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Wizz Air net profit dives in Q3, but guidance unchanged

Hungarian low-cost airline Wizz Air had net profit of EUR 1.7 million in the third quarter of its business year ending on December 31, down 87.6% from a year earlier, as expenditures rose 25.6% to EUR 512 mln on higher kerosene prices, staff expenditures and rental costs. 

Fuel costs per available seat kilometer were 21.6% higher, and costs per available seat kilometer grew from 3.23 euro cents to 3.53 euro cents, state news agency MTI reported Wednesday.

Wizz Air broke even in terms of its operating result, compared to a EUR 14.6 mln profit in the base period. Profit before income tax was EUR 1.8 mln, down from EUR 14.6 mln.

Wizz Air said passenger numbers increased 14.9% to 8.1 mln, while revenue climbed 21.2% to EUR 512.7 mln in the quarter. Ticket revenues increased by 20.4% to EUR 291.1 mln, it added.

CEO József Váradi noted that the load factor on Wizz Air flights improved by 2 percentage points to 91%, while ancillary revenues were up 6% partly due to baggage rules introduced in November. 

Wizz Air continues to project full-year net profit of between EUR 270 mln and EUR 300 mln, he added.

At the same time, Váradi warned that hitting guidance still depends on sales in March - which will be affected by Easter falling after Wizz’s financial year ends on March 31, while uncertainty around Brexit will also exert pressure on profits, according to cityam.com, the online site of free London-based newspaper City A.M.

"Wizz Air remains well on track to deliver its mission to be the undisputed ultra-low cost carrier in the industry as cost leadership positions the airline for disproportionate growth opportunities across Central and Eastern Europe and Western Europe, and makes us an increasingly formidable business under any market circumstances," cityam.com quoted the CEO as saying.

Wizz Air also confirmed that it has been granted a U.K. route license to enable it to continue flying to non-EU destinations from Britain after Brexit, noted a report on independent.ie, the website of the Irish Independent. The airline set up Wizz Air U.K. in May 2018 as part of Brexit contingency plans, and said it was granted a U.K. route license by the transport minister in its third quarter.

The company operates a fleet of 106 Airbus A320 and Airbus A321 aircraft. Its shares are listed on the London Stock Exchange.