Wizz Air losses grow as fuel prices climb
Hungarian low-fare carrier Wizz Air racked up a EUR 452.5 million loss in the first quarter of its business year started April 1, widening from a EUR 114.4 mln loss in the base period as fuel prices doubled from pre-pandemic levels, an earnings report published today shows.
CEO József Váradi said unit costs for the quarter were up around 40% from pre-pandemic levels, adding that 75% of the increase was driven by commodity inflation. Unit revenues slipped 10% under levels before the coronavirus crisis, mainly because of lower load factors as Wizz Air ramped up operations and the war in Ukraine "dented" the airline's momentum, he added.
He noted that a non-cash, unrealized FX loss caused by the stronger dollar impacted the bottom line, while the operating loss for the quarter came to EUR 284.5 mln.
Passenger numbers jumped to 12,182,156 from 2,954,274, and load factor increased by 21.1 percentage points to 84.7%.
Revenue quadrupled, rising to EUR 808.8 mln from EUR 199 mln.
The average fuel price for Wizz Air - including hedging impact and excluding into-plane premium - rose 130.3% to USD 1,238.7/tonne, the report shows.
Wizz Air had total cash of EUR 1.583 bln at the end of Q1.
Váradi said Wizz Air focused on ramping up its network during the quarter, restoring capacity in core markets to "just below pre-pandemic levels".
"We've now adjusted our network in view of the industry supply chain disruptions, making tactical capacity reductions from June onwards to increase the agility of our operation and supply chain," he added.
He said Wizz Air expects to deliver "a material operating profit as revenue and pricing momentum continue to improve".
Wizz Air's fleet grew to 157 aircraft during the quarter. The average age of the fleet is 4.9 years.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.