Wizz Air reports quarterly loss amid Israel crisis and engine issues

Wizz Air was forced to cancel six per cent of planned capacity in October for the final quarter of 2023 as the crisis unfolded in Israel. 

Affected capacity was redeployed across the network at short notice, which partly contributed to lower load factors in the period, the budget carrier disclosed today.

“The conflict caused a spillover effect to seasonal demand for travel to the nearby markets of Jordan and Egypt, whose capacity was partially also redeployed, accounting for additional three per cent of redeployed capacity,” the airline said.

Wizz Air confirmed that flights to Tel Aviv are to restart from Luton,  Budapest, Sofia, Bucharest, Krakow and Rome to Tel Aviv from early March following a “comprehensive security analysis”.

The airline has also been forced to ground 33 of its Airbus aircraft because of issues involving GTF engines. It is expected to take 300 days to return the engines back into service due to the need for mandatory inspections. 

Wizz Air has “actively managed its fleet to minimise the impact of grounding, deploying [Airbus] Neo fleet to longer sectors, delivering new aircraft and extending existing leases to shore up the flying capacity”.

The eastern and central European low cost carrier reported a 22% rise in passenger carryings to 15.1 million in the three months to December 31, with total revenue up by almost 17% year-on-year to more than €1 billion.

But it recorded a €105.4 million loss for the Christmas quarter against a deficit of €33.5 million in the same period in 2022.

Despite this, the airline is maintaining its 2024 net profit guidance of range of €350 million-€400 million, supported by positive trading and higher aircraft utilisation.

Wizz Air confirmed that it carried 60.3 million passengers in the calendar year 2023, setting a new record for the highest number flown in any 12-month period during the company’s 18-year history.

Chief executive Josef Varadi said: “At the beginning of the quarter we faced geopolitical crises in Israel and the Middle East and have responded by cancelling affected flights to protect our passengers, employees, assets and general public.

“Despite the associated flight cancellations and redeployment of capacity at short notice, we managed operations well, delivering improved on-time performance and significantly better utilisation, year-on-year.

“While a portion of our fleet will remain grounded this year, our key markets continue to grow and evolve. We remain committed to stimulating demand in smaller markets, and have relaunched inbound operations to Chisinau, Moldova in December, while delivering additional aircraft to Kutaisi, Georgia.

“There are  opportunities for us to optimise 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 Air continued to deliver industry-leading capacity growth during the third quarter, ahead of the anticipated grounding of aircraft in Q4 as GTF engines are removed for mandatory inspections.

“We have worked hard to adjust the schedule in line with updated capacity projections, focusing on seasonality and markets with the greatest potential to deliver stronger yields and optimal operational performance. We continue to actively manage the GTF engine issues to minimise the impact on our operations.”

The schedule for spring and summer this year is still being finalised and Wizz Air expects to operate flat capacity year-on-year in the first half of the new financial year.

Varadi added: “While financial performance in the last quarter was materially affected by the suspension and reallocation of Israel capacity, we maintain our expectations for F’24 net income, which are underpinned by positive trading at the start of Q4, reduced capacity in the same period and compensation for the grounded aircraft.

“Based on our assessment of the overall impact of mandatory engine inspections, we are confident that our long-term growth plans of operating a fleet of 500 aircraft by the end of the decade remain unaffected.”

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