Ryanair vs. Wizz: battle of seat costs

Ryanair vs. Wizz: battle of seat costs

Ryanair boss Michael O’Leary recently questioned the independent survival of Wizz Air (as well as fellow low cost rivals Norwegian, Monarch and EasyJet)[1].

“Wizz is a niche player. It will get pushed out of the way as [Ryanair] moves more into Eastern Europe.”, claimed O’Leary.

Is he correct?

To put this to the test, Aviation Analytics ran a cost comparison between Ryanair and Wizz. This was based on Ryanair’s B373 and Wizz’s A321 aircraft over a typical two hour sector[2].

Our data showed that while Ryanair has a slight advantage on Airport Fees (€0.64/seat), Handling (€0.29/seat), Direct Operating Costs (€0.53/seat) and Aircraft Standing Costs (€0.33/seat), Wizz’s more significant savings on Fuel (€1.36/seat), as well as Overheads (€0.83/seat), brought it out marginally in front, with total costs of €37.90/seat – €0.40 less than Ryanair’s total of €38.30.

This means that nominally Wizz’s A321 claims the crown for the cheapest seat costs in Europe. This is a not an inconsiderable achievement, given the economies of scale available to its larger rival, which has more than five times as many seats in the market (128 million for Ryanair vs. 23 million for Wizz). It should be noted, however, that Wizz’s larger aircraft means that it needs to attract more passengers at the same seat costs, meaning that Ryanair is still technically the more efficient of the two carriers.

Nevertheless, Wizz’s competitive cost position means that it is well placed to take on Ryanair. Hence it is our belief that any future airline consolidation in Eastern Europe is unlikely to be driven by necessity on Wizz’s part.

Get the full picture. How do other LCCs stack up against Ryanair? For fare performance, seat costs and profitability for all European and US LCCs, contact Jon Soars on +44 (0) 207 856 0159 or at jonsoars@aviationanalytics.com

[1] Reported in Travel Weekly

[2] Costs based on a 189-seat 737 for Ryanair and a 230 seat A321 for Wizz, based on the most recent published accounts, adjusted for aircraft size and divided by the number of seats. Airport and Handling fees are airline average figures. Direct Operating Costs include maintenance and overflight charges, whilst Aircraft Standing Costs are the ownership and crew costs of the aircraft.

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