Looking at operational cost, which is currently your biggest pressure right now and in the immediate future?
But I would say fuel is always the biggest component because fuel is roughly around 30 to 35% of our cost. So that's a very significant component. Of course, labor inflation is significant, so we are very much interested in understanding the inflationary environment, but at the same time, if I take labor inflation, indeed an employee earns more salary today than what the employee earned a few years back, but at the same time operating the A321 neo aircraft, we are more productive with that operation because we are operating 239 seats with two pilots. We used to operate 180 seats with two pilots. So basically, even if you are increasing the cost of pilots, you pay more salary to those people, on a per seat basis effectively we are still lower cost than what we used to be. So I think when you look at labor inflation, it is one issue, but you also need to look at labor productivity through technology, how you actually can gain more productivity by applying better and bigger technologies than before. So I would say that kind of inflationary pressure is out there. As I think as you rightly pointed out, we are seeing more regulations coming in, regulations around environment, regulations around some other matters, and they tend to be cost driving. They bring more cost to the system. You cannot do too much about it. What I can say is that if I look at my relative competitive position to my competitors, given that we are a very efficient airline flying the youngest fleet of aircraft in the whole industry and the largest aircraft which derives economic benefits, I think I'm looking better than my competitors. Notwithstanding that this is cost creeping and this is cost coming to my system. But again, I think we have to look at it in its entirety, what we are doing about this cost creep ourselves and how we compare to our competitors in the industry.
You have recently been affected by some operational challenges. For example, the Pratt & Whitney engines problem. What are your biggest operational challenges right now worldwide and maybe specifically in Romania?
Yeah, so I would say that there are two clear lines of external affections to the business. One is around supply chain, as you said, the GTF engines made a significant impact on our ability to operate. There was a point when 45% of our aircraft were grounded due to engine inspections. Now that number is getting smaller and smaller, so we have around 30 aircraft at the moment on the ground, and we expect full recovery from that by the end of 2027. So it is a significant impact. Of course, geopolitics. The war in Ukraine, the war in the Middle East, or the flare-ups of the war in the Middle East have made significant impact on our ability to operate. We had to close operations permanently or periodically here and there. So it's been quite a hiccup, quite some level of unpredictability we had to process. I would say that these are clearly the most important issues we have been dealing with. Of course, over the years we have been learning a lot how best to address challenges like this, and if I look at the current situation in the Middle East, I think our ability to stop the exposure, reallocate some of the affected capacity was very, very strong, and we didn't lose any aircraft. Every aircraft and every crew we rescued, all of our crews from the region. I think it was a very smooth and very flawless recovery from that set of circumstances. So in case of Romania, I think Romania is fine. I mean, the Romania specific issues may be around airport capacity. I mean, you know that Bucharest Otopeni is quite a congested airport. Baneasa is also quite a constrained airport. There might be hiccups and delays resulting from that. I can name another airport like Suceava, which tends to be quite subject to severe weather conditions, fog, when it's very difficult or impossible to operate. But other than that, I think we are very mature in Romania. We are having a very strong operation with a very strong team, great pilots and great cabin crew. So I think we are having a very solid setup in the country.
Considering Bucharest airport is already a bottleneck not only for you but for other airlines as well as they have mentioned. Do you think there is a need for another Bucharest airport or another airport around Bucharest, or would you consider shifting more capacity to regional airports in Romania?
I mean, I think we have to come to grips with some new realities in Central Eastern Europe. This is not just down to Bucharest, because we are seeing exactly the same thing in countries like Poland or Hungary. All of a sudden, the capital airports became full. And of course that begs the question, what's next? I think these airports need to be invested, either by expanding the current infrastructure or building a new infrastructure. I would caution anyone to think about building new airports, because new airports tend to be extremely expensive and they are never completed on time. So I would definitely look at ways of expanding Otopeni, Baneasa in case of Bucharest. But again, this is the same challenge in Warsaw, this is the same challenge in Budapest. So this is not a sole issue in Romania. I think what has been happening is that all these airport infrastructure projects were built on almost like the pre-EU times perceptions, predicting some level of traffic development, and that traffic development changed completely. And I think this is predominantly because of us, because we brought in a lot cheaper infrastructure, a lot easier connectivity to people, and a lot more people started traveling and more frequently than was ever anticipated. And now the system is stuck with the infrastructure, so the infrastructure is no longer sufficient to meet the needs of the public, to meet the needs of the consumers. And there are kind of last minute emergency interventions to try to deal with the capacity constraints. I think in each of these countries, people and governments must think through what is best for the country, but my suggestion is that this is serious, this is important, this is urgent that proper airport infrastructure must be created in case of Bucharest, in case of Budapest, in case of Warsaw, with no hesitation, because that will create problems. I don't think that the solution is that okay, if Bucharest is full, go to the regions. That's not the solution. If Bucharest is full, Bucharest has to be expanded, because people want to travel more and they need infrastructure to support it.
So increasing capacity, that would be key for airports to do to increase further growth. Do you see any other measure that the regional or local airports in Romania could do to increase growth, to support growth for Wizz Air?
Yeah, you know, we are very strong in regional Romania. I mean, we basically fly more in regional Romania than in Bucharest. So by far we are the strongest airline in regional Romania. I mean, we have been carrying the flag of airlines effectively in regional Romania. We have nine operating bases in total and we are flying a total of 14 airports in Romania. So we have been going really big on extending our business in the regions. I think the regions are doing what they have to do. We have a lot less bottlenecks in the regions than in Bucharest. I think the problem in terms of airport infrastructure is very much down to Bucharest. The regions are great. I think they are very agile in terms of capturing financial support from the European Union, investing that financial support, raising money for expanding infrastructure basically across the whole system in regional Romania. I think Bucharest is stuck, but regional Romania is doing fine with that regard.
