Wizz Air chief: Israel conflict causing ‘ripple effect’ on demand
The conflict between Israel and Palestine is causing a “ripple effect” on demand across neighbouring countries, the chief executive of Wizz Air has said, after the airline trimmed its 2024 profit forecast this morning.
In an interview with City PM József Váradi named the Israel-Palestine conflict alongside ongoing issues with its Pratt & Whitney-manufactured engines, as the two most significant short-term impacts on the business.
Renewed conflict in the Middle East has hit airline share prices over the last month. A slew of carriers have cancelled their Israel routes, while concern remains over the effect of rising oil prices on jet fuel costs.
Wizz Air shares fell nearly 20 per cent in October despite this summer’s record season of travel, while rival Easyjet and the IAG also dipped.
Speaking on the conflict’s impacts, Váradi noted that the “very neighbouring countries” like Jordan and Egypt had seen a “ripple effect” on demand. Wizz Air suspended all of its flights to Israel in early October.
Váradi noted that the “broader Middle East is different” and had remained largely untouched, with no headwinds in demand for countries such as Saudi Arabia and the United Arab Emirates.
The low-cost carrier trimmed its annual profit forecast this morning, despite swinging to record profit on the back of soaring travel demand.
In a statement on the London Stock Exchange, Wizz Air warned of “external factors related to conflicts between countries” including in Ukraine and renewed violence in Israel-Palestine as key risks in the coming months.
Faults with some of its geared turbofan (GTF) engines have also forced it to ground 45 of its aircraft by the end of next year and cut capacity.