
*
Including both current and non-current asset and liability balances, respectively.
Property, plant and equipment increased by €753.2 million as at 31 March 2022 compared to 31 March
2021, 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 €6.9 million as at 31 March 2022 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 €4.4 million as at 31 March 2022
compared to 31 March 2021 (see also Notes 3 and 21 to the financial statements). In 2022 these hedge
receivable balances are related to fuel hedge instruments.
Trade and other receivables increased by €72.3 million as at 31 March 2022 compared to 31 March 2021.
This was primarily driven by increase in trade receivables as a result of increased sales and operation level,
and decrease in maintenance reserve receivables due to maintenance events performed during the financial
year.
Cash and cash equivalents amounted to €766.6 million at 31 March 2022 (2021: €1,100.7 million), and
short-term cash deposits to €450.0 million at 31 March 2022 (2021: €346.8 million).
Wizz Air Holdings Plc Annual report and accounts 2022
66
Borrowings (including convertible debt) increased by €827.6 million as at 31 March 2022 compared to 31
March 2021. The increase was primarily driven besides the bond issue by lease liabilities recognised during
the fiscal year (see Note 23 to the financial statements).
Deferred income increased by €285.3 million as at 31 March 2022 compared to 31 March 2021 (see Note 26
to the financial statements). This was primarily driven by the higher business activity compared to the
previous year-end which was affected more severely by the coronavirus pandemic.
Derivative financial liabilities (current and non-current) decreased by €4.4 million as at 31 March 2022
compared to 31 March 2021 (see Notes 3 and 21 to the financial statements). The €4.6 million liability at 31
March 2022 was related to fuel hedges.
Provisions increased by €18.1 million as at 31 March 2022 compared to 31 March 2021 (see Note 30 to the
financial statements). The increase is in line with the planned maintenance schedule.
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 losses and gains on these
instruments were charged to the statement of comprehensive income as exceptional expense in F21 and
F22.
In light of pertaining 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 US Dollar and jet fuel hedging in
order to reduce the risk of over-hedging.
Since June 2021 the Company has a “no hedge” policy in place with respect to US Dollar and jet fuel price
risk after carefully evaluating the economic costs and benefits of the Company’s hedging programme; as a
result the Company is no longer engaging in systematic cash flow hedging of US Dollar denominated
expenses and jet fuel price risk. US Dollar hedges expired before F22, while the last jet fuel hedges expired
in September 2021.
The treasury department, under the supervision of the Audit and Risk Committee, continuously monitors the
Company’s risk environment, market and business opportunities to reduce or transfer its exposure to market
risks.
Given the high and volatile commodity environment, the Company has, in agreement with its Board, capped
part of its fuel cost exposure for the five months ended August 2022 with zero cost collars. Details of the
current hedging positions (as at 31 March 2022) are set out below:
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
Jourik Hooghe
Chief Financial Officer
8 June 2022
F23
12 months
1,620.0
240.0
15%
$1,130.0
$982.0
Wizz Air Holdings Plc Annual report and accounts 2022
67
STRATEGIC REPORT
KEY STATISTICS
CAPACITY
Number of aircraft at end of period
Equivalent aircraft
Utilisation (block hours per aircraft per day)
Total block hours
Total flight hours
Revenue departures
Average departures per day per aircraft
Seat capacity
Average aircraft stage length (km)
Total ASKs (’000 km)
OPERATING DATA
RPKs (revenue passenger kilometres) (’000 km)
Load factor (%)
Number of passenger segments
Fuel price (US$ 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)**
F22
F21
Change*
153
143.5
7.73
405,556
354,461
167,709
3.20
34,754,709
1,605
55,787,659
137
129.7
4.13
195,601
172,469
80,820
1.71
15,927,709
1,604
25,551,625
43,679,179
78.1%
27,128,160
789
16,691,569
64.0%
10,186,077
674
11.7%
10.7%
87.2%
107.3%
105.5%
107.5%
87.5%
118.2%
0.1%
118.3%
161.7%
14.1 ppt
166.3%
16.9%
1.16
3.81
47.9
61.3
2.98
3.98
2.81
1.17
(0.8%)
4.43
46.4
72.5
2.89
4.85
3.86
(14.0%)
3.2%
(15.5%)
3.1%
(18.0%)
(27.3%)
* Percentage changes in this table are calculated by division of the two years’ KPIs also when the KPIs are expressed as
percentages.
** Excluding the impact of exceptional items, as explained in Note 11 to the financial statements.
Glossary of technical terms
Available seat kilometres (ASKs): 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.
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 benefits 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 (RPKs): the number of seat kilometres flown by passengers who paid for
their tickets.
RASK: total revenue divided by ASK.
Underlying net loss: 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.
Yield: the total revenue per RPK.
Wizz Air Holdings Plc Annual report and accounts 2022
68
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 (or loss) 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 loss (excluding exceptional income/(expense))
Effective tax rate for the year
Operating loss after tax (excluding exceptional income/(expense))
Average shareholders’ equity
Average borrowings
Average cash and cash equivalents
Average short-term cash deposits
Average capital employed
ROCE (%)
F22
F21
(469.6) (434.5)
(1.7%)
(0.1%)
(441.8)
(470.1)
583.8 1,069.3
3,551.1 2,588.4
(989.3)
(933.7)
(389.7)
(398.4)
2,802.8 2,278.6
(19.4%)
(16.8%)
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 loss (excluding exceptional income/(expense))
Depreciation and amortisation
EBITDA (excluding exceptional expense)
Borrowings
Cash and cash equivalents
Short-term cash deposits
Net debt
Leverage
F22
(469.6)
446.3
(23.3)
F21
(434.5)
345.3
(89.2)
3,964.8 3,137.3
(766.6) (1,100.7)
(346.8)
(450.0)
1,689.8
2,748.2
(18.9)
(117.9)
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
F22
F21
766.6 1,100.7
346.8
450.0
1,663.4
739.0
195.9%
73.1%
Wizz Air Holdings Plc Annual report and accounts 2022
69
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 Company is committed to proactively identifying
and managing risks effectively. We have integrated the learning from the past 2+ years of two different but
overlapping periods which the Company has gone through. First the pandemic pronounced operational and
demand driven downturn, during which time the focus was on cutting cash losses, minimising the effect
of unfavourable fuel hedges. This was followed by a market and demand recovery due to the vaccination
programmes. Second, the conflict between Ukraine and Russia is causing in the present and near future
high geopolitical instability, very high fuel prices and inflationary pressure together with a volatile overall
business environment.
Our risk management process
The Board is responsible for the Group’s risk management and it has delegated to the Audit and Risk
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 Wizz Air risk categories have “averse” risk appetite due
There were no significant changes in the risk appetite of the Company compared to the F22 mid-year review.
The majority of
their
safety/compliance/regulatory nature. Similar to the previous year, in F22 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 risks related to growth and network expansion 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, and commodity and exchange rate volatility). The category “geopolitical changes”
became cautious from averse due to the fact that Wizz operates in volatile environments and countries.
to
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 Risk 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 F21 and include a deeper assessment of external factors, 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:
information technology and cyber risk, including website availability, protection of our own and our
customers’ data, and ensuring the availability of operations-critical systems in an increasingly complex
system landscape;
external factors, ensuring the Company has capabilities and resilience to deal with risks such as
geopolitical risks, Brexit, fuel cost, foreign exchange rates, risk of higher cost of doing business,
competition, general economic trends, and the default of a partner financial institution;
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;
fleet development, ensuring the Company has the right number of aircraft available at the right time to
take advantage of commercial opportunities and grow in a disciplined way without any supply chain
disruption;
Wizz Air Holdings Plc Annual report and accounts 2022
70
regulatory risk, making sure that we remain compliant with regulations affecting our business and
operations and we remain agile to react to the changing governmental actions due to COVID-19, Brexit
and changing policies due to sustainability (taxation, etc.);
operations, including safety events and terrorist incidents and employee and passenger security;
global pandemic, which has been the reality during 2020, 2021 and the start of 2022 and may continue
to impact the Company and its interests in the near future even after the successful vaccination
programmes and slowly reaching an endemic state;
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 Company has appropriate succession management in place for key colleagues, even in the context
of a global pandemic;
social and governance risks, making sure we are at all times guided through our core values, our value
of integrity, respected throughout our business processes and deals and providing transparency to all
our stakeholders through responsible reporting and disclosure; and
environmental risk, ensuring that we are able to answer the growing need of environmental protection
and consciousness, mitigate the emerging transition and physical risks and create a sustainable, climate-
friendly service for our customers at all times respecting the planet.
Principal risks requiring the most attention in F23
Out of the principal risks the following will need the most attention in F23:
External factors, of which the most critical are the geopolitical changes and the security challenges due
to the ongoing conflict between Ukraine and Russia, higher inflation, quicker and more drastic changes
in FX rates, risk of higher cost of doing business, changes in oil prices affecting fuel costs, and potentially
consequences behind Brexit. Employee and passenger security is of utmost importance for Wizz and our
Company will adjust its internal protocols and policies to protect employees and passengers while flying
with Wizz. The conflict already generated financial losses due to trapped aircraft, over and above
operating cost to evacuate our people, and lowered commercial performance behind partial closure of
airspace affecting current and future aircraft allocation. We have previously disclosed the four trapped
aircraft in Ukraine, which continue to be in good condition and continue to be monitored closely by the
Company so they can be put back into service at the first opportunity that presents itself.
Beyond the short-term impact there may be a longer-term demand impact as market potential (e.g. in
Ukraine, Russia, Poland, Hungary and Romania) may get dented and impact fares especially at a time
where we are growing capacity, which, in turn, will need to be weighed against the opportunity of down-
tiering if there were stagflation and further shrinking of competitive capacity in CEE where smaller local
players equally will get affected and will suffer from a materially uncompetitive cost structure.
Moreover, the Company has decided to stop structural hedging whereas key competitors (Ryanair and
easyJet) have continued to hedge. The current oil price trajectory represents a high financial
disadvantage versus those hedged competitors. This is a transitory risk but a material one, and the
Company is continuing to monitor hedging opportunities to reduce and limit the exposure linked to
commodity price volatility in the short term.
Further tension on the EU-UK relations can have material adverse impacts on labour flows to the UK
which might have a potential impact on revenue and on available human resources in WUK.
Human resources, presenting a big challenge the Company had to face during the ramp-up period and
a major challenge to staff up to reach 170+ aircraft by summer 2022. Insufficient number of flight crew
and the inability to find, develop and retain the appropriate office staff represent the most critical risks
in this area.
Information technology and cyber risk
Over 90 per cent of bookings are made through wizzair.com and mobile apps every year and refunds are
mostly handled through digital channels as well. Wizz aircraft connection via a connected Electronic Flight
Bag is being tested and rolled out. We are therefore dependent on our information technology systems to
enable and manage ticket reservations and other payments and 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 are our shop window and therefore it is critical that they are functional, reliable and secure. The
complexity of our system landscape is growing; therefore, we created new roles within the Digital team to
strengthen the architecture processes and give better control and faster reaction time over the increasing
complexity.
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
Wizz Air Holdings Plc Annual report and accounts 2022
71
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 Company has continued to employ business continuity processes since its beginning and during the
2022 financial year the Company’s business continuity plan was comprehensively reviewed and updated to
ensure that it remained appropriate and sufficient for the Company’s continued growth. The up-to-date state
and the operability of the business continuity plan are ensured through regular testing and maintenance.
Business continuity and crisis management plans were activated and are used with success due to the conflict
between Ukraine and Russia.
System resiliency requires continuous monitoring as well; system and data redundancy strongly supports
business continuity. The risk of lack of system resiliency can be reduced with new generation platform and
cloud migration.
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 Company’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 annual PCI DSS accreditation audit.
During the 2022 financial year, we have continued to invest in and strengthen such 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. Training, tests and exercises
conducted by the Digital team were continuous in F22 and will be ongoing in F23 as well. 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 our Company.
Besides the pandemic, the regional conflicts 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.
Although social distancing regulations eased, pressure on the IT infrastructure increased and its reliability
became more important than before in ensuring business continuity. The resource gaps in the Digital team
to manage cyber risks were addressed by increasing resources on the external cyber team and creating an
additional senior cyber leader position.
External factors
IATA reported that the airline industry suffered $51.8 billion loss in 2021, while net 2020 loss estimates have
been revised to $137.7 billion (from $126.4 billion). 2022 industry losses were first forecasted by IATA to be
approximately $11.6 billion with jet fuel at $78/barrel and fuel representing 20 per cent of total costs. At the
beginning of March, jet fuel prices were over $140/barrel, so the losses will be significantly higher for the
airline industry should high inflation prevail, while the industry is still struggling to recover after two years of
pandemic and as COVID-19 starts to reach its endemic state. Airspace and travel restrictions rolled out due
to the conflict between Ukraine and Russia further catalyse challenges and losses.
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.
The ongoing conflict between Ukraine and Russia not only closes two emerging markets for Wizz but also is
bordering other significant Wizz base countries. Employee and passenger security is of utmost importance
for Wizz and our Company will adjust its internal protocols and policies to protect the employees and
passengers while flying with Wizz. The conflict already generated additional losses due to inaccessibility of
property, equipment and closure of airspace and markets and these losses may escalate further and the
costs of doing business are also likely to rise as outlined before. Despite this adversity, the Company has
reallocated the in-bound operation and in-bound fleet to other opportunities across its network. The
Company has also spared no expense to help our Ukrainian crew to find new opportunities outside of Ukraine,
across our network.
Some of the other 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 governmental officials, social and ethnic unrest and currency instability. Certain countries
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are 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.
Hedging policy is continuously discussed by management and the Board in order to provide reasonable
protection against price shocks while being consistent with the minimum level of capacity utilisation during
COVID-19. The Company is relooking at hedging plans but decided to stop structural hedging and review
the policy annually and try to manage higher levels of volatility including potentially engaging in specific
short-term hedging opportunities.
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
Risk Committee.
During the 2022 financial year fuel including ETS and IPP accounted for 30 per cent of our total Group
operating costs and a rise in fuel prices will significantly affect our operating costs.
Financial counterparties. We believe that a strong cash position is a vital foundation for the Company’s
continued, aggressive growth 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 and
hedging counterparties. In fact, all of the Company’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 tremendous 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.
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, effectively utilise as
many aircrafts as possible and keep load factors at a maximum possible level, allowing Wizz Air to better
deal with risks caused by airspace and 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, Wizz successfully
opened new domestic routes and bases in several countries. Improving the network allowed Wizz Air 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 of flying 170+ aircraft in the summer
of 2022 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 5.04 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
Company 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 2022 comprised 34 A320neo, 244 A321neo and 47 A321XLR aircraft
with deliveries scheduled to take place between 2022 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 financed all of our A320-family 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 Company we are focused on multiple possibilities to finance our future fleet to ensure we secure
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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.
With the advances in 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. Sanctions,
protectionist policies and country-specific economic isolation can also have a negative effect on growth.
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 and Wizz Air UK relies on an AOC and operating
licence issued by the United Kingdom. In each case, the licences allow the airline to operate air services both
within Europe and to and from countries with which Europe has liberalised air traffic agreements. Each
operating licence requires the Company to meet ownership and control requirements, which currently means
for our European airline AOC nationals of the European Economic Area and Switzerland. If the Company
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 Company on a periodic basis but at least before
voting events suspends proportionately voting rights on Ordinary Shares held by Non-Qualifying Nationals
such that the airline is effectively majority controlled by EEA holders.
The Company'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.
In order to enhance government relations, a dedicated department for government and public affairs was
established.
Operational risks
The Company’s Crisis Management team and several business continuity plans were activated at the start
of the conflict between Ukraine and Russia. As mentioned above, the ongoing conflict between Ukraine and
Russia created several principal risks for Wizz and the Company is adjusting and revising its internal protocols
and policies to ensure maximum employee and passenger security and minimise the damage of property
and equipment as much as possible. The Security team is reviewing contingency planning, revising business
intelligence capabilities and scope, and enforcing internal resources of Group security and resilience.
Additionally, external special services are contracted for physical security, extraction and additional services.
Employees from Ukraine who wished to leave the country were able to do so with the help of the Company.
Those who remained are obliged (martial law) or decided to stay. 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.
An accident or incident, or terrorist attack, can adversely affect an airline’s reputation and customers’
willingness to travel with that airline. With COVID-19 still around, 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.
Even though the possibility of sudden airport closures and ground handling stops is less significant, to
mitigate the remaining risk, our operational teams are keeping close contact with all relevant airports 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 operation 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
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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.
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.
Global pandemic
COVID-19 turned into a worldwide pandemic. Although mass vaccination is in progress, COVID-19 is
forecasted to stay with us in the near future but thanks to the successful vaccination programmes, it is
assessed to soon reach its endemic state.
Nevertheless, the Company may be impacted in the future by decisions taken by regulators and governments
that impact mobility should there be a major surge in infection levels in the future.
The experience of COVID-19 has taught the Company to continuously adjust protocols to ensure the health
and safety of its passengers and employees, and has revealed the key interventions it should take from a
commercial, operational, financial and human resource point of view to maximally mitigate the business
operational and financial risk linked to potential future mobility restrictions and to keep its workforce
maximally engaged during these times of extreme adversity in overall business context and in the way our
colleagues are doing their work every single day.
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. Human resources/hiring represents
the biggest challenge the Company had to face during the ramp-up period and it was a major challenge to
staff 170+ aircraft by the summer of 2022. Insufficient number of flight crew and the inability to find, develop
and retain the appropriate office staff represent the most critical risks in this area. As a risk mitigation Wizz is:
Boosting recruitment using external agencies, university recruitment, job fares, etc.
Re-evaluating processes, making them more effective with a complex platform development including
internal solutions monitoring and boosting careers and opportunities, crew life cycle management and
implementing new digital solutions to make onboarding more effective.
Mitigating 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 cascaded down on department level to action plans.
Initiating special office and crew-related actions including the Crew Development Centre, career path
planning, revision of financial benefits, follow-up processes after engagement surveys, exit interviews,
etc.
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 Company, 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.
Driving our success to date by our key personnel. Our continuing success will depend on having the right
people in those 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 Company in the future.
Amongst the most ethnically diverse professional organisations you will find in the business world, with
50 nationalities within its employee base. We have a strong commitment to close the diversity gap in
our boardroom and at leadership level and have included management diversity in our reward structure,
with a target to have 40 per cent female Officers by 2026. Equal opportunities are also presented during
recruitment and relevant management KPIs are integrated into the incentive plan of all managers.
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Social and governance
At Wizz Air, we are committed to transparency. Our passengers trust us every day to operate a safe service
at the lowest cost to bring them to their desired destination. Equally, stakeholders are trusting Wizz Air to
operate a sustainable business model, not only integer from an environmental point of view but equally
operating with high integrity with regard to all other stakeholders, our passengers and how we treat them,
communities of people and how our service may affect their daily life, investors and how we make the most
out of their investments, and how we partner with suppliers and governmental bodies.
Our core values include integrity. We have strong governance for the operation through our Board of
Directors and the Sustainability Council established and led by the People and ESG Officer. We continue to
invest in being a more transparent organisation and have significantly improved our disclosure around
sustainability, environmental, social and how the Company is governed. We have laid out mid and long-term
targets and have incentivised management to deliver the highest priority targets.
For more information please see our dedicated Sustainability and Governance sections of the annual report.
Environment
Climate change is one of our principal risks and it may impact our business in the short (0–1 years), mid (1–
5 years) and long term (5–10 years). To further improve the Company’s climate risk scenario analysis, Wizz
Air has worked together with Risilience, the company applying the research frameworks pioneered by the
Centre for Risk Studies (CCRS) at the University of Cambridge Judge Business School. The methodology and
organisation for the ERM environmental risk evaluation is based on the Cambridge Centre for Risk Studies
methodology and is identical with the TCFD and sustainability report. Wizz Air has outlined four different
climate scenarios in the sustainability and TCFD reports and has integrated climate risk management into its
Enterprise Risk Management (ERM) process.
These scenarios are the following:
Emission pathway
Global temperature rise
by 2100 (above pre-
industrial baseline)
Global reduction
in CO2
emissions
Average annual
emissions
reduction
Description
No policy
>4°C
Current policy
3°C
200% by
2100
0%
-50% by
2100
0.85%
Paris Agreement limit 2°C
Net zero by
2070
5%
Paris aspiration
1.5°C
Net zero by
2050
7.5%
Assumes policy reversals
and increased energy
consumption and
emissions
Continuation of current
trend, without any further
or additional changes in
policy
Aligned with Paris
Agreement, requiring rapid
and widespread changes in
energy system, behaviours
and technology
Radical and urgent policy
response, requiring rapid
and systemic energy and
behaviour shifts and major
technology innovation
These physical and transition risks are outlined in more detail in the Sustainability section of the annual
report and their impact is different depending on the different climate scenarios and the time horizon.
This risk evaluation of the environmental risk area resulted in several specifically identified physical and
transition risks. In the short and mid term transition risks will be more significant to Wizz but in the long
term physical risks can have more serious effects on the Company and the planet itself.
For the scenarios, transition and physical risks are inversely proportional. The higher the global temperature
rise is, the less significant transition risks may be, but the more impactful physical risks may be as policies
are less strict, and as such global temperatures may rise more. The better the policy changes are, the fewer
physical risks should be faced (but a significant rise in transition risks should be expected).
Environment – transition risks
Policy changes and new legislation by governments are and will be implemented in order to price and penalise
GHG emissions. Adverse movements in the carbon pricing (including ETS) might have a negative impact on
Wizz’s portfolio. A reform in tax policies to incentivise carbon-efficient technologies would double the overall
level of taxation in the mid term. Increased taxation will slow the industry growth. For F23 these are
considered as principal risks for the Company. In addition to carbon pricing policies, emission reduction
regulations across global jurisdictions require organisations to adhere to reductions or face penalties. Further
policy-related transition risks include expansion of national governments mandating sustainable aviation
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fuels in aviation fuel blends, increasing fuel and operating costs. For voluntary carbon markets, acceptance
of offsets in GHG reduction targets poses risk of over-reliance.
Environmental-related liability risks describe the rising possibility for emission and climate damage litigations
including loss of Company interest due to environmental liability to suppliers.
An uptake rate of low-carbon aviation technologies affects business competitiveness, operating costs and
asset values. Capex and R&D investments must balance risk and reward, promoting sustainable but
profitable innovations.
Market and reputation-related transition risks include consumer preferences shifting towards sustainable
behaviour and a preference for sustainable services, with mid to longer-term demand growth reducing for
air travel (personal and business), and potential divestment by investors of carbon-intensive assets and
public opinion supporting low-carbon intense services.
Environment – physical risks
While the impacts connected to physical risks have more relevance the further we look into the future, the
awareness and careful analysis of such risks are key for the Company to allow it to prepare with strong risk
mitigation plans incorporated in Wizz Air's sustainable growth strategy. This enables the Company to stay
resilient in the face of climate change and the disruption that physical risks may cause.
The ReFuelEU aviation regulation mandates minimum SAF blending volumes in aviation fuel, rising from 2
per cent in 2025 to 5 per cent in 2030 and 63 per cent in 2050. Extreme weather events increase the risk
of large-scale crop failures that would heavily impact SAFs (main raw materials for production), causing
supply chain disruption.
Airports’ sites will be varyingly susceptible to various extreme weather events. Damage to assets, including
aircraft, may disrupt the operations of flights and could result in temporary suspension.
Extreme weather events can reduce the productivity of business activities and add costs to operations and
processes by causing operational disruption. Typically, storms and floods are destructive and cause
significant physical capital losses, while extreme temperature waves disrupt productivity. The effects of
extreme weather on business activities include direct physical damage or destruction of physical assets.
Operational disruption results in the loss of productive output, either if the means of production are directly
disrupted or the ability to fly is impacted.
Extreme weather events can cause short-term disruption to regular revenue streams, particularly when
poorly forecasted, resulting in market disruption. Sales may be affected by changes in demand if consumers
alter their behaviours because of the weather. There is also the risk of reduced flight capacity if customers
can't access airports due to infrastructure damages.
Wizz Air aspires to be the greenest airline on the planet. Today this is a key strength and contributor to our
competitive advantage. However, in view of global warming, our responsibility towards the environment is
our single biggest opportunity in creating a pathway towards being an even greener airline. This is why we
have aligned ourselves to our 2030 goal of reducing emission intensity to 43 grams per RPK, whilst we work
on an even bolder 2050 target.
For more information please see our detailed Sustainability section of the annual report.
József Váradi
Chief Executive Officer
8 June 2022
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GOVERNANCE
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78
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 profitability, the airline industry continued to experience the effects
of the COVID-19 pandemic, with the Company seeing unpredictable demand reflecting varying and often
inconsistent travel restrictions and the particular health situation in each country in which we operate. More
recently, the war in Ukraine directly affected the Company’s operations in Ukraine and, most importantly,
continues to affect our colleagues and customers in the country.
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. At times of crisis, the
importance of good governance and oversight of the Company’s business takes on an elevated importance.
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 F22, a certain number of directorate changes or re-appointments occurred:
On 4 November 2021, Ms Anna Gatti joined the Board as an independent Non-Executive Director. Ms Gatti
is a global technology and business leader with robust corporate governance experience built over years of
board membership in international public and private companies. She currently serves as independent non-
executive director at Intesa Sanpaolo Bank, Fiera Milano and WiZink Bank in Spain. As a seasoned digital
sales and operations executive, she has demonstrated ability to translate strategic thinking into strong
business growth, driving customer success at scale for companies such as Google, YouTube and Skype. She
worked at launching YouTube in more than 22 countries and she built an entirely new advertising product
business for Skype that laid the foundation for the company's planned IPO and eventual sale to Microsoft.
