WIZZ AIR HOLDINGS PLC
ANNUAL REPORT AND ACCOUNTS 2023
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 179 Airbus A320 and A321-family aircraft, and connecting 228
destinations across 56 countries. A team of dedicated aviation professionals delivers superior service
and very low fares, making Wizz Air the preferred choice of over 51 million passengers. Wizz Air is
listed on the London Stock Exchange under the ticker WIZZ.
At Wizz Air, 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
Report on sustainability
Modern Slavery Act disclosure statement 2023
Financial review
Key statistics
Emerging and principal risks and uncertainties
Governance
Chairman’s statement on corporate governance report
Management of the Company
Report of the Chairman of the Audit and Risk Committee
Report of the Chair of the Safety, Security and Operational Compliance
Committee
Report of the Chairman of the Nomination and Governance Committee
Directors’ remuneration report
Directors’ report
Company information
Statement of Directors’ responsibilities in respect of the financial statements
Accounts and other information
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes forming part of the financial statements
Independent auditors’ report
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6
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13
75
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84
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216
References to “Wizz Air”, “Wizz”, “the Company”, “the Group”, “we” or “our” in this report are references to Wizz Air Holdings Plc,
or to Wizz Air Holdings Plc and its subsidiaries, as applicable.
F23 in this document refers to the financial year ended 31 March 2023. Equivalent terms are used for prior/future financial years.
Wizz Air Holdings Plc Annual report and accounts 2023
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HIGHLIGHTS AND
COMPANY OVERVIEW
€3.9B REVENUE
€1.5B TOTAL CASH*
€466.8M OPERATING LOSS
€535.1M NET LOSS
3.98 €CENTS RASK*
2.58 €CENTS EX-FUEL CASK*
•
For definition refer to the Glossary of technical terms on page 84. Total cash comprises cash and cash equivalents (€1,408.6
million), short-term cash deposits (€nil million), and current and non-current restricted cash (€120.4 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 2023
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2.3272.7610.7391.6633.896F19F20F21F22F23—0.5001.0001.5002.0002.5003.0003.5004.0001.5051.4961.6171.3791.529F19F20F21F22F23—0.5001.0001.5002.0002.5003.000357.9338.3(528.1)(465.3)(466.8)F19F20F21F22F23(510.0)(408.0)(306.0)(204.0)(102.0)—102.0204.0306.0408.0123.0281.1(576.0)(642.5)(535.1)F19F20F21F22F23(800.0)(600.0)(400.0)(200.0)—200.0400.03.863.952.892.993.98F19F20F21F22F23—0.501.001.502.002.503.003.504.004.502.312.273.862.812.58F19F20F21F22F23—0.501.001.502.002.503.003.504.004.50
GEOGRAPHIES
We offer tickets for 1,057 routes across Europe and the
Middle East
Number of routes operated and on sale as at 31 March 2023 *:
From Central and Eastern Europe (CEE) countries
Poland
Romania
Hungary
Bulgaria
Albania
Bosnia and Herzegovina
North Macedonia
Lithuania
Serbia
Moldova
Georgia
Kosovo
Latvia
Montenegro
Slovenia
Estonia
From other European countries
Italy
United Kingdom
Austria
Cyprus
From Gulf Cooperation Council (GCC) and Middle East countries
United Arab Emirates
Israel
* Showing routes that are based/originated from the respective countries
Wizz Air Holdings Plc Annual report and accounts 2023
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195
76
62
44
38
36
29
26
19
12
5
4
3
2
1
158
76
34
9
25
6
3
WHY INVEST IN WIZZ?
DESIGNED FOR PROFITABLE
GROWTH
A key strength of Wizz Air is its focus on being airline with the lowest costs. It achieves this by a
relentless focus on absolute cost reduction, maximising aircraft utilisation, high seat density,
increasing load factors and optimising pricing strategies. We combine these factors with an attractively
priced and timely order book of Airbus A321neo aircraft, featuring the highest single-aisle cabin
configuration with 239 seats. With a backlog order of 365 aircraft, including 47 A321XLRs that offer
additional flying time compared to A321neo, and the lowest cost base enabled by the lowest fuel burn
and our disciplined ultra-low-cost model, we have a strong basis to deliver consistent profitable
growth. We target 15–20 per cent growth in seat capacity every single year and aspire to deliver a net
income margin between 13 and 15 per cent as we move towards our 2030 target of reaching a fleet of
500 aircraft. The Company reinstated its jet fuel hedging policy during fiscal year 2023 bringing more
predictability to its fuel expenses in the coming years.
ULTRA-LOW COST BY DESIGN
The European short to medium-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 a straight forward business
model - high aircraft utilisation and staff productivity rates result in lower costs than our legacy rivals.
Wizz Air’s ultra-low-cost model gives it a clear cost advantage versus most of its rivals, including 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 our customers. We
have made additional investments to scale our key operational areas, including customer service, crew
support and supply chain. Automation and digital assets are replacing repetitive and labour-intensive
tasks, contributing to better and more cost-effective decisions.
We operate the newest fleet of aircraft with the lowest emissions intensity. We utilise our aircraft more
than twelve hours per day, 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.
MEETING AND STIMULATING
DEMAND
We make flying affordable for more people by offering the lowest fares. Historically, 75 per cent of our
growth has come through market growth. Today, we are seeing gradual recovery in industry market
seat capacity to pre-pandemic levels. In many locations our capacity growth fills the void left by many
operators which are unable to meet passenger demand either due to resource constraints or supply
chain issues. Our broader and more diversified network offers more choice to allocate capacity in a
way that drives profitable growth. We continue to be the market leader in our core Central Eastern
European market, while continuing to make investments in the Middle East, where a propensity to fly,
calculated as a number of seats per head of population, is lower than in Central and Eastern Europe
and significantly lower than 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 and will continue to grow as we deploy
advanced data science to key product lines, driving further passenger demand.
BALANCE SHEET STRENGTH
We have €1,529.0 million of total cash (including short-term deposits and restricted cash balances) at
the end of March 2023. The Company has hedged more than half of planned jet fuel volume
consumption for F24 with industry competitive average prices. Estimated Emissions Trading Scheme
obligations for F24 are covered at 99 per cent, while F23 year-end jet fuel related EUR/USD FX hedges
are at 30 per cent for F24. Even as we add 41 new A321neo aircraft to our fleet in F24, our net debt
(gross debt minus unrestricted cash) is expected to reduce, supported by lower lease liabilities and
higher operational cash generation. 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
Wizz Air Holdings Plc Annual report and accounts 2023
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utilisation. Wizz Air’s investment grade rating by Fitch is maintained at BBB- with negative outlook,
while during the third quarter of fiscal year 2023 Moody’s issued a Ba1 rating with stable outlook.
THE MOST SUSTAINABLE CHOICE
OF AIR TRAVEL
We launched Wizz Air with the strong belief that air travel should not be a privilege. And while we
gave the freedom to travel to more people, we have also proven that growth and sustainability can be
achieved hand in hand. At Wizz Air we strive to serve more and more passengers every day, in the
most sustainable way possible. Our motto is: “When you don’t need to fly, please don’t. But when you
do, fly the greenest.”
In F23 Wizz Air decreased its average carbon emissions intensity by 11.3 per cent compared to the
previous financial year. This is the lowest CO2/RPK performance we have measured and reported in
the history of the Company, and we will continue to improve, decreasing our CO2 emissions intensity
by 25 per cent by the fiscal 2030 vs fiscal 2020 period.
We are proud to have been awarded Global Environmental Sustainability Airline Group of the Year by
CAPA (Centre for Aviation), naming Wizz Air as the most environmentally sustainable airline not just in
Europe but globally. This is a further validation of our commitment towards becoming the most
environmentally responsible choice for air travel.
Wizz Air is continuously adding new Airbus A321neo aircraft to its fleet and replacing older aircraft,
with the share of new “neo” technology aircraft already surpassing 50 per cent. We have one of the
youngest fleets globally (4.6 years), which allows exceptional fuel economy, contributing to lower
emissions per passenger kilometre. We are continuously working on identifying new fuel efficiency
initiatives and have made important steps this year to improve the related data analytics.
Alongside technology and operational improvements, alternative fuels are a crucial part of
decarbonising aviation. Wizz Air’s SAF strategy consists of a combination of project investments to
secure its own source of supply and securing contractual offtake agreements with suppliers that can
deliver sufficient supplies of SAF to meet future blending mandates. The Company is working with
stakeholders to qualify a SAF supply chain in line with the ULCC principles whilst meeting all applicable
criteria on feedstock.
We recognise that Wizz Air has an obligation to take further steps towards the decarbonisation of the
airline industry by enabling innovative technologies. We believe that our business model and
operational design (high seat density, high passenger load factors) as well as our commitment to the
most efficient available aircraft and engine technology inherently drive the industry’s sustainability
agenda, well ahead of any of our competitors.
Wizz Air Holdings Plc Annual report and accounts 2023
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STRATEGIC REPORT
CHAIRMAN’S STATEMENT
Dear fellow shareholders, colleagues, customers and partners,
After several years of travel restrictions, this year returned to normality as passenger demand for air
travel surged. With pandemic imposed travel limitations behind us and the suffering from the war in
Ukraine geographically contained, the airline industry turned its attention to a new set of challenges –
increased costs, supply chain disruptions and labour shortages.
While revenue supported by fleet and capacity growth increased, certain costs, notably jet fuel,
remained elevated until right before the end of the fiscal year, which drove the Company to a 535m
EUR net loss position for the year ended 31 March 2023 (F23).
The summer season exposed how fragile the supply chain had become as Wizz Air and the partners it
relies on failed to meet operational metrics it had historically achieved. This was an unacceptable
outcome, especially in an environment with high consumer demand and resulted in customer
dissatisfaction, opportunity cost and brand impairment. Results did, however, emphasize the
Company’s need to return to pre-pandemic operational behaviour and its back to basics’ ultra-low cost
airline business model.
Wizz Air’s industry-leading fleet order book provided certainty to its growth trajectory which meant
that all focus was focused on cost reduction, both in absolute terms and unit cost, to regain its lead as
the lowest cost producer of airline seats. This is the advantage that will drive Wizz Air’s performance
and is what Wizz Air executed against. The Company established specific key performance indicators
that encompass the core principles of ULCC and, as achieved, will drive the cost results it has
historically delivered.
Our success starts with our people. In addition to ensuring there is a balance in the productivity of our
workforce, we enhanced our investments in our people, which relies on roughly 2,000 new hires
annually. This meant starting the staff training cycle sooner, to allow for longer lead times in hiring, as
well as comprehensive salary review processes. Inflation spiked in 2022 and the Company paid a one-
off bonus to all staff below Head Level to assist in defraying day-to-day cost increases.
There was further network geographic diversification, building on this theme from last year. We
increased our investment into Wizz Air Malta, to split the Central and Eastern European fleet across
two airline operating certificates (“AOC”), each with accountable managers and dedicated resources,
to better address disruption in their respective territories without diverting resources from unaffected
areas of the core operations. Core operating principles for each AOC were developed so that each of
the United Kingdom, Malta, Hungary and Abu Dhabi airlines can act and deliver on a standalone basis.
We consolidated our corporate headquarters to ensure management and employees were under the
same building, to foster collaboration, in-person community building and cost reduction.
The H2 numbers demonstrate the results of these efforts. Our unit costs ex-fuel have reduced to the
levels we provided guidance to, while our unit revenue remained consistently ahead of pre-pandemic
levels. The trajectory starts with a clear vision and a robust strategic plan.
Employees
We want to thank our employees for their commitment to Wizz Air. We are seeing stability in the
workforce and Wizz Air’s range of career opportunities shows it is an attractive employment home at
a company with a winning formula. The combination of a path to profitability and sustained growth
creates more opportunities at Wizz Air than in many other companies. Whether you are a cadet
seeking a Captain position, cabin crew looking for management experience, or just pursuing the next
challenge, the opportunities are plentiful. We remain focused on continuing to improve the diversity of
our workforce and building a strong and diverse bench for the Wizz Air team
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. Our employees remain engaged and, through our Employee
Survey, voted Wizz Air as their employer of choice
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.
Customers
Thank you for your continued trust in Wizz Air. Our business succeeds when we can offer low fares
and reliable travel and we are grateful for your business. Our redirected focus on completion rate and
on time performance will restore performance standards we can take pride in and we encourage you
to explore our expanded footprint, with more options to fly than ever before.
Wizz Air Holdings Plc Annual report and accounts 2023
6
Environment
Fleet renewal remains our core pillar in reducing CO2 emissions, as demand for new aircraft
technology encourages innovation and technological advances. Wizz Air has been leading this effort to
address emissions reduction in the short term.
We have evaluated many sources of sustainable aviation fuel (SAF) and look to invest where we see
potential, especially in technologies like the Firefly and CleanJoule projects we invested in, where the
SAF feedstock meets legislative requirements.
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. Management regularly engages with key stakeholders such as
regulators, governments, shareholders, customers and local communities to drive action on national
and local issues.
Looking ahead
We have always prided ourselves on our ability to innovate and adapt and in this financial year 2023,
we refocused on these values and pivoted from a prior year of challenges to a year of renewal. By
prioritizing our investments into staff, supply chain and operational resilience, we are taking strategic
steps to enhance our financial health, streamline our operations and consolidate our business. We
have diversified our supplier base to increase reliability and flexibility, to enable us to better service
our customers and better react to the disruptions the industry will send our way. A strong, adaptable
company is better equipped to face the uncertainties of tomorrow and by combining that with our ultra
low-cost business model we expect to deliver enhanced shareholder value over the long term and
sustainable growth.
William A. Franke
Chairman of the Board of Directors
8 June 2023
Wizz Air Holdings Plc Annual report and accounts 2023
7
STRATEGIC REPORT
CHIEF EXECUTIVE’S REVIEW
Demand for air travel was quick to return this fiscal year after a rapidly retreating pandemic, with the
F23 summer season proving just how eager passengers were to return to the skies and visit loved
ones, take that overdue holiday and shake a customer’s hand. Fears about a fundamental change in
consumer travel behaviour quickly subsided as the industry proved, as it has after every other ‘shock’,
its ability to snap back. While airline industry seat capacity struggled to recover to pre-pandemic
levels, held back by manufacturer delivery delays and the lead time in reactivating aircraft from long-
term parking, Wizz Air launched forward growing its headcount by 2,949 employees and its fleet by 58
aircraft, from F20 to F23. We quickly proved that the decisions made during the COVID-19 period
would enable Wizz Air to become Europe’s fastest growing airline, while still growing unit revenue.
The choice we made during the COVID-19 period to increase our Airbus order book and place our fleet
focus on the A321 aircraft variant, with an industry leading 239 -seat configuration, and equipped with
the most fuel-efficient engines available, gave us seat capacity to deploy across a growing network
that now spans markets from Iceland to the Maldives. Nobody else has a similar order book, at least
not for three or four years, and this availability will allow us to lay a foundation to return to profit next
year, barring any unforeseen events such as impacts from the war in Ukraine, the pandemic or
otherwise.
We deliver this by reducing costs and intelligently deploying growth. We faced unimaginable
challenges in the Summer of F23, as we scrambled to redeploy our staff and capacity from Ukraine
elsewhere in the WIZZ network. Airspace over and around Ukraine was either closed or severely
constrained, which meant there were limitations to flying we were forced to accommodate. Air traffic
controllers, affected by pandemic -related decisions, were in short supply, further complicating the
limited airspace over our core central and eastern Europe market. We faced dramatically high jet fuel
costs and the range of currencies that we sell tickets in demonstrated high volatility compared to the
US Dollar, in which many of our costs are denominated.
To ensure that we are prepared to address externally driven labour and supply chain disruptions, we
developed a set of key performance indicators to measure our business. KPIs carefully derived from
prior periods of Company profitability that, when achieved, are designed to replicate the operating
environment to deliver the profit margins shareholders are to expect from Wizz Air. These KPIs deliver
best-in-class metrics around minimal flight cancellations, high daily aircraft utilization and balanced
labour productivity while simultaneously reduce ex-fuel unit costs.
From the beginning of F24, our fuel and fuel-related FX hedging strategies are in line with internal
policy, which wasn’t the case in F23 due to the time required when deploying forward hedging tools.
We work with the leading financial institutions to manage risk systemically to avoid speculation and to
assist in financial planning and confident decision making.
The building blocks for future success are a) a stabilized expanded geographic footprint into which we
can use our capacity to build market share; b) KPIs designed to improve operational performance &
customer satisfaction while reducing cost, and c) risk management policies that eliminate any peer
advantage on fuel and fuel-related currency cost.
A focused ultra-low-cost business model
Our business model relies on effective control over costs, efficient operations and productive use of all
of our assets. In the pandemic years of F20, F21 and F22, different strategies were required to
navigate that operating environment. During F23, as the demand for passenger air travel started
increasing, we placed all our focus on returning to our ultra-low cost principals, delivering higher asset
utilization, passenger load factors and a relentless drive to lower unit costs (fuel and ex-fuel) year-
over-year. Our workforce profile changed during these recent years, with many WIZZ veterans having
left the business and new fresh team members learning the WIZZ way.
Additionally, as a larger business, we have been deploying our scale to strengthen the ultra-low-cost
model. We have automated number of processes to deal with higher volume of transactions, including
across number of support functions. Digital assets are now helping improve key performance metrics
like on-time performance, crew and fleet utilization and schedule completion. Negotiations with our
suppliers are delivering new volume discounts and we are focusing on key cost items, ranging from
airport volume agreements to engine selection and aftermarket support.
The fleet we operate today is one of the youngest global fleets of 100+ aircraft with a 4.6 year
average age with an average seat count of 219, up from 212 last year and now one of the highest
average seat count on any narrow-body fleet. When this fleet is used optimally and in the normal
operating conditions it delivers best economic and environmental value for all stakeholders. We
believe the price we pay for our aircraft, on per seat basis, is one of the lowest globally, due to timing
and the volume of respective orders.
We reinstated staff salaries to pre-COVID levels two years ago, before any major European airline did.
Since then we have adjusted salaries to respond to rising inflationary environment. Our timely and
Wizz Air Holdings Plc Annual report and accounts 2023
8
targeted actions have prevented further cost escalation, and as we return to our high utilization model
our crew compensation tops global market levels taking into account variable pay contributions.
We maintain our strong cash position, with average balances through the year the same as last year.
We are prudent with borrowing and limit the amount of additional financial debt to a sole pre-delivery
payment (PDP) facility that effectively accelerates the release of deposits that would otherwise be
credited at the point of aircraft delivery. We expect operating cash to build, along with profit, which
will reduce the Company’s balance sheet leverage.
Our geographic footprint as sustainable competitive advantage
Most of our network focus in F23 has been on increasing frequencies and joining existing airports
(with approximately 95 per cent of capacity growth in F23 vs F22 delivered in this fashion). When we
look at our pre-COVID-19 network footprint, our growth came predominantly from the following
markets: 8 per cent UAE, 38 per cent Italy and 54 per cent rest of the network. These developments
highlight our deliberate strategy of rapidly growing and diversifying our footprint during the years
impacted by COVID-19 travel restrictions (mainly 2020 and 2021), which open opportunities to deploy
capacity faster once restrictions lifted and demand recovers while improving our structural cost from
locking in a cost structure at a time when we could leverage our bargaining power due to depressed
demand for airport capacity.
We fully restored our business in our core CEE region and further expanded during F23, with Wizz Air
retaining its market leadership position. It grew its market share to 24 per cent (+5.0 per cent vs F22
and +6.5 per cent vs F20) and is the top airline in three of its core CEE markets (Romania, Hungary
and Bulgaria). Recent announcements highlight our expansion in Poland, where we grew the country
fleet to 30 aircraft (11 aircraft in Warsaw) and in Georgia, where we allocate one more aircraft for a
total fleet of four that serve the thriving city of Kutaisi.
Our historic positions in select markets in the West, notably in the London, Italian and Austrian
markets were strengthened during F23. We have consolidated our presence in London, by focusing on
our continued leadership in Luton and opportunities in Gatwick. In Italy, we have closed smaller bases
in Palermo and Bari and allocated the resources to Rome and Milan, where we see great traction for
our product and where additional aircraft are being allocated in F24, growing our presence in the
entire market from 18 to 25 aircraft. In Austria, we have differentiated our offer in the Vienna market,
which has shown positive results, and we are allocating further aircraft there starting in summer 2023.
As part of our “Go East” strategy, Wizz Air Abu Dhabi has now been operating for more than two
years. It is already the second largest airline in terms of seats at Abu Dhabi Airport. Its fleet is
growing from of nine to 16 aircraft in the next twelve months and it will double the number of
employees to 800, serving an expanding list of destinations and pushing the brand awareness to 50
per cent . We believe it can become a 50-aircraft operation serving a potential market of 5 billion
people within a five-hour flying range from Abu Dhabi by the end of the decade.
As part of our initial phase of serving the Saudi Arabia market, we have commenced flying more
routes to Jeddah, Riyadh and Dammam from our core CEE, Italy and Austria markets. There are also
daily flights from Abu Dhabi to Dammam and to Medina. The initial phase of our Saudi Arabian
operations includes a planned network of 24 inbound routes (21 have commenced flying at the time of
press release).
Wizz Market Share in Select Regions
Market
Albania
Austria
Bosnia and Herzegovina
Bulgaria
Cyprus
Georgia
Hungary
Italy
Lithuania
Moldova
North Macedonia
Poland
Romania
Serbia
United Arab Emirates
United Kingdom
CEE
Market share
54.1 %
5.9 %
42.7 %
33.2 %
8.0 %
17.2 %
31.7 %
9.6 %
18.3 %
19.6 %
61.6 %
23.6 %
49.2 %
19.7 %
1.8 %
4.6 %
24.0 %
Low-cost segment share
77.7 %
20.7 %
65.9 %
50.1 %
13.5 %
49.0 %
45.1 %
14.6 %
28.1 %
43.6 %
89.1 %
36.6 %
66.8 %
71.2 %
5.9 %
7.8 %
41.6 %
Low-cost market position
1
2
1
1
3
1
1
3
2
2
1
2
1
1
5
4
1
Wizz Air Holdings Plc Annual report and accounts 2023
9
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 more than 12:30 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 accommodate more passengers in a
still very comfortable seating configuration. Our strong balance sheet enabled us to maintain our fleet
delivery programme in F23. In fact, the combination of the Wizz Air credit rating and the A321 NEO
aircraft consistently means our aircraft finance tenders are multiple times oversubscribed as investor
seek stable long term returns. In total, 35 A321neos joined the fleet this year, taking the total number
of aircraft to 179 at the end of March 2023. The fleet composition as at 31 March 2023 is as follows:
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 2023
Actual
March 2024
Planned
March 2025
Planned
13
28
9
6
41
82
—
179
74 %
219
4
21
9
6
41
127
—
208
85 %
226
—
11
9
6
37
176
2
241
91 %
231
As at the date of approval of this document, the share of new “neo” technology aircraft within Wizz
Air’s fleet increased to 49 per cent by the end F23, and is planned to reach 64 per cent by the end of
F24.
The new neo aircraft are powered by Pratt & Whitney GTF engines, which reduce fuel burn by 16 per
cent and 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 emissions 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 emissions intensity was affected by COVID-19 travel restrictions given the
impact on passenger load on our flights, but in F23 we have made a significant improvement, at one
point reaching the lowest carbon emissions intensity ever recorded for the rolling twelve-month period
in the month of December.
Creating the leading digital platform
A frictionless digital customer experience and efficient, data-driven operations are core to the business
model of an ultra-low-cost carrier. It drives costs out of the system, it allows the airline to scale
profitably, and it drives immediacy instead of dependency on lead times. Our digital strategy is
centred around six key pillars:
1. An exceptional digital customer journey: our customers’ journey remains in the centre of our
strategy, with digital experience 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 fully digital today. Next year, the WIZZ digital platform (website and app) is expected to
generate over 750 million visits, making it one of the world’s most visited websites. Given
Wizz Air’s focus on continuous modernisation of the digital platform (web and app) it has
launched a programme to introduce further improvements. The programme (Next Generation
Platform – OneWizz) will improve Company’s digital speed to market, add scale and increase
levels of stability. Digital speed to market is especially critical as the airline expands its
customer base and enters new markets across multiple continents. Further benefits will
include
levels of
experimentation and personalisation. Additionally, the programme will be built on modern
architecture to create scalability and accelerate delivery. In F23 we introduced an additional
payment method called Trustly in certain markets and further streamlined communication
channels with customers. We keep digitalising our customer service processes and
continuously enhancing use cases of our chatbot Amelia.
improved website and app conversion rates and allow greater
Wizz Air Holdings Plc Annual report and accounts 2023
10
2. Digitally powered operations: Wizz Air is deploying new technology and data to drive
efficiencies in its operations and augment decision making with actionable insights. Not only
are we automating existing processes, but we are reimagining our operations with digital
being the catalyst for improving key performance metrics like on-time performance, crew and
fleet utilisation and schedule completion, and ultimately to drive a lower CASK. Wizz Air
successfully completed the roll-out of Electronic Flight Book (EFB) and equipped every pilot
with a connected device. Wizz Air also launched Electronic Technical Log Book (ETLB) to
replace the paper-based communication and records managed by pilots and third parties with
roll-outs to be completed in F24. Wizz Air has also invested in latest technologies addressing
operational disruptions, including data analytics, intelligent algorithms, and AI/ML, all of which
support better decision-making, increase the scale of our Operations Control Centre, and
improve predictability. Wizz Air also successfully delivered several initiatives focused on fuel
optimisation, which drive fuel cost down by providing real-time data and insights to improve
decision making about fuel consumption.
3. Scale without boundaries: to support our growth, Wizz Air is working on standardising and
automating the core process across support functions like Finance, Accounting and Human
Resources, with the focus on end-to-end automation of transactions, reduction of lead times
and higher pixelation of data to allow for more data-driven decision making. During F23 Wizz
Air automated treasury workflows, implemented a Treasury and Risk Corporate Solution and
improved reporting compliance across Finance, Legal and ESG. In F24 Wizz Air will launch a
custom-built Fleet Management and Planning System to support a multi-AOC setup, a Direct
Cost Management Solution to drive better control over fuel and navigation cost, and Corporate
Finance and Reporting Management modernisation to better support data-driven decisions. In
addition, Wizz Air will initiate the journey for its ERP modernisation and build a scalable, highly
standardised solution to support the growth of the airline.
4. Digital employee experience and digital upskilling: Amongst a number of initiatives Wizz Air
digital experience efforts were focused on our crews, increasing the levels of their self-service
(e.g. by launching MyWizz Learning to test their own safety and compliance knowledge
anytime, anywhere). In addition, Wizz Air established an Automation Centre of Excellence
(ACE), to further increase adoption of automation across the enterprise and enable employees
to focus on value added activities. In F24 we further plan to focus and deliver several digital
initiatives to streamline and simplify workflows for our crew and office staff, and improve their
connectivity and productivity.
5. Data analytics: Wizz Air invests in data platforms and solutions to ensure accurate data is
available where needed and as quickly as needed. This applies to the synchronisation of data
between systems to de-silo digital solutions as well as making data available to end users
through decision support and real-time dashboard systems. The sharing of data between
critical systems has moved from periodic synchronisation to near real-time data sharing
through data streams, accelerating responsiveness and visibility of airline operations.
6.
Information security: Wizz Air considers information security a key priority and the Company
continuously invests in strengthening its abilities. Larger investment allows it to keep abreast
of the constantly changing and evolving threat landscape by actively monitoring and managing
its risk posture. In pursuit of becoming a leading digital airline, the information security
function combines industry best practices with leading technology to become an enabler and a
trusted adviser for all functions within the Company when it comes to digital investments and
protecting Wizz Air’s information assets. The function is subject to constant regulatory
oversight, and most recently received the “Cyber Security Certificate of Compliance” from the
UK Civil Aviation Authority.
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 F23 our employee engagement score was 6.4, broadly aligned with the industry average, with
a participation rate of 55 per cent. Our employee engagement survey showed a small reduction in
overall satisfaction rate, which is understandable after three challenging years marked by the
COVID-19 pandemic, ongoing war in Ukraine and industry infrastructure limitations as travel
restrictions receded, having a significant impact on our customers, colleagues and operations. 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. 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 93 different nationalities at all levels in the
organisation. We are also focused on driving a better gender balance within the organisation. The
current gender diversity balance is 48 per cent female to 52 per cent male. Our Board gender diversity
remained at 30 per cent, just shy of our 33 per cent target, while our Management Team diversity
slightly decreased from 34 per cent to 32 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.
Wizz Air Holdings Plc Annual report and accounts 2023
11
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.
We believe that Wizz Air offers the best career progression opportunity in the industry, irrespective of
whether you are a pilot, cabin crew or office employee. Wizz Air opens up opportunities for diverse
talents to learn, develop and succeed.
Outlook
We invested heavily in F23, starting with our people, to ensure that we have the right resources with
the right incentives to meet the capacity growth we have added and the robust demand we are
expecting in F24. We expect the changes we have made to our network, our scheduling, our flying
patterns and our operations will better prepare us for continued post-COVID-19 pressure on the
aviation industry’s ecosystem, which is still recovering. We have taken time to reflect on the lessons
learned in F23 and enter next year armed with a more experienced workforce that is now better
equipped with tools to reduce the disruptions from this year while ready for new challenges.
In reinstating our commodity and financial risk management policies, we have neutralised any
advantage our competitors have had on some of our largest cost drivers, which allows us to focus on
those aspects of our cost base we can and will control. We have developed best-in-class operational
key performance indicators which we are pairing with disciplined financial targets – both of which we
have demonstrated we can deliver in the past.
By being the lowest cost airline operator, we will return to delivering low-cost fares and superior value
to our stakeholders – shareholders, employees, and the passengers and communities we serve. In
doing so, we drive emissions efficiency, which is at the top of Wizz Air’s agenda, to migrate
passengers to more environmentally efficient flights for a sustainable future.
József Váradi
Chief Executive Officer
8 June 2023
Wizz Air Holdings Plc Annual report and accounts 2023
12
STRATEGIC REPORT
FLYING TOWARDS
SUSTAINABILITY
OUR ANNUAL SUSTAINABILITY REPORT 2023
REPORT ON SUSTAINABILITY TABLE OF CONTENTS
I. REPORT OF THE CHAIR OF THE SUSTAINABILITY AND CULTURE COMMITTEE
II. EMBRACING SUSTAINABILITY
Wizz Air’s ultra-low-cost business model and resource efficiency
Key milestones in F23
Our sustainability strategy and targets
How sustainability is integrated into the Company’s strategic priorities
III. STAKEHOLDER ENGAGEMENT AND MATERIALITY ASSESSMENT
Stakeholder engagement
Materiality assessment
Materiality matrix
IV. OUR SUSTAINABILITY AND CLIMATE GOVERNANCE
Board of Directors
Leadership Team and Sustainability Council
Sustainability governance summary via the Enterprise Risk Management Framework
Environmental regulation compliance and mitigation of climate change-related risks
Risk governance structure
Ethical business conduct
Data governance and reporting standards
V. OUR ENVIRONMENT-RELATED TARGETS AND PRIORITIES
Our position on climate change and net zero
TCFD-based climate risk analysis
• Methodology: qualitative risk analysis
• Climate-related risks, their significance and mitigation measures
• Physical risks
• Transitional risks
• Quantitative risk analysis
Key targets and priority programmes
• Carbon intensity (CO2/RPK) reduction
▪ Fleet renewal
▪ Fuel efficiency
• Sustainable aviation fuels
• Noise emissions reduction
• Qualify future technology building blocks and industry partnerships
• Other carbon-related programmes
▪ Working towards a sustainable supply chain
▪ Compliance markets and voluntary offsetting
• All Environmental and Greenhouse Gas Metrics (incl. Non-CO2 emissions)
VI. CLIMATE POLICY POSITIONS AND ADVOCACY
Fit for 55 climate package
Single European Sky
Advocacy in the United Kingdom
Engagement and climate policies in the United Arab Emirates
Political donations and advocacy expenditures
VII. PEOPLE PILLAR – WIZZ AIR CARES FOR ITS EMPLOYEES AND CUSTOMERS
Our values
Our social strategy and priority programmes
• Put safety first
• Recruit and develop our employees
• Improve and leverage the diversity of our employees
• Engage our employees and ensure effective communication through the People Council
• Addressing challenges for the continuous improvement of customer experience
• Community programmes and charitable support
People metrics - Our team members
Wizz Air Holdings Plc Annual report and accounts 2023
14
VIII. ECONOMY PILLAR
Connectivity and responsible GDP growth
Social metrics – our communities
IX. CYBER SECURITY AND GDPR
X. INDICES
TCFD index
GRI index
Wizz Air Holdings Plc Annual report and accounts 2023
15
Strategic Report
I. REPORT OF THE CHAIR OF THE SUSTAINABILITY AND
CULTURE COMMITTEE
“As the Group grows, the
Committee’s responsibilities grow as
well. We are committed to ensuring
the responsible growth of the
Group.”
Charlotte Andsager
Chair of the Sustainability and Culture
Committee
Introduction
Dear Shareholder,
I am pleased to present my
first report of the Wizz Air
Sustainability and Culture
Committee for the year ended
31 March 2023, having taken
over the role of Chair from
Charlotte Pedersen, who was
named Chair of the newly
created Safety, Security and
Operational Compliance
Committee.
Wizz Air was named Global
Environmental Sustainability
Airline Group of the Year by
the CAPA Centre for Aviation,
in addition to EMEA
Environmental Sustainability
Airline of the Year 2022. I am
proud that Wizz Air is taking a
leadership position in its
ambition to become the
greenest choice for flying.
Looking to 2023 and beyond,
as the aviation industry
continues to pay close
attention to climate change
mitigation actions and
solutions for a sustainable
transition, Wizz Air remains
committed to its ambition to
decrease rapidly its carbon
emissions intensity, with the
lowest reported CO2 per
passenger kilometre in Europe
– 53.8 grammes of CO2 per
passenger kilometre for the
financial year 2023.
The Committee played a vital
role in helping the Board fulfil
its oversight responsibilities
with respect to sustainable
and responsible growth. This
fiscal year the Committee
oversaw the Group’s goals in
relation to carbon reduction,
diversity and people
engagement and kept the
Board informed of all goals set
and actions undertaken. In the
coming year the Committee
will continue to focus on
environmental and social
responsibility. As the Group
grows, the Committee’s
responsibilities grow as well.
We are committed to ensuring
the responsible growth of the
Group.
The Group’s core values
continue to thrust Wizz Air
towards more sustainable
aviation, improving the lives of
our colleagues and
communities, and contributing
to a thriving economy, whilst
decreasing our environmental
footprint per passenger. All
the Group’s successes, and its
ability to overcome the
recurring challenges the sector
has faced, reflect the ambition
and values of our people:
positivity, integrity, dedication,
inclusivity and sustainability.
Membership, meetings
and attendance
a. Charlotte Andsager
(Chair from 26 July
2022)
b. Charlotte Pedersen
(Chair until 26 July
2022)
c. Dr Anthony Radev
d. Andrew S. Broderick
The Committee consists of
three Non-Executive Directors,
including the Employee
Engagement Director,
appointed by the Board
according to experience,
dedication and capacity. The
Company Secretary acts as
Secretary to the Committee
and relevant members of the
senior leadership team are
invited to attend meetings.
https://wizzair.com/en-gb/
information-and-services/
investor-relations/governance/
board-committees
Key activities
ESG strategy, projects and
initiatives
The Committee was regularly
updated on Wizz Air’s ESG
strategy and discussed target
tracking and pathway status.
In particular, it followed the
Group’s actions on fleet
renewal, fuel efficiency
initiatives and agreements for
sustainable aviation fuel
(SAF).
The Committee reviewed the
Company’s targets relating to
its commitment to the Science
Based Targets initiative (SBTi).
The Committee followed
progress on projects related to
SAF equity investment, Airbus
ZEROe hydrogen aircraft and
the Company’s participation in
the European Commission led
alliances, namely the Alliance
for Zero Emission Aviation
(AZEA) and the Renewable
and Low-Carbon Fuels Value
Chain Industrial Alliance
(RLCF).
Wizz Air Holdings Plc Annual report and accounts 2023
16
ESG ratings and reporting
The Committee was updated
about scores, obtained from
various ESG ratings agencies,
in the January Committee
meeting and considered
follow-up actions to be taken.
The Committee was regularly
updated about changes in
climate policy, in particular the
EU Fit for 55 and Taxonomy
files, and it was briefed on
emerging reporting
frameworks in the EU and
internationally.
Diversity and culture
The Committee discussed
regularly the progress made
with respect to diversity and
target tracking, in particular
with respect to gender
diversity in senior
management.
During the fiscal year, the
Committee was briefed and
reviewed several people
initiatives, including a one-off
payment as support for the
cost-of-living crisis and crew
bonuses for their exemplary
performance and seniority. A
fixed rostering scheme was
implemented for the crew,
having been shaped in
accordance with the feedback
provided through a Company
engagement survey and other
employee forums. The
Committee endorsed the
measures, which underpin the
Group’s commitment to its
people and aligns with the
Board’s strategy on inclusive
culture.
Charlotte Andsager
Chair of the Sustainability and Culture Committee
8 June 2023
Wizz Air Holdings Plc Annual report and accounts 2023
17
II. EMBRACING SUSTAINABILITY
WIZZ AIR’S ULTRA-LOW-COST BUSINESS MODEL AND RESOURCE EFFICIENCY
Our ultra-low-cost operations have been the most important strategic priority in
delivering on Wizz Air’s mission. A highly efficient operational framework enables Wizz
Air to provide air travel to more people in the world in an affordable, safe, sustainable
and reliable way.
•
•
•
•
Affordable travel: We believe that flying should not be a privilege, so we are connecting
airports in a way that is affordable for people at all income levels. The backbone of our
passenger traffic are people travelling with us to reconnect with friends or family after having
migrated mainly for employment reasons.
Point-to-point network: Our flight services connect destinations where alternative forms of
travel are often unavailable or impractical or have a higher environmental impact. We connect
these points in a direct way (as opposed to connecting flights via airport hubs) which lowers
overall emissions.
Seat density and passenger carbon footprint: We do not offer business or first-class seats,
which would take up more space in the cabin, thereby increasing passengers’ carbon intensity
footprint for the flight.
Young fleet, state-of-the-art technology: At Wizz Air, low cost and low fares do not mean low
quality of service, quite the opposite. We operate the youngest and most carbon-efficient fleet
in Europe, and one of the youngest fleets in the world – among airlines with more than 100
aircraft in their fleet.
• No competing with other modes: Through our commercial planning, we carefully evaluate and
make sure that none of our routes have a direct train alternative under four hours of travel
time.
•
Value for money: We offer a pay-for-what-you-use approach – instead of unnecessary
services and extra waste generated – and a welcoming service, brought to our passengers by
a well-trained, highly motivated, engaged and positive-spirited workforce, and all of this is
enabled by our highly digitised and scalable operations.
We are confident that our business model, resource efficiency and clear focus on technology and
innovation will continue to make the most efficient operations achievable across the industry.
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 to
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.”
UN Sustainable Development Goals (SDGs)
By continuously integrating sustainability into its business and operations, Wizz Air contributes to the
following UN SDGs that are within its scope of influence. Throughout this report, the applicable SDGs
will be paired with the relevant business areas and material topics.
Wizz Air Holdings Plc Annual report and accounts 2023
18
Sustainability, resilience in the face of climate risks and a culture built on inclusion, gender diversity
and career prosperity are at the forefront of our development and business conduct. We acknowledge
the challenges aviation is facing currently due to the aftermath of the pandemic, and the actions
required to decarbonise the sector in the long run. Wizz Air aspires to be the leading airline on
environmental sustainability, recognising our impact on the environment, and constantly assessing
new opportunities to enable a green transition within aviation. By doing so, with our continued focus
on resource efficiency, we believe we will do good for the planet and the communities we serve, lower
our cost structure, win the hearts and minds of our customers and improve access to capital over the
long run.
KEY MILESTONES IN F23
In calendar year 2022, Wizz Air observed average carbon emissions intensity decrease by 15.4 per
cent compared to the previous calendar year. This is the starkest CO2/RPK decrease we have
measured and reported from one year to the next, and we will continue to improve, to reach our
ambitious intensity target by 2030, with the help of our fleet renewal and fuel efficiency initiatives,
and the use of sustainable aviation fuels (SAF). At the end of F23, Wizz Air surpassed its previous
record, surpassing its calendar year 2022 CO2/RPK performance (55.2 grams), reaching 53.8 grams
by the end of F23.
Working on the Company’s SAF strategy and accelerating our actions to secure adequate supplies for
the future has been a key strategic priority this year and will continue to remain so going forward.
Wizz Air has so far signed four Memorandums of Understanding with SAF producers and in April 2023
announced a £5 million investment in a biofuel company, Firefly. This is Wizz Air’s first equity
investment in SAF research and development.
In an effort to help drive change in the industry, Wizz Air joined the European Commission’s Alliance
for Zero Emission Aviation and the Renewable and Low-Carbon Fuels Value Chain Industrial Alliance,
and is engaging with key stakeholders in Wizz Air entities including in the UK and United Arab
Emirates.
Throughout the year, Wizz Air has been recognised as the most sustainable low-cost airline by World
Finance Magazine and was named Global Environmental Sustainability Airline Group of the Year by
CAPA (Centre for Aviation), one of the world’s most trusted sources of market intelligence for the
aviation industry. The airline also received recognition as the EMEA Environmental Sustainability
Airline of the Year.
OUR SUSTAINABILITY STRATEGY AND TARGETS
Wizz Air’s mission and purpose is to provide travel opportunities that can enhance lives and make the
world around us better, bringing nationalities, cultures and businesses together. We are committed to
making sure that everyone, everywhere can benefit from air travel at affordable prices, whilst setting
high benchmarks for safety, service, customer experience, good corporate citizenship and reliability.
The most critical task today is establishing a sustainable business, mitigating the impact of climate
change on our operations, and finding solutions to reduce our impact on the planet. We remain
committed to continuous improvement across 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 and, as such, we have set 15 objectives to deliver on Wizz Air’s
sustainability ambition.
Environment
Our ultimate goal is to ensure that by choosing to fly with Wizz Air, our customers are making the
most carbon-efficient choice of air travel available. We are continuously working on reducing our
environmental footprint and carbon intensity.
People
Our people pillar focuses on our workforce 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.
Governance
Our sustainability agenda is governed by the Sustainability and Culture Committee. The Committee
assists the Board in reviewing Company policies and practice on sustainability and culture, ensuring
that climate and diversity strategies are implemented according to plan.
Economy
Our Company mission is to provide affordable travel for all, contributing to the GDP growth of WIZZ
destinations by driving tourism, and creating new jobs and opportunities to do business.
Wizz Air Holdings Plc Annual report and accounts 2023
19
The sustainability strategy tracker table below describes the key objectives and the current status of
our targets, respectively (
= on target;
= action plan in place to reach target).
More details can be found on each commitment later in the Sustainability Report.
Sustainability
pillar
Commitments
On
target
Current status
Environment
People
To reduce CO2/RPK (carbon emitted per
passenger kilometre) from flight operations
by 25% until 2030 (F20 base year).
Qualify a sustainable aviation fuel (SAF)
supply chain from 2025.
Drive noise reduction by ensuring all our fleet
is compliant with the applicable Chapter 14
noise emission standards by 2028.
Qualify future technology building blocks and
industry partnerships to enable
decarbonisation by 2050.
Continue to put safety first, in everything we
do.
Further improve gender diversity in the
Board, management and flight deck to
achieve:
1.
2.
3.
33% female gender diversity in the
Board of Directors
40% female gender diversity in the
Management Team by F26
7% female gender diversity in the
flight deck by F30
See target glidepath and related information
on page 34.
On target. Partnerships with four SAF
suppliers. Investment in a green fuels
company. See page 38.
On target.
77% of our aircraft are compliant.
See page 41.
Ongoing by the Board of Directors and the
Sustainability Council.
See page 42.
On target. Cross-functional safety council
meets four times per year. Dedicated
Safety, Security and Operational
Compliance Committee established in F23
for additional oversight. See page 50.
On target to achieve goals by target year.
1.
Board of Directors: 30%
2. Management Team: 32%
3.
Flight deck: 4.68%
See page 57.
Develop and sustain employee engagement in
the top 25% of the industry benchmark.
Action plans in progress. See relevant
section on employee engagement. Page 60.
Governance
Improve customer experience each year as
measured by various customer satisfaction
metrics.
Ensure effective Board oversight of all
elements of the sustainability strategy.
Continue to improve our climate-related
disclosures (alignment of our decarbonisation
roadmap to the SBTi; reporting on all scopes
of greenhouse gas (GHG) emissions as of
F22).
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 CEO and Officers as of F22.
Grow our fleet to 500 aircraft by 2030.
Economy
Increase the number of customers from 40
million in 2019 to 170 million by 2030.
Employ over ~20,000 people directly and
125,000 people indirectly across the network.
Action plans in progress. See page 64 on
customer experience.
On target. Details in the Sustainability
Governance section, from page 24.
Continuous work on climate-related
disclosures and alignment with applicable
reporting frameworks such as the Task
Force for Climate Related Financial
Disclosures; see page 29.
SBTi: see page 48.
GHG inventory Scope 1, 2 and 3 reporting
from F22 (page 45).
Incentive scheme in place since 2021
(details in the F22 Annual Report).
Incentive scheme in place since 2021
(details in the F22 Annual Report).
On target to achieve goal by F30. Current
fleet: 179 aircraft. See page 35.
On target to achieve goal by F30.
Passengers in F23: 51.072 million.
On target to achieve goal by F30.
New employees hired in F23: 2,522
(total employee number: 7,389).
HOW SUSTAINABILITY IS INTEGRATED INTO THE COMPANY’S STRATEGIC PRIORITIES
Opportunity, consistent resource 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
Wizz Air 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 by 25 per cent by F30
Our strategic priorities
1. A focused ultra-low-cost, low-fare business model
2.
Increasing and diversifying our geographical footprint
3. Delivering leading sustainability in accordance with the Company’s ESG strategy
Wizz Air Holdings Plc Annual report and accounts 2023
20
4. Enabling our business by creating the leading digital platform
5. Continuing to run a highly engaged, agile and entrepreneurial organisation
ESG-related metrics are integrated into our key performance measures, year on year:
1. Leading on cost
3. Leading sustainability
5. A highly engaged
organisation
CASK
1/1
performance
1/2
Ancillary PAX
revenue
1/3
Cash
2. Increasing our
geographical footprint
Market
2/1
penetration
Market share
2/2
4. Leading digital
platform
3/1
CO2 emissions
intensity
3/2
Gender diversity
Employee
5/1
engagement
Staff attrition
5/2
5/3
Promotion from
within
Brand
4/1
awareness
4/2
visitors
4/3
Conversion
Web/app
III. STAKEHOLDER ENGAGEMENT AND MATERIALITY
ASSESSMENT
Stakeholder priorities on the environment, social and governance spectrum are constantly changing,
and Wizz Air needs to continually evolve to meet emerging expectations. Conducting a thorough
materiality assessment helps the Company to identify and prioritise the issues that matter most to our
business as well as our stakeholders. It also enables us to sharpen our strategies.
Wizz Air identified its key stakeholder groups as follows: our customers, people, investors, partners
and communities, as well as policymakers and regulators. To identify those priority issues that matter
most to each individual stakeholder group, Wizz Air is using a materiality assessment method
combining various solutions for engagement.
STAKEHOLDER ENGAGEMENT
We engage with our principal
stakeholders on a continuous basis
every year, to re-evaluate our
activity and maintain a close
understanding of their priorities.
Identifying their expectations allows
us to blend our vision and strategies
with their views on Wizz Air and
focus on setting targets that are
credible and meaningful.
After a series of challenging periods
like COVID-19 and
the post-
pandemic recovery, the invasion of
Ukraine in 2022, and aviation supply
chain disruption issues last summer,
our principal stakeholders have
sought even more guidance from
the Company and their feedback has
been valuable – they appreciated
our proactive action in addressing
those elements that are of the
highest importance to them.
Wizz Air Holdings Plc Annual report and accounts 2023
21
Stakeholder
Why they matter to us
What matters to them
Our customers
Our investors
Our people
Our partners
Our communities
Regulators and
policymakers
Our customers are the foundation of our
success. We strive to meet their needs and
take all necessary steps to decrease the
operational
number
impact
cost
disruptions, whilst
structure
and
competitive.
keeping our
affordable
fares
and
and
of
Our customers value the relationship Wizz Air
is building with them. They are looking for a
reliable, safe, and environmentally responsible
travel experience, low prices, great service,
frictionless digital
more choices, and a
experience,
complaints
management.
including
of
support
investors
our
The
and
Shareholders
is crucial
to sustain our
to
business model. They
continuously improve the Company and our
services via investment in the growth of our
business,
leading
whilst
Shareholder returns.
allow us
delivering
Our investors value results delivered in a
sustainable and responsible manner. They see
Wizz Air as a disruptor in the sector not only
in terms of our low-cost business model but
due to our focus on resource efficiency,
leading
and
environmental leadership position.
intensity
carbon
results
Above all, Wizz Air is made of the many
talented and loyal employees we have. They
are the face of the Company towards our
customers, and the professionals helping our
business grow and improve. We focus on
improving and leveraging the diversity of
our employees, enabling a highly engaged
workforce, which will lead to a more efficient
and customer-centric service offered.
Our workforce expects a safe,
inclusive,
reliable work environment where they are
nurtured and respected. They find reward in
the interactions with our passengers and in
realising their career aspirations. Our people
want their voice to be heard, leveraging 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.
Wizz Air is a focused operation, and we
partner with many companies across the
industry and other sectors, to deliver a
“lowest-cost-done-right” service. Wizz Air
values the agility of our partners even in the
most difficult times and rewards them with
security and growth prospects.
Our partners expect a trusting relationship
where both sides challenge each other to
develop professionally, while adding and
retaining value.
Wizz Air brings prosperity and happiness to
the communities it serves. It connects
communities
in economies and creates
opportunities for them, which adds to the
Company’s positive impact on society.
Our communities expect Wizz Air to create
local opportunities, enable progress, and
contribute to the growth and prosperity of the
economies we operate in, all this carried out in
a sustainable, responsible manner.
equitable
Wizz Air supports commitments for more
sustainable aviation, advocating for a fair
and
all
geographies, while developing the necessary
incentivising a green
ecosystems, and
transition that serves the best interests of
our communities.
approach
across
Regulators and policymakers want to ensure a
just and socially fair sustainable transition,
while strengthening
innovation and
competitiveness of the impacted industries.
They look to key industry players to lead the
way and set and achieve ambitious targets
towards a net zero economy.
the
The relevant communication channels are in place for stakeholder groups to communicate feedback or
complaints if any. Direct feedback was collected from our customers and employees, via a digital
materiality survey. To better understand our investors’ priorities, the Company engages with investor
representatives regularly, as part of which ESG and sustainability priorities are frequently discussed.
MATERIALITY ASSESSMENT
In line with the GRI framework, we have updated our materiality matrix to confirm the most material
priorities for the Company. The Company had previously selected a wide range of environmental (E),
social (S) and governance (G) topics based on the key issues most relevant for our industry, and the
focus areas that other stakeholders in the sector report on.
Regarding the topics that matter most to our partners, communities and policymakers, we have been
collecting information from the relevant in-house experts, while the Company also conducted a
benchmarking analysis across a selection of airlines to have a comprehensive overview of the most
material topics relevant in aviation and our sector. Findings and recommendations of the extra-
financial ESG rating agencies were also considered in the assessment. To note, the Company is
working towards a revised materiality assessment approach, collecting and analysing direct feedback
from all stakeholder groups once a year.
In the list of high-materiality topics and the materiality matrix presented below you can find each of
these issues representing the level of materiality for Wizz Air and our stakeholders. We will provide
further perspective in this report with regard to our goals, strategies and results connected to these
issues and opportunities. Note, the report covers all of the below listed high-priority topics, discussed
under the relevant ESG pillar disclosures respectively, to ensure added transparency and detail on the
topics most essential for our stakeholders.
The annual Sustainability Report was structured in a way to disclose in detail how we are managing all
the issues most material to us. The relevant processes will be indicated and detailed in each relevant
section.
Wizz Air Holdings Plc Annual report and accounts 2023
22
MATERIALITY MATRIX
y
t
i
l
a
i
r
e
t
a
m
l
r
e
d
o
h
e
k
a
t
S
)
Y
s
i
x
A
(
Wizz Air Materiality
(Axis X)
The materiality matrix showcases sustainability topics by contrasting two dimensions. Axis Y indicates
the importance of the issue to our stakeholders, while axis X shows the importance of the issues to
Wizz Air regarding the influence these will have on the Company's business processes and success.
MATERIALITY MATRIX – HIGHEST PRIORITY TOPICS
The following list includes the sustainability topics most material to both the organisation and our key
stakeholders. The following report will discuss how the Company is managing these issues. All related
sections will be indicated with a “high-materiality topic” icon.
Environment
Emissions standards
page 34
Renewables
page 38
Product and operational H&S page 50
Climate change position
page 28
Noise emissions
page 41
Social
Governance
Employee relations
pages 59 and 60
Equal opportunities
pages 56 and 27
Complaint management
page 64
Employee health and safety page 50
Ethical conduct
page 27
GDPR and cyber security
page 68
Wizz Air Holdings Plc Annual report and accounts 2023
23
IV. OUR SUSTAINABILITY AND CLIMATE GOVERNANCE
BOARD OF DIRECTORS
Wizz Air’s sustainability governance has two main pillars, the Board of Directors and its internal
governance structure. The Group strategy has proper oversight through the Board structure via the
Group Chief Executive Officer (CEO) and the Chairman of the Board, as well as the Sustainability and
Culture Committee tasked with overseeing the execution of the sustainability strategy, and monitoring
progress of the highest priority projects. The Board, based on the proposal of the CEO, examines and
approves the key objectives and strategy of the business including those related to environmental,
social and governance factors.
The Sustainability and Culture Committee assists 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.
The Sustainability and Culture Committee (“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) coordinate non-financial and diversity reporting processes in accordance with applicable legislation
and international benchmarks.
The Committee also assists the Board in reviewing the Company’s policies and practice on culture. It
ensures that the Company promotes diversity throughout the entire workforce and enables an
effective two-way communication between the management and employees. This entails the following
responsibilities:
(a) review the Group’s diversity strategy, targets and their implementation; and
(b) review the Group’s employee relations, in particular the effectiveness of the People Council.
The Committee also appointed a Director responsible for employee engagement (including
engagement with the Wizz Air People Council).
In F23, the Sustainability and Culture Committee reviewed the Company’s sustainability and climate
actions during six meetings. A detailed update on the main agenda items can be found in the Chair’s
letter.
The Audit and Risk Committee has a crucial role in overseeing the Company’s risk assessment
processes. This includes the approval of the processes around the Enterprise Risk Management
framework (outlined on page 86) and the annual comprehensive climate opportunity and risk analysis
integrated into that. In addition to the regular, bi-monthly Board updates, the Committee receives a
detailed briefing on the principal risks as well as the risk appetite and it reviews the action plans
proposed by management.
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. Going forward, as of F24, the Board and 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
Corporate and ESG Officer, who is the Chair of the internal Sustainability Council.
LEADERSHIP TEAM AND SUSTAINABILITY COUNCIL
The Sustainability Council, chaired by the Corporate and ESG Officer, meets for regular reviews to
discuss the sustainability agenda, new developments and the status of ongoing projects and to discuss
and analyse further plans regarding the Company’s decarbonisation pathway. On the working level,
the Sustainability Council is coordinated by the Group Sustainability Manager, and is comprised of key
internal stakeholders such as the Corporate and ESG Officer, the Executive Vice President and Chief
Corporate Affairs Officer, the Executive Vice President and Chief Financial Officer, the People Officer,
the Customer and Marketing Officer, the Managing Directors of the airlines within the Group, and all
Heads of Function along with senior managers responsible for the applicable business areas. 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.
The Company-wide, fully cross-functional Sustainability Council will continue to meet regularly 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 coordinated with the Sustainability and Culture
Committee.
Wizz Air Holdings Plc Annual report and accounts 2023
24
In January 2023, the members of the Sustainability and Culture Committee and the Leadership Team
(along with the responsible Heads and Managers) participated in comprehensive and interactive
Sustainability and ESG training by experts regarding applicable regulation and reporting frameworks,
reporting obligations and compliance, global net zero actions, market expectations and sustainable
aviation fuels. The Board is comfortable with its level of knowledge regarding climate change and the
related industry transition and is aware of the importance of continuous education in this fast-
changing environment. Ensuring the proper oversight and management of our sustainability ambitions
is crucial to maintain momentum and achieve our objectives. We continue to focus on further
developing our sustainability governance including additional training 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; and iii) be Europe’s greenest choice for flying.
Board of Directors
Sustainability and Culture Committee
SUSTAINABILITY GOVERNANCE SUMMARY
Approval
supervision
strategic
objectives
and
of
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
of
execution
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 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. fleet renewal, fuel efficiency initiatives,
aircraft innovation partnerships, climate regulation advocacy, sustainable aviation fuels and
non-fuel-related emissions and waste.
Meets for regular updates on a Council as well as dedicated working group level, with
quarterly CEO reviews.
SUSTAINABILITY COUNCIL STAKEHOLDERS
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SUSTAINABILITY GOVERNANCE SUMMARY VIA THE ENTERPRISE RISK MANAGEMENT FRAMEWORK
Sustainable aviation-related risks have been identified as one of the principal risks for the Company.
Along with all other risk types, environment and climate change-related risks are evaluated under
Wizz Air’s Enterprise Risk Management (ERM) framework, which is presented to and reviewed by the
Board of Directors twice per year.
Risk identification is a process that involves finding, recognising and describing the risks that could
affect the achievement of Wizz Air’s objectives. Risk identification is essential for semi-annually
updating the risk universe and with this the risk appetite of the Company. Alternative methods for risk
identification include meetings, interviews, group discussions, historical data and market information.
Risks identified are analysed and evaluated using the following aspects: impact and likelihood.
Apart from these processes, sustainability-related risks are continuously assessed by the Group’s ESG
function as well. It works together with experts to carry out the detailed climate scenario analysis
every year, which is then channelled into the ERM as well. The risks are assessed through the ERM
classification methods for the business planning relevant timeframes. More information about this
process and the mitigation for climate risks can be found in the Task Force on Climate-related
Financial Disclosures (TCFD) section of this report.
