Wizz Air, a Hungarian low-cost airline, has indicated that capacity will not increase either in the first half of the current fiscal year or the entire year. This follows their ongoing challenge with unstable geopolitical circumstances and aircraft grounded due to engine-related problems.
As stated in a company document, as of May 17, Wizz Air had grounded 47 of its Airbus A320 fleet because of issues with the engines. The company anticipates approximately 50 aircraft will remain grounded until the conclusion of H1 of the financial year 2025. It was also revealed that the company secured compensation from the engine manufacturer, Pratt & Whitney, and is expecting future payments under similar conditions for the final quarter of the financial year and thereafter.
Despite the hurdles, Wizz Air has experienced an encouraging financial year, marked by consistent demand and a favourable booking trajectory for the summer season. The company has forecasted a net profit for the entire year ranging from €500 million to €600 million, compared to a previous estimate of €515 million. Last year, Wizz Air posted a net income of €376 million attributable to shareholders, surpassing expectations.
The engine troubles are not the only issues Wizz Air is facing, it is also contending with interruptions to air traffic control as well as geopolitical crises including disruptions to its service to Israel. The firm reported that the revenue impact from the Israel-Hamas dispute and the wider region came to approximately €80 million during its most recent fiscal year.
Thus far this year, Wizz Air’s shares have depressed about 11 per cent, marking it the last of the main budget airlines to announce its quarterly findings. Both Ryanair Holdings Plc and EasyJet Plc reported robust travel demand this summer and highlighted the capacity constraints across Europe due to supply chain delays.