Ms Gatti is also an active angel investor. In Silicon Valley, where she has been living for over 20 years, she
co-founded two start-ups leveraging artificial intelligence applied to big data. Prior to her career in
technology, Ms Gatti spent years in research and public policy, working at the World Health Organization
and at the University of Berkeley, California, Goldman School of Public Policy. She currently serves as
Associate Professor of Practice of Digital Transformation at the Scuola di Direzione Aziendale (SDA) at Bocconi
University, where she is also the director of the research lab in life sciences and digital technology (LIFT
Lab). She earned a PhD in Business Administration and a PhD in Criminology. She also completed a post-
doctoral programme in Organisation Behaviour at Stanford University.
After serving on the Company’s Board for eight years, Mr Simon Duffy decided not to put himself forward
for re-appointment as a Director, owing to other commitments. Mr Duffy provided an exceptional and expert
contribution to the Company during his time on the Board and he leaves us with our thanks for that
contribution and best wishes for the future. Following Mr Duffy’s retirement from the Board on 28 January
2022, Mr Barry Eccleston was appointed Senior Independent Non-Executive Director and Mr Enrique Dupuy
de Lome Chavarri was appointed Chairman of the Audit and Risk Committee.
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 and, more
recently, the war in Ukraine. 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. The Company’s ambitious “WIZZ 500”
vision, which will see the Company grow to become a 500 aircraft airline group by the end of the decade, is
a fundamental part of the strategy and a consideration in every aspect of the Company’s business. The Board
fully supports the Company having a long-term strategy and goal that will both provide exceptional
opportunities for the Company’s employees to develop their careers and enhance shareholders’ interests.
Progress of the many workstreams necessary to deliver that strategy is reported regularly by Management
to the Board.
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During F22, the Company continued its strategic growth, with the Wizz Air fleet growing to 153 aircraft
including 25 additional game-changing Airbus A321neo aircraft, taking the Company’s total Airbus A321neo
fleet to 47 aircraft. 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. The operating economics delivered in service by the
aircraft are compelling and, on 15 November 2021, the Board approved the purchase of up to an additional
196 Airbus A321neo Family aircraft from Airbus, including 75 purchase rights, subject to Shareholder
approval as a Class 1 transaction. Shareholder approval for the order of up to 117 Airbus A321neo family
aircraft was gained at an extraordinary general meeting of the Company on 22 February 2022. Showing that
the Board is not just an oversight body but is also keen to leverage the industry skills and knowledge of
Directors in everyday business when appropriate, a number of Directors were personally involved in the
conclusion of the deal. The requirement for Shareholder approval of the acquisition of aircraft pursuant to
the 75 purchase rights will be assessed at the time (if any) of exercise of those purchase rights.
On 17 December 2021, the Board approved the successful issuance by the Company of a second €500
million Eurobond under the €3,000 million Euro Medium-term Note programme as described in the base
prospectus dated 4 August 2020.
The Board also recognises that the role of aviation and its environmental impact are now the subject of ever
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. Reflecting the Board commitment to connecting sustainability with corporate purpose and
strategy, the establishment of a Sustainability and Culture Committee was approved by the Board on 2 June
2021 with Ms Charlotte Pedersen being appointed as its Chair. We have often said that employees are the
Company’s greatest asset and we strongly believe that the Wizz Air team has created a culture which is both
strong and unique, evidenced by the resilience shown during the COVID-19 pandemic as well as, more
recently, the war in Ukraine. Our culture is as important to the Company’s sustainability as its environmental
impact. Dr Anthony Radev, the Director with responsibility for employee engagement, is a member of and
reports to the Sustainability and Culture Committee. Both Dr Radev and Ms Pedersen have participated in a
number of employee engagement events at bases through the Company’s network as well as meeting with
the Company’s People Council. Oversight of sustainability issues has therefore now passed from the former
Audit and Sustainability Committee, which is now renamed the Audit and Risk Committee.
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 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 Risk Committee. The Company’s Risk Council reports to the Audit
and Risk 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 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 2022, Wizz Air once again 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 aligning 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.
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:
a) the level of the Board’s focus on ESG, and specifically the extent to which ESG factors are incorporated
into discussions and decision making;
b) the consideration of the succession plans in place for key leadership positions, including at Board level
and amongst the senior management team;
c)
the management of risk, and specifically the level of focus on risk at Board level;
d) the information provided to the Board on key stakeholders and the Company’s engagement with
various parties, including investors, customers, employees and regulators;
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e) the composition of the Board, and the relationships amongst the members, including the manner in
which the dynamic has developed under remote working conditions; and
f)
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 2022, at which point the Board will agree key objectives to take forward.
Lintstock remains available to the Chairman 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.
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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. The only exception to this is that 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,
Mr Franke has unrivalled knowledge of developing ultra low-cost airlines such as the Company and has
exceptionally broad experience of the airline industry from both executive and non-executive roles across
many regions of the world. As the Company continues to grow and to expand into different geographies,
the Board believes that Mr Franke should continue as Chairman, given his recognised experience in the
airline industry, his alignment with the interests of shareholders as an investor in the Company and his
dedication to ensuring high quality governance of the Company.
Our key Shareholders
As at 31 March 2022, 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
Indigo Hungary LP
Baillie Gifford & Co.
Capital International Investors
Fidelity International
Fidelity Management & Research Company LLC
Indigo Maple Hill LP
Capital Research Global Investors
Reported shareholding
18.4 per cent
9.9 per cent
7.3 per cent
6.4 per cent
6.1 per cent
5.6 per cent
4.7 per cent
Reported number of shares
18,950,611
10,230,426
7,517,439
6,569,240
6,254,860
5,734,284
4,879,728
Between 1 April and 13 May 2022 Capital International Investors bought 132,203 shares, Fidelity
International bought 619,116 shares and Fidelity Management & Research Company LLC bought 341,336
shares, while Baillie Gifford & Co. sold 61,246 shares and Capital Research Global Investors sold 23,498
shares.
Changes in interests that have been notified to the Company pursuant to DTR 5 of the DTRs scan 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
As at 31 March 2022, Indigo (Indigo Hungary LP and Indigo Maple Hill LP together) held 23.9 per cent of the
Company’s issued Ordinary Shares. On 2 June 2021 the Company converted Indigo’s entire holding of
17,377,203 Convertible Shares into Ordinary Shares, on a one for one basis, in accordance with the
Company’s articles of association. The details of the conversion can be found in the Regulatory News section
of the Investor Relations page of the Company’s corporate website: https://wizzair.com/en-gb/information-
and-services/investor-relations/investors/regulatory-news.
Indigo also holds a number of convertible notes which may be converted into Ordinary Shares, 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:
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82
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;
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
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
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 Risk 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.
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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
2022, 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 2022 Annual General Meeting, the Chairman, the Senior Independent Non-Executive Director, and the
Chairman of the Audit and Risk Committee and of the Remuneration Committee will 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 27 July 2021, all resolutions proposed were approved by Shareholders. Two
of those resolutions, the Directors' Remuneration Policy and the Wizz Air Value Creation Plan (VCP) were
supported by 67 per cent and 68 per cent of Shareholders, respectively. As a consequence of this vote, the
Company engaged with Shareholders to solicit their feedback on voting at last year’s AGM.
As background information, in advance of the 2021 AGM, the Wizz Air Board engaged in an extensive
consultation with a majority of Shareholders to discuss the proposed Remuneration Policy and VCP and to
set out the primary drivers of the proposals. Following multiple rounds of Shareholder engagement, the
Board incorporated Shareholder feedback into the final proposals put to Shareholders at the 2021 AGM.
While the Board was pleased that the majority of Shareholders approved all AGM proposals, the Company
conducted a further consultation following the meeting to solicit further feedback from Shareholders on the
Remuneration Policy and the VCP. Despite recognising the stretch nature of targets and the role of the plans
in retaining and incentivising the Senior Leadership Team, some Shareholders reiterated during the post-
AGM consultation that they considered the maximum potential payout to be excessive. Shareholders were
broadly supportive of the other elements of the Remuneration Policy. Understanding that Shareholders and
other representative bodies are fine-tuning their policies regarding the adoption of VCPs, particularly after
the increase in their adoption during the 2021 AGM season, the Board looks forward to maintaining an
ongoing dialogue with Shareholders on remuneration and related issues. The Board believes it has taken the
right decisions in the interest of the business and its stakeholders as a whole and implemented a series of
plans which will incentivise superior performance, from an all-time high share price, over the next five years.
The Board would like to thank all Shareholders that took part in engagement and values the feedback and
insight it has gained through the process.
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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.
Board membership
Wizz Air’s Board currently comprises one Executive and nine 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 2022 financial year and
since year end are:
Name
Executive Director
József Váradi
Non-Executive Directors
William A. Franke
Simon Duffy*
Position
Committee membership (as at 31 March 2022)
Chief Executive Officer
Chairman
Nomination and Governance Committee
Non-Executive Director,
Senior Independent Director
Stephen L. Johnson
Charlotte Pedersen
Non-Executive Director
Non-Executive Director
Barry Eccleston
Non-Executive Director
Peter Agnefjäll**
Maria Kyriacou***
Andrew S. Broderick
Charlotte Andsager
Enrique Dupuy de Lome
Chavarri
Dr Anthony Radev****
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Anna Gatti*****
Non-Executive Director
*
Retired upon expiry of appointment on 28 January 2022.
** Resigned effective as of 13 April 2021.
Audit and Risk Committee
Sustainability and Culture Committee
Nomination and Governance Committee,
Remuneration Committee
Sustainability and Culture Committee
Nomination and Governance Committee,
Remuneration Committee
Audit and Risk Committee
Sustainability and Culture Committee; INED
overseeing employee engagement
Remuneration Committee, Audit and Risk Committee
***
Did not stand for re-election at the 27 July 2021 Annual General Meeting.
****
Joined effective as of 13 April 2021.
*****
Joined effective as of 4 November 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, 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.
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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.
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 and strategic adviser to the CEO, leadership team
and board of directors at 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. He is a Lecturer at the
School of Law and the Haas School of Business at the University of California, Berkeley, and serves on the
Executive Advisory Board of the University’s Berkeley Center for Law and Business.
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.
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
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
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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 and holds an
international directorship degree from INSEAD.
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 and 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 in 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 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 the 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 in Economics from the Institute of Contemporary Social Sciences
in Sofia, Bulgaria, and a postgraduate programme in International Studies from Bologna Center, School for
Advanced Studies at the Johns Hopkins University, Bologna, Italy.
Anna Gatti
Ms Gatti is a global technology and business leader with robust corporate governance experience built over
years of board membership in international public and private companies. She currently serves as
independent non-executive director at Intesa Sanpaolo Bank, Fiera Milano, and WiZink Bank in Spain.
As a seasoned digital sales and operations executive, she has demonstrated ability to translate strategic
thinking into strong business growth, driving customer success at scale for companies such as Google,
YouTube and Skype. She worked at launching YouTube in more than 22 countries and she built an entirely
new advertising product business for Skype that laid the foundation for the company’s planned IPO and
eventual sale to Microsoft. Ms Gatti is also an active angel investor. In Silicon Valley, where she has been
living for over 20 years, she co-founded two start-ups leveraging artificial intelligence applied to big
data. Prior to her career in technology, Ms Gatti spent years in research and public policy, working at the
World Health Organization and at the University of Berkeley, California, Goldman School of Public Policy.
She currently serves as Associated Professor of Practice of Digital Transformation at the Scuola di Direzione
Aziendale (SDA) at Bocconi University, where she is also the director of the research lab in life sciences and
digital technology (LIFT Lab). She earned a PhD in Business Administration and a PhD in Criminology. She
also completed a post-doctoral programme in Organisation Behaviour at Stanford University.
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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; and
c) Andrew S. Broderick, who was appointed effective from 16 April 2019, is not considered to be an
independent Non-Executive Director as he is a managing director of Indigo.
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 F22, namely Simon
Duffy, Barry Eccleston, Peter Agnefjäll, Maria Kyriacou, Charlotte Pedersen, Charlotte Andsager, Enrique
Dupuy de Lome Chavarri, Anthony Radev and Anna Gatti, 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 remained in that position until his retirement from the Board on 28 January
2022. On 28 January 2022, Barry Eccleston was appointed as the Company’s new Senior Independent Non-
Executive Director.
Independent Non-Executive Director overseeing engagement with employees
In order to strengthen workforce engagement, Wizz Air decided to appoint an independent Non-Executive
Director to oversee engagement with employees. The key purpose of the role is to ensure that the employee
voice reaches the boardroom. The relevant Non-Executive Director is expected to engage independently of
management with the Company’s employees and to report back to the Board any issues arising which could
affect employees’ ongoing engagement with the Company. Mr Barry Eccleston, who joined the Board of Wizz
Air Holdings Plc on 1 June 2018, was appointed as the independent Non-Executive Director overseeing
engagement with employees effective from 1 January 2019. On 13 April 2021, Dr Anthony Radev took over
as the Company’s independent Non-Executive Director overseeing engagement with employees. In that role,
Dr Radev also sits on and reports regularly to the Sustainability and Culture Committee. During F22, Dr
Radev attended a number of engagement events with employees, as well as engaging through the Wizz
People Council members.
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88
Senior management team
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 June 7th, the Group’s senior management team, in addition to the Group Chief Executive Officer, is:
Wizz Air Holdings Plc:
Name
Michael Delehant
Jourik Hooghe
Wizz Air Hungary Limited:
Name
Robert Carey
Heiko Holm
Zsuzsa Poós
Johan Eidhagen
Alexandra Avadanei
Wizz Air Innovation Limited:
Name
Joel Goldberg
Owain Jones
Wizz Air UK Limited:
Name
Marion Geoffroy
Position
Executive Vice President, Operations
Executive Vice President, Finance
Position
President
Operations Officer
Customer and Marketing Officer
People and ESG Officer
Revenue Officer
Position
Digital Officer
Supply Chain and Legal 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
Mr Delehant joined Wizz Air in April 2021 as Executive Vice President, Operations. Mr Delehant is an American
citizen who has a bachelor’s degree 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 was the
Chief Strategy and Network Officer.
Jourik Hooghe, Executive Vice President and Group Chief Financial Officer
Mr Hooghe joined Wizz Air in February 2020 as Executive Vice President, Finance. 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
evolution 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. He is a Non-Executive
Director at Royal Mail PLC.
Johan Eidhagen, 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, Operations Officer
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89
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.
Owain Jones, Supply Chain and Legal 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.
Joel Goldberg, 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, 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.
Alexandra Avadanei, Revenue Officer
Ms Avadanei joined Wizz Air as a cabin attendant in January 2009. She moved into her first office role with
Wizz Air in 2013 and since then has held three senior management roles: Head of Customer Experience,
Head of Digital (Ancillary) Revenue, and most recently Head of Cabin Operations. Ms Avadanei has been
consistently top rated since joining the Company, and under her leadership Wizz Air became the number
one airline, globally, to reach highest ancillary revenue relative to total revenue during 2021. She obtained
her bachelor’s degree in Economic Studies and master’s degree in Marketing and Management from the
Academy of Business Studies in Bucharest, Romania. In her role as Revenue Officer Ms Avadanei is
responsible for pricing and revenue management, digital (ancillary) revenue, cargo, sales and e-commerce
areas.
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 laws (LLM) 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 (LLM) 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 Risk Committee, a Remuneration Committee, a Nomination and
Governance Committee and a Sustainability and Culture 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 Risk Committee
The Audit and Risk 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;
b) reviewing significant financial reporting issues and judgments which they contain having regard to
matters communicated to it by the auditors;
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90
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 Risk 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 Risk 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 Risk Committee shall ensure that the Company’s Senior Internal Audit Manager has the right
of direct access to the Chairman, the Audit and Risk Committee Chairman and the rest of the Audit and
Risk Committee, and is accountable to the Audit and Risk 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 Risk Committee shall oversee the selection process for
new auditors and if auditors resign the Audit and Risk 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 Risk 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;
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.
The Corporate Governance Code recommends that the Audit and Risk Committee (ARC) 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
2022, the membership of the Company’s ARC comprised three members. At the start of F22, the members
were Simon Duffy, Peter Agnefjäll and Enrique Dupuy de Lome Chavarri. The current ARC comprises
Enrique Dupuy de Lome Chavarri, Charlotte Pedersen and Anna Gatti, all of whom are independent Non-
Executive Directors, have appropriate knowledge and understanding of financial matters, and have
Wizz Air Holdings Plc Annual report and accounts 2022
91
commercial expertise gained in industries with similar characteristics, giving the ARC as a whole
competence relevant to the sector in which the Group operates. No members of the ARC 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 ARC.
The Audit and Risk 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 Risk Committee. The Company’s external auditors and the
Chief Financial Officer are invited to attend meetings of the Audit and Risk 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 Risk Committee’s meetings to report on internal audit matters. The
Company’s Head of Accounting also attends the Audit and Risk Committee’s meetings to report on accounting
matters. Following each meeting, the Chairman of the Audit and Risk Committee reports to the Board on the
significant items discussed during the Audit and Risk Committee’s meeting. The Audit and Risk Committee
held seven meetings during the 2022 financial year. In addition to the formal meetings, the Audit and Risk
Committee remains in regular contact with relevant management in connection with significant business
issues.
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 2022, the membership of the Company’s Remuneration Committee comprised three members. At
the start of F22, the members were Barry Eccleston, Peter Agnefjäll and Charlotte Andsager, all of whom
were independent Non-Executive Directors. Effective 13 April 2021, Peter Agnefjäll resigned as Non-
Executive Director and was replaced by Enrique Dupuy de Lome Chavarri. Effective 28 January 2022 and
following Mr Dupuy de Lome Chavarri’s appointment as Chairman of the Audit and Risk Committee, Anna
Gatti replaced him as a member of the Remuneration Committee. The Chairman of the Remuneration
Committee is Mr Eccleston.
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 2022 financial year as well as regular contact with
management and the Company’s advisers.
Nomination and Governance Committee
The Nomination and Governance Committee assists the Board in discharging its responsibilities relating to
the composition of the Board. The Nomination and Governance 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 have no other connections with the Company or with any of the
Directors.
The Nomination and Governance Committee gives full consideration and is formulating plans for 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 and Governance 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, the Nomination and Governance Committee evaluates the balance of
skills, knowledge, experience and diversity on the Board, and in light of this evaluation prepares 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 and Governance
Committee should be independent Non-Executive Directors. The Company’s Nomination and Governance
Committee is comprised of three members, namely William A. Franke, Barry Eccleston and Charlotte
Andsager. The Chairman of the Nomination and Governance Committee is Mr Franke. The Company
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92
therefore considers that it complies with the Corporate Governance Code’s recommendations regarding the
composition of the Nomination and Governance 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 and Governance 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 and by diversity targets in senior management incentive programmes that are directly
linked to diversity targets.
The Nomination and Governance Committee is scheduled to meet formally at least twice a year and otherwise
as required. There were six meetings of the Nomination and Governance Committee during the 2022 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.
Candidates for the Non-Executive Directors were interviewed by the members of the Nomination Committee.
Sustainability and Culture Committee
The Sustainability and Culture Committee shall assist the Board in reviewing the Company’s policies and
practice on sustainability. It ensures that the Company promotes long-term value creation and thus takes
environmental issues into account in defining the Company’s strategy by submitting recommendations to
the Board. In particular, the Committee shall: (a) review the Group’s sustainability strategy and its
implementation; (b) examine the extra-financial risks and specifically those relating to environmental, social
and societal issues; and (c) co-ordinate non-financial and diversity reporting processes in accordance with
applicable legislation and international benchmarks.
The Sustainability and Culture Committee shall also assist the Board in reviewing the Company’s policies and
practice on culture. It ensures that the Company promotes diversity in all areas and enables an effective
two-way communication between the management and employees thus taking social issues into account in
defining the Company’s strategy by submitting recommendations to the Board. In particular, the Committee
shall: (a) review the Group’s diversity strategy and targets and their implementation; and (b) review the
Group’s employee relations, in particular the effectiveness of the People Council. The Sustainability and
Culture Committee is chaired by Charlotte Pedersen, with the other members being Andrew S. Broderick
and Dr Anthony Radev. Outside its regular meetings, the members of the Sustainability and Culture
Committee meet regularly with management to discuss emerging issues as well as ongoing engagement
with the Company’s employees.
Attendance at Board meetings
The following table sets out the attendance by Directors at the Board and Committee meetings held during
the 2022 financial year. For completeness, the total for each Director represents the total number of
meetings during the year.
Board
attended/total
Audit and Risk
attended/total
Remuneration
attended/total
Nomination and
Governance
attended/total
Sustainability
and Culture
attended/total
Executive Director
József Váradi
Non-Executive Directors
William A. Franke
Simon Duffy**
Stephen L. Johnson
Barry Eccleston
Maria Kyriacou***
Andrew S. Broderick
Charlotte Pedersen
Charlotte Andsager
Enrique Dupuy de Lome Chavarri
Dr Anthony Radev
Anna Gatti****
11/11
11/11
10/10
10/11
11/11
1/1
11/11
11/11
11/11
11/11
10/11
5/5
8/8*
9/9*
6/6*
5/5*
—
7/7
—
—
1/1
—
8/8
—
2/2
—
1/1
—
—
—
9/9
1/1
—
—
8/9
8/8
—
1/1
6/6
5/5
—
6/6
—
—
—
1/1
—
—
—
—
—
—
—
—
5/5
5/5
—
—
4/5
—
*
**
***
****
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 put himself forward for re-appointment upon expiry of term on 28 January 2022.
Did not stand for re-election at 2021 AGM.
Joined effective 4 November 2021, and appointed to Audit and Risk Committee and Remuneration Committee
effective 28 January 2022.
Wizz Air Holdings Plc Annual report and accounts 2022
93
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
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 2022 Annual General Meeting.
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94
GOVERNANCE
REPORT OF THE CHAIRMAN OF THE AUDIT AND RISK
COMMITTEE
F21 and F22 have been two consecutive years of unprecedented hardship for the industry. COVID-19 and
the health-related travel restrictions have imposed a tremendous burden on the industry and on the
Company, and the outbreak of the war in Ukraine is adding to this challenge as we embark on F23. The
challenges presented for the industry and the Company underline the importance and value of the Company’s
approach to risk management and the importance of having financial discipline, resilience and agility. Also
this year, we have continued to re-examine all aspects of the way we govern and operate to ensure the
business continues to be run to the highest possible standards regardless of the external operating
environment.
During F22, we have evolved the focus of the Audit and Risk Committee, and its composition with the
appointment of new Board Directors.
1. The Audit and Sustainability Committee was renamed the Audit and Risk Committee. The sustainability
responsibility and focus of the Committee was transferred to a dedicated Committee, the Sustainability
and Culture Committee, chaired by my colleague Ms Charlotte Pedersen. Sustainability and culture are
two critical strategies for the Company and we want to ensure they become undisputed competitive
advantages for the Company. The sustainability responsibilities were transferred due to its growing
relevance to a special dedicated Sustainability Committee. For further perspective on the focus areas of
the Sustainability and Culture Committee please find on page 15 the report of the Chair of the
Sustainability and Culture Committee.
2. The composition of the Audit and Risk Committee changed during the year as follows:
a) on 20 December 2021, Mr Simon Duffy, Senior Independent Director and Chair of the Audit and Risk
Committee, elected not to put himself forward for re-appointment as Non-Executive Director beyond
28 January 2022. Following Mr Duffy’s decision, I accepted the mandate as Chair of the Audit and Risk
Committee effective 28 January 2022. I wanted to personally thank Simon for his service and personal
leadership on the Audit and Risk Committee; and
b) effective 28 January 2022, we welcomed Ms Anna Gatti to the Audit and Risk Committee as
independent Director.
The focus for the Audit and Risk Committee in the current volatile environment has been, and will be, to
ensure that financial policies and practices, internal controls and risk management systems, and the finance,
accounting and other organisations supporting these processes remain effective during this period of
continued challenges and rapid change. At the same time the Committee is evolving the processes and
systems of the Company to enable a continuous improvement in its performance and controls as the
Company doubles and triples its fleet in the next five and ten years. Liquidity management, hedging strategy,
financing, counterparty risk, overall enterprise risk management including how the Company manages cyber
risk, oversight of the Internal Audit function, the finance organisation and systems and the Company’s
relationship with its external auditors are key recurring topics on the agenda of the bi-monthly Audit and
Risk Committee.
Main activities of the Audit and Risk Committee during F22
Risk management
The Board has overall responsibility for the systems of risk management and internal control and for
reviewing their effectiveness. The Committee carries out the review on behalf of the Board 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 in line with the
established process and standards in place in previous years, for the year under review and up to the date
of the approval of the annual report:
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, reviews the risk register and the principal risk report at least semi-annually and shares it with
the Board;
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95
the Risk Council reports two times per year to the Committee on, among other things, proposed
changes to the principal risk report, including updates and consequent mitigating actions; and
the principal risk report, once approved by the Committee, is delivered to the Board as a whole for
approval.
During F21 and F22, the Company’s established risk management programme was tested in depth for
addressing a prolonged period of low levels of operation and financial income. In this unique 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.
For the first time in F21 the Company aligned its disclosure with the recommendations of the Task Force on
Climate-Related Financial Disclosures and during F22 we have further improved our disclosures. These
improvements versus last year include amongst others:
a direct integration of those scenarios in our mid-term plan, which serves as a basis for the Company’s
viability assessment and other analysis such as impairment testing of the fleet of the Company;
the appointment of an independent third party (Cambridge Centre for Risk Studies) to validate
strategic and principal risks in view of the increased volatility in our external environment and to better
define scenarios and risks within those scenarios to help the Company to manage and be more
resilient in this more volatile environment going forward; and
the appointment of an independent third party (Avieco, now Accenture) to validate our Scope 2 and
Scope 3 emissions which helped to inform and confirm our environmental sustainability strategy.