As the ERM includes a number of ESG-related risks, and within the climate-related risks, the primary
and secondary risk owners are identified based on the functional expertise required, it is the risk
owner’s responsibility to assess the risks appropriately while giving information to Internal Audit
during the annual update process.
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 main principal risks, as identified during our Enterprise Risk Management work, are mapped, and
discussed as such for their one-year and five-year and ten-year impact. The same approach is used
for climate 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.
Wizz Air is committed to continuously forecasting and mitigating the impacts of climate-related
phenomena on the environment, our communities and our business. As such, climate considerations
are integrated into our financial planning and controlling processes. Each year, when the Company is
preparing the financial operating plan for the following year (and forecasts on medium term), the key
risks are collected from the Heads of Function, indicating the potential financial impact of the risks.
This information is therefore channelled into the financial planning continuously, ensuring that the
organisation remains prepared and resilient, calculating the most important risks and their financial
threat.
ENVIRONMENTAL REGULATION COMPLIANCE AND MITIGATION OF CLIMATE CHANGE-RELATED RISKS
A key risk connected to climate change and ESG will be environmental regulation compliance. This
entails the applicable current and future mandatory reporting frameworks related to corporate
sustainability, emissions reporting, ETS reporting, future environmental taxation compliance, or any
other requirements that are not currently known but could potentially result in non-compliance-related
penalties or reputational damages in the future. To counteract that, Wizz Air is laser focused on
strengthening its internal and Board-level sustainability governance with frequent reviews and updates
of reporting requirements, also enabled by training and by employing expert sustainability
consultants. All reporting and environmental compliance matters have ownership assigned to the
responsible function, which then reports on the applicable risks and mitigation actions to the
Corporate and ESG Officer and the Sustainability Council.
The Company’s risk mitigation actions and projects addressing climate-related risks are discussed in
detail in this report’s section V. Environment-related targets and priorities section, on pages 28–47.
RISK GOVERNANCE STRUCTURE
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26
ETHICAL BUSINESS CONDUCT
Wizz Air’s Board of Directors and entire workforce are expected to act with integrity and in accordance
with all applicable laws and regulations at all times.
A key policy for ethical business conduct at Wizz Air is the Policy of Good Conduct, which has been
reviewed and revised most recently in August 2022. It outlines in detail the expectations of all WIZZ
employees when carrying out their duties in their business and professional relationships. The
Company also recently released its new Equal Opportunities and Fair Treatment Policy, to signify our
commitment to create a safe and respectful working environment for all stakeholders, based on
mutual respect, fairness and equality, to advocate diversity and to preserve an atmosphere which is
free from any forms of discrimination, victimisation, vilification, bullying or harassment.
WIZZ believes that in order to ensure the continued integrity of its business there shall be an effective
reporting line for its employees. If the employees suspect any breach of Company policies, they can
raise their concerns and report it to the relevant personnel anonymously via the whistleblowing
programme, as detailed in the policy.
There are also additional policies ensuring the ethical conduct of the Board of Directors and those in
leadership positions. 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.
Similarly, all of Wizz Air’s partners and suppliers are expected to comply with the Company’s Supplier
Code of Conduct, which sets out our requirements for ethical business, social and labour standards,
legal compliance and environmental and commercial sustainability. In accordance with the Sustainable
Procurement Policy, the Supplier Code of Conduct is shared with all supplier candidates in the
tendering phase for complete awareness of the Company’s expectations.
Wizz Air’s Anti-Corruption Policy prohibits any kind of corrupt or improper practices or bribery between
Wizz Air personnel and third parties intended to induce any person to perform a relevant function
improperly or to reward improper performance. Appropriate anti-corruption education and training is
provided to Wizz Air personnel and third parties involved in conducting or supervising business
operations.
As part of the employees’ general onboarding processes, there are multiple mandatory e-learning
training courses on business ethics, including conflict of interest training, the General Data Protection
Regulation, competition law and information security management, to ensure that the workforce is
aware of the key principles that govern the ethical and compliant conduct of Wizz Air. New and revised
policies are always shared with employees via the Company’s internal digital channels to ensure
continued awareness and compliance.
It is the responsibility of the Internal Audit function, and the Audit and Risk Committee of the Board to
review compliance with the above mentioned business ethics principles.
DATA GOVERNANCE AND REPORTING STANDARDS
Scope of reporting: Unless otherwise stated, the report includes all operating entities under the
Company, namely Wizz Air Hungary Ltd., Wizz Air UK Ltd., Wizz Air Abu Dhabi LLC and Wizz Air Malta
Ltd and all related subsidiaries.
This Sustainability Report has been prepared in reference to both the Task Force on Climate-related
Financial Disclosures and the Global Reporting Initiative. The indices with the relevant page numbers
and external disclosure references can be found at the end of this Sustainability Report.
Assurance: This report was reviewed and approved by Wizz Air's responsible executive officer, as well
as the Sustainability and Culture Committee of the Board of Directors. The GHG emissions reporting in
this disclosure received independent limited assurance from Deloitte Auditing and Consulting Ltd.
Hungary - the certificate is separately available on Wizz Air's sustainability website.
Emissions data from intra-European flights (EU and UK Emissions Trading Schemes) and all other
flights falling under the scope of the UN Carbon Offsetting and Reduction Scheme for International
Aviation (CORSIA) is reviewed and verified by Verifavia, an independent third party, for the complete
calendar year.
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27
V. OUR ENVIRONMENT-RELATED TARGETS AND PRIORITIES
OUR POSITION ON CLIMATE CHANGE AND NET ZERO
Wizz Air aspires to be the greenest and most efficient choice for flying, which is also
our key competitive advantage, enabled by our young and highly fuel-efficient fleet
and business model. At the same time, as the industry is laser focused on actions
and solutions for a sustainable transition, we also have a responsibility to create a
pathway towards being an even greener airline.
We remain committed to our 2030 goal of reducing emissions intensity by 25 per cent versus our F20
baseline. We have also dedicated significant resources this year to continuously assess our potential
pathways for an interim and final target for 2035 and 2050 respectively. Our aspiration to support the
global efforts for a long-term target for aviation is clear, and we have identified the crucial elements
on the path to achieve this:
At the same time, there is still much uncertainty around external circumstances outside of our control
(such as zero emissions aircraft and the related ecosystem, adequate supplies of sustainable aviation
fuels, direct air carbon capture technologies, or air traffic modernisation), so we cannot at the present
time issue an official net zero commitment.
We are focused on remaining responsible and realistic in terms of decarbonisation, and while we have
ambitions to use sustainable SAF – and later on, if available, fly zero emissions aircraft – to ensure the
sector is becoming climate neutral in the long term, we cannot yet credibly commit to a net zero
pathway until we see the relevant infrastructure and supply chain building up and able to support
aviation with adequate supplies. Like everything Wizz Air is doing, and any commitment and target we
set, it must be meaningful and based on the facts available today. Consequently, the Company,
together with the Board of Directors, will continue to work on evaluating and defining our long-term,
end-to-end plan prior to any further market communication on 2050 targets.
In October 2021, Wizz Air’s Commitment Letter to the Science Based Targets initiative (SBTi) was
accepted, in which we committed to developing a science-based target aligned with the applicable
criteria and submitting the target to the SBTi for validation within 24 months. The Company has been
working on its ambitious decarbonisation roadmap throughout F23 and is currently in the process of
completing its near-term target submission to the SBTi (intensity target aimed at decreasing well-to-
wake Scope 1 and Scope 3 jet fuel GHG emissions by 2035).
Wizz Air Holdings Plc Annual report and accounts 2023
28
TCFD-BASED CLIMATE RISK ANALYSIS
As an airline, we are aware of our impact on the environment, the expectations of the industry to
decarbonise by 2050, 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. While we
keep improving our understanding of how we can decrease our negative impact on the climate, we
must also stay focused on continually assessing the impact of climate change on our operations.
Climate change is identified as an emerging risk to Wizz Air as part of the Enterprise Risk Management
(ERM) process (see page 86) as it will impact our business over the short, medium and longer term.
Wizz Air has been reporting in accordance with the TCFD guidance since F21. In terms of the
Company’s TCFD maturity, Wizz Air’s management is comfortable with the consistency of our
reporting regarding the core TCFD recommendations and recommended disclosures, and the TCFD all
sector guidance, including the supplemental guidance for non-financial groups for our industry, and
has a clear timetable to develop further in the future.
METHODOLOGY: QUALITATIVE RISK ANALYSIS
We have outlined the impact that climate change could have on our business via an assessment of the
impact of four global warming scenarios, as described below. We have looked at the impact on our
business, projecting our current fleet plan and the WIZZ500 ambitions. To continuously develop our
climate risk assessment approach and its effectiveness in supporting the organisation’s resilience, we
have also been working with expert sustainability and climate consultants from Deloitte Ltd. Hungary
who helped improve our existing climate risk analysis approach. The methodology considered four
different climate change scenarios, in accordance with the Intergovernmental Panel on Climate
Change (IPCC). These scenarios are 1.5°C, 2°C, 3°C, 4°C.
The four potential climate change scenarios had been previously chosen as they cover a broad
spectrum of outcomes, enabling Wizz Air 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
have a crucial socioeconomic narrative with assumptions about policy change, energy outlooks and
technology.
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 & widespread changes in energy
system, behaviours, and technology
Radical and urgent policy response,
requiring rapid & systemic energy &
behaviour shifts & major technology
innovation
The first step in the process was the thorough vulnerability assessment, reviewing all potentially
impacted business functions, in order to identify those risks most likely to affect Wizz Air in the short,
medium and long term. As part of this, every potential risk type (physical and transitional) was
evaluated under the above mentioned climate scenarios by 2100. For context, transition risks include
potential market-specific changes arising from the shift to a low-carbon economy while physical risks
refer to changes in global climate and the related impacts. Our potential risk categories are aligned
with the TCFD framework.
Through the detailed and thorough interview and internal survey exercise with our consultants,
including all business areas, such as Wizz Air's services, operations and supply chain, all applicable
climate risks were identified. Taking into account the latest scientific findings and relevant literature,
in cooperation with Deloitte Ltd. Hungary, we evaluated the exposure of Wizz Air’s vulnerability with
regard to key operational areas, critical airport bases with our network, and the location of the tier
one suppliers.
From a regulatory perspective, two main regions were assessed for transitional risks: 1) the EU, the
UK and Switzerland, due to their comparable regulatory environment; and 2) all the other areas, such
as non-EU and Middle East regions. On the other hand, focusing on a geographical assessment for the
most likely physical risks, three main regions were differentiated: 1) Europe; 2) the Mediterranean
and North Africa; and 3) the Middle East, given their distinguishing climatic conditions.
The selected climate scenarios are based on Shared Socio-economic Pathways (SSPs), and the
Representative Concentration Pathways (RCPs). The IPCC is using the SSP-RCP framework for
scientific forecasting in terms of the various climate change impacts, applied differently in accordance
with each specific pathway. The qualitative scenario analysis of physical risks considered the IPCC’s
Atlas, a climate change map for further insight into key risks within the Wizz Air network.
Wizz Air Holdings Plc Annual report and accounts 2023
29
The qualitative scenario analysis of transitional risks relied on the IEA’s World Energy Outlook 2022
and various other primary sources such as EU policies and climate regulations. The IEA's report offers
clear guidance on the crucial differences between the impact of the currently existing, the less
ambitious and the more ambitious regulatory policy scenarios. Deploying the IEA’s analysis gave
clarity on how Wizz Air may be impacted under the various policy scenarios, as the 4°C and 3°C
pathways are forecasting a less effective implementation of climate policies globally, while the 1.5°C
and 2°C scenarios will increase the regulatory pressure with strict policy measures implemented
across the industry.
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). Following this assessment, the risks
were compiled in risks heatmaps, following the same logic and risk ranking framework that our in-
house ERM is using.
CLIMATE-RELATED RISKS, THEIR SIGNIFICANCE AND MITIGATION MEASURES
Based on the previously described heat-mapping process, Wizz Air identified the main climate risks
including those categorised as a high-impact risk in any time horizon, or those which have at least
medium risk impact for each time horizon. The table below includes the description of the main
physical and transitional climate risks identified and their impacts on Wizz Air, with the mitigation
actions and strategies applied by the Company’s responsible functions.
In the following risk assessment tables below, the risk impact categories and colour coding in the first
column are in line with the Company’s Enterprise Risk Management framework. Accordingly, green =
low risk impact (accept risk); yellow = medium impact (action plan); and red = high impact (avoid,
reduce or transfer risk). The risk impact visualisation for short, medium and long term indicates how
the same risk type may have different risk severity over time, when changing from green to yellow or
red.
Physical risks
As evident from the assessment below, no high-impact physical risks were identified within the time
horizon evaluated during the analysis. The impacts of physical risks will have more relevance the
further we look into the future (by 2050 and beyond) and we expect no critical change within the next
ten years when compared to existing temperature or weather pattern changes. In case climate policy
implementation is ineffective, physical risks will cause operational, market and supply chain disruption
and asset damage and could impact feedstock availability for sustainable aviation fuels.
Risk type
and
estimated
significance
Change in weather
patterns (general)
Acute flooding
Intensive storms
Risk description
Financial impacts
Mitigation measures
Significant changes in weather
phenomena (frequency, intensity)
are likely in the long term (e.g. by
2050 and beyond); however, we
expect no critical change within the
next ten years.
Potential revenue loss
and higher operating
costs due to disruptions
that cannot be prevented,
avoided or planned for.
Intense precipitation and resulting
flash floods could increase at global
warming levels above 1.5°C
everywhere, except the
Mediterranean. These could disrupt
ground operations, or damage airport
infrastructure, causing flight
disruptions.
Severe storms may lead to
disruptions in the airspace or at
airports, or cause infrastructure
damage. They could also result in
additional fuel consumption.
Northern, North Western and Central
Europe may experience an increase
in severe storms. In the
Mediterranean, the frequency of
cyclones may decrease but could
increase in intensity.
Lost revenue, increased
operating costs.
Lost revenue, increased
operating and fuel costs.
Maintaining operational
preparedness through
existing processes and
policies for disruption
management.
Continuous TCFD-aligned
climate scenario analysis of
the related physical impacts
will enable the Company to
assess risks and set up
mitigation actions in
cooperation with the
Operational and Network
Development teams.
Future development of
forecasting technologies
(more accurately tracking
historical disruption root
causes and locations) will
support our operational
planning due to changing
weather patterns.
Wizz Air Holdings Plc Annual report and accounts 2023
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Risk type
and
estimated
significance
Heatwaves
Risk description
Financial impacts
Mitigation measures
Extended heatwaves have negative
effects on aircraft performance
(necessitating the rescheduling of
heavier aircraft or reducing their
weight).
Heatwaves may also reduce airport
capacity as a result of less dense air
impacting take-off, or runway/
taxiway damage.
In the summer, warming is expected
to be strongest in Southern Europe.
Disruption of regular
revenue streams and
increased operating costs.
Maintaining operational
preparedness through
existing processes and
policies for disruption
management.
Continuous TCFD-aligned
climate scenario analysis of
the related physical impacts
will enable the Company to
assess risks and set up
mitigation actions in
cooperation with the
Operational and Network
Development teams.
Future development of
forecasting technologies
(more accurately tracking
historical disruption root
causes and locations) will
support our operational
planning due to changing
weather patterns.
Drought
Demand
redistribution
Deficiency of precipitation over an
extended period will result in
significant crop failures, which has a
high potential to negatively affect
SAF production (where the main raw
materials for these fuels are crop
based). The Mediterranean, Central
Western Europe and the Middle East
and North Africa will be affected by
drought.
Extended and persistent high
temperatures in previously popular
leisure and seasonal destinations can
negatively impact demand, which
could lead to new geographical and
seasonal preferences among
passengers, impacting the
Company’s revenue streams.
Potential penalties due to
our inability to fulfil SAF
blending mandates
(suppliers may pass on
the penalties via
increased fuel costs).
Diversification of the
Company’s alternative fuel
supply chain to avoid
overreliance on one
particular type of SAF.
Disruption of regular
revenue streams in case
no mitigation and
changes actioned on the
route network side.
The ongoing and continuous
geographical diversification
of Wizz Air’s network, and
our demonstrably agile
operations allow sufficient
flexibility to adjust to new
consumer trends and offer
alternative summer and
winter holiday destinations.
Transitional risks
•
•
•
•
•
•
•
Policy – Change in carbon tax policy and tax compliance
Policy – ETS (carbon pricing)
Policy – Emissions reduction regulations
Policy – SAF regulation
Policy – CORSIA and offsetting
Technology – Disruptive aviation innovation
Technology – Technological feasibility issues of SAF production
• Market – High price elasticity of demand
• Market – Reduced demand due to the increasing number of ESG-conscious customers
• Market – Investor sentiment
•
•
Liability – Emissions and climate damage litigations
Reputation – Brand reputation
With regard to the lower impact transitional risks (not included in the following risk table):
•
•
The requirement of CORSIA will likely exceed current policy expectations, leading to higher costs
but only in the 1.5°C and 2°C scenarios and only in the medium term.
As for the adoption rate of low-carbon technologies, it will affect competitiveness, costs and asset
values, but due to the maturity of the related developments and the projected timelines, this will
be relevant outside of our time horizons. When it comes to liability, as aviation is a carbon-
intensive industry, the Company may face scrutiny from regulators, potentially resulting in
liability-related expenses.
Wizz Air Holdings Plc Annual report and accounts 2023
31
Risk type and
estimated
significance
Change in carbon
tax policy and tax
compliance
Risk description
Financial impacts
Mitigation measures
New fossil fuel and carbon taxation
implemented by the EU and other
national governments would
increase the general level of
taxation cost in the medium and
long term. Incorrectly assessing
changes in tax legislation could lead
to penalties.
Increased operating and
compliance costs all over
the network (in EU and
non-EU countries) without
impact on emissions. The
financial impact would be
even higher in case the
EU and its member states
introduce carbon taxes
parallel, leading to double
taxation.
Advocacy measures to ensure
a standardised approach
globally, avoiding double
taxing emissions via carbon
pricing, kerosene and carbon
taxes, putting additional
burden on operators.
Emissions Trading
Schemes (carbon
pricing)
Carbon prices are expected to
increase in the medium term due to
the phasing out of free carbon
allowances by the EU, and forecasts
also suggest EU ETS exceeding
current policy requirements in the
long term.
Additional compliance
costs under UK and EU
ETS. Operational costs
will increase due to higher
carbon prices per unit,
and the elimination of
free allowances.
Opportunity: This risk presents an opportunity in the medium term, as there are multiple
airline competitors that currently have much higher volumes of free allowance. As EU ETS
free allowances were based on the 2010 Company size, and since the Company has been
growing significantly since, it has much less free carbon allowances compared to its peers.
This provides a competitive advantage as the continuous reduction and final phasing out of
the free allowances (by 2026) will have a much less severe cost impact on Wizz Air than
many other airlines.
Maintaining an effective carbon
allowance/offset purchasing
strategy to mitigate price
volatility.
Forecasting carbon prices and
cost increases continuously to
increase resilience.
Continued work on assessing a
net zero pathway for Wizz Air
for the long term, to enable
the reduction of absolute
emissions.
Emissions reduction
regulations
In addition to the above-mentioned
carbon pricing and new taxation
policies, in a 1.5–2°C scenario, it is
expected that strict policies will be
implemented across Wizz Air’s entire
network, requiring emissions
reduction compliance.
If national governments introduce
different policy measures without a
standardised approach, there may
be a risk of non-compliance to some
due to the regulatory complexity.
Increased operational
costs and possible
penalties in the medium
term, in case of failure to
comply with the complex
set of requirements in our
operating environment.
Continuing strong focus on
assessing and ensuring tax
and regulation compliance
related to emissions
regulation.
Engagement with governments
and the EU, and other key
stakeholders for a unified
approach across geographies.
Sustainable aviation
fuel mandates
The regulations mandating SAFs in
the aviation fuel mix already in
effect in some countries will be
introduced in the EU in 2025 and the
same trend is expected in other
regions as well. Forecasts may
significantly exceed the current
policy requirements.
Significantly increasing
operational and fuel
costs, already in the
medium term.
Failure to use sufficient
SAFs may also lead to
penalties, and a slower
transition to renewables.
Opportunity: This risk presents an opportunity in the medium and long term in case Wizz Air
invests in the certification and future production of alternative fuels, which would guarantee
access to higher SAF volumes provided by one producer, at a preferential price. This would
ensure cost efficient SAF access, at a lower price than available on the market, mitigating
the cost increase resulting from the SAF mandates.
In accordance with the
Company’s SAF strategy,
procurement efforts will keep
focusing on setting up the
required SAF supply chain to
ensure compliance.
Resources have been allocated
to manage advocacy regarding
the book and claim
mechanism.
Technological
feasibility issues of
SAF production
In a 1.5–2°C world scenario,
demand for alternative fuels will
increase rapidly as operators will
aim to comply with the legal
obligations. However, a ten-year
timeframe may not be enough to
achieve the economies of scale and
technological maturity to support
global ambitions with adequate
supplies. Suppliers are likely to
encounter similar issues.
Due to potential SAF
supply chain challenges,
airlines may face
penalties for non-
compliance, and
additional costs due to
increasing ETS costs.
Continued execution of our
SAF strategy; procurement
efforts will keep focusing on
setting up the required SAF
supply chain to ensure
compliance.
Diversification of the
Company’s SAF supply chain to
avoid overreliance on one
particular type of SAF.
The Company is looking at
strategic options to support
production and research where
we see the potential for
achieving structural advantage
in terms of cost and supply.
Wizz Air Holdings Plc Annual report and accounts 2023
32
Risk type and
estimated
significance
High price elasticity
of demand
Risk description
Financial impacts
Mitigation measures
In a strict policy scenario,
compliance with requirements would
increase Wizz Air’s unit cost due to
the additional cost elements (carbon
pricing, SAF, carbon taxes). In line
with the business model, to keep
ticket fares affordable, the Company
cannot entirely pass on the
additional costs to the customers.
Increased unit costs
(impacting financial
performance and the
Company’s low-cost
profile) and/or price
increase in ticket fares
(impacting sales).
Continued investments into
sustainable technologies and
initiatives can help Wizz Air
reduce the possibility of costs
passed on to customers.
Reduced
demand due to
sustainability –
conscious customers
Due to climate change awareness,
consumer preferences are shifting,
and demand for air travel may
decrease significantly in the long
term (especially in regions where
greener alternatives are available).
The decline in customer
demand could affect
revenues negatively.
Our flight services connect
destinations where alternative
forms of travel are often
unavailable, impractical or
have a higher environmental
impact.
With the agility of network
planning, the Company can
also adjust later, if needed,
and operate in regions where
other alternatives are not
feasible.
Opportunity: In the medium and long term, this risk also presents a competitive opportunity
as Wizz Air currently has and will continue to strive towards maintaining the lowest reported
emissions intensity per passenger kilometre, compared to other airlines. Additionally, while
currently there are misconceptions about the ultra-low-cost, low-fare business model,
climate change awareness could shift consumer sentiment to favour ULCC more than
traditional airlines (due to their higher emissions per passenger kilometre), so this risk
would impact competitors more significantly than Wizz Air.
Ambitious fleet renewal plan
by 2030, continued
developments in fuel efficiency
projects and our SAF strategy
will enable Wizz Air to
differentiate its brand by
showing leadership.
Investor sentiment
In a 1.5–2°C climate scenario, ESG-
conscious investors may divest from
carbon-intensive industries.
Increase in the
Company's cost of capital.
A robust environmental
strategy including fleet
renewal with the best available
technology today, and fuel
efficiency initiatives.
SAF strategy execution to
ensure a steady supply of
alternative fuels, helping
achieve our targets.
Partnership with Airbus on its
zero emissions aircraft project.
Brand reputation
In a strict policy scenario, the
Company may experience
reputational damage as a result of
aviation’s negative image due to the
use of fossil fuels.
Potential decrease in
demand and revenues
due to negative public
perception.
Environmental projects and
targets will continue to ensure
Wizz Air’s adoption of new and
more sustainable technologies
to meet the expectations of
the public.
This may also deter potential
investors.
Increase in the
Company's cost of capital.
Out of all the risks assessed, the detailed risk table included those categorised as a high-impact risk in
any time horizon, or that have at least medium risk impact for each time horizon. In terms of the
global warming scenarios, for every risk type, the more severe potential impacts were considered,
which were 1.5°C and 2°C in case of transitional risks. On the other hand, the higher the global
temperature rise is, the less significant the transition risk impact will be as a result.
Based on the analysis, it can be concluded that transitional and physical risks are inversely
proportional. In case climate policies turn out to be ineffective, it will enable the 3°C and 4°C
scenarios, where physical risks will become more impactful; however, they will have only moderate
risk within our defined time horizons and the severe physical impacts will occur in the longer term only
(from 2050 and beyond). The better the regulation and policy implementation will be, the fewer
physical risks should be faced, while a significant rise in transition risks is expected.
Wizz Air Holdings Plc Annual report and accounts 2023
33
QUANTITATIVE RISK ANALYSIS
The qualitative climate risk assessment identified the most critical climate risks for Wizz Air’s business
planning. Out of the above presented long list of all climate risks, the following most critical material
risks were selected for the quantitative analysis:
•
•
•
•
•
carbon tax;
ETS (carbon mechanism);
SAF regulation;
SAF feasibility;
price elasticity; and
• weather pattern changes and their impact on operations.
The quantitative risk assessment was based on Wizz Air’s business projections, current climate
legislation and proposals, as well as up-to-date industry-specific reports and forecasts from EASA,
ICAO and IATA sources. As risk calculation involves assumptions and estimates, and since the financial
impact of risks is dynamically changing, it is crucial for the Company to have effective risk
management processes to frequently review and adjust cost assessment to the changing
circumstances or policy environment.
The results of the quantitative risk assessment have been shared with the relevant Wizz Air
departments and Finance teams, to support the integration of the climate risk analysis into the
Company’s financial planning processes. The impact of the most critical risks was quantified by F28, as
by focusing on this timeframe, we could gain a better understanding of the potential risks that the
Company may face in the near future.
The detailed results of the quantitative risk assessment will be disclosed in the Company’s upcoming
Carbon Disclosure Project (CDP) submission - currently in progress, to be submitted in July 2023 to
CDP - within its C2 Risks and opportunities module.
KEY TARGETS AND PRIORITY PROGRAMMES
Wizz Air has four main environmental targets with the ultimate objective to improve resource
efficiency and continuously decrease our impact on the environment, by striving for lower emissions
intensity and lower noise emissions, and establishing a sustainable aviation fuel (SAF) supply chain
that can support our efforts to contribute to decarbonising aviation:
1. carbon intensity (CO2/RPK) reduction – our core programme to gradually and radically reduce the
emissions intensity generated by flight operations through:
•
▪
1/a: fleet renewal; and
1/b: fuel efficiency;
2. sustainable aviation fuels (SAF) – qualify a SAF supply chain as of 2025, a key building block to
our F30 emission intensity glidepath and to achieve net zero in accordance with global aspirations
by 2050;
3. drive noise emission reduction through increased Chapter 14 emission standard compliance; and
4. qualify future technology building blocks and industry partnerships – to enable a net zero
pathway.
1. CARBON INTENSITY (CO2/RPK) REDUCTION
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 their whole lifecycle. Carbon emissions intensity is the key
environmental metric for Wizz Air as Scope 1 CO2 emissions from flight operations are the most
significant contributor to its carbon footprint. This intensity metric (e.g. CO2 emitted as measured per
passenger kilometre) measures emissions resulting from a given amount of activity, and 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 resource 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.
Carbon efficiency reflects the energy efficiency of aviation operations as CO2 emissions are directly
calculated from the amount of fuel burnt during flights. One tonne of fuel burn emits 3.15 tonnes of
CO2 (as per international conversion standards).
In F23, Wizz Air had the lowest carbon emissions in the industry expressed in CO2 per revenue
passenger kilometre (RPK) as it operates the youngest fleet at the highest seat load factors. Our
average CO2/RPK for F23 was 53.8 grammes, which is unique in the sector.
Wizz Air Holdings Plc Annual report and accounts 2023
34
During F23, our carbon intensity metric continued to be affected by the impact of the lower passenger
load factors, still recovering after the pandemic. At the same time, 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 led to our lowest ever intensity performance. As we continue to renew
our fleet, we are projecting further improvements year on year.
Wizz Air has established a CO2/RPK emissions target of 43 grammes vs its fiscal 2020 baseline of
57.2 grammes CO2/RPK. We established this target in 2021 based on the WIZZ300 strategy, which
has since been replaced by the WIZZ500 strategy, which moved from a 300 aircraft 2030 target to a
more ambitious 500 aircraft 2030 fleet renewal target. This was to take advantage of an opportunity
to secure attractive fleet order positions when other airlines were hesitant or even reluctant to make
such a commitment. This commitment to increased quantities of new technology aircraft would have
accelerated Wizz Air’s carbon intensity reductions, except for the various external factors now
affecting the industry and WIZZ, which instead puts pressure on Wizz Air’s carbon glidepath, such as,
most notably, unforeseen Airbus delivery delays, but also a slower market recovery after the
pandemic, the impact of the war in Ukraine and aviation supply chain challenges.
Despite Wizz Air’s leading order book position with Airbus and relatively minimal delivery delays, the
blend of NEO to CEO aircraft has changed, putting pressure on the Company’s ability to meet its F23
emissions targets. With increasing load factors, operational fuel efficiency measures, future SAF
purchase commitments, and restoration of future delivery rates, WIZZ maintains its commitment to
the overall glide path target of 42.6 grammes CO2/RPK by F30 (a 25% reduction over the decade)
compared to 57.2 grammes CO2/RPK in F20. The progress versus the ultimate CO2/RPK decrease
target remains part of the management incentive scheme for the Group CEO and all Officers.
CO2 per RPK glidepath
CO2 per RPK actuals
F22
F21
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 53.8 —
F30
F23
F29
F24
F28
F27
F26
—
—
—
—
—
—
The key actions to deliver on our CO2/RPK glidepath are outlined below:
1)
2)
fleet renewal;
fuel savings initiatives; and
3) sustainable aviation fuels.
Offset programmes are not included in the above presented glidepath.
1/A: FLEET RENEWAL – THE MAIN PILLAR OF CARBON INTENSITY DECREASE
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 4.6 years. The Company is operating the
largest Airbus A321neo fleet among airlines.
The airline operates a fleet consisting of 179
Airbus A320/1neo and ceo-family aircraft, with
an average age well below the
industry
average (which is around ten years based on
the above referenced benchmark). Wizz Air’s
average aircraft age will continue to improve
and is planned to reduce to 3.1 years by 2027,
underpinning
continued
commitment to sustainability.
airline’s
the
Airline
Wizz Air
Ryanair
EasyJet
AF-KLM
IAG
LH
Average fleet age
4.6
8.0
9.3
12.2
11.9
13.1
SAS
8.0
Source: latest available public information.
The airline has been continuously adding new Airbus A321neo aircraft to its fleet and replacing older
aircraft. The share of new “neo” technology aircraft within Wizz Air’s fleet has reached 49.3 per cent
by the end of the financial year. These aircraft can currently fly with up to 50 per cent SAF blend.
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 12 A321neo aircraft. Airbus has also granted Wizz Air 75 A321neo purchase
rights for deliveries in 2028–29. Completion of the order remains subject to approval by Wizz Air
Shareholders. As with previous orders, under the agreement Wizz Air has the right to substitute a
Wizz Air Holdings Plc Annual report and accounts 2023
35
number of the Airbus A321neo aircraft with the Airbus A320neo and/or A321XLR aircraft and vice
versa, depending on its future requirements.
The Airbus A321neo, which WIZZ introduced into the fleet 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 & 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 per cent compared to the A321ceo. The engines, together with Airbus’ fuel-
saving Sharklet™ wingtip devices, can enable per-seat fuel improvements of 20%.
In light of the global aspirations to achieve net zero by 2050, now more than ever, airlines depend on
the technology and innovations available here and now. We are confident that by investing in the
currently available most modern and fuel-efficient aircraft and engine technology we will be able to
continuously reduce passengers’ carbon footprint generated by flying and deliver the targeted CO2
intensity decrease by 2030 and beyond.
Fleet plan
Avg. fleet age
Avg. seat count
Share of neo AC
(including XLR
aircraft)
F20
5.4
201
F21
5.4
205
F22
5.04
213
F23
4.6
219
F24
4.0
226
F25
3.5
231
F26
3.3
234
F27
3.1
235
F28
3.3
236
F29
3.8
237
F30
3.1
237
7%
20% 36% 49% 64%
76% 87%
94% 99% 100% 100%
Fleet disposal information
Wizz Air operates a very young fleet and is the first operator of all aircraft in the fleet (all aircraft are
delivered to the Company brand new by Airbus). The Company is leasing its aircraft from reputable
global lessors, and the aircraft are typically quite young (on average between eight and twelve years
old) when the Company returns them to the aircraft lessors. Because of the young age and good
performance (we are contractually committed to return the aircraft in a certain condition) of the
aircraft at the end of their lease with Wizz Air, the lessors still have the option to lease out these
aircraft potentially to other lessees before the aircraft would reach their end of life. Aircraft lessors
may also re-sell the aircraft to other owners; consequently, the handling of the aircraft after the end
of lease is out of Wizz Air's control.
1/B: FUEL SAVING AND EFFICIENCY INITIATIVES
Wizz Air’s dedicated teams are continuously working on identifying new and improved solutions that
can contribute to fuel efficiency, reducing our environmental impact per flight by consuming less fuel.
With a new digital solution employing artificial intelligence for data analysis, up to 44 different fuel
efficiency initiatives were found, categorised by different phases of flight (from fuel policy to flight
planning, ground operations, departure, cruise and descent phase). Our cooperation with Storkjet
enabled the identification of new fuel optimisation opportunities, where we thought there was no room
for improvement.
In total, we have been deploying the following high-impact fuel efficiency initiatives that on an
ongoing basis are reducing consumption by 0.85 per cent:
▶ Performance/idle factors: Wizz Air constantly measures and monitors fuel-related flight data,
recorded by the aircraft itself. This data is used to create tail-specific performance models,
which are then compared to the book-level performance. The resulting performance factor
(difference between book level and actual fuel burn) is used to increase the accuracy of the
operational flight plan. Idle factors are used by the on-board flight management system to
estimate the top of descent (TOD) more accurately, reducing the need to apply engine thrust
or the use of speed brakes during descent.
•
•
•
Efficiency gain: 0.1 per cent
Total fuel saving: 950 tonnes
Total carbon saving: 2,990 tonnes
▶ Zero fuel weight optimisation: Operational flight plans used to be calculated with an estimated
zero fuel weight (ZFW) based on standard and fixed weight of passengers and their luggage.
Some years ago, Wizz Air introduced a machine learning model to better estimate ZFW, which
was trained with actual data over a period of two years. The resulting model takes into
consideration different factors for estimating ZFW, such as: city pair, time of the day, period
of the year, etc. The improved estimated weight was around one tonne lower than using the
simpler method.
•
•
•
Efficiency gain: 0.1 per cent
Total fuel saving: 810 tonnes
Total carbon saving: 2,560 tonnes
▶ Reduced take-off flap configuration: We perform reduced take-off configurations. Three years
ago, we harmonised in our operations manual (OM) 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 10–15kg of fuel per take-off due to
the decrease in induced drag, meaning that a lower thrust setting is required. In effect, this
Wizz Air Holdings Plc Annual report and accounts 2023
36
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.
•
•
•
Efficiency gain: 0.2 per cent
Total fuel saving: 3,380 tonnes
Total carbon saving: 10,670 tonnes
▶ Idle reverse thrust: Thrust reversers on jet aircraft provide a significant way of increasing the
rate of deceleration during the initial stages. When it’s operationally feasible (runway length,
aircraft weight, runway contamination, etc.) the use of idle reverse thrust reduces fuel
consumption on the ground.
•
•
•
Efficiency gain: <0.1 per cent
Total fuel saving: 2,000 tonnes
Total carbon saving: 6,310 tonnes
▶ Single engine taxi-in: During taxi-in at the airport, and after the required cooling period, the
pilots can turn one engine off, reducing the fuel consumption and emissions on the ground
(provided that the prerequisites regarding taxi time and taxiway slope/geometry are met).
•
•
•
Efficiency gain: 0.1 per cent
Total fuel saving: 810 tonnes
Total carbon saving: 2,570 tonnes
▶ Calculated reserve fuel: Wizz Air had previously been using fixed values (instead of fuel on
estimated aircraft mass) when planning final reserve fuel, which were not representative of
real operations. Around 100–200kg of extra fuel weight used to be carried on each flight as a
result, on top of the necessary amount of fuel (including safety precautions). Note, final
reserve fuel is the minimum fuel required to fly for 30 minutes at 1,500 feet above the
alternate aerodrome or, if an alternate is not required, at the destination aerodrome at holding
speed. Some Regulating Authorities require sufficient fuel to hold for longer. As safety is Wizz
Air’s first priority, the final reserve fuel is always calculated with the highest possible care and
also in compliance with all safety requirements.
•
•
•
Efficiency gain: 0.2 per cent
Total fuel saving: 2,700 tonnes
Total carbon saving: 8,530 tonnes
▶ Lighter aircraft brakes: From 2020, all newly delivered A321neo aircraft have new break units
that are 20kg lighter than the previous models. This helps to decrease our aircraft weight,
leading to decreased emissions per flight.
•
•
•
Efficiency gain: <0.1 per cent
Total fuel saving: 110 tonnes
Total carbon saving: 340 tonnes
▶ CONF 3 landing: A reduced landing flap configuration (vs full flap) allows for around 10kg of
fuel saving 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 pilot communications.
•
•
•
Efficiency gain: <0.1 per cent
Total fuel saving: 700 tonnes
Total carbon savings: 2,220 tonnes
Note, the savings are calculated against a fuel efficiency scenario where the Company is not
performing the initiatives. On top of the measures listed above, which have the highest impact on fuel
efficiency, there are various other initiatives and policies applied on an ongoing basis, to ensure the
most efficient fuel consumption during operations.
There are other solutions that lead to enhanced fuel efficiency due to aircraft design specifics or Wizz
Air operational processes:
▶ Sharklets: They can reduce fuel burn by around 2 per cent and reduce CO2 emissions by 800
tonnes/year/plane. All newly built Airbus 320/321 aircraft come with Sharklets, which can
reduce fuel burn on long routes. 100 per cent of the Wizz Air fleet will be equipped with
Sharklets by 2024.
•
•
•
Efficiency gain: 2 per cent
Total fuel saving: 6,320 tonnes
Total carbon saving: 19,980 tonnes
▶ 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.
•
•
•
Efficiency gain: 0.2 per cent
Total fuel saving: 2,480 tonnes
Total carbon saving: 7,850 tonnes
Wizz Air Holdings Plc Annual report and accounts 2023
37
There are also other key strategic projects that contribute to enhanced data analytics, and
optimisation opportunities, which support the fuel management experts’ and our pilots’ work. Flight
path optimisation options are being explored continuously and further improvements are expected as
we continue to benefit from the analysis of our third party fuel efficiency platform in combination with
our Mobile Electronic Flight Bag (EFB). We maintain our focus on the identification and qualification of
other optimisation projects continuously:
▶ Electronic Flight Bag (EFB): The Mobile Electronic Flight Bag is a significant step-change for in-
flight optimisation and helps our pilots make more accurate fuel planning decisions based on
instantly updated data. The new system is helping reduce fuel consumption due to more
precise flight planning and weight reduction. The main direct benefit of this solution is that
operational flight plans are calculated closer to the scheduled time of departure and delivered
remotely to the pilots’ iPads. This enables the use of more up-to-date weather forecasts, more
accurate aircraft weights, and more optimal alternate airports and routes. Given the
connectivity nature of the new EFB solution, pilots can have at their disposal new in-flight
optimisation tools based on updated weather forecasts and historical direct routing options.
▶ Fuel efficiency platform (FEP): A flagship project for supporting data analytics around better
fuel efficiency focused on the integration and implementation of a new leading third-party fuel
efficiency platform, Storkjet’s Fuelpro. The fuel efficiency platform (FEP) provides the analysis
capability and the tracking of cost-saving fuel initiatives in all flight-related stages: flight
planning and policies, ground operations, APU and packs, departure, flight path optimisation,
and arrival.
Artificial intelligence (AI) powered fuel efficiency at Wizz Air: In December 2022, Storkjet released a
public case study about Wizz Air using its AI powered fuel efficiency software. Wizz Air had previously
developed an in-house fuel efficiency platform, where flight data was processed and integrated with
other data sources to measure compliance to a defined set of fuel saving initiatives. Due to the need
for more sophisticated data analytics and new fuel efficiency initiatives, a more comprehensive system
had to be implemented going forward. Through the partnership, Wizz Air’s fuel management team
identified ten fuel initiatives with the highest saving potential, including improvements at various
phases of flight operation, such as climb speed or statistical taxi time.
2. SUSTAINABLE AVIATION FUELS
Alongside technology and operational improvements, alternative fuels are an
essential part of decarbonising the industry. Wizz Air has established its SAF
strategy, which includes securing offtake agreements with suppliers for the future.
To support Wizz Air’s ambitious sustainability journey and ensure sufficient supplies
of SAF to meet future blending mandates, 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.
▪
As part of this project, in 2022, Wizz Air signed a Memorandum of Understanding (MoU) with
Mabanaft/P2X Europe for the supply of Power to Liquid synthetic SAF from 2026.
▪ Wizz Air also signed an MoU with OMV, the international integrated oil, gas and chemicals
company headquartered in Vienna, for the supply of SAF between 2023 and 2030. The MoU
gives Wizz Air the opportunity to purchase up to 185,000 metric tonnes of SAF (HEFA type)
from OMV.
▪
▪
Our MoU with Neste will give Wizz Air the opportunity to purchase SAF across the airline’s
route network in Europe and the UK, starting from 2025. The companies will also jointly work
on enabling SAF adoption in other parts of the network. Neste’s SAF is produced from 100 per
cent sustainably sourced renewable waste and residue raw materials, including used cooking
oil and animal fat waste. Its SAF delivers the performance of conventional jet fuel but with a
significantly smaller carbon footprint on a lifecycle basis. Using Neste MY Sustainable Aviation
Fuel™ reduces greenhouse gas emissions by up to 80 per cent over the fuel’s lifecycle
compared to using fossil jet fuel.
The MoU signed at the end of F23 with Cepsa – a leading international company committed to
sustainable mobility and energy – gives Wizz Air the opportunity to purchase SAF to supply
the airline’s route network across Spain, starting from 2025. Cepsa’s SAF will be produced
from organic waste, such as used cooking oils or agricultural waste, among others. The
cooperation follows Cepsa’s SAF test initiative in Seville in November 2022, when Wizz Air was
among the airlines operating a total of 220 flights from the airport over one week using SAF
produced by Cepsa at its La Rábida Energy Park in Huelva. This was the first time that the
supply of SAF at this magnitude had been seen at an airport in Southern Europe.
The cooperation with these, and other future SAF suppliers, ensures that Wizz Air can progress in
accordance with its plan to set up a SAF supply chain with adequate supplies to comply with all
upcoming SAF blending mandates. In the short term, Wizz Air is primarily looking to secure SAF
supplies to guarantee compliance, while in the longer term, the Company is looking at the potential for
achieving structural advantage in terms of cost and supply.
Wizz Air Holdings Plc Annual report and accounts 2023
38
The demand for SAF will be driven by pricing, availability and regulatory requirements. There are
limitations with SAF in terms of accessibility (e.g. Eastern Europe) and pricing. SAF currently sells for
much higher prices than conventional jet fuel because of the lack of scale and limits of the existing
technological pathways. Production has only recently become viable with the support of governments
and technological development; therefore, the sector needs significant investment to scale up.
In recognising those limitations Wizz Air is engaged in advocacy with governments and stakeholders to
help create comprehensive policies and a market for producers. Wizz Air is closely following the
negotiations between the European Parliament and the Council of the European Union on the Fit for 55
climate package. Wizz Air’s position is that a SAF flexibility mechanism would help airlines to meet the
SAF blending mandates when operating in regions with limited (or zero) possibilities to purchase SAF
at a favourable price.
Connected to the fleet renewal and the Company’s business plan, Wizz Air is working to lock in its SAF
supply by 2025. In the mid term the SAF cost will be immaterial, given the EU 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 on by the
Company.
Wizz Air is committed to complying with regulatory requirements with regard to sustainable aviation
fuel (SAF) at European Union and country level. Countries that have implemented SAF blending
mandates so far are Norway, Sweden and France.
Wizz Air investment in Firefly’s SAF research and development
Due to the crucial role of SAF in decarbonising aviation, and because of the EU, UN, national and
global net zero targets’ significant and gradually increasing demand, there will be an increasing need
for more sources and processes for these alternative fuels. In April 2023, the airline announced that it
is investing £5,000,000 to support Firefly’s SAF process development to achieve ASTM qualification.
This is Wizz Air’s first equity investment in SAF research and development. The partnership with
Firefly, a biofuel company, will allow Wizz Air to supply SAF to its UK operations from 2028, up to
525,000 tonnes over 15 years. This volume of SAF supply has the potential to save ~1.5 million
tonnes of greenhouse gas lifecycle emissions, when compared to fossil jet fuel.
Firefly, a joint endeavour between GFR, Petrofac and Cranfield University, has established an
integrated technology route to SAF using sewage sludge as feedstock, and has the potential to be
more sustainable than some other types of SAF, with a more than 90 per cent reduction in
greenhouse gas lifecycle emissions versus fossil jet fuel (based on independent calculations by
Cranfield University). Firefly’s SAF will be independently validated by gold-standard sustainability
assessor RSB, and like other SAFs, it will be essentially identical to fossil jet fuel and safe to use.
Firefly aims to have its first commercial plant operating within the next five years.
Michael Berlouis, Head of Strategic Projects (Wizz Air), James Hygate, CEO of Firefly Green Fuels, and Matteo
Fregni, Head of Purchasing (Wizz Air)
Wizz Air Holdings Plc Annual report and accounts 2023
39
In terms of the feedstock, the benefits
of sewage sludge are significant, as it
is globally available in large quantities
and it is a low-value waste that can
cause environmental problems. As
such, the SAF converted from this
feedstock promises
to be more
affordable than some other routes to
SAF, allowing Wizz Air to continue to
provide accessibly priced air travel.
Firefly’s technology originated in the
laboratories of Green Fuels, which has
a 20-years history in sustainable fuels
(Green Fuels has a Royal Warrant for
sustainable fuel supply to HM King
Charles III).
Green demonstration flight
Wizz Air also completed its first green demonstration flight in 2022, which was partially operated using
SAF, on a special route between Bucharest and Lyon on 28 June. The event took place as part of a
collective effort of major airlines ahead of the European Union’s “Connecting Europe Days 2022”
sustainable mobility conference. Wizz Air’s Airbus A321neo aircraft took 4.5 tonnes of a SAF blend
consisting of 30 per cent pure SAF and 70 per cent A1 jet fuel (the total block of fuel was 9.5 tonnes).
Taking everything into account for the return trip, the uplift of the SAF delivered additional CO2
emissions reduction in addition to what the Company can already achieve through its highly efficient
fleet and fuel saving initiatives.
MOL and Wizz Air commercially test sustainable aviation fuel supply at Budapest Airport
On 10 May 2023, Wizz Air took off from Budapest Airport for the first time with a 37 per cent blend of
Neste MY Sustainable Aviation Fuel™ supplied by MOL. During the sustainable aviation fuel test, Wizz
Air’s five latest Airbus A321neo aircraft were fitted with a total of 23.5 tonnes of a blend containing 37
per cent pure SAF and 63 per cent Jet A1 fuel. The aircraft carried passengers from Budapest to Paris,
Luqa (Malta), Madrid, Castellon and Eindhoven. MOL, as the fuel supplier to Budapest Airport and Wizz
Air, has taken another step to reduce the environmental footprint of transportation fuels. The fuel is
produced by the Finnish company Neste from used cooking oil and animal fat, meaning it uses waste
from the production of kerosene to reduce lifecycle carbon dioxide emissions. The project supports
broader efforts in the aviation industry to reduce lifecycle CO2 emissions and aims to prepare the
supply system at Budapest Airport ahead of the SAF blending mandate, which will be introduced in
2025.
Wizz Air and MOL commercially test sustainable aviation fuel supply
at Budapest Airport in May 2023
Wizz Air Holdings Plc Annual report and accounts 2023
40
3. NOISE EMISSIONS REDUCTION
Due to the impact of noise pollution on society and its importance to our communities and
policymakers, we are focused on the continuous noise reduction of our fleet.
Wizz Air’s fleet renewal programme will keep delivering strong noise reduction benefits year on year.
The A321neo delivers an almost 50 per cent reduction in noise footprint versus the previous A321
aircraft (A321ceo).
Fleet renewal is important to limit noise for the communities living in the vicinity of the airports. In
December 2022, Wizz Air showcased one of its Airbus A321neo aircraft to the residents and
representatives of the local authorities (Ministry of Infrastructure) and the Eindhoven Airport
Consultation Body (Luchthaven Eindhoven Overleg) at the initiative of Eindhoven Airport. Those
attending had the opportunity to better understand the difference in noise emissions and how the new
generation engines of neo aircraft cause less noise for the airport’s surroundings. Wizz Air is keen to
support similar events in the future to raise awareness of local communities regarding the noise
reduction and environmental benefits of fleet renewal.
The number of aircraft in our fleet meeting the ICAO Chapter 4 noise emissions standard is at 100 per
cent and meeting the Chapter 14 emissions standard is at 77 per cent currently (only the 41 A321ceo
aircraft do not meet the Chapter 14 noise emissions standard) with a projection to get to 100 per cent
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 effective perceived noise units in decibels (EPNdB) quieter than Chapter 4.
Fleet
compliance
2022
March
2023
March
2024
March
2025
March
2026
March
2027
March
2028
March
2029
March
2030
March
Chapter 14
73%
77%
80%
85%
91%
95%
99%
100%
100%
Data based on latest confirmed fleet plan.
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 more passengers per trip.
EPNdB
Lateral
Flyover
Approach
Vs
Chapter 4
Vs
Chapter
14
A320neo
A321neo
Boeing 737-8
86.6
87.8
88.5
79.7
83.1
82.6
92.3
94.5
94.2
-20.0
-15.6
-14.9
-13.0
-8.6
-7.9
Wizz Air Holdings Plc Annual report and accounts 2023
41
4. QUALIFY FUTURE TECHNOLOGY BUILDING BLOCKS AND INDUSTRY PARTNERSHIPS
Wizz Air is committed to engaging with industry stakeholders in an
effort to help drive sustainable change within aviation. We are
cooperating with our suppliers, partners and other stakeholders on
projects concerning technological and operational innovations.
Alliance for Zero Emission Aviation (AZEA)
Wizz Air joined AZEA in September 2022, a voluntary initiative launched by the European Commission
to pave the way for next-generation sustainable aircraft. The objective of AZEA is to prepare the
market for the entry into service of zero emissions aircraft. The Company is participating in two
expert-level groups most relevant for our operations: one dealing with roll-out scenarios for electric
and hydrogen-powered aircraft and related “figures of reference”, while the other working group’s
focus is on incentives, analysing the barriers and opportunities operators may face when integrating
such aircraft into their fleet.
Renewable and Low-Carbon Fuels Value Chain Industrial Alliance (RLCF)
The RLCF Alliance is working on tackling the lack of availability and affordability of renewable and low-
carbon drop-in fuels for aviation (and waterborne transport), boosting production, increasing investor
certainty, reducing investment risks and reducing price differential between conventional fossil fuels
and alternative fuels. Wizz Air has been a member since September 2022, and we are eager to
contribute to the work of the Alliance by providing information and presenting interests from the
operators’ perspective.
Airbus – ZEROe Hydrogen Project
Wizz Air and Airbus signed a ZEROe Memorandum of Understanding in January 2022, to explore the
potential for hydrogen powered aircraft operations. During F23, the companies discussed the evolution
of the ecosystem, sharing insights on operational and infrastructure opportunities and challenges to
determine how a zero emissions aircraft could be operated within Wizz Air’s network.
Sustainable taxiing pilot at Eindhoven
Aircraft taxiing operations are a significant source of energy consumption and emissions at airports,
and additional testing and analysis is essential to encourage wider usage of this technique as part of
standard airport and airline operations. Wizz Air has been participating in Eindhoven Airport's
sustainable aviation and passenger journey initiatives, namely the project focusing on sustainable
taxiing. The pilot initiative is aimed at decreasing the use of the Auxiliary Power Unit during the
turnaround and increasing the use of single engine taxi procedures, which contributes to the reduction
of fuel burn and emissions at the airport.
EASA Environmental Labelling Programme for Aviation
Wizz Air continues its voluntary cooperation with EASA on the operational testing of its 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.
Target True Zero coalition
Wizz Air joined the World Economic Forum’s Target True Zero (TTZ) coalition. It was formed to assess
how the development of new technologies in engine propulsion (like electric or hydrogen powered),
can enable aviation’s transition to a net zero economy. The coalition published a report on 18 July
2022, on “Unlocking Sustainable Battery and Hydrogen Powered Flight”.
Green Motion
In collaboration with Rentalcars.com and Green Motion, Wizz Air launched a car rental reward scheme
for our passengers, offering a 10 per cent cashback reward for choosing an electric or hybrid vehicle.
Green Motion not only operates with an eco-friendly fleet, but it also reduces its environmental
footprint by consuming renewable electricity when available and uses sustainable materials. Its
services are available in many of Wizz Air’s bases and destination airports.
In-flight Waste Sorting Project at Budapest Base
We previously implemented an in-flight recycling trial programme in cooperation with Budapest Airport
to understand how we can get better results in collecting on-board waste to support circularity, and
how we can decrease and eliminate waste-to-landfill waste later on. The project involves the airline’s
cabin crew based in Budapest, the local Ground Handling teams, and the airport supporting the project
via its waste sorting station working at the airport. The Company has been analysing the results of the
trial with regard to passenger awareness, and is looking to expand the trial to other bases in the
network, currently assessing the feasibility and relevant resources.
Wizz Air Holdings Plc Annual report and accounts 2023
42
5. OTHER CARBON-RELATED PROGRAMMES
▶ Working towards a sustainable supply chain
Supply chain services are at the heart of Wizz Air’s operations, due to the valuable components such
as structures, systems and technologies provided by our partners and suppliers every day.
The Wizz Air Group supply chain covers approximately 2,500 suppliers across categories related to
airline operations, including but not limited to:
▪
▪
▪
▪
▪
▪
▪
aircraft manufacturers (including companies providing spare parts and aircraft interior
components);
fuel suppliers;
airports and ground handling providers;
aircraft maintenance services;
digital system and software companies supporting operations and other business processes
(e.g. navigational systems, booking system, website, cyber security and procurement
system);
consultants and auditors; and
other sub-contractors or service providers (e.g. financial services and contact centre services).
The Company implemented its Sustainable Procurement Policy in April 2022 to increase its oversight
regarding indirect emissions, especially in the supply chain. The policy introduced 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.
A key target is to review, collect and update data on the percentage of Wizz Air’s suppliers that
regularly measure and disclose their own greenhouse gas (GHG) emissions (Scope 1 and 2 emissions
in tCO2e). During the tender selection process, Wizz Air is also committed to including the preference
for new suppliers to have good environmental credentials. Information on the suppliers’ environmental
practices will be collected via a digital survey, based on a pre-defined set of questions (previously
aligned with Wizz Air’s consultant for environmental strategies and GHG data collection). Through the
Company’s Supply Chain Innovation and Automation Centre of Excellence team, this process was
transformed, and a seamless and efficient process was established for surveying our vendors. With the
new functionality, it is now possible to send out the surveys to multiple vendors at the same time, and
collect their answers in a central database, which allows the efficient review of supplier feedback to
our sustainability survey.
Based on the Company’s research carried out, reviewing all our base and destination airports’ climate
commitments, currently 54 per cent of our airports have net zero-related decarbonisation targets,
demonstrating their commitment to sustainable airport operations, emissions reduction, and working
towards carbon neutrality.
In line with our previous commitment, in August 2022, our supply chain teams received
comprehensive training, provided by expert procurement consultants, on the role of sustainability in
procurement. The workshop was a key step in the implementation of the recently established policy,
to ensure that procurement staff understand their role in decarbonising the supply chain and learn the
related procurement strategies to reduce the carbon impact of our operations wherever possible.
▶ Compliance markets and voluntary offsetting
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
providing 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 it offers 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 can make a payment supporting a verified carbon
offset and receive a certificate in return.
As part of the voluntary offsetting programme offered to customers, Wizz Air is supporting two verified
carbon-reducing projects:
▪
The International Small Group and Tree Planting Programme (TIST) in Uganda, an award-
winning and long-standing reforestation project.
The TIST is an innovative combined reforestation and sustainable development project carried
out by subsistence farmers to combat the devastating effects of deforestation, poverty and
drought. The farmers plant trees on their land and retain ownership of the trees and their
products, which is creating a potential long-term income stream, and developing sustainable
environments and livelihoods.
Wizz Air Holdings Plc Annual report and accounts 2023
43
▪
Landfill gas extraction and electricity generation (Türkiye)
This project converts methane emissions from landfill waste into electricity in Türkiye. It
involves developing and constructing two waste-to-energy facilities at both the Odayeri and
Komurcuoda landfill sites, which capture the methane gas released from landfill waste and use
it to generate electricity. The project objective is to build, operate and maintain these two
landfill waste-to-energy systems consisting of landfill gas (LFG) collection systems, flaring
stations and gas engines coupled with generators to produce electricity. The gas engines will
combust the landfill gas to produce electricity, and any excess LFG will be flared.
These 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 per cent of emissions (ETS offsets excluding
free credits and voluntary offsets). The average price of an EU ETS credit during F23 was 77.48 EUR
(compared to 60.38 EUR in F22).
Offsetting data:
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 by
customers (CHOOOSE)
Scope 1 CO2 emissions without offset (free credits and
baseline offsets)
F21
F22
F23
863,909
1,746,695
3,054,662
-
105
-
1,064
-
988
474,358
788,777
700,976
Wizz Air has not included offsets in its F30 carbon intensity reduction glide path.
