Wizz Air Holdings Plc forecast a return to profit this year as the summer travel season gets underway, and said it had bolstered its operations to better prepare for peak demand.
(Bloomberg) — Wizz Air Holdings Plc forecast a return to profit this year as the summer travel season gets underway, and said it had bolstered its operations to better prepare for peak demand.
Net income will reach €350 million ($375 million) to €450 million in the fiscal year that began April 1, the Hungarian low-cost carrier said in a statement Thursday. That compares with a year-ago net loss of €535.1 million, when Wizz was hit by a surge in fuel prices triggered by Russia’s invasion of Ukraine.
Staffing shortages and last-minute flight cancellations also angered travelers last year who stormed back to the skies as Covid-19 restrictions subsided. The airline has added spare aircraft and hired more staff to better prepare for this summer, Chief Executive Officer Jozsef Varadi said in a Bloomberg TV interview.
“We are very pleased with the state of the market in terms of demand, and now that the operation of the airline is stabilized, it has become very robust,” Varadi said. “We invested a lot into resilience given all the issues surrounding the industry, so we think that we are a lot better airline to operate this summer than what we were a year ago.”
Wizz profits last year were dragged down by its exposure to the oil price jump, when it was late to hedge for volatility. Those issues are behind it now, Varadi said, adding that cost levels are coming back down to 2019 and 2020 levels.
“That basically enables us to put the pricing benefits over to consumers,” he said.
Wizz shares advanced 2.2% at 8:26 a.m. in London. Through Wednesday, the carrier had gained around 46% this year, compared with a 50% advance at EasyJet and a 37% advance at Ryanair.
Slow Recovery
Wizz profits haven’t rebounded as quickly as other airlines such as Ryanair Holdings Plc and British Airways, which earlier raised their full-year earnings outlooks amid pent-up demand. Wizz said its so-called load factor, which indicates cabin occupancy, will be above 90% this year.
Wizz said it will have more than 200 aircraft in its fleet this year, with 63% of them being Airbus A320neo family jets. The airline plans to have 500 planes in operation by 2030, but some analysts say they’re skeptical about whether the airline will be able to fill the new planes when load factor has been below that of competitors.
Demand in central and eastern Europe remains strong, Wizz said. The Budapest-based carrier is growing its network further into eastern Europe, opening up more routes from countries such as Poland, Albania, and North Macedonia.
More than 5 million passengers flew with Wizz in May, a 22.1% jump compared to the same month last year.
“We’ve got the backbone now for 500 aircraft,” Varadi said.
(Updates with comment from CEO from third paragraph)
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