While the Company’s emission intensity (emission per passenger kilometre) is among the lowest in the
industry and on that critical metric the Company leads 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-saving initiatives and sustainable aviation fuels.
As previously mentioned, the Committee reviews the Company’s risk register twice per year and assesses
whether its risk management systems accord with the Financial Reporting Council’s (FRC’s) Guidance on
Risk Management, Internal Control and Related Financial and Business Reporting.
Both at the half-year review and at the full-year review, 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 itself.
Internal Audit
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: 1) internal audits over operational processes; 2) fraud investigation;
and 3) internal controls over financial reporting (ICFR). The plan is supervised 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 the completion of an internal audit or a fraud investigation, a report is compiled which sets out
findings, makes recommendations for control improvements and presents the improvement actions already
undertaken by management. These reports are submitted and presented to the Audit and Risk Committee
for discussion, input and approval. The Chairman subsequently provides the Board with detail of the internal
audit and fraud investigation reports completed.
Internal Audit tracks and verifies that any recommendations as a result of the Internal Audit Plan or the
external audit work are being implemented, and reports back to the Audit and Risk 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
work, the Committee concluded that the Company’s Internal Audit function is effective in the context of the
Company’s overall risk management system. During the review the Committee evaluated the completion of
the annual Internal Audit Plan, the quality and the context of the submitted internal audit reports with a
special focus on the findings and the risk mitigation suggestions, and the tracking and implementation of
these risk mitigation suggestions. As part of the evaluation, besides the international professional standards,
the feedback of the audited internal process owners was also taken into consideration.
Reporting procedures and 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. At least annually, the Board reviews the strategic plan for the
Company and, following that strategic review, in a separate review will review the mid-term financial plan
for the Company.
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The controls over the integrity of financial reports include amongst others reconciliations of key balances,
variance analysis to forecast and prior year results, and 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. Their submissions are thoroughly reviewed prior to inclusion and independently validated
by the Corporate Finance team and reviewed by the respective Officers.
The Company has continued to work to improve its financial reporting operation with a focus on digitisation
of manual transactions allowing higher pixelation of data and shorter lead times, leveraging the opportunities
highlighted as part of the Company’s ICFR work and leveraging some of the best technology available. For
F23 Ernst & Young was retained to continue the ICFR work supporting management and the Audit and Risk
Committee to maintain effective oversight on financial reporting, risk management and effective internal
controls and to prepare for and adopt new FRC financial control requirements over the course of F23.
As reported earlier within the F21 Annual Report and Accounts the Company received and responded to
enquiries from the FRC in respect of their review of the group's F20 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
As previously reported a number of enhancements were made in the F21 Annual Report and Accounts to
address the matters raised by the FRC. I am pleased to report that the Company received a final letter from
the FRC in July 2021 confirming their satisfaction with the responses provided and enhancements made to
the F21 Annual Report and Accounts and closed their enquiries. The enhancements made have been
continued in the preparation of the F22 Annual Report and Accounts where the matters considered continue
to be material.
The Audit and Risk 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 Audit and Risk
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.
With regard to our reporting procedures and the financial controls over these procedures, the Committee
concludes that the Company produces integer financial statements and other financial reporting and
disclosure, leveraging adequate and effective reporting processes, systems and controls.
Relationship with external auditors
As a normal responsibility of the Audit and Risk Committee, we have regular correspondence and discussions
with the engagement partner of the Group’s external auditors, 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 F22 financial year and
reviewed the reports of the auditors on the half-year review and annual results.
The audit of the F22 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 2022 audit, PricewaterhouseCoopers LLP have been the auditors of the Company
for 15 years uninterrupted, covering the years ended 31 March 2007 to 31 March 2022. The Committee
carefully considered the performance of the external auditors and the quality and effectiveness of the
external audit process. 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. The Committee has had a number of
interactions with PwC during the audit process and has obtained feedback from the group finance team on
their performance. Based on this the Committee noted that PwC’s focus was aligned to their audit plan,
which the Committee had previously approved. The Committee is satisfied that PwC has appropriately
challenged management, robustly but constructively, during the audit process and remained sceptical in
their approach as well as reporting their findings transparently to the Committee. As a result the Committee
has recommended their reappointment for the F23 audit. 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
Wizz Air Holdings Plc Annual report and accounts 2022
97
external auditors during the year (see Note 7 to the financial statements). The Audit and Risk Committee
was satisfied that non-audit services and fees did not compromise the objectivity and independence of the
auditors: (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 F22 were materially
less than the audit fees. Detail on non-audit fees paid to the auditors is set out on page 164.
Audit fees further increased in F22 compared to prior years. The increase reflects professional pay inflation
rates in the UK and in Hungary and the growth of the Company in size and complexity. For the first time,
TCFD compliance has been assessed by PwC. 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 re-appointed to perform the external audit services for five years (2018–2022). The Company
confirms compliance with the provisions of the Statutory Audit Services for Large Companies Market
Investigation Order 2014 relating to tendering. The Company tested the market early again in 2021 and
concluded that PwC will be proposed to remain as auditors and the next tender process will be run during
2025, in line with the need to change PwC as auditors as of 1 April 2026. Mr Richard Porter, the audit partner
in charge, will be replaced as of 1 April 2023 after having completed his maximum time with Wizz Air as
audit partner. The identification of Mr Porter’s successor is being worked in co-operation with PwC to ensure
proper handover time during F23.
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:
Continued 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. It
resulted in a second year of historic financial losses as revenue declined, and it resulted in higher leverage
compared to pre-COVID-19 levels as the Company issued a second EUR bond to secure liquidity whilst
it continued to invest in the expansion of its fleet, all the while successfully maintaining an investment
grade balance sheet.
The continued uncertainty around future trading prospects behind the geopolitical situation including the
impact on commodity markets required a review of the going concern assumptions 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.
The review of the hedging policy for jet fuel for the Company. The Board approved a no-hedge policy
following the outbreak of COVID-19 as a result of high trading uncertainty as a result of mobility
restrictions and the cost of hedges to the Company. The hedging policy is reviewed twice per annum. In
March 2022, the Board approved a revision of the no-hedge policy to cover up to 40 per cent of jet fuel
exposure for a rolling twelve months’ horizon under certain conditions, to allow to partially protect the
Company from material disruptions in the global supply chain for jet fuel, and, at the same time, not
needlessly expose the Company should there be new mobility restrictions in the future (e.g. because of
geopolitical conflicts or health-related mobility restrictions).
Sustainability: the Committee supported the alignment of the Company’s disclosure with the TCFD
recommendations to ensure transparency on the Company’s environmental strategy and progress
against its commitments. Also this year, we are disclosing the sustainability report integrated into the
annual report. The Committee believes that its work on sustainability including the 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.
Capital commitments and financing: the Committee undertook a detailed review of the Company’s
capital commitments including the new Airbus order announced in November 2021. The Committee and
the Board of Directors reviewed in detail the working capital assessment led by KPMG and J.P. Morgan
and the Shareholder circular and supported the proposed transaction concluding that the commitments
were appropriate and necessary to allow the Company to achieve its 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.
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The Committee reviewed treasury risk management policies and suggested enhancements around
controls over counterparty credit limits.
The Committee reviews the status of the Company’s tax returns and tax audits in the key jurisdictions
it operates in.
The Committee constructively challenged management’s initial assumptions and estimates for the
working capital assessment in relation to the supplemental Airbus order placed in F23.
The impact of the war in Ukraine: in February 2022, the airspace of Ukraine, Russia and Moldova was
closed until further notice as a result of the war in Ukraine. Four of Wizz Air’s aircrafts were stranded in
Kyiv and Lviv and at the date of this report these aircraft remain grounded on Ukrainian territory with
no immediate prospect of repatriation outside of Ukraine.
The Committee also considered whether the annual report, as written by the respective business or subject
matter owners, 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 and monitored during the year
The Committee noted the repayment of the £300 million commercial paper outstanding with the Bank
of England as part of the CCFF programme. The commercial paper was repaid on time in February 2022.
The Committee reviewed and supported a €500 million drawdown in January 2022 against its €3 billion
medium-term note programme. The four-year bond was issued at a 1.00 per cent coupon maturing in
January 2024.
The Company retained its investment grade rating with Moody’s (Baa3) and Fitch (BBB-).
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, even more so given a continued rise in cyber activity in the industry and in the Company’s
supply chain.
Enrique Dupuy de Lome Chavarri
Chairman of the Audit and Risk Committee
Wizz Air Holdings Plc Annual report and accounts 2022
99
GOVERNANCE
REPORT OF THE CHAIRMAN OF THE NOMINATION AND
GOVERNANCE COMMITTEE
Wizz Air’s Nomination and Governance Committee is comprised of three members. Until 28 January 2022,
the Committee members were Simon Duffy, then our Senior Independent Non-Executive Director, Barry
Eccleston and me. Following Simon Duffy’s retirement from the Board after eight years’ service, he was
replaced on the Nomination Committee by Charlotte Andsager. Barry Eccleston was appointed our new
Senior Independent Non-Executive Director.
The Nomination and Governance Committee assists the Board in discharging its responsibilities relating to
the composition of the Board and senior management. The Nomination and Governance 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 and Governance Committee
recognise the importance of diversity, including gender equality.
Main activities of the Nomination and Governance Committee during the 2022
financial year
During the year, the Nomination and Governance Committee receives regular updates from the Group CEO
on the performance of senior management and, during executive sessions, reflects on the performance of
the management team as a whole. If changes are to be made to the senior management team – whether,
ideally, making appointments through internal promotion or conducting searches on the external market -
then the Nomination and Governance Committee will consult on those changes with the Group CEO and
review candidate lists to ensure that due weight is given to strategic objectives such as increasing and
maintaining diversity within the management team. In the case of appointments of the most senior
members of management, members of the Nomination and Governance Committee will conduct interviews
with shortlisted candidates before employment offers are made.
Following the appointment of the Group’s President and the Group’s Executive Vice President, Operations
who took up their posts during the 2022 financial year, the Nomination and Governance Committee worked
on a number of key appointments for the Company.
On 13 April 2021, Dr Antony Radev was appointed to the Board of the Company as an independent Non-
Executive Director and took over the role of Non-Executive Director responsible for overseeing engagement
with employees. Mr Eccleston, who had previously filled that role, took over as the Chairman of the
Remuneration Committee. Dr Radev was also appointed a member of the Company’s Sustainability and
Culture Committee.
On 4 November 2021, Ms Anna Gatti was appointed to the Board of the Company as an independent Non-
Executive Director.
Following Mr Duffy’s departure from the Company, Mr Dupuy de Lome Chavarri was appointed Chairman of
the Audit and Risk Committee and Ms Gatti was appointed as an additional member of both the Remuneration
Committee and the Audit and Risk Committee.
On 1 April 2022, Ms Avadanei was appointed Revenue Officer, based in Budapest.
The Nomination and Governance Committee’s ongoing work
The Nomination and Governance 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. While increasing gender diversity remains a key part of the Company’s
sustainability strategy, as described elsewhere in the Annual Report, and is embedded in senior
management’s incentive programme, the Nomination and Governance Committee recognises the value of
broader diversity including nationality. With 50 nationalities already working for the Company – and with 8
nationalities represented both on the Board and with 12 on the Company’s strong Leadership Team – the
Nomination and Governance Committee will continue to ensure that the Company remains a diverse
organisation that represents the communities both within the Company and which we serve.
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The Nomination and Governance 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 and Governance 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 and Governance Committee
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101
GOVERNANCE
DIRECTORS’ REMUNERATION REPORT
On behalf of the Board, I am pleased to present Wizz Air’s Directors’ Remuneration Report for the financial
year ended 31 March 2022. I would also like to thank Enrique Dupuy de Lome Chavarri for his outstanding
contribution to the Remuneration Committee for the past year and welcome Anna Gatti to replace him,
effective 28 January 2022.
Resilience through COVID-19 and war in Ukraine
This year was the second year of material challenges linked to COVID-19; however, Wizz Air has continued
to place relentless focus on pursuing its strategic aims. Wizz Air is one of the leading ultra-low-cost carriers
in the world, and the strength of the business model and management team has positioned the Company
well while protecting value for Shareholders. In light of dampened demand due to lingering restrictions, the
Company declared a net loss for the financial year ended March 2022. Despite this, our investment-grade
balance sheet and strong liquidity position have allowed us to invest ahead of demand and aggressively
maintain cost and sustainability leadership throughout the pandemic.
During F22, the business focused its investments on network, fleet and people in order to lay the foundation
for the exceptional opportunity F23 will represent, while continuing to execute against its ambition to deliver
a 500 aircraft airline before the end of the decade. In November, we placed an order for up to 196 new
Airbus neo family aircraft, and throughout the year received a total of 25 A321neo aircraft deliveries.
We continue to further strengthen our network. We have increased from 25 bases pre-COVID-19 to 42 bases
today, and added over 400 new routes in total, significantly stepping up our positions in Italy, Albania and
Wizz Air UK. This expansion, in combination with the investment in a superior fleet from a cost, efficiency
and sustainability point of view, has further widened our competitive edge in a more diverse and scalable
network.
In February 2022, due to the outbreak of the war in Ukraine, all the Ukrainian bases were suspended for an
indefinite period, with the minimum closure being until the end of the calendar year. In addition to the closure
of Ukrainian, Moldovan and Russian airspace, the Company suspended all flights to and from Ukraine and
Russia while operating Moldova flights out of Iasi, Romania. The Company’s Q1 F23 capacity for the wider
network has been adjusted to grow 30 per cent from 2019 and Q2 F23 capacity is expected to grow 40 per
cent from 2019, all measured in ASKs. Our commercial plan maintains a capacity mix of c.65 per cent in our
core Central Europe region, c.30 per cent from Western bases and c.5 per cent from Abu Dhabi.
The Company prioritised the safety of employees during this time and invested significant effort to support
employees and their family members who were affected. Immediate priorities included the opportunity for
employees and their families to be evacuated via aircraft and then ground evacuation. In parallel a WIZZ
“Employee and Family Assistant Package” was introduced, which provided immediate and long-term support.
The People Council initiated a WIZZ Employee Solidarity Fund where colleagues could offer donations for the
Ukrainian crew members and their families, which was also contributed to by the Company. The Company
also announced 100,000 free seats available for Ukrainian refugees to book on all continental Europe flights
departing from Ukraine’s border countries (Poland, Slovakia, Hungary and Romania). The Company
continues to monitor the ongoing situation and is committed to prioritising the safety of employees and their
immediate family members while the situation continues.
In F21, 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. 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. Similar pay cuts were taken by the wider employee population. Whilst the salaries of
cabin crew and office employees (heads of functions and below) were restored to pre-reduction levels in
January 2021, and the pilot salary reduction was reversed to the original pre-COVID-19 levels in October
2021, the Chief Executive Officer and senior management voluntarily accepted a 7.5 per cent reduction in
base salary and the Company’s Non-Executive Directors accepted a reduction in fees of 7.5 per cent to
recognise on-going cost pressures during F22.
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102
F22 performance and remuneration outcomes
The strong leadership of the Board, the Chief Executive Officer and the management team during F22
underpinned the Company’s ability to address the impact of the pandemic. While the Company recorded a
net loss of €642.5 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 F22, the CEO’s focus was on cash preservation, cost focus and employee engagement. The CEO
spent 22 days in local meetings with employees to understand the challenges locally on the bases and in
order to be able to address those in a timely manner.
In keeping with the approach taken for F21, to recognise the cash constraints of the pandemic, the F22 STIP
opportunity for the CEO was capped at only 100 per cent of base salary (rather than the typical 200 per cent
of base salary). Performance targets for the F22 STIP were based on short-term cash targets – being
quarterly for Q1 and Q2 and half-yearly for the remainder of the year (H2) – which have been aggregated
over the year. The cash targets were achieved in full for Q1 and Q2, but the threshold level of cash
performance was not achieved for H2; therefore, the overall award to the CEO is 50 per cent of maximum.
Full details of the performance targets and outcome are provided on page 105.
Under the Long-term Incentive Plan (LTIP), the award vesting at the end of F22 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 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 F22 AGM
At the Annual General Meeting (AGM) held on 27 July 2021 all resolutions were approved by Shareholders.
While the Board was pleased that the majority of Shareholders approved all AGM proposals, the Company
conducted a consultation exercise following the meeting to solicit further feedback from Shareholders on the
Remuneration Policy and the VCP which were supported by 66.8 and 67.7 per cent of votes, respectively.
The Company received feedback that some Shareholders considered the maximum potential payout of the
VCP to be too high even as they recognised that the payout criteria were very stretched targets and would
generate 7 billion USD additional value for Shareholders. Shareholders were supportive of the other elements
of the Remuneration Policy.
The Board looks forward to maintaining an ongoing dialogue with Shareholders on remuneration and other
governance topics and 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 whilst acting in the best interest of all stakeholders.
Remuneration Policy update
At the time of finalising the Directors’ Remuneration Report for F21, the Company was still in the process of
consulting with Shareholders on our Directors’ Remuneration Policy for our Chief Executive Officer which was
subsequently included as a voting resolution at the F22 AGM. A new five-year CEO contract (incorporating
the new Directors’ Remuneration Policy put forward to the F22 AGM) was approved at the F22 AGM. The
Directors’ Remuneration Policy for the CEO and, importantly, the new long-term incentive VCP became the
cornerstones for a renewed five-year contract with the CEO, such that Mr Váradi will continue his
commitment to the business and its future success. Alongside the VCP the Company introduced two further
incentive schemes to align the total employee population of Wizz Air with the same challenging goals set
over the next five years. This included the Senior Leadership Growth Plan (SLGP) (approved by Shareholders
at the F22 AGM) and the All Employee Bonus Scheme.
For completeness, although the Remuneration Policy has already been approved by Shareholders, we have
re-published a full Remuneration Policy in this report providing details as disclosed and approved in the F21
Remuneration Report and the F22 Notice of AGM.
Wizz Air Holdings Plc Annual report and accounts 2022
103
Next steps
We hope you find this Remuneration Report clear in explaining the implementation of our Remuneration
Policy during F22 and our intended implementation for F23. We also remain committed to a continued
dialogue with Shareholders including the investor feedback received following the F22 AGM. We trust that
we have provided the information you need to be able to support this Directors’ Remuneration Report at the
Company’s F23 AGM.
Our ongoing dialogue with Shareholders and other stakeholders is valued greatly and, as always, we
welcome your feedback on this Directors’ Remuneration Report.
Barry Eccleston
Chair of the Remuneration Committee
8 June 2022
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104
Remuneration at a glance
CEO remuneration
Base salary
Short-term
Incentive Plan
(STIP)
Value Creation
Plan (VCP)
Maximum
opportunity
Performance
metrics
(weightings)
Opportunity
Performance
metrics
(weightings)
€664,050
F23 looking ahead
200% of base salary
F22 earnings
€664,050
Due to COVID-19 impact, the
CEO agreed to a 7.5%
reduction from the above salary
for F22
100% of base salary
Due to COVID-19 impact, the
CEO agreed to cap bonus at
half of normal amount for F22
Cash preservation and other
measures as appropriate
(100%)
Targets set on a quarterly basis
for H1 and a half-yearly basis
for H2
One-off award granted in F22 – five-year performance period with
40% vesting in year five, and 20% vesting per year in years six,
seven and eight
Maximum payment of £100 million for delivery of 20% share price
CAGR over five years
Profit as primary (80%) and
CASK (ex-fuel) as a secondary
metric (20%)
Targets set on yearly basis
Increase in share price (90%)
ESG (10%)
Share ownership guidelines
Post-cessation share ownership
guidelines
Holding requirement: 400% of base salary
Holding requirement: 100% of share ownership guideline for one
year after leaving and 50% of share ownership guideline for the
second year
What our CEO earned
How our CEO is aligned with Shareholders
Number of ordinary shares held by the CEO
(% of base salary)
CEO
400%
11211%
Share ownership
guideline (%)
0%
5000%
10000% 15000%
Actual shareholding calculated using number of Ordinary Shares
and the spot price at 31 December 2021.
Performance remains strong for Wizz Air (TSR) We are continuing to focus on our people
Total Shareholder Return Value of £100 investment over 7 years
£450
£400
£350
£300
£250
£200
£150
£100
£50
£0
2015
2016
2017
2018
2019
2020
2021
2022
Wizz Air
TSR Airlines Average
FTSE 250
FTSE 100
We are proud to employ aviation professionals of 75
different nationalities and deliver a superior service
across our network.
Our latest employee feedback survey showed
slightly lower overall satisfaction rate, which is
considered to result from the long, drawn-out
pandemic. We aim to bring stability to our
operations; however, the coronavirus is still with us
and strongly affecting our daily operations and
decision making.
The engagement survey participation rate was 67
per cent with a general satisfaction within the WIZZ
team at 70 per cent.
Wizz Air Holdings Plc Annual report and accounts 2022
105
Remuneration Policy
Introduction
This Directors’ Remuneration Policy was approved 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. At the time of finalising the Directors’
Remuneration Report for F21, the Company was still in the process of consulting with Shareholders on our
Directors’ Remuneration Policy for our Chief Executive Officer which was then included in the Notice to the
AGM and subsequently approved at the AGM in July 2021. For completeness this document includes a copy
of the full Remuneration Policy as approved by Shareholders.
How our Remuneration Policy addresses the factors set out in UK Corporate Governance Code
Clarity
Simplicity
Risk
Remuneration arrangements
should be transparent and
promote effective engagement
with shareholders and the
workforce
The Remuneration Committee has incorporated transparency into
the design and delivery of our Remuneration Policy. We believe our
remuneration structure is simple to understand both for
participants and shareholders.
We aim for disclosure of the Policy and how it is implemented to be
in a clear and succinct format.
Remuneration structures should
avoid complexity and their
rationale and operation should be
easy to understand
Our remuneration arrangements for our Executive Director are
simple and easy to understand, comprising fixed pay (base salary
and benefits), a short-term incentive plan (STIP) and a one-off
long-term arrangement in the form of a Value Creation Plan (VCP).
Remuneration arrangements
should ensure reputational and
other risks from excessive
rewards, and behavioural risks
that can arise from target-based
incentive plans, are identified and
mitigated
The Remuneration Policy includes a number of points to mitigate
potential risks:
There are defined limits on the maximum opportunity levels under
incentive plans
Performance targets are calibrated at appropriately stretching but
sustainable levels
The Remuneration Committee have the ability to use 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.
Incentive plans, including the VCP, include provisions to allow
malus and clawback to be applied, where appropriate
Recent introduction of in-employment and post-employment
shareholding requirements ensure that there is an alignment of
interests between our Executive Director and shareholders and
encourage sustainable performance.
We believe our disclosure is clear to allow shareholders to
understand the range of potential values which may be earned
under the remuneration arrangements. Our Remuneration Policy
clearly sets out relevant limits and potential for discretion.
The majority of our Executive Director’s potential reward is linked
to performance through the VCP with a clear line of sight between
business performance and the delivery of shareholder value. The
Remuneration Committee may adjust formulaic outcomes of
incentive arrangements to ensure that a fair and balanced
outcome is achieved, taking into account the overall performance of
the Company and the experience of Shareholders.
Predictability
Proportionality
The range of possible values of
rewards to individual directors and
any other limits or discretions
should be identified and explained
at the time of approving the policy
The link between individual
awards, the delivery of strategy
and the long-term performance of
the company should be clear.
Outcomes should not reward poor
performance
Alignment to
culture
Incentive schemes should drive
behaviours consistent with
company purpose, values and
strategy
The incentive arrangements and the performance measures used
are strongly aligned to those that the Board considers when
determining the success of the implementation of the Company’s
purpose, values and strategy.
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106
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 CEO and management have increased their engagement with employees through
scheduled floor talks, local base visits and the regular scheduled meetings with the People Council, which
represents all employees throughout the Company. In these meetings feedback on remuneration is tabled
for discussion and as a result of this, management and employees have been aligning on remuneration
principles in the Company. Management and employees have aligned on salary reduction principles
throughout the year as a result of these meetings, and the decision to bring back salaries to office employees
and cabin crew earlier than planned.
Future policy table: Executive Director
Element
Purpose and link to strategy
Operation and opportunity
Base salary
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.
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).
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.
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107
Short-term
Incentive
Plan (STIP)
To incentivise the successful
execution of the Company’s
business strategy.
To reward the achievement of
annual financial and
operational goals.
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
payout is 200% of base salary.
A threshold level of performance
is
specified in 50% of base salary;
if performance falls below this
level, there will be no payout for
that proportion of the award.
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% 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.
Wizz Air Holdings Plc Annual report and accounts 2022
108
Element
Long-term
Incentive
Plan (LTIP)
Purpose and link to
strategy
To align the Executive
Director’s long-term
interests with those of
Shareholders.
To reward strong
financial performance.
Note that the CEO will
not participate in the
LTIP for the entirety
of the Value Creation
Plan (VCP)
performance period –
see below.
Operation and opportunity
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% of base salary, with
up to 300% in exceptional
circumstances. Typically
25% of award value will vest
for threshold performance
with straight-line vesting to
maximum performance.
Value
Creation
Plan (VCP)
To retain the Chief
Executive Officer and
deliver Shareholder
value
One-off award of shares
granted in 2021. Award
vests after a five-year period
(40% of the overall award at
the end of year five and 20%
per year after years six,
seven and eight).
Overall payout is capped at
£100 million for delivery of
20% share price CAGR over
the five-year period.
Threshold is £20 million
payout for 10% CAGR over
the five-year period.
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
including ESG measures as selected
by the Committee in any given year.
Financial measures would typically
represent no less than 50% of
weighting.
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.