▶ Non-CO2 emissions
In line with its target, Wizz Air is fully committed to reducing its carbon emissions intensity. We
operate one of the youngest, most efficient fleets in Europe using the Airbus A321neo which reduces
fuel consumption and CO2 emissions by as much as 20 per cent – meaning Wizz Air currently has the
lowest CO2 emissions per passenger kilometre in Europe. The A321neo also reduces NOx emissions by
50 per cent per flight and we are further mitigating non-CO2 emission impacts through route
optimisation and jet fuel improvements. As sustainable fuels will be crucial for achieving our goals, we
have signed multiple agreements with SAF providers to supply our fleet.
Wizz Air Holdings Plc Annual report and accounts 2023
44
ENVIRONMENTAL AND GREENHOUSE GAS METRICS
Our climate strategy includes challenging objectives and ambitious targets to address climate risks
across our operations. Since F22, CO2 as measured in grammes per RPK (revenue passenger
kilometre) has been included in the annual remuneration targets for all Officers at Wizz Air.
AREA
UNIT
NOTE
g/RPK
Priority/1
F23
53.8
F22*
60.7
F21
77.3
F20
57.2
2030
TARGET
43
t
t
t
t
t
t
CAEP/8
t
t
t
t
2
2
3
4,811,337
2,646,742
1,303,397
3,783,901
1,463
1,764
2,951
5,566
1,381,602
787,825
—
—
Priority/4
4,763,307
2,620,321
1,290,647
3,746,884
5
6
6
7
8
9
10
2,964
45,066
50%
1,497
756
9,830
227
1,631
24,792
34%
823
416
5,407
124
459
12,292
20%
406
205
2,663
61
1,332
35,685
7%
1,178
595
7,732
178
—
—
—
—
—
100%
—
—
—
—
CO2/RPK
EMISSIONS
CO2e Scope 1
(a + b + c)
CO2e Scope 2
(market-based)
CO2e Scope 3
CO2 Scope 1 (a)
CH4 Scope 1 (b)
N2O Scope 1 (c)
N2O Scope 1
SO2 emissions
NMVOC emissions
CO emissions
Particulate matter
emissions
NOISE
WASTE-TO-
LANDFILL
Chapt.14
Priority/11
77%
66%
100%
%
98
72%
99
70%
98.3
12
13
14
15
16
17
Priority/18
0.00166
0.00295
0.0058
0.0179
0.023
0.000034
0.000015
87.8
1,674
0.005
64
4.6
78
1,604
0.0002
64
5.04
64
1,604
0.0007
67
5.5
93.5
1,635
0.0002
56
5.3
—
—
50
—
—
95
1,650
—
—
—
NATURAL RESOURCE USE
Freshwater use per
sales
l/EUR
Energy use per
sales
GJ/EUR
MANAGEMENT
Booked load factor
Stage length
Sustainable aviation
fuel
Offsets
Aircraft age
%
km
%
%
Years
Priority/19
*Wizz Air chose F23 as base year for the greenhouse gas emission calculations for the future, as it is the first year
with our GHG inventory reporting that received third-party assurance. As a result of that, the company has revised
its F22 emission inventory and updated the Scope 1-2-3 figures accordingly, applying the base year’s improved
calculation methodology and benchmark.
(1) CO2/RPK: See page 34, on carbon intensity reduction. Further, you can find emissions per FTE and per m2
below.
GHG emissions
Total emissions
Total average FTE (F23)
Total floor area
Emissions intensity per FTE
Emissions intensity per m2
Final year-end emissions (tCO2e)
6,194,402
6,715
32,705
922
189
100%
FTE
m2
tCO2e/FTE
tCO2e/m2
(2) Scope 1 and Scope 2 CO2e emissions are emissions Wizz Air can control. Scope 1 emissions are linked to
sources we own, lease or control, whereas Scope 2 emissions relate to purchased energy. In Scope 1, for Wizz
Air, jet fuel is the only key emissions source accounted in this category (natural gas usage was estimated for
relevant sites, while it is immaterial within Scope 1). Scope 2 accounts for GHG emissions from the generation
of purchased electricity consumed by the Company. Both market-based and location-based emissions from
electricity are calculated as per the GHG Protocol Scope 2 guidance. In the main GHG table above, the market-
based figure is listed.
(3) Scope 3 CO2e emissions include all other indirect GHG emissions emitted from a company’s value chain.
Scope 3 emissions are a consequence of the activities of the Company, but they occur from sources not owned
or controlled by Wizz Air. In scope are all emissions generated upstream of Wizz Air’s operations from Tier 1
suppliers during the reporting year. This includes goods not for resale, such as professional services. Spend
associated with fixed assets or plant, property and equipment has been categorised under capital goods
(category 2). Excluded are emissions associated with cargo operations undertaken in A330 aircraft owned by
the HU-government, which are outside of Wizz Air’s operational control.
(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 World Resources Institute (WRI)/
World Business Council for Sustainable Development (WBSCD) and GHG Protocol. The total emissions were
calculated using a hybrid methodology using actual consumption data for jet fuel, spend data for various
Wizz Air Holdings Plc Annual report and accounts 2023
45
categories and benchmark/proxy data for categories with a low degree of materiality (e.g. electricity, waste).
Compared to F22, as part of the Company's data improvement plan and due to the focused efforts to obtain
more granular utility consumption data from airports and other facilities, the amount of actual electricity and
energy-related data increased in F23. This enabled the creation of an internal benchmark more reflective of our
organisation, and representing more sites. As such, for sites where no consumption data was available, instead
of the conservative industry standard benchmark, the internal benchmark was applied, hence the lower Scope 2
emissions in F23.
Wizz Air’s single most significant emission source is jet fuel, responsible for 93 per cent 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
per cent of total GHG emissions.
GHG emissions by scope (tCO2e)
Scope 1: Jet fuel
4,811,337
Total Scope 2, market based (including purchased
electricity and heat and steam) 1,463
Total Scope 2, location-based: 1,135
Scope 3: Upstream and downstream categories total:
1,381,602
Purchased goods and services: 343,622
Fuel and energy related activities (not in Scope 1-2):
996,176
Business travel: 20,550
Employee commuting: 10,747
All other Scope 3 categories: 10,221
Total GHG emissions
6,194,402
Wizz Air’s remaining emissions (after excluding jet fuel) are concentrated in one key area: purchased goods and
services. The other emissions, whilst minor from a share of total (7 per cent), are significant in absolute terms
(business travel or employee commuting), 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 per cent of total carbon footprint, followed by purchased goods and services 6 per cent,
business travel 0.3 per cent, employee commuting 0.2 per cent, and upstream transportation and distribution
0.1 per cent, with the remaining categories being immaterial and accounting for ~1 per cent of total. Note,
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 will 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 efficiency through fleet upgrade, fuel
saving initiatives and the increased use of sustainable aviation fuel, and will generate further actions and
solutions for a sustainable transition, to achieve net zero.
(4) Scope 1 CO2 emissions (carbon dioxide) by our operations was 4,763,268 tonnes (based on our jet fuel
consumption and natural gas used within Scope 1). This also includes the fuel consumption of any wet lease
aircraft. Under our priority programmes outlined in the previous section we have detailed the key actions the
Company has undertaken to continue to be industry leading on reducing carbon intensity per passenger.
Emissions are calculated by multiplying the fuel and energy use by the applicable factors based on the UK
Government’s GHG conversion factors for company reporting. For F23, Wizz Air discloses methane (CH4) and
nitrogen dioxide(N2O) emissions for Scope 1 non-CO2 greenhouse gases, in line with the above referenced GHG
conversion factors.
(5) Scope 1 CH4 emissions (methane) by our operation is negligible. Emissions are calculated by multiplying
the fuel and energy use by the applicable factors based on the UK Government’s GHG conversion factors for
company reporting. For F23, Wizz Air discloses methane (CH4) and nitrogen dioxide(N2O) emissions for Scope
1 non-CO2 greenhouse gases, in line with the above referenced GHG conversion factors.
(6) Scope 1 N2O emissions (nitrous oxide): Emissions are calculated by multiplying the fuel and energy use
by the applicable factors based on the UK Government’s GHG conversion factors for company reporting. For
F23, Wizz Air discloses methane (CH4) and nitrogen dioxide(N2O) emissions for Scope 1 non-CO2 greenhouse
gases, in line with the above referenced GHG conversion factors.
As we are industry leading, it will not be a surprise that we have 100 per cent of our fleet meeting the ICAO
NOx CAEP/6 standards and 50 per cent of our fleet meeting the ICAO NOx CAEP/8 standards (all our neo-
powered aircraft are meeting the ICAO CAEP/8 standard). Emissions 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).
% of fleet
Mar 20
Mar 21
Mar 22
Mar 23
Mar 24
Mar 25
Mar 26
Mar 27
Mar 28
Mar 29
Mar 30
CAEP-8
7%
20%
34%
50%
64%
76%
86%
94%
99%
100% 100%
Wizz Air Holdings Plc Annual report and accounts 2023
46
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
NOx margin to CAEP/8 (%)
49
44.6
7.4
1.3
16
37.2
-10.6
-13.9
6
(7) 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 can form
aerosols. The average annual emissions 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. Emissions 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) Non-methane volatile organic compound (NMVOC), 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
emissions of NMVOC is a factor of 0.0005 times the tonnage of jet kerosene. Emissions 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.
(9) 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. Emissions
factor is verified in ICAO Aircraft Engine Emission Databank (EEDB) issue 28 with last update as of 23
December 2020.
(10) 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 inflammatory reaction if the solid particles are inhaled in the
direct vicinity of the engine. Emissions factor is verified in ICAO Aircraft Engine Emission Databank (EEDB) issue
28 with last update as of 23 December 2020.
(11) Noise emissions: See page 41, for more details on Wizz Air’s noise emissions reduction plan.
(12) Waste is generated in the aircraft, the offices and other facilities the Company is using. 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 3,420 tonnes during F23. Office waste for Wizz Air was 155 tonnes.
(13) Water use intensity: Wizz Air consumes water in its offices, training centres and hangars (where engine
wash events are also conducted), and for de-icing of aircraft where needed. In F23, the Company’s main
offices, hangars and training centre consumed a total amount of 6,471,050 litres of water.
(14) Energy use intensity: Wizz Air uses electricity through leased contracts in its offices, bases,
maintenance operations and training centre. The Company’s total energy use also includes the energy
generated by the combustion of jet fuel.
(15) Passenger load factor: This is a key operational metric, as Wizz Air operates a load factor-active
business model, trying to maximise load factor, which maximises value creation. Our mid to long-term target is
to reach 95 per cent load factor on our aircraft.
(16) Stage length for Wizz Air is on average 1,680 km with flights below 1,000km accounting for less than 13
per cent of flights. Our stage length is significantly higher than our key competitors (see below the comparison
for F20, pre-COVID-19, and the latest publicly available data).
Airlines
Wizz Air
Ryanair*
EasyJet**
Stage length F20 (km)
Stage length (latest available annual figures as
of 5 June 2023)
1,635
1,680
1,409
1,258
1,132
1,193
*Cirium SRS Analyser™; ** easyjet 2022 Annual Report and Accounts
(17) Sustainable aviation fuels: We are committed to be compliant with what we believe will be an
increasing number of blending mandates over the region we operate in. This, in time, shall 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 its carbon reduction strategies, and at the same time reduce lifecycle carbon
emissions by 80 per cent.
(18) CO2 emissions offset programme: See page 44 for more details.
(19) The average age of aircraft is 4.6 years; see also page 35 for more details on Wizz Air’s fleet.
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.
More detailed descriptions of the emission categories, operational boundaries, calculation methodology and the
base year chosen for the greenhouse gas emission calculations are included in Wizz Air Greenhouse Gas Emissions
Methodology and Additional Disclosures” document, available on the company’s sustainability website. The GHG
inventory and related additional disclosures have received limited assurance from Deloitte Auditing and Consulting
Ltd. Hungary.
Wizz Air Holdings Plc Annual report and accounts 2023
47
VI. CLIMATE POLICY POSITIONS AND ADVOCACY
FIT FOR 55 CLIMATE PACKAGE
The European Commission published a comprehensive climate package called Fit for 55 in July 2021.
The proposals put forward either modify existing legislation or establish new initiatives with the aim of
reaching at least 55 per cent greenhouse gas emissions reduction by 2030.
ReFuelEU Aviation
Wizz Air has been closely following the negotiations of and supporting the ReFuelEU Aviation proposal
to promote and develop the use of SAF for all flights in a fair and equal way. The compromise was
reached in April 2023. The new ReFuelEU Aviation legislation creates an obligation for fuel suppliers to
provide gradually increasing amounts of SAF to airlines, so they can progressively increase their use of
SAF and subsequently reduce the emissions of aviation.
Wizz Air is of the position that the inclusion of a SAF flexibility mechanism (i.e. book and claim
system) would have contributed to reaching the EU’s green goals and could be an important step
towards ensuring a level playing field for access to alternative fuels as the market develops across the
EU. Current geographic imbalances in SAF supply and price levels – especially in the Central Eastern
Europe (CEE) region and parts of the European periphery – are of particular concern. The book and
claim system could ensure that aircraft operators can purchase the requested amounts of SAF even if
not available at the specific airport they are operating from. The airlines that “purchased” the SAF
must be able to claim the proportional emissions reductions in the relevant EU-wide and international
systems and report emissions accordingly. A SAF registry could ensure transparency and avoidance of
double counting.
Wizz Air is currently working on ensuring access to adequate supplies to comply with the future
mandates. In terms of specific SAF types, we are looking at a portfolio approach, as there are a
number of technologies under development at the moment.
At the same time, it is clear that significant investment support will be required to ensure no part of
Europe is disadvantaged and left behind on the road to decarbonisation. The Funds for Sustainable
Aviation and the Green Deal Industrial Plan are amongst the initiatives we strongly support.
The Company also agreed with the proposal to set up a union labelling system for the environmental
performance metrics of aviation. Such a system could, on the one hand, increase public awareness
about aviation’s environmental footprint and, on the other hand, provide consumers with better
opportunities to make sustainable, well-informed choices about their travel plans, and in turn
incentivise the industry to decarbonise; however, airlines’ participation should be mandatory in order
to ensure a transparent European system.
ETS Aviation
European-level negotiations have concluded on the revision of the EU Emissions Trading System (ETS)
Aviation file in December 2022. During the discussions, Wizz Air has been advocating for the extension
of the scope to all departing flights from the European Economic Area (EEA), as emissions do not stop
at borders. We regret that the scope remained intra-EEA, excluding the most polluting flights.
Extension of the scope would have contributed significantly to the joint European green goal.
We have been supporting the early phase-out of free ETS allowances to airlines and welcome that
they will be fully auctioned from 2026. This is a step towards a level playing field in the European
market.
We also agree with the introduction of the SAF allowances into ETS, to incentivise SAF uptake across
Europe as we think this is the effective short to mid-term solution.
Energy Taxation Directive
The European Commission proposed to end kerosene tax exemption for intra-EU flights over a period
of ten years. Wizz Air cannot support additional financial burden to be introduced for airlines. In case
of the adoption of the proposal in its current form, the most polluting flights, namely intercontinental
long-haul flights, will be excluded despite being the main source of European CO2 emissions – based
on the Eurocontrol Data Snapshot on CO₂ emissions and flight distance from February 2021.
Considering that the EU ETS already applies to intra-European flights, we believe that double taxation
needs to be avoided. According to Eurocontrol’s analysis (Eurocontrol Aviation Intelligence Unit, Think
Paper #7 – October 2020), there is no proof that taxing aviation will result in lower greenhouse gas
emissions. However, there is a risk that such taxation would divert traffic from EU to non-EU airports
(carbon leakage), threatening Europe’s connectivity and competitiveness.
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48
SINGLE EUROPEAN SKY
The Single European Sky (SES) initiative aims to make the European air space more efficient, through
a transformation of the air traffic control system via the reformation of the Air Traffic
Management and the Air Navigation Systems. The latest revision of the SES has been underway for
years, while the conditions of the European airspace remained ineffective and disjointed.
Wizz Air welcomes the proposal for modification and urges European decision makers to make
progress on the file. Today, aircraft are flying longer than necessary routes, which result in delays and
additional emissions that could be prevented. All these contribute to increased costs and higher ticket
prices. If stakeholders want to reach the common European green goals and continue to increase
European connectivity at the same time, a robust reform of the current rules is needed.
ADVOCACY IN THE UNITED KINGDOM
Wizz Air UK provides its business insight to the UK government, to support the mission of reaching net
zero in the aviation sector by 2050. The Company is a member of the delivery groups of the UK
government’s main advisory body on sustainable aviation, the JetZero Council. In the Zero Emissions
Flight delivery group, the focus is on accelerating the design, manufacturing, infrastructure and
commercial operation of zero emissions aircraft. The SAF delivery group provides advice on how
government and industry can work together to deliver the UK SAF commitments (to have at least 10
per cent sustainable aviation fuel (SAF) in the UK jet fuel mix by 2030).
ENGAGEMENT AND CLIMATE POLICIES IN THE UNITED ARAB EMIRATES
The Emirates was the first nation in the Middle East and North Africa to make a commitment to
achieve net zero emissions by 2050. As a local airline, Wizz Air Abu Dhabi is involved and has been
participating in the UAE Aviation Environment Working Group (which was established by the local
General Civil Aviation Authority to support the UAE’s Net Zero 2050 Strategy for aviation and the
related state action plan). Therefore, Wizz Air Abu Dhabi is actively preparing for the upcoming 28th
session of the Conference of the Parties (COP 28) to the UNFCCC, which will take place in the UAE
during the Year of Sustainability.
POLITICAL DONATIONS AND ADVOCACY EXPENDITURES
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.
Since November 2021, Wizz Air has been collaborating with Penta (formerly Hume-Brophy) on
advocacy issues in the European Union, with a special focus on climate or other regulation impacting
aviation. Wizz Air is also listed in the EU Transparency Register.
Wizz Air Holdings Plc Annual report and accounts 2023
49
VII. PEOPLE PILLAR – WIZZ AIR CARES FOR ITS EMPLOYEES
AND CUSTOMERS
OUR VALUES
Wizz Air continues to stay committed to its people and to fostering an equal opportunity environment
for all as a responsible business leader. All employees are provided with an environment and tools that
support their professional goals and needs, enable them to reach their full potential and which are free
from any forms of discrimination and harassment, so that everyone is given equal and fair
opportunities to perform, develop and succeed.
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 Group Chief Executive
Officer. This important topic is also regularly discussed and monitored via the Sustainability and
Culture Committee of the Board as outlined on page 24.
The WIZZ 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.
These 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 SOCIAL STRATEGY AND PRIORITY PROGRAMMES
Wizz Air has a clear strategic plan for our communities, passengers, workforce 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, Wizz Air has the following key priority
programmes:
1. Put safety first
2. Recruit and develop our employees
3.
Improve and leverage diversity
4. Engage our employees and ensure effective communication through the People Council
5. Addressing challenges for the continuous improvement of customer experience
6. Community programmes and charitable support
1. PUT SAFETY FIRST
Safety is the first priority in our work and the key to a successful business. It is
through the personal commitment of all our employees that we will provide our
customers with the highest level of safety possible.
Wizz Air, including the Board of Directors, the Leadership Team and the entire employee community,
is firmly committed to ensuring the safest operation possible, always keeping our people and our
customers safe. Our philosophy is to create and maintain an organisation which is healthy, safe and
successful and we are fully committed to supporting the continuous improvement of the organisation
and management system. We are committed to complying with all applicable laws, regulations and
standards taking
including IATA Standards And
Recommended Practices (SARPs). In August 2022, the Safety, Security and Operational Compliance
Committee of the Board of Directors was established; it shall assist the Board with its oversight of the
Group’s policies, practices, objectives and performance on safety, security and operational
compliance.
industry best practice
into consideration
Wizz Air Holdings Plc Annual report and accounts 2023
50
Safety Policy Statement
We are committed to supporting the management of safety through the provision of sufficient
resources that will deliver our operations safely. Our senior management is committed to creating and
promoting an organisational culture that fosters safe working practices, encourages effective safety
reporting, and proactively manages safety. Safety is everyone’s responsibility and all levels of
management and all employees are accountable for the delivery of the highest level of safety
performance, starting with the Chairman of the Board of Directors and the Operations Officer.
Wizz Air has implemented a comprehensive Safety Management System to manage risks associated
with our operations and activities. We have established safety objectives and performance standards
that will help us to achieve a continuous improvement in our safety performance.
Our employees are key to delivering a safe operation and it is imperative that they report any real or
potential safety issues or concerns. Every employee is encouraged to contribute to the Safety
Management System by reporting safety issues and concerns to the Safety and Compliance
department. We have launched an employee support programme to provide assistance to our
employees to maintain their level of mental fitness.
We want to create an atmosphere of trust through our Just Culture in which people are encouraged to
report essential safety-related information. Our Just Culture Policy ensures that errors and unsafe acts
will not be punished if the error was unintentional; however, those who act recklessly or take
deliberate and unjustifiable risks will still be subject to disciplinary action. This will be decided through
a fair and consistent process including an independent review of the events that will consider any
human factor, human behaviour and mitigating circumstances as described in the Organisation
Management Manual.
Safety compliance
At Wizz Air, we are committed to complying with all applicable laws and regulations. This is supported
by a Compliance Monitoring System that constantly monitors the performance of systems and
processes employed by Wizz Air to ensure that our operation is safe, constantly works towards
meeting the expectations of our internal and external customers, and is in compliance with the
applicable national aviation regulations and Company specified standards and requirements including
IATA ISARPs.
The objectives of the Compliance Monitoring System are as follows:
▶ ensuring safe operations and airworthy aeroplanes;
▶ continuous monitoring of Wizz Air operations for compliance with all applicable standards,
requirements and procedures including feedback to the Accountable Manager;
▶ maintaining our Air Operator Certificates and Operating Licences by fulfilling requirements;
▶ achieving adequate and timely implementation of corrective and preventive actions against
non-conformities discovered during audits and inspections; and
▶ meeting the planned values of Safety Performance Indicators defined by the Accountable
Manager at the Management Evaluation.
We are committed to continuously perform our tasks meeting the requirements of Part-ORO, Part-ORA
and Part-CAMO and continuously improve our processes and performance in order to achieve the
objectives of the Compliance Monitoring System.
Wizz Air continues to be committed to following all relevant regulations issued by the responsible
aviation safety agencies in all its operating environments, ensuring that our managers and operational
personnel comply with all applicable laws, regulations and procedures in all locations where our
operations are conducted.
Health and safety – COVID-19
Over the past three years, since the outbreak of COVID-19, we have established a number of new
processes to safeguard the wellbeing of our employees, loved ones and passengers. To ensure the
highest level of protection for our crews and passengers during the peak of the pandemic, Wizz Air’s
Health and Safety team launched various key protocols, including enhanced cleaning and disinfection
procedures and mandatory face covering policies, and established a vaccination policy in 2021.
Throughout F23, the Company has been continuously monitoring the COVID-19 situation and its
impact on our operations. As more and more countries were easing their travel and safety restrictions,
Wizz Air also decided to ease mask wearing requirements on-board our aircraft.
Based on the updated procedures implemented as of 1 April 2022, our crew and our passengers
should meet the following requirements:
▶ When someone is travelling from/to a country where in both countries mask wearing on public
transportation/public indoor places is still mandated by local regulations, mask wearing on-
board is still mandatory.
▶ When someone is travelling from/to a country, where mask wearing on public transportation/
public indoor places is still mandated by local law in one of the countries, mask wearing on-
board is still mandatory for crew and passengers as well.
Wizz Air Holdings Plc Annual report and accounts 2023
51
▶ When someone is travelling from/to a country, where in both countries mask wearing on
public transportation/in indoor public places is not mandated by local regulations, masks are
no longer mandatory on-board. Passengers and our crew may wear a face mask voluntarily.
The same measures are applicable to both crew and passengers, and if a passenger doesn’t have a
mask while boarding the aircraft, the crew must provide them with a mask to ensure compliance with
the applicable local regulations.
As the situation continues to evolve, we remain vigilant and proactive in our approach to health and
safety and will reassess the related policies and processes as needed.
Health and safety – supporting our employees from Ukraine
After three challenging years marked by the pandemic, a war broke out in Ukraine, causing significant
impacts on our customers, colleagues and operations in Ukraine, Moldova and Russia. Despite the
difficulties, our employees have risen to the occasion, showing remarkable proficiency in supporting
our affected employees and trainees, and their family members. Wizz Air’s teams have worked
tirelessly to establish efficient communication strategies and procedures in collaboration with relevant
departments, ensuring that our colleagues receive the necessary support during this crisis.
In cooperation with all the departments they actively participated in the rescue phase, maintained
contact with our Ukrainian colleagues and their family members, and provided support in the
organisation of accommodation. Through working with our Employee Assistance Programme (EAP)
partner a dedicated a crisis phone number was established, accessible for the Ukrainian colleagues,
regardless of their location. In these exceptional times, the Health and Safety team worked with our
insurance company to ensure that all of our colleagues have the necessary insurance coverage.
Wizz Air also offered direct assistance via GoCrisis, an internationally recognised crisis management
company, to provide expert support during emergencies, including the implementation of a stress
management training programme. This involved maintaining constant communication with our
colleagues and regularly consulting with them on the progress of the programme, while also offering
individual, private sessions to our Ukrainian colleagues.
After the war began in Ukraine, Wizz Air started providing help to our Ukrainian employees with
immediate effect.
Altogether, the support provided included the funds collected and distributed by the People Council
(via the WIZZ Employees and Family Assistant Package), psychological support and relocation support
to new bases, as well as new employment contracts in the new bases. Wizz Air also committed to
continue paying the average salary for employees on Ukrainian employment contracts to provide
financial security to our employees in this difficult situation. We also supported our crew trainees in
Ukraine with accommodation and special allowance, while they were waiting for the relocation process
to finish. After a total of three months of emergency support, the absolute majority of our Ukraine-
based employees have been evacuated and transferred to other bases within the WIZZ network
(excluding those who had been drafted, chose to stay, or did not accept the relocation offer). The
Company is also continuously recruiting Ukrainian citizens.
The following process applies to our employees currently in Ukraine:
Employees that are formally drafted:
▶ In accordance with currently applicable local regulations, those employees who have been
formally drafted into the Ukrainian military and are not allowed to leave the country will
continue to get their average salary from Wizz Air.
Employees that are currently in Ukraine:
▶ In case at any moment the employee will decide to leave Ukraine, upon the notification to the
responsible supervisors, the bas allocation and other necessary steps will be started.
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52
2.RECRUIT AND DEVELOP OUR EMPLOYEES
Wizz Air is continuously recruiting people who are passionate about aviation, while
focusing on candidates’ talent and attitude, rather than experience only. The
Company ensures full and fair consideration of applications from all candidates, and
offers continuous onboarding, training and career development for all employees,
promoting diversity and inclusion in all areas and stages of recruitment and
employment journeys.
Since 2010, the employee base of Wizz Air has grown from 1,184 to 7,389 by the end of March 2023.
During F23, regardless of another turbulent and challenging operating year due to the effects of the
ongoing war in Ukraine on our passengers, providers and employees and the aviation industry as a
whole, Wizz Air still recruited 2,522 employees.
As part of our ongoing Crew to Office Programme, we transferred 15 employees who moved from crew
to office positions in F23. Our goal is to give the opportunity to active flight and cabin crew employees
to change the direction of their career and experience the office environment.
As before, the Company continues to provide new and alternative career opportunities for existing
employees to help them further develop in their areas of expertise or to try themselves in a new
sphere within various WIZZ departments. In F23, 46 per cent of open office positions were
successfully filled internally: 64 employees were promoted to a higher position level, whereas 38
employees moved laterally to a different position in the same or another department.
Wizz Air office career development and gender breakdown
Training our flight and cabin crew
Flight and cabin crew training is organised by a dedicated in-house training team, which consists of
423 flight deck and 438 cabin crew trainers across Wizz Air’s entire network. During F23 world class
initial and recurrent training was provided for 6,500 cabin crew and 2,500 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, and a V9000 Commander Next-Generation Fire Trainer. Wizz Air’s Crew Training
has successfully implemented a fully integrated digital Training Management System, which enables
us to manage and control the entire lifecycle of pilot and cabin crew learning and qualifications in one
single digital platform. The system will further enhance our training efficiency, organisational flexibility
and performance, while ensuring guaranteed compliance with regulations.
We are also organising dedicated “Foundations of People Management” leadership training upon
request for cabin and flight operations management in order to increase the 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.
As our WIZZ family is rapidly expanding, it is important that we maintain good relationships within our
network, especially with the newly joined colleagues that might need assistance getting acquainted
with their crew life and responsibilities. The myWIZZmentor programme was developed by the Cabin
Operations team with the purpose of improving our working environment by supporting our new
colleagues in their WIZZ journey, with the help of our valued and experienced cabin crew. The
mentoring programme is currently available in our Budapest, Vienna, Warsaw, Sofia, Rome Fiumicino
and Otopeni bases as a trial, and is planned to be implemented network wide after the successful
completion of the trial and the customisation of the programme.
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45%58%53%43%33%100%41%55%42%47%57%67%59%femalemalePromotionLateral moveCrew to officeExternal hireStayed in positionBack from parental leaveGrand total—%10%20%30%40%50%60%70%80%90%100%
Developing our office workforce
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, peer and management feedback, and a greater focus on each employee’s
potential to develop their career at Wizz Air. In the past twelve months, despite the implications of
operational challenges, 24 per cent of our office population was rewarded with internal career moves
and progression at both employee and Management Team levels. Wizz Air’s key principle when it
comes to talent management is that employees’ commitment and the delivered results should
gradually lead to career progression, in line with the Company’s objective to provide employees with
opportunities so they can develop themselves personally and professionally within a given field or
switch to a new function within the Company so they can acquire new skills over time.
Wizz Air is hosting a comprehensive office onboarding programme for new employees, as part of
which they can benefit from an intensive two-day long programme with presentations given by
Officers, Heads of Function and other key internal stakeholders, so the new hires can familiarise
themselves with Wizz Air’s culture, policies, departments, practices and procedures. This onboarding
process aims to improve new joiners’ entry experience and engagement and increase their
productivity from day one. Considering the rapid Company growth and participant feedback, the
onboarding programme has been modified this year with the agenda further improved and enriched
with guided networking activities and a training centre tour as well.
We also continued our internal training programme called WIZZ Academy – with four completed
semesters as of the end of F23. The programme aims to give both office employees and flight and
cabin crew the unique opportunity to gain knowledge about the Company’s strategic approach and
aspirations, as presented to them by Wizz Air’s top executives. Besides giving the chance to learn
from the CEO and Chief Officers, the Academy also provides a forum for more interaction between
employees and the Leadership Team, builds a community of potential internal culture/brand
ambassadors, and adds to the potential talent pool based on participants’ career ambitions. Each
WIZZ Academy semester a diverse group of 40 employees is selected (distributed between 10 office
employees, 15 cabin crew, and 15 flight crew from different departments and locations) who have the
opportunity to attend a series of eight bi-weekly, interactive lectures and training with networking
sessions included.
Because of the success of the WIZZ Management Trainee programme in F22, it has been further
expanded this year. The objective of the programme is 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 universities, and recruit and develop young talents with
strong potential to become Managers and Senior Managers in the future at WIZZ. The programme was
extended, with new recruitment waves, and brought the total number of selected new management
trainees to 27 (compared to the initial eight in 2022), four of which were already offered full-time
internal Wizz Air positions this fiscal year. Within the framework of the programme, the trainees join
the office for “one plus one” year with the possibility to get full employment with Wizz Air upon
completion and rotate every six months to a new department or function within Wizz Air.
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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54
Leadership education
In F23, the main emphasis in the development initiatives was put on leadership development (Heads
of Departments). Between October 2022 and March 2023 a dedicated programme was held in
cooperation with the School for Executive Education and Development (SEED) programme for the 29
Heads of Department, to assist them in embracing the WIZZ500 goals within the scope of their work,
and to boost their leadership and management skills necessary to realise their own and the
Company’s key aspirations. During the two three-day camps and individual coaching, mentoring and
assessment sessions in between, WIZZ Heads of Function were equipped with additional tools and
practices to help manage their teams, keep a high level of agility and support Wizz Air’s growth
ambitions while maintaining the ultra-low-cost carrier mindset.
Digital learning solutions
In addition to classroom training, we need to remain digitally savvy and committed to the use of
digital tools, platforms and tailored learning solutions. In cooperation with Microsoft, a series of
webinars were organised for the Leadership Team and internal office employees to utilise in-depth MS
Teams functions and maintain a sufficient level of digital literacy.
The Company’s cooperation with LinkedIn continues, offering our office and crew management
employees access to the online educational platform, LinkedIn Learning, which helps them to develop
professional or personal skills through expert led course videos. This digital learning tool provides
flexible, individually tailored development tools for our employees with unlimited access to interactive,
engaging courses. Employees can select from over 10,000 different courses relevant to their roles in
Business, Technology and Marketing plus many more, as well as pursuing other areas of interest
supporting their career growth or individual aspirations. General learning paths tailored to the
Company needs were launched to guide the employees with highly recommended courses on soft
skills and knowledge applicable to the work environment and culture of Wizz Air. The department
specific learning paths were mapped out with the Heads of Departments to shape the environment of
shared values and knowledge within the departments.
The overall Company-wide learning strategy is being revised to cultivate the culture of learning and to
establish the right mix of learning opportunity types better fitting the demands of the Company and
the employees at all levels and ways of working.
Regular performance and talent review
Wizz Air conducts an annual People Cycle process – the evaluation and talent review 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, and being rewarded for the right results. It consists of three stages – goal
setting (definition of Specific, Measurable, Attainable, Relevant, and Timely (SMART) professional and
development goals for upcoming fiscal year), performance appraisal (mid-year and end-of-year
evaluations of employees' performance against the WIZZ competencies and the goals previously set
by themselves, including their peers’ and managers’ feedback, and career plan discussions), and
talent review (identifying employees’ aspirations, as well as potential and required development areas
for future promotion or lateral move). All internal Wizz Air office employees and also crew Country
Managers, Base Managers and Standardisation Instructors are in scope of this process.
All stages of Wizz Air's People Cycle process are completed via a dedicated digital platform. As part of
the goal setting, each employee together with their manager defines four strategic – business and role
related – goals, cascaded from top down, and one personal development goal for the upcoming fiscal
year. Each goal should follow SMART parameters and be weighted.
The performance appraisal process works as follows: a) employees rate themselves against WIZZ
competencies and their goals set earlier; b) employees nominate a minimum of three colleagues to
provide feedback on their performance based on the WIZZ Competency Model. Managers have to
modify or approve the selected raters for their direct reports; and c) all managers provide preliminary
performance ratings for each of their direct reports. Then calibration sessions take place with Heads
and Officers to finalise ratings at function and Company level. Final performance ratings and the
feedback collected are later shared with all the employees during face-to-face discussions with their
direct managers.
As part of the talent review process, employees update their career aspirations, geographic mobility,
work experience (outside of WIZZ), educational background and language skills, and discuss with the
Manager their career and development ambitions and motivations. The managers assign a potential
talent rating for all direct reports and create a succession plan on the employees' talent profiles. Then,
similar to performance, calibration sessions take place and final talent ratings are also shared and
explained during face-to-face discussions.
Wizz Air Holdings Plc Annual report and accounts 2023
55
3. IMPROVE AND LEVERAGE THE DIVERSITY OF OUR EMPLOYEES
As an airline, our approach to diversity and inclusion mirrors our
mission to democratise air travel. In the past two decades since Wizz
Air was founded, the Company has been committed to providing
equal opportunities and an inclusive environment to all candidates,
employees and partners regardless of their race, national and ethnic
origin, social origin, gender, age, religion, political views, sexual/
gender identity or expression, marital status, citizenship, disability or
medical history, military status, employment status or any other
legally protected factor.
Decisions in all aspects of the Company’s business operations are to be based on the merit – skills,
performance and abilities – of a candidate/employee, in line with the given position’s requirements,
irrespective of any other personal characteristics.
The Company expects its workforce to adhere to our diversity and inclusion principles, which are set
out in The Wizz Way, our Policy for Good Conduct, and our Equal Opportunities and Fair Treatment
Policy, along with the expected standards of behaviour for every member of the Wizz Air team.
Nationalities
Wizz Air is an ethnically diverse and inclusive professional organisation with over 93 nationalities
within its employee base (71 in cabin crew, 59 in the flight crew and 49 in the office). At Board level,
10 current Directors are from 7 different countries, while the Company’s 35 Heads of Function, and
the 15 Officers and Executives represent 13 and 9 different nationalities respectively.
Nationality breakdown according to various employee categories:
Cabin crew
National diversity – cabin crew
Romania
27%
Flight crew
Poland
Italy
Hungary
Bulgaria
Ukraine
Albania
Republic of North Macedonia
Other nationalities, total
17%
10%
7%
6%
6%
4%
3%
20%
National diversity – flight crew
Poland
Hungary
Italy
Romania
United Kingdom
Bulgaria
Spain
France
Ukraine
Other nationalities, total
18%
13%
10%
10%
9%
4%
4%
3%
3%
27%
56%
5%
4%
3%
3%
3%
27%
Office
National diversity – office
Hungary
Poland
Romania
Spain
Russia
Ukraine
Other
Wizz Air Holdings Plc Annual report and accounts 2023
56
%27%17%10%7%6%6%4%3%20%%18%13%10%10%9%4%4%3%3%27%%56%5%4%3%3%3%27%
Management Team
National diversity – Management Team
(Head, Officer and above)
Hungary
Poland
Romania
Spain
United States
Germany
France
United Kingdom
Ireland
Portugal
Other nationalities, total
36%
10%
10%
6%
6%
4%
4%
4%
4%
4%
12%
/
Gender diversity
Within Wizz Air, the overall male to female ratio is balanced, with 48 per cent being female; however,
we are conscious that improvements shall be achieved when it comes to gender diversity in certain
employee groups and as part of Wizz Air’s broader commitment, we have targets to increase female
representation in the flight deck, leadership team and boardroom.
Wizz Air strongly believes that leadership diversity enables faster progress towards targeted growth
and employee base diversity. The Company continues to adhere to its long-term set target to achieve
40 per cent gender diversity by FY26 among its Management Team (Heads, Officers, EVPs and CEO
level), which is broken down into yearly plans and actions, and regularly reviewed at Board level and
by the Nomination and Governance Committee.
The Hampton-Alexander Review previously set a target of 33 per cent 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 per cent 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 per cent women on boards target.
In this past financial year, Board gender diversity is a 30 per cent female ratio, while the Management
Team’s gender diversity changed to at 32 per cent female ratio. Office female gender diversity
increased by 2 per cent, to a 42 per cent female to male distribution. Flight crew female gender
diversity at F23 year end is at 4.68 per cent (in terms of the operating entities, Wizz Air UK has the
highest flight deck female diversity, with 7.56 per cent), whereas the female cabin crew number
decreased by 1 per cent to 69 per cent.
To improve gender diversity in the Company, we have the following targets in place:
•
•
•
33 per cent female gender diversity in the Board of Directors;
40 per cent female gender diversity in the Management Team by F26; and
7 per cent female gender diversity in the flight deck by F30.
Wizz Air Holdings Plc Annual report and accounts 2023
57
%36%10%10%6%6%4%4%4%4%4%12%69%4%42%32%33%48%31%96%58%68%67%52%femalemaleCabin CrewFlight CrewOfficeManagement (Head +)Officers (Officers +)Grand Total—%10%20%30%40%50%60%70%80%90%100% We have put in place actions to achieve our ambitious 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 shortlist for
positions and recruitment panels are recommended to have female interviewees.
We have identified the diversity of our flight crew as a major opportunity for Wizz Air and we want to
be an industry leader. 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 few years. The Company recently released its new Equal Opportunities and Fair Treatment
Policy, to signify our commitment to undertake initiatives to support equal access to the positions
where certain protected groups (including, in particular, women) are underrepresented – taking
always into account the particular personal circumstances of all applicants, respecting their
fundamental and human rights and applying a diverse set of selection criteria for any position or
entitlement. Several one-of-a-kind programmes have been launched to nurture talent and diversity
within the organisation, and to ensure a strong pipeline of female flight crew professionals:
▶ The She Can Fly Programme is a sub-brand of our current Wizz Air Pilot Academy Programme
(WAPA) Programme but dedicated to women only to provide a unique, simple and financially
accessible path to becoming a commercial pilot at Wizz Air. The programme has envisioned to
support female candidates as a requirement to increase women’s flight deck crew diversity
well above the current 5 per cent in the industry. Wizz Air is committed to bringing down
gender stereotypes and supporting gender equality within this profession too. The primarily
targeted countries are Wizz Air’s CEE base countries to support that region with local pilots.
The programme launch was on 8 March 2023 on International Women’s Day.
▶ 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 at 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, cabin crew only, 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 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. 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 F24 for Wizz Air’s growing UK, Italian and UAE bases. Schools will be dedicated
WIZZ providers with the main focus to provide guaranteed 30/50 cadets per year/school to
the specific requirements of the UK, Italy and the UAE (licensing, nationality, etc.).
Wizz Air Holdings Plc Annual report and accounts 2023
58
4. ENGAGE OUR EMPLOYEES AND ENSURE EFFECTIVE COMMUNICATION THROUGH THE PEOPLE
COUNCIL
Our workforce has always been and will remain Wizz Air’s most important asset – our people’s
engagement and wellbeing are crucial to constantly deliver on our mission. 94 per cent of our
employees directly interact with our passengers and ensure safety and good customer service as
passengers travel with Wizz Air to their next destination. There are several key pillars on how we
engage with our employees, make sure their voices are heard and keep the WIZZ spirit alive. The
backbone of employee engagement is the Wizz Air People Council, supported by the regular people
engagement surveys (including the forthcoming actions set up as a result), and 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 and kind, and it thrives 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.
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 and 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 eleven 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. For future reference, Wizz Air is currently working on the plans to restructure the
operational setup of the People Council related to the existing operating entities within the Group.
The Council’s work is centred around three major areas, and is split into three committees
accordingly, which are the Benefit, Wellbeing and Policy Committees. The respective chairs are
appointed for one year by the President. Committees meet twice a month to discuss a variety of topics
and current challenges and initiatives, while the entire Council meets bi-weekly with the Senior
Leadership Team and separately with the Company’s CEO. These processes are key to enabling the
People Council to fulfil its main purpose:
•
•
facilitating an effective two-way communication between management and employees; and
supporting the decision-making process on matters which affect all within the Company.
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 specific employee groups’ perspectives.
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.
Wizz Air Holdings Plc Annual report and accounts 2023
59
As part of the direct engagement with office employees the People Council organises regular meetings
in the Company headquarters, where employees have the opportunity to meet the Secretary General
of the Wizz Air People Council and the local office representative, and where several critical topics are
raised and discussed, including but not limited to recruitment, knowledge management, office
environment ideas, or employee retention.
Base visits, floor talks and management updates on Workplace
These events are unique as they provide a special forum for the local crews to meet with Company
management in person and 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 “flyaround
events”, there are line operation base visits as well, as part of which the line management travels to
each base once throughout the year. At least one People Council representative must be present at
these base visits.
The People Council regularly participates in base visits when the Leadership Team spends time with
employees in the market, both formally and informally. During F23, the People Council’s President and
Secretary General and the local Council representative took part in eleven personal base visits.
The recurring floor talks hosted by the Wizz Air CEO (available to attend in person or watch and
comment live via Workplace, the internal social media channel available for all employees) provide
quantitative and qualitative insights into work and life for our employees. There is a live leadership
update provided to all employees of the Group every Monday via Workplace, and the CEO, the
President, and other chief officers also issue written updates via Workplace when events of high
importance impact Company operations or when key updates need to be delivered directly by the
management.
Wizz Air is dedicated to directly engaging with its workforce on a regular basis, ensuring that all
employees have direct access to the CEO and senior management through all the above-mentioned
channels; based on their feedback the Company is continuously implementing the relevant actions as
is also demonstrated in the next section discussing employee engagement results. The Company is
compliant with all applicable laws and regulations in every country it operates in and is also
participating in all mandatory consultations where applicable.
Employee engagement survey results and follow-up actions
Between 16 and 30 November 2022, the Company organised its sixth employee engagement survey.
There were 3,800 responses received, which means that 55 per cent of the employees participated.
On a Company level the overall satisfaction was at 6.5, while the engagement score was 6.4. The
employee Net Promoter Score for overall engagement is -9. Employees in cabin crew had an
engagement score of 6.9 (eNPS 5), in flight crew 5.6 (eNPS -34) and in office 6.5 (eNPS -17).
After sharing the compiled results of the engagement survey with Wizz Air’s management, there were
two separate sessions held with the Officers – one session focusing on office employees and one
session on the cabin and flight crew – in order to analyse the results comprehensively and discuss the
necessary action plans. The follow-up actions for all employee groups are gradually defined and sent
for proposal, then approved and communicated by the Leadership Team.
All engagement survey results are annually reviewed by the Board of Directors, which enables the
Company’s highest decision-making body to also assess and monitor progress towards cultural
objectives, identify priorities and set measurable goals for achieving the vision. Wizz Air also has a
Wizz Air Holdings Plc Annual report and accounts 2023
60
dedicated Board member, Dr Anthony Radev, who is responsible for overseeing engagement with
employees.
The three focus areas to improve crew engagement and the work environment at the Company level
are:
•
crew roster planning, quality and consistency;
• Operations Control Centre availability, resource and support; and
•
operational logistics availability, resource and support.
The following actions for flight and cabin crew already implemented are the following:
▶ The Company has been committed to offering its crew a solution that will improve roster
predictability and the quality of their work-life balance. As of October 2022, a fixed rostering
scheme was introduced for the crew. The new scheme has been shaped in accordance with the
feedback provided through the crew survey and various other channels. With the new scheme,
the crew has the chance to select between a fixed and flexible roster pattern, and in case they
choose the flexible one, they will be entitled to extra compensation (similar to our practice
pre-COVID-19).
▶ Referral Programme expanded: Starting 1 January 2023, rewards offered under the WIZZ
Referral Programme are made available to all employees who refer qualified and suitable
candidates for open positions within the organisation, including flight and cabin crew and office
roles.
▶ The captain seniority bonus was reinstated to pre-COVID-19 level. All captains who have
reached 6,000, 8,000, 10,000 or 12,000 flown hours with Wizz Air are entitled to a wage
increase.
▶ The pilot loyalty bonus has also been reintroduced, making all pilots who have participated in
type rating trainings sponsored by Wizz Air eligible for a loyalty bonus upon the expiry of their
bond.
▶ The Senior Cabin Crew Bonus Policy has been effective since January 2023. Within the cabin
crew team of more than 4,000 people, Wizz Air’s senior cabin crew colleagues and trainers
have the responsibility of ensuring that our high standards are maintained and continuously
improved. Following the People Council’s initiative to recognise the unique value and
experience brought by senior cabin crew members, the senior cabin crew seniority bonus was
established. Based on their time spent at the Company (5, 10, 15+ and more years) and the
fulfilment of certain other required eligibility conditions, senior cabin crew members are
eligible for additional annual compensation.
▶ The Company announced the introduction of a one-off bonus for its crew members for their
extra performance during this summer season, meaning the period between 1 June 2022 and
30 September 2022. The bonus was paid to all affected crew members along with their
October salaries in 2022.
▶ In April 2023, the Company introduced the new XXL sector payment for crew, for sectors that
are equal to or longer than 301 minutes (a sector is a completed one-way flight, which is
defined by the planned block duty time).
Engagement actions for office employees are currently under review by the Leadership Team and will
be communicated in due course. The applicable main focus areas for the office workforce are: reward,
recognition, culture, career progression, employee experience and leadership development.
Financial support
Our industry has faced unprecedented challenges over the past few years in the wake of COVID-19,
which, alongside the ongoing war in Ukraine, has put economies under strain globally. As the cost of
living continues to rise, to support employees during these economically uncertain times and to
recognise their efforts and continued commitment to Wizz Air, a one-off payment of gross €1,000 (in
two instalments in November 2022 and February 2023) was made to all staff under Head level.
Compensation and salary
In terms of compensation matters, Wizz Air designed its remuneration practices with a focus on base
salaries and providing a non-financial benefit that can factor in customer experience and employee
experience. The Company makes Wizz Air’s services available to all personnel at accessible, favourable
and discretionary price for leisure travel as a token of appreciation for the diligent performance of
their duties and for their continued loyalty to Wizz Air so that they all have the opportunity to
experience Wizz Air flights together with their family and friends.
Pay is only part of the proposition to join and stay at Wizz Air. Whilst the yearly salary reviews – also
supported by recurring market benchmark processes – allow adjustments, the best way to increase
compensation is through career progression, which stands as a core element in all of Wizz Air’s HR
processes (talent management, compensation, development and organisational development).
Wizz Air Holdings Plc Annual report and accounts 2023
61
Other Company projects supporting employee engagement
As social interaction and building strong, dedicated and efficient teams is an important part of the
WIZZ culture, we make sure to offer opportunities to reunite with colleagues and celebrate our
achievements together. For this reason, we will continue to organise corporate events and
programmes, such as the annual Christmas and summer parties, department away days and team
building events, and programmes such as the WIZZ Academy, to strengthen Company culture. In
December 2022, the People Council also organised a Santa Event in Wizz Air’s Training Centre, for the
children of WIZZ employees.
Employee engagement on sustainability
Wizz Air has been tirelessly working on strengthening its employees’ understanding of climate change
and the Company’s role and responsibility in decarbonisation. We believe that education and
knowledge of the latest sustainability developments are essential to create a more sustainability-
focused Company culture, where every employee understands how they can play a part in the airline’s
decarbonisation journey and net zero ambitions.
The Company recognises that sustainability is a crucial aspect that requires active engagement and
investment from all levels of the organisation. By providing its workforce with the necessary education
and resources, we are continuously building a knowledgeable and motivated team, ready to take on
the challenge of creating a more sustainable future for all. As part of these efforts, we have
implemented several sustainability-related internal activations.
Sustainability pins were introduced to be worn by cabin crew, flight crew and office teams, as a
symbol of commitment to sustainability. The initiative is part of a comprehensive educational
campaign aimed at promoting employee engagement and fostering a culture of sustainability within
the organisation. The objective of this campaign is to create awareness and encourage everyone to
take an active role in making the world around us better. By wearing these pins, employees will serve
as ambassadors of the Company's efforts to promote sustainable practices and inspire others to do the
same.
As the world is facing a historic energy crisis that has reached a global scale our Company decided to
raise our employees’ attention about conscious energy consumption and launched our “Switch It Off”
campaign in October. With this initiative, we aimed to educate and empower our employees to take
control of their energy consumption and adopt more sustainable habits, both in their homes and in the
workplace. To further encourage this change, we launched the “Step It Up” challenge, which invites
our employees to embrace a more active lifestyle by choosing to take the stairs over the elevator and
saving energy at the same time.
Our employees' keen interest in sustainability and eagerness to share their experiences has been
revealed through several internal activities; thus in November 2022, we introduced a new internal
campaign called “Sustainability Month” to encourage our workforce to adopt environmentally friendly
practices and share their current efforts on minimising their impact on the environment. Throughout
the campaign, we shared details about the Company's sustainability efforts and achievements in an
engaging way and also included weekly activations (“The Greenest Ideas of WIZZ”) dedicated to
transportation and energy-saving topics.
Wizz Air Holdings Plc Annual report and accounts 2023
62
PEOPLE METRICS – OUR TEAM MEMBERS
Below we have outlined our most critical employee health metrics:
PEOPLE
UNIT
NOTE
F23
F22
F21
F20
Work-related accidents
Fatal accidents
Contractor accident rate
Contractor fatal accident
rate
#
#
%
%
Priority/1
Priority/2
Priority/3
Priority/4
Number of employees
Total/March 31
5
Staff costs
Revenue/employee
Staff costs/revenue
Survey scores
Survey participation
Average attrition
m EUR
k EUR
%
eNPS
%
%
Priority/6
Priority/7
8
Gender diversity
% female
Priority/9
Leadership diversity
% female
Priority/10
14
0
0
0
7,389
373.9
527
10
-9
55
9.35
48
32
Flight crew gender diversity
% female
Priority/11
4.68
Cabin crew diversity
% female
12
Office diversity
% female
Priority/13
Ethnic diversity
# nationalities
Leadership ethnic diversity # nationalities
Part time ratio
%
Training per employee
Hours
Notes:
14
15
16
17
69
42
93
17
0.49
30.71
0
0
0
0
5,772
220.5
288
13
9
67
11.2
48
34
4
70
40
75
16
1
42
0
0
0
0
5
0
0
0
3,960
4,440
133
187
18
231
622
8
46
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
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 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) Number of employees: Total number of active employees as of 31 March 2023 (excluding employees on
leave of absence e.g. parental leave).
(6 and 7) Survey scores: the way of measuring your employees' satisfaction levels, based on NPS methodology,
which is used to measure customer loyalty. The eNPS score is a number, calculated by subtracting the percentage
of “detractors” (who gave a score of 0–6 on a scale of 10) from the percentage of “promoters” (who gave a score
of 8–10 on a scale of 10), and can range from -100 to 100. In F23 the eNPS of Wizz Air was -9 and the
participation rate was 55 per cent of all employees.
(8) Attrition (average): the reduction in staff numbers across the organisation that occurs as employees resign,
retire or are dismissed.
(9) Gender diversity: percentage of total roles, including direct and indirect employment, occupied by women.
(10) Leadership diversity: percentage of leadership roles, Heads of Function and above, occupied by women.
(11) Flight crew gender diversity: percentage of flight-deck staff, including direct and indirect employment,
occupied by women. As the flight deck diversity target for F30 is 7%, this figures is reported with decimals to
represent the improvement year on year.
(12) Cabin crew gender diversity: percentage of cabin crew staff, including direct and indirect employment,
occupied by women.
(13) Office gender diversity: percentage of office staff, including direct and indirect employment, occupied by
women.
Wizz Air Holdings Plc Annual report and accounts 2023
63
(14) Ethnic diversity: number of different nationalities compiled based on declarations by employees at the time
of hire.
(15) Leadership ethnic diversity: number of different nationalities compiled based on declarations by Heads of
Function and above.
(16) Part-time ratio: percentage of total employees who have reduced working time arrangements (not full-time
employees).
(17) 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. In terms of online training, the
Company’s cooperation with LinkedIn continues, offering office and crew management employees access to digital,
flexible and individually tailored development opportunities with unlimited access via interactive, engaging courses.
The flight deck and cabin crew also regularly receive digital training via e-learning solutions, on top of their offline
training.
5. ADDRESSING CHALLENGES FOR THE CONTINUOUS IMPROVEMENT OF CUSTOMER EXPERIENCE
At Wizz Air, we strive to put the customers at the heart of everything we do. During the summer of
2022, however, Wizz Air faced unprecedented flight disruptions caused by external factors, particularly
supply chain issues because of post-COVID-19 and air traffic control deficiencies across the Company’s
network. As a result, the Company received an unprecedented volume of customer claims that needed
to be resolved, and despite almost doubling the contact centre agent capacity some customers
experienced delays in the processing of their claims. Currently 95 per cent of all claims received in F23
have been already resolved and the customer support team is continuously working on resolving any
remaining backlog with first priority.
To address the challenges faced last summer, Wizz Air has been investing in a number of customer-
focused initiatives. Besides significant investments and improvements in the operational teams and
processes to help avoid disruptions altogether, the Customer Experience team has contracted four
new contact centres and doubled the customer support agent capacity compared to that of summer
2022. Automation solutions, in the processing of claims, have been deployed and digital solutions
continue to remain in focus in F24, to enable a fast and scalable claim and complaint resolution
framework. The Company has also enhanced its self-service capabilities to allow customers to manage
changes to their booking, even in case of disruption, via our web and app services. Furthermore, we
have improved Wizz Air’s Virtual Assistant, Amelia, available on the website, in the WIZZ application
and via the Facebook messenger channel. Amelia has become the primary point of contact for
customer support in F23, quickly surpassing the phone call channel. The Company is also planning to
launch a brand-new Help Centre in F24, the ultimate objective of which will be to support customers
with easy-to-find information and guidance on available self-service options and services, and how to
best utilise these features, ensuring a smooth and enjoyable customer journey from the conception of
travelling to reaching the destination and back.
The Company recognises the importance of
learning from its customers and uses these
learnings to continuously improve the travel
experience. To this end the WIZZ Youth Forum
(made up of travel enthusiasts and passengers)
was assembled to bring the customers’ voice
on-board the design phase of current and
future WIZZ products and services. The Youth
Forum’s members
interact directly with
stakeholders from Wizz Air representing all
customer journey stages. A key focus area
discussed as part of the Youth Forum was
disruption management. The Company is also
developing a disruption specific customer
survey, which will allow our passengers to
provide detailed
their
experiences during disruptions, helping the
Company learn how it can better assist them in
the future.
information about
The existing and planned initiatives are designed to provide our customers with efficient and effective
services. These actions aim to ensure that WIZZ will continue to meet its commitment to providing a
reliable service to its customers, particularly during flight disruptions. The Company's focus on the
continuous improvement of its customer service offerings ensures that it will remain the airline of
choice in F24 and beyond, for existing and future customers alike.
6. COMMUNITY PROGRAMMES AND CHARITABLE SUPPORT
Rescue flight – Türkiye
On 7 February 2023 Wizz Air flew a rescue team of 20 people from Budapest to Adana, a city in
Türkiye, which was hit by a strong earthquake. The special rescue unit from the Hungarian Counter
Terrorism Centre, consisting of doctors and well-prepared specialists in alpine technology, joined the
rescue mission upon arrival, by providing help to those in need. Wizz Air’s Airbus A321neo departed
from Budapest and returned safely. The Company is very proud to have been able to mobilise a team
within just a matter of hours when needed and support this humanitarian mission that contributed to
saving many lives afterwards.
Wizz Air Holdings Plc Annual report and accounts 2023
64
Free and rescue fare tickets for Ukrainian refugees
In early 2022 Wizz Air announced it would support Ukrainian refugees by offering free seats on
Continental Europe flights departing from Ukraine’s border countries (Poland, Slovakia, Hungary and
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’s offering of free tickets was later extended and
finished at the end of October 2022. As part of this programme, a total of 135,456 free tickets were
used by the affected refugees.
