Wizz Air lowers profit forecast
Higher fuel prices and summer flight cancellations have forced Wizz Air to lower its profit forecast down from €310 million to €340 million to between €270 million and €300 million for the 2018/19 financial year.
The Hungary-based low-cost carrier said it had managed to offset around half of the €80 million increase in fuel costs by trimming costs in other areas, but its profits have also been hit by flight disruption during the first six months of the year, forcing it to cancel 251 services at a cost of €16.8 million.
Half-year profits to the end of September were up 1.2% to €292.2 million, but the airline’s tour division lost €2 million on revenues of €11.4 million. Announcing the result, the company confirmed that it has decided to close Wizz Tours at the end of December.
All bookings already taken by Wizz Tours, which operates mainly in the airline’s central European markets, will be honoured but no further bookings will be taken after December 31.
Chief executive Jozsef Varadi described the first half of the year as ‘particularly challenging for all European airlines with unprecedented disruptions caused by ATC strikes, slot constraints as well as heavily congested airports’.
"These conditions also coincided with the Company’s ramp up of our new UK airline, Wizz Air UK, and an extensive delivery program of 17 aircraft in 17 weeks. Our operations are now back on track with October and November KPIs ahead of last year," he said.
"We are starting to enjoy further cost improvements from our investment grade credit rated balance sheet with over €1.1 billion of free cash and the Company has recently signed letters of intent to finance 10 A321 NEO aircraft at rates significantly better than the Company’s previous best deals.
"The encouraging revenue environment, robust demand and an improved operational performance combined with our relentless focus on costs will enable the Company to offset approximately half of the fuel headwind which is estimated at around €80 million for the full year and disruption costs. As a result our full year net profit guidance is lowered to a range of between €270m and €300m".
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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