Jet fuel costs keep Wizz Air loss making – but optimism for the year ahead
Wizz Air saw its operating losses remain flat at €466.8m (£401.6m) in its full year results this morning, as last year’s soaring jet fuel costs pummelled the budget carrier.
Total net losses were at €535.1m (£460.4m).
Despite this, Wizz Air was confident about swinging to a profit later in the year, and saw a record 88 per cent increase in passenger demand between 2022 and 2023, with revenues also doubling to €3.9bn (£3.35bn).
József Váradi, chief executive officer, said: “F23 was a year of significant growth for the business, with our key operational and financial performance metrics moving in the right direction as we transition into the post-COVID era. During the year Wizz Air delivered industry-leading capacity increases.”
“The effects of fuel price increases and structural capacity issues at airports remained features throughout the year, but we are mitigating these through decisive actions which helped to improve ex-fuel cost performance.”
Varadi added: “The company’s net profit is expected to be in a range between €350 and €450 million in F24, subject to the absence of adverse exogenous events such as an incremental impact from the war in Ukraine, delivery delays, or similar.”
Analysts had been anticipating big losses for the low-cost carrier, on the back of last year’s record jet-fuel costs, which rose north of 60 per cent.
Wizz Air previously adopted a no hedge policy, which it backtracked on in July last year, after Russia’s war pushed fuel costs to record levels. It said today that the group was “severely impacted” by this strategy.
However, an expected boom in summer bookings and a sharp decline in the price of jet fuel has led analysts to suggest this could be a turning point for the airline.
Last week, the airline reported a 22.1 per cent year-on-year rise in passenger numbers in its May 2023 traffic figures, with its rival Ryanair also hitting similar numbers.
Olly Anibaba, analyst at Third Bridge, said: “Both Wizz Air and Ryanair saw an increase in passenger volumes during May, as Europeans continue to prioritize their summer holidays over other forms of discretionary spending.”
“Our experts say the challenge for ultra-low-cost airlines is finding the capacity to cope with this resurgent demand.”
Wizz Air has faced a number of criticisms over its recent performance and customer service. A Sunday Times investigation revealed that the carrier owed Brits £5m in unpaid refunds across 881 separate court judgements.