WIZZ Aid
WIZZ Aid is designed to provide financial support to our colleagues who need urgent medical
treatment or suffer from natural or man-made disasters outside of the coverage of Life and Travel and
Accident Insurance. The WIZZ Aid policy sets out the criteria and process related to the funding
granted to employees. This corporate initiative is open for any Wizz Air Group employee (both
indefinite and fixed-term contract) facing such an emergency situation and temporary financial
hardship, provided they have passed their probation period and are not pending a notice period.
During F23, six applications were approved, in the amount of EUR 30,425 for life-saving medical
assistance and surgery, and other related financial support.
WIZZ Foundation – Csodalámpa Foundation partnership
WIZZ Foundation has 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 provides flight tickets (and
the applicable services) every year for children and their travelling guardians, to support the
foundation's projects where the surprise involves travelling to another destination by plane. In F23,
Wizz Air supported the Magic Lamp Wish-Granting Foundation, completing nine special wishes, with a
total number of 26 flight tickets provided to the children and their families.
The WIZZ Foundation also supported another initiative, as part of which WIZZ volunteers transported
leftover items (fresh but unsold) from bakeries to a children’s hospital, where pastries, confectioneries
and sandwiches were distributed among the children, doctors and nurses for one month a year. The
initiative was supported by volunteers from the Company’s Budapest (Hungary) headquarters and
airport base.
Employees’ local charity and volunteer activity
As it has been duly demonstrated throughout the past years’ challenges during the pandemic and the
crisis in Ukraine, the generosity of our employees is unique, and this is what brings the WIZZ spirit to
all of our base countries. We are proud that in F23, our cabin and flight crews have volunteered and
supported various local initiatives across our entire network from Wizz Air UK to Wizz Air Abu Dhabi,
including but not limited to: blood donation, clothes and food donation, volunteer support at local
hospitals, bee saving projects and charity walks.
WIZZ marathons
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,
similar to the ultra-low-cost, low-
fare business model. This year we
sponsored several running events
across Europe,
including our
flagship event, the Budapest Half
Marathon, and races in Bucharest,
Skopje,
Cluj-Napoca,
Debrecen and Cardiff. In 2022
more than 53,000 runners joined
the WIZZ
events,
including more than 200 WIZZ
employees
from the Wizz Air
network. We mobilised 32,000
runners and attracted a total of
105,000 visitors with all our
events.
running
Sofia,
Charlotte Pedersen (Board of Directors), Yvonne Moynihan (Corporate
and ESG Officer), and Anna Gatti (Board of Directors)
at the 2022 Budapest Half Marathon
Wizz Air Holdings Plc Annual report and accounts 2023
65
VIII. ECONOMY – CONNECTIVITY AND RESPONSIBLE GDP
GROWTH
Wizz Air is contributing to the GDP growth of our destinations by enabling affordable
connectivity, which in turn will create new jobs and 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 over 100,000 citizens in our
network. We launched Wizz Air to create a world of opportunity for all through
affordable travel, and we are consistently delivering on that promise.
The majority 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.
Wizz Air continued its significant capacity growth in F23, creating a number of new, affordable travel
options while also contributing to the growth of the local economy and recovery after COVID-19. After
a large expansion during the previous fiscal years, we focused on offering more travel options in
Central Eastern Europe by remaining the region’s largest carrier as well as densifying and diversifying
our network in our newer ventures.
In F23, we remained committed to bringing something new to our customers: an additional base has
been opened in Suceava (SCV), Romania, which allowed us to double the number of destinations
flown to and from the city, also providing important employment opportunities for the local
community. With two aircraft allocated at the airport, six new routes were opened by Wizz Air,
connecting Suceava to new countries all around Europe and beyond; in the first year of our new base
there, more than 700,000 seats have been offered to our customers. Wizz Air’s London Gatwick base
has also been revitalised, increasing Wizz Air’s presence to five aircraft during the summer season,
showing our continuous trust in the UK.
The airline also did not stop expanding at our existing bases either. The largest growth has been
introduced to our Rome Fiumicino base with six additional aircraft and more than 330 per cent
capacity growth achieved this year, reaching a fleet of eight aircraft based there in total, with further
expansion plans for F24. Our Rome growth is a great example of Wizz Air’s investment in a market’s
recovery where the post-COVID-19 build-back was at a slower pace. Another symbol of how Wizz Air
is embedded into the local economies is our support to the Romanian people by offering recovery
flights and tickets after Blue Air suspended its operations, as well as maintaining direct connections on
the routes most critical to Bucharest-based customers discontinued by Blue Air. To show our market
commitment, Wizz Air also added six new aircraft to our Bucharest base in F23.
Our role in society – testimonials
Mr David Ciceo – CEO of Cluj International Airport (Romania)
"Since 2007, when Wizz Air started operating in Cluj-Napoca, the airline has significantly developed
its operations and created a constructive ripple effect for the local economy and brought many other
benefits for the entire region.
“As the CEO of Cluj International Airport, I want to emphasise the critical importance of Wizz Air
operations as it ensures a consistent and reliable traffic flow, which is essential for operational
efficiency and profitability. By allocating the seventh aircraft for the Cluj-Napoca base, Wizz Air
responded efficiently to the strong market demand of Cluj International Airport catchment area. Wizz
Air has demonstrated that it is one of the strongest European airlines and together we manage to
offer more than 40 destinations in Europe and the Middle East."
Mr Musa Kastrati – Senior Vice President of the Kastrati Group, Tirana International Airport (Albania)
“The opening of a Wizz Air base at Tirana International Airport, and the allocation of the tenth aircraft
this summer is a testament to the positive impact Wizz Air has had on the Albanian market, our
airport, and the tourism industry.
Wizz Air Holdings Plc Annual report and accounts 2023
66
The Company has also put an emphasis on being a pioneer and developing new markets and
destinations, by adding four new countries and 23 new destinations to the WIZZ network in F23. Wizz
Air established new routes to the Maldives, Kuwait and Uzbekistan, and announced the start of 24 new
routes to Saudi Arabia, connecting Dammam, Jeddah, Riyadh and Medina to the Gulf and Europe,
providing more than 1.3 million seats per annum.
Social metrics and targets – our communities
We have previously outlined the role we see for the Company towards the communities and countries
where we operate. Our related key metrics include:
COMMUNITIES
UNIT
NOTE
F23
F22
F21
F20
Passengers
km run
Paid taxes
Government debt
Furlough support
m
km
m EUR
m EUR
m EUR
1
2
3
4
5
51
5,799
632
0
0
27.1
10.2
40
168
304
0
1.1
17,730
7,830
107
326
7.1
340
0
0
Notes:
(1) Wizz Air reported 51.072 million booked passengers in F23, showing strong recovery and growth after
travel demand had been heavily impacted by the post-pandemic environment.
(2) This year we sponsored several running events across Europe, including our flagship event, the Budapest Half
Marathon, and races in Bucharest, Cluj-Napoca, Sofia, Skopje, Debrecen and Cardiff. The internal WIZZ Run Club
Challenge took place in May 2022 where the participating employees together ran a total of 5,600km.
(3) Wizz Air contributes to the communities it operates in through the payment of taxes. In F23, a total
of €631,799,359 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 16 per cent of revenues. Wizz Air advocates for a level playing field on taxation as many jurisdictions
favour national airlines and promote tax schemes that are not based on carbon emissions intensity; instead, taxes
would be based on historical emissions levels regardless of how polluting the used aircraft technology is 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 previously repaid a £300 million outstanding commercial paper with the Bank of England (as part of
the CCFF) in February 2022.
(5) Wizz Air is no longer receiving financial support via furlough schemes (in previous years, due to COVID-19, the
Company benefited from the UK furlough support scheme).
Wizz Air Holdings Plc Annual report and accounts 2023
67
IX. CYBER SECURITY AND GDPR
Cyber security, data protection and security are highly critical elements of our operations, and one of
the areas also closely and regularly monitored by our Board. Wizz Air’s responsible Digital Officer
reports on cyber security matters bi-monthly to the Audit and Risk Committee of the the Board of
Directors. The Company previously established an internal Security Council, which is conducting
thorough reviews every quarter.
The following actions are undertaken to ensure that Wizz Air complies at all times with the
accountability principle of the General Data Protection Regulation (GDPR). The legal basis for
processing personal data must be clear and unambiguous in all cases. A Data Protection Officer has
been previously appointed with specific responsibility for data protection in the organisation. All staff
involved in handling personal data understand their responsibilities for following good data protection
practice, having been provided the relevant training. The Company provides options for data subjects
wishing to exercise their rights regarding personal data and such enquiries are handled effectively.
Regular reviews of procedures involving personal data are carried out by the responsible experts
working at Wizz Air. Privacy, by design, is adopted for all new or changed systems and processes in
the Company.
As cyber security is a constantly evolving challenge, we have continued to invest in and strengthen
the relevant processes, systems and policies and have cooperated with the Data Protection function to
further increase our security preparedness. Wizz Air follows a layered approach to ensure proper
hygiene in cyber and data protection matters. It involves safety mechanisms for prevention, as the
first line of defence, detection and response mechanisms as the second line of defence, and robust
recovery procedures implemented.
Wizz Air’s Cyber Programme is based on the NIST CSF, ISO 27001, PCI Data Security Standards and
Open Web Application Security Project® (OWASP) standards. Wizz Air holds the Cyber Certificate of
Compliance from the Civil Aviation Authority (CAA) UK after going through the Cyber Assessment
Framework audit.
The Company’s cyber security team is made up of skilled professionals with extensive experience in
the field, focusing on the people, process and technology aspects of cyber by running multiple
workstreams, e.g.:
• Governance, Risk and Compliance (GRC) Workstream
A risk-based, effective and efficient management framework and oversight of Wizz Air’s Cyber
Programme to drive continuous improvement within the organisation, address compliance
requirements and protect the Company against internal and external information security
threats through the Cyber Workstreams and the Security Operations team.
•
Cloud and Infrastructure Security Workstream
Safeguards information systems by providing proactive expertise to define the standards for
resilient and secure infrastructure both on-prem and in the Cloud. Enforces cyber security best
practices and hardens the IT estate against risks by establishing secure configurations and
monitors adherence to these in every environment that is under Wizz Air’s management.
•
Cyber Awareness Workstream
Embedding cyber awareness into Wizz Air’s culture and way of working by conducting
continuous and targeted awareness campaigns and related activities to reduce the risks of
cyber security breaches caused by human error.
•
Identity and Access Management (IAM) Workstream
Ensures that the right people have the right access to information resources for the right
reason, balancing both productivity and security aspects.
•
IT Service Continuity Management (ITSCM) Workstream
Builds organisational capabilities to support the Company’s business functions by prevention,
detection, and response to disruption and recovery of IT services meeting predefined recovery
requirements (e.g. time, data loss, performance, capacity, etc.).
•
Product Security Workstream
Ensures that security requirements are well defined, understood and met by products and/or
applications throughout their whole lifecycle from planning to retirement, by standardising
security best practices, procedures and supporting toolsets.
Wizz Air Holdings Plc Annual report and accounts 2023
68
•
Threat and Vulnerability Management (TVM) Workstream
Monitors and reduces Wizz Air’s attack surface by identifying, classifying, remediating and
mitigating weaknesses in the IT environment and establishing detection and response
capabilities to defend against internal and external threats targeting these weaknesses in Wizz
Air’s information resources.
A crucial factor related to cyber security is our colleagues’ awareness of the risks and the possible
ways in which our business could be attacked. As such, a comprehensive and compulsory e-learning
training programme for all colleagues is maintained as a key educational and prevention measure,
along with regular simulation exercises.
Wizz Air is also continuously running internal and external security tests (including penetration testing
and “red teaming”) to identify and resolve potential gaps, thereby improving the organisation’s
readiness in detecting and responding to cyber incidents.
Wizz Air Holdings Plc Annual report and accounts 2023
69
X. INDICES
TCFD index
Responding to TCFD recommended disclosures
Governance
Disclose the organisation’s governance around climate-
related risks and opportunities.
Recommended disclosure a)
Describe the board’s oversight of climate-
related risks and opportunities.
Board-level oversight is with the Chief Executive and the Chairman
of the Board, as well as the Sustainability and Culture Committee.
See pages 24–26.
Recommended disclosure b)
Describe management’s role in assessing and
managing climate-related risks and
opportunities.
Management defines strategies and drives progress through the
Corporate and ESG Officer and the cross-functional Sustainability
Council. See pages 24–26.
Our disclosure is consistent with the TCFD framework.
Strategy
Recommended disclosure a)
Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium, and long term.
Disclose the actual and potential impacts of climate-related
risks and opportunities on the organisation’s businesses,
strategy, and financial planning where such information is
material.
The ongoing development of our risk register including climate-
related risks is integrated into the ERM process (see page 86), but
independently researched and supported via our sustainability
consultants at Deloitte Ltd. Hungary, as outlined further on pages
29–33.
Recommended disclosure b)
Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning.
Addressed through our comprehensive climate strategy, see pages
26 and 34, where we have outlined how climate risk analysis and
risk management are embedded in our financial planning for the
short and medium-term risks and opportunities.
Recommended disclosure c)
Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario.
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 2023, Wizz Air
improved its climate risk analysis on a qualitative and a quantitative
level to assess the applicable risks under four different climate-
related scenarios. Please refer to pages 29–34.
Our disclosure is consistent with the TCFD framework.
Risk management
Recommended disclosure a)
Describe the organisation’s processes for
identifying and assessing climate-related risks.
Recommended disclosure b)
Describe the organisation’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 organisation’s overall
risk management.
Disclose how the organisation identifies, assesses, and
manages climate-related risks.
Climate-related risks are identified as part of our ERM process (page
86), based on cross-functional alignments and independently
reviewed by third-party climate risk assessment experts (pages 29–
33).
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 pages 28, and 34–47.
We manage climate-related and ESG risks through our corporate
ERM framework. The Company’s risk register identifies a wide array
of ESG-related risks, a sub-group of which includes climate risks.
See pages 26 and 86.
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 organisation 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 organisation to
manage climate-related risks and opportunities
and performance against targets.
See pages 19, and 45–47 for our environmental metrics and
targets.
We report extensively on Scope 1, Scope 2 and Scope 3 emissions
on pages 45–47.
See page 124 of the Directors’ Remuneration Report on the
inclusion of a CO2 emissions intensity target in the Leadership
Team’s award conditions and page 131 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 regarding location-based emissions reporting in the short and medium term.
Wizz Air Holdings Plc Annual report and accounts 2023
70
GRI Index
Statement of use
Wizz Air Holdings Plc has reported the information cited in this GRI
content index for the period 1 April 2022 to 31 March 2023, with
reference to the GRI Standards.
GRI 1 used
GRI 1: Foundation 2021
Disclosure
Location
GRI 2: General Disclosures
2-1 Organisational details
2-2 Entities included in the organisation’s sustainability
reporting
2-3 Reporting period, frequency and contact point
2-4 Restatements of information
2-5 External assurance
2-6 Activities, value chain and other business relationships
2-7 Employees
2-8 Workers who are not employees
2-9 Governance structure and composition
Wizz Air Holdings Plc
Registered seat: 44 Esplanade, St Helier,
Jersey JE4 9WG, registration number: 103356
The Sustainability Report includes all operating
entities under the Company, namely Wizz Air
Hungary Ltd., Wizz Air UK Ltd., Wizz Air Abu Dhabi
LLC, and Wizz Air Malta Ltd.
Reporting period: Financial year 2023 (F23) (1 Apr
2022–31 Mar 2023)
Frequency: Annual
Date of publication: 8 June 2023
Contact: dissustainabilityteam@wizzair.com
GHG reporting:
Wizz Air chose F23 as base year for the the
greenhouse gas emission calculations for the
future, as it is the first year with our GHG
inventory reporting that received third-party
assurance. As a result of that, the company has
revised its F22 emission inventory and updated the
Scope 1-2-3 figures accordingly, applying the base
year’s improved calculation methodology and
benchmark.
Emissions data from intra-European flights (EU
and UK Emission Trading Schemes) and all other
flights falling under the scope of the UN Carbon
Offsetting and Reduction Scheme for International
Aviation (CORSIA) are reviewed and verified by
Verifavia, an independent third party, for the
calendar year.
The company’s F23 GHG reporting received
independent limited assurance from Deloitte
Auditing and Consulting Ltd. Hungary, which will
be available on Wizz Air's sustainability website.
Aviation and airlines
More details on the Company’s supply chain are
included in the “Working towards a sustainable
supply chain” section of the ESG Report, on page
43.
Total number of employees in F23: 7,389.
More information in the people metrics table, on
page 63.
Wizz Air currently does not track indirect/
contractor employee data in its own systems. The
Company will work on collecting the relevant
information in the future.
Wizz Air’s sustainability governance is explained
on page 24. Wizz Air’s central governance
structure and composition is covered in the
Corporate chapter on pages 94–157.
2-10 Nomination and selection of the highest governance
body
Detailed under the Corporate chapter, from page
122.
2-11 Chair of the highest governance body
William A. Franke – Chairman of the Board of
Directors.
Wizz Air Holdings Plc Annual report and accounts 2023
71
2-12 Role of the highest governance body in overseeing the
management of impacts
2-13 Delegation of responsibility for managing impacts
2-14 Role of the highest governance body in sustainability
reporting
Our Sustainability and climate governance section
can be found on page 24.
Corporate chapter, pages 94–157.
The Climate risk management section of the report
starts on page 26.
The Board of Directors, including the Sustainability
and Culture Committee, has ultimate oversight of
the Company's sustainability strategy, its TCFD
reporting, climate-related issues and target
setting, reported to it by the responsible Corporate
and ESG Officer.
The Audit and Risk Committee of the Board
receives bi-annual updates about the climate-
related physical and transition risks via the
Enterprise Risk Management framework and the
Group’s Leadership Team.
The Sustainability Report was reviewed and
approved by Wizz Air's responsible executive
officer, as well as the Sustainability and Culture
Committee and the Board of Directors.
Ethical business conduct section, page 27.
2-15 Conflicts of interest
2-16 Communication of critical concerns
Policy of Good Conduct
Anti-Corruption Policy
Policy of Good Conduct
2-17 Collective knowledge of the highest governance body
Corporate chapter, page 103.
2-18 Evaluation of the performance of the highest
governance body
Corporate chapter, page 102.
2-19 Remuneration policies
Corporate chapter, pages 124–135.
2-20 Process to determine remuneration
Corporate chapter, pages 124–149.
2-21 Annual total compensation ratio
Corporate chapter, page 150.
2-22 Statement on sustainable development strategy
2-23 Policy commitments
Position on climate change section, page 28.
UN Sustainable Development Goals, page 18.
Anti-Corruption Policy
Policy of Good Conduct
Equal Opportunities and Fair Treatment Policy
Supplier Code of Conduct
Anti-Slavery and Human Trafficking Policy
2-24 Embedding policy commitments
2-25 Processes to remediate negative impacts
See 2-23.
See 2-23.
2-26 Mechanisms for seeking advice and raising concerns
See 2-23.
2-27 Compliance with laws and regulations
Ethical business conduct section, page 27.
2-28 Membership associations
Member of the European Commission’s Alliance for
Zero Emission Aviation, and the Renewable and
Low-Carbon Fuels Value Chain Industrial Alliance,
page 42.
2-29 Approach to stakeholder engagement
Stakeholder management section, page 21.
Wizz Air Holdings Plc Annual report and accounts 2023
72
2-30 Collective bargaining agreements
Wizz Air is not party to any third-party collective
bargaining agreements. Wizz Air’s approach to
employee engagement is one of innovative direct
dialogue, which is the most effective way to
safeguard and promote: (i) the right to freedom of
expression; (ii) the right to obtain or impart
information necessary to make an informed choice
on matters relevant to the workplace; and (iii) the
right to protection against interference with
privacy, family, home, correspondence or
reputation.
Our approach is based on cooperation by relying on
face-to-face interaction and communication
through innovative technologies. This approach
offers a better alternative to more contentious and
outdated practices used by third parties.
We remain faithful to these convictions by relying
on our People Council which provides a platform for
discussions between management and employees.
In addition, the Company has appointed a
dedicated independent Board member responsible
for overseeing engagement with employees.
Feedback is periodically shared with the Board of
Directors and transformed into actions relating to
remuneration and work–life balance. Our executive
management (including our CEO) conducts regular
floor talks and base visits where all employees are
invited to participate, raise any topic they may
deem relevant and discuss it openly and
transparently.
GRI 3: Material Topics
3-1 Process to determine material topics
Materiality assessment section, page 22.
3-2 List of material topics
Materiality assessment section, page 23.
3-3 Management of material topics
Materiality assessment section:
▶ Emissions standards, page 34.
▶ Renewables, page 38.
▶ Product and operational H&S, page 50.
▶ Climate change position, page 28.
▶ Noise emissions, page 41.
▶ Employee relations, pages 59 and 60.
▶ Equal opportunities, pages 56 and 27.
▶ Complaint management, page 64.
▶ Employee health and safety, page 50.
▶ Ethical conduct, page 27.
▶ GDPR and cyber security, page 68.
Disclosure 302-1 Energy consumption within the
organisation
All environmental metrics section, page 45.
Disclosure 302-3 Energy intensity
All environmental metrics section, page 45.
GRI 302: Energy
GRI 305: Emissions
305-1 Direct (Scope 1) GHG emissions
All environmental metrics section, page 45.
305-2 Energy indirect (Scope 2) GHG emissions
All environmental metrics section, page 45.
305-3 Other indirect (Scope 3) GHG emissions
All environmental metrics section, page 45.
305-4 GHG emissions intensity
All environmental metrics section, page 45.
305-5 Reduction of GHG emissions
Environmental targets and priority programmes
section, page 28.
GRI 401: Employment
Disclosure 401-1 New employee hires and employee
turnover
People metrics section, page 63.
Disclosure 401-2 Benefits provided to full-time employees
that are not provided to temporary or part-time employees
People metrics section, page 63.
Wizz Air Holdings Plc Annual report and accounts 2023
73
GRI 403: Occupational Health and Safety
Disclosure 403-1 Occupational health and safety
management system
Disclosure 403-3 Occupational health services
Health and safety and operational safety section,
page 50.
Health and safety and operational safety section,
page 50.
Disclosure 403-4 Worker participation, consultation, and
communication on occupational health and safety
Disclosure 403-5 Worker training on occupational health
and safety
Working Hours Policies and Compliance
Employee Health and Safety Policy
Employee Health and Safety Policy
Disclosure 403-9 Work-related injuries
People metrics section, page 63.
GRI 413: Local Communities
Disclosure 413-1 Operations with local community
engagement, impact assessments, and development
programmes
Noise emissions section, page 41.
416-1 Assessment of the health and safety impacts of
product and service categories
Health and safety – COVID-19, page 51.
GRI 416: Customer Health and Safety
418-1 Substantiated complaints concerning breaches of
customer privacy and losses of customer data
Wizz Air had no substantiated/significant
complaints concerning breaches of customer
privacy or losses of customer data in the last
financial year.
Wizz Air Holdings Plc Annual report and accounts 2023
74
MODERN SLAVERY ACT DISCLOSURE STATEMENT 2023
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 2023. This statement is made by Wizz Air Holdings Plc, the parent of
all three operating airlines, Wizz Air Hungary Ltd., Wizz Air UK Ltd. 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".
In accordance with section 54 of the Act, in this statement we refer to the following:
1. organisational structure and supply chain;
2. policies;
3. due diligence;
4.
risk assessment;
5. key performance indicators; and
6.
training.
1. Organisational structure and supply chain
a. WIZZ
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 51.1 million passengers in the financial year
F23 ended 31 March 2023. Its fleet consists of 179 aircraft and its network spans more than 1,057
routes across 56 countries. Wizz Air employs over 8,000 people across a network of 33 bases. Our
Company is incorporated in Jersey. Wizz Air Holdings Plc has four airline subsidiaries: Wizz Air
Hungary Ltd., Wizz Air UK Limited, Wizz Air Malta Ltd. and Wizz Air Abu Dhabi LLC. For further details
of Wizz Air's subsidiaries and corporate structure, please see page 200.
b. 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.
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.
2. Policies
We are committed to assessing any instance of non-compliance regarding modern slavery or
human trafficking on a case-by-case basis. We have in place policies related to human rights
principles, including our Anti-Slavery Policy. As well as this, our Code of Ethics, "The Wizz
Way", applies to every Company employee regardless of seniority. These, along with our
Supplier Code of Conduct, and Whistleblowing Procedure and Anti-Corruption Policy, help us to
maintain an effective compliance environment across our supply chain. Actions in relation to
these policies are reviewed by the Audit and Risk Committee.
3. Due diligence
Due diligence processes include management of compliance with our Supplier Code of Conduct
and ensuring that the Company’s Purchasing department incorporates dedicated contractual
clauses into agreements, ensuring the prevention of slavery.
4. Risk assessment
Risk assessments are undertaken as part of our whistleblowing processes and Supplier Code of
Conduct compliance.
Wizz Air Holdings Plc Annual report and accounts 2023
75
5. 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.
6. 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 or any member of the
Management Team or Human Resources. This is a key feature of our Anti-Slavery Policy.
The above statement has been approved by the Board of Wizz Air Holdings Plc.
József Váradi
Chief Executive Officer
8 June 2023
Wizz Air Holdings Plc Annual report and accounts 2023
76
STRATEGIC REPORT
FINANCIAL REVIEW
F23, despite loss-making, was a year of steadily improving trading where we saw strong demand
recovery and passenger growth across all our markets. Along the way we faced several
macroeconomic events, including the ongoing war in Ukraine, sharply rising energy costs and supply
chain issues. We acknowledge these challenges as we emerged from COVID-19, and that led to high
levels of passenger disruption, which we have been actively remedying. Still, Wizz Air operated record
capacity and delivered an industry leading growth rate. Wizz Air’s more diversified network and larger,
more efficient fleet have been key in recovering capacity and returning unit costs towards pre-
pandemic levels. Our focus has centred on controlling cost as we operated at a higher capacity versus
pre-COVID-19, while adjusting our operations in the face of airport and airspace interruptions
impacting European operators. Wizz Air carried 51.1 million passengers during F23, an increase of
88.3 per cent compared to the previous fiscal year. Revenues increased by 134 per cent to €3,895.7
million. Passenger and revenue figures reflect the increase in demand throughout the year, as more
people returned to flying, encouraged by the first year without COVID-19 travel restrictions.
Throughout the year the underlying focus for the Company has been on controlling costs, but also on
maximising revenues, particularly during the peak periods, as we faced rising energy costs, while
trying to rebuild our commodities hedging policy.
As average fuel price went up by more than double, our fuel CASK increased by 71 per cent to 2.00
Euro cents in F23 from 1.17 Euro cents in F22. CASK excluding fuel expenses decreased by 8 per cent
to 2.58 Euro cents in F23 from 2.81 Euro cents in F22. We operated 76 per cent more ASKs in F23,
which, combined with a rigorous focus on cost cutting, contributed to ex-fuel CASK reducing
substantially year over year. Our unit revenue, measured in terms of ASKs, increased by 33 per cent
to 3.98 Euro cents, supported by a higher ticket price environment as well as another strong year of
ancillary revenues.
Wizz Air reported a net loss of €535.1 million (compared to a €642.5 million net loss in F22) despite
the significant revenue growth primarily due to adverse fuel prices and flight disruptions in the
Summer season.
Management pursued several key actions to support relentless cost management while sustaining the
growth of the business, in volatile macroeconomic conditions:
From a cost point of view:
▶ adjusting flight volumes, building buffers in daily schedules and redistributing resources to key
areas in crew planning and logistics;
▶ reintroducing fixed crew roster patterns, redesigning complex flight duties and streamlining
ground operations;
▶ decentralising Group support functions, giving more capacity to our local airlines, including
operations and maintenance control;
▶ pooling volume with other Indigo Partner airlines in supplier selection negotiations, such as
maintenance procurement, and driving additional savings from scale;
▶ repatriating one of our aircraft that was based in Ukraine and deploying different technical
strategies on the other three aircraft to maximize the value when returned to service; and
▶ deploying new systems and hardware as part of its digitally powered operations, including
departure control systems across its stations.
From a revenue point of view:
▶ maximising unit revenues across a broader and more diversified network, driving pricing and
load factors during the peak demand periods;
▶ expanding advance data science techniques supporting dynamic pricing of key ancillary
product lines, including baggage, priority boarding and seating;
▶ introducing a new type of checked-in bag with a weight allowance of 26kg, besides the
available 10, 20 and 32kg options, offering more choice and driving further ancillary revenue;
and
▶ allocating new and existing aircraft to markets with opportunity for scale and profitable
growth.
From an investment and financing point of view:
▶ earlier in F23 Wizz Air has reinstated its commodities hedging policy with jet fuel zero-cost
collars, accumulating a coverage of 60 per cent of its jet fuel needs for F24 at a price of
844/970 $/ mT. The jet fuel-related EUR/USD FX coverage now stands at 40 per cent for F24
at 1.0678/1.1108;
▶ purchasing a sufficient amount of emission units under the EU/UK Emissions Trading System
(ETS) that provide 100 per cent of coverage needs for a rolling twelve months;
Wizz Air Holdings Plc Annual report and accounts 2023
77
▶ exercising its purchase rights in relation to 75 A321neo aircraft to be delivered in years 2028–
29, in line with Wizz Air’s ambition to become a 500-aircraft airline by the end of the decade;
▶ signing Memorandums of Understanding (MoUs) with a number of producers for the supply of
sustainable aviation fuel (SAF) for the coming decade and beyond;
▶ opening a new airline subsidiary in Malta and receiving a fourth Airline Operating Certificate
(AOC) that supports a fleet of 54 aircraft at F23 end;
▶ automating and scaling the customer support process, with an addition of a new call centre,
providing faster resolutions and improved customer service;
▶ selecting a lender for a three-year $280.6 million pre-delivery payment (PDP)-backed facility
and drawing $274.3 million at attractive financing terms; and
▶ taking delivery of 35 new A321neo aircraft, while returning nine A320ceo aircraft, bringing
forward the benefits of new technology in ownership and operating cost, fuel consumption and
lower carbon and noise emissions.
From a cash point of view:
▶ continuing to apply our ambitious “payment days” extension programme with suppliers,
leveraging the strength of our balance sheet and credit rating which allowed suppliers to
better differentiate Wizz Air from other airlines, supported by our ability to offer true long-
term partnerships;
▶ optimising key elements of our investment cash flow by focusing on optimised fleet deliveries;
▶ signing more EUR currency aircraft and spare engine leases during the period covering 61 per
cent of new contracts;
▶ including caps to rent formulas limiting the impact of rising interest rates; and
▶ advancing aircraft with pre-delivery payments (PDP) denominated in EUR currency for
inclusion in next year's delivery stream.
The macro variables with significant influence on the financial performance of the Group developed
during the year as follows:
Average jet fuel price ($/metric tonne, including into-plane
premium and impact of effective hedges)
Average EUR/USD rate (including impact of effective
hedges)
Year-end EUR/USD rate
Financial overview
Summary statement of comprehensive income
€ million
Total revenue
Fuel costs (including exceptional income)
Operating expenses excluding fuel
Total operating expenses
Operating loss
Comprising:
– Operating loss excluding exceptional income
– Exceptional income
Operating profit margin (excluding exceptional income)
Net financing expense
Loss before income tax
Income tax credit/(expense)
Loss for the year
Exceptional income net of income tax
Underlying loss after tax
n.m.: not meaningful as a variance is more than (-)100 per cent.
Loss per share
Loss per share, EUR (Note 13)
Basic and diluted loss per share, €
F23
F22
Change
1,218
789
54.4 %
1.04
1.08
1.16
1.11
(10.2) %
(2.4) %
F23
F22
3,895.7
1,663.4
(1,954.4) (649.0)
(2,408.1) (1,479.7)
(4,362.5) (2,128.7)
(465.3)
(466.8)
Change
134.2 %
201.1 %
62.7 %
104.9 %
0.3 %
(466.8)
—
(469.6)
4.3
(12.0) % (28.2) %
(97.9)
(564.6)
29.5
(535.1)
—
(535.1)
(176.2)
(641.5)
(0.9)
(642.5)
4.3
(646.7)
(0.6) %
(100.0) %
16.2 ppt
(44.5) %
(12.0) %
n.m.
(16.7) %
(100.0) %
(17.3) %
F23
F22
Change
(5.07)
(6.33)
(19.9) %
Wizz Air Holdings Plc Annual report and accounts 2023
78
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.
Two rating agencies, Fitch and Moody’s, have issued updates during the third quarter with Fitch
maintaining Wizz Air’s BBB- investment grade profile with negative outlook, while Moody’s issued a
Ba1 rating with stable outlook.
ROCE*
Leverage ratio*
Liquidity*
F23
F22
(13.5) % (16.8) %
29.0 (117.7)
36.2 % 73.9 %
Change
3.3 ppt
146.7 ppt
(37.7) ppt
* See the definition of these non-statutory measures and their calculation under key statistics on page 85.
Financial performance
Revenue
The following table sets out an overview of Wizz Air’s revenue streams for F23 and F22 and the
percentage change in those items:
F23
F22
Total
(€ million)
Percentage of
total revenue
Total
(€ million)
Percentage of
total revenue
Percentage
change
Passenger ticket revenue
Ancillary revenue
Total revenue
2,024.9
1,870.8
52.0 % 732.1
48.0 % 931.4
44.0 %
56.0 %
3,895.7
100.0 % 1,663.4
100.0 %
176.6 %
100.9 %
134.2 %
The increase in passenger ticket revenue was driven by an 88.3 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 decreased to 48.0 per cent.
Average revenue per passenger increased by 24.2 per cent from €61.44 in F22 to €76.28 in F23.
Average ticket revenue per passenger increased from €27.00 in F22 to €39.70 in F23 (by 46.6 per
cent), while average ancillary revenue per passenger increased to €36.60 from €34.30 (by 6.7 per
cent).
Operating expenses
Total operating expenses excluding exceptional income increased by 104.5 per cent to €4,362.5
million in F23 from €2,133.0 million in F22.
The following table sets out for F23 and F22 the expenses relevant for the CASK measure (thus
excluding exceptional income), and the percentage changes in those expenses:
F23
Percentage
of total
operating
expenses
Unit cost
(€cts/ASK)
8.6%
0.38
Total
(€ million)
373.9
F22
Total
(€ million)
220.5
Percentage
of total
operating
expenses
10.3%
Unit cost
(€cts/
ASK)
0.39
Percentage
change of
total cost
69.6%
1,954.4
44.8%
2.00
653.3
30.6%
1.17
199.2%
91.5
2.1%
0.09
43.4
2.0%
0.08
110.8%
237.0
5.4%
0.24
170.4
8.0%
0.30
39.1%
963.2
22.1%
0.99
545.9
25.6%
0.98
76.4%
601.1
141.3
13.8%
3.2%
0.61
0.14
446.3
53.2
20.9%
2.5%
0.80
0.10
34.7%
165.7%
4,362.5
100.0%
4.46 2,133.0
100.0%
3.82
104.5%
114.5
4,476.9
0.12
86.7
4.58 2,219.7
0.16
3.98
32.0%
101.7%
Staff costs
Fuel costs (excluding
exceptional income)
Distribution and
marketing
Maintenance materials
and repairs
Airport, handling,
en-route charges
Depreciation and
amortisation
Net other expenses
Total operating
expenses (excluding
exceptional income)
Net cost from financial
income and expense
Total
Wizz Air Holdings Plc Annual report and accounts 2023
79
Staff costs were €373.9 million in F23, up by 69.6 per cent from €220.5 million in F22. The cost
increase is driven by higher office and crew numbers and higher wages as well. The number of
average full time office employees increased by 14.2 per cent in F23, while crew headcount increased
by 40.2 per cent in F23 compared to F22. Besides that the volume also went up as the total ASKs
grew by 75.7 per cent during the financial year.
Fuel expenses (excluding exceptional income) increased by 199.2 per cent to €1,954.4 million in F23,
up from €653.3 million in F22. The main driver for this increase was an ASK increase of 75.7 per cent
as well as higher fuel prices. The average fuel price, including hedging impact and into-plane
premium, paid by Wizz Air in F23 was $1,218 per tonne, an increase of 54.5 per cent from the
previous year’s figure of $789 per tonne. The average Euro/US Dollar exchange rate, including the
impact of hedging, was 1.04 in F23 compared to a rate of 1.16 in F22. The impact of effective fuel
hedges was a €33.2 million loss in F23 (compared to a €13.7 million gain in F22).
The increase in distribution and marketing costs of 110.8 per cent to €91.5 million in F23 from €43.4
million in F22 is mainly driven by the credit card commission as the revenue increased by 134.2 per
cent versus F22 and the fees were increased by the card provider companies.
Maintenance, materials and repair costs increased by 39.1 per cent to €237.0 million in F23 from
€170.4 million in F22. Maintenance costs are largely driven by the size of the fleet, predetermined
maintenance schedules and aircraft utilisation.
Airport, handling and en-route charges increased by 76.4 per cent to €963.2 million in F23 from
€545.9 million in F22. This increase is primarily driven by the increase in both seat capacity and
passenger numbers, which increased by 67.8 per cent and 88.6 per cent respectively.
Depreciation and amortisation charges increased by 34.7 per cent to €601.1 million in F23, up from
€446.3 million in F22 due to the increased number of aircraft in the fleet being depreciated, besides
the increased variable part of depreciation (for strict obligation assets) which increased due to the
higher number of flight hours and -cycles 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 €141.3
million was primarily driven by: (i) significantly higher flight disruption costs (2023: €111.0 million;
2022: €29.5 million) because the number of flight cancellations and delays increased in F23 (mainly in
the summer season): completion factor decreased by 2.1 per cent and on-time-performance (D15)
also decreased by 21.4 per cent; (ii) increase in crew-related costs due to ramping up operations
(2023: €69.6 million; 2022: €32.5 million); and (iii) increase in overhead costs due to higher level of
operations compared to F22 (2023: €62.3 million; 2022: €40.1 million). For further details, please
refer to Note 7.
Net financing income and expense
The Group’s net financing expense was €97.9 million in F23 after an expense of €176.2 million in F22.
This aggregate change was driven by foreign exchange impacts whilst the increase in net financial
expense was mainly due to the increase of the leased fleet, as shown in the table below:
€ million
Net financial expense
Net foreign exchange gains
Net financing expense
F23
(114.5)
16.6
(97.9)
F22
(86.7)
(89.5)
(176.2)
Change
32.0 %
n.m.
(44.5) %
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 credit of €29.5 million in F23 compared to the €0.9 million charge
in F22 as the main subsidiary of the Company switched to Hungarian corporate tax from Swiss
corporate tax with effect from 1 April 2023, which resulted in a deferred tax asset revaluation.
The effective rate for the Group in F23 was 5.2 per cent compared to (0.1) per cent in F22. The main
components of the tax charge in F23 and F22 were local business tax and innovation tax paid in
Hungary and the change in deferred tax balances.
Loss for the year
The Group incurred an underlying net loss of €535.1 million in F23, compared to the underlying net
loss of €646.7 million in F22.
Other comprehensive income and expenses
In F23 the Group had other comprehensive expense of €88.8 million compared to an expense of €4.1
million in F22. This significant increase was due to the increased number of hedges in F23 as a result
of the reinstatement of a systematic hedging policy.
Wizz Air Holdings Plc Annual report and accounts 2023
80
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 F23
and F22:
€ million
Net cash generated by operating activities
Net cash generated by/(used in) investing activities
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
F23
F22
(restated*)
Change
421.9
281.2
50%
532.9
(317.8)
n.m.
(311.2)
(325.5)
(4) %
643.7
(362.1)
n.m.
766.6 1,100.7
(30) %
Effect of exchange rate fluctuations on cash and
cash equivalents
(7.7)
28.0
Cash and cash equivalents at the end of the year
1,402.6
766.6
n.m.
83%
* The prior year classification between operating and investing activities was restated – refer to Note 35 for more detail.
n.m.: not meaningful as a variance is more than (-)100 per cent.
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.
Cash generated by operating activities increased from €281.2 million in F22 to €421.9 million in F23
primarily driven by the following factors:
▶ Operating cash flows before adjusting for changes in working capital improved by €102.1
million year on year driven by the market recovery and increase in demand.
▶ An increase in deferred income in the amount of €161.0 million which is mainly driven by the
increase in unearned revenue (tickets paid by passengers for which the flight service is yet to
be performed) due to higher demand and ticket bookings made further in advance.
Cash flows from investing activities
Investing activities resulted in €532.9 million net cash generated in F23, compared to €317.8 million
net cash used in F22, due to the following:
▶ The net cash flows from advances paid and refunded in relation to aircraft deliveries decreased
by €205.5 million from €217.6 million cash outflow in F22 to €12.1 million cash outflow in F23.
This change was primarily driven by the Company’s delivery schedule and associated PDP cash
flows with Airbus.
▶ Cash inflows due to the decrease in short-term cash deposits was €450.0 million in F23
compared to the cash outflow in the amount of €99.2 million due to the increase in cash
deposits in F22.
▶ Net cash flows from the purchase and sale of tangible and intangible assets including sale and
leaseback transactions increased by €81.5 million from €3.90 million cash outflow in F22 to
€77.6 million cash inflow in F23.
Cash flows from financing activities
Financing activities resulted in a net cash outflow of €311.2 million in F23 and a net cash outflow of
€325.5 million in F22, including the following main components:
▶ Proceeds from new loans related to aircraft financing was €63.0 million in F23 and €16.4
million in F22. Repayment of such loans plus interest, in addition to lease payments amounted
to €605.0 million in F23 and €470.7 million in F22.
▶ Proceeds from new debt was €245.5 million, mainly related to PDP financing, in F23 and
€497.5 million, from the issuance of bonds, in F22. Repayment of debt plus interest amounted
to €14.5 million, which includes interest payments only, in F23 compared to €368.6 million,
which included the repayment of the commercial paper issuance under the CCFF, in F22.
Wizz Air Holdings Plc Annual report and accounts 2023
81
Summary statement of financial position
The following table sets out summary statements of financial position of the Group for F23 and F22:
€ 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
F23
F22
Change
4,666.0
120.4
1.2
411.4
—
1,408.6
426.8
7,034.4
3,631.4
162.2
0.7
207.6
450.0
766.6
137.6
5,356.1
1,034.6
(41.8)
0.5
203.8
(450.0)
642.0
289.2
1,678.4
(357.9)
263.9
(621.8)
945.4
5,301.4
873.6
108.4
156.1
7.3
7,392.3
7,034.4
615.4
3,964.9
396.8
4.6
107.0
3.5
5,092.1
5,356.1
330.0
1,336.6
476.9
103.8
49.1
3.8
2,300.2
1,678.3
*
Including both current and non-current asset and liability balances, respectively.
Property, plant and equipment increased by €1,034.6 million as at 31 March 2023 compared to 31
March 2022, 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 €41.8 million as at 31 March 2023 compared
to the year before. The 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) increased by €0.5 million as at 31 March 2023
compared to 31 March 2022 (see also Notes 3 and 21 to the financial statements). These balances are
related to fuel hedge instruments.
Trade and other receivables increased by €203.8 million as at 31 March 2023 compared to 31 March
2022. This was primarily driven by an increase in trade receivables as a result of increased sales and
operation level.
Cash and cash equivalents amounted to €1,408.6 million at 31 March 2023 (2022: €766.6 million),
and short-term cash deposits to €nil at 31 March 2023 (2022: €450.0 million).
Borrowings (including convertible debt) increased by €1,336.6 million as at 31 March 2023 compared
to 31 March 2022. The increase was primarily driven by lease liabilities recognised during the fiscal
year, and financing against aircraft pre-delivery payments (see Note 23 to the financial statements).
Deferred income increased by €476.9 million as at 31 March 2023 compared to 31 March 2022 (see
Note 26 to the financial statements). This was primarily driven by the higher business activity
compared to the previous year end.
Derivative financial liabilities (current and non-current) increased by €103.8 million as at 31 March
2023 compared to 31 March 2022 (see Notes 3 and 21 to the financial statements). These balances
are related to fuel hedge instruments. The significant increase is due to the reinstatement of the jet
fuel hedging policy, and also due to the volatility in jet fuel prices.
Provisions increased by €49.1 million as at 31 March 2023 compared to 31 March 2022, in line with
the planned aircraft maintenance schedule (see Note 29 to the financial statements).
Wizz Air Holdings Plc Annual report and accounts 2023
82
Hedging strategy
Wizz Air operates under a clear set of treasury policies approved by the Board and supervised by the
Audit and Risk Committee. During the earlier phases of the COVID-19 pandemic, key players in the
airline industry, including Wizz Air, were severely impacted with significant financial hedge losses. As a
result, during that time and as agreed with its Board of Directors, Wizz Air moved to a no hedge policy
to avoid hedge losses in the future.
In Europe, however, key competitors continued to hedge, albeit at lower coverage levels versus pre-
pandemic.
Given the sustained and ongoing volatility in commodity prices Wizz Air has decided to reinstate the
jet fuel hedging and align the policy with its peers from F24 onwards. The hedges under the hedge
policy will be rolled forward quarterly, 18 months out, with coverage levels over time reaching
indicatively between 65 per cent for the first quarter of the hedging horizon and 15 per cent for the
last quarter of the hedging horizon. In line with the hedging policy, Wizz Air also intends to hedge its
fuel consumption-related US Dollar exposure in a similar fashion. Hedge coverages as at 31 March
2023 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
Foreign exchange hedge coverage
Period covered
Exposure (million)
Coverage (million)
Hedge coverage for the period
Weighted average ceiling
Weighted average floor
F24
12 months
1,919.0
1,081.0
56 %
994.0 $
864.0 $
F25
6 months
2,306.0
177.5
8 %
884.0
767.0
F24
12 months
1,632.2
312.0
19 %
1.1154
1.0724
F25
6 months
—
—
—
—
—
$
$
$
$
$
$
Near term and full-year outlook:
The near term outlook is summarised as follows:
•
•
•
•
Capacity: +30% ASKs year-on-year in F24 (H1 and H2 at similar levels)
Load factors: above 90% for F24;
Cost: ex-fuel CASK in F24 lower vs prior year
Financial performance: Full year F24 net profit in the range of €350 - €450 million.
Ian Malin
Chief Financial Officer
8 June 2023
Wizz Air Holdings Plc Annual report and accounts 2023
83
STRATEGIC REPORT
KEY STATISTICS
F23
F22
Change*
CAPACITY
Number of aircraft at end of period
Equivalent aircraft
Aircraft utilisation (hh:mm)***
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
Yield (revenue per RPK, € cents)
Average revenue per seat (€)***
Net Fare (Total net revenue/passenger segments
(€))***
RASK (€ cents)
CASK (€ cents)**
Ex-fuel CASK (€ cents)**
179
163.8
11:08
666,476
580,863
267,707
4.48
58,190,317
1,680
97,779,087
153
143.5
7:44
405,556
354,461
167,313
3.20
34,682,368
1,605
55,655,292
86,807,338
87.8 %
51,071,836
43,679,179
78.1 %
27,128,160
1,218
1.04
4.49
66.95
76.28
3.98
4.58
2.58
789
1.16
3.81
44.96
61.44
2.98
3.98
2.81
17.0%
14.1%
48.9%
64.3%
63.9%
60.0%
40.0%
67.8%
4.7%
75.7%
98.7%
12.4%
88.3%
54.4%
(10.3) %
17.8%
48.9%
24.2%
33.7%
15.0%
(8.2) %
* Percentage changes in this table are calculated by division of the two years’ KPIs including when the KPIs are expressed as
percentages.
** Excluding the impact of exceptional items, as explained in Note 11 to the financial statements.
*** F22 figure was changed as we have updated our utilisation calculation by weighing the monthly utilisation figure with the
monthly aircraft count to arrive at the annual utilisation figure.
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.
Monthly aircraft utilisation: total block hours/number of days in the relevant period/equivalent aircraft
number/24 hours.
Aircraft utilisation: weighted average of monthly aircraft utilisation (total block hours/number of days
in the given month/equivalent aircraft number/24 hours) based on the month-end fleet counts.
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84
Yield: the total revenue per RPK.
Passenger segments: the number of passengers who bought tickets (thus making revenue for the
Company) for a flight within a given period.
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)
Effective tax rate for the year
Operating loss after tax (excluding exceptional income)
Average Shareholders’ equity
Average borrowings
Average cash and cash equivalents
Average short-term cash deposits
Average capital employed
ROCE (%)
F23
(466.8)
F22
(469.6)
5.2%
(0.1) %
(442.5)
(47.0)
4,633.1
(1,087.6)
(225.0)
3,273.5
(470.1)
583.8
3,551.1
(933.7)
(398.4)
2,802.8
(13.5) % (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)
Depreciation and amortisation
EBITDA (excluding exceptional income)
Borrowings
Cash and cash equivalents
Short-term cash deposits
Net debt
Leverage ratio
F23
(466.8)
601.1
134.3
5,301.4
(1,408.6)
—
3,892.8
F22
(469.6)
446.3
(23.3)
3,964.8
(766.6)
(450.0)
2,748.2
29.0
(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
F23
F22
1,408.6
—
3,895.7
36.2 %
766.6
450.0
1,663.4
73.1 %
Wizz Air Holdings Plc Annual report and accounts 2023
85
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 effectively managing risks. Compared to F22, the Company has placed
more attention on environmental risks. Given the EU’s ambition to become climate neutral by 2050,
the regulations on corporate sustainability are tightening, with the inclusion of directives such as the
Corporate Sustainability Reporting Directive (CSRD) and EU Taxonomy. Both regulations require the
assessment of climate risks (CSRD will require a scenario analysis-based assessment of both
transitional and physical climate risks; meanwhile EU Taxonomy requires the assessment of physical
risks for determining the sustainability of certain investments) and are putting increasing pressure on
Wizz Air to take all required steps to reduce and eventually eliminate emissions from travel and, as
the result, mitigating environmental risks. At the same time, we continue integrating the lessons
learned from the past few years, such as ongoing war between Ukraine and Russia that is causing in
the present and near future high geopolitical instability, high fuel prices and high 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.
There were no significant changes in the risk appetite of the Company compared to the F23 mid-year
review. The majority of the Wizz Air risk categories have “averse” risk appetite due to their safety/
compliance/regulatory nature. Similar to the prior year, in F23 we have also assessed environmental,
social and 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 categorised as “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). Wizz Air’s risk appetite for the category “geopolitical changes” changed to cautious from
averse due to the fact that Wizz Air operates in volatile environments and countries.
As part of this process, 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 Group’s Leadership Team fall into nine broad groupings which are
largely consistent with the groupings of F22 and include a deeper assessment of external factors, ESG
and global geopolitical risks. Additionally, climate risks have been separated from social and
governance risks, facilitating enhanced risk and opportunity identification, as well as more effective
action planning in each respective domain:
▶ 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 a
significantly escalating threat landscape;
▶ external factors, ensuring the Company has capabilities and resilience to deal with risks such
as geopolitical risks, Brexit, inflation, 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;
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86
▶ 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;
▶ 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
slowing economic landscape, ownership & control, loss of traffic rights, and changing policies
due to sustainability (taxation, etc.);
▶ operations, including safety events and terrorist incidents and employee and passenger
security;
▶ 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;
▶ social and governance risks, making sure we operate in accordance with our core values and
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 F24
Out of the principal risks the following will need the most attention in F24:
▶ Information technology and cyber risk, due to increasing IT dependence and the complexity of
the IT landscape, cyber security, data protection and security are highly critical elements of
our operations, and one of the areas also closely and regularly monitored by our Board. As
cyber security is a constantly evolving challenge, we have continued to invest in and
strengthen the relevant processes, systems and policies, a comprehensive and compulsory e-
learning training programme for all colleagues is maintained and the Company’s cyber security
team is made up of skilled professionals with extensive experience in the field, focusing on the
people, process and technology aspects of cyber by running multiple workstreams.
▶ External factors, of which the most critical are the changes in oil prices affecting fuel costs, as
well as adverse movements in the EUR/USD exchange rate or in other currency pairs. Both
factors can have a significant negative impact on Wizz Air's net profit. Given the sustained and
ongoing volatility in commodity prices Wizz Air maintains its hedging policy and ensures its
policy is aligned to those of its peers. As a result, the Company will materially mirror hedge
coverage levels of its main peers as of F24 – targeting to level the playing field on jet fuel
prices. This revised policy was approved by the Board and the systemic hedge policy continues
to be rolled forward quarterly, 18 months out.
The ongoing war between Ukraine and Russia creates further challenges and a hostile business
environment, especially for WIZZ whose flight operations must accommodate restricted
airspace and other related air traffic effects. All Russian operations continue to be suspended
indefinitely and all contracts and third-party providers are reviewed to ensure there are no
Russian or otherwise sanctioned ties.
Supply chain disruptions affected both the Company directly and its suppliers indirectly which
put pressure on its ability to meet its operational key performance indicators. This ultimately
resulted in customer disruption, increased costs, and lost revenue. We were particularly
impacted by this in Summer 2023 and invested heavily in people, network design and
resilience to help mitigate a continuation of these factors going forward.
▶ Human resources risks pose a large challenge that the Company had to face during the ramp-
up period to reach 185+ aircraft by summer 2023, as well as to keep up with the continued
growth of the airline, which requires a constant supply of the staff. An insufficient number of
flight crew and the inability to find, develop and retain the appropriate office staff represents
one of the most critical risks in this area.
▶ Environmental risks require significant focus from the Company, as airlines are increasingly
expected to comply with sustainability requirements. During F23 we reassessed the risks
together with independent sustainability experts and climate consultants from Deloitte Ltd.
Hungary, to ensure a more objective analysis than is expected. Through a detailed
assessment, which was supplemented by interviews and internal survey exercises covering all
the business areas, such as Wizz Air's services, operations and supply chain, the main climate
risks were identified including those categorised as high-impact risks in any time horizon, or
those that have at least medium risk impacts for each time horizon. Taking into consideration
the latest scientific findings and relevant literature, we also evaluated the exposure of Wizz
Air’s vulnerability with regard to key operational areas, critical airport bases within our
network, and the location of our tier one suppliers.
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87
Information technology and cyber risk
As in prior years, over 90 per cent of bookings were made directly on our website (at wizzair.com) and
via our mobile app in F23 and refunds were mostly handled through digital channels. Wizz Air flight
crew leverages a recently implemented Electronic Flight Bag solution to optimize flight performance.
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 in compliance with industry
standards and GDPR requirements. We leverage technology to check in passengers, manage our
traffic network, perform flight operations and engage in other critical business tasks. Our website and
our mobile app are our shop window and therefore it is critical that they are functional, reliable and
secure.
As cyber security is a constantly evolving challenge, we have continued to invest in and strengthen
the relevant processes, systems and policies and have cooperated with the Data Protection Officer to
further increase our security preparedness. Wizz Air follows a multi-layered approach to ensure
stringent standards in both cybersecurity and data protection matters. It involves safety mechanisms
for prevention as the first line of defence and detection and response mechanisms as its second line of
defence, while implementing robust recovery procedures.
Besides employing an experienced internal IT and cyber security team, we continue to involve
external cyber security experts and service providers. This option delivers a more stable cyber security
capability, which is more important to deliver continued progress on strengthening cyber security to
protect business-critical systems and data. Beyond Wizz Air, we focus on supplier processes and
practices to ensure all possible gaps are adequately identified and addressed where needed.
During F23 as part of the continuous improvement efforts, several of the Company’s business
continuity plans had been reviewed and updated to ensure they remain appropriate and sufficient for
the Company’s continued growth. The up-to-date state and the operability of the business continuity
plans are ensured through regular testing and maintenance. Business continuity and crisis
management plans were activated and are used with success due to the ongoing war between Ukraine
and Russia.
The recently established IT Service Continuity Management (ITSCM) Workstream act as an enabler to
achieve the Company's business continuity objectives via seamless integration into the organization-
wide Business Continuity Management (BCM) program.
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 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 in January 2023.
During F23, 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 F23 and will be ongoing in F24 as well.
Our in-house IT Security department continues to review emerging threats and the Board oversees
the actions being taken to safeguard our Company.
Aside from the pandemic, 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.
A growing business, both in headcount and geographic reach, combined with more distributed working
patterns post COVID-19, places more pressure on Wizz Air’s IT infrastructure and its reliability is more
important than before in ensuring business continuity. The Company strengthened its cyber team by
adding additional resources and hiring a cyber leader with experience at several multi-national firms.
Wizz Air Holdings Plc Annual report and accounts 2023
88
External factors
The International Air Transport Association (IATA) expects a return to profitability for the global airline
industry in 2023 as airlines continue to cut losses stemming from the effects of the COVID-19
pandemic to their business in prior years. In 2023, airlines are expected to post a small net profit of
$4.7 billion – a 0.6 per cent net profit margin. It is the first profit since 2019 when industry net profits
were $26.4 billion (a 3.1 per cent net profit margin).
According to IATA’s forecast released on 6 December, 2022, jet kerosene is expected to average
$111.9/barrel (down from $138.8/barrel). Regardless, the actual jet kerosene price remained
permanently below $100/barrel in the first quarter of 2023. This decrease reflects a relative
stabilisation of fuel supply after the initial disruptions from the war in Ukraine.
We are exposed to global political, economic and epidemic events and trends. A worldwide economic
downturn affects demand for air travel. Our business extends beyond the borders of the EU and into
regions including the Caucasus, North Africa, Central Asia and the Middle East.
The ongoing war between Ukraine and Russia not only closes two emerging markets for Wizz Air but
also borders other significant WIZZ base countries. Employee and passenger security is of utmost
importance for Wizz Air and our Company adjusts its internal protocols and policies to protect its
employees and passengers while flying with Wizz Air.
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 were 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.
Given the sustained and ongoing volatility in commodity prices, Wizz Air decided in F23 to reinstate
hedging policies that were aligned to those of its peers. These revised policies were approved by the
Board and are being rolled forward quarterly, 18 months out. As a result, the Company will:
1. mirror hedge coverage levels of the main peers as of F24; and
2. put additional jet fuel price caps in place, therefore limiting the exposure for the Company
should further extreme volatility in jet fuel prices be observed in market.