Based on a combined performance of
share price CAGR (90%) and ESG
criteria (10%), ESG criteria are only
paid if share price threshold is met.
ESG criteria: 5% based on CO2
emissions reduction goals by
2026/5% based on gender diversity
target of a minimum of 40% female
representation within management at
year end F26.
To ensure that vesting outcomes are
consistent with superior Shareholder
experience, the Remuneration
Committee has discretion to adjust
the level of vesting downwards
(including for the avoidance of doubt
to nil) where it considers
that the level of vesting resulting
from applying a performance
condition would not be a fair and
accurate reflection of the performance
of the Company, the Group, any
Group member or the participant
and/or such other factors as the
Remuneration Committee may
consider appropriate.
If the participant ceases to be
employed by reason of ill health,
injury, disability, death, retirement
with the agreement
of the Remuneration Committee, or
for any other reason at the discretion
of the Remuneration Committee, 40
per cent of the award will vest as
Wizz Air Holdings Plc Annual report and accounts 2022
109
soon as practicable after the cessation
date and 20 per cent in each of the
next three years, to the extent that
the performance conditions have
been met. The award will lapse in all
other circumstances.
Malus and clawback may be applied
at any time before an award vests or
for three years after the fifth
anniversary of the grant date in the
following circumstances: material
misstatement of the results of the
Company, errors or inaccuracies or
misleading information leading to
incorrect grant or vesting of the
award, gross misconduct, material
failure of risk management by the
Company, corporate failure (e.g.
administration or liquidation) or any
other circumstance which in the
opinion of the Remuneration
Committee could have a significantly
adverse impact on the
Company's reputation.
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 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 long-term strategy and Shareholder interests.
Difference in Remuneration Policy for Executive Director and employees
Remuneration for the Company’s senior management team and wider employee base have all been aligned
to the same five-year goals as the CEO under the Value Creation Plan.
The amounts of the components and vehicles granted vary for the individuals and the levels of the position
but the intended performance is mirrored from the top to the bottom of the organisation.
To facilitate this, at the F22 AGM, Shareholders approved the changes to Wizz Air’s Omnibus Plan including
the introduction of a Senior Leadership Growth Plan for senior managers. We have also introduced, for the
first time, an annual cash-based all employee bonus scheme.
In total this means that the goals of the Value Creation Plan awarded to the CEO are mirrored in those
awards provided to senior leaders and all employees. An overview of the alignment of these schemes is
provided below as approved by Shareholders at the F22 AGM.
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110
Details of implementation for the CEO can be found in the Annual Report on Remuneration and Application
of the Remuneration Policy in F23.
Senior Leadership
Growth Plan
(SLGP)
President and
EVPs/Officers
All Employee
Bonus Plan
All employees
below head level
One-off award of
shares (made in
2021)
Share price –
100% of award
Annual award in
cash
Share price –
100% of award
Five years
40% at end of year
five, 20% per year
at years six, seven
and eight
100% payout:
20% CAGR. 0%
payout: 15%
CAGR straight- line
vesting in between
One year
100% at end of
year
100% payout for
15% CAGR. 25%
payout for 7.5%
CAGR
Long-term
Incentive Plan
(LTIP)
Head level and
above (excluding
CEO)
Annual shares
award
Share price – 90%
of award
ESG criteria – 10%
of award
Three years
100% at end of
year three
Max payout: 15%
CAGR; 100% ESG
achievement.
Threshold (25% of
max): 7.5%
CAGR; 50% ESG
achievement.
Same ESG KPIs as
the VCP but with
targets set over
each three-year
period
Five annual awards
with one-year
cycles: 1H CY
2021–1H CY 2022,
etc. Annually to 1H
2026
One month's salary
Annual awards
with three-year
cycles, e.g. 1H CY
2021–1H CY 2024,
1H CY 2022–1H CY
2025, etc.
No cap on payout:
award values
capped 250%
normal max at
grant; 300%
discretionary max
at grant in
exceptional
circumstances
Base period for
calculation is VWAP
over 1H CY 2021 –
tested against
share price at end
of period VWAP 1H
CY 2026
Cap at 20% CAGR:
€6 million for
President and
EVPs, €4 million for
Officers cap to be
quoted in £GBP
based on exchange
rate at the time of
the award
Plan
Value Creation Plan
(VCP)
Eligibility
CEO
Frequency
One-off award of
shares (made in
2021)
Performance criteria Share price – 90%
Performance period
Vesting
Performance/payout
curve
Base period
Cap on payout
Shareholder
ownership
of award
ESG criteria – 10%
of award
Five years
40% at end of year
five, 20% per year
at years six, seven
and eight
£100 million
payout for 20%
five-year CAGR
£20 million
threshold payout
for 10% five-year
CAGR ESG criteria
is only paid if share
price threshold is
met ESG criteria.
5% based on CO2
emissions
reduction goals by
2026/5% based on
gender diversity
target of minimum
of 40% female
representation
within
management at
year end F26
Base period for
calculation is VWAP
over 1H CY 2021 –
tested against
share price at end
of period VWAP 1H
CY 2026
Cap of £100 million
for 20% CAGR
New shareholding
requirement of
400% of salary.
Post-cessation
requirement equal
to 400% year one
and 200% for the
second year
Wizz Air Holdings Plc Annual report and accounts 2022
111
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.
Non-Executive Director remuneration
The Non-Executive Directors are only paid 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 Chairs of the Audit and Risk
Committee, the Sustainability and
Culture Committee and the
Remuneration Committee and the
Senior Independent Director. Fees
for Non-Executive Directors, other
than the Chairman, are determined
by the Chairman and the Executive
members of the Board. Fees for the
Chairman are determined by the
Remuneration Committee without
the Chairman being present. In both
cases, there is flexibility to increase
fee levels to 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.
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. 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.
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112
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.
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 LTIP and STIP, if an Executive Director leaves, the default position is that no payment will be
made of any outstanding share awards and awards will lapse in full. In order to receive a payment under the
STIP or any unvested LTIP awards the Board would need 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 STIP scheme, and, subject to performance conditions, a pro-rata amount
of their LTIP 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 STIP and LTIP 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:
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)
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.
Wizz Air Holdings Plc Annual report and accounts 2022
113
Consideration of Shareholder views
The Remuneration Committee and the Board consider Shareholder feedback received at the AGM each year
at a meeting immediately following the AGM. This, and any additional feedback received from Shareholders
from time to time, is then considered by the Remuneration Committee as part of the Company’s annual
review of remuneration arrangements.
Last year, the Remuneration Committee engaged with key Shareholders to understand the rationale behind
voting (in particular in relation to the Directors' Remuneration Policy and the Wizz Air Value Creation Plan
(VCP)). The Company received feedback from some Shareholders that they considered the maximum
potential payout of the VCP to be excessive. Shareholders were broadly supportive of the other elements of
the Remuneration Policy. Understanding that Shareholders and other representative bodies are fine-tuning
their policies regarding the adoption of VCPs, particularly after the increase in their adoption during the 2021
AGM season, the Board looks forward to maintaining an ongoing dialogue with Shareholders on remuneration
and related issues.
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.
Annual Report on Remuneration
The members of the Remuneration Committee during F22 were Barry Eccleston (Chairman), who joined the
Committee in September 2020; Charlotte Andsager, who joined in November 2020; and Enrique Dupuy de
Lome Chavarri, who joined in March 2021. Effective from 28 January 2022, Mr de Lome Chavarri’s
membership of the Company’s Remuneration Committee was taken over by Anna Gatti.
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 92
to 93 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, Owain Jones, the Chief
Supply Chain and Legal 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 was re-contracted as remuneration consultant following a competitive
tender process in 2020. They attend Committee meetings as and when required. During F22, Willis Towers
Watson received fees based on time and materials totalling £396,687 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 F22.
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 2021 AGM all resolutions proposed were approved by Shareholders. Two of those resolutions, the
Directors’ Remuneration Policy and the Wizz Air Value Creation Plan (VCP), were supported by 67 per cent
and 68 per cent of Shareholders, respectively. Consequent to this vote, the Company engaged with
Shareholders to solicit their feedback on voting at the AGM. In advance of the 2021 AGM, the Wizz Air Board
engaged in an extensive consultation with a majority of Shareholders to discuss the proposed Remuneration
Policy and VCP, and to set out the primary drivers of the proposals. Following multiple rounds of Shareholder
engagement, the Board incorporated Shareholder feedback into the final proposals put to Shareholders at
the AGM. While the Board was pleased that the majority of Shareholders approved all AGM proposals, the
Company conducted a further consultation following the meeting to solicit further feedback from
Shareholders on the Remuneration Policy and the VCP. As outlined, the structure of the VCP was updated to
Wizz Air Holdings Plc Annual report and accounts 2022
114
incorporate Shareholder feedback prior to the AGM. Despite recognising the stretch nature of targets and
the role of the plans in retaining and incentivising the senior leadership team, some Shareholders reiterated
during the post-AGM consultation that they considered the maximum potential payout to be excessive.
Shareholders were broadly supportive of the other elements of the Remuneration Policy. The Board believes
it has taken the right decisions in the interest of the business and its stakeholders as a whole, and
implemented a series of plans which will incentivise superior performance, from an all-time high share price,
over the next five years. The Board, through the Remuneration Committee, is committed to structuring
incentive arrangements that serve to support the business in retaining key talent and delivering strong
returns to Shareholders, while remaining conscious of the wider stakeholder experience and business
performance.
Details of the voting outcomes are provided in the table below:
Votes for
Votes against
Total votes
Votes withheld
Votes for
Votes against
Total votes
Votes withheld
Annual Report on Remuneration
(2021 AGM)
16,269,317
187,688
16,457,005
10
98.86% 34,412,174
1.14% 36,735,491
71,147,665
108,709
Annual Report on
Remuneration
(2020 AGM)
48.37%
51.63%
Wizz Air Value Creation Plan
11,118,557
5,338,452
16,457,009
6
67.56% 10,994,259
5,462,746
32.44%
16,457,005
10
Directors’ Remuneration
Policy (2021 AGM)
66.80%
33.20%
Executive Directors’ remuneration
Full details of the Chief Executive Officer’s remuneration for F22 and F21 are set out below (in Euros):
Single total figure of remuneration table
József Váradi
Fees and
salary
€
Benefits
€
STIP
€
LTIP
€
Pension
€
Total
€
Total fixed
remuneration
€
Total variable
remuneration
€
2022
614,246
2021
517,980
—
—
307,123
1,088,027
— 2,009,396
614,246
1,395,150
—
1,102,429
—
1,620,409
517,980
1,102,429
The Chief Executive Officer has voluntarily accepted a 7.5 per cent reduction of base salary for F22,
previously 22 per cent average reduction for F21, from his contracted base salary of €664,050 in response
to the long, drawn-out COVID-19 pandemic resulting in a total of €614,246 salary. The LTIP for F22 reflects
the award with performance period ending March 2022 and has been calculated on the 23,398 shares that
are to vest in June 2022 using the Q4 average share price of €44.9, to be amended upon vesting in the
summer of 2022, with the difference to be adjusted in the award value for the subsequent year.
The 2022 financial year was the second year of material challenges linked to COVID-19; however, the
Company has continued to place relentless focus on pursuing its strategic aims. In light of dampened demand
due to lingering restrictions, the Company declared a net loss for the financial year ended March 2022.
Despite this, our investment-grade balance sheet and strong liquidity position have allowed us to invest
ahead of demand and aggressively maintain cost and sustainability leadership throughout the pandemic. As
a result, the STIP F22 did not consist of annual targets but was based on short-term, quarterly and half-
yearly targets. These targets have aggregated over the fiscal year into a STIP payout of the two quarters
and one half year combined according to the normal schedule for the financial year. Reflecting the persisting
extraordinary circumstances, 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. Half-yearly target
for H2 F22 to start phasing out the COVID-19 structure, including execution KPI to ensure business continuity
without upside and only downside collar. The Chief Executive Officer has been measured for his STIP payout
against one performance KPI: total Company cash. More information on the target and achievement result
can be found in the table below. No payment is made for a below the target level of achievement.
Cash target (in € million)
Actual (in € million)
Achievement %
Q1
1,485
1,663
100%
Q2
1,639
1,670
100%
H2
1,700
1,379
0%
The Company cash targets were fully achieved in the first two quarters while the second half year cash target
failed. As for the second half year the cash target achievement was considered as a threshold; the final STIP
payout was based only on the achievements of the first two quarters.
Wizz Air Holdings Plc Annual report and accounts 2022
115
The evaluation of the Chief Executive Officer’s personal performance during F22 has primarily been measured
against his response and leadership throughout another challenging year during COVID-19. He has managed
the crisis as it has continued to evolve over the course of the full financial year by swiftly adjusting capacity
to match demand in the event of both upside and downside, while focusing on maintaining the Company’s
strong cash position.
At the same time the Company has leveraged its investment-grade balance sheet to continue investment
into its fleet, network and people on its path to delivering a 500 aircraft airline by the end of the decade.
Wizz Air significantly grew its presence in Italy, Albania and the UK, while closing the first successful year of
operations at Wizz Air Abu Dhabi. In addition to launching a new airline and aggressively expanding into new
markets, Wizz Air continued with its aircraft delivery schedule and placed an order for up to 196 new Airbus
A321neo family aircraft, further cementing its position in cost, efficiency and sustainability leadership within
the industry.
The Chief Executive Officer also dedicated focus and attention throughout the year to listen to the employee
feedback. The last Company-wide engagement survey was launched in November 2021 with a participation
rate of 67 per cent. The results of the survey showed the highest score in management support compared
to other drivers – 70 per cent engagement score (9 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 3pp reaching 30 per cent. Management Team
diversity improved 7pp to reach 34 per cent. Office female gender diversity improved by 3pp reaching 40
per cent. Flight crew female ratio stayed at 4 per cent and cabin crew decreased by 5pp to 70 per cent.
LTIP vested during F22
An 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 was 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; and
the TSR group consists of the following entities: Ryanair and easyJet (50 per cent weighting); and
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; and
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); and
under the Long-term Incentive Plan, the award vesting at the end of F21 paid out at 50 per cent of
maximum. As the Company has not been profitable since the beginning of the COVID-19 pandemic,
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, 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.
VCP granted in F22
The one-off VCP award was made during F22 and included an award of 837,943 shares. In relation to VCP
awards, the award will be subject to the following performance conditions:
a)
20 per cent compound annual growth rate (CAGR) in the Company's share price over the next five-
year period (90 per cent weighting):
-
the threshold growth level is 10 per cent CAGR for which 20 per cent of the maximum award vests
with straight-line vesting in between these two points. Base period for calculation is volume weighted
average share price (VWAP) over 1H CY 2021 – tested against share price at end of period VWAP
1H CY 2026; and
Wizz Air Holdings Plc Annual report and accounts 2022
116
b)
if the minimum threshold CAGR of 10 per cent CAGR is achieved then up to 10 per cent of an award
may vest based on the achievement of ESG targets, the criteria for which will be people and
environment, both weighted at 5 per cent. If the 10 per cent CAGR is not achieved, no ESG portion of
the award will vest.
No further LTIP awards will be made to the CEO over the course of the VCP performance period.
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 F21 or F22.
Historical TSR performance1 – value of hypothetical £100 holding
The following performance graph shows the Company’s total shareholder return compared to the FTSE 250
index and the FTSE 100 index, as well as a selection of airlines for the financial years following IPO. TSR is
defined as share price growth plus reinvested dividends.
Total Shareholder Return Value of £100 investment over 7 years
£450
£400
£350
£300
£250
£200
£150
£100
£50
£0
2015
2016
2017
2018
2019
2020
2021
2022
Wizz Air
FTSE 250
TSR Airlines Average
FTSE 100
1 Growth in the value of a hypothetical £100 holding over seven years, in comparison with the FTSE 250, the airline peer
group used for measurement of relative TSR and the FTSE 100. 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, the FTSE 100 index and a selection of airline peers. 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 and 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.
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
F13
F14
F15
F16
F17
F18
F19
F20
F21
F22
Single figure
of total
remuneration
Euro
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
2,009,396
Performance
STIP
achieved
against
maximum
possible
0%
97%
91%
95%
48%
58%
26%
40%
0%1
50%
LTIP shares
vesting
against
maximum
possible1
n/a
n/a
n/a
n/a
n/a
n/a
100%
50%
50%
50%
1 There were no options vesting in F16–F18 under either the old (ESOP) or the new (LTIP) share option plan.
In F21, although targets were achieved in three out of the four quarters based on the cash targets, 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 was in line
with the overall industry and Company performance for the twelve-month relevant period which was heavily impacted by
the COVID-19 pandemic and the significant drop in air traffic.
Wizz Air Holdings Plc Annual report and accounts 2022
117
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 in
F22, between the year ended 31 March 2021 and the year ended 31 March 2022, as well as F21, between
the year ended 31 March 2020 and the year ended 31 March 2021, for the Directors, compared to the
average earnings of all other Wizz Air employees.
József Váradi
William A. Franke
Stephen L. Johnson
Simon Duffy9
Andrew S. Broderick
Barry Eccleston
Peter Agnefjäll10
Maria Kyriacou10
Guido Demuynck5
Susan Hooper6
Charlotte Pedersen3
Enrique Dupuy de Lome Chavarri4
Charlotte Andsager4
Dr Anthony Radev7
Anna Gatti8
Average pay based on all
employees2
Salary
and fees
19%
19%
20%
9%
28%
32%
(98%)
(78%)
—
—
60%
158%
148%
—
—
30%
F22
Benefits1
0%
0%
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%
0%
0%
100%
Salary and
fees
(22%)
(20%)
(21%)
(21%)
(14%)
(27%)
(26%)
(26%)
(83%)
(87%)
—
—
—
—
—
(42%)
F21
Benefits1 Annual STIP
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
(100%)
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
(100%)
1 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.
2 The average employee figures are based on the average earnings of Group-level employees as Wizz Air Holdings Plc has no
employees.
3 Joined as of 2 June 2020.
4 Joined as of 4 November 2020.
5 Resigned as of 28 July 2020.
6 Resigned as of 3 June 2020.
7 Joined as of 13 April 2021.
8 Joined as of 4 November 2021.
9 Resigned as of 28 January 2022.
10 Resigned as of 27 July 2021 (did not stand for re-election).
The overall increase of 19.0 per cent for the CEO, versus 22.0 per cent decrease in F21, in the Chief Executive
Officer’s base salary reflected the voluntary reductions he accepted as a continuous response to the long,
drawn-out pandemic including 22.0 per cent decrease in F21 and 7.5 per cent decrease in F22. The STIP
payment for F22 resulted in a 100 per cent increase 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, reduced all fees by 7.5 per cent between 1 April 2021 and 31
March 2022, versus 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 increase in their annual compensation. Similar
pay cuts were taken by the wider employee population. The salaries of cabin crew and office employees
(heads of functions and below) were restored to pre-reduction levels in January 2021, and the pilot salary
reduction was reversed to the original pre-COVID-19 levels in October 2021.
There were no dividends or share buybacks in either F22 or F21, and therefore disclosure of “relative
importance of spend on pay” has not been included. There were no scheme interests awarded in either F22
or F21.
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:
Wizz Air Holdings Plc Annual report and accounts 2022
118
Single total figure of remuneration table – audited
Salary and fees
€
Benefits
€
STIP
€
LTIP
€
Pension
€
Total
€
2022
2021 2022
217,375 183,104 —
61,625 —
84,026 —
14,521 —
10,625 —
61,625 —
2021 2022
—
—
—
—
—
—
—
—
—
—
—
—
2021 2022
—
—
—
—
—
—
—
—
—
—
—
—
2021 2022
—
—
—
—
—
—
—
—
—
—
—
—
2021
2022
— 217,375
— 74,000
— 91,177
—
—
—
—
— 78,625
74,000
91,177
—
—
78,625
William A. Franke
Stephen L. Johnson
Simon Duffy7
Guido Demuynck1
Susan Hooper2
Andrew S.
Broderick
91,831
Barry Eccleston
Peter Agnefjäll8
1,002
Maria Kyriacou8
13,577
Charlotte Pedersen3 88,260
81,706
Enrique Dupuy de
Lome Chavarri4
Charlotte Andsager4 78,625
Dr Anthony Radev5
77,888
Anna Gatti6
34,533
Total
69,594 —
61,625 —
61,625 —
55,250 —
31,663 —
31,663 —
— —
— —
928,599 726,946 —
2021
183,104
61,625
84,026
14,521
10,625
61,625
69,594
61,625
61,625
55,250
31,663
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 91,831
—
1,002
— 13,577
— 88,260
— 81,706
— 78,625
— 77,888
— 34,533
— 928,599
31,663
—
—
726,946
1 Resigned as of 28 July 2020.
2 Resigned as of 3 June 2020.
3 Joined as of 2 June 2020.
4 Joined as of 4 November 2020.
5 Joined as of 13 April 2021.
6 Joined as of 4 November 2021.
7 Resigned as of 28 January 2022.
8 Resigned as of 27 July 2021 (did not stand for re-election).
Total Directors’ remuneration (Executive and Non-Executive)
Total remuneration of Directors for F22 was €2,937,995 (2021: €2,347,355). 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 increase versus F21 was driven by two factors: the continued, but lower voluntary COVID-19
reduction on the Chief Executive Officer’s base salary (7.5 per cent reduction) and on the Non-Executive
Directors’ fees (7.5 per cent reduction), and the STIP payout as a result of the overall industry and business
performance throughout the year.
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 Value Creation Plan.
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 of 31 March 2022 are set out below:
Wizz Air Holdings Plc Annual report and accounts 2022
119
Directors and connected persons’ interests in shares
Direct ownership
Interests
Director1
William A. Franke2
József Váradi3, 4
Stephen L. Johnson
Simon Duffy
Barry Eccleston
Number of
Ordinary Shares
112,917
—
52,750
7,097
5,000
Number of Ordinary
Shares
24,759,645
1,399,144
—
—
—
Number of Ordinary
Shares (if full principal
of outstanding
convertible notes is
fully converted)
24,246,715
—
—
—
—
Total Ordinary Share
interests
24,872,562
1,399,144
52,750
7,097
5,000
1 Directors not included in the table did not have any direct ownership or interest in shares as at 31 March 2022.
2 Mr Franke is deemed to be interested in all of the Ordinary 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 20,141 LTIP shares vested but not exercised yet, in addition to his 1,399,144 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 2022 to the date of the notice
of the 2022 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 F23
a) Chief Executive Officer’s base salary
There is no planned increase to the Chief Executive Officer’s base salary for F23. 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 voluntary salary reduction, in place to recognise
cost pressures, will be removed and full salary will be reinstated.
b) Short-term Incentive Plan
The Chief Executive Officer is eligible to receive a cash bonus of up to 200 per cent of base salary for F23.
The amount payable will depend on the achievement of profit targets (weighted 80 per cent of the overall
award) and CASK (ex-fuel) as a secondary metric (weighted 20 per cent of the overall award). Achieving the
minimum amount set as the net profit target will also count as the threshold for achieving the cascaded
CASK.
Targets are set on yearly basis and were decided at the start of the performance period; however, they are
not yet disclosed due to commercial sensitivity but will be disclosed retrospectively in next year’s
Remuneration Report alongside the outcome.
c) Long-term incentive awarded to Chief Executive Officer
As referenced in our Policy the Chief Executive Officer will not receive any other long-term incentive awards
for the entirety of the Value Creation Plan performance period; as such, no LTIP will be made to the Chief
Executive Officer in F23.
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 2023. Since these fees have remained unchanged since 2018, these fees will be reviewed
in the course of F23.
Enrique Dupuy de Lome Chavarri, as Chairman of the Audit 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 and an additional fee of €10,000 per annum for the role of Senior Independent
Director.
Charlotte Pedersen, as Chair of the Sustainability and Culture Committee, receives an additional fee of
€12,500 per annum for taking on that role.
Dr Anthony Radev receives an additional fee of €2,500 per employee engagement event attended, as the
independent Non-Executive Director overseeing engagement with employees.
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.
The Non-Executive Directors will also be reimbursed for all proper and reasonable expenses incurred in
performing their duties.
Wizz Air Holdings Plc Annual report and accounts 2022
120
Since the Company’s performance has increased since last year, the Board has taken a decision to stop the
7.5 per cent reduction applied on the annual fees paid to the Non-Executive Directors in F22 and revert back
to full year fees for F23.
Other disclosures
Chief Executive pay ratio
The table below sets out the Chief Executive Officer to worker pay ratios for the year ending March 2022.
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 121.
In calculating the figures, the following considerations were made:
the single total figure of remuneration of our colleagues was calculated using a year's worth of
remuneration up to and including March 2022 payroll;
where employees joined part way through the reporting period, pay was pro-rated to determine the full
year equivalent; and
this data then identified those employees at the 25th (lower quartile), 50th (median) and 75th (upper
quartile) percentile points.
Financial year
2022
2021
Method used
Option A
Option A
P25 (lower quartile)
80:1
80:1
Pay ratio
P50 (median)
59:1
62:1
P75 (upper quartile)
29:1
37:1
The table below summarises the identified employees in 2022:
Financial year
Base pay
Total pay
P25 (lower quartile)
All employees
P50 (median)
Base pay
Total pay
Base pay
Total pay
P75 (upper quartile)
2022
2021
€ 13,479 €24,981
€ 15,670 €34,022
€ 43,101 €70,413
€16,269
€24,569
€24,044
€31,587
€36,235
€53,903
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 F23, the calculations reflect both the impact of
the reduced total pay levels for employees during the furlough period up to October 2021 and the
corresponding voluntary salary decreases and significant total pay opportunity reductions for the Chief
Executive Officer and are consistent with our Company’s 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 the Swiss branch of Wizz Air Holdings Plc (“the
Company”) 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 for
a period of up to 24 months from 1 January 2021 with a principal place of work being London, the United
Kingdom, instead of Budapest, Hungary. During the secondment the employer continues to be the Company
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 the Company or any of its business partners in the EU as well as those non-
EU countries where the Wizz Air Group 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.
