Wizz Air sees record summer but first-quarter losses amidst industry disruption
Wizz Air is expecting record traffic in summer 2022, but has cautioned that ATC disruption, airport staffing challenges and a tough economic backdrop are all posing challenges.
“We see strong consumer demand for summer, but expect an operating loss for the first quarter of F23,” chief executive József Váradi said, referring to the carrier’s fiscal year, which runs until end-March 2023.
For the year to end March 2021, Wizz reported a net loss of €642.5 million ($687 million), against a loss of €576 million ($616 million) the previous year. It said it can’t provide financial guidance for the current year due to the uncertainties surrounding ATC and airport disruption and rising inflation.
“The airline industry remains exposed to externalities such as air traffic control disruption and continuing operational issues within the airports sector, adding to a volatile macro environment,” Váradi added in the airline’s full-year results statement on June 8, 2022.
The airline is now partially hedged against rising fuel costs for summer 2022, but said it was looking at opportunities to extend this throughout the financial year.
The Hungarian-based low-cost carrier said its crewing plans were on track and that it had recruited over 2,200 staff since the start of the last fiscal year but noted challenges in the “industry supply chain”. The airline expects to have 6,700 people by the end of Summer 2022, up from around 4,000 people pre-pandemic.
The aviation industry has struggled to recruit enough staff, especially in areas such as ground handling and security, to meet rebounding demand from the COVID-19 pandemic, leading to long lines and disruption at airports including Dublin, Manchester and Amsterdam.
Wizz Air, which has announced plans for a new airline in Malta, said it expects capacity for the first quarter of its fiscal year (April-June 2022) to be 30% above 2019 levels, while for its second quarter, capacity will be 40% above 2019 levels.
“Our bookings are showing strong performance in the first fiscal quarter, with average fares trending higher at low single digits versus same period in F20 and with loads around 85% for the quarter,” Váradi commented. Those metrics will improve further in the second quarter, he added.
The carrier also said it had exercised conversion rights for 21 A320no aircraft, switching them for the larger A321neo, with deliveries due in the calendar years 2024-2026.
Wizz Air had to cancel flights and redeploy staff and aircraft as a result of the war in Ukraine. In February and March it canceled approximately 2% and 7% of its flights. It said load factors and yields in countries bordering Ukraine have fully recovered as of June. The airline still has four aircraft in Ukraine, worth a total of €25 million ($27 million).
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