We are an international business and, while we report in Euro, we transact in over 20 currencies. A
large proportion of our payments are denominated in US Dollars. Appreciation of the US Dollar against
the Euro may negatively impact results and margins. The Company’s hedging policies call for similar
hedging of transactional USD exposure with regard to jet fuel. In all cases, hedging transactions are
subject to the approval of the Audit and Risk Committee.
During F23 fuel including ETS and into plane premium (IPP) accounted for 45 per cent of our total
Group operating costs and a rise in fuel prices will significantly affect our operating costs.
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, by offering discounted fares or more attractive
schedules. States are often large and/or 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.
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, Western Europe, the Middle
East and their surrounding regions are large addressable markets which will continue to provide
opportunities for profitable growth.
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.
Network development
During FY23, the main effort was on reallocating capacity from markets that became affected by the
Ukrainian war. Seven aircraft that were supposed to be deployed in Ukraine following the open skies
agreement were reallocated to other bases within the network. CEE and Western Europe received this
additional capacity. In addition, one further aircraft worth of inbound capacity was reallocated to other
markets. 32 new routes were launched as a result and 70+ routes increased.
Overall, Wizz Air focused on giving more density to the Network, building on the pillars established
during COVID, allocating +75% of capacity growth vs F22 went to existing markets to build back the
Wizz Air Holdings Plc Annual report and accounts 2023
89
product after COVID where route expansion was prioritised. At the same time, Wizz Air kept investing
in expanding towards new markets and Abu Dhabi in particular doubling the fleet from four to eight
aircraft by the end of FY23. This expansion helps diversify markets and reduce the exposure to market
weakness and less heavily competed markets.
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 4.61 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. As at 31 March 2023, Wizz Air’s delivery backlog comprises a firm
order for 13 x A320neo, 305 x A321neo and 47 x A321XLR aircraft, a total of 365 aircraft.
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 the majority of our A320-family
aircraft through sale and leaseback arrangements with the balance through JOLCO financing. 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 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
Aviation remains a highly regulated industry. Wizz Air Group airlines rely on air operator certificates
(AOCs) and Operating Licenses (OLs) issued by competent national authorities and regulated by
national legislation in Hungary, Malta, the UK and the United Arab Emirates respectively. In Hungary
the European Union Aviation Safety Agency (EASA) is responsible for issuing the AOC of Wizz Air
Hungary. The Civil Aviation Authority of Hungary is responsible for granting the OL. In Malta, EASA is
responsible for issuing the AOC of Wizz Air Malta. The Maltese Civil Aviation Directorate is responsible
for granting the OL. In the UK, the UK Civil Aviation Authority is responsible for issuing the AOC and
granting the OL of Wizz Air UK. In the United Arab Emirates, the General Civil Aviation Authority of the
UAE is responsible for issuing the AOC and granting the OL for Wizz Air Abu Dhabi. In each case, the
AOC’s allow the airlines to operate air services in between countries, subject to the aero political rights
agreed between the country which issued the AOC and the destination country. Each AOC requires the
respective airline to meet ownership and control requirements. If an airline ceases to be majority
owned and effectively controlled by Qualifying Nationals, then its AOC – and so its right to operate its
business – could be at risk.
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Operational risks
The Company’s Crisis Management team and several business continuity plans remain on alert due to
the war between Ukraine and Russia. As mentioned above, the ongoing war between Ukraine and
Russia contributed to 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. In F22 and F23 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. In F23, we also 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 continues to be a key focus. To be able to implement standardised, central
measures a new Group Health, Safety and Well-being 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 identified.
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 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.
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. An
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. Wizz Air is:
▶ Revising contractual agreements with our resource suppliers and boosting recruitment using
external agencies, university recruitment, job fares, etc.
▶ Re-evaluating processes, making them more effective with 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.
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91
▶ 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.
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 trust Wizz
Air to operate a sustainable business model, not only 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 Corporate 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 Deloitte Ltd. Hungary.
The methodology and organisation for the ERM environmental risk assessment was based on the
Shared Socio-economic Pathways (SSPs), and the Representative Concentration Pathways (RCPs). The
IPCC uses the SSP-RCP framework for scientific forecasting in terms of the various climate change
impacts, applied differently in accordance with each specific pathway. The qualitative scenario analysis
of transition and physical risks considered the IPCC’s Atlas and climate change map for additional
insight into key risks within the Wizz Air network. The qualitative risk assessment was focused on the
identification of climate risks under four different IPCC scenarios (1.5°C, 2°C, 3°C, 4°C) and consisted
of two main phases to help the identification of key climate risks – vulnerability assessment and heat
mapping.
The 1.5°C and 2°C scenarios are based on an ambitious decarbonisation pathway, with more stringent
climate policies, leading to increased transition risks, while in the 3°C and 4°C scenarios, the world
falls short of achieving climate targets, due to less efficient implementation of climate policies
worldwide, causing more severe physical risks in the long run.
These identified 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 Air but
in the long term physical risks can have more serious effects on the Company and the planet itself.
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92
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 Air’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 F24 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 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.
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 6 per cent in 2030 and 70 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.
The 1.5°C IPCC scenario (RCPs) estimates significant changes in weather patterns (relevant for
geographies where Wizz Air operates) in the scientific time horizons of climate scenarios (e.g. 2050
and 2100), but no significant change is expected compared to the recent years in the time horizons
considered by Wizz Air's business planning (maximum ten years). For this reason airport 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 emissions intensity to 43
grammes per RPK, whilst we work on an even bolder 2050 target.
For more information please see our detailed Sustainability section of the Annual Report. The group's
going concern and viability statements are included in the Directors' report.
József Váradi
Chief Executive Officer
8 June 2023
Wizz Air Holdings Plc Annual report and accounts 2023
93
GOVERNANCE
“Wizz Air is leading with a
sustainable purpose and has
integrated a long-term
strategy which combines
purpose and business growth.”
William A. Franke
Chairman of the Board of Directors
CHAIRMAN’S STATEMENT ON
CORPORATE GOVERNANCE REPORT
Introduction
I am pleased to present the
Corporate Governance
Report for the year ended
31 March 2023. The goal of
this report is to demonstrate
the corporate governance
framework employed by
Wizz Air. I would like to
thank the Directors and
management for ensuring
rigorous corporate oversight
during another challenging
year fraught with inflation,
operational disruption and
the macro-economic impact
of the war in Ukraine.
The Board is focused on
sustainable growth and
aligning its business strategy
with its positive contribution
to Wizz Air’s people, the
environment, the economy
and society. We are proud to
be named the most
environmentally sustainable
airline globally as awarded
by CAPA. This achievement
demonstrates our
commitment to sustainability
and to the transition to a
more sustainable economy.
This commitment is also
evident from our fleet
renewal strategy and the
exercise of purchase rights
for 75 Airbus A321neo
aircraft, which was approved
by the Board in September
2022 and is subject to
Shareholder approval as a
Class 1 transaction.
Wizz Air is leading the
aviation industry with a
sustainable purpose and has
integrated a long-term
strategy which combines
purpose and business
growth. Against that
backdrop high standards of
corporate governance
underpin the Wizz Air
strategy.
Activities F23
Strategy
During F23, the Company
continued its strategic
growth, with the
introduction of a fourth Air
Operator’s Certificate (AOC).
In September 2022 Wizz Air
Malta was granted an AOC
by the European Union
Aviation Safety Agency and
an operating licence by the
Malta Civil Aviation
Directorate.
The Company took a
number of expansion
initiatives in Cyprus,
Romania, Italy, Austria,
Albania and Abu Dhabi and
new operations in Saudi
Arabia following the signing
of a Memorandum of
Understanding with the
Ministry of Investment in the
Kingdom of Saudi Arabia.
Wizz Air fleet grew to 179
aircraft including 35
additional game-changing
Airbus A321neo aircraft,
taking the Company’s total
Airbus A321neo fleet to 82
aircraft at the end of March
2023.
Wizz Air benefited from
having fixed interest rate
structures financing 94 per
cent of its existing fleet and
it agreed the financing terms
of 31 aircraft. The Company
aircraft finance tender
processes continued to be
oversubscribed, with a 15
per cent increase in
financing participants
compared to last year. The
Company successfully added
EUR-denominated lease
contracts with 61 per cent of
new contracts now EUR
financed.
The Company secured a
$281 million PDP-backed
financing facility adding an
additional layer of liquidity
for the Company.
Operational performance
Safety is the highest priority
of the Company, and we are
proud to have been named
one of the safest airlines in
the world by
airlineratings.com. To
enhance safety compliance
oversight further,
particularly in light of
expansion, the Board
approved the newly created
Safety Security and
Operational Compliance
Committee.
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94
The Board considered the
impact of the summer
disruption on its
stakeholders, including
customers, employees and
regulators. Decisive action
was taken to build resilience
into the system and engage
with customers and
authorities. Significant
issues were addressed and
operational performance
normalised in the latter part
of the year.
People and culture
Wizz Air has a diverse and
inclusive culture, and these
values are embedded within
the Company. The Company
is on track to reach its
targets of 40 per cent
female representation in
management and the Board
by 2025. We are proud that
two of our Board
Committees are chaired by
women. Going forward the
Board will focus on the
introduction of a Diversity,
Equity and Inclusion Policy
and implementation of
actions in accordance with
the Parker Review.
On engagement, a number
of Non-Executive Directors
embarked on engagement
activities with employees
across the Group, including
from corporate, customer
and operational functions, in
addition to interactions with
crew and the People Council.
Directors received direct
feedback from employees
enabling a better
understanding of the
employee experience at
Wizz Air.
Stakeholders and
investors
The Board continues to
ensure a high standard of
corporate governance and
engagement with its
stakeholders and investors.
The Board considers the
impact of its decisions on
the workforce, customers,
suppliers, society and its
Shareholders.
The Board has direct
engagement with investors
and as Chair I have had
several meetings and
exchanges with
Shareholders on matters
concerning ESG, governance
and strategy.
A statement on how the
Directors have had regard to
the matters set out in
section 172 of the
Companies Act 2006 can be
found on page 97.
The subsequent pages of the
Corporate Governance
Report detail Board and
management composition,
governance framework and
Board and Committee
activities during the year.
I wish to take the
opportunity to express
gratitude on behalf of the
Board for the dedication of
the Wizz Air workforce, and
our investors and other
stakeholders who continue
to place trust in the Board. I
would also like to thank
again my colleagues on the
Board for their continued
support to the Company and
the high standards of
corporate governance.
William A. Franke
Chairman of the Board
8 June 2023
The Board received regular
updates from the Employee
Engagement Director and
People Officer, and
incorporated employee
feedback into Board
decisions relating to
remuneration outcomes for
F23, including the revised
remuneration policy as
detailed in the Directors
Remuneration Report.
Regarding executive pay,
the Board takes into account
the experience of employees
and key stakeholders. The
Board is committed to
supporting continued
investment in the workforce
to ensure the Company
remains competitive and
attractive from a market
perspective. Ultimately, the
Board takes a considered
and responsible approach to
decisions on remuneration.
Board composition
In accordance with the UK
Corporate Governance Code
2018 (“the Code”), the
Nomination and Governance
Committee considered a
number of changes,
including the appointment of
a Deputy Chair; the creation
of the Safety, Security and
Operational Compliance
Committee; and changes to
the composition of the Board
Committees. Further
information can be found at
pages 114-126.
Board performance
As always Wizz Air is
committed to good
corporate governance. In
line with the Code, the
Company engaged Lintstock
to facilitate an evaluation of
the performance of the
Board, its Committees, the
Chair and individual
Directors. Lintstock is an
advisory firm that
specialises in board reviews
and provides no other
services to the Company.
Further detail is provided at
page 102.
Wizz Air Holdings Plc Annual report and accounts 2023
95
GOVERNANCE FRAMEWORK
THE BOARD
CHAIR –
WILLIAM A. FRANKE
GROUP CHIEF EXECUTIVE OFFICER – JÓZSEF
VÁRADI
SENIOR INDEPENDENT DIRECTOR – BARRY
ECCLESTON
•
•
•
•
•
•
•
•
•
•
Chairs the Board and sets direction.
Ensuring highest standard of corporate
governance.
Responsibility for setting the agenda and
strategic discussion.
Responsible for ensuring engagement with
investors and stakeholders.
Accountable to the Board and the Chair.
Responsible for the Group’s senior
leadership team.
Responsible for strategic, financial and
operation performance of the Group.
Acts as a sounding board for the Chair.
Acts as intermediary for the other Directors.
Available to Shareholders to address
concerns.
NON-EXECUTIVE DIRECTORS –
Responsible for key reserved matters:
ANNA GATTI
ANDREW S. BRODERICK
ANTHONY RADEV
BARRY ECCLESTON
CHARLOTTE ANDSAGER
CHARLOTTE PEDERSEN
ENRIQUE DUPUY DE LOME CHAVARRI
STEPHEN L. JOHNSON
WILLIAM A. FRANKE
EMPLOYEE ENGAGEMENT DIRECTOR – ANTHONY
RADEV
COMPANY SECRETARY –
YVONNE MOYNIHAN
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
overall strategy and management;
structure and capital;
financial reporting and controls;
internal control and risk management;
approval of significant or material contracts;
approval of Shareholder communication and
communication relating to Board decisions;
Board membership and appointments;
determining the executive remuneration
plan and incentive plans;
reviewing corporate governance matters;
and
reviewing Group safety, security and
operational compliance.
Acts as link between the workforce, the
People Council and the Board.
Provides regular updates to the Board on
employee engagement, incorporated into
decisions.
Supports the Chair, the Group Chief
Executive Officer and Chairs of Committees
in agenda setting and minute taking.
Liaison between senior management and
the Directors and responsible for timely
delivery of materials.
Advises the Board on corporate governance
and is responsible for compliance of Share
Dealing Code.
• Works with the Chair for Board training
plan, Board reviews and corporate
Wizz Air Holdings Plc Annual report and accounts 2023
96
Statement of Compliance with 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 Financial Reporting Council 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 during the financial year. The only exception to this is that William
A. Franke, the Chair, 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 and his alignment with the interests of Shareholders. The Board is of the view that Mr.
Franke’s role in no way compromises his independence of judgment and character.
Application of the principles of the UK Corporate Governance Code
Board leadership and company purpose
Composition, succession and evaluation
Chairman’s Statement, p.6
Corporate culture, p.98
Investment in Workforce, p.98
Board activities, p.98
Stakeholder Interests, p.98
Board Decisions, p.98
Board composition, p.103
Appointment, re-election, resignation and removal of
Directors, p.102
Nomination and Governance Committee Chair
Statement, p.122
Board evaluation, p.102
Board biographies, p.103
Section 172 Statement, p.98
Audit, risk and internal controls
Whistleblowing, p.75
Conflicts of interest, p.101
Division of responsibilities
Audit and Compliance Committee Report, p.114
Risk management and internal control, p.115
Confirmation and reassessment of emerging principal
risks and uncertainties, p.115
Fair, balanced and understandable confirmation of
principal risks, p.115
Board of Directors’ division of responsibilities, p.101
Directors’ independence, p.108
Remuneration
Governance framework, p.96
Directors’ Remuneration Report, p.124
Board and Committee attendance, p.113
Remuneration Committee Chair Statement, p.124
Board and Committee meetings, p. 113
Alignment with provision, p.129
Wizz Air Holdings Plc Annual report and accounts 2023
97
1. Board leadership and
company purpose
The role of the Board is to
uphold the highest standards
of corporate governance and
ensure effective leadership
and oversight of the Group’s
strategy and performance. The
Board is responsible for
aligning the corporate purpose
to the success of the business
and its stakeholders, including
Shareholders, customers,
employees and society.
The Board promotes the
values of the Group, namely
integrity, dedication,
inclusivity, positivity and
sustainability.
The Company purpose is
centred around no-frills travel
available for everyone,
everywhere at the lowest price
possible, creating equal value
for all passengers while
remaining conscious of the
environment. The Board
reviews its strategic decisions
in line with this mission.
Corporate culture
Culture is a core focus of the
Board and the Sustainability
and Culture Committee. The
Board closely monitors
employee engagement
feedback, including the results
of surveys and action plans.
Investment in workforce
The Board works to ensure fair
terms and conditions for
employees, in addition to
relevant training and
development. Through the
Board Committees the Board
ensures Wizz Air remains an
attractive and competitive
employer.
Stakeholders
The Board engages with both
Shareholders and investors
and the workforce. The
Chairman and Chair of the
Remuneration Committee have
ongoing dialogue with
investors. The Board receives
regular updates from the
Employee Engagement
Director who is a link between
the Board and the workforce
and People Council. There was
further engagement with other
Directors and the workforce
during the year.
Board activities
The Board met on eight
occasions during the year. The
agenda for each meeting is
agreed with the Chairman, the
Group Chief Executive Officer
and the Company Secretary.
Regular updates are provided
by the President, Group Chief
Financial Officer, Group Chief
Operations Officer and Group
Corporate Affairs Officer. The
Board reviewed and approved
a number of significant and
material contracts, including
the exercise of an option to
purchase 75 A321neo aircraft.
The Board receives updates
from the Committee Chairs
throughout the year. Further,
it deliberates on a number of
matters of strategic
importance to the Company.
In addition, all meetings
include an agenda item to
cover a private executive
session for Non-Executive
Directors.
The Company Secretary
maintains minutes of the
Board and Committee
meetings and reviews all
minutes with the Chairman
and Chairs of the Committees.
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.
Section 172 considerations
included:
•
Investor engagement
concerning executive
remuneration, ESG and
quarterly and annual
results, including a trading
update.
• 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 Chairs of the Audit
and Risk Committee and of
the Remuneration
Committee were available
to answer questions from
investors.
Wizz Air Holdings Plc Annual report and accounts 2023
98
•
•
Employee engagement
and consideration of
remuneration and
incentive plans. External
benchmarking was
undertaken. Discussions
through the People Council
regarding roster stability
and pay.
Consideration of customer
proposition, in particular
with respect to customer
care handling.
Our key Shareholders
As at 31 March 2023, the
Company had been notified
pursuant to DTR 5 of the
Financial Conduct Authority’s
Disclosure Guidance and
Transparency Rules (DTRs)
that the following
Shareholders held more than
3.00 per cent of the
Company’s issued Ordinary
Shares:
Reported shareholding
Reported number of shares
18.3 per cent
8.2 per cent
7.6 per cent
6.2 per cent
5.6 per cent
5.2 per cent
4.2 per cent
3.7 per cent
18,950,611
8,445,166
7,844,911
6,423,962
5,734,284
5,378,769
4,386,985
3,856,260
•
•
At the Company AGM held
on 13 September 2022, all
resolutions proposed were
approved by Shareholders.
Regulator and government
engagement on ESG
positions, taxation and
customer claim handling.
• Discussions with safety
regulators and authorities
regarding the war in
Ukraine, fatigue
management and
operational ramp-up and
disruption.
Shareholder
Indigo Hungary LP
Capital International Investors
Baillie Gifford & Co.
Fidelity Management & Research Company LLC
Indigo Maple Hill LP
Fidelity International
Capital Research Global Investors
Orbis Investment Management Ltd.
Between 1 April and 15 May
2023 Capital International
Investors sold 99,267 shares,
Fidelity International bought
397,430 shares and Fidelity
Management & Research
Company LLC sold 31,600
shares, while Baillie Gifford &
Co. bought 138,390 shares,
Capital Research Global
Investors sold 572,571 shares
and Orbis Investment
Management sold 347,525
shares.
Changes in interests that have
been notified to the Company
pursuant to DTR 5 of the DTRs
can be found in the Regulatory
News section of the Investor
Relations page of the
Company’s corporate website:
http://corporate.wizzair.com/
en-GB/investor_relations/
news/press_releases.
Wizz Air Holdings Plc Annual report and accounts 2023
99
Our relationship with Indigo
As at 31 March 2023, Indigo
(Indigo Hungary LP and Indigo
Maple Hill LP together) held
23.9 per cent of the
Company’s issued Ordinary
Shares. Indigo 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:
▶ 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 and
Governance Committee shall
consist of a majority of
independent Directors, and the
Remuneration and Audit and
Risk Committees shall consist
only of independent Directors.
The Board confirms that since
the entry into the relationship
agreement on 24 February
2015, the Company and Indigo
have complied with the
independence provisions
provided in the relationship
agreement.
Wizz Air Holdings Plc Annual report and accounts 2023
100
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.
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.
Annual General Meeting
The AGM was held in Geneva
on 13 September 2022. All
resolutions put to the
Shareholders were passed.
There were no resolutions that
were opposed by more than
20 per cent of voting
Shareholders. This illustrated
the strong Shareholder
support. The Company will
continue to engage with
Shareholders.
2. Division of
responsibilities
Roles
The role of the Board is to
uphold the highest standards
of corporate governance and
ensure effective leadership
and oversight of the Group’s
strategy and performance.
The Board retains a Schedule
of Reserved Matters which sets
out the Board’s
responsibilities. The Board has
delegated the day-to-day
management of the Company
to the Chief Executive and the
senior leadership team.
Matters in the Schedule which
the Board considers suitable
for delegation to its
Committees are contained in
the terms of reference of its
Committees.
The Board has four
Committees comprised of Non-
Executive Directors and, in the
case of the Nomination and
Governance Committee, the
Chairman. At each Board
meeting, Committee Chairs
report to the Board in relation
to the Committee meetings
and decisions. The Committee
activities are referred to in the
individual Committee Chair
reports.
The roles of the Chairman and
Chief Executive Officer are
clearly separated. The
Chairman is responsible for
maintaining the efficient
performance of the Board. The
Chief Executive Officer and the
senior leadership team are
responsible for the day-to-day
management of the Group and
the implementation of its
strategy.
Board meetings and
attendance
The total number of Board
meetings held during the year
was eight. 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. The
Board also engaged in a
number of dinners with the
senior leadership team.
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.
At each Board meeting, the
Board approves the minutes of
the previous Board meeting.
At the end of each Board
meeting, there is a private
session for Non-Executive
Directors to meet with the
Chairman to discuss any
relevant matters.
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.
The Board and Committee
attendance can be found on
page 113.
External appointments
In accordance with the UK
Corporate Governance Code
Non-Executive Directors are
required to seek approval for
additional external
appointments. The Directors’
external appointments are
outlined in the Board
biographies.
During the year the following
external appointment was
approved:
•
Charlotte Pedersen’s
appointments as Non-
Executive Director of Alpha
Trains Group SarL, Rolling
Stock Leasing, LU, and
Non-Executive Director of
Air Greenland A/S.
Wizz Air Holdings Plc Annual report and accounts 2023
101
3. Composition,
succession and
evaluation
The Nomination and
Governance Committee has
responsibility for all
appointments to the Board.
There were no new
appointments to the Board
during the financial year.
There were a number of
changes to the composition of
the Board, which are outlined
on p.108
Upon appointment new Non-
Executive Directors follow an
induction process to ensure an
overview of the strategy and
business environment, and to
become familiar with the key
areas of business. The
induction process also includes
meetings with relevant
stakeholders across the
business.
Re-election
All Directors will offer
themselves for re-election at
the Company’s next AGM. This
is in line with the Company’s
articles of association and is
subject to satisfactory
performance.
Training
All Directors are offered
training in accordance with
their needs. During the year
training opportunities were
provided through workshops
and seminars where internal
and external advisers
participated. During the year
there was a focus on ESG and
safety training.
The Company has adopted a
Share Dealing Policy. As a
consequence, the Directors are
continually reminded of their
obligations in accordance with
this policy.
Board performance
In line with the Code, the
Company engaged Lintstock to
facilitate an evaluation of the
performance of the Board, its
Committees, the Chair and
individual Directors. Lintstock
is an advisory firm that
specialises in board reviews
and provides no other services
to the Company.
The evaluation comprises the
preparation and completion of
questionnaires and the
collation of responses,
followed by interviews if
necessary. Once all stages of
the review are completed the
Board reviews the findings and
implements any relevant
actions.
Support materials were made
available and provided by the
Company Secretary, including
minutes and supporting Board
and Committee materials.
The Chairman discussed the
main conclusions of the
evaluation with the evaluation
team and subsequently with
the Board.
The overall conclusion of the
evaluation was positive that
the Board and the Committees
satisfactorily fulfilled their
duties and responsibilities and
adequately addressed the
strategic priorities of the
Company. The key
recommendations from the
evaluation were: (i) that the
Board continue to successfully
implement the group’s
strategy after several years of
travel restrictions and
pandemic uncertainty; (ii) to
continue to prioritise
stakeholders such as people,
customers and the
environment; and (iii) to
ensure meetings focused on
forward looking issues.
Case study on decision making relating to purchase
of 75 aircraft
The decision to purchase 75 A321neo aircraft was a strategic one for the Board, both in terms of the
WIZZ500 strategy and also the Group sustainability strategy. The Board considered the fleet renewal
plan and replacement of older generation aircraft with newer, more fuel efficient aircraft as crucial to
the future success of the Company.
In making its decision to exercise the purchase, the Board considered the impact on its investors, the
environment, the workforce, customers and the Company’s suppliers. On investors, the Board
recognised the cost savings, increased seat capacity, potential for increased revenues and fuel price
savings that would positively impact the long-term success of the Group. In terms of the environment,
the Board decided that as well as economic benefits, investment in the A321neo aircraft would bring
enhanced environmental benefits, with a nearly 50 per cent reduction in noise footprint, a 20 per cent
reduction in fuel consumption and 50 per cent reduction in nitrogen oxide emissions.
The Board believed that the investment proved to the workforce the commitment of the Company to
both the environment and the crew to ensure safe, efficient and reliable aircraft and corresponding
world class training. The Board also considered the commitment to consumers to furnish the best in
class technology and guarantee a safe and efficient journey.
Finally, in its deliberations, the Board considered its long-standing relationship with Airbus, and with
Pratt and Whitney, its engine supplier. The cost and maintenance implications were well deliberated in
making the ultimate decision.
As the decision constitutes a Class 1 transaction under the Listing Rules, the Board will ensure the
appropriate governance and regulatory oversight, as well as independent legal advice to ensure the
highest standards of corporate governance.
Wizz Air Holdings Plc Annual report and accounts 2023
102
GOVERNANCE
MANAGEMENT OF THE COMPANY
BOARD COMPOSITION
Board of Directors
membership
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.
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 2023 financial year
and since year end are:
Name
Position
Executive Director
József Váradi
Chief Executive Officer
Non-Executive Directors
Committee membership
(as at 31 March 2023)
William A. Franke
Chairman
Nomination and Governance
Committee
Stephen L. Johnson
Non-Executive Director and
Deputy Chair
Barry Eccleston
Non-Executive Director
Charlotte Pedersen
Non-Executive Director
Andrew S. Broderick
Non-Executive Director
Dr Anthony Radev
Non-Executive Director
Charlotte Andsager
Non-Executive Director
Nomination and Governance
Committee, Remuneration
Committee, Safety, Security
and Operational Compliance
Committee. Senior
Independent Director
Audit and Risk Committee
Safety, Security and
Operational Compliance
Committee
Sustainability and Culture
Committee, Safety, Security
and Operational Compliance
Committee
Sustainability and Culture
Committee, Remuneration
Committee. INED overseeing
employee engagement
Nomination and Governance
Committee, Sustainability and
Culture Committee
Enrique Dupuy de Lome
Chavarri
Non-Executive Director
Audit and Risk Committee
Anna Gatti
Non-Executive Director
Remuneration Committee,
Audit and Risk Committee
Wizz Air Holdings Plc Annual report and accounts 2023
103
Board competency matrix
Conditions for indicating competence in the table:
Qualifications, certification of training, and/or professional background and experience
* Strong knowledge base and understanding of the entire ESG spectrum, including aviation's climate impact, the physical and
transition risks of the various climate pathways and how the Company will be affected.
Board gender diversity and tenure
Board nationalities
Wizz Air Holdings Plc Annual report and accounts 2023
104
William A. Franke
Chairman
József Váradi
CEO
Stephen L. Johnson
Deputy Chair
Nationality: US
Appointed: 2015
Nationality: Hungarian
Appointed: 2015
Nationality: US
Appointed: 2011
Key skills:
Airlines, legal and regulatory
Key skills:
Airlines, sales and
marketing, finance
Current external
appointments:
Chair, Frontier Airlines
Airlines Holdings, Inc.;
Chair, Lynx Air; Chair,
JetSMART Airlines SpA;
Chair, APiJET LLC.
Relevant experience:
Founder and Managing
Partner of Indigo Partners
LLC, a private equity fund
focused on investments in
air transportation, including
Wizz Air.
Served as Chair and Chief
Executive Officer of America
West Airlines from 1993 to
2001, as Chair of Spirit
Airlines Inc. from 2006 to
2013 and as Chair of Tiger
Aviation Pte. Ltd, a
Singapore-based airline,
from 2004 to 2009. He was
a Director of Volaris
(Concesionaria Vuela
Compañía de Aviación S.A.B.
de C.V.), a Mexican airline,
from 2012 to 2023.
Current external
appointments:
Board Member, JetSMART
Airlines; Trustee, Corvinus
University of Budapest.
Relevant experience:
One of the founders of Wizz
Air in 2003.
Worked at Procter & Gamble
between 1991 and 2001 and
became Sales Director for
global customers where he
was responsible for major
clients throughout eleven EU
countries.
Served as Chief Commercial
Officer and Chief Executive
Officer of Malev Airlines from
2001 to 2003. 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).
Key skills:
Airlines, legal and regulatory
Current external
appointments:
Vice Chair and Chief
Strategy Officer, American
Airlines Inc; Board Member,
Executive Advisory Board,
University of Berkeley
Center for Law and
Business.
Relevant experience:
Steve served as Executive
Vice President of Corporate
Affairs from 2009 to 2022.
In that role, he was
responsible for corporate
governance and legal affairs,
government and regulatory
affairs, labour relations, and
real estate and airport
affairs. From 2003 to 2009,
he was a partner at Indigo
Partners LLC, a private
equity firm specialising in
investments in the airline
industry.
Between 1995 and 2003,
held positions at America
West Airlines, including
Executive Vice President of
Corporate. Prior to that,
Steve served as Senior Vice
President and General
Counsel at GPA Group PLC
and practised law at the
Seattle-based law firm Bogle
& Gates.
Wizz Air Holdings Plc Annual report and accounts 2023
105
Barry Eccleston
Senior Independent
Director
Charlotte Pedersen
Non-Executive Director
Andrew S. Broderick
Non-Executive Director
Nationality: British/US
Appointed: 2018
Nationality: Danish /
Luxembourgish
Key skills:
Aviation, safety
Current external
appointments:
None.
Relevant experience:
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
from 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.
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. He is past
Chairman of the British-
American Business
Association in Washington
DC, and past President of
The Wings Club of New York,
as well as being appointed
an OBE in 2019 by Her
Majesty the Queen.
Appointed: 2020
Key skills:
Aviation, safety, regulatory,
ESG
Current external
appointments:
CEO/Owner, Pegasus
Consilium SarL; Board
Member, Alpha Trains Group
SarL; Board Member, Air
Greenland A/S.
Relevant experience:
Ms Pedersen started her
career as Air Force Officer
and Helicopter Search &
Rescue pilot, graduating in
the US Navy on the
Commodore’s List with
Distinction. After 17 years of
military service she joined
the Civil Aviation Authority
in Luxembourg as Flight
Operations Inspector. She
supported the initial EASA
regulatory working groups
as a Helicopter Safety Team
and Human Factors Expert.
She joined Luxaviation in
2012 and was appointed
Chief Operating Officer of
the Group in 2014 before
becoming the President of
Helicopter Services and
Chief Executive Officer of
Luxaviation Helicopters. Ms
Pedersen holds an MBA with
Honors and is a certified
INSEAD International
Director as well as ILA
(Institut Luxembourgeois
des Administrateurs)
certified Director. She is an
Elected Fellow of the Royal
Aeronautical Society. Ms
Pedersen is actively
supporting “Women in
Aviation, Maritime and
Racing” initiatives.
Nationality: US
Appointed: 2019
Key skills:
Airlines, finance
Current external
appointments:
Board Member, JetSMART
Airlines SpA; Board Member,
Frontier Holdings Inc.; Board
Member, APiJET LLC.
Relevant experience:
Serves as Managing Director
of Indigo Partners LLC, a
private equity fund focused
on air transportation, since
2008. 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.
Wizz Air Holdings Plc Annual report and accounts 2023
106
Anthony Radev
Non-Executive Director
Charlotte Andsager
Non-Executive Director
Enrique Dupuy de Lome
Chavarri
Non-Executive Director
Nationality: Bulgarian
Appointed: 2021
Nationality: Danish
Appointed: 2020
Nationality: Spanish
Appointed: 2020
Key skills:
Listed company, finance
Key skills:
Airlines, aviation, regulatory
Key skills:
Airlines, finance
Current external
appointments:
President, Corvinus
University of Budapest;
Board Member, MOL
Hungarian Oil and Gas PLC;
Board Member, Hungary
Football Federation; Board
Member, DSK Bank PLC.
Relevant experience:
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.
Current external
appointments:
None.
Relevant experience:
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.
Current external
appointments:
Board Member, Nadisla
investments SL; Senior
Adviser, A.T. Kearney;
Senior Adviser, Bluepeak
Aviation.
Previous experience:
Served as Finance Director,
and ultimately Chief
Financial Officer, Iberia. 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.
Wizz Air Holdings Plc Annual report and accounts 2023
107
Anna Gatti
Non-Executive Director
Nationality: Italian
Appointed: 2021
Key skills:
Digital, consumer, sales and
marketing
Current external
appointments:
Board Member, Intesa
Sanpaolo S.p.a; Board
Member, WiZink Bank S.L.
Previous experience:
Served as digital sales
executive 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.
Changes to the Board
during F23
The Board decided to create
the new role of Deputy
Chair. Stephen L. Johnson
was appointed to the role
due to his industry
experience, as well as his
long association with the
Company.
In order to ensure proper
Board oversight over the
Company’s key areas of
focus, the Board established
a Safety, Security and
Operational Compliance
Committee, chaired by
Charlotte Pedersen, to assist
the Board with oversight of
of the Group’s policies,
practices, objectives and
performance in relation to
safety, security and
operational compliance
management.
In connection with the
creation of the Safety,
Security and Operational
Compliance Committee, the
Board made a number of
changes to the membership
of Committees:
a. Charlotte Pedersen
stepped down from
the Sustainability
and Culture
Committee as a
result of becoming
Chair of the Safety,
Security and
Operational
Compliance
Committee.
b. Charlotte Andsager
stepped down from
the Remuneration
Committee to
become Chair of the
Sustainability and
Culture Committee.
c. Both Andrew S.
Broderick and Barry
Eccleston were
appointed to the
Safety, Security and
Operational
Compliance
Committee.
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.
In all cases, the Board is
assured that the roles of the
aforementioned Non-
Executive Directors are in no
way compromised of
independence of judgment
and character.
Wizz Air Holdings Plc Annual report and accounts 2023
108
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. On 28
January 2022, Barry
Eccleston was appointed as
the Company’s Senior
Independent Non-Executive
Director.
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
F23, Barry Eccleston,
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.
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.
On 13 April 2021, Dr
Anthony Radev was
appointed 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 F23, Dr
Radev attended a number of
engagement events with
employees, as well as
engaging through the Wizz
Air People Council members.
Data on the diversity for board and executive management for the year ending 31 March 2023
Gender diversity
Men
Women
Other categories
Not specified/prefer not
to say
Ethnic background
Number of
board
members
Percentage of
the board
Number of senior
positions on the
board (CEO, SID
and Chair)
Number in
executive
management
Percentage of executive
management
7
3
_
_
70%
30%
_
_
3
_
_
_
10
5
_
_
67%
33%
_
_
The data on gender and ethnic
diversity of the Board and Executive
Management was collected on a
confidential and voluntary self-
reporting basis. From July 2023 the
percentage of women in executive
management will increase to 37.5%.
Number of
board
members
Percentage
of the
board
Number of
senior positions
on the board
(CEO, SID and
Chair)
Number in
executive
management
Percentage of
executive
management
White British or other
White (including
minority-white
groups)
Mixed/Multiple Ethnic
Groups
Asian/Asian British
Black/African/
Caribbean/Black
British
Other ethnic group,
including Arab
Not specified/ prefer
not to say
10
100%
_
-
_
_
_
_
-
_
_
_
3
_
_
_
_
_
15
100%
_
_
_
_
_
_
_
_
_
_
is
fully committed
Wizz Air
to
promoting equality and diversity to
enhance decision making, which is
crucial for the long-term success of
Wizz Air’s and its stakeholders.The
Company’s commitment to diversity is
set out in the Sustainability and TCFD
reports. The Board is mindful of the
listing rule requirements in relation to
gender and ethnic diversity of the
Board and executive management.
The targets set out in LRs 9.8.6R
(9)(a)(i) (ii) and (iii) have not been
met. While diversity criteria is taken
into consideration during recruitment
processes, decisions are subject to the
principle of merit. Addressing diversity
is a priority for the Nomination and
Governance Committee in F24.
Wizz Air Holdings Plc Annual report and accounts 2023
109
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 of 1 April, the Group’s senior management team, in addition to the Group Chief Executive Officer,
is:
Wizz Air Innovation Limited:
Name
Robert Carey
Michael Delehant
Owain Jones
Alexandra Avadanei
Joel Goldberg
Yvonne Moynihan
Veronika Jung
Zsuzsanna Poós
Wizz Air Hungary Limited:
Name
Ian Malin
Heiko Holm
Roland Tischner
Wizz Air UK Limited:
Name
Marion Geoffroy
Wizz Air Abu Dhabi Limited:
Name
Johan Eidhagen
Position
President
EVP & Group Chief Operations Officer
EVP & Group Chief Corporate Affairs Officer
Revenue Officer
Digital Officer
Corporate and ESG Officer
People Officer
Customer and Marketing Officer
Position
EVP & Group Chief Financial Officer
Officer Wizz Air Central Operations
Officer Wizz Air Hungary Operations
Position
Managing Director
Position
Managing Director
Wizz Air Malta Limited:
Name
Position
Diarmuid O’Conghaile
Managing Director
Robert Carey, President
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.
Ian Malin, Executive Vice President and Group Chief Financial Officer
Mr Malin joined Wizz Air in 2022 with over 24 years of finance experience. Most recently, he served as
the Chief Strategy & Commercial Officer of Unical Aviation in Los Angeles, after ten years as Chief
Financial Officer for the UK-based AJW Group, where he directed overall financial strategy and
corporate development. He also served as CEO of AJW Leasing, the group’s aircraft, engine and
component leasing platform. Prior to AJW Group, Ian served as a Senior Vice President at Seabury
Aviation & Aerospace Asia Limited, an investment bank based in Hong Kong where he opened and
developed the firm's first office in Asia. Ian also spent eight years in asset finance with the Allco
Finance Group of Australia, having joined them as a tax manager from KPMG. Ian attended New York
Law School where he earned his Juris Doctorate and holds a bachelor's degree from Middlebury
College in Vermont.
Wizz Air Holdings Plc Annual report and accounts 2023
110
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.
Owain Jones, Executive Vice President and Group Chief Corporate Affairs Officer
Mr Jones joined Wizz Air as General Counsel in September 2010. He was promoted to Chief Corporate
Officer in June 2014 before becoming the Managing Director of Wizz Air UK in September 2018 and
Development Officer in September 2021. He was promoted to his current role as the Group’s
Executive Vice President and Chief Corporate Affairs Officer, with responsibility for legal, government
affairs, ESG and people matters, together with fleet procurement and fleet finance, in February 2023.
Mr Jones is a Solicitor of the Senior Courts of England and Wales. Having trained at Nicholson Graham
and 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.
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.
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.
Yvonne Moynihan, Corporate and ESG Officer
Ms Moynihan joined Wizz Air in July 2022 as Corporate Officer, leading legal, regulatory and
government affairs functions. She took over ESG in March 2023. Ms Moynihan is an Irish lawyer with
law degrees from University College Cork and The Honourable Society of Kings Inns. She has practised
as a litigator in the Irish Courts and held roles as a researcher for the Irish Superior Courts and the
European Court of Justice. Ms Moynihan pivoted into aviation and has a track record in the low-cost
industry, having held legal roles in Ryanair and Vueling where she held the position of General
Counsel and Board Secretary.
Veronika Jung, People Officer
Ms Jung joined Wizz Air as the Head of Human Resources in March 2021. Between 2000 and 2011 Ms
Jung held various human resources roles at Nicholson International and HBO. In 2012 she joined
Telenor as the Human Resource Business Partner and was later promoted to the role of Human
Resource Regional Manager and from September 2018 to Chief Human Resource Officer at Telenor
Common Operation. Before joining Wizz Air Ms Jung worked as the Chief Human Resource Officer of
Cetin Hungary, a telecom network infrastructures operator with CEE footprint. In her new role as Wizz
Air Group’s People Officer, Ms Jung will be responsible for the Group’s human resources, recruitment
and organisational development. Ms Jung holds an MSc degree in economics from Corvinus University
of Budapest.
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.
Wizz Air Holdings Plc Annual report and accounts 2023
111
Heiko Holm, Officer Wizz Air Central Operations
Mr Holm joined Wizz Air in 2015 as Head of Technical Services. Starting from 1 April 2023, Mr Holm
was appointed Officer Wizz Air Central Operations. 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.
Roland Tischner, Officer Wizz Air Hungary Operations
Mr Tischner joined Wizz Air as Head of Human Resources in November 2011. Between 1998 and 2009
Mr Tischner held various human resource leadership roles at General Electric in Hungary and in the
United States. In 2009 he joined NBC Universal in the United Kingdom as Vice President of Human
Resources. At Wizz Air, following the human resource role, he was appointed to Head of Cabin
Operations in 2016, and four years later to Head of Ground Operations. He was named Officer Wizz Air
Hungary Operations in June 2022, responsible for flight, cabin and ground operations, crew training,
continuing airworthiness management organisation and safety and compliance. Mr Tischner holds a
Bachelor of Arts degree in business studies from Oxford Brookes University.
Marion Geoffroy, Managing Director, Wizz Air UK
Ms Geoffroy joined Wizz Air as Head of Legal and General Counsel in March 2015. 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. She was
appointed Chief Corporate Officer of Wizz Air in September 2018 overseeing the Legal, Data Protection
and Health and Safety departments. 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).
Johan Eidhagen, Managing Director, Wizz Air Abu Dhabi
Mr Eidhagen joined Wizz Air in January 2015 as Head of Brand and Marketing, became Chief Marketing
Officer on 1 February 2016 and was named Chief People Officer on 1 November 2019 and ESG and
People Officer on 1 June 2021. Starting from 1 April 2023, Mr Eidhagen took the position of Managing
Director, Wizz Air Abu Dhabi. 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.
Diarmuid O’Conghaile, Managing Director, Wizz Air Malta
Mr O’Conghaile joined Wizz Air as Managing Director of Wizz Air Malta on 1 November 2022. Mr
O’Conghaile has a long background in aviation, having served as Chief Executive of the Irish Aviation
Regulator, 2021–2022, and with Ryanair from 2016–2021 as Chief Executive of Malta Air (Ryanair
Group) and before that Director of Public Affairs. Mr O’Conghaile was General Manager of Strategy,
Pricing & Economic Regulation with Dublin Airport Authority from 2011–2016. He holds BA Mod, MA
and MLitt degrees from Trinity College Dublin in economics and a postgraduate diploma in EU
competition law from King’s College London. Prior to entering the aviation sector, he worked in a
number of industry and government positions, including with the European Commission and the Irish
Department of Finance.
New Appointment: Silvia Mosquera, Executive Vice President and Chief Commercial Officer
Silvia Mosquera will join WIZZ on the 13th of July as EVP & Group Chief Commercial Officer from her
current position as Chief Commercial & Revenue Officer at TAP Air Portugal. Silvia is a seasoned
executive with over 20 years of experience in the airline industry and consulting to airlines with
leadership roles across commercial functions including network, revenue management, sales,
marketing, and customer experience. She started at Clickair and moved through various Commercial
roles in the IAG Group (Clickair, Vueling, Iberia Express), culminating in CCO of Iberia Express. From
there, she moved to Avianca, and them most recently to TAP Air Portugal where she is the Chief
Commercial and Revenue Officer responsible for the commercial area, including Pricing and Revenue
Management, Distribution, Sales, Branding & Marketing, Ancillaries, Customer Service and the Loyalty
program. She holds a Chemical Engineering Degree from Santiago de Compostela University and
postgraduate certifications from APICS (The Educational Society for Resource Management) and IESE
Business School - University of Navarra.
Wizz Air Holdings Plc Annual report and accounts 2023
112
Attendance at Board meetings
The following table sets out the attendance by Directors at the Board and Committee meetings held
during the 2023 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
Safety,
Security and
Operational
Compliance
attended/total
Executive
Director
József Váradi
Non-Executive
Directors
William A.
Franke
Stephen L.
Johnson
Barry
Eccleston
Andrew S.
Broderick
Charlotte
Pedersen
Charlotte
Andsager
Enrique
Dupuy de
Lome Chavarri
Dr Anthony
Radev
Anna Gatti
8/8
6/6*
8/8*
6/6*
6/6*
4/4*
8/8
8/8
7/8
8/8
8/8
8/8
8/8
8/8
8/8
—
—
—
—
6/6
—
6/6
—
6/6
—
—
8/8
—
—
6/6
—
6/6
—
—
—
—
—
6/6
2/2****
2/2**
6/6
4/4*****
—
6/6***
7/8
—
—
—
—
6/6
—
—
—
3/4
4/4
4/4
—
—
—
—
*
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.
**
Ms Andsager was a member of the Remuneration Committee until September 2022.
***
Mr Radev joined the Remuneration Committee from September 2022.
**** Ms Pedersen stepped down as Chair of the Sustainability and Culture Committee and became Chair of the Safety, Security
and Operational Compliance Committee from September 2022.
***** Ms Andsager became Chair of the Sustainability and Culture Committee from September 2022.
Wizz Air Holdings Plc Annual report and accounts 2023
113
GOVERNANCE
REPORT OF THE CHAIRMAN OF THE AUDIT AND RISK
COMMITTEE
“The Audit & Risk Committee evaluates and
manages financial risks, ensures accurate
financial reporting and maintains the
integrity of the internal control
environment.”
Enrique Dupuy de Lome Chavarri
Chairman of the Audit and Risk Committee
Membership, meetings
and attendance
The Committee consists of
three Non-Executive
Directors, appointed by the
Board according to
experience, commitment
and capacity. The Company
Secretary acts as Secretary
to the Committee and
relevant members of the
senior leadership team are
invited to attend meetings.
https://wizzair.com/en-gb/
information-and-services/
investor-relations/
governance/board-
committees
a. Enrique Dupuy de
Lome Chavarri
(Chair)
b. Charlotte Pedersen
c. Anna Gatti
The Corporate Governance
Code recommends that the
Audit and Risk Committee
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 2023, the
membership of the
Committee comprised three
members. All the members
are independent Non-
Executive Directors, have
appropriate knowledge and
understanding of financial
matters, and have
commercial expertise gained
in industries with similar
characteristics, giving the
ARC as a whole competence
relevant to the sector in
which the Group operates.
No members of the
Company 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
Committee.
Main functions of the
Audit and Risk
Committee
The Audit and Risk
Committee focuses on
developing leading financial
policies, practices, internal
controls and risk
management systems, with
consistent evolution to
improve performance and
controls as the Company
expands its fleet over the
next decade. Key recurring
topics focus on liquidity
management, hedging
strategies, financing,
counterparty risk, cyber risk
management, finance
systems, oversight of
Internal Audit, and our
relationship with external
auditors. These are
discussed bi-monthly in the
Audit and Risk Committee
meetings and after each, I
provide a Board update on
the key issues discussed in
our meetings. In addition to
the members of the Audit
and Risk Committee, our
meetings are routinely
attended by the Group Chief
Financial Officer, the Head of
Accounting, the Senior Audit
Partner and other senior
members of the External
Audit team from our
auditors, PwC. In addition,
other senior executives are
Introduction
Dear Shareholder,
I am pleased to present the
Audit and Risk Committee
Report for the financial year
ended 31 March 2023.
F23 saw a much welcomed
departure from direct
challenges relating to
COVID-19 but also
introduced indirect
consequences to the three
years of restrictions and
consumer behaviour
changes. High inflation and
monetary policy intervention
drove increases in all
elements of our cost base,
coupled with supply chain
and hiring challenges both at
Wizz Air and the vendors it
relies on. For the first time
in two decades, the Euro
reached parity with the US
Dollar, in which many of our
costs are incurred. While the
impact to travel of the war
in Ukraine proved to be
contained largely within the
border of Ukraine, fuel
prices remained elevated
through the end of this fiscal
year. The challenges
presented to the industry
and the Company underline
the importance and value of
a rigorous approach to risk
management and the
importance of having
financial discipline, resilience
and agility. Although the
recent trends and economic
prospects for the new
financial year should benefit
demand growth, revenues
and costs, we continue to
monitor 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.
Wizz Air Holdings Plc Annual report and accounts 2023
114
invited to attend meetings,
as required to provide the
Committee with a deeper
level of insight on relevant
matters.
During F23, the composition
of the Audit and Risk
Committee was not subject
to any change.
Main activities of the
Audit and Risk
Committee during F23
Risk management
The Board is responsible for
the Group’s risk
management and the Audit
and Risk Committee
supports the Board in the
role of monitoring the
adequacy and effectiveness
of the Group’s risk
management systems to
ensure they are effective
and operate as intended.
This 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. The day-to-
day management of risk is
delegated to the Executive
Leadership Team, which is
responsible for implementing
risk management
procedures, ensuring
compliance with these
procedures and reporting
back to the Committee on
risk exposures and
mitigation activities.
The Group’s comprehensive
Enterprise Risk Management
(ERM) process, which
identifies and collects risks
within our risk universe and
groups them into risk
categories, allows risks to be
analysed for likelihood and
impact. In particular:
▶ 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;
▶ key members of the
Company’s senior
management team,
reviews the risk register
and the emerging and
principal risks and
uncertainties report at
least semi-annually and
shares it with the
Board;
▶ two times per year, the
Committee, among
other things, approved
changes to the
emerging and principal
risks and uncertainties
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.
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)
Guidance on Risk
Management, Internal
Control and Related
Financial 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 applicable
guidance. No significant
failings or weaknesses were
identified in the review
process.
Climate Risks
The Company’s financial
disclosures follow the
recommendations
established by the Task
Force on Climate-related
Financial Disclosures
(TCFD), for use by
companies in providing
information to investors and
other stakeholders about
their climate-related
financial risks and
opportunities. Since F21 the
Company has been aligning
its disclosure with the
recommendations of the
TCFD and during F23 we
have further improved our
disclosures. These
improvements versus last
year include amongst
others:
▶ the continuous
development of our
climate risk assessment
approach and its
effectiveness in
supporting the
organisation’s
resilience. As part of
this, we have been
working with expert
sustainability and
climate consultants
from Deloitte Ltd.
Hungary who helped
improve our existing
climate risk analysis
and supported both the
qualitative and
quantitative risk
assessment;
▶ the cooperation with
third-party
sustainability
consultants Avieco (now
Accenture) to assess
Wizz Air’s greenhouse
gas inventory and
calculate its emissions
(Scope 1, 2 and 3); and
▶ the appointment of an
independent third party,
Deloitte Auditing and
Consulting Ltd, for the
limited assurance of the
Company’s greenhouse
gas emissions reporting
for F23.
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
(see page 38 to 40 of the
sustainability report).
Internal Audit
The purpose of Wizz Air’s
Internal Audit function is to
Wizz Air Holdings Plc Annual report and accounts 2023
115
provide independent,
objective assurance and
internal consulting services
designed to add value and
improve operations of all the
entities and functions within
the Group. The Senior
Internal Audit Manager is
dedicatedly responsible for
the proper operation of Wizz
Air’s Internal Audit function
and, if necessary, involves
outsourced service
provider(s) to perform
mainly assurance projects
and to a limited extent
consulting services.
The Senior Internal Audit
Manager prepares a risk-
based plan of internal audits
for the upcoming year,
which is approved by the
Audit and Risk Committee.
This Internal Audit Plan also
covers:
▶ internal audits over
operational processes;
▶ fraud-specific audits to
be performed by the
designated Anti-fraud
and Investigations
Manager under the
supervision of the
Senior Internal Audit
Manager; and
▶ periodic review of the
Internal Controls over
Financial Reporting
(ICFR) project. The plan
is supervised by the
Senior Internal Audit
Manager, who has
direct responsibility to
the Chairman of the
Committee as well as
an administrative
reporting line to the
Company’s Chief
Financial Officer.
Each audit and project is
preceded by a detailed
scoping and resource
planning exercise which
forms the basis of the
procedures. Following the
completion of an internal
audit or a fraud-specific
audit, 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. In
accordance with Wizz Air’s
business process automation
aspirations, Internal Audit
introduced an improved
internal database to monitor
the implementation of
Internal Audit’s
recommendations more
effectively.
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.
Anti-Fraud
To assess Wizz Air’s
alignment to international
anti-fraud requirements and
good practices, EY Hungary
was commissioned as an
independent consulting
service provider to review
and analyse the Company’s
anti-fraud strategy and
related internal policies. As
the result of their analysis,
recommendations related to
the development of the anti-
fraud framework have been
presented and agreed.
The role of the Anti-Fraud
and Investigations Manager
was introduced in November
to provide an independent,
objective assurance of the
design, development and
implementation of Wizz Air’s
anti-fraud management
program. The Anti-Fraud
and Investigations Manager
performs planned and ad-
hoc fraud specific audits in
line with the anti-fraud
management program.
The Anti-Fraud and
Investigations Manager
functions as the second line
of defence while monitoring
and supporting other Wizz
Air Personnel and
Departments in ensuring
business operations and
performing operational tasks
that align with the
established program and
policy. In F24, additional
resources will be identified
to support this function.
Reporting procedures and
controls
Management is responsible
for internal controls over
financial reporting for the
Group. Each week, the
Board receives an 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.
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 is 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 Accounting team and
reviewed by the respective
Officers.
The Company has continued
to work to improve its
financial reporting operation
with a focus on digitalisation
of manual transactions
allowing higher pixelation of
data and shorter lead times,
leveraging the opportunities
Wizz Air Holdings Plc Annual report and accounts 2023
116
highlighted as part of the
Company’s ICFR project and
leveraging some of the best
technology available. During
F24, EY Hungary will
continue to provide
consultancy services
regarding an ongoing ICFR
project 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 internal control,
assurance and resilience
requirements over the
course of F24.
Audit Quality Review
Following the completion of
PwC’s F22 audit, the
Committee was informed
that the Audit Quality
Review (AQR) team of the
Financial Reporting Council
had chosen the Group’s
audit for its review as part of
its annual inspection of audit
firms. The Audit and Risk
Committee has recently
received a copy of the
findings of the AQR and was
pleased to note that it did
not identify any key findings
and only a limited number of
improvements were required
with one good practice
matter identified. The Audit
and Risk Committee has
discussed the findings of the
AQR with PwC and PwC have
confirmed that, in the F23
audit, it had addressed
those areas that had been
identified as requiring
improvement.
Financial Information Flow
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 comprehensive
financial statements and
other financial reporting and
disclosure, leveraging
adequate and effective
reporting processes,
systems and controls.
Relationship with external
auditors
With the completion of the
F23 audit,
PricewaterhouseCoopers LLP
have been the auditors of
the Company for 17 years
uninterrupted, covering the
years ended 31 March 2007
to 31 March 2023. 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.
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.
Mr Richard Porter, the audit
partner in charge, will be
replaced following the
completion of the F23 audit
after having completed his
maximum time with Wizz Air
as audit partner. The
identification of Mr Porter’s
successor is being worked
on in cooperation with PwC
to ensure a proper
handover.
The Committee approved
the fees to be paid and the
external audit plan for the
F23 financial year and
reviewed the reports of the
auditors on the half-year
review and annual audit.
The audit of the F23
financial statements and the
review of the half-year
financial statements were all
completed on time and to a
high standard and addressed
the key issues arising from
the Company’s business that
could have a material impact
on the financial statements.
Following the completion of
PwC’s F22 audit, the
Committee was informed
that the Audit Quality
Review (AQR) team of the
Financial Reporting Council
had chosen the Group’s
audit for its review as part of
its annual inspection of audit
firms. The Audit and Risk
Committee has recently
received a copy of the
findings of the AQR and was
pleased to note that it did
not identify any key findings
and only a limited number of
improvements were required
with one good practice
matter identified. The Audit
and Risk Committee has
discussed the findings of the
AQR with PwC and PwC have
confirmed that, in the F23
audit, it had addressed
those areas that had been
identified as requiring
limited improvement.
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 have
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 re-
appointment for the F24
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
Wizz Air Holdings Plc Annual report and accounts 2023
117
performed and the non-audit
fees paid to the 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 assurance
departments are not part of
the audit team; and (ii) no
such services were ordered
by the Company that carried
a 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 F23 were
materially less than the
audit fees. Detail on non-
audit fees paid to the
auditors is set out on page
193.
Audit fees further increased
in F23 compared to prior
years. The increase reflects
professional pay inflation
rates in the UK and in
Hungary and the growth of
the Company.
The last external audit
services tender was
conducted in the summer of
2017, when
PricewaterhouseCoopers LLP
were re-appointed to
perform the external audit
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 for F24 and the
next tender process will be
run during 2026, in line with
the need to change PwC as
auditors for the year ending
31/3/28.
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 and industry
experience, and constantly
challenging management’s
judgment:
▶ 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
analysis 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 used
and unused hedges to
the Company. A
hedging policy was
reinstated early in F23
and is reviewed twice
per annum. The hedge
policy approved last
year remains in effect
and this Committee is
briefed each time
management propose
adding additional
hedges, the details of
such hedges, the
conformity of these
hedges with policy and
the achieved outcome
of any prior approved
hedge requests. The
policy and its efficacy is
reviewed at each
Committee meeting.
▶ Capital commitments
and financing: the
Committee undertook a
detailed review of the
Company’s capital
commitments including
the required repayment
of the Company’s bond
in January 2024. The
Committee and the
Board of Directors
reviewed in detail the
working capital
assessment led by the
Company and noted
that management had
secured, or will
generate sufficient
trading cash flow, over
the term covered by the
going concern period, to
meet its obligations.
