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Wizz Air Holdings Plc, Eastern Europe’s biggest discount airline, plans to stop charging customers for carry-on luggage, bringing it into line with rivals Ryanair Holdings Plc and EasyJet Plc as low fuel prices boost earnings.
While Wizz had allowed customers to bring aboard small items and laptop bags for free, it imposed a fee of between 10 and 35 euros ($11.50-$50) for standard-sized cabin luggage, depending on the time booked. Those levies will be dropped from Oct. 29, allowing free carriage of bags up to 50 percent bigger, it said Wednesday.
“We are listening to our customers,” Chief Executive Officer Jozsef Varadi told Bloomberg TV. “Charging for cabin bags was one of the critiques we have been getting. It will post some operational challenges obviously, but I think the industry has figured it out. All in all, I don’t think we will see significant distress as a result of this change.”
Ryanair, Europe’s biggest discount carrier, already allows passengers to carry two bags into its cabins, one weighing up to 10 kilograms and the other being a small personal bag or handbag. EasyJet, the No. 2, permits one free item that must fit in an overhead locker, with Plus card, flexi-fare and extra-legroom customers permitted a second.
Wizz is easing baggage charges after net income jumped 50 percent in the first quarter, prompting the Budapest-based carrier to predict that full-year earnings will be close to the top of a 250 million euro to 270 million euro range. The company has also introduced a priority-boarding option, something that should help make up for any shortfall in baggage revenue.
“The first quarter came in above expectation, and we are seeing robust bookings going into the summer,” Varadi said. “It looks like the industry has moved into a more favorable macroeconomic environment because of the lower fuel price, and I think that is going to continue.”
Wizz plans to lift capacity by 23 percent this fiscal year. The U.K.’s vote to quit the European Union has so far weighed on business only through the depreciation of the pound, with underlying demand “intact,” said Varadi, who appointed Air New Zealand’s strategy officer Stephen Jones as deputy CEO and promoted financial planning head Iain Wetherall to chief financial officer
Shares of London-listed Wizz traded 0.7 percent lower at 2,569 pence as of 10:23 a.m. in the U.K.. The stock has advanced 43 percent this year, valuing the company at 2.63 billion pounds ($3.4 billion).
©2017 Bloomberg L.P.