Wizz Air Holdings Plc Annual report and accounts 2022
121
Non-Executive Directors
The Company entered into letters of appointment with Mr William A. Franke 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. The term of each re-appointment was
thereafter renewed on a rolling one-year basis, subject to re-election at the Company’s Annual General
Meeting. Mr Barry Eccleston and Mr Andrew Broderick were respectively appointed on 1 June 2018 (and
thereafter renewed on a rolling one-year basis subject to re-election at the Company’s Annual General
Meeting) and 16 April 2019. On 1 June 2021, Mr Barry Eccleston’s appointment was extended for a further
one year. Ms Charlotte Pedersen was appointed on 20 May 2020. Ms Charlotte Pedersen’s appointment was
extended on 1 June 2021 (on a rolling one-year basis subject to re-election at the Company’s Annual General
Meeting) Mr Dupuy de Lome Chavarri and Ms Charlotte Andsager were appointed on 4 November 2020. Dr
Anthony Radev was appointed on 13 April 2021. Ms Anna Gatti was appointed on 4 November 2021.
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 by the Nomination and Governance Committee.
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.
On behalf of the Board
Barry Eccleston
Chairman of the Remuneration Committee
8 June 2022
Wizz Air Holdings Plc Annual report and accounts 2022
122
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 2022.
Results and dividend
The results for the year are shown on page 131.
The Directors do not recommend the payment of a dividend (2021: 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:
József Váradi;
William A. Franke;
Stephen L. Johnson;
Simon Duffy (resigned with effect from 29 January 2022);
Barry Eccleston;
Peter Agnefjäll (resigned with effect from 13 April 2021);
Maria Kyriacou (resigned with effect from 28 July 2021);
Charlotte Pedersen;
Andrew S. Broderick;
Charlotte Andsager;
Enrique Dupuy de Lome Chavarri;
Dr Anthony Radev (appointed with effect from 13 April 2021); and
Anna Gatti (appointed with effect from 4 November 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 62 to 77.
Emerging and principal risks and uncertainties facing the Group are described on pages 70 to 77. 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 2022, the Group held cash and cash equivalents of €766.6 million (total cash of €1,378.8 million
including €450.0 million of short term cash deposits and €162.2 million of restricted cash), while net current
assets were €145.5 million. In legal terms, the external borrowings of the Group consist of: €500 million
bonds maturing in January 2024, €500 million bonds maturing in January 2026 and convertible debt with a
balance of €26.4 million. In accounting terms a further €2,926.9 million are presented as borrowings in
relation to future commitments from lease contracts. These borrowings do not contain any financial
covenants.
The Group operates using a three year planning cycle. The Directors have reviewed their latest financial
forecasts for the next twelve months from the date of signing these financial statements, plans to finance
committed future aircraft deliveries (see Note 33) due within this period that are currently unfinanced and
available committed financing for aircraft. After making enquiries and testing the assumptions against
different forecast scenarios including a severe but plausible downside scenario, the Directors have satisfied
themselves that the Group is expected to be able to meet its commitments and obligations as they fall due
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 develop
over the next twelve months from the date of signing this report. Wizz Air expects to very quickly return to
full utilization of its fleet with higher load factors and RASK levels improving compared to F20. Progressive
pass-through of pricing combined with anticipated retirement of cost-prohibitive capacity in the industry
would allow pricing to stabilize around a new-found equilibrium, compensating for continuing high fuel and
other inflation costs. In addition, the Directors have also modelled a downside scenario that assumes an
even higher price for jet fuel and a stronger USD, whilst at the same time modelling a weaker trading
Wizz Air Holdings Plc Annual report and accounts 2022
123
environment (simulated by a lower RASK for the entire planning period). In this scenario the Group is still
forecasting significant liquidity throughout this period.
The Directors also considered the impact of climate change over the time period and concluded that it was
unlikely that material physical or transition risks that are described in our Sustainability Report page 15
would arise over this period. In preparing its base and downside forecasts the Directors also took into account
the impact of the war in Ukraine and the four aircraft stranded in Ukraine (see Note 14) and no material
impact is forecast. The Directors have assumed that there will be no further significant disruption caused by
the COVID-19 pandemic of the magnitude previously experienced.
Accordingly, the Directors concluded it was correct to retain the going concern basis of accounting in
preparing the financial statements.
Subsequent events
Wizz Air announced on 17 May 2022 its intention to establish a new airline subsidiary in Malta. Wizz Air is
constantly evaluating the structure of its business and exploring options to establish new AOCs and bases in
Europe and beyond. The successful establishment of Wizz Air Malta later this year will help to reinforce our
position and support our expansion plans in Europe.
On 3 June 2022, Wizz Air announced it will cancel all Wizz UK flying from its Doncaster Sheffield Airport base
from 10 June 2022. Pilots and cabin crew have been offered the opportunity to fly out of another base in
the UK.
Viability
In accordance with Provision 31 of the UK Corporate Governance Code (2018), the Directors have assessed
the prospects and 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 financial planning process
traditionally covers three years. Beyond the three-year horizon, the Directors engage at least once per year
in a longer term Group strategy review.
Assessment of prospects
The Group’s prospects are assessed by management and the Board primarily through the strategic and
financial 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 top-down 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 F23. 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; 2) leveraging on the historic strength of a faster growing
Central and Eastern Europe, where travel for work or to visit family and friends is becoming an increasingly
essential feature of life, but at the same time complementing this with a more focused footprint in the West
and expansion further East – diversification is key to buffer demand shocks in part of the network with the
rest of the network; 3) a low-cost base offering a sustainable competitive advantage and allowing the
Company to sustain low fares to stimulate demand; and 4) 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.
'The base plan includes the forecast impact of climate change over this period being principally the impact
of new regulation (EU FitFor55 package) with kerosene jet fuel taxation introduced and blending mandates
on sustainable aviation fuel. The base plan also includes the Company's plan to continue to introduce more
fuel-efficient aircraft into the fleet in line with its order book.
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. The specific parameters that are stress tested are: the yield
performance of the business (impacting RASK); the cost of commodities (jet fuel price and price of carbon
credits); and the ability to fully utilize the fleet, which are all highlighted as part of the Company’s principal
risks. In each of these scenarios, the Directors additionally reviewed the impact of other emerging and
principal risks that could prevent the Group from delivering on its strategy and financial targets, as
summarised on pages 70 to 77 in the Strategic Report. In doing so, they paid particular attention to the
potential impact of climate scenarios as outlined on pages 27 to 45, modelling these impacts in terms of
Wizz Air Holdings Plc Annual report and accounts 2022
124
impact on the Company’s earnings and cash flow. The Directors assessed these potential impacts, and
governmental policies and/ market attractiveness in key markets were considered the most plausible risks
in terms of both likelihood and potential impact over the next three years.
The results of this stress testing showed that, due to the Group’s strong competitive cost position and its
existing cash reserves, it would be able to withstand the impact of these downside scenarios over the period
of the financial forecasts, and it equally highlighted that the continued disciplined management of liquidity
in the most stressed scenario is crucial to withstand prolonged periods of adversity, as already demonstrated
during the pandemic.
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 2025. In making this
assessment the Directors have assumed that the existing €500m bond expiring in January 2024 will be
refinanced; that there is continued access to aircraft financing, typically from sale and leaseback deals; that
implausible scenarios do not occur; that the war in Ukraine comes to an end this year; and that there is no
further significant and prolonged disruption caused by the COVID-19 pandemic or equivalent.
For further information on emerging and principal risks and longer-term viability please refer to pages 70 to
77.
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 151 to 160.
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 17 to 45.
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 46 to 59.
Stakeholder engagement
Details of stakeholder engagement can be found on page 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 2023
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 they benefit all of the Company’s current and past Directors and are a
Wizz Air Holdings Plc Annual report and accounts 2022
125
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
(“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 2022, the Company had 103,072,739 Ordinary Shares of £0.0001 each in issue, each with one
vote. 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:
a) 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;
b) 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;
c)
the right to receive dividends on a pari passu basis; and
d) 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 2022 financial year 60,520 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 2022 financial year was £20.86.
The aggregate cash consideration received by the Company for the allotment of the Ordinary Shares was
£477,375.
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.
Ordinary Shares represent 100.0 per cent of total shares (2021: 83.1 per cent) and the remaining nil per
cent of total shares (2021: 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 78. 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 2022
126
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)
Non-pro-rata allotments of equity for cash (major subsidiaries)
Contracts of significance involving a Director
Contracts of significance involving a controlling Shareholder
9.8.4(8)
9.8.4(10)
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))
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.
For and on behalf of the Board
József Váradi
Chief Executive Officer
8 June 2022
Registered number: 103356
Wizz Air Holdings Plc Annual report and accounts 2022
127
GOVERNANCE
COMPANY INFORMATION
Registered number
103356
Registered office
44 The Esplanade
St Helier
Jersey
JE4 9WG
Secretary
Intertrust 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
13 Castle 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 2022
128
GOVERNANCE
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF
THE FINANCIAL STATEMENTS
The directors are responsible for preparing the annual report and accounts in accordance with applicable law
and regulation.
Companies (Jersey) Law 1991 requires the directors to prepare financial statements for each financial year.
Under that law the directors have prepared the group financial statements in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the EU.
Under Companies (Jersey) Law 1991, directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the group and of the profit or loss of the
group for that period. In preparing the financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
state whether applicable IFRSs as adopted by the EU have been followed, subject to any material
departures disclosed and explained in the financial statements;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the group will continue in business.
The directors are responsible for safeguarding the assets of the group and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The directors are also responsible for keeping adequate accounting records that are sufficient to show and
explain the group’s transactions and disclose with reasonable accuracy at any time the financial position of
the group and enable them to ensure that the financial statements with the Companies (Jersey) Law 1991
and the Directors’ Remuneration Report comply with the Companies Act 2006 as if the company were a
quoted company under the United Kingdom Companies Act 2006.
The directors are responsible for the maintenance and integrity of the group’s website. Legislation in the
United Kingdom governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
Directors’ confirmations
The directors consider that the annual report and accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary for shareholders to assess the group’s position and
performance, business model and strategy.
Each of the directors, whose names and functions are listed in the Governance Report confirm that, to the
best of their knowledge:
the group financial statements, which have been prepared in accordance with IFRSs as adopted by the
EU, give a true and fair view of the assets, liabilities, financial position and profit or loss of the group;
and
the Strategic Report includes a fair review of the development and performance of the business and the
position of the group, together with a description of the principal risks and uncertainties that it faces.
In the case of each director in office at the date the directors’ report is approved:
so far as the director is aware, there is no relevant audit information of which the group’s auditors are
unaware; and
they have taken all the steps that they ought to have taken as a director in order to make themselves
aware of any relevant audit information and to establish that the group’s auditors are aware of that
information.
On behalf of the Board
József Váradi
Director
8 June 2022
Wizz Air Holdings Plc Annual report and accounts 2022
129
ACCOUNTS
AND OTHER
INFORMATION
Wizz Air Holdings Plc Annual report and accounts 2022
130
ACCOUNTS AND OTHER INFORMATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022
Passenger ticket revenue
Ancillary revenue
Total revenue
Staff costs
Fuel costs (including exceptional expense/income)
Distribution and marketing
Maintenance materials and repairs
Airport, handling and en-route charges
Depreciation and amortisation
Net other expenses
Total operating expenses
Operating loss
Comprising:
- Operating loss excluding exceptional expense
-
Exceptional income/(expense) (included in fuel costs)
Financial income
Financial expenses
Net foreign exchange (loss)/gain
Net financing expense
Loss before income tax
Income tax expense
Net loss for the year
Net loss for the year 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 (expense)/income for the year, net
of tax
Total comprehensive expense for the year
Total comprehensive expense for the year attributable to:
Non-controlling interest
Owners of Wizz Air Holdings Plc
Basic and diluted loss per share (€/share)
Note
5,6
5,6
5,6
11
7
7
11
10
10
10
10
12
29
29
2022
€ million
732.1
931.4
1,663.4
(220.5)
(649.0)
(43.4)
(170.4)
(545.9)
(446.3)
(53.2)
(2,128.7)
(465.3)
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)
(469.6)
4.3
2.8
(89.5)
(89.5)
(176.2)
(641.5)
(0.9)
(642.5)
(434.5)
(93.6)
11.6
(78.4)
28.4
(38.4)
(566.5)
(9.5)
(576.0)
(10.7)
(631.8)
(3.9)
(572.1)
10.9
(12.5)
(2.5)
(4.1)
39.2
200.3
0.8
240.3
(646.6)
(335.7)
(11.4)
(635.2)
(6.33)
(4.0)
(331.7)
(6.73)
13
The Notes on pages 136 to 184 are an integral part of these financial statements.
Wizz Air Holdings Plc Annual report and accounts 2022
131
ACCOUNTS AND OTHER INFORMATION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 MARCH 2022
Note
2022
€ million
2021
(restated*)
€ million
21
22
19
20
14
15
22
16
20
3,631.4
62.4
67.3
1.7
20.7
3,783.5
70.9
186.9
2.5
0.7
94.9
450.0
766.6
1,572.5
5,356.1
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Restricted cash
Deferred tax assets
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
Trade and other payables
Provisions for other liabilities and charges
Total non-current liabilities
Current liabilities
558.6
Trade and other payables
0.2
Current tax liabilities
413.1
Borrowings
0.3
Convertible debt
4.6
Derivative financial instruments
333.8
Deferred income
63.2
Provisions for other liabilities and charges
1,373.7
Total current liabilities
5,092.1
Total liabilities
Total equity and liabilities
5,356.1
* See Notes 3, 25 and 36 on correction of comparative amount classification between current and non-current.
3,525.3
26.1
63.0
3.4
56.8
43.9
3,718.4
—
381.2
(193.0)
279.3
(15.4)
263.9
8.3
(3.8)
(0.7)
87.3
23
24
26
16
25
30
23
24
21
26
30
29
29
29
29
29
18
25
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
79.0
51.1
2,594.8
386.7
0.2
722.1
0.3
9.0
68.0
37.8
1,224.1
3,818.9
4,722.6
The Notes on pages 136 to 184 are an integral part of these financial statements.
The financial statements on pages 131 to 184 were approved by the Board of Directors and authorised for
issue on 8 June 2022 and were signed on behalf of the Board by.
József Váradi
Chief Executive Officer
Wizz Air Holdings Plc Annual report and accounts 2022
132
ACCOUNTS AND OTHER INFORMATION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
Share
Share
premium
capital
€ million
€ million
29
29
— 381.2
Note
Balance at
1 April 2021
Comprehensive
income/(expense):
Reorganisation
reserve
€ million
29
(193.0)
Equity part
of
convertible
debt
€ million
29
8.3
Cash flow
hedging
reserve
€ million
29
(2.2)
Cumulative
translation
adjustment
€ million
29
1.1
Retained
earnings
€ million
29
Total
€ million
712.3 907.7
Non-
controlling
interests
€ million
18
(4.0)
Total
equity
€ million
903.7
Loss for the year
Fair value gains in the
year
Gains transferred to
income statement
Hedge discontinuation
gains transferred to
income statement
Currency translation
differences
Total other
comprehensive
income/(expense)
Total
comprehensive
income/(expense)
for the year
Transactions with
owners:
Share-based payment
charge (Note 29)
Total transactions
with owners
Balance at
31 March 2022
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— (631.8) (631.8
(10.7) (642.5)
—
10.9
— (11.9)
—
(0.6)
—
—
—
)
—
10.9
—
10.9
— (11.9)
—
(11.9)
—
(0.6)
—
(0.6)
—
—
(1.8)
—
(1.8)
(0.7)
(2.5)
—
(1.6)
(1.8)
—
(3.4)
(0.7)
(4.1)
—
—
—
—
(1.6)
(1.8) (631.8) (635.2
(11.4) (646.6)
)
—
—
—
—
—
—
—
—
—
—
—
—
6.8
6.8
6.8
6.8
—
—
6.8
6.8
— 381.2
(193.0)
8.3
(3.8)
(0.7)
87.3 279.3 (15.4)
263.9
The Notes on pages 136 to 184 are an integral part of these financial statements.
Wizz Air Holdings Plc Annual report and accounts 2022
133
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
Reorganisation
reserve
€ million
29
(193.0)
Equity part
Cash flow
of
hedging
convertible
reserve
debt
€ million
€ million
29
29
8.3 (241.7)
Cumulative
Retained
translation
earnings
adjustment
€ million
€ million
29
29
0.2 1,280.3 1,234.8
Total
€ million
Non-
controlling
interests
€ million
18
— 1,234.8
Total
equity
€ million
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
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
39.2
— (572.1) (572.1)
39.2
—
—
(3.9) (576.0)
39.2
—
—
68.4
— 131.9
—
—
—
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)
—
0.6
—
—
—
—
—
—
—
—
—
—
—
4.1
0.6
4.1
—
—
0.6
4.1
—
0.6
—
—
—
—
4.1
4.7
—
4.7
— 381.2
(193.0)
8.3
(2.2)
1.1
712.3
907.7
(4.0)
903.7
The Notes on pages 136 to 184 are an integral part of these financial statements.
Wizz Air Holdings Plc Annual report and accounts 2022
134
ACCOUNTS AND OTHER INFORMATION
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2022
Cash flows from operating activities
Loss before income tax
Adjustments for:
Depreciation
Amortisation
Financial income
Financial expenses
Unrealised fair value gain 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
Other non-cash operating expense
Changes in working capital
(Increase)/decrease in trade and other receivables
Decrease in restricted cash
(Increase)/decrease in inventory
Increase/(decrease) in provisions
Increase in trade and other payables
Increase/(decrease) in deferred income
Cash generated by/(used in) operating activities
before tax
Income tax paid
Net cash generated by/(used in) 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
Increase/(decrease) in short term cash deposits
Net cash used in investing activities
Cash flows from financing activities
Proceeds from the issue of share capital
Proceeds from new loan**
Repayment of loans**
Interest paid – loans - IFRS 16 lease liability
Interest paid loans - JOLCO
Proceeds from unsecured debt
Repayment of unsecured debt
Interest paid – unsecured debt*
Interest paid – other*
Net cash (used in)/generated by financing activities
Note
2022
€ million
2021*
€ million
(641.5)
(566.5)
14
15
27
14
14
31
31
436.3
10.0
(2.8)
89.5
(3.4)
81.6
5.6
(49.7)
6.7
1.6
(66.1)
(74.0)
15.4
(17.2)
9.2
138.7
369.5
375.5
(4.9)
370.6
(59.1)
(77.7)
43.5
(407.6)
190.0
2.9
(99.2)
(407.2)
—
16.4
(397.5)
(71.3)
(1.9)
497.5
(357.5)
(8.9)
(2.2)
(325.5)
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
(146.4)
0.6
195.6
(336.5)
(67.9)
(1.4)
1,177.0
(338.2)
(1.9)
(2.5)
624.6
253.6
878.0
(30.9)
1,100.7
Net (decrease)/increase 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***
* Interest paid - other of €4.4 million as disclosed in the F21 financial statements has been further analysed above to
separately show the interest paid on unsecured debt of €1.9 million in F21 to aide comparison.
(362.1)
1,100.7
28.0
766.6
** Mostly JOLCO and IFRS16 leases.
*** Cash and cash equivalents at 31 March 2022 include €235.6 million (€461.8 million at 31 March 2021; €288.2 million at 31
March 2020) of cash at bank and €531.0 million (€638.9 million at 31 March 2021; €589.8 million at 31 March 2020) of
cash deposits maturing within three months of inception.
The Notes on pages 136 to 184 are an integral part of these financial statements.
Wizz Air Holdings Plc Annual report and accounts 2022
135
ACCOUNTS AND OTHER INFORMATION
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 audited
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 Ltd., Wizz Air Abu Dhabi Ltd., Wizz Air Abu Dhabi LLC, Wizz Air Innovation Ltd.
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 trivial.
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 judgements in the process of applying
the Group's accounting policies. The areas involving a high degree of judgement or complexity or areas
where assumptions and estimates are significant to the consolidated financial statements are disclosed in
Note 4.
New standards, amendments and interpretations
a) Standards, amendments and interpretations effective and adopted by the Group
Interest Rate Benchmark Reform – Phase 2– Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4
and IFRS 16
As a result of interest rate benchmark reform many benchmark interest rates will not be published until
sometime after 31 December 2021. The Group has exposures to LIBORs, which are anticipated to be
published until 30 June 2023, in connection with floating rate leases. Accordingly this had no impact on the
F22 financial statements and the effect of this change will be evaluated once the existing rates are replaced
and contracts are amended. Based on management's assessment to date there is no significant risk that
the IBOR reform will have a material impact on the Group’s consolidated results or financial position.
Amendments to IFRS 4 Insurance Contracts – Deferral of IFRS 9
Under IFRS 4 Insurance Contracts, the effective date to apply IFRS 9, for the temporary exemption from
IFRS 9, was 1 January 2021. These amendments had no impact on the consolidated financial statements of
the Group, nor is there expected to be any future impact to the Group based on existing insurance
arrangements.
IFRS IC decision on Configuration or Customisation Costs in a Cloud Computing
Arrangement (IAS 38 Intangible Assets)
The publication covers how to account for configuration and customisation costs in cloud computing
arrangements and if they should be capitalised as an intangible asset or a prepayment in the statement of
financial position, or if they are required to be expensed when incurred. The Company has “Software as a
Service” (SaaS) contracts, but the IFRS IC decision had no material impact on the consolidated financial
statements of the Group due to the limited use of such software.
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136
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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 as a direct consequence of the COVID-19 pandemic the
same way it would account for the change applying this Standard if the change were not a lease modification.
The Group decided not to apply the practical expedient described in the Amendment to IFRS 16 “Leases”.
c) Standards, amendments and interpretations effective and not early adopted by the Group
Onerous Contracts – Cost of Fulfilling a Contract – Amendments to IAS 37
The amendments clarify that the costs of fulfilling a contract include all directly attributable costs. They
include the additional costs of fulfilling a contract such as direct costs of labour or materials and the inclusion
of other costs that relate directly to fulfilling contracts. General and administrative expenses do not relate
directly to the contract and so are not costs of fulfilling a contract, unless the contract specifically provides
for them to be charged on to the customer. Before recognising a separate provision for an onerous contract,
the entity recognises any impairment loss that has occurred on assets used in fulfilling the contract. These
amendments are expected to have no material impact on the consolidated financial statements of the Group,
but may impact future periods should the Group have any onerous contracts.
Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16
The amendments prohibit deducting from the cost of an item of property, plant and equipment any proceeds
from selling items produced while bringing that asset to the location and condition necessary for it to be
capable of operating in the manner intended by management. Instead, an entity recognises the proceeds
from selling such items, and the cost of producing those items, in profit or loss. It also clarifies that an entity
is ‘testing whether the asset is functioning properly’ when it assesses the technical and physical performance
of the asset. The financial performance of the asset is not relevant to this assessment. These amendments
are expected to have no material impact on the consolidated financial statements of the Group.
Reference to the Conceptual Framework – Amendments to IFRS 3
The changes update IFRS 3 so that it refers to the 2018 Conceptual Framework instead of the 1989
Framework; add to IFRS 3 a requirement that, for transactions and other events within the scope of IAS 37
or IFRIC 21, an acquirer applies IAS 37 or IFRIC 21 (instead of the Conceptual Framework) to identify the
liabilities it has assumed in a business combination; and add to IFRS 3 an explicit statement that an acquirer
does not recognise contingent assets acquired in a business combination. The amendments are expected to
have no material impact on the consolidated financial statements of the Group.
Annual Improvements to IFRS Standards 2018–2020 Cycle
The amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41 are expected to have no material impact on the
consolidated financial statements of the Group.
d) Standards early adopted by the Group
There are no standards early adopted by the Group.
e) Interpretations and standards that are not yet effective and have not been early adopted by the
Group
Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12
Definition of Accounting Estimates – Amendments to IAS 8
Classification of Liabilities as Current or Non-current – Amendments to IAS 1
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2
IFRS 17 Insurance Contracts (issued on 18 May 2017); including Amendments to IFRS 17 (issued on 25
June 2020)
Amendments to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative
Information (issued on 9 December 2021)
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 Group 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:
power over the entity;
Wizz Air Holdings Plc Annual report and accounts 2022
137
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
exposure, or rights, to variable returns from its involvement with the entity; and
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:
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(including their
branches) 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.
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 62 to 77.
Emerging and principal risks and uncertainties facing the Group are described on pages 70 to 77. 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 2022, the Group held cash and cash equivalents of €766.6 million (total cash of €1,378.8 million
including €450.0 million of short term cash deposits, which can be accessed within less than 12 months after
the financial year end, and €162.2 million of restricted cash), while net current assets were €145.5 million.
In legal terms, the external borrowings of the Group consist of: €500 million bonds maturing in January
2024, €500 million bonds maturing in January 2026 and convertible debt with a balance of €26.4 million. In
accounting terms a further €2,926.9 million are presented as borrowings in relation to future commitments
from lease contracts. These borrowings do not contain any financial covenants.