▶ 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. Three of Wizz
Air’s aircraft were
stranded in Kyiv and at
the date of this report
two of the engines
affixed to these aircraft
have been exported to
Poland (with the third
and fourth currently in
transit) and the
remaining two engines
and three airframes
remain grounded on
Ukrainian territory
Wizz Air Holdings Plc Annual report and accounts 2023
118
Other matters considered
and monitored during the
year
▶ The Committee noted
the drawing of a $274.3
million pre-delivery
payment (PDP) facility
in February 2023.
▶ The Company retained
its investment grade
rating with Fitch
(BBB-).
▶ Cyber security: the
Committee continued to
review regular 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
8 June 2023
although management
is actively pursuing all
options to facilitate the
return of these assets
to support the Wizz Air
fleet.
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, understandable
and whether it provided the
necessary information for
Shareholders to assess the
Company’s financial
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.
Wizz Air Holdings Plc Annual report and accounts 2023
119
REPORT OF THE CHAIR OF THE SSOC COMMITTEE
“The Committee carries out oversight of the
effectiveness of the Group’s safety systems
and standards in respect of AOC structures,
facilitating the Group’s safe expansion.”
Charlotte Pedersen
Chair of the Safety, Security and Operational
Compliance Committee
Certificates (AOCs) with
individual safety
responsibilities, regulatory
frameworks and reporting
obligations. The Committee
welcomed Wizz Air Malta to
the Group, having received
its AOC and performed its
first flight in September
2022.
The respective AOCs are
regulated by the European
Union Aviation Safety
Agency, the UK Civil Aviation
Authority and the General
Civil Aviation Authority of
the United Arab Emirates
(UAE). The Committee
carries out oversight of the
effectiveness of the Group’s
safety systems and
standards in respect of AOC
structures, facilitating the
Group’s safe expansion.
Since the establishment of
the Committee, it receives
frequent periodic reports
from the Group Chief
Operations Officer and as
Chair I have had direct
access to the safety teams,
demonstrating the
independent oversight
function of the Committee.
In my role as Chair I provide
regular updates to the Board
and provide my fellow
Directors with safety
materials and information to
allow comprehensive
knowledge sharing of safety
matters and the Group
safety management system.
Membership, meetings
and attendance
•
•
•
Charlotte Pedersen
(Chair)
Barry Eccleston
Andrew S. Broderick
The Committee consists of
three Non-Executive
Directors, appointed by the
Board according to
experience, dedication and
capacity. The Company
Secretary acts as Secretary
to the Committee and
relevant members of the
senior leadership team and
the different AOCs are
invited to attend meetings.
https://wizzair.com/en-gb/
information-and-services/
investor-relations/
governance/board-
committees
The Committee first met in
September 2022 and has
had four meetings during
the year. The Committee
focused on the following
activities:
•
•
•
•
•
agreed the objectives
and terms of reference
of the Committee;
reviewed the Group
safety and security
principles;
reviewed risks relating
to safety, security and
compliance management
and emergency
response;
received regular reports
on safety performance,
audit findings and
incidents; and
received updates from
the AOC Managing
Directors.
In addition, the Committee
was invited to participate in
a preparation session of the
emergency response
planning (ERP) committee.
Dear Shareholder,
I am pleased to present the
first ever report of the Wizz
Air Safety, Security and
Operational Compliance
Committee, which was
incorporated on 26 July
2022 with a mandate to
reinforce the Wizz Air
Group's strong safety
culture and enhance
oversight of the Group's
safety, security and
compliance performance.
Safety is at the heart of
Wizz Air’s operations and is
the highest priority in the
Group. This fiscal year Wizz
Air was named as one of the
safest airlines in the world
by AirlineRatings.com, which
is a testament to the
dedicated people who
ensure safe operations on a
daily basis. A major
achievement for the people
of Wizz Air was the safe
expatriation of an aircraft
from Ukraine which had
been stranded as a result of
the Russian invasion.
The Committee’s role is to
ensure that the Group’s
safety record continues to
be impeccable by assisting
the Board with oversight of
the Group's policies,
practices, objectives and
performance in relation to
safety, security and
operational compliance
management.
The Wizz Air Group is
comprised of four airlines
and Aircraft Operator
Wizz Air Holdings Plc Annual report and accounts 2023
120
Key activities
Operational readiness
The Committee was briefed
on the challenges of the
Group operations following
on from a disruptive
summer which resulted in
mass cancellations due to
capacity constraints at
airports, air traffic control
shortages and multiple
weather events.
The Committee reviewed the
Company’s response which
included identifying
mitigating strategies which
led to structural changes to
the AOCs. Robust
procedures were put in place
to minimise potential future
disruptions in a safe
manner. This resulted in a
significant improvement in
the Group’s operations.
Risk management
Future of the Committee
The Committee will continue
to focus on the adoption of
policies, standards and
processes in accordance
with best practices of the
airline industry, particularly
in light of the Group’s
ambitious growth plans to
new regions with differing
safety and regulatory
frameworks.
The Committee was updated
about safety risks and
incidents and how they were
managed by the Group and
the respective AOCs. The
Committee reviewed the
performance of the risk
mitigation strategies and
corrective actions in
response to audit findings.
Due to the war in Ukraine,
the Committee was updated
about continuous monitoring
and risk management
related to physical security
risks due to the proximity of
the Group’s network to the
war. As a result of these
safety assessments a
decision was made to close
the Group’s base at Chisinau
International Airport (KIV) in
Moldova for an indefinite
period due to instability in
the region.
Wizz Air Holdings Plc Annual report and accounts 2023
121
REPORT OF THE CHAIRMAN OF THE NOMINATION AND
GOVERNANCE COMMITTEE
“During the year the Committee facilitated
the strengthening of the Board and senior
management team through its oversight of
talent development, succession planning
and diversity.”
William A. Franke
Chair of the Nomination and Governance Committee
Succession planning was
also a key focus of the
Committee to ensure the
balance of skills, knowledge,
experience, diversity and
independence to implement
the Company’s strategic
priorities. In order to ensure
the orderly success of the
Board, the Committee led
the process to create the
new role of Deputy Chair.
The Committee carried out
an internal evaluation of the
Board’s effectiveness in
accordance with corporate
governance standards.
Further details can be found
at page 102.
Membership, meetings
and attendance
• William A. Franke
(Chair)
•
•
Charlotte Andsager
Barry Eccleston
The Committee consists of
three Non-Executive
Directors, appointed by the
Board according to
experience, dedication and
capacity. Stephen L.
Johnson attends the
Committee as an observer.
The Company Secretary acts
as Secretary to the
Committee and relevant
members of the senior
leadership team are invited
to attend meetings.
https://wizzair.com/en-gb/
information-and-services/
investor-relations/
governance/board-
committees
The Committee had six
meetings during the year
and focused on the following
activities:
•
•
•
•
•
reviewed and approved
changes to the Board
Committees;
considered Board
succession planning and
approved the creation of
the role of Deputy Chair
and appointment of
Stephen L. Johnson;
approved changes to the
senior leadership team
and recruitment of new
Officer appointments;
commenced annual
Board review process;
and
considered talent,
succession planning and
diversity of the senior
leadership team.
Key activities
Board composition
In accordance with the UK
Corporate Governance Code,
the Committee considered
and proposed a number of
changes, including the
appointment of a Deputy
Chair; the creation of the
Safety, Security and
Operational Compliance
Committee; and changes to
the composition of the
Board.
The Board decided to create
the new role of Deputy
Chair. The Deputy Chair will
deputise for the Chair if the
Chair is not present at the
Board. Stephen L. Johnson
was appointed to the role
due to his industry
experience, as well as his
long association with the
Company.
Introduction
Dear Shareholder,
I am pleased to present the
Nomination and Governance
Committee Report for the
financial year ended 31
March 2023. During the year
the Committee facilitated
the strengthening of the
Board and senior
management team through
its oversight of talent
development, succession
planning and diversity.
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.
This year the Committee
focused on talent
development and diversity
by strengthening its senior
leadership team through
several Officer
appointments. The
Committee supported
management efforts to
achieve its diversity target
of 40 per cent of women in
senior leadership roles by
2025. Significant progress
was made this year in
relation to diversity and the
Company is on track to
achieve its target.
Wizz Air Holdings Plc Annual report and accounts 2023
122
In order to ensure proper
Board oversight over the
Company’s key areas of
focus, the Board established
a Safety, Security and
Operational Compliance
Committee, chaired by
Charlotte Pedersen, to assist
the Board with oversight of
the Group’s policies,
practices, objectives and
performance in relation to
safety, security and
operational compliance
management.
In connection with the
creation of the Safety,
Security and Operational
Compliance Committee, the
Board approved a number of
changes to the membership
of Board Committees:
•
•
•
Charlotte Pedersen
stepped down from the
Sustainability and
Culture Committee as a
result of becoming Chair
of the Safety, Security
and Operational
Compliance Committee;
Charlotte Andsager
stepped down from the
Remuneration
Committee and has
become the Chair of the
Sustainability and
Culture Committee; and
both Andrew S.
Broderick and Barry
Eccleston were
appointed to the Safety,
Security and Operational
Compliance Committee.
Management changes
In ensuring the development
of a solid talent pipeline, the
Committee oversaw the
strengthening of the senior
leadership team. The
Company welcomed Ian
Malin to the Group as
Executive Vice President and
Group Chief Financial
Officer, following the
departure of Jourik Hooghe.
The Committee considered
the appointment of Yvonne
Moynihan as Corporate and
ESG Officer; Roland Tischner
as Operations Officer, Wizz
Air Hungary; Diarmuid
O’Conghaile as Managing
Director, Wizz Air Malta; and
Veronika Jung as People
Officer.
The Committee also
considered changes to the
senior leadership team
including the change of
Johan Eidhagen from People
& ESG Officer to Managing
Director of Wizz Air Abu
Dhabi, and the change of
Owain Jones from
Development Officer to
Executive Vice President and
Group Chief Corporate
Affairs Officer.
Re-election
In accordance with the UK
Corporate Governance Code
and the Company’s articles,
each Director is required to
seek election or re-election
annually at the Company’s
AGM. The Board, on the
support of the Committee,
recommends the re-election
of all Non-Executive
Directors at the upcoming
AGM. The Committee and
Board are satisfied that the
Non-Executive Directors
have discharged their duties
effectively and demonstrate
the requisite mix of skills
and time commitment
relevant.
Diversity and inclusion
Consistent with the
Company’s Diversity and
Inclusion Policy, the Board
and Committee are
committed to improving
diversity at the Board and
support female
representation on the Board
and senior leadership team.
Due consideration is
afforded to all aspects of
diversity, including gender
social and ethnic
backgrounds. The
Committee is mindful of the
recommendations of the
Financial Conduct Authority,
the UK FTSE Women
Leaders Review, as well as
the Parker Review. In line
with the Company’s policy
on diversity, new
appointments to the Board
will give due consideration
to the above best practice
guidelines.
The Board has 30% female
representation, two of which
are Chairs of the
Sustainability and Culture
Committee and the Safety,
Security and Operational
Compliance Committee,
respectively. The Board
currently does not have any
Directors from an ethnic
minority background.
Increasing Board diversity
will be a priority for F24 and
the Committee has started
the recruitment process for
further Board appointments
who will be identified based
on merit but due regard will
be given to ethnicity and
diversity criteria.
Diversity and inclusion is
embedded in senior
management’s incentive
programme, the Committee
recognises the value of
broader diversity including
nationality. With over 90
nationalities already working
for the Company – and with
7 nationalities represented
both on the Board and with
8 on the Company’s strong
Leadership Team – the
Committee will continue to
ensure that the Company
remains a diverse
organisation that represents
the communities both within
the Company and which we
serve.
It is a priority for the Board
to review the board diversity
and inclusion policy which
complements the group’s
wider workforce policies and
values. In compliance with
DTR 7.2.8AR its intended to
revise and formalise its
diversity and inclusion policy
of the Board and its
Committees, namely the
Remuneration Committee,
Audit Committee and
Nomination and Governance
Committee.
William A. Franke
Chair of the Nomination and
Governance Committee
8 June 2023
Wizz Air Holdings Plc Annual report and accounts 2023
123
DIRECTORS’ REMUNERATION REPORT
“The great people of Wizz Air are central to
the recovery of the business. Consequently,
attracting and retaining the workforce has
been a key focus of the Committee during
the year.”
Barry Eccleston
Chair of the Remuneration Committee
evolving market trends and
to ensure competitiveness.
In doing so the Committee
was also mindful of its
Shareholders’ interests
against the backdrop of
economic uncertainty.
The outlook for F24 expects
a return to pre-pandemic
performance. The
Committee is therefore
confident that the improved
remuneration structures,
which are in line with the
expectations of
Shareholders, will enable the
Company to grow and
guarantee value creation.
Membership, meetings
and attendance
•
•
•
Barry Eccleston (Chair)
Anthony Radev (Sept
2022)
Anna Gatti
The Committee consists of
three Non-Executive
Directors, appointed by the
Board according to
experience, dedication and
capacity. The Company
Secretary acts as Secretary
to the Committee and
relevant members of the
senior leadership team are
invited to attend meetings.
https://wizzair.com/en-gb/
information-and-services/
investor-relations/
governance/board-
committees
The Committee had eight
meetings during the year
and focused on the following
activities:
•
considered and
approved a number of
actions related to pay to
mitigate the cost-of-
•
•
•
•
•
living crisis for the wider
workforce;
reviewed and approved
the revision of the
conditions of the STIP
for F23;
assessed the
performance of in-flight
LTIPs and recommended
an amendment to the
performance conditions
of future LTIPs;
reviewed and
recommended pay
increases for
management and the
CEO;
considered and
recommended changes
to the structure and fees
related to Non-Executive
Directors (NEDs); and
considered and
approved remuneration
packages for new Officer
and Executive Vice
President appointments
Key activities
F23 performance
After a difficult first quarter,
Wizz Air delivered strong
results in revenue and
capacity growth during the
rest of the fiscal year.
Despite a period of
unprecedented operational
disruption, and continued
macro effects from the war
in Ukraine, including fuel
price increases and high
inflation, the Company
delivered unit revenue
growth and net profit in the
later quarters of the year.
However, due to the adverse
geopolitical events, the
Company declared a net loss
for the financial year ended
March 2023.
Introduction
Dear Shareholder,
I am pleased to present the
Directors’ Remuneration
Report for the financial year
ended 31 March 2023. I
would like to welcome
Anthony Radev to the
Remuneration Committee
effective from July 2022.
Anthony replaces Charlotte
Andsager who was
appointed as Chair of the
Sustainability and Culture
Committee.
Wizz Air, and the aviation
industry as a whole, faced
several headwinds
throughout the financial
year, including the Russian
invasion of Ukraine, fuel
price increases, inflation and
operational disruption.
However, despite these
challenges, through the
stewardship of the Board,
the Chief Executive Officer
and senior management, the
Company delivered industry-
leading growth and revenue.
The Committee is grateful to
the commitment of
management and employees
during this challenging
period, and as such
approached remuneration
matters and outcomes
within this context.
The Committee was tasked
with balancing the needs of
both management and the
wider workforce to manage
talent and retention. As a
result, the Committee
supported a number of
actions taken by
management in relation to
pay to address the
challenges impacting the
workforce as a result of the
cost-of-living crisis. The
Committee also supported
changes in executive
remuneration in response to
Wizz Air Holdings Plc Annual report and accounts 2023
124
Highlights of F23
performance include:
• maintaining an
•
•
•
investment grade
balance sheet and
strong liquidity position;
capacity increase of 36
per cent versus F20;
leading the aviation
industry on sustainability
with the lowest
emissions per passenger
in Europe;
continued expansion in
Cyprus, Italy, Austria,
Poland, Albania,
Georgia, Bulgaria,
Romania, Serbia and
Abu Dhabi, and new
operations in Saudi
Arabia; and
•
addition of Wizz Air
Malta AOC to the Group.
Workforce engagement
The great people of Wizz Air
are central to the recovery
of the business.
Consequently, attracting and
retaining the workforce has
been a key focus of the
Committee during the year.
The Committee received
regular updates from the
People Officer and the
Employee Engagement
Director in relation to
remuneration approaches to
best support the workforce.
Interventions were
implemented as a result of
direct employee feedback
through an employee
engagement survey.
Remuneration outcomes
The Committee paid careful
attention to the inflationary
impact on employees.
Accordingly, the Committee
supported the introduction
of several actions, including:
Crew
•
Performance bonuses for
crew; the reinstatement of
captain seniority bonus; the
reinstatement of pilot loyalty
bonus and implementation
of loyalty bonus for the
cabin crew crew.
• Wider workforce
A one-off payment to the
wider workforce in response
to the cost-of-living crisis.
•
CEO and senior
management STIP
and All Employee
Bonus Plan
During F21 and F22 the
CEO’s maximum STIP
opportunity was reduced to
100 per cent (from 200 per
cent) to acknowledge the
impact of COVID-19. For
F23 the maximum
opportunity was reinstated
to 200 per cent.
The Committee recognised
the business circumstances
and restructured the STIP
award for the CEO and the
Senior Management,
whereby 75% of the award
was subject to Individual
performance rating and 25%
was subject to quarterly
financial metrics. The
Committee also used its
discretion to allow 50%
payment under the All
Employee Bonus Plan
despite of missing the
performance targets in order
to recognise the work of all
employees. Note this plan
only applies to employees
below Head level, neither
the CEO nor the Senior
Management nor Head level
participate in the All
Employee Bonus Plan.
•
CEO base salary
Reinstated the base salary
at the start of F23 following
a 7.5 per cent reduction for
F22 and a 15 per cent
reduction for F21 to
acknowledge the impact of
COVID-19. During F23 7 per
cent increase was
implemented in October
2022.
• NED Fees and
structure
Reinstated fees following 7.5
per cent reduction on policy
fees for F22 and 15 per cent
reduction on policy fees in
F21. NED fee structure was
changed from a payment of
attendance fee to an all-
inclusive fee. A guideline
was also issued to
encourage NED share
ownership equivalent to
one-year basic fee to be
built up over three years.
Further, the Company
facilitated a scheme for
payment in shares in order
to meet the guideline.
The Committee was pleased
to approve the various
remuneration interventions.
This reflected the significant
contribution of management
and the wider workforce in
responding to the external
challenges and delivering
strong results despite the
headwinds.
Shareholder engagement
As Chair of the Committee I
am committed to
engagement with
Shareholders and held
numerous meetings and
calls throughout the year on
the Company Remuneration
Policy. After considering the
experience of the workforce,
Shareholders and the
Company’s strategy, the
Committee undertook a
comprehensive review of the
Directors’ Remuneration
Policy, and concluded that
the current Remuneration
Policy had broken down and
no longer motivated the
management or supported
the Company strategy.
Consequently, the
Committee recommended
changes to the policy with
respect to the VCP, SLGP,
LTIP and STIP going
forward.
After extensive Shareholder
engagement, a two-year
extension to the CEO’s
current five-year contract is
being proposed at the FY24
AGM to ensure that Mr
Váradi will continue his
commitment to the business
and its future success.
Under this contract
extension the vesting date
of the VCP will also be
moved to 2028 (previously
2026).) Additionally, the
share price performance
conditions will be met in full
if the maximum average
share price goal is hit during
any two consecutive
quarters before the end of
the performance period in
F28. This ensures that the
executives are not only
incentivised to deliver
shareholder value but to
maximise performance and
shareholder value
throughout the full
performance period and
maintain it beyond the
performance period as
shares vest in years, 7, 8, 9,
and 10 from the original
award date of the VCP. The
ESG measures will remain
tested on their original
timeline F26. However, it is
proposed that the stock-
price threshold underpin for
any payment under the ESG
Wizz Air Holdings Plc Annual report and accounts 2023
125
measures will be removed to
ensure management
continue to have an
incentive to deliver these
important metrics by F26.
With respect to the carbon
emissions metric, the
measure for F26 will be
amended to 48.9 grams RPK
from 45.1 grams / RPK,
whilst maintaining the
longer term F30 target of
42.6 grams / RPK. This is
being proposed in light of
the COVID-19 related supply
chain issues causing the
delayed delivery of the new
generation technology
airplanes, as a result Wizz
Air is operating a larger than
planned proportion of old
generation airplanes to meet
the strong customer demand
and growth opportunities.
This modification will retain
the same carbon emissions
target for F30 and reinforce
Wizz Air’s position as the
leading company in the
airline industry for carbon
emissions.
Alongside the extension of
the CEO’s contract and VCP
the Company has also
extended the performance
period of the SLGP and the
All Employee Bonus Scheme.
Regarding the STIP and LTIP
going forward, the
Committee will propose
structural changes. The
STIP will be restructured to
weight towards financial
metrics and individual
performance ratings for all
participants (CEO, EVPs,
Officers and Heads). EVPs,
Officers and Heads will also
be subject to CASK Ex-fuel
measures. In addition,
Department based metrics
will be in place for Officers
and Heads. Head’s F24 STIP
will also include functional
measures.The LTIP going
forward proposes to
introduce restricted stock as
half of the award.
The Committee and the
Board maintain the view that
the revised Remuneration
Policy and interventions will
reinforce the commitment of
management to deliver long-
term Shareholder value and
returns.
The Directors’ Remuneration
Report for the financial year
ended 31 March 2022 was
approved by Shareholders in
September 2022. Although
some Shareholders voted
against the report, the
Committee considers
feedback and acknowledges
concerns.
Next steps
We hope you find this
Remuneration Report clear
in explaining the
implementation of our
Remuneration Policy during
F23 and our intended
implementation for F24. We
also remain committed to a
continued dialogue with
Shareholders including the
investor feedback received
following the F23 AGM. We
trust that we have provided
the information you need to
be able to support this
Directors’ Remuneration
Report at the Company’s
F24 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 2023
Wizz Air Holdings Plc Annual report and accounts 2023
126
Remuneration at a glance
CEO remuneration
Base salary
F23 earnings
€687,292
Reinstated base salary
following 7.5% reduction for
F22 to acknowledge COVID-19
impact. Followed by 7%
increase implemented October
2022
F24 looking ahead
€710,534
Short-term
Incentive Plan
(STIP)
Maximum
opportunity
Performance
metrics
(weightings)
Opportunity
Value Creation
Plan (VCP)
200% of base salary
Maximum opportunity was
reduced to 100% of base
salary in F21 and F22 to
acknowledge the impact of
COVID-19. During F23 this was
reinstated to 200% of base
salary.
Individual performance (75%)
Financial measures (25%)
Net profit after tax and CASK
(ex-fuel)
Targets set on quarterly basis
Threshold payout requires a
performance rating of “A”
200% of base salary
Underlying profit after tax
(85%)
Individual performance rating
(15%)
Targets set on yearly basis.
Threshold pay out requires a
performance rating “A”.
One-off award granted in F22 – seven-year performance period
with 40% vesting in year seven, and 20% vesting per year in
years eight, nine and ten
Maximum payment of £100 million for delivery of end share
price of £119.24
Performance
metrics
(weightings)
Increase in share price (90%)
ESG (10%)
Share ownership guidelines
Holding requirement: 400% of base salary
Post-cessation share ownership
guidelines
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
Performance remains strong for Wizz
Air (TSR)
Actual shareholding calculated using number of Ordinary
Shares and the spot price at 31 December 2022.
Wizz Air Holdings Plc Annual report and accounts 2023
127
We are continuing to focus on our people
We are proud to employ aviation professionals of 93 different nationalities and deliver a superior
service across our network.
Our latest employee feedback survey showed a 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 consequences of coronavirus is still with us and strongly affecting our daily operations
and decision making.
The engagement survey participation rate was 55 per cent; the overall satisfaction was at 6.5, while
the engagement score was 6.4.
Wizz Air Holdings Plc Annual report and accounts 2023
128
Remuneration Policy
Introduction
This Directors’ Remuneration Policy will be put forward for approval for Shareholders at the Company’s
AGM in August 2023 and is intended to be in place for a period of three years from the AGM.
How our Remuneration Policy addresses the factors set out in the UK Corporate Governance Code
Clarity
Simplicity
Risk
Predictability
Proportionality
Alignment to
culture
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
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 range of possible
values of rewards to
individual Directors
and any other limits or
discretion should be
identified and
explained at the time
of approving the policy
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).
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 has 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 ensures 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 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
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.
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.
Wizz Air Holdings Plc Annual report and accounts 2023
129
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 the cost-
of-living crisis.
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
Changes to Remuneration Policy
We have a unique and world class leader in our CEO, József Váradi, who has led the business through
a period of strong growth since IPO and, despite the recent external environment, has continued to
create the strongest and one of the most profitable airlines in the world. The Committee believes his
leadership is central to delivering Wizz Air’s recovery in the coming years and has therefore decided to
review the Remuneration Policy for the CEO.
After extensive Shareholder engagement, a two-year extension to the CEO’s current five-year contract
is being proposed at the FY24 AGM to ensure that Mr Váradi will continue his commitment to the
business and its future success. Under this contract extension the vesting date of the VCP will also be
moved to 2028 (previously 2026). The only changes to the proposed policy relate to the VCP and will
be put to Shareholders at the AGM.
The one-off VCP award was made during F22 and included an award of 837,943 shares. No further
LTIP awards have been or will be made to the CEO over the course of the VCP performance period.
Given the extension of the CEO’s contract changes to the performance conditions of the VCP award:
▪
The end share price of £119.34 for a £100 million payout has been maintained. To align with
the contract extension the performance period has been extended to seven years from five
years (90 per cent weighting):
•
•
•
•
The threshold end share price £77.24 has also been maintained.
There will continue to be straight-line vesting in between threshold and maximum
performance.
Base period for calculation is volume weighted average share price over first half of
calendar year 2021 (VWAP 1H CY 2021) – tested against share price at end of period
VWAP 1H CY 2028.
Amendments have also been made to allow full payout if 100 per cent target share
price is hit during two consecutive quarters before end date, otherwise defaulting to
measured achievement based on 1H CY 2028 VWAP. In any period equivalent to H1
(i.e. two consecutive quarters or one-half year), if the share price VWAP target is
achieved, the full number of shares of the VCP will be deemed to have vested in full.
In practice, the shares will not vest until the end of the seven year performance period
and will follow the phased vesting schedule outlined – there will be no acceleration in
vesting. As the award is denominated in a number of shares, the value received will a)
continue to fluctuate as the share price fluctuates and b) continue to be subject to the
£100m defined cap; and.
▪
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.
•
•
The diversity objective will remain unchanged based on achieving a minimum of 40%
female representation within management by end of F26.
It is proposed that the carbon target glidepath be updated. Management’s
commitment to reducing CO2 emissions by 25% to 42.6 grams / RPK by 2030 will
remain as the strategic commitment. However, the glidepath to achieving that goal
will be amended to recognise the company’s upsized fleet ambitions (target fleet count
of 500 aircraft by 2030, up from 300) and the wider disruption of supply chain and
aircraft manufacturing that has impacted all airlines. The revised glidepath will now
include a target for the VCP in FY26 of 48.9 grams / RPK instead of 45.1 grams / RPK
with a steeper emissions reduction to achieve the 2030 goal
Wizz Air Holdings Plc Annual report and accounts 2023
130
•
The ESG proportion of the award will now be payable regardless of the achievement
against the threshold share price. We believe the decoupling of the ESG measures will
motivate the CEO to perform against the ESG on the original timeline. We consider
these ESG criteria, gender and climate to be important to the business, its culture and
external brand and should not be extended along with the timeline for the delivery of
Shareholder value. Clearly, the value for the ESG measures is still delivered in shares
in Wizz Air and there remains even for this part an incentive to increase the share
price.
A full summary of the proposed VCP is summarised in the future policy table below. The amendments
made to align the wider workforce’s incentive schemes with these changes are set out in the table
below the future policy table.
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.
Future policy table
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.
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.
Wizz Air Holdings Plc Annual report and accounts 2023
131
Element
Purpose and link to
strategy
Operation and
opportunity
Framework used to assess
performance and provisions for the
recovery of sums paid
Benefits
To attract, retain
and motivate
Executive
management
without paying
more than
necessary.
Pension
Not applicable.
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:
The Executive Director is
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).
Not applicable.
Wizz Air Holdings Plc Annual report and accounts 2023
132
Element
Purpose and link to
strategy
Operation and
opportunity
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
STIP 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
per cent of base salary.
A threshold level of
performance is specified
in 50 per cent of at
target bonus; if
performance falls below
this level, there will be
no payout for that
proportion of the award.
Long-term
Incentive Plan
(LTIP)
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.
Each year, performance
shares may be granted.
Awards vest over a
three-year period,
subject to the
achievement of
performance targets
over those three years.
The maximum face
value of annual awards
will be 250 per cent of
base salary, with up to
300 per cent in
exceptional
circumstances. Typically
25 per cent of award
value will vest for
threshold performance
with straight-line vesting
to maximum
performance.
Framework used to assess
performance and provisions for the
recovery of sums paid
Performance requirements are
determined by the Remuneration
Committee. They are intended to
align the performance of the
Executive Director with the Group’s
near-term objectives of delivering
against its strategy. The Committee
may use its discretion to ensure that
a fair and balanced outcome is
achieved, taking into account the
overall performance of the Company
and the experience of Shareholders.
The STIP is based on a combination of
financial and non-financial measures
as selected by the Committee in any
given year. Financial measures would
typically represent no less than 50 per
cent of weighting.
The annual STIP is subject to malus
and/or clawback in the event of
serious misconduct which could have
served as a reason for termination of
the employment for cause, or if the
employee was involved in fraud,
dishonesty or other types of illegal
activity. The policy does not
determine the time frame of the
malus and/or clawback.
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 per cent 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.
Wizz Air Holdings Plc Annual report and accounts 2023
133
Element
Purpose and link to
strategy
Operation and
opportunity
Framework used to assess
performance and provisions for the
recovery of sums paid
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 seven-year
period (40 per cent of
the overall award at the
end of year seven and
20 per cent per year
after years eight, nine
and ten).
The award is based on
the following
performance conditions:
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.
90% share price growth;
and 10% ESG (5%
based on CO2 emissions
reduction goals; and 5%
based on gender
diversity target).
Maximum payout is
capped at £100mn.
Threshold payment is
£20mn for delivery of
share price £77.24.
ESG criteria are
independent of share
price growth criteria.
Straight line vesting in
between
The award will payout at
100% if the maximum
share price is achieved
during two consecutive
quarters before end-
date.
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 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.
Wizz Air Holdings Plc Annual report and accounts 2023
134
Scenario chart
Annualised value of VCP is demonstrated in the chart below.
The VCP is presented in the scenario chart at nil value where the performance conditions are not met,
at a threshold value of £20 million, annualised over the seven-year performance period and the
maximum value of £100 million annualised over the seven-year period should the maximum share
price and ESG performance conditions be met. The VCP is based on a number of Shares and the
Pound Sterling value has been translated into Euro at 1.14 for the purposes of this chart, which
represents a three-month average as of the time of drafting. The illustration does not provide a bar
for additional share price growth as the value is capped at the maximum £100 million regardless of
any future share price growth.
The chart above shows the annual illustration of the application of the Executive Directors'
Remuneration Policy for F24 at minimum, threshold and maximum levels, on the basis of the adoption
of the extension to the VCP in our proposed revised Executive Directors' Remuneration Policy. The
chart presents the annualised value over a seven-year period as only one VCP award was made in
2021 with the time horizon now extended to run over seven years.
At the maximum level of remuneration, the share price will have reached £119.34 and the ESG
portion of the award will have to be achieved in full. If the share price increases beyond the target of
£119.34, the value of the award will not exceed the maximum, as the value of the VCP is capped. If
the value of Wizz Air’s share price does not reach the threshold share price of £77.24 no value will be
delivered under this portion of the award. Similarly, if the threshold ESG criteria is not met then no
value will be delivered under this portion of the award.
Future policy: wider workforce
How the organisation considered wider workforce pay when developing new Policy for Executive
Directors
Wizz Air’s intention is to treat the wider-workforce and Executive Directors in the same way and
implement an aligned philosophy from top to bottom. Remuneration for the Company’s senior
management team and wider employee base have all been aligned to the same seven-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. In relation to remuneration of the Executive Directors, employees
have had the opportunity to provide feedback through the people council. An overview of these
schemes is provided below:
Plan
Value Creation
Plan (VCP)
Long-term
Incentive Plan
(LTIP) - FY24
Eligibility
CEO
Frequency
One-off award
of shares
(made in F22)
Head level and
above
(excluding
CEO)
Annual shares
award
Senior
Leadership
Growth Plan
(SLGP)
President and
EVPs/Officers
Short-term
Incentive Plan
(STIP) - F24
All Employee
Bonus Plan
Head level and
above
All employees
below Head
level
One-off award
of shares
(made in 2021)
Annual award
in cash
Annual award
in cash
Wizz Air Holdings Plc Annual report and accounts 2023
135
Plan
Value Creation
Plan (VCP)
Long-term
Incentive Plan
(LTIP) - FY24
Performance
criteria
Share price –
90 per cent of
award
ESG criteria –
10 per cent of
award
50 per cent of
the award is
delivered in
restricted stock
50 per cent of
the award is
delivered in
performance
shares
Senior
Leadership
Growth Plan
(SLGP)
Share price –
100 per cent of
award
Short-term
Incentive Plan
(STIP) - F24
All Employee
Bonus Plan
Share price –
100 per cent of
award
CEO:
Financial
measure -
Underlying
Profit After Tax
(85 per cent)
and
Individual
performance
rating (15 per
cent).
EVPs:
Financial
measure -
Underlying
Profit After Tax
(70 per cent),
Individual
performance
rating (15 per
cent) and
Operational
measure -
CASK ex-Fuel
(15 per cent).
Officers:
Financial
measure -
Underlying
Profit After Tax
(55 per cent),
Individual
performance
rating (15 per
cent),
Operational
measure -
CASK ex-Fuel
(15 per cent)
and
Department
measure (15
per cent).
Heads:
Financial
measure -
Underlying
Profit After Tax
(40 per cent),
Individual
performance
rating (15 per
cent),
Operational
measure –
CASK ex-Fuel
(15 per cent),
Department
measure (15
per cent) and
Functional
measure (15
per cent).
Performance
period
Seven years
Three years
Seven years
One year
One year
Wizz Air Holdings Plc Annual report and accounts 2023
136
Plan
Vesting
Performance/
payout curve
Value Creation
Plan (VCP)
Long-term
Incentive Plan
(LTIP) - FY24
100 per cent at
end of year
three
40 per cent at
end of year
seven, 20 per
cent per year
at years eight,
nine and ten
One-off award
of shares
granted in
2021. Award
vests after a
seven-year
period (40% of
the overall
award at the
end of year
seven and 20%
per year after
years eight,
nine and ten).
100 per cent
payout: 14 per
cent net profit
margin on
average over
three years
25 per cent
payout: 9 per
cent net profit
margin on
average over
three years
Senior
Leadership
Growth Plan
(SLGP)
40 per cent at
end of year
seven, 20 per
cent per year
at years eight,
nine and ten
100 per cent
payout: share
price £119.24
0 per cent
payout: share
price of £77.24
Straight-line
vesting in
between
The award is
based on the
following
performance
conditions:
90% share
price growth;
and
10% ESG (5%
based on CO2
emissions
reduction
goals; and 5%
based on
gender
diversity
target).
Maximum
payout is
capped at
£100mn.
Threshold
payment is
£20mn for
delivery of
share price
£77.24.
ESG criteria are
independent of
share price
growth criteria.
Straight line
vesting in
between
The award will
payout at
100% if the
maximum
share price is
achieved during
two
consecutive
quarters before
end-date.
Short-term
Incentive Plan
(STIP) - F24
All Employee
Bonus Plan
100 per cent at
end of year
100 per cent at
end of year
100 per cent
payout: 15 per
cent CAGR
25 per cent
payout: 7.5 per
cent CAGR
Threshold is
equal to 50 per
cent of at
target bonus.
Maximum is
equal to 200
per cent of at
target bonus.
There will be a
straight line of
payment
between
threshold to
target and
target to
overperformanc
e.
Payout will be
calculated
based on the
performance
against the
above
measures for
each position,
requiring at
least “A”
Individual
Performance
rating or higher
for payment to
be made under
the plan.
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.
Wizz Air Holdings Plc Annual report and accounts 2023
137
Short-term
Incentive Plan
(STIP) - F24
All Employee
Bonus Plan
Seven annual
awards with
one-year
cycles: 1H CY
2021–1H CY
2022, etc.
Annually to 1H
2028
One month's
salary
Total bonus
payments are
capped at 200
per cent of at
target bonus
for all
participants.
Senior
Leadership
Growth Plan
(SLGP)
Base period for
calculation is
VWAP over 1H
CY 2021 –
tested against
share price at
end of period
VWAP 1H CY
2028
Cap at 20 per
cent 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
Annual awards
with three-year
cycles, e.g. 1H
CY 2023–1H CY
2026, 1H CY
2024–1H CY
2027, etc.
No cap on
payout: award
values capped
250 per cent
normal max. at
grant; 300 per
cent
discretionary
max. at grant
in exceptional
circumstances
Plan
Base period
Value Creation
Plan (VCP)
Long-term
Incentive Plan
(LTIP) - FY24
Base period for
calculation is
VWAP over 1H
CY 2021 –
tested against
share price at
end of period
VWAP 1H CY
2028
Cap on payout Cap of £100
million for
share price of
£119.34
Shareholder
ownership
Shareholding
requirement of
400 per cent of
salary. Post-
cessation
requirement
equal to 400
per cent year
one and 200
per cent for the
second year
Wizz Air Holdings Plc Annual report and accounts 2023
138
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
Purpose and link to
strategy
Operation and opportunity
Fees
To remunerate
Non-Executive
Directors to reflect
their level of
responsibility.
Each Non-Executive Director
receives an annual fee which is
inclusive of one Committee fee.
Additional fees are paid for
chairing Committees; to the
Senior Independent Director; to
the Vice Chair; and to the Director
responsible for employee
engagement. 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. The Non-
Executive Directors will also be
reimbursed for all proper and
reasonable expenses incurred in
performing their duties.
Fees are made in cash and/or
shares which are not subject to
performance.
Wizz Air Holdings Plc Annual report and accounts 2023
139
Future Policy: other items
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. Subject
to the Shareholder approval, the CEO will have a fixed term seven-year contract, in all other cases
there no fixed terms on the service contracts. The Remuneration Committee will take into
consideration the circumstances and reasons for departure, health, length of service and performance.
Under this policy, the Remuneration Committee will make any statutory payments it is required to
make. In addition, the Remuneration Committee may agree to payment of outplacement counselling
costs and disbursements (such as legal costs) if considered to be appropriate and depending on the
circumstances of departure.
There are no pre-determined contractual provisions for Directors regarding compensation in the event
of loss of office save for those listed in the table below.
Details of provision
Executive Director
Notice period
Six months’ notice by either party.
Termination payment 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.
Non-Executive
Directors
One month’s notice by
either party.
Fees and expenses
accrued up to
termination only.
Post-termination
covenants
Post-termination restrictive covenants apply for a
period of one year following termination of
employment.
Not applicable.
Under the LTIP and STIP, if an Executive Director leaves, the default position is that no payment will
be made. 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 pro-rated bonus payment as determined under
the STIP scheme. The pro-rata bonus shall be calculated on the basis of the proportion of the actual
period of active employment in the relevant financial year. Achievement of targets shall be reviewed
and assessed by, and at the discretion of, the Remuneration Committee. If good leaver status is not
granted to an Executive Director, all outstanding awards made to them under the LTIP will lapse.
Wizz Air Holdings Plc Annual report and accounts 2023
140
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
The Committee may approve remuneration payments and payments for loss of office on terms that
differ to the terms in the Policy where the terms of the payment were agreed before the Policy came
into effect or were agreed at a time when the relevant individual was not a Director of the Company.
This includes the exercise of any discretion available to the Committee in connection with such
payments.
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.
During the first half of 2023, the Remuneration Committee engaged with key Shareholders to
understand their sentiment towards the proposed Policy change (i.e. the extension of the Value
Creation Plan for the CEO). Conversations were well received and shareholders were understanding of
the change given the circumstances and the Company’s rationale. The Company received feedback
from some Shareholders that they would be interested in transparency in disclosure on how the
changes would be cascaded below the CEO (the sole Executive Director governed by the Company’s
Remuneration Policy). The Company has included this information in this Directors’ Remuneration
Report and would re-emphasise that the proposed changes to the Policy and broader remuneration
fulfil three core objectives:
•
•
•
They are consistently applied to our entire workforce and across all of our various incentive plans
– aligned with Wizz Air’s philosophy of equal treatment for all employees.
They maintain Wizz Air’s focus on a pay-for-performance model.
They pragmatically align expectations with our business reality by extending time horizons for
achievement but not reducing targets and expected delivery for shareholders.
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.
Wizz Air Holdings Plc Annual report and accounts 2023
141
Annual Report on Remuneration
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 94 to 95 of the Corporate Governance Report.
Barry Eccleston (Chairman), who joined the Committee in September 2020 in the Chairman position,
remains in post. Charlotte Andsager stepped down on 26 July 2022; her membership of the
Company’s Remuneration Committee was taken over by Anthony Radev, effective 01 September
2022. Anna Gatti joined the Committee on 28 January 2022.
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, Chief Executive Officer; Vera Jung, People Officer; Owain Jones, Executive Vice
President and Group Chief Corporate Affairs Officer; Stephen L. Johnson, Non-Executive Director; and
Yvonne Moynihan, Company Secretary, 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 WTW, as appointed by the Remuneration Committee.
WTW was re-contracted as remuneration consultant following a competitive tender process in 2020. It
attends Committee meetings as and when required. During F23, WTW received fees based on time
and materials totalling £248,363 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 WTW to the
Company in F23.
WTW 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 WTW 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 FY22 AGM the Directors’ Remuneration Policy was supported by 66.80 per cent of Shareholders.
In 2022, the most recent Directors’ Remuneration Report was supported by 81.48 per cent of
Shareholders.
FY23 AGM - Directors Remuneration Report voting results:
Votes for
Votes against
Total votes
Votes withheld
Directors’ Remuneration Report
13,384,492
3,041,329
16,425,821
16
81.48 %
18.52 %
F22 AGM - Director’s Remuneration Report and Policy voting results
Votes for
Votes against
Total votes
Votes withheld
10,994,259
5,462,746
16,457,005
10
66.80 % 16,269,317
187,688
33.20 %
16,457,005
10
Directors’ Remuneration Policy
Directors’ Remuneration
Report
98.86 %
1.14 %
Wizz Air Holdings Plc Annual report and accounts 2023
142
Executive Director’s remuneration
Full details of the Chief Executive Officer’s remuneration for F23 and F22 are set out below (in Euros):
Single total figure of remuneration table (audited)
Fees and
salary
€
Benefits
€
STIP
€
LTIP
€
Pension
€
Total
€
Total fixed
remuneration
€
Total variable
remuneration
€
József Váradi
2023 687,292
— 568,759
—
— 1,256,051
687,292
568,759
2022
614,246
—
307,123
850,283
— 1,771,652
614,246
1,157,406
Base salary
The Chief Executive Officer had voluntarily taken a 7.5 per cent reduction to his base salary for F22
and previously took a 15 per cent reduction during F21, from his contracted base salary of €664,050
in response to the long, drawn-out COVID-19 pandemic. The Chief Executive Officer’s salary was
increased by 7.5 per cent at the beginning of F23 back to the level of his contracted salary. During
F23 the Remuneration Committee reviewed and approved an 7 per cent increase to a salary of
€710,534 annually with an effective date of 1 October 2022. Prior to this the last salary increase that
was not derived from restoring pre-COVID-19 status was in April 2018.
Short-term Incentive Plan F23 - audited
During F21 and F22 the maximum bonus opportunity was reduced to 100 per cent of base salary to
acknowledge the impact of COVID-19. For F23 the maximum opportunity was reinstated to 200 per
cent of base salary. As travel restrictions relented in early 2022, the aviation industry showed signs of
recovering from the effects of the COVID-19 pandemic and the industry was expected to return to
normality after two years of disruption. However, this expectation was outweighed by supply chain
issues struggling to return to pre-COVID-19 levels, which caused large scale disruptions to operations.
Alongside operational issues, the cost-of-living crisis and overall inflation context moved compensation
levels upwards steeply. In addition, the lack of available talent across the industry meant there was
increased competition in finding and retaining experienced managerial talent. These factors cumulated
in the Company revising F23 STIP targets and structure within the rules of the policy in Q3 2022, to
keep the CEO and management team motivated and focused on managing the business during the
pressure of external circumstances. The Committee determined that due to the unstable external
environment, the performance conditions should be tested on a quarterly basis keeping the practice of
years during uncertain COVID-19 years. The Committee determined that 75 per cent of the STIP
would be paid at the end of the performance period subject to individual performance rating and 25
per cent to financial metrics as per the approved target levels that were built on positive market
outlook. Within financial measures, net profit after tax was weighted at 60%, with CASK ex-fuel with a
weighting of 40%. The entire bonus (both financial and individual portions) is subject to a minimum
achievement of an “A” individual rating. The bandwidth (min to max) for the profit target was +/-15
per cent of target whereas for CASK ex-fuel was +/-0.02 EUR cent of target. More information on the
target and achievement result can be found in the table below. At target, the STIP pays out the
annual base salary of the CEO (i.e. 100% of salary). Threshold payout is 50% of target and maximum
payout is 200% of target. As per the policy, payout for performance between threshold and target and
between target and maximum has been calculated by using linear interpolation (straight-line
percentage performance). For individual performance threshold payout is provided for performance
rating “A”, target payout at performance rating “AA” and maximum payout at performance rating
“AAA” or “1”.
Weighting
Performance indicators
25%
FINANCIAL targets achievement
Q1
0%
Net profit after tax (€ million) – actual
-452.5
CASK ex-fuel (€ C/ASK) – actual
Net profit after tax (€ million) – target
CASK ex-fuel (€ C/ASK) – target
2.62
-71
2.34
Q2
0%
68.2
2.61
343
2.16
Q3
Q4
Total
120%
0% 7.5%
33.5
2.49
-89
2.26
-184.3
2.61
-149
2.25
75%
Individual performance
100%
100%
100%
100% 75%
The CEO’s performance is assessed by the
Chairman (between 0%–200%) and payout
approved by the Remuneration Committee.
Wizz Air delivered growth and maintained a solid cash position, complemented by establishing a credit
line to protect against unforeseen events associated with COVID-19, the war in Ukraine or otherwise.
However, the dramatically higher fuel price and volatile currency environment during the period
proved more challenging than expected and the Company’s financial performance failed to meet
expectations.
By the third quarter of F23, Wizz Air had exceeded net profit projections, while performing above the
growth seen by industry leaders. This was achieved through operating 49 per cent more ASKs versus
the same period last year (and +38 per cent vs 2019). In addition, operational adjustments
Wizz Air Holdings Plc Annual report and accounts 2023
143
contributed to a significantly lower flight disruption cost in Q3 and costs remained stable throughout
the financial year despite the industry-leading growth.
The evaluation of the Chief Executive Officer’s personal performance during F23 has primarily been
measured against his response and leadership throughout another challenging year. He has managed
to drive growth and 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. Operationally, during the period Wizz Air announced base expansions across Cyprus,
Italy, Austria, Poland, Albania, Georgia, Bulgaria and Serbia, while opening a new base in Romania
and strengthening our leadership in this core Wizz Air CEE market. In addition to launching a new
airline and aggressively expanding into new markets, Wizz Air continued with its aircraft delivery
schedule. Wizz Air has caught up with peers in terms of systematic jet fuel hedging impact through
F24.
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 2022 with
a participation rate of 55 per cent. Despite the low participation rate the survey shows as the top
three key strengths of the organisation management support, autonomy and freedom of opinion. The
engagement survey results are useful for the Company as they allow it to work with employees, the
management team and the People Council to identify areas of improvement.
As part of our sustainability commitment, we want to comply as a minimum with the Hampton-
Alexander Review guidelines calling out the need for one-third female Board members and 40 per
cent-60 per cent gender split by the end of F26 at management level (Head level and above). As per
the current status, we have 30 per cent female representation among the Board of Directors and 31
per cent female representation at management level. The number of employed nationalities further
grew by 12 per cent, reaching 93 nationalities at Company level, of which Wizz Air is rightly proud.
Based on the individual performance demonstrated above, the Chief Executive Officer received a
performance rating of “AA” and therefore achieved 100 per cent of target against the individual
performance measure, which has a weighting of 75 per cent under the short-term incentive scheme.
This combined with the financial performance set out above resulted in an 83 per cent salary payout.
LTIP vested during F23 (audited)
An award under the LTIP (of 250 per cent of base salary) was made to the Chief Executive Officer
during F20 (in May 2019). This award included 46,796 performance options, valued at £31.02 per
option share at the date of grant. Vesting was on 30 May 2022. 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), Air
France-KLM, Deutsche Lufthansa, Finnair, IAG and SAS; 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 12 per cent,
19.5 per cent and 27 per cent, respectively; and
25 per cent of the portion of the award subject to EPS will vest for threshold performance, 50 per
cent of the portion of the award subject to EPS will vest for target performance and 100 per cent
of the portion of the award subject to EPS will vest for maximum performance (with straight-line
vesting in between these points).
Under the Long-term Incentive Plan, the award vesting in F23 paid out at 50 per cent of maximum.
The value of LTIP F22 has been updated since the disclosure of the Annual Report last year based on
the actual vesting share price of €36.34 of 30 May 2022, deriving from share price at vesting 30,94
GBP and GBP/EUR 0.8515.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. Wizz Air’s TSR translated to -8.0 per cent,
resulting in an award payment of 50 per cent of maximum. The median of the peer group was -30.7
per cent and the upper quartile was -22.6 per cent.
The LTIP granted in FY21, vesting in F24 reflects the forecasted vesting of the award with
performance criteria not meeting the minimum requirement as per the estimations for the period
ending March 2023.
Payments to past Directors (audited)
Wizz Air Holdings Plc Annual report and accounts 2023
144
No payments were made to past Directors.
Payments for loss of office (audited)
No payments were made for loss of office.
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.
1.
Growth in the value of a hypothetical £100 holding over eight 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, Air France-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
F14
F15
F16
F17
F18
F19
F20
F21
F22
F23
Single figure of total
remuneration Euro
Performance
STIP achieved
against
maximum
possible
LTIP shares
vesting
against
maximum
possible1
1,462,212
1,607,587
1,812,883
1,240,812
1,281,304
4,056,438
2,640,666
1,620,409
1,771,652
1,256,051
97 %
91 %
95 %
48 %
58 %
26 %
40 %
0%1
50%
83 %
n/a
n/a
n/a
n/a
n/a
100 %
50 %
50 %
50 %
0 %
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 2023
145
Change in the remuneration of the Executive Directors 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 F23, between the year ended 31 March 2022 and the year ended 31 March 2023, as well as
F22, between the year ended 31 March 2021 and the year ended 31 March 2022, for the Directors,
compared to the average earnings of all other Wizz Air employees.
F23
Benefits
1
Salary
and fees
Annual
STIP
Salary
and fees
F22
Benefits
1
Annual
STIP
Salary
and fees
F21
Benefits
1
Annual
STIP
16 %
0 % 85 %
19 %
0 % 100 % (22) %
0 % (100) %
38 %
25 %
(100) %
12 %
35 %
(100) %
(100) %
0 %
0 %
14 %
26 %
21 %
16 %
155 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
19 %
0 %
20 %
0 %
9 %
0 %
28 %
0 %
32 %
0 % (98) %
0 % (78) %
0 %
0 %
0 %
0 %
0 %
60 %
0 % 158 %
0 % 148 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 % (20) %
0 % (21) %
0 % (21) %
0 % (14) %
0 % (27) %
0 % (26) %
0 % (26) %
0 % (83) %
0 % (87) %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
0 %
22 %
0 % 84 %
30 %
0 % 100 % (42) %
0 % (100) %
József
Váradi
William A.
Franke
Stephen L.
Johnson
Simon
Duffy5
Andrew S.
Broderick
Barry
Eccleston
Peter
Agnefjäll6
Maria
Kyriacou6
Guido
Demuynck7
Susan
Hooper8
Charlotte
Pedersen
Enrique
Dupuy de
Lome
Chavarri
Charlotte
Andsager
Dr Anthony
Radev3
Anna
Gatti4
Average
pay based
on all
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 13 April 2021.
4. Joined as of 4 November 2021.
5. Resigned as of 28 January 2022.
6. Resigned as of 27 July 2021 (did not stand for re-election).
7. Resigned as of 28 July 2020.
8. Resigned as of 3 June 2020.
The overall increase of 16 per cent for the CEO reflects a two-step salary increase, in the first step to
restore pre-COVID-19 level salary as of 1 April 2022 and in the second step to increase salaries as per
the market. The last real salary increase was in 2018. The 19.0 per cent increase in the Chief
Executive Officer’s base salary in F22 demonstrates the voluntary reductions the CEO accepted as a
continuous response to the long, drawn-out pandemic including 15.0 per cent decrease in F21 and 7.5
per cent decrease in F22 compared to F20. The STIP payment for F23 resulted in an 85 per cent
increase of the Short-term Incentive Plan for the Chief Executive Officer versus the previous financial
year.
Wizz Air Holdings Plc Annual report and accounts 2023
146
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 optical increase in their annual
compensation in F22. 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. In order to tackle the difficult business environment represented by high inflation and
by shortage of talents the management recommended and got an approval for a modest adjustment
to base salaries of 5.4 per cent on average across EVPs, Officers and Heads and implemented a salary
increase for office staff to the extent of 13 per cent on average in F23.
Relative importance of spend on pay
There were no dividends or share buybacks in either F23 or F22, and therefore disclosure of “relative
importance of spend on pay” has not been included.
Scheme interests (audited)
There were no scheme interests awarded in either F23 or F22.
Non-Executive Director remuneration
The Chairman and Non-Executive Directors are paid only Directors’ fees. The full details of the annual
compensation of the Non-Executive Directors are set out below:
Single total figure of remuneration table – audited
William A. Franke
Stephen L. Johnson
Simon Duffy3
Andrew S. Broderick
Barry Eccleston
Peter Agnefjäll4
Maria Kyriacou4
Charlotte Pedersen
Enrique Dupuy de Lome Chavarri
Charlotte Andsager
Dr Anthony Radev1
Anna Gatti2
Total
Salary and fees
€
2023
2022
298,917
217,375
92,500
—
88,125
123,750
—
—
100,627
103,232
95,419
90,625
88,125
74,000
91,177
78,625
91,831
1,002
13,577
88,260
81,706
78,625
77,888
34,533
1,081,320
928,599
1. Joined as of 13 April 2021.
2. Joined as of 4 November 2021.
3. Resigned as of 28 January 2022.
4. Resigned as of 27 July 2021 (did not stand for re-election).
In F21, in line with a commitment to cost restriction and alignment with stakeholder experience, 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. During F22, Non-Executive Directors also
accepted a reduction in fees of 7.5 per cent to recognise ongoing cost pressures. At the start of F23,
the Committee decided it was no longer necessary for the fees reduction to be in place and the fees
for the Chair and Non-Executive Directors were reinstated to the contracted amount. The
Remuneration Committee reviewed and approved a change in fee structure during F23 for the Non-
Executive Directors, with an effective date of 1 September 2022. Prior to reductions made in relation
to COVID-19 the last time the Non-Executive Director fees were changed was in F19.
The Committee agreed that the basic Non-Executive Director fee would be €100,000 and that all
Committee Chairs would receive an additional €25,000. For secondary Committee membership an
additional fee of €12,500 would be paid. The Senior Independent Director and Vice Chair would
receive an additional €20,000 and the Director responsible for employee engagement would receive
€2,500 per physical employee event attended. The Committee also agreed that fees would be paid
quarterly.
The Committee also reviewed the Chairman fee and agreed that going forward as Chairman, William
A. Franke will receive a fee of €336,000 (all inclusive) per annum for taking on that role.
Wizz Air Holdings Plc Annual report and accounts 2023
147
Total Directors’ remuneration (Executive and Non-Executive)
Total remuneration of Directors for F23 was €2,337,371 (2022: €2,937,995). This is the sum of the
total Chief Executive Officer’s compensation and the total fees and salaries paid out to the Non-
Executive Directors. The decrease against F22 was driven by the under-performance of the LTIP 2020
award that is fully based on TSR, which was significantly impacted by generating loss in F23 while
growing significantly and by late hedging of jet fuel, which will have a positive impact mostly in F24.
Our conflict of interest policy prohibits any other employment (for all employees) on top of the
employment at Wizz Air. Therefore, in the 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.
Statement of Directors’ shareholdings and share interest (audited)
For Executive Directors the shareholding requirement is equivalent to 400 per cent of base salary. 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. Wizz Air considers the shareholding
requirement to have been met.
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 2023 are set out below:
Directors’ and connected persons’ interests in shares5 (audited)
Direct
ownership
Options (performance measures
based)
Interests
Director1
William A. Franke2
József Váradi3, 4, 5
Stephen L. Johnson
Anthony Radev
Charlotte Andsager
Charlotte Pedersen
Andrew S. Broderick
Barry Eccleston
Number of
Ordinary Shares
Vested, not
exercised yet
Unvested3
Number of
Ordinary Shares
Number of
Ordinary Shares
(if full principal
of outstanding
convertible
notes is fully
converted)
212,917
-
-
24,759,645
24,246,715
—
43,359
880,505
1,450,933
52,750
5,000
4,000
185
485
5,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1. Directors not included in the table did not have any direct ownership or interest in shares as at 31 March 2023.
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 880,505 unvested share options, 42,562 options under LTIP F21 and 837,943 options under VCP.
4. Mr Váradi exercised 151,789 share options on 5 July 2022 with a share price of GBP 18.57 and EUR/GBP exchange rate 0.8587.
5 There was no movements in shares between 31 March 2023 and 08 May 2023.
During F23 the Board began recommending that Non-Executive Directors should invest in the
Company and show support through holding shares in the Company to encourage alignment with
Shareholder values. The recommendation is such that Non-Executive Directors should build up their
share ownership in Wizz Air over a three-year period which is equal in value to one year’s basic fee.
The CEO already has a significant number of shares over and above the normal requirements of such
shareholding guidelines.
Wizz Air Holdings Plc Annual report and accounts 2023
148
Application of the Remuneration Policy in F24
a) Chief Executive Officer’s base salary
There is no planned increase to the Chief Executive Officer’s base salary for F24. 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.
