Wizz Air exits joint venture with ADQ amid operational challenges

"Wizz Air will intensify its focus on its core Central and Eastern European markets, as well as select Western European countries such as Austria, Italy, and the UK," stated the airline. This strategic shift aims to redeploy resources to regions with greater long-term growth potential.

József Váradi, CEO of Wizz Air, acknowledged the challenges faced by the airline in sustaining its ambitions in the Middle East. He noted that changing market conditions have made it difficult to maintain those goals. Despite being a difficult decision, Váradi believes it is necessary to focus on core markets for improved customer service and shareholder value.

Wizz Air highlighted three significant issues affecting its operations in Abu Dhabi: engine reliability in harsh environments impacting aircraft availability, geopolitical volatility leading to airspace closures, and regulatory barriers limiting entry into key markets. Johan Eidhagen, Managing Director of Wizz Air Abu Dhabi, previously mentioned attempts to fly from Abu Dhabi to India and Pakistan were hindered by regulatory obstacles.

The decision comes as Wizz Air experiences a decline in profitability. The carrier reported a net profit decrease of 41.5% for FY2024/2025 compared to FY2023/2024. Since launching operations in January 2021, Wizz Air Abu Dhabi has been loss-making but achieved positive cash flow recently.

Additionally, changes in UAE's tax code may have influenced Wizz Air's decision to exit the joint venture. A corporate income tax of 9% was introduced in Abu Dhabi according to the company's FY2024/2025 report.