Low-cost carrier Wizz Air has reported a nearly 88 per cent decrease in profits for the three months to 31 December despite growth in passenger numbers.
The Hungarian airline saw profits of €1.7 million – far below the €14 million recorded in the same period of 2017.
However, passenger numbers rose 14.9 per cent to 8.1 million, while load factor was up two percentage points to 91.4 per cent.
With revenue growing more than 21 per cent in the quarter to €512.7 million, CEO Jozsef Varadi blamed the slump in profits on rising fuel prices.
Varadi said: “Due to higher fuel prices, we proactively adjusted growth capacity to help offset the cost pressure with higher yields. As a result, the company saw a six per cent increase in unit revenues per ASK [Available Seat Kilometre] in the reporting period.
“The introduction of a new carry-on bag policy in November of last year contributed to a strong performance in ancillary revenue with unit revenue per passenger 7 per cent higher in the quarter. Our industry-leading aircraft utilisation, which helps drive our unit costs lower, was negatively impacted by the capacity adjustments in the quarter, but with the recent fall in fuel prices we will be increasing our utilisation levels back to the high levels from the start of F20.”
Wizz Air recently announced it would become the largest carrier at Luton airport after it adds two A320neo aircraft to its fleet. The airline purchased take-off and landing slots at the hub from the administrators of Monarch Airlines after it went out of business in 2017.
In 2018, Wizz Air owner Indigo Partners said it would deploy 146 new aircraft to the airline's European fleet after it placed an order for 430 planes with Airbus.
Despite the Q3 results, Varadi says the airline has not adjusted its net profit guidance and claims he still expects Wizz Air to take between €270 million and €300 million for the full year. But he says where the carrier falls within this range “depends on the extent of March yield pressures, which will be affected year-on-year given Easter falls after the financial year-end in April and external factors such as Brexit uncertainty.”
wizzair.com