How airlines make money by selling cheap tickets: Wizz Air has revealed the secrets
The European low-cost airline Wizz Air, which often sells tickets for 20 euros, spent an average of 85 euros to cover the operating costs of transporting each passenger.
What is the benefit for the carrier and does it really get the desired profit, Аvianews.com explains. Wizz Air's total operating expenses in the financial year 2023 amounted to 4 billion 362.5 million euros. For this money, the low-cost airline carried 51.07 million passengers.
According to the airline's report, Wizz Air spent money onstaff remuneration:
- 373.9 million euros;
- fuel: 1.954 billion euros;
- ticket distribution and marketing: 91.5 million euros;
- aircraft maintenance and repair, spare parts: €237 million;
- airport charges, ground handling and air navigation: €963.2 million;
- depreciation of equipment: €601.1 million;
- other expenses: EUR 141.3 million.
Where does the profit come from
Wizz Air sells tickets at different prices. For example, if a flight is operated by a 186-seat Airbus A320neo aircraft, only a few passengers will be able to fly at low fares, while the rest will pay more. Accordingly, in fiscal year 2023, it received an average of €39.65 per passenger from ticket sales.
Wizz Air also made a profit from the sale of additional services - an average of EUR 36.63 per passenger. For example, the following services are paid for:
- transportation of large hand luggage and baggage;
- seat selection;
- meals on board.
In the financial year 2023 (from 1 April 2022 to 31 March 2023), Wizz Air paid EUR 9.14 per passenger and therefore recorded a loss. However, according to forecasts, the low-cost airline plans to return to profitability in fiscal year 2024.
