Wizz Air has reported a significant drop in annual profits after taking a £43.1 million hit due to the Iran war. The budget airline stated it could not provide an outlook for the coming year, partly because of volatility from the conflict and the closure of the Strait of Hormuz.
Financial Performance
The company posted an operating profit of £120.6 million for the year ending March, down 16.6% from the previous year. Net profit was nearly wiped out, falling from £184.6 million to just £1.1 million year-on-year. Wizz Air attributed the decline to several one-off costs, including maintenance and repairs from phasing out an older fleet, delivery of new aircraft, and a 16% increase in crew costs.
Impact of Iran War
Like other airlines, Wizz Air was forced to cancel flights after the war in Iran broke out in February. Cancelling flights to Tel Aviv, the Middle East, and Cyprus in March impacted earnings by an estimated £43.1 million. The war also contributed to the closure of the Strait of Hormuz, a key waterway for global aviation fuel supplies.
Passenger Growth
Despite the challenges, Wizz Air flew a record 69.7 million passengers in the year to March, a 10% increase from the previous year. Revenue from airfares rose 8.4% to £2.73 billion. However, the company's load factor, a key measure of how full its planes are, dipped by 0.5 percentage points to 90.7%, largely due to the aftermath of the Iran war.
CEO Statement
Jozsef Varadi, Wizz Air's chief executive, commented: "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."