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
F24. The amount payable will depend on the achievement the Balanced Scorecard:
• Underlying Profit After Tax will represent 85 per cent weighting of the award.
•
Individual performance rating will represent the remaining 15 per cent of the award.
There will be a straight line of payment between threshold to target and target to overperformance.
Payout will be calculated based on the performance against the above measures, requiring at least “A”
Individual Performance rating or higher for payment to be made under the plan. Targets are set on a
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 F24.
d) VCP awarded to Chief Executive Officer
The one-off VCP award was made during F22 and included an award of 837,943 shares. No further
LTIP awards have been or will be made to the CEO over the course of the VCP performance period.
Given the extension of the CEO’s contract changes to the performance conditions of the VCP award:
•
•
•
•
•
•
•
•
the end share price of £119.34 for a £100 million payout has been maintained. To align with the
contract extension the performance period has been extended to seven years from five years (90
per cent weighting);
the threshold end share price of £77.24, for a GBP 20m payout has also been maintained;
there will continue to be straight-line vesting in between threshold and maximum performance;
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 2028;
amendment to allow full payout if 100 per cent target share price is hit during two consecutive
quarters before end date, otherwise defaulting to measured achievement based on 1H CY 2028
VWAP;
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;
The diversity objective will remain unchanged based on achieving a minimum of 40% female
representation within management by end of F26.
It is proposed that the carbon target glidepath be updated. Management’s commitment to
reducing CO2 emissions by 25% to 42.6 grams / RPK by 2030 will remain as the strategic
commitment. However, the glidepath to achieving that goal will be amended to recognise the
company’s upsized fleet ambitions (target fleet count of 500 aircraft by 2030, up from 300) and
the wider disruption of supply chain and aircraft manufacturing that has impacted all airlines. The
revised glidepath will now include a target for the VCP in FY26 of 48.9 grams / RPK instead of 45.1
grams / RPK with a steeper emissions reduction to achieve the 2030 goal.
•
the ESG proportion of the award will now be payable regardless of the achievement against the
threshold share price.
e) Chairman and Non-Executive Directors’ fees
During F23 the Board made changes to the structure of the Non-Executive Directors’ fees, which were
last updated in F19 against external benchmarks. During F24, the Non-Executive Director fee will be
consistent with F23 and are summarised below.
The Committee agreed that the basic Non-Executive Director fee would be €100,000 and that all
Committee Chairs would receive an additional €25,000. For secondary Committee membership an
additional fee of €12,500 will be paid. The Senior Independent Director and Vice Chair will receive an
additional €20,000 and the Director responsible for employee engagement receives €2,500 per
physical employee event attended. The Committee also agreed that fees will be paid quarterly.
In addition, William A. Franke, as Chair, will receive a fee of €336,000 (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 2023
149
Other disclosures
Chief Executive pay ratio
The table below sets out the Chief Executive Officer to worker pay ratios for the year ended March
2023. 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 143.
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 2023 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
2023
2022
2021
Method used
Option A
Option A
Option A
P25 (lower quartile)
43:1
80:1
80:1
Pay ratio
P50 (median)
36:1
59:1
62:1
P75 (upper quartile)
22:1
29:1
37:1
The table below summarises the identified employees in 2023:
Financial year
Base pay
Total pay
Base pay
Total pay
Base pay
Total pay
P25 (lower quartile)
P50 (median)
P75 (upper quartile)
2023
2022
2021
€21,121 €28,878
€23,987 €35,231
€31,705 €56,272
€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 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 the impact of
the reinstated base salary for the Chief Executive Officer, the subsequent base salary increase and the
bonus payment made to the Chief Executive Officer. Against F22, the pay ratio figures have reduced
significantly as the Chief Executive Officer’s LTIP FY2020 than F23. The impact of the remuneration
interventions on the total pay for the Chief Executive Officer aligns with the pay and reward decisions
made during F23, and has resulted in reduced pay ratio figures against F22.
Directors’ service agreements and letters of appointment
Executive Director
Since 1 September 2022 Mr Váradi has had a contract with Wizz Air UK Limited. The Company has the
right to terminate Mr Váradi’s employment with immediate effect by payment in lieu of notice. The
service agreement contains 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.
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 S. 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. All Directors had their appointments
extended until 31 March 2024, subject to shareholder approval.
Wizz Air Holdings Plc Annual report and accounts 2023
150
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 2023
Wizz Air Holdings Plc Annual report and accounts 2023
151
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 2023.
Results and dividend
The results for the year are shown on page 160.
The Directors do not recommend the payment of a dividend (2022: 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;
▶ Barry Eccleston;
▶ Charlotte Pedersen;
▶ Andrew S. Broderick;
▶ Charlotte Andsager;
▶ Enrique Dupuy de Lome Chavarri;
▶ Dr Anthony Radev; and
▶ Anna Gatti.
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 77
to 93. Emerging and principal risks and uncertainties facing the Group are described on pages 86 to
93. 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 2023, the Group held cash and cash equivalents of €1,408.6 million (total cash of
€1,529.0 million including €120.4 million of restricted cash), while net current liabilities were €957.2
million and net liabilities were €357.9 million. The Group's contractual undiscounted external
borrowings comprise: €500.0 million of bonds maturing in January 2024, €500.0 million of bonds
maturing in January 2026, €257.7 million of PDP financing from Carlyle Aviation Partners group (see
Notes 3 and 32) that is repayable over 12 months but may be re-borrowed and convertible debt with
a balance of €26.0 million. In addition, borrowings include an amount of €4,192.8 million that
represents future undiscounted commitments from lease contracts accounted for under IFRS 16 and
liabilities related to JOLCO and FTL contracts (see Note 3). None of these borrowings contain any
financial covenants.
The Group operates using a three-year planning cycle. The Directors have reviewed their latest
financial forecasts for a period of eighteen months from the date of signing these financial statements
including plans to finance committed future aircraft deliveries (see Note 32) due within this period that
are currently unfinanced and taking into account available committed financing for aircraft. After
making enquiries and testing the assumptions against different forecast scenarios including a severe
but plausible (downside) scenario (see below), 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 the testing performed in reaching this conclusion included the review of a base
case model of how the operations of the business would develop against a backdrop of higher inflation
and continued supply chain challenges. Wizz Air expects to achieve full utilisation of its fleet with
higher load factors and RASK levels improving in F24, reflecting its ability to pass-through higher fuel
costs in a competitive arena in which Wizz Air will no longer have a competitive disadvantage, having
restored its financial risk management strategies (i.e. fuel and EUR/USD hedging). This base case was
then flexed to produce a downside forecast that reflects the potential impact of trading scenarios such
as a lower RASK, higher fuel costs and stronger USD as well as to reflect the financing required for
expected currently unfinanced aircraft deliveries (see Note 32). Both the base and downside forecasts
reflect the repayment of €500m of bonds in January 2024.
The Directors also considered the impact of climate change over the time period and concluded that it
is unlikely that material physical or transition risks that are described in our Sustainability Report page
28-47 will arise over this period. As part of our base and downside forecasts, we included somewhat
higher pricing for ETS levied in Europe and the UK and included the expected costs from the CORSIA
implementation as from January 2024. Combined with an expected lower amount of ‘free’ ETS credits,
this reflects in general our expected cost increases of carbon emissions. The use of Sustainable
Wizz Air Holdings Plc Annual report and accounts 2023
152
Aviation Fuel (SAF) with traditional fuel will likely impact the average cost of jet fuel and was modelled
as part of the downside forecast by way of increased fuel pricing.
In preparing the base and downside forecasts the Directors also considered the requirements of
security levels in its card acquirer contracts and took into account the impact of the war in Ukraine
and the three aircraft stranded in Ukraine (see Note 14) and concluded that no material adverse
impact on future cash flows is likely to result from these items. The Directors have assumed that there
will be no further significant disruption of the magnitude experienced in recent financial years.
In this downside scenario the Group is still forecasting significant liquidity (or access to liquidity)
throughout this period. Accordingly, the Directors concluded it is appropriate to retain the going
concern basis of accounting in preparing the financial statements.
Subsequent events
Tax residency change of Wizz Air Hungary Ltd.
Wizz Air Hungary Ltd. moved its place of effective management from Switzerland to Hungary with an
effective date of 1 April 2023. As a result, its tax residency is Hungarian from F24 onwards.
Commercial operations of Wizz Air Malta
During F23, crew and aircraft were transferred to Wizz Air Malta and the entity provided wet-lease
capacity to Wizz Air Hungary Ltd. From 1 April 2023, Wizz Air Malta commenced commercial
operations and started to sell tickets for its own flights in addition to its wet-lease operations.
Viability
In accordance with Provision 31 of the UK Corporate Governance Code (2018), the Directors have
assessed the prospects and the viability of the Group over a three-year period to March 2026. The
Directors have determined that a three-year period is appropriate because the Group’s strategic
planning process traditionally covers three years.
Assessment of prospects
The Group’s prospects are assessed by management and the Board primarily through the strategic
planning process. This three-year plan takes into account the current position of the Group, includes a
detailed ‘bottom-up’ annual operating plan for the financial year starting in April of that year and then,
based on that plan, builds a sufficiently detailed 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
macroeconomic environment 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 considers the existing aircraft order book of the Group and the aircraft deliveries falling due
over the three year plan period together with their financing. This order book underpins the Group’s
planned growth for several years ahead. 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 Group’s customers being drawn from the younger demographic
segments; 2) leveraging on the historical 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 to the Middle East, with this diversification 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.
Although the strategic plan reflects management’s and the Directors’ best estimate of the future
prospects of the business, they have also tested the resilience of the business to unfavourable
deviations of certain key variables from the base case scenario. In defining these scenarios, the
Directors considered the emerging and principal risks that could prevent the Group from delivering on
its strategy and financial targets, as summarised on pages 86 to 93 in the Strategic Report.
The Directors have assumed as part of its stress testing that it will be able to continue to finance its
aircraft deliveries as they fall due, have access to its three-year PDP financing facility, continued
access to the Eurobond program, which was extended in early 2023, as well as other financial
products available to the Group. The Directors have also assumed that there are no other events that
may cause a material adverse shock to the business. The results of this stress testing show that the
Group will be able to withstand the impact of the assumptions used in the stress testing.
Wizz Air Holdings Plc Annual report and accounts 2023
153
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 2026.
For further information on emerging and principal risks and longer-term viability please refer to pages
86 to 93.
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 180 to 189.
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 24 to 49.
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 50 to 65.
Stakeholder engagement
Details of stakeholder engagement can be found on pages 21 to 23.
Disclosure of information to auditors
The Directors at the date of approval of the financial statements confirm that, so far as they are
aware, there is no relevant audit information of which the Company's auditors are unaware, and that
they have taken all the steps they ought to have taken as Directors to make themselves aware of any
relevant audit information and to establish that the Company's auditors are aware of that information.
Independent auditors
A resolution for the appointment of the auditors of the Company for the financial year ending 31
March 2024 is to be proposed by the Directors at the forthcoming Annual General Meeting.
Indemnities
The Company maintains Directors’ and Officers’ liability insurance. This insurance provides coverage
for the Directors and Officers protecting them from claims that may be brought against them arising
from their decisions taken when exercising their duties.
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.
Wizz Air Holdings Plc Annual report and accounts 2023
154
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) or to speak at the general meeting of the Company or to 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 2023, the Company had 103,282,854 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 2023 financial year 210,115 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 2023 financial year was
£20.86. The aggregate cash consideration received by the Company for the allotment of the Ordinary
Shares was £477,375.
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 94. 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 2023
155
Information required by Listing Rule 9.8.4C
In compliance with Listing Rule 9.8.4C, the Company discloses the following information:
Listing Rule Information required
9.8.4(1)
Interest capitalised by the Group
Relevant disclosure
N/A
to
the
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
unaudited
changes
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
Report.
Corporate
Governance
9.8.4(2)
Unaudited financial information as required (LR 9.2.18)
9.8.4(4)
Long-term Incentive Plans (LR 9.4.3)
9.8.4(5)
Directors’ waivers of emoluments
9.8.4(6)
Directors’ waivers of future emoluments
9.8.4(7)
Non-pro-rata allotments of equity for cash (the Company)
9.8.4(8)
Non-pro-rata allotments of equity for cash (major subsidiaries)
9.8.4(10)
Contracts of significance involving a Director
9.8.4(11)
Contracts of significance involving a controlling Shareholder
9.8.4(12) Waivers of dividends
9.8.4(13) Waivers of future dividends
9.8.4(14)
Agreement with a controlling Shareholder (LR 9.2.2.AR(2)(a))
For and on behalf of the Board
József Váradi
Chief Executive Officer
8 June 2023
Registered number: 103356
Wizz Air Holdings Plc Annual report and accounts 2023
156
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
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 2023
157
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.
The 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 the Companies (Jersey) Law 1991, the 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 judgments 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 comply with the
Companies (Jersey) Law 1991 and the Directors’ Remuneration Report complies with the Companies
Act 2006 as if the Company were a quoted company under the United Kingdom Companies Act 2006.
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
financial position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed in the Directors’ Report, confirm that, to
the best of their knowledge:
▶ the Group consolidated 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 2023
Wizz Air Holdings Plc Annual report and accounts 2023
158
ACCOUNTS
AND OTHER
INFORMATION
Wizz Air Holdings Plc Annual report and accounts 2023
159
ACCOUNTS AND OTHER INFORMATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
Passenger ticket revenue
Ancillary revenue
Total revenue
Staff costs
Fuel costs (including exceptional 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 income
Exceptional income (included in fuel costs)
Financial income
Financial expenses
Net foreign exchange gains/(losses)
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 expense – items that may be
subsequently reclassified to profit or loss:
Change in fair value of cash flow hedging reserve, net of tax
Cash flow hedging reserve recycled to profit or loss
Cost of hedging
Cost of hedging recycled to profit or loss
Currency translation differences
Other comprehensive expense for the year, net of tax
Total comprehensive expense for the year
Total comprehensive expense for the year attributable to:
Non-controlling interests
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
28
28
28
28
28
18
13
2023
€ million
2,024.9
1,870.8
3,895.7
(373.9)
(1,954.4)
(91.5)
(237.0)
(963.2)
(601.1)
(141.3)
(4,362.5)
(466.8)
(466.8)
—
20.8
(135.3)
16.6
(97.9)
(564.6)
29.5
(535.1)
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)
(469.6)
4.3
2.8
(89.5)
(89.5)
(176.2)
(641.5)
(0.9)
(642.5)
(12.1)
(523.0)
(10.7)
(631.8)
(102.7)
33.2
(30.0)
6.0
4.7
(88.8)
(623.9)
10.9
(12.5)
—
—
(2.5)
(4.1)
(646.6)
(11.5)
(612.4)
(5.07)
(11.4)
(635.2)
(6.33)
The Notes on pages 165 to 215 are an integral part of these financial statements.
Wizz Air Holdings Plc Annual report and accounts 2023
160
ACCOUNTS AND OTHER INFORMATION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 MARCH 2023
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Restricted cash
Deferred tax assets
Derivative financial instruments
Trade and other receivables
Total non-current assets
Current assets
Inventories
Trade and other receivables
Current tax assets
Derivative financial instruments
Restricted cash
Short-term cash deposits
Cash and cash equivalents
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital
Share premium
Reorganisation reserve
Equity part of convertible debt
Cash flow hedging reserve
Cost of hedging reserve
Cumulative translation adjustments
Retained (losses)/earnings
Capital and reserves attributable to the owners of Wizz Air
Holdings Plc
Non-controlling interests
Total equity
Non-current liabilities
Borrowings
Convertible debt
Deferred income
Deferred tax liabilities
Derivative financial instruments
Trade and other payables
Provisions for other liabilities and charges
Total non-current liabilities
Current liabilities
Trade and other payables
Current tax liabilities
Borrowings
Convertible debt
Derivative financial instruments
Deferred income
Provisions for other liabilities and charges
Total current liabilities
Total liabilities
Total equity and liabilities
Note
2023
€ million
2022
€ million
14
15
22
16
21
20
19
20
21
22
28
28
28
28
28
28
28
18
23
24
26
16
21
25
29
25
23
24
21
26
29
4,666.0
76.7
56.7
50.6
0.2
21.4
4,871.7
295.6
390.1
3.8
1.0
63.7
—
1,408.6
2,162.8
7,034.4
—
381.2
(193.0)
8.3
(73.2)
(24.0)
3.3
(433.6)
(331.0)
(26.9)
(357.9)
4,000.5
25.7
103.3
3.2
4.2
59.1
76.3
4,272.3
886.3
4.1
1,275.0
0.3
104.2
770.3
79.8
3,120.0
7,392.3
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
—
381.2
(193.0)
8.3
(3.8)
—
(0.7)
87.3
279.3
(15.4)
263.9
3,525.3
26.1
63.0
3.4
—
56.8
43.9
3,718.4
558.6
0.2
413.1
0.3
4.6
333.8
63.2
1,373.7
5,092.1
7,034.4
5,356.1
The Notes on pages 165 to 215 are an integral part of these financial statements.
The financial statements on pages 160 to 215 were approved by the Board of Directors and authorised
for issue on 8 June 2023 and were signed on behalf of the Board by:
József Váradi
Chief Executive Officer
Wizz Air Holdings Plc Annual report and accounts 2023
161
ACCOUNTS AND OTHER INFORMATION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
Share
capital
€
Share
premium
Reorganisation
reserve
million € million
28
28
€ million
28
Equity
part of
converti
ble debt
€
million
28
Cash
flow
hedging
reserve
Cost of
hedging
reserve
Cumulative
translation
adjustments
€ million € million
28
28
€ million
28
Retained
earnings
€ million
28
Total
€ million
Non-
controlling
interest
€ million
18
Total
equity
€ million
— 381.2
(193.0) 8.3 (3.8) —
(0.7) 87.3 279.3 (15.4) 263.9
— —
— — — —
— (523.0) (523.0) (12.1) (535.1)
— —
— — (69.5) (24.0)
4.1
— (89.4)
0.6 (88.8)
— —
— — (69.5) (24.0)
4.1 (523.0) (612.4) (11.5) (623.9)
— —
— — — —
—
2.2
2.2
—
2.2
— —
— — — —
—
2.2
2.2
—
2.2
— 381.2
(193.0) 8.3 (73.2) (24.0)
3.3 (433.6) (331.0) (26.9) (357.9)
Note
Balance at 1
April 2022
Comprehensi
ve income/
(expense):
Loss for the
year
Other
comprehensi
ve income/
(expense)
Total
comprehensi
ve income/
(expense)
for the year
Transactions
with owners:
Share-based
payment
charge (Note
27)
Total
transactions
with owners
Balance at 31
March 2023
The Notes on pages 165 to 215 are an integral part of these financial statements.
Wizz Air Holdings Plc Annual report and accounts 2023
162
ACCOUNTS AND OTHER INFORMATION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
Share
capital
Share
premiu
m
Reorganisatio
n reserve
Equity
part of
convertibl
e debt
Cash flow
hedging
reserve
Cumulative
translation
adjustment
Retained
earnings
Non-
controlling
interest
Total
Total
equity
€ million € million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
28
28
28
28
28
28
28
18
— 381.2
(193.0)
8.3
(2.2)
1.1 712.3 907.7
(4.0) 903.7
— —
—
—
—
— (631.8) (631.8) (10.7) (642.5)
— —
—
—
(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
Note
Balance at 1
April 2021
Comprehensive
expense:
Loss for the year
Other
comprehensive
expense*
Total
comprehensive
expense for the
year
Transactions
with owners:
Share-based
payment charge
(Note 27)
Total
transactions
with owners
Balance at 31
March 2022
*
In FY22 items within other comprehensive income were presented separately in the consolidated changes in equity . See
the details in the consolidated statement of comprehensive income and in Note 28.
The Notes on pages 165 to 215 are an integral part of these financial statements.
Wizz Air Holdings Plc Annual report and accounts 2023
163
ACCOUNTS AND OTHER INFORMATION
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
Cash flows from operating activities
Loss before income tax
Adjustments for:
Depreciation
Amortisation
Financial income
Financial expenses
Unrealised fair value loss/(gain) on derivative financial
instruments
Unrealised foreign currency gains
Realised non-operating foreign currency (gains)/losses
Gain on sale of property, plant and equipment
Share-based payment charges
Other non-cash operating (income)/expense
Changes in working capital
Increase in trade and other receivables
Decrease in restricted cash
Increase in inventory
(Decrease)/increase in provisions
Increase in trade and other payables*
Increase in deferred income*
Cash generated by operating activities before tax
Income tax paid
Net cash generated by operating activities
Cash flows from investing activities
Purchase of aircraft maintenance assets
Purchase of tangible and intangible assets
Proceeds from the sale of tangible assets*
Advances paid for aircraft
Refund of advances paid for aircraft
Interest received
Decrease/(increase) in short-term cash deposits
Net cash generated by/(used in) investing activities
Cash flows from financing activities
Proceeds from new loans**
Repayment of loans**
Interest paid – loans – IFRS 16 lease liability
Interest paid – loans – JOLCO
Proceeds from unsecured debt
Proceeds from secured debt
Repayment of unsecured debt
Interest paid – unsecured debt
Interest paid – secured debt
Interest paid – other
Net cash used in financing activities
2023
2022
Note
€ million
(restated*)
€ million
(564.6)
(641.5)
14
15
27
26
14
14
30
30
30
30
30
30
30
30
30
30
587.6
13.5
(20.8)
135.3
8.2
(9.1)
(13.2)
(99.7)
2.2
(3.4)
36.0
(186.1)
48.3
(226.4)
8.0
316.7
432.4
428.9
(7.0)
421.9
(69.7)
(94.7)
242.0
(475.5)
463.4
17.4
450.0
532.9
63.0
(492.5)
(97.7)
(14.8)
—
245.5
—
(11.8)
(0.2)
(2.7)
(311.2)
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
147.4
271.4
286.1
(4.9)
281.2
(59.1)
(77.7)
132.9
(407.6)
190.0
2.9
(99.2)
(317.8)
16.4
(397.5)
(71.3)
(1.9)
497.5
—
(357.5)
(8.9)
—
(2.2)
(325.5)
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year***
Effect of exchange rate fluctuations on cash and
cash equivalents
Cash and cash equivalents at the end of the year***
* The prior year was restated – refer to Note 35 for more detail.
** Mostly JOLCO and IFRS 16 leases.
643.7
766.6
(362.1)
1,100.7
(7.7)
1,402.6
28.0
766.6
*** Cash and cash equivalents at 31 March 2023 include €197.3 million (€235.6 million at 31 March 2022; €461.9 million at 31
March 2021) of cash at bank and €1,211.3 million (€531.0 million at 31 March 2022; €638.8 million at 31 March 2021) of cash
deposits maturing within three months of inception, and overdrafts (repayable on demand) of € 6.0 million (nil at 31 March
2022 and 31 March 2021), which are an integral part of cash management activities.
The Notes on pages 165 to 215 are an integral part of these financial statements.
Wizz Air Holdings Plc Annual report and accounts 2023
164
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
1. General information
Wizz Air Holdings Plc (“the Company”) is a public limited company incorporated in Jersey, registered
under the address 44 The Esplanade, St Helier, Jersey JE4 9WG. Until 31 March 2023, the Company
was managed from Switzerland, under the address Route François-Peyrot 12, 1218 Le Grand-
Saconnex, Geneve. With effective date of 1 April 2023 the place of effective management was moved
from Switzerland to Hungary. 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. The Company’s Ordinary
Shares are listed in the premium segment of the Official List of the Financial Conduct Authority and
admitted to the Main Market of the London Stock Exchange.
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 combine the financial information 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 Euro (EUR or €).
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 adopted IFRS legislates
the use of certain critical accounting estimates and requires management to exercise judgments in the
process of applying the Group's accounting policies. The areas involving a high degree of judgment or
complexity or areas where assumptions and estimates involving significant uncertainty that have a
risk of causing material adjustment to the carrying value of assets and liabilities in the coming year
are disclosed in Note 4.
New standards, amendments and interpretations
a) Standards, amendments and interpretations effective and 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.
Wizz Air Holdings Plc Annual report and accounts 2023
165
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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.
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 early adopted by the Group
There are no standards early adopted by the Group.
d) Interpretations and standards that are not yet effective and have not been early adopted by the
Group
New standards effective for periods beginning 1 January 2023:
▶ 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)
New standards effective for periods beginning 1 January 2024:
▶ Effective date of amendments to IAS 1
On 31 October 2022, the IASB issued Non-current Liabilities with Covenants (Amendments to
IAS 1) to clarify how conditions with which an entity must comply within twelve months after
the reporting period affect the classification of a liability. The amendments are effective for
reporting periods beginning on or after 1 January 2024.
▶ Effective date of amendments to IFRS 16
On 22 September 2022, the IASB issued Lease Liability in a Sale and Leaseback (Amendments
to IFRS 16) with amendments that clarify how a seller-lessee subsequently measures sale and
leaseback transactions that satisfy the requirements in IFRS 15 to be accounted for as a sale.
The amendments are effective for annual periods beginning on or after 1 January 2024.
The above new accounting standards and interpretations that have been published 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.
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;
▶ 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.
Wizz Air Holdings Plc Annual report and accounts 2023
166
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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 77
to 93. Emerging and principal risks and uncertainties facing the Group are described on pages 86 to
93. 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 2023, the Group held cash and cash equivalents of €1,408.6 million (total cash of
€1,529.0 million including €120.4 million of restricted cash), while net current liabilities were €957.2
million and net liabilities were €357.9 million. The Group's contractual undiscounted external
borrowings comprise: €500.0 million of bonds maturing in January 2024, €500.0 million of bonds
maturing in January 2026, €257.7 million of PDP financing from Carlyle Aviation Partners group (see
Notes 3 and 32) that is repayable over 12 months but may be re-borrowed and convertible debt with
a balance of €26.0 million. In addition, borrowings include an amount of €4,192.8 million that
represents future undiscounted commitments from lease contracts accounted for under IFRS 16 and
liabilities related to JOLCO and FTL contracts (see Note 3). None of these borrowings contain any
financial covenants.
The Group operates using a three-year planning cycle. The Directors have reviewed their latest
financial forecasts for a period of eighteen months from the date of signing these financial statements
including plans to finance committed future aircraft deliveries (see Note 32) due within this period that
are currently unfinanced and taking into account available committed financing for aircraft. After
making enquiries and testing the assumptions against different forecast scenarios including a severe
but plausible (downside) scenario (see below), 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 the testing performed in reaching this conclusion included the review of a base
case model of how the operations of the business would develop against a backdrop of higher inflation
and continued supply chain challenges. Wizz Air expects to achieve full utilisation of its fleet with
higher load factors and RASK levels improving in F24, reflecting its ability to pass-through higher fuel
costs in a competitive arena in which Wizz Air will no longer have a competitive disadvantage, having
restored its financial risk management strategies (i.e. fuel and EUR/USD hedging). This base case was
then flexed to produce a downside forecast that reflects the potential impact of trading scenarios such
as a lower RASK, higher fuel costs and stronger USD as well as to reflect the financing required for
expected currently unfinanced aircraft deliveries (see Note 32). Both the base and downside forecasts
reflect the repayment of €500m of bonds in January 2024.
Wizz Air Holdings Plc Annual report and accounts 2023
167
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
The Directors also considered the impact of climate change over the time period and concluded that it
is unlikely that material physical or transition risks that are described in our Sustainability Report page
29-40 will arise over this period. As part of our base and downside forecasts, we included somewhat
higher pricing for ETS levied in Europe and the UK and included the expected costs from the CORSIA
implementation as from January 2024. Combined with an expected lower amount of ‘free’ ETS credits,
this reflects in general our expected cost increases of carbon emissions. The use of Sustainable
Aviation Fuel (SAF) with traditional fuel will likely impact the average cost of jet fuel and was modelled
as part of the downside forecast by way of increased fuel pricing.
In preparing the base and downside forecasts the Directors also considered the requirements of
security levels in its card acquirer contracts and took into account the impact of the war in Ukraine
and the three aircraft stranded in Ukraine (see Note 14) and concluded that no material adverse
impact on future cash flows is likely to result from these items. The Directors have assumed that there
will be no further significant disruption of the magnitude experienced in recent financial years.
In this downside scenario the Group is still forecasting significant liquidity (or access to liquidity)
throughout this period. Accordingly, the Directors concluded it is appropriate 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 Wizz Air Hungary Ltd.
generating the vast majority of the Group’s revenues is EUR. The other airline companies’ functional
currency is different by entity. The functional currency 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 £) and the
functional currency of Wizz Air Malta 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 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:
Wizz Air Holdings Plc Annual report and accounts 2023
168
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Description in the statement of financial position
IFRS 9 category
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
Financial assets measured at amortised cost
Fair value through profit or loss
Financial assets measured at amortised cost
Financial assets measured at amortised cost
Fair value through profit or loss
Financial assets measured at amortised cost
Financial assets measured at amortised cost
Financial assets measured at amortised cost
Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost
Fair value through profit or loss
Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost
Fair value through profit or loss
The classification of financial assets depends on the business model for managing the financial assets
and contractual cash flow characteristics of the financial assets determined by the management at
initial recognition.
a) Financial assets measured at amortised cost
These are non-derivative financial assets held by the Group in order to collect contractual cash flows
and the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
The Group’s financial assets measured at amortised cost comprise trade and other receivables
excluding prepayments, 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 which are also measured at amortised cost.
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
The Group uses zero-cost collars to hedge jet fuel price and foreign exchange risks related to highly
probable future cash flows. In F23, the Group used call options to a limited extent to hedge jet fuel
price risk during the period from December to January.
Wizz Air Holdings Plc Annual report and accounts 2023
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The Group designates only the intrinsic value of the options as hedging instrument. Changes in time
value are accumulated in the cost of hedging reserve, within other comprehensive income, and are
recycled into profit and loss, within fuel cost, in the months when the hedged transactions take place.
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).
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.
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▶ The carrying amount of the asset is reduced through recognising the impact of the
amortisation 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.
▶ Other receivables include amounts receivable from aircraft and spare engine lessors (in the
form of security deposits and maintenance reserves paid) and also prepayments, deferred
expenses and accrued income (see Note 20). The accrued income within other receivables also
comprises insurance claims related to events that are covered by insurance contracts. The
Group recognises the income in the financial statements only from those insurance claims
which, based on management’s judgment, are virtually certain to be received by the Group.
Impairment policy of trade and other receivables
Management reviewed the Group’s different customer payment channels and the receivables from
these channels. The most significant component is ticket sales and the various forms of payment for
tickets. The vast majority of tickets are paid either by bank cards or by bank transfer, in any case
prior to flight. Based on their nature, in practice there is no impairment required for these. The other,
less significant components involving credit risk are commissions receivable from non-ticket revenue
partners and marketing support receivable from airports and other parties.
In accordance with IFRS 9 requirements on expected credit loss recognition, management reviewed
historical payment and impairment statistics for transactions in these channels. The historical loss
rates were adjusted to reflect current and forward-looking information on macroeconomic factors
affecting the customers' ability to settle receivables. Based on this analysis, management concluded
that the impairment of receivables in these channels does not have a material impact on the Group's
financial statements, in compliance with IFRS 9.
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 €nil at 31 March 2023 (2022: €450.0 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
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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.
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 under-performing 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 counterparties 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.
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The estimated useful lives of the relevant asset categories, reflecting the Group’s intention for the
period of use in the business, are as follows:
Land and buildings – investments made on
leased buildings
3–5 years, being the shorter of useful economic life
of the investment and the lease term of the building
Aircraft (A320neo and A321neo 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)
Right-of-use assets (from leases)
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
3–5 years
The lease term over one year (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 and
A321neo aircraft where the 14-year life corresponds to 50 per cent of the residual value of the asset
component excluding the maintenance condition of the aircraft. This aircraft type is otherwise, and
having considered the impact of climate change, estimated to be capable of flying for 28 years.
The residual values and useful lives are reassessed, if applicable, annually.
Assets received free of charge
In certain cases, the Group receives assets free of charge. These items are classified as non-cash
items in the statement of cash flows. The Group recognises these assets as deferred income and
amortises them over their useful lives, except for assets received as compensation for already
incurred costs or financial losses. In those cases, the fair value of the assets is recognised immediately
as other income in the financial statements.
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 lease rentals from F23 and related expenses are recognised in the aircraft
rentals line. The Group does not apply IFRS 16 to other leases of intangible assets. Some lease
contracts contain variable payment terms that are linked to floating market interest rates.
The Group chose to treat compensation 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 IFRS 16. These payments are therefore not included in the measurement of the
lease liability. Contractual maintenance obligations which are not dependent on the use of the aircraft
or spare engine are recognised in full on commencement of the lease.
Lease extension options
Some of the Group’s lease contracts contain lease extension options. The extension option is taken
into account in the measurement of the lease liability only when the Group is reasonably certain that it
would later exercise the option. Such judgment is relevant both at inception, for the initial
measurement of the lease liability, and also for a subsequent remeasurement of the lease liability if
the initial judgment is revised at a later date.
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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 regard 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 Limited is GBP.
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.
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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.
Advances paid for aircraft maintenance assets – engine flight 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,
which 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.
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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 recognised 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 aircraft 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 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.
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
The Group's revenue disaggregation differs from the requirements under IFRS 15, ‘Revenue from
Contracts with Customers’. The revenue is disaggregated into two main categories: passenger ticket
revenues (representing the invoiced value of flight seats) and ancillary revenues. Any compensation
payable to passengers for delays and cancellations is deducted from the revenue up to the level of the
original revenue, in accordance with IFRS 15. Any excess compensation beyond the original revenue is
accounted for as an expense. This treatment is consistent with the principle under IFRS 15 that
revenue should only be recognised to the extent that it is probable that a significant reversal of
revenue recognised will not occur when uncertainties are resolved.
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 aircraft 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. For details of main ancillary revenue categories see Note 5. 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:
▶ enter into contracts with the passengers/customers and bear the liability towards customers
for delivering the products and services;
▶ define the majority of the product portfolio, manage the inventory, are responsible for product
availability/outage, have title to the inventory and, the effect of the profit share
notwithstanding, bear the risk of loss; and
▶ have 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.
Wizz Air Holdings Plc Annual report and accounts 2023
177
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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.
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.
Wizz Air Holdings Plc Annual report and accounts 2023
178
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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 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 a 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 issue
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
applicable 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.
Wizz Air Holdings Plc Annual report and accounts 2023
179
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Government grants
Grants that compensate the Group for expenses incurred are recognised in profit or loss as other
income on a systematic basis in the periods in which the expenses are recognised, unless the
conditions for receiving the grant are met after the related expenses have been recognised. In this
case, the grant is recognised when it becomes receivable.
Exceptional items
Exceptional items are disclosed separately in the financial statements where it is necessary to do so to
provide further understanding of the financial performance of the Group. They are material items of
income or expense that are shown separately due to the conditions created by COVID-19 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
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
Wizz Air operates under a clear set of treasury policies approved by the Board and supervised by the
Audit and Risk Committee. During the COVID-19 crisis, key players in the airline industry, including
Wizz Air, were severely impacted with significant financial hedge losses. As a result, during that time
and as agreed with its Board of Directors, Wizz Air moved to a no hedge policy to avoid hedge losses
in the future.
In Europe, however, key competitors continued to hedge, albeit at lower coverage levels versus pre-
pandemic.
During the final quarter of F22, the Board approved a temporary exception to the Group's "no hedge"
policy due to the high and volatile commodity environment. As part of this exception, a portion of the
fuel cost exposure for the five-month period ending in August 2022 was capped using zero-cost
collars. This decision was made to manage the risks associated with the volatile commodity market
during this period.
In F23, given the sustained and ongoing volatility in commodity prices Wizz Air has decided to
reinstate the jet fuel hedging and align the policy with its peers from F24 onwards. The hedges under
the hedge policy will be rolled forward quarterly, 18 months out, with coverage levels over time
reaching indicatively between 65 per cent for the first quarter of the hedging horizon and 15 per cent
for the last quarter of the hedging horizon. In line with the hedging policy, Wizz Air also intends to
hedge its fuel consumption related US Dollar exposure in a similar fashion.
Wizz Air Holdings Plc Annual report and accounts 2023
180
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 and aircraft leases; 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) and the Romanian Leu (RON).
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:
At 31 March 2023
Financial assets
Trade and other receivables
Derivative financial assets
Cash and cash equivalents
Restricted cash
Total financial assets
Financial liabilities
Unsecured debt*
Secured 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
Deferred income
Total financial liabilities
Net liabilities
EUR
€ million
USD
€ million
Other
€ million
Total
€ million
193.4
—
964.4
0.7
1,158.5
1,005.5
—
405.1
5.7
850.8
—
26.0
558.1
—
4.8
2,856.0
(1,697.5)
65.4
1.2
373.0
119.3
558.9
—
250.0
2,371.4
—
288.4
13.8
—
68.7
108.4
—
3,100.7
(2,541.8)
11.6
—
71.2
0.4
83.2
—
—
—
12.8
72.0
—
—
78.8
—
—
163.6
(80.4)
270.4
1.2
1,408.6
120.4
1,800.6
1,005.5
250.0
2,776.5
18.5
1,211.2
13.8
26.0
705.6
108.4
4.8
6,120.2
(4,319.6)
* Unsecured debt represents the European Mid Term Note and reclassification of negative cash balance from cash.
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
Total financial liabilities
Net liabilities
EUR
€ million
USD
€ million
Other
€ million
Total
€ million
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)
4.5
—
71.7
—
0.4
76.6
—
—
3.1
27.0
—
—
48.2
—
78.3
(1.7)
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)
* Unsecured debt represents the European Mid Term Note.
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).
Wizz Air Holdings Plc Annual report and accounts 2023
181
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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 2023, all requirements for calendar year 2022 and 100 per cent
of total forecast requirements for calendar year 2023 were covered. This coverage includes forward
purchase agreements in the value of €219.2 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 a small portion of future commitments under certain lease contracts that are based on
floating interest rates. The recently utilised PDP refinancing credit facility (see Note 23) is a variable
rate loan, which is expected to be gradually settled within one year. The floating nature of these
interest charges exposes the Group to interest rate risk. Interest rates charged on Eurobond,
convertible debt liabilities and 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 uses zero-cost collar instruments to hedge its foreign exchange exposures and jet fuel price
exposures. In F23, the Group used call options to a limited extent to hedge jet fuel price risk during
the period from December to January. In order to ensure economic relationship, the Group enters into
hedge relationships where critical terms of the hedging instrument match exactly with that of the
hedged item.
The gains and losses arising from hedge transactions during the year were as follows:
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*
Total loss recognised within fuel costs
* Fair value change and result of discontinued hedges were charged to exceptional expense.
Fuel hedge:
(Loss)/gain 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*
Cost of hedging recycled to profit or loss
Total (loss)/gain recognised within fuel costs
* Fair value change and result of discontinued hedges were charged to exceptional expense.
2023
€ million
2022
€ million
—
—
—
—
(1.8)
—
(0.4)
(2.2)
2023
€ million
2022
€ million
(33.2)
—
—
(6.0)
(39.2)
13.7
0.6
4.0
—
18.3
Wizz Air Holdings Plc Annual report and accounts 2023
182
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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 the Group had the following open hedge positions:
a. Foreign exchange hedges with derivatives:
Derivative financial instruments
Notional
amount
US$ million
Non-current
assets
€ million
Current
assets
€ million
Non-current
liabilities
€ million
Current
liabilities
€ million
At 31 March 2023
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.
—
312.0
—
312.0
—
—
—
—
—
—
—
—
—
—
—
(0.4)
Net
liability
€ million
—
(0.4)
—
—
— (0.4)
—
(0.4)
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 2023
Maturity profile of notional amount (million)
Weighted average ceiling
Weighted average floor
No such hedges as at 31 March 2022.
b. Foreign exchange hedge with non-derivatives:
F24
F25
12 months
312.0
1.1154
1.0724
6 months
—
—
—
$
$
$
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.
Fuel hedge:
Derivative financial instruments
‘000
metric tonnes
Non-current
assets
€ million
Current
assets
€ million
Non-current
liabilities
€ million
Current
liabilities
€ million
Net
liability
€ million
At 31 March 2023
Effective cash flow hedge positions 1,258.5
Discontinued cash flow hedge
positions
—
1,258.5
Total fuel hedge
0.2
1.0
(4.2) (103.8) (106.8)
—
0.2
—
1.0
—
—
—
(4.2) (103.8) (106.8)
At 31 March 2022
Effective cash flow hedge positions
Discontinued cash flow hedge
positions
Total fuel hedge
Derivative financial instruments
‘000
metric tonnes
Non-
current
assets
€ million
Current
assets
€ million
Non-current
liabilities
€ million
Current
liabilities
€ million
Net
liability
€ million
240.0 —
0.7
—
(4.6)
(3.9)
— —
240.0 —
—
0.7
—
—
—
(4.6)
—
(3.9)
For the movements in other comprehensive income refer to the consolidated statement of changes in
equity.
Wizz Air Holdings Plc Annual report and accounts 2023
183
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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 2023
Maturity profile (‘000 metric tonnes)
Blended capped rate
Blended floor rate
At 31 March 2022
Maturity profile (‘000 metric tonnes)
Blended capped rate
Blended floor rate
F24
12 months
1,081.0
994.0 $
864.0 $
F25
6 months
177.5
884.0
767.0
F23
12 months
240.0
1,130.0
982.0
F24
6 months
—
—
—
$
$
$
$
Effects of hedge accounting on the financial position and performance
The effects of the foreign exchange hedges on the Group’s financial position and performance are as
follows:
Zero-cost collars
Carrying amount (net liability)
Notional amount
Maturity date
Hedge ratio
Change in fair value of outstanding hedging instruments
Change in value of hedged item used to determine hedge
effectiveness
2023
€ million
2022
€ million
(0.4)
312.0
April 2023 -
March 2024
1:1
—
—
—
—
—
—
—
—
The effects of the fuel hedges on the Group’s financial position and performance are as follows:
Zero-cost collars
Carrying amount (net liability)
Notional amount
Maturity date
Hedge ratio
Change in fair value of outstanding hedging instruments
Change in value of hedged item used to determine hedge
effectiveness
2023
€ million
2022
€ million
(106.8)
1,006.9
(3.9)
259.4
April 2023 -
October 2024
April 2022 -
August 2022
1:1
(83.2)
1:1
(3.9)
83.2
3.9
Hedge effectiveness
Hedge effectiveness testing is performed at each reporting date. Ineffectiveness may arise in case of
changing in the timing of forecast transactions, or material changes in credit risk of the hedge
counterparties.
Due to COVID-19 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 loss or gain on these instruments (2023:
€nil; 2022: €4.2 million net gain) 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.
Wizz Air Holdings Plc Annual report and accounts 2023
184
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Sensitivity analysis
The table below shows the sensitivity of the Group’s profits to various market risks for the current and
the prior year, excluding any hedge impacts.
Fuel price sensitivity
Fuel price $100 higher per metric tonne
Fuel price $100 lower per metric tonne
FX rate sensitivity (USD/EUR)
FX rate 0.05 higher (meaning EUR stronger)
FX rate 0.05 lower
FX rate sensitivity (GBP/EUR)
FX rate 0.03 higher (meaning EUR stronger)
FX rate 0.03 lower
Interest rate sensitivity (EUR)
Interest rate is higher by 100 bps
Interest rate is lower by 100 bps
2023
2022
Difference in profit
after tax
€ million
Difference in
profit after tax
€ million
-142.4
+142.4
-74.5
+74.5
+208.9
-269.0
+104.2
-113.6
-11.6
+12.4
+14.1
-13.9
-5.4
+5.7
+14.9
-14.8
The group is primarily exposed to changes in EUR/USD foreign exchange rate. The sensitivity of profit
or loss to changes in the exchange rates arises mainly from USD lease liabilities and JET fuel related
USD exposure.
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
2023
Difference
€ million
2022
Difference
€ million
-114.3
+114.3
+20.6
-20.6
-5.1
+5.1
-7.8
+7.8
-0.2
+0.2
-6.7
+6.7
The sensitivity analyses for 2023 above were performed with reference to the following market rates,
as the base case:
▶ for profits, annual average rates: jet fuel price $1,196.0 per metric tonne; EUR/USD FX rate
1.04; EUR/GBP FX rate 0.86; and
▶ for other comprehensive income, year-end spot rates: jet fuel price $800.1 per metric tonne;
EUR/USD FX rate 1.08.
Wizz Air Holdings Plc Annual report and accounts 2023
185
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Liquidity risks
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding.
The unprecedented impact of the COVID-19-related prolonged travel restrictions and the following
disruptions in the supply chain affected the liquidity position of the Group. As a response to these
special challenges a number of actions were taken to improve costs and liquidity, the most important
ones being:
▶ continue to ensure that the flights that are operated deliver positive cash contribution;
▶ securing nearly all lease financing for aircraft delivery positions until December 2023;
▶ 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;
▶ issuance of a four-year €500 million bond in January 2022 that pays an annual fixed coupon of
1.00 per cent; and
▶ contracting a flexible PDP refinancing credit facility available for a maximum of three years in
February 2023 (see Note 23).
As a result of these measures, the Group is confident in its ability to maintain sufficient liquidity in
case of further unexpected events or increases in commodity prices. For further notes, refer to the
going concern assessment under Note 2.
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.
Within three
months
€ million
Between three
months
and one year
€ million
Between one
and five years
€ million
More than five
years
€ million
At 31 March 2023
Financial assets
Trade and other receivables
Derivative financial assets
Cash and cash equivalents
Restricted cash
Total financial assets
Financial liabilities
Unsecured debt
Secured 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
Deferred income
Total financial liabilities
234.4
0.3
1,408.6
16.2
1,659.5
6.0
77.1
105.0
0.9
21.6
—
—
609.0
38.7
4.8
863.1
Total
€ million
270.4
1.2
1,408.6
120.4
1,800.6
—
—
—
0.6
0.6
—
—
1,027.8
257.7
21.3
0.2
—
56.1
77.6
510.0
—
14.7
0.7
—
47.5
62.9
511.8
180.6
328.9
2.6
71.9
1,348.6
12.3
388.3
1,004.5
7.3
900.9
2,787.0
23.1
1,382.7
—
—
37.5
65.4
—
1,198.7
—
26.0
48.6
4.3
—
2,338.1
13.8
—
10.5
—
—
1,937.0
13.8
26.0
705.6
108.4
4.8
6,336.9
Wizz Air Holdings Plc Annual report and accounts 2023
186
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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
110.0
0.7
766.6
—
36.7
914.0
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
6.8
11.8
1,021.8
—
1,040.4
122.1
0.5
10.6
—
—
432.7
—
—
572.7
321.4
1.6
32.9
—
—
39.7
4.6
—
412.0
1,338.4
6.7
174.0
—
26.4
49.7
—
—
2,617.0
847.8
5.2
410.8
13.5
—
7.0
—
—
1,284.3
2,629.7
14.0
628.3
13.5
26.4
529.1
4.6
—
4,886.0
The Group has obligations under financial guarantee contracts as detailed in Note 31. The most
significant financial guarantee contracts relate to aircraft leases, hedging, EMTN notes, PDP financing
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.
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:
At 31 March 2023
Financial assets
Cash and cash equivalents
Restricted cash
Trade and other receivables
Derivative financial assets
Total financial assets
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
1,398.6
120.4
20.8
0.9
1,540.7
0.3
—
0.4
0.3
1.0
2.9
—
—
—
2.9
6.8
—
249.2
—
256.0
1,408.6
120.4
270.4
1.2
1,800.6
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
1,521.1
Wizz Air Holdings Plc Annual report and accounts 2023
187
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
From the unrated category within trade and other receivables the Group has €21.0 million (2022:
€25.2 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.
Based on the information above management does not consider the counterparty risk of any of the
counterparties to be 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 2023:
Assets
Derivative financial instruments
Liabilities
Derivative financial instruments
Level 1
€ million
Level 2
€ million
Level 3
€ million
Total
€ million
—
—
—
—
1.2
1.2
108.4
108.4
—
—
—
—
1.2
1.2
108.4
108.4
The following table presents the Group’s financial assets and liabilities that are measured at fair value
at 31 March 2022:
Assets
Derivative financial instruments
Liabilities
Derivative financial instruments
Level 1
€ million
Level 2
€ million
Level 3
€ million
Total
€ million
—
—
—
—
0.7
0.7
4.6
4.6
—
—
—
—
0.7
0.7
4.6
4.6
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 32); 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 Holdings Plc Annual report and accounts 2023
188
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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. The Group furthered 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. In
addition, the Group entered into a PDP refinancing credit facility which is available for a maximum of
three years.
The existing aircraft orders of the Group create a need for raising significant amounts of capital in the
following years. The strategy of the Group is to ensure that it has access to various forms of long-term
financing, which in turn allows the Group to further reduce its cost of capital and the cost of ownership
of its aircraft fleet.
4. Critical accounting estimates and judgments made in applying the Group’s
accounting policies
a) Maintenance policy
The estimations and judgments 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 29).
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 5
per cent increase in the planned costs of heavy maintenance works at the 31 March 2023 year end
would increase the balance of both aircraft maintenance assets and aircraft maintenance provisions by
€7.4 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 31 per cent decrease in the F24 forecast aircraft utilisation would
result in the same average utilisation as in F23. This would cause €6.0 million decrease in the balance
of aircraft maintenance assets.
The basis of these estimates is 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 judgment whether it would perform future
maintenance that would impact the condition of the respective aircraft or spare engine asset in a way
that eliminates the need for paying compensation to the lessor on the re-delivery of the leased asset.
When such maintenance is not expected then accrual is made for the compensation due to the lessor
in line with the terms of the respective lease contract.
Judgment: The policy adopted by the Group, as summarised above, is only one of the policies
available under IFRS in accounting for heavy maintenance for aircraft held under lease agreements. A
principal alternative policy involves recognising provisions for future maintenance obligations in
accordance with hours flown or similar measure, and not only when lease re-delivery conditions are
not met. In the judgment of the Directors the policy adopted by the Group, whereby provisions for
maintenance are recognised only when lease re-delivery conditions are not met, provides the most
reliable and relevant information about the Company's obligations to incur major maintenance
expenditure on leased aircraft and at the same time it best reflects the fact that an aircraft has lower
maintenance requirements in the early years of its operation. The average age of the Group’s aircraft
fleet at 31 March 2023 was 4.6 years (5.0 years at 31 March 2022). Given the policy adopted we
currently do not consider that the impact of climate change has a material impact on maintenance
provision.
Wizz Air Holdings Plc Annual report and accounts 2023
189
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
b) Hedge and derivative accounting
Estimate: The asset and liability balances at year end related to open hedge instruments can be
material. The fair value of derivatives is estimated by the contracting financial institutions as per their
industry practice. As required, the fair values ascribed to those instruments are verified also by
management using high-level models. These estimations are performed based on market prices
observed at year end and therefore, according to paragraph 128 of IAS 1, do not require further
disclosure. Such fair values might change materially within the next financial year but these changes
would not arise from assumptions made by management or other sources of estimation uncertainty at
the end of the year but from the movement of market prices. The fair value calculation is most
sensitive to movements in the jet fuel and foreign currency spot prices, their implied volatility and
respective yields. A sensitivity analysis for the jet fuel price and for the FX rate on most relevant
currency pairs is included in Note 3.
Due to the reinstated hedging policy, the open hedge instrument balances of the Group increased
significantly during the period. The net carrying amount of cash flow hedges was €(107.2) million
liability at 31 March 2023 (31 March 2022: €(3.9) million liability). There was no discontinued hedging
relationship during the financial year.
Estimate and judgment: The effectiveness of hedges is tested both prospectively and retrospectively
to determine the appropriate accounting treatment of hedge gains and losses. Prospective testing of
open hedges requires making certain estimates, the most significant one being for the future expected
level of the business activity (primarily the utilisation of fleet capacity) of the Group, that is supported
by the models used to prepare going concern assessments.
Building on these estimations of the future, management makes judgment on the accounting
treatment of open hedge instruments. Hedge accounting for jet fuel and foreign currency cash flow
hedges was discontinued where the “highly probable” forecast criterion was not met in accordance
with the requirements of IFRS 9.
None of the hedge counterparties had a material change in their credit status that would have
influenced the effectiveness of the hedging transactions.
c) Net presentation of government taxes and other similar levies
The Group’s accounting policy stipulates that where charges levied by airports or government
authorities on a per passenger basis represent a government tax in fact or in substance, then such
amounts are presented on a net basis in the statement of comprehensive income (netted against
revenue).
Judgment: Management reviews all passenger-based charges levied by airports and government
authorities to ensure that any amounts recovered from passengers in respect of these charges are
appropriately classified within the statement of comprehensive income. Given the variability of these
charges and the number of airports and jurisdictions within which the Group operates, the assessment
of whether these items constitute taxes in nature is an inherently complex area for some airports,
requiring a level of judgment.
d) Accounting for aircraft and spare engine assets
Judgment: When the Group acquires new aircraft and spare engines, it applies the following critical
judgments in determining the acquisition cost of these assets:
▶ 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.
e) Accounting for leases
Judgment: Some of the Group’s lease contracts contain options to extend the lease term for a period
of one to two years. The extension option is taken into account in the measurement of the lease
liability only when the Group is reasonably certain that it would later exercise the option. Such
judgment is made lease by lease, and is relevant both at inception, for the initial measurement of the
lease liability, and also for a subsequent remeasurement of the lease liability if the initial judgment is
revised at a later date.
Judgment: The Group takes the view that, as a lessee, it is not able to readily determine the interest
rate implicit in its lease contracts. Therefore, it applies its incremental borrowing rate for discounting
future lease payments.
Wizz Air Holdings Plc Annual report and accounts 2023
190
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
The estimations made by management in accounting for leases do not materially impact the asset and
liability balances of the Group. The majority of aircraft and spare engine assets are leased and as such
their period of depreciation is the shorter of their useful economic lives and lease duration. As these
assets are new at the inception of the lease and typically have a useful economic life of at least twice
the duration of the lease no further estimation has been required.
f) Revenue from contracts with other partners
As explained in Note 6, revenue from contracts with other partners relates to commissions on the sale
of on-board catering, accommodation, car rental, travel insurance, bus transfers, premium calls and
co-branded cards.
Judgment: The Group considers that it is an agent (as opposed to principal) in relation to all its
contracts with other partners. Accordingly, Wizz Air recognises revenue from these contracts on a net
(commission) basis.
Out of these contracts, the one for the provision of on-board catering services is the most significant
in value and it is also the most complex from the perspective of making the “agent versus principal”
assessment/judgment. The Company’s judgment was based on the facts that it is the partner that: (i)
enters into contracts with the passengers/customers and bears the liability towards them for
delivering the products and services; (ii) defines the majority of the product portfolio, manages the
inventory, is responsible for product availability/outage, has title to the inventory and bears the risk of
loss; and (iii) has discretion in establishing prices. The difference on this contract between gross sales
and net commission revenue (as recognised in the statement of comprehensive income) was €49.2
million (2022: €45.7 million).
g) Aircraft in Ukraine
Judgement: Successful efforts have been made to repatriate one aircraft, which has already been
reintegrated into the fleet without major repairs in F23. Based on checks and maintenance work
performed on the remaining three aircraft on ground, management believes that those are in good
condition and have not been damaged. Engineers can access the aircraft to perform storage
procedures and maintenance. Management will continue to closely monitor the situation and take
necessary actions to expedite the return of these aircraft to the fleet. It is assumed that this will
happen by the end of the summer season.
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 F23 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 credit/(expense)
Loss for the year
Entity-wide disclosures
Products and services
2023
€ million
3,895.7
(4,362.5)
(466.8)
(97.9)
29.5
(535.1)
2022
€ million
1,663.4
(2,128.7)
(465.3)
(176.2)
(0.9)
(642.4)
Revenue from external customers can be analysed by groups of similar services as follows:
Passenger ticket revenue
Ancillary revenue
Total segment revenue
2023
€ million
2,024.9
1,870.8
3,895.7
2022
€ million
732.1
931.4
1,663.4
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.
Wizz Air Holdings Plc Annual report and accounts 2023
191
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Ancillary revenue arises mainly from baggage charges, booking/payment currency conversion charges,
airport check-in fees, fees for various convenience services (e.g. priority boarding, extended legroom
and reserved seats), loyalty programme membership fees, commission on the sale of on-board
catering, accommodation, car rental, travel insurance, bus transfers, premium calls, co-branded cards
and repatriation.
Geographic areas
Segment revenue can be analysed by geographic area as follows:
EU
UK
Other (non-EU)
Total revenue from external customers
2023
€ million
2,707.5
474.1
714.1
3,895.7
2022
€ million
1,192.9
153.1
317.4
1,663.4
In the table above, other (non-EU) comprises a number of non-EU geographic areas that are all
individually less than 10 per cent of the total revenue.
Revenue was allocated to geographic areas based on the location of the first departure airport on each
ticket booking.
The Company’s revenue from external customers within the EU is mainly generated by Italy of €526.7
million (2022: €212.1 million), Romania of €438.7 million (2022: €207.4 million) and Poland of
€314.0 million (2022: €122.2 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 key operating entities of the Group is as
follows:
Wizz Air Hungary
Wizz Air Malta
Wizz Air Fleet Management*
Wizz Air UK
Wizz Air Abu Dhabi
Other
Total non-current assets
* Previously called Wizz Air Leasing.
2023
€ million
2,755.8
1,117.2
504.9
460.1
32.5
1.2
4,871.7
2022
€ million
3,149.5
—
195.4
424.5
12.4
1.9
3,783.5
No revenue or non-current asset of the Group was recognised in Jersey, the Company’s country of
domicile for the year ended 31 March 2023 (for the year ended 31 March 2022: €nil).
Wizz Air Malta Limited and WAM Ventures Holding Limited were successfully established to reinforce
Wizz Air’s position and support its expansion plans in Europe.
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 consolidated 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
2023
€ million
3,833.7
62.0
3,895.7
2022
€ million
1,627.1
36.4
1,663.4
Wizz Air Holdings Plc Annual report and accounts 2023
192
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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, where the Group acts as an agent.
The contract assets reported at 31 March 2023 as part of trade and other receivables amounted to
€5.9 million (31 March 2022: €2.3 million) and the contract liabilities (unearned revenues) reported as
part of deferred income were €761.1 million (31 March 2022: €326.6 million). Out of the €3,833.7
million revenue from contracts with passengers recognised in F23 (2022: €1,627.1 million), €326.6
million (2022: €65.0 million) was included in the contract liability balance at the beginning of the year
(see unearned revenue in Note 26).