The Group operates using a three year planning cycle. The Directors have reviewed their latest financial
forecasts for the next twelve months from the date of signing these financial statements, plans to finance
committed future aircraft deliveries (see note 33) due within this period that are currently unfinanced and
available committed financing for aircraft. After making enquiries and testing the assumptions against
different forecast scenarios including a severe but plausible downside scenario, the Directors have satisfied
themselves that the Group is expected to be able to meet its commitments and obligations as they fall due
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 develop
over the next twelve months from the date of signing this report . Wizz Air expects to very quickly return to
full utilization of its fleet with higher load factors and RASK levels improving compared to F20. Progressive
pass-through of pricing combined with anticipated retirement of cost-prohibitive capacity in the industry
would allow pricing to stabilize around a new-found equilibrium, compensating for continuing high fuel and
other inflation costs. In addition, the Directors have also modelled a downside scenario that assumes an
even higher price for jet fuel and a stronger USD, whilst at the same time modelling a weaker trading
environment (simulated by a lower RASK for the entire planning period). In this scenario the Group is still
forecasting significant liquidity throughout this period.
The Directors also considered the impact of climate change over the time period and concluded that it was
unlikely that material physical or transition risks that are described in our Sustainability Report page 17
would arise over this period. In preparing its base and downside forecasts the Directors also took into account
the impact of the war in Ukraine and the four aircraft stranded in Ukraine (see note 14) and no material
Wizz Air Holdings Plc Annual report and accounts 2022
138
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
impact is forecast. The Directors have assumed that there will be no further significant disruption caused by
the COVID-19 pandemic of the magnitude previously experienced.
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 Euro (EUR). The functional currency of all the Group entities with the
exception of Dnieper Aviation LLC, Wizz Air Ukraine Airlines LLC, Wizz Air UK Ltd., Wizz Air Abu Dhabi Ltd.,
Wizz Air Abu Dhabi LLC and Wizz Air Innovation Ltd. is EUR. 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
EUR 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 EUR 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 EUR 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 Ltd. is the US Dollar (USD or $) and of Wizz Air Abu Dhabi LLC is
the United Arab Emirates Dirham (AED), the functional currency of Wizz Air UK Ltd. is British Pound (GBP or
£), while the functional currency of Wizz Air Innovation Ltd. is Hungarian Forint (HUF).
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:
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;
equity is translated at historical rate (except for the cash flow hedging reserve within equity);
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:
IFRS 9 category
Financial assets measured at amortised cost
Fair value through profit or loss
Financial assets measured at amortised cost
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
Short term cash deposits
Cash and cash equivalents
Non-current liabilities
Borrowings
Convertible debt
Derivative financial instruments
Current liabilities
Trade and other payables
Borrowings
Convertible debt
Derivative financial instruments
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.
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 assets measured at amortised cost
Financial liabilities 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
Fair value through profit or loss
Wizz Air Holdings Plc Annual report and accounts 2022
139
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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.
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 collars and outright forward contracts to hedge jet fuel and foreign
exchange risks related to highly probable future cash flows that were discontinued due to COVID-19. In F22
the Group used zero-cost collars to hedge jet fuel 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 instruments.
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 an exceptional income or expense in the respective operating expense line.
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:
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).
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140
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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:
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;
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; and
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
change in the circumstances affecting the hedge effectiveness requirements. Such significant change can
occur as follows:
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 operating income or expense.
Trade and other receivables
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;
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;
and
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 judgement, 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
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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 €450.0 million at 31 March 2022 (2021: €346.8 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.
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:
a) 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
b) 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.
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Impairment of financial assets
The Group considers the probability of default upon initial recognition of a financial asset and whether there
has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess
whether there is a significant increase in credit risk, the Group compares the risk of a default occurring on
the financial asset as at the reporting date with the risk of default as at the date of initial recognition.
At each reporting date the Group measures the loss allowance for financial assets at an amount equal
to the lifetime expected credit losses if there is a significant increase in credit risk or the financial
assets are not settled in accordance with the terms stipulated in the agreements, management
considers these financial assets as underperforming or non-performing and to be impaired.
The historical loss rates are estimated based on the historical credit losses experienced over the
expected life of the receivables and are adjusted to reflect current and forward-looking information
on macroeconomic factors affecting the ability of the counter parties to settle the receivables.
A loss allowance is recognised on financial assets carried at amortised cost or fair value through other
comprehensive income for expected credit losses. When management considers that there is no reasonable
expectation of recovery, the financial assets will be written off.
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.
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-family)
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.
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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:
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; and
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 has short-term leases from F22 and related expenses are recognised in the Aircraft rentals line.
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 judgement 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 judgement 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.
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.
Some sale and leaseback contracts 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 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 aircraft assets and parts (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 USD to EUR and the USD to GBP, as most future payments under the aircraft lease contracts of the
Group are defined in USD while the functional currency of Wizz Air Hungary Ltd. is EUR and of Wizz Air UK
Ltd. is GBP.
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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 (“RoU 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 conditions are depreciated either straight line or based on
usage, depending on their nature.
Variable lease payments
In part of the extended lease agreements, the Group has introduced a new power by the hour lease payment
scheme. The minimum payable amount in such agreements is included in the measurement of lease
liabilities. The maximum amount in such agreements is not considered in-substance unavoidable and as such
in-substance fixed lease payment based on management best estimates, and therefore treated as variable
lease payments that are not included in the measurement of the lease liabilities.
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.
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 EUR, if PDPs are refunded, it might result in
some realised foreign exchange gain or loss. The Group started converting PDP payments to EUR in order to
reduce the exposure to EUR/USD foreign currency exchange rate significantly in the years ahead. There are
no other gains or losses incurred in relation to PDPs. The amount is not depreciated.
The Group will usually 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 in USD. 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.
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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. This 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, that provide 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 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.
Landing and take-off rights are recognized at cost less any accumulated impairment losses. They are
recorded as intangible assets with an indefinite useful life as based on an analysis of all the relevant factors,
there is no foreseeable limit to the period over which the assets are expected to generate net cash inflows
for the entity provided minimum utilisation requirements are observed. They are not amortised, however
their value in use is tested for impairment (in accordance with IAS 36) at each reporting date together with
the fleet of aircrafts as a single CGU, or where there is any indication of impairment.
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.
Emissions Trading Scheme
As of 2012 the scope of the EU Emissions Trading Scheme 2008/101/EC (EU ETS) covers airlines. A UK
Emissions Trading Scheme (UK ETS) replaced the UK’s participation in the EU ETS on 1 January 2021. The
routes covered by the UK ETS include UK domestic flights, flights between the UK and Gibraltar, and flights
departing the UK to European Economic Area states conducted by all included aircraft operators, regardless
of nationality. 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
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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 their
market are recorded at the purchase price in inventory. The Group is given free allowances by 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 F22 the Group recognised net €nil (2021: €2.5 million gain) under financial income. 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.
The 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 or
earlier if there is an impairment trigger 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 within staff costs 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).
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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 benefits
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).
Revenue
Revenues reported by the Group are disaggregated differently to 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. Refunds are measured at initial transaction price, excluding non-
refundable services.
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 recognises revenue from contracts with other partners as agent if it is the other partners that:
enters into contracts with the passengers/customers and bears the liability towards customers for
delivering the products and services;
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
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
existing revenue presentation is considered relevant for the users of the financial statements because: (i) it
is regularly reviewed by the Chief Operating Decision Maker for evaluating financial performance; and (ii) it
mirrors disclosures presented outside of the financial statements.
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 being 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 membership fees following the pattern of customers utilising 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.
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NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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
is no longer planned, 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-EUR amounts are translated on inception to EUR
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:
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
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ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
added to the amount previously capitalised within property, plant and equipment as advances paid for
aircraft maintenance assets; and
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.
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 delivery 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 expense comprises interest payable, finance charges on finance and operating (under IFRS
16) 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.
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ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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 and outbreak of the war
in Ukraine and its impact on jet fuel prices.
Underlying loss 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 excludes the effect of exceptional items.
This measure might occasionally be used by the Company also in determining the variable remuneration of
senior management.
Segment reporting
Operating and reportable segments
The Group is managed as a single business unit that provides point to point low-cost, low-fare passenger air
transportation services using a fleet of single aisle aircraft. 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 jet fuel 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 Risk 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 USD 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.
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 losses and gains on these
instruments were charged to the statement of comprehensive income as exceptional expense in F21 and F22.
In light of pertaining 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 USD and jet fuel hedging in order to
reduce the risk of over-hedging.
Since June 2021 the Company has a ‘no hedge’ policy in place with respect to USD and jet fuel price risk
after carefully evaluating the economic costs and benefits of the company’s hedging programme, as a result
the Company is no longer engaging in systematic cash-flow hedging of USD denominated expenses and jet
fuel price risk. USD hedges expired before F22, while the last jet fuel hedges expired in September 2021.
The treasury department, under the supervision of the Audit and Risk Committee, continuously monitors
the Company’s risk environment, market and business opportunities to reduce or transfer its exposure to
market risks.
Given the high and volatile commodity environment, the Company has, in agreement with its Board, capped
part of its fuel cost exposure for the five months ended August 2022 with zero cost collars, as a temporary
exception to the Company’s "no hedge" policy approved by the Board of Directors.
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ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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 its 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 USD while a significant portion of the Group’s expenses are USD 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).
EUR/USD 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
Other
€ million
Total
€ million
At 31 March 2022
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 debt*
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
* Unsecured debt represent the European Mid Term Note.
68.9
—
597.5
450.0
0.6
1,117.0
997.9
328.5
6.8
398.1
—
26.4
381.4
—
2,139.1
(1,022.1)
68.2
0.7
97.4
—
161.2
327.5
—
2,008.8
—
154.8
13.5
—
99.5
4.6
2,281.2
(1,953.7)
EUR
€ million
USD
€ million
51.5
5.1
495.2
46.8
168.9
767.5
25.9
—
214.1
300.0
—
540.0
At 31 March 2021 (restated)
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 debt*
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
* Unsecured debt represents the European Mid Term Note and the Covid Corporate Financing Facility.
499.2
304.7
8.6
319.6
—
26.5
245.4
—
1,404.0
(864.0)
—
1,478.1
—
107.6
12.8
—
156.8
9.0
1,764.3
(996.8)
4.5
—
71.7
—
0.4
76.6
—
—
3.1
27.0
—
—
48.2
—
78.3
(1.7)
Other
€ million
6.3
—
391.4
—
0.2
397.9
350.3
—
2.5
27.5
—
—
21.3
—
401.6
(3.7)
141.6
0.7
766.6
450.0
162.2
1,521.1
997.9
2,337.3
9.9
579.9
13.5
26.4
529.1
4.6
4,498.6
(2,977.5)
Total
€ million
83.7
5.1
1,100.7
346.8
169.1
1,705.4
849.5
1,782.8
11.1
454.7
12.8
26.5
423.5
9.0
3,569.9
(1,864.5)
** During the year the composition of financial assets and liabilities (in the table above) and their maturities (in the table disclosed
below in this note) was analysed in greater detail. As a result the comparative amounts as at 31 March 2021 in the table above
have been changed to correct the classification of these assets and liabilities. This impacted the amounts shown for trade and other
receivables and trade and other payables. Trade and other receivables now total €83.7m (previously €109.3 million) of which €25.9
million (previously €34.8 million) is denominated in EUR, €51.5 million (previously €64.3 million) denominated in USD and €6.3
million (previously €10.2 million) denominated in other currencies. Similarly trade and other payables in the table above now total
€423.5 million (previously €231.7 million), of which €245.4 million (previously €172.9 million) is denominated in EUR, €156.8
million (previously €40.4 million) is denominated in USD, and €21.3 million (previously €18.4 million) is denominated in other
currencies.
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ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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 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 part of 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. See further details regarding jet fuel at market risks and hedge
transactions within this note.
The Group is also exposed to price risk related to Carbon Emission Trading System schemes (ETS). In order
to comply with regulations ETS allowances must be purchased and surrendered on a yearly basis. To reduce
the exposure to price volatility and inflation the Group enters into spot and forward purchase transactions.
As at 31 March 2022, all requirements for calendar year 2021 and 75% of total forecast requirements for
calendar year 2022 were covered. This coverage includes forward purchase agreements in the value of
€112.7 million. As at the approval of this document, the coverage for calendar year 2022 is at 92%, including
additional forward purchase agreements in the value of €15.2 million. These forward purchase agreements
qualify for own use exemption and therefore are not accounted for as a financial instrument under IFRS 9.
Interest rate risk
The Group’s objective is 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:
(Loss)/gain recognised within fuel costs
Effective cash flow hedge
Discontinued cash flow hedge expiring in the financial year*
Fair value change of discontinued cash flow hedge expiring in the financial
year*
Discontinued cash flow hedge expiring in following financial year(s)*
Fair value change of discontinued cash flow hedge expiring in following
financial year(s)*
Total loss recognised within fuel costs
*–Fair value change and result of discontinued hedges were charged to exceptional
expense.
Gain recognised within financial income
Effective fair value hedge
Total gain recognised within financial income
Gain recognised within net foreign exchange gains
Effective fair value hedges
2022
€ million
2021
€ million
(1.8)
—
(0.4)
—
—
—
7.7
(8.0)
0.3
(0.6)
(2.2)
(0.6)
—
—
—
—
0.4
0.4
5.1
5.1
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153
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Fuel hedges:
Gain/(loss) recognised within fuel costs
Effective hedge
Discontinued cash flow hedge expiring in the financial year*
Fair value change of discontinued cash flow hedge expiring in the financial
year*
Discontinued cash flow hedge expiring in following financial year(s)*
Fair value change of discontinued cash flow hedge expiring in following
financial year(s)*
Total gain/(loss) recognised within fuel costs
*Fair value change and result of discontinued hedges were charged to exceptional expense.
2022
€ million
2021
€ million
13.7
0.6
4.0
(68.4)
(125.2)
33.5
—
—
(14.7)
13.5
18.3
(161.3)
Hedge year-end open positions
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 below in this note.
At the end of the year and the prior year the Group had the following open hedge positions:
a) Foreign exchange hedges with derivatives:
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)
At 31 March 2021
Effective fair value hedge positions
Effective cash flow hedge positions
Discontinued cash flow hedge
positions
Total foreign exchange hedges
No such hedges as at 31 March 2022.
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:
EUR/USD foreign exchange hedge:
At 31 March 2021
Maturity profile of notional amount (million)
Weighted average ceiling
Weighted average floor
No such hedges as at 31 March 2022.
F22
12 months
$129.7
$1.1621
$1.1164
F23
6 months
—
—
—
b) Foreign exchange hedge with non-derivatives:
Non-derivatives, such as cash, are existing financial assets or liabilities that hedge highly probable foreign
currency cash flows in the future and therefore act as a natural hedge.
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ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Fuel hedge:
At 31 March 2022
Effective cash flow hedge positions
Discontinued cash flow hedge
positions
Total fuel hedge
‘000
metric tonnes
240.0
—
Non-current
assets
€ million
—
—
Derivative financial instruments
Non-current
liabilities
€ million
—
—
Current
assets
€ million
0.7
—
Current
liabilities
€ million
(4.6)
—
Net
liability
€ million
(3.9)
—
240.0
—
0.7
—
(4.6)
(3.9)
At 31 March 2021
Effective cash flow hedge positions
Discontinued cash flow hedge
positions
Total fuel hedge
Derivative financial instruments
‘000
metric tonnes
253.0
117.0
Non-
current
assets
€ million
—
—
Current
assets
€ million
3.6
1.3
Non-current
liabilities
€ million
—
—
Current
liabilities
€ million
(3.8)
(2.6)
Net
liability
€ million
(0.2)
(1.3)
370.0
—
4.9
—
(6.4)
(1.5)
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 2022
Maturity profile (‘000 metric tonnes)
Blended capped rate
Blended floor rate
At 31 March 2021
Maturity profile (‘000 metric tonnes)
Blended capped rate
Blended floor rate
F23
12 months
240.0
$1,130.0
$982.0
F22
12 months
370.0
$554.0
$503.0
F24
6 months
—
—
—
F23
6 months
—
—
—
Hedge effectiveness
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 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 and outbreak of the
war in Ukraine.
Building on these estimations of the future, management makes judgement 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.
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 and early F22 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 gain on these instruments of €4.2 million (2021: €93.6 million net loss)
has been recognised in the income statement.
None of the hedge counterparties had a material change in their credit status that would have influenced the
effectiveness of the hedging transactions.
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.
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ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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
Interest rate sensitivity (EUR)
Interest rate is higher by 100 bps
Interest rate is lower by 100 bps
2022
Difference in profit
after tax
€ million
2021
Difference in
profit after tax
€ million
-74.5
+74.5
+104.2
-113.6
-5.4
+5.7
+14.9
-14.8
-35.0
+35.0
+70.2
-76.5
-3.0
+3.3
+15.4
-15.4
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 market 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
2022
Difference
€ million
2021
Difference
€ million
+20.6
-20.6
-0.2
+0.2
-6.7
+6.7
+22.9
-22.9
+0.1
-0.1
+1.1
-1.1
The sensitivity analyses for 2022 above were performed with reference to the following market rates, as the
base case:
For profits, annual average rates: jet fuel price $789.0 per metric tonne; EUR/USD FX rate 1.16;
EUR/GBP FX rate 0.85; and
For other comprehensive income, year-end spot rates: jet fuel price $512.0 per metric tonne; EUR/USD
FX rate 1.16.
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. Nevertheless, the unprecedented impact of COVID-19 on the industry was affecting the liquidity
of the Group in 2021 and 2022 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:
continue to ensure that the flights that are operated deliver positive cash contribution;
securing lease financing for aircraft delivery positions until December 2022;
working with suppliers to reduce contracted rates and improve payment terms;
reducing discretionary spending and suspending non-essential capital expenditure;
issuance of a three-year €500 million bond in January 2021 that pays an annual fixed coupon of 1.35
per cent; and
issuance of a four-year €500 million bond in January 2022 that pays an annual fixed coupon of 1.00 per
cent.
As a result of these measures, Wizz Air is confident in its ability to survive, even in case of potential prolonged
restrictions or further increases in commodity prices. For further notes, refer to the going concern assessment
under Note 2.
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NOTES FORMING PART OF THE FINANCIAL STATEMENTS
The Group paid €232.6 million in F21 to settle hedging transactions. Liquidity risk from derivative financial
liabilities is not material at 31 March 2022 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 2022
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 debt
IFRS 16 aircraft and engine
lease liability
IFRS 16 other lease liability
JOLCO and FTL lease liability
Loans from non-controlling
interests
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
11.0
—
—
450.0
58.2
519.2
20.6
—
—
—
66.7
87.3
—
—
—
—
0.6
0.6
Total
€ million
141.6
0.7
766.6
450.0
162.2
1,521.1
11.8
321.4
1,021.8
1,338.4
—
847.8
1,040.4
2,629.7
1.6
32.9
—
—
39.7
4.6
—
412.0
6.7
174.0
—
26.4
49.7
—
—
2,617.0
5.2
410.8
13.5
—
7.0
—
—
1,284.3
14.0
628.3
13.5
26.4
529.1
4.6
—
4,886.0
110.0
0.7
766.6
—
36.7
914.0
6.8
122.1
0.5
10.6
—
—
432.7
—
—
572.7
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ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Within three
months
€ million
Between three
months
and one year
€ million
Between one and
five years
€ million
More than five
years
€ million
Total
€ million
83.7
5.1
1,100.7
346.8
169.1
1,705.4
872.3
1,991.7
—
107.4
358.8
292.3
513.5
1,137.6
—
—
—
—
14.6
14.6
21.5
—
—
—
119.5
141.0
9.1
3.1
—
346.8
12.8
371.8
53.1
2.0
1,100.7
—
22.2
1,178.0
At 31 March 2021 (restated)
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 debt
IFRS 16 aircraft and engine
lease liability
IFRS 16 other lease liability
JOLCO and FTL lease liability
Loans from non-controlling
interests
Convertible debt
Trade and other payables**
Derivative financial liabilities
Financial guarantees
Total financial liabilities
*As a consequence of the adjustments made to financial assets and liabilities noted above, the maturity analysis of trade and
other receivables and trade and other payables in the table above have been changed. As a result trade and other receivables
balances as at 31 March 2021 now total €83.7 million (previously €109.3 million) have been analysed as €53.1 million
(previously €79.9 million) with maturity within three months, and €21.5 million (previously €20.3 million) with maturity
between one and five years, amount with maturity between three months and one year did not change. Likewise trade and
other payable balances as at 31 March 2021 now total €423.5 million (previously €231.7 million), including €283.2 million
(previously €206.3 million) with maturity within three months, €61.3 million (previously €25.4 million) with maturity within
three months and one year, €71.9 million (previously €nil) with maturity within one and five years, and €7.1 million (previously
€nil) with maturity within more than five years. As a result of the change in maturity analysis, the statement of financial
position classification between current and non-current was restated as shown in Note 36.
26.5
71.9
—
—
1,884.2
—
61.3
2.6
—
741.4
—
7.1
—
—
793.5
—
283.2
6.4
0.7
405.1
6.2
128.5
—
3.4
315.8
12.8
1.3
25.1
—
—
454.4
0.4
7.0
—
26.5
423.5
9.0
0.7
3,824.2
11.3
476.4
12.8
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 and therefore assets 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:
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ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
At 31 March 2022
Financial assets
Cash and cash equivalents
Short term cash deposits
Restricted cash
Trade and other receivables
Derivative financial assets
Total financial assets
A
€ million
A-
€ million
Other
€ million
Unrated
€ million
Total
€ million
757.1
450.0
161.9
—
0.7
1,369.7
1.9
—
0.1
—
—
2.1
7.1
—
0.2
—
—
7.3
0.5
—
—
141.6
—
142.1
766.6
450.0
162.2
141.6
0.7
1521.1
A
€ million
A-
€ million
Other
€ million
Unrated
€ million
Total
€ million
At 31 March 2021
Financial assets
Cash and cash equivalents
Short term cash deposits
Restricted cash
Trade and other receivables*
Derivative financial assets
Total financial assets
* See note above for explanation of the change in trade and other receivables balances as at 31 March 2021. Trade and other
899.1
346.8
168.8
—
2.1
1,416.8
150.3
—
0.2
—
2.9
153.4
0.4
—
—
83.7
—
84.1
50.9
—
0.1
—
0.1
51.1
1,100.7
346.8
169.0
83.7
5.1
1705.4
receivables remain unrated.
From the unrated category within trade and other receivables the Group has €25.2 million (2021: €35.3
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,
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 2022, out of the €7.1 million in the category “other” €nil million (2021:
€48.5 million) relates to cash deposits held with BBB+ rated banks. In 2021 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 2022:
Level 1
€ million
Level 2
€ million
Level 3
€ million
Total
€ million
Assets
Derivative financial instruments
Liabilities
Derivative financial instruments
—
—
—
—
0.7
0.7
4.6
4.6
—
—
—
—
Wizz Air Holdings Plc Annual report and accounts 2022
0.7
0.7
4.6
4.6
159
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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 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 as presented in the statement of financial position,
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 diversified further its financing options through the establishment in January 2021 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 judgements 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 required 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 2022 year end would increase the balance of both aircraft
maintenance assets and aircraft maintenance provisions by €8.9 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 46% decrease in the F23 forecast aircraft utilisation would result in the same average utilisation
as in F22. This would cause €6.4 million decrease in the balance of aircraft maintenance assets.
The basis of these estimates are reviewed annually at least, 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 judgement whether it would perform future
maintenance that would impact the condition of the respective aircraft or spare engine asset in a way that
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160
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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.
Judgement: 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 judgement 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 2022 was 5.0 years (5.4 years at 31 March 2021).
Given the policy adopted we currently do not consider that the impact of climate change has a material
impact on maintenance provision.
b) 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 against revenue).
Judgement: 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 for some airports, requiring a level of
judgement.
c) Accounting for aircraft and spare engine assets
Judgement: When the Group acquires new aircraft and spare engines, it applies the following critical
judgements in determining the acquisition cost of these assets:
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; and
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.
d) Accounting for leases
Judgement: 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 judgement 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 judgement is revised at a later date.
Judgement: 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.
e) Income taxes
Judgement: A significant judgement has been made by the Group in relation to the position that the Swiss
tax authority would take with respect to the calculation of income and capital gains taxes for F18–F22 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.
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161
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
f) 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.
Judgement: 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/
judgement. The Company’s judgement 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 €45.7 million (2021: €13.6 million).
g) Aircraft in Ukraine
Judgement: Based on photographic and local employee information management believes that these aircraft
are in good condition and have not been damaged in the conflict. Maintenance could also be performed to a
limited extent for one aircraft ensuring that aircraft is better prepared for storage. The aircraft are assumed
to be returned to the fleet by the end of the summer season.
Estimate: The incremental maintenance provision requirement for the four aircraft stranded in Ukraine is a
judgement by management where the range of outcomes is estimated between a minimum of €0.8 million
and maximum of €30.0 million less amounts already provided of €1.6 million. The maximum of the range
represents a very remote, worst-case scenario which assumes that no access is granted to the aircraft for
6-12 months, no mitigation action can be taken in the meantime, and major overhaul is required on all
components, including engines.
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 F22 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
Net financing expense
Income tax expense
Loss for the year
2022
€ million
1,663.4
(2,128.7)
(465.3)
(176.2)
(0.9)
(642.4)
2021
€ million
739.0
(1,267.1)
(528.1)
(38.4)
(9.5)
(576.0)
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
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.
2022
€ million
732.1
931.4
1,663.4
2021
€ million
325.7
413.3
739.0
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),
Wizz Air Holdings Plc Annual report and accounts 2022
162
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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
Revenue was allocated to geographic areas based on the location of the first departure airport on each
ticket booking.
2022
€ million
1,192.9
153.1
317.4
1,663.4
2021
€ million
526.4
128.6
84.0
739.0
The Company’s revenue from external customers within the EU is mainly generated by Italy of €212.1 million
(2021: €29.4 million) Romania of €207.4 million (2021: €106.6 million) and by Poland of €122.2 million
(2021: €75.9 million).
