The boss of low-cost airline Wizz Air warned today capacity will be “subdued for some time”, in the latest sign that the post-pandemic travel recovery may have run its course.
Revenue grew to €1.07 billion (£914 million) in the three months to 31 December, but Wizz swung to a €105 million loss. Its load factor of 87.6% is still six percentage points below 2019.
Travel businesses had been on a strong post-Covid trajectory for most of 2022 and 2023, appearing unaffected by the cost-of-living crisis. But that recovery now appears to be slowing. Fellow low-cost airline easyJet reported a £126 million loss yesterday.
CEO József Váradi said: “There are opportunities for us to optimize operations and achieve better trading yields, as overall market capacity is likely to remain subdued for some time due to both the macro-economic environment, and other external pressures.”
Wizz says the ongoing conflict in Israel and Gaza cost it €0.10 of unit revenue, which likely means a total hit of around €30 million. It is set to restart flights to Tel Aviv from various locations, including London, from March.
A number of Wizz’s planes will be grounded this quarter as their engines are removed for mandatory inspections.
Neil Shah, Executive Director of Content & Strategy at the Edison Group, said: “Wizz Air's recent financial performance reveals a challenging landscape, with the budget airline experiencing a significant operating loss of 180 million euros. This figure surpasses the previous year's loss of 155 million euros, primarily attributed to flight cancellations.
“Contributing factors to this downturn include the necessity for engine inspections leading to grounded fleet segments and the impact of the Middle East conflict causing suspension of flights. Despite these setbacks, the company's outlook remains cautiously optimistic. Wizz Air retains its net income forecast for fiscal 2024, bolstered by a promising commencement to the fourth quarter ending in March.”
