Despite having posted a significant annual net loss yesterday, Hungarian low-cost carrier Wizz Air today proved slightly more optimistic after predicting that it was perfectly ready for a record-breaking summer - the most profitable period for European carriers. And with hopes for a successful season ahead, the airline expects to swing into a profit this year.
Doubling revenue, narrowing loss
The airline's financial year ending March 31st saw revenue more than doubled to an estimated €3.90 billion ($4.19 billion) from the €1.66 billion ($1.78 billion) reported the previous year. According to Wizz Air, the promising revenue increments were primarily due to an increase in the number of passengers carried. This rose from 27.1 million the prior year to 51.1 million in the most recent year. The airline's Chief Executive Officer Jozsef Varadi highlighted:
"The financial year 2023 was a year of significant growth for the business, with our key operational and financial performance metrics moving in the right direction as we transition and settle into the post-pandemic era."
But even with revenue having more than doubled, Wizz Air reported a pretax loss, although it was narrowed by about 12% to €564.6 million ($606.2 million) from the significant €641.5 million ($688.6 million) reported the year before. Although the losses were trimmed, the budget carrier still paid the price as chaotic operational challenges became alarmingly common during the financial year.
Some contributing factors included feeling the consequential effects of geopolitical issues, staffing shortages across the global aviation industry, and industrial walkouts, leaving capacity far lower than anticipated. Unstable fuel prices were also primary contributing factors to the airline's continued annual loss, as Varadi continued:
"The effects of fuel price increases and structural capacity issues at airports remained features throughout the year, but we are mitigating these through decisive actions which helped to improve ex-fuel cost performance."
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Confident of a successful summer
The low-cost carrier is confident about its preparedness for this summer and the overall outlook for the current financial year. Like its rivals Ryanair and easyJet, the airline continues to see solid bookings and higher fares for the anticipated season. It has also hinted that it had invested significantly into making its operating model much more bullet-proof.
Given the current global supply chain issues, this meant investing in more aircraft spare parts and aircraft. About 30 new Airbus A321neos are expected from Airbus by next April, and Varadi is optimistic that those will still arrive on time. Wizz Air also invested in hiring extra pilots and cabin crew, ensuring they were ready and available for this busy travel season.
With such hopeful foresight, Varadi is further confident that the airline can expect a decent net profit, earning between €350 million ($376.16 million) and €450 million ($483.63 million) in the next financial year. The airline chief emphasized:
"Today, we are a significantly more resilient airline and expect this year to deliver a new set of record operational and strong financial reports. We are also adequately placed to continue driving profitable growth through the rest of the decade and beyond."
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Bottom line
This summer, Wizz Air is expected to fly to over 62 destinations across 30 different countries from Budapest's Ferenc Liszt International Airport and Debrecen International Airport, whereby the budget carrier will provide an estimated 32% of all seats available from Hungary during this peak travel season. Hopefully, the airline will not experience as many operational challenges this summer as last year, and there could be a chance for a profitable financial year after all.
Source: Reuters
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Wizz Air
- IATA/ICAO Code:
- W6/WZZ
- Airline Type:
- Ultra-Low-Cost Carrier
- Year Founded:
- 2003
- CEO:
- József Váradi
- Country:
- Hungary