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
2022
€ million
3,149.5
424.5
12.4
195.4
1.9
3,783.5
2021
€ million
2,595.6
311.2
12.4
144.3
1.9
3,065.4
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 existing
revenue 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
2022
€ million
1,627.1
36.4
1,663.4
2021
€ million
704.1
34.9
739.0
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 F22 as part of trade and other receivables amounted to €2.3 million (2021:
€0.4 million) and the contract liabilities (unearned revenues) reported as part of deferred income were
€326.6 million (2021: €65.0 million). Of the €1,627.1 million revenue from contract with customers
recognised in F22 (2021: €704.1 million), €65.0 million (2021: €172.3 million) was included in the contract
liability balance at the beginning of the year (see unearned revenue in Note 26).
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163
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
7. Operating loss
Net other expenses
Net other expenses increased from €1.2 million in F21 to €53.2 million in F22, as there was a significant
increase in other expenses after the industry’s recovery from the COVID-19 pandemic.
The following charges are included in net other expenses:
Gain on sale and leaseback transactions
Overhead related expenses*
Crew related expenses
Flight disruption related expenses
Expense relating to short-term leases
Auditors’ remuneration (see Note below)
Impairment of receivables
Expense relating to variable lease payments
Net other income
Net other expenses
2022
2021
€ million
€ million
49.7
(40.1)
(32.5)
(29.5)
(2.5)
(1.4)
(1.0)
(0.5)
4.6
(53.2)
40.6
(30.9)
(14.6)
(6.7)
—
(1.0)
—
—
11.4
(1.2)
* Overhead related expenses include fees for legal support, professional services, consulting, and IT related services.
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
Audit-related assurance services
Other assurance services
Total remuneration of auditors
2022
€ million
2021
€ million
1.0
0.2
0.1
0.1
1.4
0.8
0.1
—
0.1
1.0
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.
Inventories
Inventories totalling €14.5 million were recognised as maintenance materials and repairs expenses in the
year (2021: €6.7 million).
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
Wizz Air Holdings Plc Annual report and accounts 2022
2022
10
4,372
327
4,709
2022
€ million
172.4
7.4
18.2
6.7
204.7
15.8
220.5
2021
9
3,647
304
3,960
2021
€ million
106.5
4.3
11.7
4.1
126.6
6.3
132.9
164
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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
ETS put option fair value gain
Financial income
Interest expenses:
Convertible debt
IFRS 16 lease liability
JOLCO and FTL lease liability
Unsecured debt
Other
Financial expenses
Net foreign exchange (loss)/gain
Net financing expense
2022
€ million
1.6
0.3
2.9
2.5
7.3
2022
13
1
2022
€ million
2.8
—
2.8
(2.0)
(71.3)
(4.7)
(10.5)
(1.0)
(89.5)
(89.5)
(176.2)
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)
Interest income and expense include interest on financial instruments (earned on cash and cash equivalents
and short term deposits).
Net foreign exchange loss in net amount of €96.0 million for F22 relates to remeasurement of lease liabilities
denominated in USD (Note 3). During F22 the USD/EUR exchange rate decreased from 1.17 USD/EUR at 31
March 2021 to 1.11 USD/EUR at 31 March 2022 which resulted in an increase in lease liability and related
recognition of foreign exchange loss.
11. Exceptional items and underlying loss
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 and outbreak of the war
in Ukraine and its impact on jet fuel prices.
In F22 the Group had exceptional operating income of €4.3 million (total of €3.0 million gain on transactions
resulting in gain and €1.3 million gain on transaction resulting in a loss during the financial year) relating to
cash flow hedges regarding future fuel purchases that were classified as discontinued (refer to Note 3) as a
consequence of the partial grounding of the Group’s fleet under the COVID-19 virus situation. In F21 the
Group had exceptional operating expenses of €93.6 million 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 virus situation. The change is due to the
significant fuel price movements and also due to the lower level of hedging in F22. These items were used
by management in the determination of the non-IFRS underlying profit measure for the Group – see below.
Underlying loss
Net loss for the year
Adjustment for exceptional items
Underlying loss after tax
The tax effects of the adjustments made above are insignificant.
2022
€ million
(642.5)
(4.3)
(646.7)
2021
€ million
(576.0)
93.6
(482.4)
Wizz Air Holdings Plc Annual report and accounts 2022
165
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
12. Income tax expense
Recognised in the statement of comprehensive income:
Current tax on loss 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 – (decrease)/increase in deferred tax liabilities
Deferred tax – (increase)/decrease in deferred tax assets
Total deferred tax (benefit)/charge
Total tax charge
2022
€ million
0.3
(0.4)
5.7
(1.0)
4.6
(3.0)
(0.6)
(3.6)
0.9
2021
€ million
0.1
(0.1)
4.8
(3.1)
1.7
6.3
1.5
7.8
9.5
The Company, that is Wizz Air Holdings Plc, has a tax rate of 13.97 per cent (2021: 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 2022 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 (2021: 13.97 per cent). The difference is
explained below.
Loss before tax
Tax at the corporation tax rate of 13.97 per cent (2021: 13.97 per cent)
Adjustment for current tax of prior years
Adjustment for income-based taxes of prior years
Increase 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
2022
€ million
(641.5)
(89.6)
(0.4)
(1.0)
—
79.7
6.6
5.7
0.9
(0.1)%
2021
€ million
(566.5)
(79.1)
(0.1)
(3.1)
1.7
76.6
8.8
4.7
9.5
(1.7)%
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 €4.9 million tax in the year (2021:
€3.6 million). Substantially all the losses and the profits of the Group in F22 and F21, 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.
In the Spring Budget 2020, the UK Government announced that from 1 April 2020 the corporation tax rate
would remain at 19% (rather than reducing to 17%, as previously enacted). The Government made a
number of budget announcements on 3 March 2021. These include confirming that the rate of corporation
tax will increase to 25% from 1 April 2023. This new law was substantively enacted on 24 May 2021. There
is no material impact on the current and deferred taxation balances of Wizz Air UK Limited.
Other income-based foreign tax represents the local business tax and the “innovation contribution” payable
in Hungary in F22 and F21 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
2022
€ million
—
—
2021
€ million
(0.5)
(0.5)
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 F22
was to release €0.8 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
Wizz Air Holdings Plc Annual report and accounts 2022
166
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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. Loss per share
Basic and diluted loss per share
Basic earnings or loss 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. There is no
difference between the basic and diluted loss per share for F22 and F21 as potential ordinary shares are anti-
dilutive due to incurred loss.
Loss for the year, € million
Weighted average number of Ordinary Shares in issue
Basic and diluted loss per share, €
2022
(631.8)
2021
(576.0)
99,812,331 85,545,648
(6.73)
(6.33)
There were no Convertible Shares in issue at 31 March 2022 (17,377,203 at 31 March 2021) (see Note 29).
These shares were non-participating, i.e. the loss attributable to them is nil. These shares were not included
in the basic loss per share calculation above.
Underlying loss per share
The underlying earnings per share is a fully diluted non-IFRS measure defined by the Company, calculated
as follows:
Underlying loss for the year (see Note 11), € million
Weighted average number of Ordinary Shares for underlying earnings
per share
Underlying loss per share, €
2022
(636.1)
2021
(482.4)
99,812,331 85,545,648
(6.37)
(5.64)
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.
Wizz Air Holdings Plc Annual report and accounts 2022
167
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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
463.4
27.9
(65.7)
4.6
354.9
162.1
(25.3)
54.2
12.6
0.7
546.0
165.1
(4.7) (129.8)
(54.2)
—
Advances
paid
for aircraft
maintenan
ce assets
€ million
RoU assets
aircraft and
spares
€ million
RoU
assets
other
€ million
Total
€ million
192.0 2,422.5
418.4
(40.4)
—
41.7
(12.2)
(4.6)
10.9
4.6
—
—
4,020.5
820.6
(278.1)
—
0.1
—
—
—
0.5
9.1
—
9.7
430.3
36.1
— (126.1)
33.0
—
0.7
—
545.9
163.8
(19.5)
—
—
8.6
2.7
527.1
407.6
— (200.2)
—
—
—
—
217.3 2,809.6
738.9
(137.2)
—
2.8
40.5
(0.3)
(33.0)
0.1
15.5
0.6
—
—
—
4,572.5
1,397.8
(483.3)
—
3.6
25.8 374.0 690.3
11.3
734.4
224.6 3,414.1
16.1 5,490.6
287.0
41.7
5.5
—
— 1,128.1
3.2
1,467.5
77.3
(65.7)
0.3
298.9
89.0
25.9
(5.7)
(0.3)
61.5
33.1
0.9
—
—
6.4
1.2
— (124.6)
0.1
—
4.5 263.4
(10.8)
—
—
—
83.8
7.6
—
—
—
—
—
—
—
—
—
—
229.4
(40.4)
1.8
—
336.5
(111.8)
—
2.0
— 1,319.1
310.1
—
—
5.0
2.2
2.0
1,694.2
436.8
—
—
(137.1)
0.6
—
—
(272.5)
0.7
— 1,492.7
7.2 1,859.2
18.1
0.1
—
—
—
18.2
7.6
Cost
At 1 April 2020
Additions
Disposals
Transfers
FX translation
effect
At 31 March
2021
Additions
Disposals
Transfers
FX translation
effect
At 31 March
2022
Accumulated
depreciation
At 1 April 2020
Depreciation
charge for the
year
Disposals
FX translation
effect
At 31 March 2021
Depreciation
charge for the
year
Disposals
FX translation
effect
At 31 March
2022
Net book
amount
At 31 March
2022
At 31 March 2021 14.9
2.1
—
3.3
1.2
1.2
—
21.3 110.6 606.5
3.7
734.4
224.6 1,921.4
8.9 3,631.4
131.4
484.4
2.2
527.1
217.3 1,490.5
10.4
2,878.2
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 and treated as aircraft assets and parts (as if there were no sale at
all) (Note 2).
Other Right-of-Use (RoU) assets include leased buildings and simulator equipment. Please refer to Note 23
for details on lease liabilities.
Additions to aircraft maintenance assets (€36.1 million in F22 and €27.9 million in F21) 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 F22 in the statement of cash flows the cash inflow was
Wizz Air Holdings Plc Annual report and accounts 2022
168
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
€190.0 million “refund of advances paid for aircraft” and the cash outflow was €407.6 million “advances paid
for aircraft”.
The Group has reviewed the expected useful economic lives attributed to its leased aircraft fleet and notes
that the duration of its leases is significantly less than the current expected life of the aircraft and accordingly
no change as a result of climate change has been made.
Impairment assessment
An impairment assessment was performed for the Group’s aircraft fleet which comprises a single cash
generating unit (CGU) that includes virtually all property, plant, equipment, and also the intangible assets of
the Group. The recoverable amount of that CGU was estimated by value in use calculations based on cash
flow projections in the plan approved by the Board for the following three financial years up to and including
March 2025.
Management’s assessment of future trends includes trading and other assumptions - such as fleet size,
passenger numbers, load factors, commodity prices, foreign exchange rates - based on external and internal
inputs, as well as climate change risks and opportunities outlined in the TCFD disclosure. Key assumptions
for the jet fuel price and USD exchange rate were the following:
Jet fuel price (EUR per metric tonne)
USD/EUR exchange rate
2023
1,050.0
1.1
2024
950.0
1.1
2025
950.0
1.1
An average growth rate of 2.1% (2021: 1.7%) was used to extrapolate cash flow projections beyond March
2025 for a period of 12 years in total to cover all lease terms in the existing aircraft fleet. A pre-tax discount
rate of 9.7% (2021: 8.0%) was derived from the weighted average cost of capital of the Group. The risk of
significant adverse changes in cash flows were taken into account by calculating and weighting
management’s base case approved plan with a downside scenario that is consistent with that used in the
Group’s going concern assessment. Sensitivity analysis was performed by management to assess the impact
of changes in its trading assumptions and the key assumptions detailed above. Management did not identify
any reasonable possible changes in assumptions that would cause an impairment.
Four aircraft in Ukraine
The above impairment assessment included the four aircraft on the ground in Ukraine, with a total net book
value of €25.7 million. Based on photographic and local employee information management believes that
these aircraft are in good condition and have not been damaged in the conflict. Whilst not a separate CGU
cash flow projections were estimated for these aircraft based on the average cash contribution generated
per aircraft in the Group’s fleet adjusted for a downward scenario according to the plans and calculations
described above, and the cost of planned maintenance of the particular aircraft. Management’s working
assumption is that these aircraft will be returned to the fleet by the end of the summer season, however,
delays to the date until the aircraft remain on the ground can cause material changes to their estimated
recoverable amount. If the aircraft do not return into service for a prolonged period of time, then additional
consideration will be needed in the upcoming reporting cycles.
Wizz Air Holdings Plc Annual report and accounts 2022
169
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
15. Intangible assets
Cost
At 1 April 2020
Additions
Disposals
At 31 March 2021
Additions
Transfers
Disposals
At 31 March 2022
Accumulated amortisation
At 1 April 2020
Amortisation charge for the year
At 31 March 2021
Amortisation charge for the year
Disposals
At 31 March 2022
Net book amount
At 31 March 2022
At 31 March 2021
Software
€ million
Licences
€ million
CIP intangible assets
€ million
Total
€ million
47.3
7.5
—
54.8
—
15.2
(10.2)
59.8
24.5
8.8
33.4
10.0
(10.2)
33.2
26.6
21.5
4.7
—
—
4.7
26.7
—
—
31.4
0.3
—
0.3
—
—
0.3
31.1
4.4
—
12.1
(7.5)
4.6
15.4
(15.2)
—
4.8
—
—
—
—
—
—
4.8
4.6
52.0
19.6
(7.5)
64.1
42.0
—
(10.2)
95.9
24.8
8.8
33.7
10.0
(10.2)
33.5
62.4
30.4
Out of the licences, €4.4 million relates to landing slots at London Luton Airport, purchased from Monarch
Airlines. In 2022 the Company purchased further landing slots at Gatwick Airport from Air Norway AS and
Norwegian Air Shuttle ASA (“Norwegian”) in the amount of €23.7 million. Connected to the W22 landing and
take-off rights purchase at Gatwick Airport from Norwegian, there is a €5.9 million commitment due in July
2022. 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.
16. Tax assets and liabilities
Deferred tax assets and liabilities recognised
RoU assets
and
lease liabilities
€ million
2.6
Provisions for
other liabilities
and charges
€ million
(0.5)
Property,
plant and
equipment
€ million
(0.4)
Advances paid
for aircraft
maintenance
assets
€ million
(0.4)
Tax loss
carry
forward
€ million
1.0
Other
€ million
0.8
Total
€ million
3.1
(2.4)
—
0.2
—
0.2
3.2
—
3.4
—
3.4
(2.3)
—
(2.8)
—
(2.8)
—
—
(2.8)
—
(2.8)
(0.9)
—
(1.3)
—
(1.3)
0.2
—
(1.1)
—
(1.1)
(1.8)
—
(2.2)
—
(2.2)
—
—
(2.2)
—
(2.2)
0.1
—
1.1
—
1.1
—
—
1.1
—
1.1
(0.5)
(0.5)
(0.2)
(0.2)
—
0.1
—
(0.1)
—
(0.1)
(7.8)
(0.5)
(5.2)
(0.2)
(5.0)
3.5
—
(1.7)
—
(1.7)
At 1 April 2020
Charged/(credited) to:
Profit or loss
Other comprehensive
income/(expense)
At 31 March 2021
Less than one year
Greater than one year
Charged/(credited) to:
Profit or loss
Other comprehensive
income/(expense)
At 31 March 2022
Less than one year
Greater than one
year
Assets: + / Liabilities: -
The €3.4 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 period the Group
IFRS financial statements cumulatively include more expense and a lower profit than the tax returns.
Wizz Air Holdings Plc Annual report and accounts 2022
170
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
There was no deferred tax asset recognised in relation to the losses incurred by the Group in F22 mainly
because the losses incurred by the main airline subsidiary of the Group are not eligible for utilisation against
taxable profits in the future.
17. Subsidiaries
The Group has the following principal subsidiaries as at 31 March 2022:
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 Aviation
Professionals
WA Pilot Academy
Sp. Z.o.o.
Wizz Air UK Ltd.
Wizz Air Finance
Company B.V.
Wizz Air Leasing Ltd.
Wizz Air Abu Dhabi
Ltd.
Wizz Air Abu Dhabi
LLC
Wizz Air Innovation
Ltd.
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
Moldova
Poland
UK
The Netherlands
Hungary
United Arab
Emirates
United Arab
Emirates
Hungary
3
Crew company Ordinary
100 31 December
4
5
5
6
Dormant Ordinary
100
31 March
Dormant Ordinary
Dormant Ordinary
100 31 December
100 31 December
Crew company Ordinary
100 31 December
Ordinary
7 Special purpose
company
8 Airline operator Ordinary
Ordinary
Financing
4
company
1
9
Aircraft leasing Ordinary
Holding entity Ordinary
100 31 December
100
100
100
49
31 March
31 March
31 March
31 March
10 Airline operator Ordinary
49
31 March
1 Service provider Ordinary
100 31 December
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 12 May 2021 Wizz Air Innovation Ltd. was 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.
Wizz Air Holdings Plc Annual report and accounts 2022
171
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
18. Non-controlling interests
The following table summarises the information relating to Wizz Air Abu Dhabi Ltd. and Wizz Air Abu Dhabi
LLC that has material NCI, before any intra-group eliminations.
2022
€ million Abu
Dhabi LLC
2021
€ million Abu Dhabi
LLC
2022
€ million Abu
Dhabi Limited
2021
€ million Abu
Dhabi Limited
Non-current
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Net assets attributable to NCI
Revenue
Loss
OCI
Total comprehensive income
Loss 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
167.7
24
200.7
39.9
(48.9)
(15.4)
20.2
(35.6)
(2.2)
(37.8)
(10.7)
(0.7)
5.4
(1.9)
(13.4)
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
(9.9)
30.8
Aircraft consumables
Emissions trading scheme (EU ETS) purchased allowances
Total inventories
45.1
—
45.1
—
—
—
—
—
—
—
—
—
(2.5)
—
2.5
—
2022
€ million
27.1
43.8
70.9
42.6
—
42.6
—
—
—
—
—
—
—
—
—
(42.6)
—
42.6
—
2021
€ million
20.2
33.5
53.7
During the year remnant stock with a book value of €0.2 million was written off to maintenance expenses
(2021: €0.1 million). There was no write back in either year of any write down of inventory made previously.
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
Prepayments, deferred expenses and accrued income
Current trade and other receivables
Total trade and other receivables
2022
€ million
2021
€ million
9.4
11.3
20.7
96.3
19.7
4.2
23.9
66.7
186.9
207.6
12.6
9.0
21.6
63.1
30.2
1.0
31.2
19.4
113.7
135.3
Trade and other receivables in F22 included financial instruments in the amount of €141.6 million (2021:
€83.7 million, which has been restated from €109.3 million disclosed in the F21 financial statements as
explained in Note 3).
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 €52.3 million receivables from contracts with customers (2021: €24.0 million).
The lower balances in F21 were driven by the significant decline in sales revenues due to the COVID-19
outbreak.
Wizz Air Holdings Plc Annual report and accounts 2022
172
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Impairment of trade and other receivables
Impaired receivables
– trade receivables
Allowances on impaired receivables
– other receivables
2022
€ million
2021
€ million
3.7
0.6
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
Current derivatives
Cash flow hedges
Discontinued hedges
Total derivative financial assets
Liabilities
Current derivatives
Cash flow hedges
Discontinued hedges
Total derivative financial liabilities
2022
€ million
2021
€ million
0.7
—
0.7
(4.6)
—
(4.6)
3.8
1.3
5.1
(6.1)
(2.9)
(9.0)
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.
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.
22. Restricted cash
Non-current financial assets
Current financial assets
Total restricted cash
2022
€ million
67.3
94.9
162.2
2021
€ million
134.1
35.0
169.1
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 debt
Liability related to JOLCO and FTL contracts
Total current borrowings
Lease liability under IFRS 16
Unsecured debt
Loans from non-controlling interests
Liability related to JOLCO and FTL contracts
Total non-current borrowings
Total borrowings
2022
€ million
374.3
—
38.8
413.1
1,972.9
997.9
13.5
541.0
3,525.3
3,938.4
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
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. The CCFF
was repaid in February 2022. On 19 January 2021, Wizz Air Finance Company B.V., a 100 per cent owned
Wizz Air Holdings Plc Annual report and accounts 2022
173
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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.
Further to that, on 19 January 2022, Wizz Air Finance Company B.V., a 100 per cent owned subsidiary of
Wizz Air Holdings Plc., issued €500.0 million 1.00 per cent Eurobond, fully and irrevocably guaranteed by
the Company, under the €3,000.0 million EMTN programme with a maturity in January 2026.
The maturity profile of borrowings as at 31 March 2022 is as follows:
IFRS 16 aircraft and
engine lease
liability
€ million
IFRS 16 other
lease liability
€ million
JOLCO and FTL
lease liability
€ million
Unsecured
debt
€ million
Loans from non-
controlling
interests
€ million
Total
€ 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
41.7
61.5
0.2
0.3
—
9.7
269.2
1.4
29.2
—
—
—
—
—
41.8
71.5
—
299.9
1,176.2
788.7
2,337.3
5.7
2.2
9.8
161.6
997.9
—
2,341.3
379.4
—
13.5
1,183.8
579.9
997.9
13.5
3,938.4
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 Unsecured debt
€ 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
Total
€ million
45.4
52.7
45.3
45.6
0.1
0.7
—
6.4
—
—
—
—
248.8
1.1
23.7
350.3
—
623.9
1,013.9
429.2
5.7
3.5
122.5
499.2
—
1,641.3
302.0
—
12.8
747.5
1,782.8
11.1
454.6
849.5
12.8
3,110.8
The total cash outflow for leases, including JOLCO and FTL, during F22 was €470.7 million (2021: €405.9
million). See Note 7 for details on expenses relating to short-term and variable lease payments, and Note
14 for details on right-of-use assets.
24. Convertible debt
Non-current financial liabilities
Current financial liabilities
Total convertible debt
2022
€ million
26.1
0.3
26.4
2021
€ million
26.2
0.3
26.5
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 as an option to Indigo. 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.
Wizz Air Holdings Plc Annual report and accounts 2022
174
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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
2022
€ million
2021
€ million
Non-current liabilities
Accrued expenses
Other payables
Non-current trade and other payables
Current liabilities
Trade payables
Payables to passengers
Other payables
Accrued expenses*
Current trade and other payables
Total trade and other payables
*Non-current accrued expenses as at 31 March 2021 now total €79.0 million (previously €nil) following a correction in the
maturity analysis of these amounts, with current accrued expenses now totalling €148.0 million (previously €227.0 million) This
also resulted in the classification of these amounts as shown on the statement of financial position being restated as shown in
Note 36.
123.4
110.9
16.6
307.7
558.6
615.4
55.3
1.5
56.8
89.8
116.4
32.5
148.0
386.7
465.7
79.0
—
79.0
Payables to passengers include 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 that are subject of sale and repurchase
agreements, representing the obligation of the Group to repurchase the allowances.
Accrued expenses mainly include accruals for operating expenses such as airport and ground handling, fuel,
ETS allowances, en-route and navigation, crew and maintenance related expenses.
26. Deferred income
Non-current financial liabilities
Deferred income
Current financial liabilities
Unearned revenue
Other
Total deferred income
2022
€ million
2021
€ million
63.0
43.5
326.6
7.2
333.8
396.8
65.0
3.0
68.0
111.5
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 lower deferred income in F21 was due to the
significant drop in ticket sales due to the COVID-19.
The contract liabilities (unearned revenue) of €326.6 million existing at 31 March 2022 (€65.0 million at 31
March 2021) will become revenue during F23 (subject to further cancellations that might happen after the
year end). The lower basis of contract liabilities in F21 was driven by the lower business activity and shorter
booking windows during and towards the end of the financial year, both due to the COVID-19.
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 2018–2021 under the Long-term Incentive Plan (LTIP), Senior Leadership Growth Plan (SLGP)
and Value Creation Plan (VCP) of the Group. The expenses (other than social security) recognised in relation
to these instruments were €6.7 million (2021: €4.1 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.
Wizz Air Holdings Plc Annual report and accounts 2022
175
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
The Group announced on 6 August 2021, that it signed a new long-term service agreement with József
Váradi, the Group's founding Chief Executive Officer. The contract term is for five years and the terms of his
service agreement are materially the same as his previous agreement with the exception of a new long-term
incentive arrangement, the Value Creation Plan (VCP), which targets a 20% CAGR in the Group's share price
over the next five years. The VCP, together with a revised LTIP and new Senior Leadership Growth Plan
(SLGP) were approved by shareholders at the Group's recent AGM.
The fair value of the awards has been calculated using a Monte Carlo simulation model, with adjustment to
the volatility assumption used for the impact of COVID-19 on the Wizz Air share price. In accordance with
IFRS 2, the resulting cost is charged to staff costs in the statement of comprehensive income and a
corresponding increase in equity over the vesting period of the awards. The total amount is determined by
reference to the fair value of the awards granted including any market performance conditions, which are
those that are based on the Wizz Air share price, and the individual remaining an employee over a specified
time period. The Group plans to settle the awards on vesting in equity. The Group assumes management
rotation of 19% for LTIP and 22% for SLGP to calculate number of shares to be forfeited during the vesting
period.
