Originally Posted by
antheads
The only reason Wizz is losing money on the balance sheet is because of that massive 321neo order, i've lost count.
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Interesting theory, largely unsupported by the financial data. For the past three years, Wizz has been losing money at the operational level (that is, before financing and acquisition costs are factored in). A fair chunk of their woes were undoubtedly related to the pandemic, some of their problems could be pinned on fuel costs, and the rest looked like just poor cost containment.
RyanAir took a not dissimilar hit but over a shorter period (two, as opposed to three years) with a faster recovery. RyanAir were more profitable last year than they were pre-pandemic; Wizz lost over half a billion euros last year.
That said, Wizz's H1 FY24 numbers are looking significantly better, so they will likely be back in the black in terms of profitability this FY.
Regards 'losing money on the balance sheet'; a bit of a terminological mash-up there. You would normally talk about losing (or making) money on the Profit and Loss (P&L) account, and losing (or gaining) equity on the balance sheet.
Originally Posted by
antheads
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That's what a startup LCC with massive capital does, just wait, they'll be dominating Ryanair. ...
Wizz has been in business for over 20 years now. I think that they're well and truly past the start-up phase. And in terms of capital, Wizz itself has fallen into the red with equity standing at -€358 million.
More to the point though, and as others have pointed out, Bonza is not following the traditional LCC path of no/low-frills offerings on largely established, usually high density, routes. Bonza is trying to create routes while deliberately steering clear of established, high density routes.
Bonza also decided to be "
the first airline globally to take an app-first approach with the only place to book direct being the Fly Bonza app". Their app turned out to have more bugs than a mangrove swamp in January and is currently very poorly rated by users. Making it difficult to get money from customers is rarely a winning business approach.
The whole thing may work, it may not. Because of the opacity of their current business structure, at this stage most of us have essentially no good data to say whether it is or it isn't.
As the Zen Master said, "We'll see."