Wizz Air has reported a sharp decline in annual profits after absorbing a 50 million euro (£43.1 million) blow from the Iran war, though the budget carrier emphasised its resilience after carrying a record number of passengers.
Financial Performance
The low-cost airline posted an operating profit of 139.7 million euros (£120.6 million) for the year ending in March, a 16.6% drop from the previous year. Net profit was virtually wiped out, falling from 213.9 million euros (£184.6 million) to just 1.3 million euros (£1.1 million).
Exceptional Costs
Wizz Air encountered a series of exceptional costs throughout the year, including maintenance and repairs linked to the retirement of an older fleet and the arrival of new aircraft. Crew costs surged by 16%.
Like other carriers, it was forced to ground flights following the outbreak of the US-Israeli war with Iran towards the end of February. Scrapping flights to Tel Aviv and other routes to the Middle East and Cyprus in March resulted in an estimated 50 million euro (£43.1 million) hit to earnings.
Passenger Growth
Despite financial pressures, Wizz Air carried a record 69.7 million passengers in the year to the end of March, a 10% increase year-on-year. Income from ticket sales rose by 8.4% to 3.16 billion euros (£2.73 billion). However, the load factor slipped by 0.5 percentage points to 90.7%, mainly due to the Iran war fallout.
Future Outlook
Services to Tel Aviv restarted at the end of May, and Wizz Air said it moved swiftly to bolster summer offerings to alternative destinations like Spain, Italy, Croatia, and Albania. The airline said it cannot offer guidance for the coming year due to uncertainty from the conflict and the closure of the Strait of Hormuz.
Jozsef Varadi, chief executive, said: "We have continued to grow and serve an increasing number of customers. Equally, the defining feature of the year was the set of strategic decisions we made to position the business for long-term resilience and competitiveness."