Value Creation Plan (VCP)
Share options issued during the financial year
Terms and conditions:
Number of options
Exercise price
Vesting period
Termination
*Share price at grant date: £47,96
Senior Leadership Growth Plan (SLGP)
Share options issued during the financial year
Terms and conditions:
Number of options
Exercise price
Vesting period
Termination
*Share price at grant date: £47,96
Long-term Incentive Plan (LTIP)
Share options issued during the financial year
Terms and conditions:
l
l
Number of options
Exercise price
Vesting period
Termination
*Share price at grant date: £47,96
All Options
837,943
nil
Performance Options
837,943
nil
5 years
10 years
All Options
356,386
nil
Performance Options
356,386
nil
5 years
10 years
All
Options
181,675
nil
Restricted
Options
20,213
nil
3 years
10 years
Performance
Options
161,462
nil
3 years
10 years
Share options in issue
The number of VCP, SLGP and 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
880,344
1,376,004
(58,754)
(401,551)
1,796,043
128,059
Restricted
Options
78,442
20,213
(7,599)
(28,764)
62,292
17,500
Performance
Options
801,902
1,355,791
(51,155)
(372,787)
1,733,751
110,559
The weighted average remaining contractual life for the LTIP share award at 31 March 2022 was seven years
and five months (seven years and five months at 31 March 2021).
Employee Share Option Plan (ESOP)
Share options issued during the financial years
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.
Wizz Air Holdings Plc Annual report and accounts 2022
176
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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
2022
Weighted
average
exercise price
€
—
—
—
—
—
—
2022
Number
of options
—
—
—
—
—
—
2021
Weighted
average
exercise price
€
13.69
—
13.69
—
—
—
2021
Number
of options
47,500
—
(47,500)
—
—
—
At the end of the 2021 and 2022 financial year, there were no outstanding options any more.
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 Ltd. 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 €1.2 million (2021: €7.1 million).
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 (2021: 170,000,000) Ordinary
Shares of £0.0001 each and 80,000,000 (2021:
80,000,000) non-voting, non-participating
Convertible Shares of £0.0001 each
Allotted, called up and fully paid
Equity: 103,072,739 (2021: 103,012,219) shares of
£0.0001 each
Ordinary Shares
Convertible Shares
2022
60,520
2021
103,012,219 102,803,633
208,586
103,072,739 103,012,219
103,072,739 85,635,016
— 17,377,203
2022
£
2022
€
2021
£
2021
€
25,000
34,415
25,000
34,415
10,307
10,307
—
13,780
13,780
—
10,301
8,564
1,737
12,092
10,053
2,039
During both F22 and F21 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.
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 nil Convertible Shares in issue at 31 March 2022 (2021:
17,377,203 shares). The Company informed Indigo Hungary LP and Indigo Maple Hill, L.P. (together
Wizz Air Holdings Plc Annual report and accounts 2022
177
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
"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.
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 2022) 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. During F22 €nil million (2021: €0.6 million) was recorded in the share premium, all related to the
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 (2021: €8.3 million) is net
of attributable transaction costs of €8.3 million.
Share-based payment charge
The share-based payment balance of €25.2 million credit (2021: €18.4 million) corresponds to the
recognised cumulative charges 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 €1.5 million loss (2021: €2.2 million loss), while the deferred tax effect was €nil (2021: €nil).
Retained earnings
There were no dividends paid or declared in F22 or F21. Share-based payments are credited to retained
earnings.
30. Provisions for other liabilities and charges
At 1 April 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
Capitalised within property, plant and equipment
Charged to comprehensive income
Used during the year
At 31 March 2022
Non-current provisions
Current provisions
Aircraft
maintenance
€ million
105.9
44.2
61.7
25.9
—
(53.7)
78.1
49.3
28.8
21.0
0.8
(11.1)
88.8
43.0
45.8
Other
€ million
15.3
2.7
12.6
—
5.7
(10.2)
10.8
1.8
9.0
—
19.0
(11.5)
18.3
0.9
17.4
Total
€ million
121.2
46.9
74.3
25.9
5.7
(63.9)
88.9
51.1
37.8
21.0
19.8
(22.6)
107.1
43.9
63.2
Non-current provisions relate to future aircraft maintenance obligations of the Group on leased aircraft and
spare engines, falling due typically between one and five years 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
Wizz Air Holdings Plc Annual report and accounts 2022
178
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Note 4). Maintenance 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.
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:
Fair value
(restated)
2021
€ million
21.5
169.1
5.1
62.1
1,100.7
346.8
(79.0)
(344.5)
(9.0)
(26.5)
(2,318.5)
(858.0)
(1,930.2)
Carrying
amount
2022
€ million
20.6
Fair value Carrying amount
(restated)
2022
€ million
20.6
2021
€ million
21.5
162.2
0.7
120.9
766.6
450.0
(56.8)
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 after more than one
year
Trade and other payables due within one year*
Derivative financial liabilities
Convertible debt
Borrowings
Unsecured debt
Net balance of financial instruments
(liability)
*Trade and other receivables due within one year at 31 March 2021 have been restated from a carrying amount of €113.7
million to €62.1 million as explained in Note 3. Likewise trade and other payables due within one year at 31 March 2021 have
been restated from a carrying amount of €465.7 million to €344.5 million. The book value of both these amounts approximated
their fair value.
(79.0)
(344.5)
(9.0)
(26.5)
(2,261.3)
(849.5)
(1,864.4)
(472.4)
(4.6)
(26.4)
(2,940.4)
(997.9)
(2,977.5)
(472.4)
(4.6)
(26.4)
(2,821.5)
(953.6)
(2,814.3)
162.2
0.7
120.9
766.6
450.0
(56.8)
169.1
5.1
62.1
1,100.7
346.8
The fair value of the Eurobonds is estimated using quoted prices (Level 1), derivatives (Note 3) and lease
liabilities are valued using Level 2 methodology and the fair value of all other financial assets and financial
liabilities is estimated using Level 3 in the fair value hierarchy.
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
2022
€ million
0.7
0.7
Carrying amount
2021
€ million
5.1
5.1
Carrying amount
2022
€ million
4.6
4.6
Carrying amount
2021
€ million
9.0
9.0
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’ USD swap rate prevailing on the last day of the financial year. The carrying
value of the level 3 instruments within trade and other receivables is considered to be the fair value as
discounting has an immaterial effect.
Wizz Air Holdings Plc Annual report and accounts 2022
179
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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 contractual cash flows with the
discount rate (incremental borrowing rate) prevailing at the year end.
Gains and losses
The following net realised FX gains or losses were recognised in the statement of comprehensive income in
relation to derecognition financial assets measured at amortised cost:
during the year €37.4 million gain (2021: €30.1 million gain) on cash and cash equivalents;
during the year €0.5 million loss (2021: €15.2 million loss) on short term cash deposits
no material realised FX on restricted cash and trade and other receivables
See Note 10 for details of interest income recognised in F22 and F21.
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
2022
One to
two
years
2021
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
debt
IFRS 16
aircraft and
engine
lease
liability
IFRS 16
other lease
liability
JOLCO and
FTL lease
liability
7.4%
26.4
0.3
26.1
—
—
7.4%
26.5
0.3
26.2
—
1.35% 997.9
—
— 997.9
— 1.53% 849.5 350.3
—
499.2
—
—
3.4% 2,337.3 372.5 348.2 828.0 788.7
4.3% 1,782.8 339.8 284.2 729.7 429.1
3.55%
9.8
1.8
1.7
4.1
2.2 2.78%
11.1
1.9
1.6
4.1
3.5
0.97% 579.9
38.9
40.4 121.2 379.4 0.92% 454.6
30.1
30.3
92.2 302.0
Interest earning financial assets
The Group invested excess cash primarily in EUR and USD denominated short-term time deposits at market
rates 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
Proceeds from new loans
Repayment of loans
Proceeds from unsecured debt
Repayment of unsecured debt
Paid interest
Change in net borrowings from cash flows
New non-cash borrowings
Accrued interest
Exchange differences*
Other non-cash items
Net borrowings at the end of the year
2022
€ million
3,139.9
16.4
(397.5)
497.5
(357.5)
(84.3)
(325.5)
946.8
88.5
116.5
(1.5)
3,964.8
2021
€ million
2,039.4
195.6
(336.5)
1,177.0
(338.2)
(72.7)
625.2
482.2
76.7
(82.6)
(1.0)
3,139.9
Wizz Air Holdings Plc Annual report and accounts 2022
180
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
32. Financial guarantees
The Company has provided 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 Ltd. in the context of the UK operating licence application process of Wizz Air UK
Ltd.
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 in January 2021 and the issue of €500.0 million 1.00 per
cent Eurobond in January 2022 by Wizz Air Finance Company B.V. is fully and irrevocably guaranteed by the
Company.
33. Capital commitments
At 31 March 2022 the Group had the following contracted capital commitments:
A commitment to purchase 325 Airbus aircraft of the A320-family in the period 2022–2027. Of the 325
aircraft 278 relate to the “neo” version of the A320-family (59 from the purchase orders placed in June
2015, 144 from the purchase order placed in November 2017 and 75 from the purchase order placed in
November 2021), while the remaining 47 relate to the “neo XLR” version (20 from the purchase order
placed in June 2019 and 27 the purchase order placed in November 2021). The total commitment is
valued at US$45.8 billion (€41.1 billion) based on list prices last published in 2018 and escalated annually
until the reporting date based on contract terms (2021: US$34.1 billion (€29.1 billion);
As at the date of approval of this document out of the 325 aircraft 40 are to be delivered in F23 and for
29 financing is already contracted. The Group uses 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; and
A commitment to purchase 32 IAE “neo” (GTF) spare engines in the period 2022–2026. 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. In September 2019 the Group
restated and amended this engine selection agreement with certain other commitments including a
purchase of 25 additional spare engines. In October 2021 the Group committed to purchase further 2
spare engines. The total commitment is valued at US$534.7 million (€480.4 million) at list prices in 2022
US$ terms (2021: US$557.4 million (€474.5 million), valued at 2021 list prices). As at the date of
approval of this document out of the 32 engines 5 are to be delivered in F23 and none of them is financed
yet.
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.
Wizz Air Holdings Plc Annual report and accounts 2022
181
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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:
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 2022); and
key management personnel (Directors and Officers).
Indigo, Directors and Officers altogether held 25.6 per cent of the voting shares of the Company at 31 March
2022 (2021: 11.4 per cent).
Transactions with related parties
Transactions with Indigo
At 31 March 2022 Indigo held 24,684,895 Ordinary Shares (equal to 23.9 per cent of the Company’s issued
share capital) and nil Convertible Shares of the Company (2021: 7,307,692 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 €26.4 million at 31 March 2022 (2021: €26.7
million).
During the year ended 31 March 2022 the Company entered into transactions with Indigo as follows:
the Company recognised interest expense on convertible debt instruments held by Indigo in the amount
of €2.0 million (2021: €2.0 million);
fees of €0.3 million (2021: €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; and
conversion of Convertible Shares to Ordinary Shares (Note 29).
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
2022
€ million
5.4
1.1
5.6
2.5
14.6
2021
€ million
3.5
0.8
3.1
2.7
10.2
There were no termination benefits paid to any key management personnel in the year or the prior year.
There were no post-employment benefits and other long-term benefits provided to any key management
personnel in the year or the prior year.
There were no material transactions with related parties during the financial year except as indicated below.
In addition the Group has contracted with a related party of the CEO to provide IT services with regards to
Machine Learning. The amount paid for this service in F22 was €1.2 million (F21: €0.2 million), which in the
judgement of the Board was not material.
Wizz Air Holdings Plc Annual report and accounts 2022
182
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
36. Prior period restatements
The consolidated statement of financial position for the year ended 31 March 2021 has been restated as
follows:
LIABILITIES
Non-current liabilities
Trade and other payables
Current liabilities
Trade and other payables
2021
As previously
stated
Impact of
maintenance
related accrual
short term - long
term
reclassification
2021
As restated
€ million
€ million
—
79.0
79.0
465.7
(79.0)
386.7
See Note 3 and 25 for more details on this change in classification between current and non-current. For
2020 out of €469.6 million of current trade and other payables previously reported, €70.8 million should
have been classified as non-current.
37. Subsequent events
Wizz Air announced on 17 May 2022 its intention to establish a new airline subsidiary in Malta. Wizz Air is
constantly evaluating the structure of its business and exploring options to establish new AOCs and bases in
Europe and beyond. The successful establishment of Wizz Air Malta later this year will help to reinforce our
position and support our expansion plans in Europe.
On 3 June 2022, Wizz Air announced it will cancel all Wizz UK flying from its Doncaster Sheffield Airport base
from 10 June 2022. Pilots and cabin crew have been offered the opportunity to fly out of another base in
the UK.
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 13 May 2022 approximately 55.0 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. To
protect the EU airline operating licence of Wizz Air Hungary Ltd (a subsidiary of the Company), the Board
has resolved to continue to apply a disenfranchisement of Ordinary shares held by non-EEA shareholders in
the capital of the Company. This will continue to be done on the basis of a ‘Permitted Maximum’ of 45 per
Wizz Air Holdings Plc Annual report and accounts 2022
183
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
cent pursuant to the Company’s articles of association (the “Permitted Maximum”). The decision by the Board
is considered appropriate to ensure Wizz Air Hungary Ltd’s continued compliance with applicable ownership
and control requirements. We will provide further details on or before 1 July 2022, simultaneously with the
notice of annual general meeting that is scheduled to take place on 26 July 2022.
Wizz Air Holdings Plc Annual report and accounts 2022
184
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WIZZ AIR HOLDINGS PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
In our opinion, Wizz Air Holdings Plc’s group financial statements:
give a true and fair view of the state of the group’s affairs as at 31 March 2022 and of its loss and
cash flows for the year then ended;
have been properly prepared in accordance with International Financial Reporting Standards as
adopted in the European Union; and
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 2022 (the
''Annual Report''), which comprise: the Consolidated statement of financial position as at
31 March 2022; the Consolidated statement of comprehensive income, the Consolidated statement of
cash flows and the Consolidated statement of changes in equity 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 Risk 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
Context
The aviation sector has been severely impacted by the COVID-19 pandemic. As the impact of this has
started to abate with the roll-out of vaccination programmes and the lifting of travel restrictions, further
uncertainty has been caused by the war in Ukraine and underlying rising inflation that the war has
accelerated further together with restricting access to some of the markets in which the group previously
operated. This, coupled with staffing challenges has a large impact on the sector. We have considered
this background in our risk assessment and during the course of our audit work on the group’s F22
financial statements.
There is also significant interest from stakeholders including members about how climate change will
affect the group’s business and its future financial performance. We have considered the disclosures
made by the group in the Emerging sustainability as a force for growth section of the Strategic Report
and note that a number of financial risks could arise from both the transitional and physical risks
associated with climate change. These have been reflected by management in the preparation of the
financial statements to the extent that they can be forecast at present or in their conclusions as to why
no material impact is expected. The future financial impacts of climate change are clearly uncertain
given the timeframe involved and how Governments, global markets, corporations and society respond.
Overall management has concluded there is currently no material impact that it can forecast that
impacts the results for F22 or financial position at 31 March 2022. The key areas of the financial
statements that are also key audit matters where the potential impact of climate change was considered
are as follows:
Wizz Air Holdings Plc Annual report and accounts 2022
185
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WIZZ AIR HOLDINGS PLC
The impact on maintenance provisioning (see note 30); and
The group’s going concern assessment covering the period to June 2023 (see note 2).
The impact of climate change was also considered by management in respect of the headroom in the
group’s impairment assessment for the fleet (see note 14) which was not materially impacted and the
appropriateness of the estimated useful economic lives of the group’s fleet (see note 14), where no
changes were considered necessary given the useful economic life of the aircraft is expected to be much
longer than the typical lease period entered into.
Overview
Audit scope
The group financial statements are a consolidation of Wizz Air Holdings Plc, the trading subsidiaries
Wizz Air Hungary Ltd., Wizz Air UK Limited, Wizz Air Abu Dhabi LLC, Wizz Air Finance Company B.V
and Wizz Air Leasing Ltd. plus a number of insignificant intermediate holding and small trading
companies, and companies that are dormant.
The accounting for these entities and the group consolidation is centralised in Hungary where the
majority of our audit work was performed.
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
Accuracy of IFRS 16 'Leases' input data
Aircraft maintenance provisioning
Ability of the group to continue as a going concern
Materiality
Overall materiality: €17,500,000 (2021: €17,500,000) based on 5% of four-year average (2021:
three year average) profit / loss before tax adjusted for exceptional items, capped at the level of
the prior year materiality.
Performance materiality: €13,125,000 (2021: €13,125,000).
The scope of our audit
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.
Hedge and derivative accounting, consideration of the impact of COVID-19 and impairment of non-
financial assets, which were key audit matters last year, are no longer included because of their
reduced impact on the financial statements this year. Otherwise, the key audit matters below are
consistent with last year.
Wizz Air Holdings Plc Annual report and accounts 2022
186
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WIZZ AIR HOLDINGS PLC
Key audit matter
How our audit addressed the key audit matter
Accuracy of IFRS 16 'Leases' input data
The group recognised right-of-use (RoU) assets
of €1,930.3 million and associated lease
liabilities of €2,347.2 million as at 31 March
2022.
We understood and evaluated the process
followed by management to account for its
leases under IFRS 16.
The right-of-use assets and lease liabilities
largely relate to aircraft leases and are
calculated based on discounted future lease
payments. These calculations involve
assumptions including, but not limited to, the
determination of the lease payments, the
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 aircraft 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
2022 and Notes 14 and 23 which disclose the
right of use assets and lease liability balances
and movements, respectively.
We tested the integrity of management's system
used to perform the lease liability and RoU asset
calculations by testing that its IT general
controls are operating.
We tested the accuracy of the underlying data
used in management’s system calculation for
new leases in the year to supporting lease
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 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.
We assessed the appropriateness of lease
extension options being used to calculate the
value of the lease liabilities.
Where leases contained an option for early
termination or extension, we considered
management's assessment of the likelihood of
the option being exercised, based on the nature
of the assets and the terms including changes in
the period under option.
Using a digital audit solution we also
reperformed the calculation of the asset,
liability, depreciation and interest entries
relating to accounting for leases under IFRS 16
and compared the results to the values
generated by management’s system and found
the difference to be within acceptable
thresholds.
Wizz Air Holdings Plc Annual report and accounts 2022
187
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WIZZ AIR HOLDINGS PLC
We did not identify any material uncorrected
misstatements from our work in respect of the
right-of-use assets and lease liabilities.
Aircraft maintenance provisioning
The group operates aircraft which are held
under lease arrangements and incurs liabilities
for maintenance costs in respect of leased
aircraft in line with the terms of its aircraft
leases.
We understood and evaluated the process
followed by management to determine its
maintenance provision, including the input data,
assumptions and significant judgements and
estimates used.
Under these 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.
We tested the integrity of the maintenance
provision system used by management by
testing the IT general controls and testing
specific automated calculations therein.
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 €88.8 million for
aircraft maintenance costs in respect of leased
aircraft are recorded in the financial statements
at 31 March 2022 (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, including an assessment of
whether climate change may impact the
maintenance cycle. This includes a judgement
on whether to perform future maintenance
based on expected flying hours or whether to
avoid this and 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.
We also assessed the process by which the
variable factors used within the provision were
estimated by performing the following
procedures:
- Comparing the cost assumptions in 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.
- Testing the input data through
agreement to underlying lease
contracts, focussing specifically on new
and amended contracts and considered
whether the planned maintenance could
be materially impacted by risks
associated with climate change.
- Assessing whether the calculations took
into account the impact, if any, of
aircraft that have been parked including
the four aircraft in Ukraine.
- Re-performing calculations.
- Performing a look back test to assess
the accuracy of past estimates.
- Testing the short and long-term split of
the provision.
We assessed the adequacy of disclosures in note
4 in respect of the significant judgements and
estimates involved in maintenance provisioning.
We did not identify any material uncorrected
misstatements from our work on maintenance
provisions.
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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WIZZ AIR HOLDINGS PLC
Ability of the group to continue as a going
concern
The COVID-19 pandemic has had a significant
impact on the airline industry, and has had a
significant impact on the group's operations,
results and the cash outflows that it experienced
in the year ended 31 March 2022.
Our procedures and conclusions in respect of
going concern are set out below in the
'Conclusions relating to going concern' section
below.
There is on-going uncertainty over the shape
and speed of potential recovery and the impact
of new variants of the COVID-19 virus as well as
the impact of the war in Ukraine which has
restricted access to some markets for the group
and added to the inflationary pressures being
faced by the global economy.
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 2023. Both scenarios include
considerations about future capacity levels, the
availability of aircraft financing, and
assumptions on fuel costs. The forecasts
assume that the four aircraft stranded in
Ukraine will be returned to the fleet by the final
quarter of this year. Management has concluded
that the impact of physical or transition risks
due to climate change is unlikely to have a
material impact in this relatively short forecast
period.
The group’s debt facilities do not contain
financial covenants and accordingly the focus of
the going concern assessment is on liquidity
levels.
The Directors have concluded that there is
sufficient liquidity available for at least the
period of its going concern assessment to June
2023.
We focused on management’s going concern
assessment due to the uncertainty of the
industry’s recovery from the COVID-19
pandemic, the impact of the war in Ukraine 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 judgments and estimates in relation to
their going concern assessment.
How we tailored the audit scope
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.
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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WIZZ AIR HOLDINGS PLC
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, the main ones being Wizz Air Hungary
Ltd., Wizz Air UK Limited, and Wizz Air Abu Dhabi LLC, Wizz Air Finance Company B.V and Wizz Air
Leasing Ltd together with branch operations in base countries. Whilst the consolidated results consist
of a number of legal entities, due to the internal reporting process and maintenance of centralised entity
and consolidated general ledgers for the group, our audit approach is to audit the consolidated results
as one component. The accounting for these entities and the group consolidation is centralised in
Budapest, 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. The UK team has directly audited the consolidation and
certain other areas and directed and supervised the work of the local team Hungary.
In addition to the audit work performed by the engagement team based in Hungary, the UK team
members visited the team in Hungary five times during the audit cycle. These visits involved discussing
the audit approach, key audit matters and issues arising from the work. The UK team members also
attended the local clearance meeting in Hungary and all Audit Committee meetings in Switzerland,
either in person or via telephone call. This gave us the evidence we required to form our opinion on the
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 (2021: €17,500,000).
How we determined it
Rationale for benchmark applied
5% of four-year average (2021: three year
average) profit / loss before tax adjusted for
exceptional items, capped at the level of the
prior year materiality.
We believe that profit / loss before tax adjusted
for exceptional items is a key measure used by
shareholders in assessing the performance of
the Group. For the year ended 31 March 2022
the group continued to incur losses for the
second year due to the COVID-19 pandemic,
which resulted in restrictions on flying and
impacted measures of performance. To mitigate
this we have used a four 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 compared to pre-pandemic levels, we
decided to cap materiality at the F20 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% (2021: 75%) of overall materiality, amounting to
€13,125,000 (2021: €13,125,000) for the group financial statements.
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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WIZZ AIR HOLDINGS PLC
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 Risk Committee that we would report to them misstatements identified
during our audit above €875,000 (2021: €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:
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 2023.
Management's base case forecasts are taken from its normal budget and forecasting process for the
next three years. We understood and assessed this process including the assumptions used for F23
and F24 and assessed whether there was adequate support for these assumptions. We also
considered the 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 flows
experienced in F22 and by comparison of assumed flying levels relative to those experienced in F21
and F22.
We read and understood the key terms of its committed debt facilities to understand any terms,
covenants or undertakings that may impact the availability of the facility. We also considered the
group’s contracts with its card acquirers, the restrictions they may impose and the ability of the
group to switch providers.
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.
Using our knowledge from the audit and assessment of previous forecasting accuracy, we applied
our own sensitivities 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.
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.
We assessed the adequacy of disclosures in the Going Concern statement on pages 123 to 124
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.
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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WIZZ AIR HOLDINGS PLC
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,
which includes reporting based on the Task Force on Climate-related Financial Disclosures (TCFD)
recommendations. 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 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:
The directors’ confirmation that they have carried out a robust assessment of the emerging and
principal risks;
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;
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;
The directors’ explanation as to their assessment of the group's prospects, the period this
assessment covers and why the period is appropriate; and
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:
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;
The section of the Annual Report that describes the review of effectiveness of risk management and
internal control systems; and
The section of the Annual Report describing the work of the Audit and Risk Committee.
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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WIZZ AIR HOLDINGS PLC
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 Listing Rules of the UK Financial Conduct Authority,
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 and relevant corporation tax compliance regulations, 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
such as aircraft maintenance provisions. Audit procedures performed by the engagement team included:
Discussions throughout the year with management, Internal Audit and the Group's internal counsel,
including consideration of known or suspected instances of non-compliance with laws and regulation
and fraud;
Understanding and evaluating controls designed to prevent and detect irregularities and fraud;
Assessing significant judgements and estimates in particular those relating to impairment,
maintenance provisions, lease accounting, and income taxes, and the disclosure of these items;
Identifying and testing journal entries, in particular journal entries posted with unusual account
combinations; and
Reading the minutes of Board meetings to identify any inconsistencies with other information
provided by management.
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.
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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WIZZ AIR HOLDINGS PLC
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 obtained all the information and explanations we require for our audit; or
certain disclosures of directors’ remuneration specified by law are not made.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee (now the Audit and Risk 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 ended 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 15
years covering the years ended 31 March 2008 to 31 March 2022 and for the Company is 13 years,
covering the years ended 31 March 2010 to 31 March 2022.
VOLUNTARY REPORTING
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.
OTHER MATTER
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency
Rule 4.1.14R, these financial statements will form part of the ESEF-prepared annual financial report
filed on the National Storage Mechanism of the Financial Conduct Authority in accordance with the
ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance over
whether the annual financial report will be prepared using the single electronic format specified in the
ESEF RTS.
Richard Porter
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Recognized Auditor
London, United Kingdom
8 June 2022
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