Wizz Air has revealed its annual profits slumped after taking a 50 million euro (£43.1 million) hit from the Iran war but hailed “resilience” after flying a record number of passengers.
Financial Performance
The low-cost airline said it could not provide an outlook for the year ahead partly because of the volatility stemming from the conflict and the closure of the Strait of Hormuz. It reported an operating profit of 139.7 million euros (£120.6 million) for the year to the end of March, down 16.6% on the year before. The company’s net profit was almost entirely wiped out, from 213.9 million euros (£184.6 million) to 1.3 million euros (£1.1 million) year on year.
One-off Costs and Operational Challenges
Wizz Air said it faced a number of one-off costs during the year including maintenance and repairs from the phase-out of an older fleet and delivery of new aircraft, and crew costs jumping by 16%. Like other airlines, it also had to cancel flights after the onset of the US-Israeli’s war with Iran at the end of February. Cancelling flights to Tel Aviv in Israel and other routes to the Middle East and Cyprus in March impacted its earnings by an estimated 50 million euros (£43.1 million), according to the firm.
Passenger Growth and Revenue
Despite the cost pressures, Wizz Air said it flew a record 69.7 million passengers in the year to the end of March, a 10th more than the year before. Revenues from airfares increased by 8.4% year on year to 3.16 billion euros (£2.73 billion). The company’s load factor, a key industry measure of how well it fills its planes, dipped by 0.5 percentage points to 90.7%, which it was largely a result of the aftermath of the Iran war.
CEO Statement and Future Outlook
Jozsef Varadi, Wizz Air’s 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. This has proven to be the right direction, working well in a balanced environment as well as at times of volatility, which the industry experienced towards the end of the financial year due to the Middle East crisis.”
Flights to Tel Aviv resumed at the end of May, and Wizz Air said it took steps to improve its summer season offers to alternative destinations like Spain, Italy, Croatia and Albania.
