Wizz Air: Shares tank as profit tumbles
Wizz Air reported a hefty drop in annual profit as it grapples with long-running supply chain issues and conflict in Ukraine and the Middle East.
Shares tanked 22.7 per cent as markets opened on Thursday.
Annual operating profit fell 51.7 per cent year-on-year to €167.5m (£141m), below analyst expectations, even as passenger traffic hit a record 63.4m.
Revenue rose 3.8 per cent to €5.3bn.
The Hungarian low-cost airline has had to ground a substantial portion of its aircraft fleet as it works through problems with its Pratt and Whitney-manufactured GTF engines. Conflict in Israel and Ukraine has also impacted a number of its routes in recent years.
The turbulence has been such that it has refrained from giving guidance for full-year 2026 due to the “lack of visibility.”
“I describe our fiscal year 2025 with two words: resilience and transformation,” chief executive József Váradi said.
“In an environment where rare challenges have become recurrent, Wizz Air has evolved structurally, embedding increased flexibility into our standard operating model.
“While often dismissed as ‘easier said than done,’ the past year’s events tested both our company and management. We emerged stronger, wiser, and better prepared.”
Shares have fallen by nearly a third over the last year, but are up 17.9 per cent since January in a sign the airline may be starting to turn a corner.
“Despite the unproductivity of a grounded fleet, we successfully delivered a second consecutive year of profitability,” Váradi added.
“We have the benefit of more than a year of experience operating under these unique circumstances – conditions airlines would never experience when demand exceeds supply.”
Wizz Air outlook uncertain
Looking ahead, Wizz said it expected low fares to drive traffic over summer and “leverage higher summer close-in booking yields.”
The company has made plans on how to reintroduce services to Ukraine amid multilateral discussions over a possible ceasefire with Russia.
Services would be reintroduced around six weeks from a regulatory green light. This is seen as a 5m passenger opportunity by the end of year one and 15m by year three, Wizz Air said.
It added: “With regards to Israel, we operated an intermittent service through F25 based on security considerations, however, we remain committed to providing a full service to this market once it is deemed safe to do so.”