Central and Eastern European low-cost carrier (LCC) Wizz Air lowered its full-year profit guidance by €20 million ($21.5 million) following a third-quarter profit drop by more than 20%.
CEO József Váradi said lower fuel prices would continue to feed into lower fares over coming months.
The airline had also experienced operational disruptions over the current winter period because of “unusually severe weather conditions” in its core territory. As a result, management “believes it is prudent to trim the company’s guidance for net profit for the full year from the existing range of between €245-€255 million to a range of between €225-€235 million.”
Wizz Air’s 3Q revenue rose 9.9% to €341.1 million, up from €310.5 million a year ago. However, underlying profit after tax dropped 21.5% to €13.5 million, compared to €17.2 million in the year-ago period.
Passenger numbers jumped 20.1% to 5.7 million in 3Q compared to 4.7 million last time.
“Wizz Air remains on track to strengthen its position during the 2017 financial year through continued growth in our core markets and expansion of our network,” Váradi said.
“We expect to grow capacity in terms of ASKs at 20% for the current financial year. And the current environment of very low fares and increasing fuel prices presents excellent trading conditions for Wizz Air to continue securing its market leadership position while maintaining industry-leading profitability,” he said.
“Our ultra-low-cost model is being reinforced with a delivery stream of brand new [Airbus] A321 aircraft, which deliver double-digit cost savings compared to A320 aircraft. By March 2018, Wizz Air will be operating 26 A321 aircraft—representing a third of the airline’s seat capacity—which will give us a clear cost advantage versus most of our rivals. This winning formula leaves Wizz Air well placed to continue to deliver significant growth and returns for our shareholders.”
Total unit costs fell 7% to 3.16 euro cents per ASK, but total unit revenue declined 9.4% to 3.31 euro cents per ASK. Ex-fuel costs were unchanged at 2.29 euro cents per ASK, while fuel costs dropped 21.5% to 0.87 euro cents per ASK.
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