Budget airline Wizz Air boosts profit guidance on strong passenger growth
European budget airline Wizz Air today increased its profit guidance for its financial year to between €350m (£296m) and €355m on strong third quarter results.
The carrier said today passenger numbers grew 23.2 per cent in the the three months to 31 December compared to the same quarter the previous year.
Net profit for the period was €21.4m compared to a loss of €21m in the same period last year.
Passenger numbers jumped 23 per cent to 10m from 8.1m the previous year.
Revenue rose 24.6 per cent to €637.3m, up from €511.3m last year.
Wizz Air chief executive Jozsef Varadi said: “Wizz Air again reports a record financial performance in the third quarter as our low-fare, low-cost business model delivered a net profit of €21.4m compared to a broadly breakeven operational outcome in the same period last year.
“We have delivered unit cost reduction ahead of expectations with ex-fuel CASK [ cost per available seat-kilometre] improving 5.6 per cent year-on-year.
“Whilst growing passenger volumes by an industry leading 23 per cent in the third quarter, we have achieved both higher load factors and improved yields. In short, it has been another quarter of significant achievement.”
On current trading and the full-year outlook, Varadi said: “As previously announced at our H1 results, Wizz Air has reinvested some of its outperformance of the first half in the third quarter, and will grow even faster in the fourth quarter, delivering an industry leading growth rate of 24 per cent.
“The company will benefit from this additional growth in the next financial year as new routes will be in place ahead of the all-important summer period.
“Wizz Air also confirms that the current trading conditions continue to be favourable with a relatively benign competitive environment, stable fuel prices and a positive yield environment.
“Despite our additional investment in growth in the fourth quarter, the company is today raising its net profits guidance to a range of between €350m to €355m for the full year.”
Julie Palmer, partner at Begbies Traynor, said: “Despite it being a turbulent period for the aviation industry, which has intensified over the last year with the administration of Flybmi and Thomas Cook, Wizz Air has remained on an upward trajectory with positive passenger and revenue growth.
“The airline has appealed to more consumers with its efficient and inexpensive flights, flying in the face of competitors such as Flybe who have struggled with rising fuel costs, poor demand and currency fluctuations. By maintaining a low-cost model while expanding routes, the business has been able to achieve a healthy profit margin and adapt to changes in the market.
“With the fall-out from Brexit still impending, and proposals for an aviation duty to be introduced, 2020 could pose challenges for airlines such as Wizz Air. And airlines that are investing heavily in lower carbon flight technology are a threat. But with plans to introduce new routes across the globe and the struggles of competitors, investors will be feeling like they are walking on air with the company’s current standing.”