Wizz Air spirals into loss as rising fuel costs bite

Wizz Air plunged into a quarterly loss in the face of soaring fuel costs due to the Middle East conflict.

 

The eastern and central European budget carrier reported a net loss of more than €198 million for the three months to June 30 against a profit of €38.4 million in the same period last year.

 

The fall into the red came despite passenger carryings rising by a quarter in the period to 21.2 million.

 

Passenger ticket revenue increased by 1% to €806.9 million and ancillary revenue rose by 11.3% to €700.5 million year on year.

 

However, this was offset by operating costs rising by 20.7% to €1.7 million and fuel expense up almost 40% to €610.5 million

 

The airline noted “revenue resilience” for the summer peak with capacity for the current quarter up 20%.

 

Wizz Air pointed out that exposure to the Middle East region was “limited” and mostly focused on Israel.

 

“Most of this capacity was immediately redeployed to our core CEE markets, improving the existing summer season products to destinations in Spain, Italy, Croatia, Albania and others,” the airline said.

 

“We continue to monitor closely the situation on the ground in the Middle East and in Ukraine. On 28 of May we resumed flights to Tel Aviv from most of our CEE bases.”

 

Chief executive Jozsef Varadi said: “The company is continuing to focus on its unit cost performance relative to the market, as well as delivering high growth throughout H1 F27 with high revenue resilience in peak summer.

 

“The industry has been extremely volatile over the June quarter due to conflict in the Middle East, elevated fuel prices, and changes in booking patterns.

 

“While we reported a net loss for this period, which reflects in particular the 21% rise in unit fuel costs, we operate the business with a strong balance sheet, more than €2 billion of cash and a liquidity ratio of 37%, which is amongst the strongest in the industry.

 

“We achieved some notable success in the quarter, with a 25% year-on-year increase in passengers carried, underlining the scale of our expanding network and the continued high demand for affordable, convenient air travel across Europe and beyond.

 

“We are seeing continued momentum in the business as we recover aircraft from GTF[engine]-related groundings and reallocate capacity to our most attractive European markets.

 

“The number of grounded aircraft is reducing and our plan to return the affected fleet to service by the end of calendar 2027 remains on track.”

 

He added: “We are focused on strengthening the core network, improving density and reallocating flying from longer-haul Middle Eastern operations into shorter European sectors. This supports higher sector productivity, creates more attractive schedules for customers, improves network integrity, and delivers incremental growth at a lower cost.

 

“While we continue to see the build-up of forward bookings, the rest of the year is expected to present both industry challenges and strategic opportunities. Wizz Air is well positioned, with a strong liquidity position, a modern and efficient fleet, and a disciplined approach to capacity deployment.

 

“We will continue to manage the business for profitability while remaining ready to take advantage of market opportunities that may arise as supply and demand rebalance across Europe."