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Profits at Wizz Air fell by more than a fifth over the summer season as one of Europe’s largest low-cost carriers grapples with the grounding of its aircraft due to engine problems.
The London-listed airline said on Thursday that net profit for the six months to the end of September fell 21.3 per cent compared with the previous year to €315.2mn, sending shares down by almost 5 per cent in early trading on Thursday.
Difficulties with its Pratt & Whitney engines have hampered Wizz Air for more than a year and forced it to ease ambitious growth plans.
Wizz is not alone — the aviation supply chain has struggled to produce enough aircraft to meet overall demand since the Covid-19 pandemic. Rival Ryanair on Monday trimmed its passenger forecasts because of Boeing delivery delays.
Forty-one Wizz aircraft were on the ground for inspections at the end of September because of potential problems with Pratt & Whitney engines, down from 46 at the end of June.
Wizz said it was negotiating a new compensation deal with Pratt & Whitney, after receiving undisclosed compensation for the loss of the aircraft over the summer.
The airline said it expected 40-45 aircraft to be grounded at any one time over the next 18 months, an improvement on its previous assumption of 50.
“I wouldn’t declare victory,” chief executive József Váradi said. “I still think that we will really get this whole engine issue behind us, not before 2027.”
Wizz has responded to the issues by extending the life of some of its older planes, leasing in aircraft and taking new deliveries from Airbus. But passenger numbers rose by less than 1 per cent year on year to 33.3mn.
Váradi said new deliveries from Airbus meant the company was targeting fleet growth of between 15-20 per cent in its next financial year, which begins in April 2025.
Meanwhile, Wizz is facing higher costs as it deals with the engine problems. Excluding fuel, costs per available seat kilometre — an industry metric that takes into account distance flown — rose 15.4 per cent over the six months to September, to 3 cents.
Still, Wizz Air maintained full-year profit guidance of between €350mn-€450mn.
Váradi said passenger demand for flying was strong, and that Wizz had shifted flying routes to focus on its most profitable ones during the groundings.
“Wizz is refocusing its network around core markets, focusing on density rather than new market expansion which should bring yield benefits. However . . . cost remains a significant headwind,” JPMorgan analysts said.