7. Operating loss
Net other expenses
The following charges are included in net other expenses:
Gain on sale and leaseback transactions
Flight disruption-related expenses
Crew-related expenses
Overhead-related expenses
Expense relating to short-term leases
Expense relating to variable lease payments
Auditors’ remuneration (see Note below)
Impairment reversal/(charge) for receivables
Net other income
Net other expenses
2023
€ million
2022
€ million
99.7
(130.6)
(69.6)
(62.3)
(8.4)
(3.0)
(1.7)
0.2
34.2
49.7
(29.5)
(32.5)
(40.1)
(2.5)
(0.5)
(1.4)
(1.0)
4.6
(141.3)
(53.2)
Overhead-related expenses include fees for legal support, professional services, consulting and IT-
related services.
Net other income is mainly related to credits received from suppliers and to income and expenses
from cargo operations.
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
2023
€ million
2022
€ million
1.2
0.4
—
0.1
1.7
1.0
0.2
0.1
0.1
1.4
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 €21.2 million were recognised as maintenance materials and repairs expenses in
the year (2022: €14.5 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:
Non-Executive Directors
Crew and pilots
Administration and other staff
Total staff number
Wizz Air Holdings Plc Annual report and accounts 2023
Number of persons
2023
9
6,399
405
6,813
2022
10
4,372
327
4,709
193
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
The aggregate compensation of these persons was as follows:
Wages and salaries
Pension costs
Social security costs other than pension
Share-based payments
Subtotal
Subcontracted staff costs (rented pilots)
Total staff costs
9. Directors’ emoluments
Salaries and other short-term benefits
Social security costs
Share-based payments
Directors’ services and related expenses
Total Directors’ emoluments
Directors receiving emoluments
The number of Directors who in respect of their services received LTIP
share options under long-term incentive schemes during the year
10. Net financing income and expense
Interest income
Financial income
Interest expenses:
Convertible debt
IFRS 16 lease liability
JOLCO and FTL lease liability
Unsecured debt
Secured debts
Other
Financial expenses
Net foreign exchange gain/(loss)
Net financing expense
2023
€ million
302.3
13.0
32.1
7.2
354.6
19.3
373.9
2023
€ million
2.0
0.4
2.9
2.9
8.2
2023
10
1
2023
€ million
20.8
20.8
(1.7)
(97.9)
(18.8)
(13.3)
(2.0)
(1.5)
(135.3)
16.6
(97.9)
2022
€ million
172.4
7.4
18.2
6.7
204.7
15.8
220.5
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)
Interest income and expense include interest on financial instruments. Interest income is earned on
cash and cash equivalents and short-term deposits.
Net foreign exchange gain in net amount of €5.4 million (F22: €96.0 million loss) relates to the
remeasurement of lease liabilities denominated in USD (Note 3). While the USD/EUR exchange rate
decreased in the first half of the financial period, there was a significant increase in the second half,
which resulted in a decrease (F22: increase) in lease liabilities and related recognition of foreign
exchange gain (F22: 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 significance of their nature or amount.
In the first half of F22, the Group had exceptional operating income of €4.3 million relating to fuel
hedges that were classified as discontinued as a consequence of the partial grounding of the Group’s
fleet under the COVID-19 virus situation. There were no discontinued hedges, or other exceptional
items in F23. These items were used by management in the determination of the non-IFRS underlying
loss measure for the Group – see below.
Wizz Air Holdings Plc Annual report and accounts 2023
194
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Underlying loss
Net loss for the year
Adjustment for exceptional items
Underlying loss after tax
Non-controlling interest
Owners of Wizz Air Holdings Plc
The tax effects of the adjustments made above are insignificant.
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
Increase/(decrease) in deferred tax liability
Deferred tax increase in deferred tax asset
Total deferred tax credit
Total tax charge/(credit)
2023
€ million
(535.1)
—
(535.1)
(12.1)
(523.0)
2022
€ million
(642.5)
(4.3)
(646.7)
(10.7)
(636.1)
2023
€ million
1.0
(1.1)
9.7
0.1
9.7
(0.2)
(39.0)
(39.2)
(29.5)
2022
€ million
0.3
(0.4)
5.7
(1.0)
4.6
(3.0)
(0.6)
(3.6)
0.9
The Company, that is Wizz Air Holdings Plc., has a local corporate tax rate of 13.97 per cent (2022:
13.97 per cent). The tax rate relates to Switzerland, where the Company is tax resident. The income
tax expense/benefit is fully attributable to continuing operations. The deferred tax benefit in F23 of
€29.7 million (shown also in the tax reconciliation table below) is a one-off credit impact attributable
to the change of the tax residency of Wizz Air Hungary Ltd. from Switzerland to Hungary effective
from 1 April 2023, as temporary differences will be reversed at a higher tax rate in the future.
Reconciliation of effective tax rate
The tax benefit 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 (2022: 13.97 per cent). The
difference is explained below.
Loss before tax
Tax at the corporation tax rate of 13.97 per cent (2022: 13.97 per cent)
Adjustment for current tax of prior years
Adjustment for income-based taxes of prior years
Effect of the change of tax residency of Wizz Air Hungary from 1 April
2023
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 (credit)/charge
Effective tax rate
2023
€ million
(564.6)
(78.9)
(1.1)
0.1
(29.7)
55.3
15.1
9.7
(29.5)
5.2%
2022
€ million
(641.5)
(89.6)
(0.4)
(1.0)
—
79.7
6.6
5.7
0.9
(0.1) %
The effect of different tax rates of subsidiaries is a composition of impacts primarily in Switzerland,
Hungary, the UK and Malta, relating to the airline subsidiaries of the Group. The Company paid €6.8
million tax in the year (2022: €4.9 million). Substantially all the losses of the Group, both in the
current and in the prior financial year, 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.
Other income-based foreign tax represents the local business tax and the “innovation contribution”
payable in Hungary in F23 and F22 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.
On 20 December 2021, the OECD released a framework for Pillar Two Model Rules which will introduce
a global minimum corporate tax rate of 15% applicable to multinational enterprise groups with global
revenue over €750 million. On 15 December 2022, the EU Council formally adopted the EU minimum
tax directive by written procedure and rules are expected to apply for accounting periods starting on
or after 31 December 2023 (i.e. the year ending 31 March 2025 for the Group). Management is
reviewing this legislation and monitoring the status of implementation outside of the EU to understand
the potential impact on the Group’s future tax position.
Wizz Air Holdings Plc Annual report and accounts 2023
195
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Tax residency change
Wizz Air Hungary Ltd. moved its place of effective management from Switzerland to Hungary with an
effective date of 1 April 2023. As a consequence, its tax residency is Hungarian from F24 onwards.
Recognised in the statement of other comprehensive income
Deferred tax related to movements in cash flow hedging reserve
Total tax charge
2023
€ million
9.9
9.9
2022
€ million
—
—
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 F20–F23. 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 F23 was to release €0.9 million of provisions (F22: release €0.8 million of provisions)
previously made, resulting in an F23 year-end balance of €0.1 million. The F23 reversal was due to
the facts that during the year: (i) some prior tax periods expired for tax authority examination; or (ii)
there was a tax examination that confirmed the treatment applied by the Company. For all other tax
returns the Group concluded that it was probable that the tax authority would accept the uncertain tax
treatment that has been taken or is expected to be taken in those tax returns and therefore accounted
for income taxes consistently with that tax treatment. The final liabilities, as later assessed by the tax
authorities, is not expected to materially 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 F23 and F22 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, €
2023
(523.0)
(631.8)
103,210,067 99,812,331
(6.33)
(5.07)
2022
There were no Convertible Shares in issue at 31 March 2023 (nil at 31 March 2022) (see Note 28).
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, €
2023
(523.0)
2022
(636.1)
103,210,067 99,812,331
(5.07)
(6.37)
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 2023
196
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
14. Property, plant and equipment
Land and
buildings
€ million
Aircraft
maintena
nce assets
€ million
Aircraft
assets
and parts
€ million
Fixtures
and
fittings
€ million
Advances
paid
for
aircraft*
€ million
Advances
paid
for
aircraft
maintenan
ce assets
€ million
RoU assets
aircraft and
spares
€ million
RoU
assets
other
€ million
Total
€ million
8.6 527.1 217.3 2,809.6 15.5 4,572.5
0.6 1,397.8
40.5 738.9
2.7 407.6
— (483.3)
(0.3) (137.2)
— (200.2)
—
—
—
—
—
(33.0)
—
—
0.1
2.8
—
3.6
25.8 374.0 690.3 11.3 734.4 224.6 3,414.1 16.1 5,490.6
69.7 745.5 11.2 2,069.2
— (807.4)
—
—
1.8 481.7
(0.9) (406.1)
—
— (225.0)
—
(85.2)
—
—
—
(0.9)
(14.0)
—
(21.3)
25.9 428.6 1,298.3 12.2 810.0 208.2 3,920.6 27.3 6,731.1
—
0.7
0.2
(6.6)
—
—
3.3 298.9 61.5
0.1 106.4 652.8
— (137.2) (38.2)
—
— 85.2
Cost
At 1 April 2021 18.2 430.3 545.9
Additions
7.6 36.1 163.8
— (126.1) (19.5)
Disposals
Transfers
—
— 33.0
FX translation
effect
At 31 March
2022
Additions
Disposals
Transfers
FX translation
effect
At 31 March
2023
Accumulated
depreciation
At 1 April 2021
Depreciation
charge for the
year
Disposals
FX translation
effect
At 31 March
2022
Depreciation
charge for the
year
Disposals
FX translation
effect
At 31 March
2023
Net book
amount
At 31 March
2023
At 31 March
2022
1.2 89.0 33.1
— (124.6) (10.8)
1.5 117.5 59.0
— (137.2) (14.1)
21.3 110.6 606.5
6.0 242.4 128.6
19.9 186.2 1,169.7
4.5 263.4 83.8
—
—
(1.3)
(0.1)
0.1
—
6.4
—
— 1,319.1
5.0 1,694.2
1.2
—
—
—
— 310.1
— (137.1)
2.2
436.8
— (272.5)
—
—
—
0.6
—
0.7
7.6
—
— 1,492.7
7.2 1,859.2
1.7
(0.9)
—
—
— 405.7
— (225.0)
2.7
588.1
— (377.2)
—
—
—
(3.6)
—
(5.0)
8.4
—
— 1,669.8 9.9 2,065.1
3.8 810.0 208.2 2,250.8 17.4 4,666.0
3.7 734.4 224.6 1,921.4
8.9 3,631.4
* Disposals represent the refunds upon delivery of aircraft of advances previously paid.
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 (€106.4 million in F23 and €36.1 million in F22) 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 power by the hour agreements.
Wizz Air Holdings Plc Annual report and accounts 2023
197
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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 F23 in the statement of cash flows the
cash inflow was €463.4 million “refund of advances paid for aircraft” and the cash outflow was
€(475.5) million “advances paid for aircraft”. In F23, the Group entered into a PDP financing loan
agreement denominated in US dollars ($), according to which PDPs in the amount of $334.4 million
were pledged as collateral (see Note 23).
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.
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 2026.
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 (USD per metric tonne)
USD/EUR exchange rate
2024
924.0
1.1
2025
750.0
1.1
2026
750.0
1.1
Cash flow projections of the approved plan were extrapolated beyond March 2026 for a period of 12
years in total to cover all lease terms in the existing aircraft fleet. A pre-tax discount rate of 10.1%
(2022: 9.7%) 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.
Aircraft in Ukraine
The above impairment assessment includes the three aircraft on the ground in Ukraine, with a total
net book value of €14.7 million. Based on photographic evidence and local employee information these
aircraft are in good condition and have not been damaged in the war. 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 remains cautiously optimistic about the near term resolution of the war and the return of
grounded assets to Wizz Air’s fleet. Its working assumption is that these aircraft will be returned to
the fleet by the end of the summer season and, if needed, the assets economic useful life can be
extended through buy-out or lease amendment to maximise their value in use. However, delays to the
date until the aircraft remain on the ground or inability to extend the period during which the assets
can generate cash flows 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 2023
198
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
15. Intangible assets
Cost
At 1 April 2021
Additions
Transfers
Disposals
At 31 March 2022
Additions
Transfers
Write-off
Disposals
FX translation effect
At 31 March 2023
Accumulated amortisation and
impairment
At 1 April 2021
Amortisation charge for the year
Disposals
At 31 March 2022
Amortisation charge for the year
Write-off
Disposals
At 31 March 2023
Net book amount
At 31 March 2023
At 31 March 2022
Software
€ million
Licences
€ million
CIP intangible
assets
€ million
54.8
—
15.2
(10.2)
59.8
—
28.1
(4.2)
(5.6)
—
78.1
33.4
10.0
(10.2)
33.2
13.5
(0.8)
(5.5)
40.4
37.7
26.6
4.7
26.7
—
—
31.4
5.7
—
—
(0.2)
(0.9)
36.0
0.3
—
—
0.3
—
—
(0.2)
0.1
35.9
31.1
4.6
15.4
(15.2)
—
4.8
27.0
(28.1)
(0.4)
—
(0.1)
3.2
—
—
—
—
—
—
—
—
3.2
4.8
Total
€ million
64.1
42.0
—
(10.2)
95.9
32.7
—
(4.6)
(5.8)
(1.0)
117.2
33.7
10.0
(10.2)
33.5
13.5
(0.8)
(5.7)
40.5
76.7
62.4
Out of the licences, €5.2 million (31 March 2022: €4.4 million) relates to landing slots at London Luton
Airport, purchased from Monarch Airlines and TUI. In 2023 the Company purchased further landing
slots at Gatwick Airport from Air Norway AS and Norwegian Air Shuttle ASA (“Norwegian”) in the
amount of €5.7 million. The total balance of landing slots at Gatwick Airport as at 31 March 2023
amounted to €30.7 million (31 March 2022: €23.7 million). As these landing slots have no expiry date
and are expected to be used in perpetuity, they are considered to have an indefinite life and
accordingly are not amortised.
The impairment review for intangible assets was performed together with property, plant and
equipment, as described in Note 14.
Wizz Air Holdings Plc Annual report and accounts 2023
199
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
16. Tax assets and liabilities
Deferred tax assets and liabilities recognised
RoU assets
and
lease
liabilities
Provisions
for other
liabilities and
charges
Property,
plant and
equipment
Advances
paid for
aircraft
maintenanc
e assets
Tax loss
carry
forward
Hedge
Other
Total
€ million
€ million
€ million
€ million
€ million
€ million
0.2
—
0.2
(2.8)
—
(2.8)
(1.3)
—
(1.3)
(2.2)
—
(2.2)
1.1
—
1.1
—
—
—
€ million
€
(0.2) (5.2)
(0.2) (0.2)
— (5.0)
3.2
—
0.2
—
—
—
0.1 3.5
—
3.4
—
3.4
0.7
2.7
—
(2.8)
—
(2.8)
—
(2.8)
—
(1.1)
—
(1.1)
—
(1.1)
—
(2.2)
—
(2.2)
—
(2.2)
—
1.1
—
1.1
1.1
—
—
—
—
—
—
—
— —
(0.1) (1.7)
— —
(0.1) (1.7)
(0.1) 1.7
— (3.4)
16.6
21.2
(8.7)
2.2 10.9
—
(3.0) 39.2
At 1 April 2021
Less than one year
Greater than one year
(Charged)/credited to:
Profit or loss
Other comprehensive
income
At 31 March 2022
Less than one year
Greater than one year
Deferred Tax Assets
Deferred Tax Liabilities
(Charged)/credited to:
Profit or loss
Other comprehensive
income
—
20.0
At 31 March 2023
—
Less than one year
Greater than one year 20.0
Deferred Tax Assets
30.7
—
18.4
17.5
0.9
—
(9.8)
—
(9.8)
—
—
— 12.0
—
—
— 12.0
9.9
9.9
—
9.9
— 9.9
(3.1) 47.4
(3.1) 14.4
— 33.0
18.3
(8.8)
—
1.0
9.9
(0.5) 50.6
Deferred Tax
Liabilities
Assets: + / Liabilities: -
(10.7)
0.1
(1.0)
— 11.0
—
(2.6) (3.2)
The total balance of the deferred taxes is €47.4 million asset (2022: €1.7 million liability) that consist
of €50.6 million deferred tax assets and €3.2 million deferred tax liabilities (2022: €1.7 million
deferred tax assets and €3.4 million deferred tax liabilities).
The €20.0 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 the respective income tax returns, 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 (or higher loss) than the tax returns.
The €18.4 million deferred tax asset was recognised in relation to provisions (e.g. for carbon quota
submission obligation in the EU Emissions Trading System) that are not deductible for tax purposes.
This temporary difference will be reversed when the Company makes payments to settle the provision
and receives the tax deductions.
Wizz Air Holdings Plc Annual report and accounts 2023
200
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
17. Subsidiaries
The Group has the following principal subsidiaries as at 31 March 2023:
Country of
incorporation
Registered
address
Principal activity
Class of
shares held
Percentage
held
Financial
year end
Subsidiary
undertakings
Wizz Air Hungary Ltd.
Hungary
1 Airline operator Ordinary
100
31 March
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 Limited
Wizz Air Finance
Company B.V.
Wizz Air Fleet
Management Ltd.*
Wizz Air Abu Dhabi
Ltd.
Wizz Air Abu Dhabi
LLC
Wizz Air Innovation
Ltd.
Wizz Air Malta Ltd.
WAM Ventures Holding
Ltd
100
100
31
December
31
December
100
100
100
100
100
31
December
31
December
31
December
31
December
31 March
Poland
2
Dormant Ordinary
3 Crew company Ordinary
Bosnia and
Herzegovina
The Netherlands
Ukraine
Ukraine
4
5
5
Dormant Ordinary
100
31 March
Dormant Ordinary
Dormant Ordinary
Moldova
6 Crew company Ordinary
Poland
UK
Special purpose
7
company Ordinary
8 Airline operator Ordinary
The Netherlands
4
Financing
company Ordinary
100
31 March
Hungary
1 Aircraft leasing Ordinary
100
31 March
United Arab
Emirates
United Arab
Emirates
9
Holding entity Ordinary
10 Airline operator Ordinary
Hungary
1
Service
provider Ordinary
Malta
11 Airline operator Ordinary
49
49
100
100
31 March
31 March
31
December
31 March
Malta
11
Holding entity Ordinary
100
31 March
*Previously called Wizz Air Leasing Ltd.
Registered offices
1. 1103 Budapest, Kőér utca 2/A. B. ép. II-V, Hungary
2. ul. Wolnosci 90, 42-625 Pyrzowice, Poland
3. Tuzla International Airport, Passenger Terminal Building, first floor-room No.12, Gornje
Dubrave b.b., Živinice
4. Luna ArenA, Herikerbergweg 238, 1101 CM Amsterdam, the Netherlands
5. Bulv. Tarasa Shevchenko 33-B, 3rd floor, 01032 Kyiv, Ukraine
6. MD-2062, bd. Dacia, 49/8, municipiul CHIŞINĂU, R.MOLDOVA
7. 26 Jasna Street, 00-054 Warszawa, Poland
8. Main Terminal Building, London Luton Airport, Luton LU2 9LY, United Kingdom
9. PO Box 35665, 34th & 35th Floor, Al Maqam Tower, Regus Adgm Square, Al Maryah Island,
Abu Dhabi, United Arab Emirates
10. Business Park 01, Plot P6, Office number 208, Abu Dhabi International Airport, Abu Dhabi, Abu
Dhabi, United Arab Emirates
11. 171 Old Bakery Street, Valetta, VLT 1455, Malta
12.
On 5 May 2022 WAM Ventures Holding Ltd, a wholly owned subsidiary of Wizz Air Holdings Plc, and its
wholly owned subsidiary Wizz Air Malta Ltd. were incorporated.
Wizz Air Holdings Plc Annual report and accounts 2023
201
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
The Group entered into various financing arrangements in order to finance aircraft including Sale and
Leaseback, Japanese Operating Lease with Call Option (JOLCO) and French Tax Lease (FTL)
structures. Certain of these arrangements include Special Purpose Vehicles (SPV) in the financing
structure and in accordance with IFRS 10, where the Group has control of these entities, these are
consolidated in the Group balance sheet.
Certain subsidiaries have a financial year end different from the Group’s financial year end due to the
requirements of local legislation.
18. Non-controlling interests
The following table summarises the information relating to Wizz Air Abu Dhabi Ltd. and Wizz Air Abu
Dhabi LLC that has material NCI, before any intra-group eliminations.
Summarised balance sheet
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
2023
2022
2023
2022
€ million Abu
Dhabi LLC
€ million Abu
Dhabi LLC
€ million Abu
Dhabi Limited
€ million Abu
Dhabi Limited
283.7
56.7
309.0
119.0
(87.6)
(26.9)
112.9
(40.2)
1.7
(38.5)
(12.1)
0.6
1.0
(0.2)
167.7
24.0
200.7
39.9
(48.9)
(15.4)
20.2
(35.6)
(2.2)
(37.8)
(10.7)
(0.7)
5.4
(1.9)
45.9
—
45.9
—
—
—
—
—
—
—
—
—
(0.8)
—
—
(13.4)
0.8
0.8
(9.9)
—
45.1
—
45.1
—
—
—
—
—
—
—
—
—
(2.5)
—
2.5
—
Aircraft consumables
Emissions Trading Scheme (EU ETS) purchased allowances
Total inventories
2023
€ million
33.1
262.5
295.6
2022
€ million
27.1
43.8
70.9
During the year remnant stock with a book value of €0.2 million was written off to maintenance
expenses (2022: €0.2 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
2023
€ million
2022
€ million
9.1
12.3
21.4
233.8
15.5
27.2
42.7
113.5
390.1
411.5
9.4
11.3
20.7
96.3
19.7
4.2
23.9
66.7
186.9
207.6
Receivables from lessors (both current and non-current) represent the deposits provided by the Group
to lessors as security in relation to the lease contracts and in relation to the funding of future
maintenance events.
Trade receivables included €127.0 million receivables from contracts with customers (31 March 2022:
€52.3 million).
Wizz Air Holdings Plc Annual report and accounts 2023
202
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Total trade and other receivables as at 31 March 2023 included financial instruments in the amount of
€270.4 million (31 March 2022: €141.6 million).
Impairment of trade and other receivables
Impaired receivables
– trade receivables
Allowances on impaired receivables
– other receivables
2023
€ million
2022
€ million
(3.5)
(3.7)
(0.5)
(0.6)
The Group recorded €2.1 million of receivables from Warsaw Modlin Airport during 2013 as
compensation for damages which was immediately impaired in full. However, the Group is legally
claiming the full amount in court. The compensation claimed by the Group, plus interest, was awarded
by the District Court of Warsaw in June 2018. However, the airport appealed against the decision,
which is currently pending. There was no transaction regarding this receivable in this financial year.
21. Derivative financial instruments
Assets
Non-current derivatives
Cash flow hedges
Current derivatives
Cash flow hedges
Total derivative financial assets
Liabilities
Non-current derivatives
Cash flow hedges
Current derivatives
Cash flow hedges
Total derivative financial liabilities
2023
€ million
2022
€ million
0.2
0.2
1.0
1.0
1.2
(4.2)
(4.2)
(104.2)
(104.2)
(108.4)
-
-
0.7
0.7
0.7
—
—
(4.6)
(4.6)
(4.6)
Derivative financial instruments represent cash flow 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) 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
2023
€ million
56.7
63.7
2022
€ million
67.3
94.9
120.4
162.2
Restricted cash is not accessible by the Group. It 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.
Wizz Air Holdings Plc Annual report and accounts 2023
203
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
23. Borrowings
Lease liability under IFRS 16
Unsecured debt
Secured 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
2023
€ million
444.2
506.7
250.0
74.1
1,275.0
2,350.9
498.8
13.8
1,137.0
4,000.5
5,275.5
2022
€ million
374.3
—
—
38.8
413.1
1,972.9
997.9
13.5
541.0
3,525.3
3,938.4
On 19 January 2021, Wizz Air Finance Company B.V., a 100 per cent owned subsidiary of Wizz Air
Holdings Plc, issued €500.0 million 1.35 per cent Eurobond, fully and irrevocably guaranteed by the
Company, under the €3,000.0 million EMTN programme with a maturity in January 2024. 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. These
Eurobonds do not contain any financial covenants.
In February 2023, the Group entered into a PDP financing loan agreement, according to which a part
of the PDPs made have been financed and at the same time pledged as collateral, through the
novation of the PDPs and the associated aircraft purchase rights to an orphan SPV. At 31 March 2023
$274.3 million is borrowed, and PDPs in the amount of $334.4 million are collateralised. The Group
has an obligation to repay the financed amount, its interest and other costs related to the transaction
within one year. When all obligations are settled, the aircraft purchase rights and the PDPs are
automatically re-novated to Wizz Air. In case of default, the Group bears the potential risk of losing
the purchase rights and the related PDP amounts. The PDP refinancing credit facility is available for
further financing for a maximum of three years and does not contain any financial covenants.
The maturity profile of borrowings as at 31 March 2023 is as follows:
IFRS 16
aircraft
and
engine
lease
liability
IFRS 16 other
lease liability
JOLCO and FTL
lease liability
Unsecured
debt
Secured
debt
Loans from
non-
controlling
interests
Total
€ million
€ million
€ million
€ million
€ million
€ million
€ million
Payments
due:
Within one
month
Between one
and three
months
Between
three months
and one year
44.9
0.2
—
6.0
5.2
—
56.3
68.8
0.4
18.6
—
65.0
— 152.8
328.0
1.9
55.6
500.7
179.8
— 1,066.0
Between one
and two years 415.0
Between two
and three
years
385.0
2.6
77.8
—
—
— 495.4
2.3
79.5
498.8
—
— 965.6
Between
three and
four years
303.1
1.9
81.4
Between four
and five years 222.6
More than
five years
1,009.1
1.8
83.2
7.4
815.1
—
—
—
—
—
— 386.4
— 307.6
—
13.8 1,845.4
Total
borrowings
2,776.5
18.5
1,211.2 1,005.5
250.0
13.8 5,275.5
Wizz Air Holdings Plc Annual report and accounts 2023
204
Between one and
three months
Within three
months and one
year
Between one and
five years
More than five
years
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
The maturity profile of borrowings as at 31 March 2022 is as follows:
IFRS 16
aircraft
and engine
lease
€ million
IFRS 16 other
lease liability
JOLCO and FTL
lease liability Unsecured debt
Loans from non-
controlling
interests
€ million
€ million
€ million
€ million
Payments due:
Within one month
41.7
0.2
—
61.5
0.3
9.7
—
—
—
—
Total
€ million
41.8
71.5
269.2
1.4
29.2
—
—
299.9
1,176.2
5.7
161.6
997.9
—
2,341.3
Total borrowings
2,337.3
788.7
2.2
9.8
379.4
579.9
—
997.9
13.5
13.5
1,183.8
3,938.4
The total cash outflow for leases, including JOLCO and FTL, during F23 was €604.9 million (2022:
€470.7 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
2023
€ million
25.7
0.3
26.0
2022
€ million
26.1
0.3
26.4
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.
Convertible Notes are guaranteed by Wizz Air Hungary Ltd. – see Note 31.
For more information about the Group’s exposure to interest rate risk, see Note 3.
25. Trade and other payables
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
2023
€ million
2022
€ million
59.1
—
59.1
173.7
95.2
34.0
583.4
886.3
945.4
55.3
1.5
56.8
123.4
110.9
16.6
307.7
558.6
615.4
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. Credits not eligible for cash refund are classified as deferred income.
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 and liabilities
for EU regulation (EC) No. 261/2004 (EU261) compensation to customers, refund made to passengers
beyond the original paid value.
Total trade and other payables as at 31 March 2023 included financial instruments in the amount of
€705.5 million (31 March 2022: €529.2 million).
Wizz Air Holdings Plc Annual report and accounts 2023
205
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
26. Deferred income
Non-current liabilities
Deferred income
Current liabilities
Unearned revenue
Other
Total deferred income
2023
€ million
2022
€ million
103.3
63.0
761.1
9.2
770.3
873.6
326.6
7.2
333.8
396.8
Non-current deferred income represents the value of benefit for the Group coming from credits and
free aircraft components received from manufacturers and component suppliers, which will be
recognised as a credit (a decrease to aircraft-related expenses) over the useful life 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, the current part of the value of supplier credits received and credits provided to
passengers with no cash conversion option in the amount of €19.4 million. Unearned revenue
increased due to higher demand and ticket booking made further in advance.
The contract liabilities (unearned revenue) of €761.1 million existing at 31 March 2023 (€326.6 million
at 31 March 2022) will become revenue during F24 (subject to further cancellations that might happen
after the year end).
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 2019–2022 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 €7.2 million (2022: €6.7 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.
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 per cent
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. This model simulates
the share price of Wizz Air over the performance period, based on a number of assumptions, to
calculate the proportion of an award which might vest and the value at the vesting date. By averaging
the results of thousands of simulations, a robust valuation can be calculated with adjustment to the
volatility assumption used for the impact of COVID-19 on the Wizz Air share price. To account for the
exclusion of the seven-month COVID-19 period, date ranges have been expanded to ensure a full
period of three or five years is covered. Had there not been a global pandemic, the assumptions would
likely be three or five years to date of grant; however, COVID-19 has caused significant volatility in
particular within the industry in which Wizz Air operates.
The reason behind the assumptions on volatility is to make an estimate about the future; however, as
a base principle we apply the same volatility assumptions for the awards made on the same day. The
past is considered as IFRS 2 states that the historical levels should be observed for the same length of
time as we are looking forward to model the awards being valued. Risk free rates as defined:
▶ F23 LTIP – Yield on a zero-coupon UK government bond over three years: 1.83 per cent
▶ SLGP – Yield on a zero-coupon UK government bond over five years: 1.91 per cent
Wizz Air Holdings Plc Annual report and accounts 2023
206
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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. Non-market-based performance conditions in general are not incorporated into
the fair value per share at the date of grant. Instead, the value recognised is adjusted at each
reporting date to take into account current expectations of the number of shares due to vest. At the
end of the performance period this value is trued up to reflect the actual vesting level. The Group
assumes management rotation of 19 per cent for LTIP and 23 per cent for SLGP to calculate the
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: £32.53.
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: £32.53.
Long-term Incentive Plan (LTIP)
Share options issued during the financial year
Terms and conditions:
Number of options
Exercise price
Vesting period
Termination
Share price at grant date: £32.53.
Share options in issue
All options
0
nil
Performance options
0
nil
5 years
10 years
All options
93,562
nil
Performance options
93,562
nil
5 years
10 years
All
options
350,665
nil
Restricted
options
52,137
nil
3 years
10 years
Performance
options
298,528
nil
3 years
10 years
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
Restricted
options
1,796,043.0
447,431.0
(58,476.0)
(208,763.0)
Performance
options
62,292.0 1,733,751.0
373,463.0
73,968.0
(50,026.0)
(8,450.0)
(199,744.0)
(9,019.0)
1,976,235.0 118,791.0 1,857,444.0
144,072.0
174,001.0
29,929.0
The weighted average remaining contractual life for the LTIP share award at 31 March 2023 was eight
years and one month (seven years and five months at 31 March 2022). The weighted average share
price of the exercised options during F23 was 22.48 GBP.
Wizz Air Holdings Plc Annual report and accounts 2023
207
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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.
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
At the end of the 2022 and 2023 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. 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 (2022: 170,000,000)
Ordinary Shares of £0.0001 each and 80,000,000
(2022: 80,000,000) non-voting, non-participating
Convertible Shares of £0.0001 each
Allotted, called up and fully paid
Equity: 103,282,854 (2022: 103,072,739) shares
of £0.0001 each
Ordinary Shares
Convertible Shares
2023
210,115
2022
103,072,739 103,012,219
60,520
103,282,854 103,072,739
103,282,854 103,072,739
—
—
2023
£'000
2023
€'000
2022
£'000
2022
€'000
25
34
25
34
10
10
—
13
13
—
10
10
—
13
13
—
During both F23 and F22 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 2023 (2022: nil shares). The Company informed Indigo Hungary LP and Indigo Maple Hill LP
(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.
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 2023) 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 F23 €nil (2022: €nil) was recorded in the share premium,
all related to the conversion of employee share options.
Wizz Air Holdings Plc Annual report and accounts 2023
208
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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
(2022: €8.3 million) is net of attributable transaction costs of €8.3 million.
Share-based payment charge
The share-based payment balance of €27.4 million credit (2022: €25.2 million credit) 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 unrealised change in the fair value of cash flow hedging instruments was €112.6
million loss (2022: €10.9 million gain), while the deferred tax effect was €9.9 million (2022: €nil).
€33.2 million loss (2022: €12.5 million gain) was recycled to profit or loss related to cash flow
hedging instruments. Cost of hedging was €30.0 million loss (2022: €nil). €6.0 million loss was
recycled to profit or loss (2022: €nil). For more information please see Note 3.
Cumulative translation adjustments
Cumulative translation adjustments included currency translation differences amounting to €4.7
million gain (2022: €2.5 million loss), from which €0.6 million related to Non-controlling interest
(2022: €0.7 million).
Retained earnings
There were no dividends paid or declared in F23 or F22. Share-based payments are credited to
retained earnings.
29. Provisions for other liabilities and charges
At 1 April 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
Transfer to Trade and other payables and Deferred income
Capitalised within property, plant and equipment
Charged to comprehensive income
Used during the year
FX translation effect
At 31 March 2023
Non-current provisions
Current provisions
Aircraft
maintenance
€ million
78.1
49.3
28.8
21.0
0.8
(11.1)
88.8
43.0
45.8
—
86.6
7.0
(34.5)
0.8
148.7
76.2
72.5
Other
€ million
10.8
1.8
9.0
—
19.0
(11.5)
18.3
0.9
17.4
(13.0)
—
4.6
(2.5)
—
7.4
0.1
7.2
Total
€ million
88.9
51.1
37.8
21.0
19.8
(22.6)
107.1
43.9
63.2
(13.0)
86.6
11.6
(37.0)
0.8
156.1
76.3
79.8
Non-current provisions mainly 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 Note 4). Maintenance provisions in relation to engines and APUs
covered by power by the hour agreements are netted off with the prepayments made to the
maintenance service provider under those agreements in respect of the same group of engines and
APUs.
Wizz Air Holdings Plc Annual report and accounts 2023
209
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
30. Financial instruments
Fair values
The fair values of the financial instruments of the Group together with their carrying amounts shown
in the statement of financial position are as follows:
Trade and other receivables due after more
than one year
Restricted cash
Derivative financial assets
Trade and other receivables due within one
year
Cash and cash equivalents
Short-term cash deposits
Trade and other payables due after more
than one year
Trade and other payables due within one
Derivative financial liabilities
Convertible debt
Borrowings
Secured debt
Unsecured debt
Deferred income
Net balance of financial instruments
(liability)
Carrying
amount
2023
€ million
Fair value
2023
€ million
21.3
120.4
1.2
21.3
120.4
1.2
249.0
249.0
1,408.6 1,408.6
—
—
(59.1)
(646.4)
(108.4)
(26.0)
(59.1)
(646.4)
(108.4)
(26.0)
(4,020.0) (3,408.8)
(250.0)
(927.1)
(4.8)
(250.0)
(1,005.5)
(4.8)
Carrying
amount
2022
€ million
20.6
162.2
0.7
120.9
766.6
450.0
Fair value
2022
€ million
20.6
162.2
0.7
120.9
766.6
450.0
(56.8)
(472.4)
(4.6)
(26.4)
(2,940.4)
—
(997.9)
—
(56.8)
(472.4)
(4.6)
(26.4)
(2,821.5)
—
(953.6)
—
(4,319.6) (3,630.0)
(2,977.5)
(2,814.3)
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
2023
€ million
1.2
1.2
Carrying amount
2022
€ million
0.7
0.7
Carrying amount
2023
€ million
108.4
108.4
Carrying amount
2022
€ million
4.6
4.6
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.
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.
Wizz Air Holdings Plc Annual report and accounts 2023
210
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
Gains and losses
The following net realised FX gains or losses were recognised in the statement of comprehensive
income in relation to derecognition of financial assets measured at amortised cost:
▶ during the year €4.1 million gain (2022: €37.4 million gain) on cash and cash equivalents;
▶ during the year zero loss/gain (2022: €0.5 million loss) on short-term cash deposits; and
▶ no material realised FX on restricted cash and trade and other receivables.
See Note 10 for details of interest income recognised in F23 and F22.
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. Lease liability and
secured debt are denominated in USD, while unsecured debt and convertible debt are denominated in
EUR (see Note 3).
Effective
interest
Total
Within
one year
2023
One to
two
years
Two to
five years
Above five
years
Effective
interest
Total
Within
one year
One to
two
years
Two to
five years
Above
five years
2022
rate € million € million € million
€ million
€ million
rate
€ million
€ million € million
€ million
€ million
7.42% 26.0
0.3 25.7
—
—
7.4%
26.4
0.3 26.1
—
1.35% 1,005.5 506.7
— 498.8
— 1.35% 997.9
—
— 997.9
9.71% 250.0 250.0
—
—
—
—%
—
—
—
—
—
—
—
3.90% 2,776.5 441.7 415.0 910.6 1,009.2 3.40% 2,337.3 372.5 348.2 828.0 788.7
3.06% 18.5
2.5
2.6
6.0
7.4 3.55%
9.8
1.8
1.7
4.1
2.2
2.22% 1,211.2 74.1 77.8 244.1 815.2 0.97% 579.9 38.9 40.4 121.2 379.4
5,287.7 1,275.3 521.1 1,659.5 1,831.8
3,951.3 413.5 416.4 1,951.2 1,170.3
Convertibl
e Notes
Unsecured
debt
Secured
debt
IFRS 16
aircraft
engine
lease
liability
IFRS 16
other
lease
liability
JOLCO
and FTL
lease
liability
Total
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
Proceeds from secured debt
Paid interest
Other cash items
Change in net borrowings from cash flows
New non-cash borrowings
Interest expense
Exchange differences
Other non-cash items
Net borrowings at the end of the year
2023
€ million
3,964.8
63.0
(492.5)
6.0
—
245.5
(127.2)
(0.7)
(305.9)
1,487.3
135.0
20.1
0.1
5,301.4
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
*At 31 March 2023 € 6.0 million (nil at 31 March 2022) is related to overdrafts, In the consolidated statement of cash flows, this
amount was included within cash and cash equivalents, decreasing its total balance, instead of presenting it separately as
proceeds from unsecured debt.
Wizz Air Holdings Plc Annual report and accounts 2023
211
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
31. 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 certain hedging counterparties, to guarantee the
performance of Wizz Air Hungary Ltd., under the respective hedge contracts.
The Company has provided a parent guarantee to Airbus S.A.S connected to its PDP financing
arrangement to guarantee the performance of Wizz Air Hungary Ltd.
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.
The Company has provided a guarantee to Runway Five Lender LLC and Airbus S.A.S, to guarantee
the performance of Wizz Air Hungary and the SPV involved, under the PDP financing loan related
agreements.
32. Capital commitments
At 31 March 2023 the Group had the following contracted capital commitments:
▶ A commitment to purchase 290 Airbus aircraft of the A320 family in the period 2023–2028.
The total commitment is valued at US$42.2 billion (€38.8 billion) based on list prices last
published in 2018 and escalated annually until the reporting date based on contract terms
(2022: US$45.8 billion (€41.1 billion) to purchase 325 Airbus aircraft of the A320 family in the
period 2022–2027). As at the date of approval of this document out of the 290 aircraft 42 are
to be delivered in F24 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.
▶ In line with Wizz Air’s ambition to become a 500-aircraft airline by the end of the decade, the
Group has exercised its purchase rights in relation to 75 A321neo aircraft to be delivered in
calendar years 2028–2029. As at 31 March 2023, this commitment is subject to Shareholder
approval and is valued at US$11.0 billion (€10.1 billion) based on list prices last published in
2018 and escalated annually until the reporting date based on contract terms.
▶ A commitment to purchase 27 IAE “neo” (GTF) spare engines in the period 2023–2026. The
total commitment is valued at US$572.5 million (€525.7 million) at list prices in 2023 US$
terms (2022: US$534.7 million (€480.4 million), valued at 2022 list prices, to purchase 32 IAE
“neo” (GTF) spare engines in the period 2022–2026). As at the date of approval of this
document out of the 27 engines 11 are to be delivered in F24 and none of them are financed
yet.
33. 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 2023
212
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. In 2023 the Romanian Supreme
Court dismissed the claim entirely.
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.
34. 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 2023); 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 2023 (2022: 25.6 per cent).
Transactions with related parties
Transactions with Indigo
At 31 March 2023 Indigo held 24,684,895 Ordinary Shares, equal to 23.9 per cent of the Company’s
issued share capital (2022: 24,684,895 Ordinary Shares, 23.9 per cent).
Indigo has an interest in convertible debt instruments issued by the Company (see Note 24). The
Company’s liability to Indigo, including principal and accrued interest, was €26.0 million at 31 March
2023 (2022: €26.4 million).
During the year ended 31 March 2023 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 €1.7 million (2022: €2.0 million); and
▶ fees of €0.4 million (2022: €0.3 million) were paid to Indigo in respect of the remuneration of
two of the Directors who were delegated by Indigo to the Board of Directors of the Company.
Transactions with key management personnel
Officers (members of executive management) and Directors of the Board are considered to be key
management personnel. The compensation of key management personnel, including Non-Executive
Directors, is as follows:
Salaries and other short-term employee benefits
Social security costs
Share-based payments
Amounts paid to third parties in respect of Directors’ service
Total key management compensation expense
2023
€ million
9.1
1.2
6.3
2.9
19.5
2022
€ million
5.4
1.1
5.6
2.5
14.6
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 an IT company, which is a related party to the CEO, to provide
machine learning capabilities with regard to ticket and ancillary sales. The amount paid for this service
in F23 was €2.5 million (F22: €1.2 million), which in the judgment of the Board was not material.
Wizz Air Holdings Plc Annual report and accounts 2023
213
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
35. Prior period restatements
After careful reflection and having regard to the growth in the number of aircraft on order and
increased significance of gains on sale and leaseback transactions, the Group determined that the
proceeds from sale and leaseback transactions which were included in cash flows from operating
activities within the statement of cash flows in the prior period should be presented as cash flows from
investing activities. Accordingly, management has restated the presentation of the consolidated
statement of cash flows for the year ended 31 March 2022. Gains and credits associated with sale and
leaseback transactions in the prior period amounted to €89.4 million; they were previously included
under changes in deferred income within cash generated by operating activities before tax, and are
now presented under proceeds from the sale of tangible assets within cash flows from investing
activities. There was no impact on the consolidated statement of financial position or consolidated
statement of comprehensive income as a result of this change in presentation within the consolidated
statement of cash flows.
2022
As previously
stated
€ million
Impact of sale and
leaseback gain
reclassification
€ million
2022
As restated
€ million
Changes in working capital
Increase in trade and other payables
Increase in deferred income
Cash generated by operating activities before
tax
Net cash generated by operating activities
Cash flows from investing activities
Proceeds from the sale of tangible assets
Net cash used in investing activities
138.7
369.5
375.5
370.6
43.5
(407.2)
8.7
(98.1)
(89.4)
(89.4)
147.4
271.4
286.1
281.2
89.4
89.4
132.9
(317.8)
36. Subsequent events
Tax residency change of Wizz Air Hungary Ltd.
Wizz Air Hungary Ltd. moved its place of effective management from Switzerland to Hungary with an
effective date of 1 April 2023. As a result, its tax residency is Hungarian from F24 onwards.
Commercial operations of Wizz Air Malta
During F23, crew and aircraft were transferred to Wizz Air Malta and the entity provided wet-lease
capacity to Wizz Air Hungary Ltd. From 1 April 2023, Wizz Air Malta commenced commercial
operations and started to sell tickets for its own flights in addition to its wet-lease operations.
37. Ultimate controlling party
In the opinion of the Directors there is no individual controlling party in relation to the Company's
issued Ordinary Shares.
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.
Wizz Air Holdings Plc Annual report and accounts 2023
214
ACCOUNTS AND OTHER INFORMATION
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
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 the definition above.
To protect the EU airline operating licence of Wizz Air Hungary Ltd. and Wizz Air Malta Ltd
(subsidiaries 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 cent pursuant to the Company’s articles of
association (“the Permitted Maximum”). In preparation for the 2022 Annual General Meeting (AGM),
on 13 September 2022 the Company sent a Restricted Share Notice to Non-Qualifying registered
Shareholders, informing them of the number of Ordinary Shares that will be treated as Restricted
Shares. We will provide further details on or before 3 July 2023, simultaneously with the notice of
Annual General Meeting that is scheduled to take place on 2 August 2023.
Wizz Air Holdings Plc Annual report and accounts 2023
215
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 2023 and of its loss
and cash flows for the year then ended;
▶ have been properly prepared in accordance with International Financial Reporting Standards
(IFRSs) 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 2023 (“the
Annual Report”), which comprise: the Consolidated statement of financial position as at 31 March
2023; 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 group in accordance with the ethical requirements that are relevant
to our audit of the financial statements in the UK, which includes the Financial Reporting Council’s
(“FRC”) Ethical Standard, as applicable to listed public interest entities in accordance with the
requirements of the Crown Dependencies' Audit Rules and Guidance for market-traded companies,
and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s
Ethical Standard were not provided.
Other than those disclosed in Note 7, we have provided no non-audit services to the company or its
controlled undertakings in the period under audit.
Our audit approach
Overview
Audit scope
▶ 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 and Wizz Air
Malta Limited, 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 Budapest,
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: €35,000,000 (2022: €17,500,000) based on 0.9% of total revenues
(2022: four-year average profit / loss before tax adjusted for exceptional items, capped at the
level of the prior year materiality).
▶ Performance materiality: €26,250,000 (2022: €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.
Wizz Air Holdings Plc Annual report and accounts 2023
216
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
WIZZ AIR HOLDINGS PLC
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.
The key audit matters below are consistent with last year.
Key audit matter
Accuracy of IFRS 16 'Leases' input data
How our audit addressed the key audit matter
The Group recognised right-of-use (‘RoU’) assets
of €2,268.1 million and associated
lease
liabilities of €2,795.1 million as at 31 March
2023.
relate
to aircraft
The right-of-use assets and lease liabilities
largely
leases and are
calculated based on discounted future lease
payments.
involve
assumptions including, but not limited to, the
the
determination of
expected lease term, consideration of extension
options and the discount rate used to determine
the liabilities.
lease payments,
calculations
These
the
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
2023 and Notes 14 and 23 which disclose the
right of use assets and lease liability balances
and movements, respectively.
We understood and evaluated the process
followed by management to account for its
leases under IFRS 16.
We tested the integrity of management's system
used to perform the lease liability and RoU asset
its IT general
calculations by testing that
controls are operating,
the new
instance of the system which was launched
during F23.
including
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 also tested the appropriateness of the other
significant assumptions used for lease additions
in the year. This included the discount rates
used where 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.
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 reperformed the
calculation of the asset, liability, depreciation
and interest entries relating to the 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.
We did not identify any material uncorrected
misstatements from our work in respect of the
right-of-use assets and lease liabilities.
Wizz Air Holdings Plc Annual report and accounts 2023
217
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
WIZZ AIR HOLDINGS PLC
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.
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.
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.
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.
We tested the integrity of the maintenance
provision system used by management by
testing the IT general controls and testing
specific automated calculations therein, including
the new instance of the system which was
launched during F23.
We also assessed the process by which the
variable
the provision
calculation were appropriately estimated by
performing the following procedures:
factors used within
Maintenance provisions of €148.7 million for
aircraft maintenance costs in respect of leased
aircraft are recorded in the financial statements
at 31 March 2023 (refer to note 29 to the
financial statements).
At each balance sheet date, the calculation of
the maintenance provision includes a number of
variable factors and assumptions including: the
likely utilisation of the aircraft; the expected cost
of the heavy maintenance check at the time it is
expected to occur; the condition of the aircraft;
and the lifespan of life-limited parts.
We focused on this area because an inherent
level of management judgement and estimation
is required in determining the above variable
factors and assumptions on an aircraft by
aircraft basis. This includes a judgement on
whether to perform future maintenance based
on expected flying hours 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 29 for specific disclosures
relating to the maintenance provisions.
Comparing the cost assumptions in the
maintenance provision system with recent
approved
invoices,
maintenance plans as well as validated
current flight hours and flight cycles to non-
financial data sources.
inspected
and
lease
Testing the input data through agreement to
underlying
focussing
specifically on new and amended contracts
and
the planned
maintenance could be materially impacted by
risks associated with climate change.
considered whether
contracts,
Assessing whether the calculations took into
account the impact, if any, of the aircraft that
have been parked for a long period in Ukraine
due to the war.
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.
Wizz Air Holdings Plc Annual report and accounts 2023
218
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
WIZZ AIR HOLDINGS PLC
Our procedures and conclusions in respect of
going concern are set out in the ‘Conclusions
relating to going concern’ section below.
Ability of the group to continue as a going
concern
Despite the recovery in demand from the
COVID-19 pandemic, ongoing macroeconomic
and sector uncertainty such as supply chain
disruption and fuel and other cost inflation and
the on-going war in Ukraine, led to a significant
loss being incurred in F23 and impacted the level
of cash generated by operations.
Much of this uncertainty seems likely to continue
into F24 and beyond. In addition, repayments of
the first bond under the EMTN programme and
the PDP financing loan are due within F24 and
falls within the period assessed by the Directors
in its going concern assessment.
Given this uncertainty, management has
modelled a base and downside liquidity
headroom position for its going concern
assessment covering the 18 month period to
December 2024. Both scenarios include
considerations about future capacity levels, the
availability of aircraft financing, and assumptions
on fuel costs. The forecasts assume that the
three 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 and security levels requiring a level of
liquidity to be held by the business as per the
contractual terms it has with its current card
acquirers.
The Directors have concluded that there is
sufficient liquidity available for a period of at
least 12 months from the date of signing of the
F23 financial statements.
We focused on management’s going concern
assessment due to the factors described above
and the associated risks in relation to the
group's liquidity over the going concern
assessment period.
Refer to the Accounting policies note (note 2) for
management’s disclosures of the relevant
judgments and estimates in relation to their
going concern assessment.
Wizz Air Holdings Plc Annual report and accounts 2023
219
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
WIZZ AIR HOLDINGS PLC
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.
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, Wizz Air Abu Dhabi LLC and Wizz Air Malta Limited, 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 and treasury 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.
In addition to the audit work performed by the engagement team based in Hungary that was directed
and supervised by the UK team, members of the UK team visited the team in Hungary at least six
times during the audit cycle. These visits involved discussing the audit approach, key audit matters
and issues arising from our work amongst the combined UK/Hungary engagement team and with
management. The UK team members also attended all Audit and Risk Committee meetings in
Switzerland, either in person or virtually. This gave us the evidence we required for our opinion on the
financial statements as a whole.
The impact of climate risk on our audit
The Annual Sustainability Report within the Strategic Report describes the group’s strategy to reduce
carbon emissions and explains how climate change could have a significant impact on the group’s
business but also provides a number of significant opportunities. The group has publicly set out its
commitment to reducing carbon emissions by 25% by 2030 relative to 2019 levels and has a strategy
aligned to meeting this. It has also disclosed that it is working on potential pathways towards an
interim and final target for 2035 and 2050 respectively. A number of financial risks could arise from
both the transitional and physical risks associated with climate change. Management, assisted by an
independent expert, has evaluated these as disclosed in the Annual Sustainability Report within the
Strategic Report. This has then informed the evaluation of financial risks that have been reflected by
management in the preparation of the financial statements to the extent that they can be forecast at
present or 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.
As part of our audit we have made enquiries of management to understand the work performed by
management and its experts to assess the potential impacts of climate change on the group and
leading to the disclosures in the Annual Sustainability Report within the Strategic Report, which
includes the group’s TCFD disclosures, and the resultant impact on the F23 financial statements. We
have used this information and understanding to assess the impact on the financial statements and
our audit thereof. We have also considered the consistency of this assessment with the
communications of climate related impacts both in the F23 Annual Report and Accounts and other
sources such as its website and the group’s public submission to the Carbon Disclosure Project.
Overall management has concluded, having considered both the physical and transition risks arising
from climate change, that there is currently no material impact that it can forecast impacting the F23
results or financial position. The key areas of the financial statements where the potential impact of
climate change was considered are as follows:
▶ The group’s going concern assessment covering a period of at least 12 months from the date
of signing of the financial statements (see note 2);
▶ The useful economic lives of aircraft, aircraft spare engines, maintenance assets and parts and
associated depreciation of these assets (see note 2);
▶ The impact on the annual impairment assessment of the group’s aircraft fleet (see note 14);
and
▶ The impact on maintenance provisioning (see notes 4 and 29 of the financial statements and
key audit matter above).
Wizz Air Holdings Plc Annual report and accounts 2023
220
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
WIZZ AIR HOLDINGS PLC
Where significant, further details on how climate change has been considered in the above areas and
our audit response is given in the key audit matters above. Our procedures did not identify any
material impact in the context of our audit of the financial statements as a whole for the year ended
31 March 2023. The future estimated financial impacts of climate risk are clearly uncertain given the
medium to long term timeframes involved and their dependency on how Governments, global
markets, corporations and society respond to the issue of climate change and the speed of
technological advancements that may be necessary. Accordingly, the financial statements cannot
capture all possible future outcomes as these are not yet known.
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
How we determined it
Rationale for benchmark applied
€35,000,000 (2022: €17,500,000).
0.9% of total revenues (2022: four-year average
profit / loss before tax adjusted for exceptional
items, capped at the level of the prior year
materiality)
In F23, all travel restrictions have been lifted
and the group
flew a record number of
passengers, with revenue at over 140% of the
FY20 full year revenue, the last year prior to
COVID-19. Given this we no longer considered
that an averaging mechanism was appropriate.
We considered various potential benchmarks
including loss before tax and concluded, using
professional judgement, that FY23 revenue is an
appropriate benchmark for the current year
audit.
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% (2022: 75%) of overall materiality, amounting to
€26,250,000 (2022: €13,125,000) for the group financial statements.
In determining the performance materiality, we considered a number of factors - the history of
misstatements, risk assessment and aggregation risk and the effectiveness of controls - and
concluded that an amount at the upper end of our normal range was appropriate.
We agreed with the Audit and Risk Committee that we would report to them misstatements identified
during our audit above €1,750,000 (2022: €875,000) as well as misstatements below that amount
that, in our view, warranted reporting for qualitative reasons.
Wizz Air Holdings Plc Annual report and accounts 2023
221
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
WIZZ AIR HOLDINGS PLC
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 31 December 2024.
▶ 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 F24 and F25 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 F23 and by comparison of assumed flying levels
relative to those experienced in F22 and F23.
▶ We read and understood the key terms of committed debt facilities to understand any terms,
covenants or undertakings that may impact the availability of the facility. We also understood
the impact of the base and downside forecasts on security levels in card acquirer contracts of
the group which generally require a level of liquidity to be held by the business.
▶ We understood the schedule of committed aircraft and engine deliveries over the next
eighteen 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 during the period of the assessment.
▶ We assessed the adequacy of disclosures in the Going Concern statement in Note 2 of the
group financial statements and the Going Concern statement in the Director’s Report and
found that these appropriately reflect the key areas of uncertainty identified and assumptions
made.
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the group's ability
to continue as a going concern for a period of at least twelve months from when the financial
statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a
guarantee as to the Group's ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code,
we have nothing material to add or draw attention to in relation to the Directors’ statement in the
financial statements about whether the Directors considered it appropriate to adopt the going concern
basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are
described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial
statements and our auditors’ report thereon. The directors are responsible for the other information,
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.
Wizz Air Holdings Plc Annual report and accounts 2023
222
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
WIZZ AIR HOLDINGS PLC
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-
term viability and that part of the corporate governance statement relating to the company’s
compliance with the provisions of the UK Corporate Governance Code specified for our review. Our
additional responsibilities with respect to the corporate governance statement as other information are
described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the corporate governance statement, included within the Corporate Governance Report is
materially consistent with the financial statements and our knowledge obtained during the audit, and
we have nothing material to add or draw attention to in relation to:
▶ 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.
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.
Wizz Air Holdings Plc Annual report and accounts 2023
223
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
WIZZ AIR HOLDINGS PLC
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 regulations of country aviation authorities such as
the European Union Aviation Safety Agency, the UK Civil Aviation Authority and the UAE General Civil
Aviation Authority Regulations and General Data Protection Regulation, 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, the Listing Rules of the UK Financial Conduct Authority, the UK
Corporate Governance Code, relevant corporate tax compliance regulations, Regulation (EC) 261/2004
and EU Emissions Trading System. 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 the Audit and Risk Committee, 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;
▶ Reviewing legal expense accounts to identify significant legal spend that may be indicative of
non-compliance with laws and regulations;
▶ Identifying and testing journal entries, in particular journal entries posted with unusual
account combinations; and
▶ Reading the minutes of Board and Committee meetings to identify any inconsistencies with
other information provided by management.
▶ Challenging assumptions and judgements made by management in determining the significant
judgements and estimates used in the preparation of the financial statements, including those
relating to revenue, maintenance provisions, hedge and derivative accounting, aircraft and
spare engine assets (including those in Ukraine) and lease accounting, and the disclosure of
these items.
There are inherent limitations in the audit procedures described above. We are less likely to become
aware of instances of non-compliance with laws and regulations that are not closely related to events
and transactions reflected in the financial statements. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud
may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or
through collusion.
Our audit testing might include testing complete populations of certain transactions and balances,
possibly using data auditing techniques. However, it typically involves selecting a limited number of
items for testing, rather than testing complete populations. We will often seek to target particular
items for testing based on their size or risk characteristics. In other cases, we will use audit sampling
to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the
FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’
report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a
body in accordance with Article 113A of the Companies (Jersey) Law 1991 and for no other purpose.
We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
Wizz Air Holdings Plc Annual report and accounts 2023
224
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
WIZZ AIR HOLDINGS PLC
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
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 16
years covering the years ended 31 March 2008 to 31 March 2023 and for the Company is 14 years,
covering the years ended 31 March 2010 to 31 March 2023.
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
8 June 2023
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225