Wizz Air swings to profit on record 62m passengers despite cocktail of challenges
Wizz Air swung to profit last year as resurgent travel demand helped offset a string of challenges including supply chain issues and conflict in the Middle East.
The Hungarian low-cost airline said profit hit €365.9m (£310.6m) in the 12 months to March, up from a loss of €535.1m (£455.3m) the year prior. Operating profit also swung into the green at €437m, up from -€466.8m.
The rise was driven by an unprecedented 62m passengers opting to fly with Wizz, an increase of nearly a quarter year-on-year that helped push up revenue by 30 per cent to €5.1bn.
Shares jumped nearly five per cent in early trading.
Chief executive József Váradi said: “Sustained healthy demand for air travel across our markets was a defining feature of F24, signalling that the surge witnessed post pandemic has evolved into a longer-term trend in consumer behaviour. Wizz Air has been strongly positioned for this trend as reflected in our performance for the year.”
Echoing a string of airlines in recent weeks, Wizz said it had seen “positive” booking momentum for the upcoming summer as demand refuses to tail off.
But it comes after a year marred by disruption, which has taken the shine off the carrier’s performance and sent shares down over 30 per cent despite record flying numbers.
Váradi’s outfit was forced to cut capacity dramatically and ground aircraft last year as many of its GTF engines, built by Pratt and Whitney, were called in for inspection amid production hiccups.
Wizz said on Thursday it had 47 aircraft on the ground as of 17 May due to the issues and expects around 50 aircraft to be grounded by the half-year mark of this financial year.
The eruption of violence between Israel and Gaza has simultaneously caused thousands of flight cancellations to the Middle East since November.
The budget carrier revealed it nixed around six per cent of its planned capacity for the third quarter in early October as the crisis emerged. It added “seasonal demand” had also been impacted in the nearby markets of Jordan and Egypt, where capacity was also “partially redeployed.”
Váradi said: “While some of the external challenges we experienced throughout F24, including groundings due to GTF engine inspections and geopolitical instability, are expected to persist in the coming year, we have proven that our model is agile, highly resilient and well positioned to mitigate the impact of these ongoing issues.
“This includes the current scale and diversity of our network, which means we are incredibly well placed to react quickly to issues as they arise.”