Wizz Air earnings hit by air traffic control ʼdisruptionsʼ
Hungarian low-fare carrier Wizz Airʼs after-tax profit fell 14% year-on-year in the first quarter of its business year that started in April as costs outpaced revenue growth, an earnings report released yesterday shows.
Wizz Air revenues between April-June rose 18% to EUR 553.4 million, while costs climbed about 23% to EUR 498.9 mln, lifted by higher payroll and fuel costs. The after-tax profit fell 14% to EUR 50 mln.
The company said that costs increased because of higher staff costs induced by capacity growth and also by the crew recruitment and training needed to operate 17 new aircraft delivered for the 2018 summer season. The average fuel price in Q1 was up nearly 20% from the base period, it added. Passenger numbers were up almost 20% at 8.6 million, and load factor increased by 0.9 of a percentage point to 92.1%.
Wizz Air CEO József Váradi told national news agency MTI that the airline had delivered a "very solid performance" considering that high-yielding Easter traffic fell into the end of Q4 and "significant challenges" caused by European air traffic control issues.
"With these disruptions likely to continue into autumn and on the back of a continued rise in fuel prices in the first quarter, the company took the decision to trim its full year growth target from 20% to 18%," Váradi added. Wizz Air put its full-year load factor up one percentage point and its net profit at EUR 310 million-340 million in guidance in the report.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.