Hungarian Low-Cost Airline Adjusts Projections Amid External Challenges
Hungarian low-cost carrier Wizz Air has experienced an 8% drop in its share price following an announcement adjusting its earnings outlook. The airline reported a profit of €400 million for the six months ending September 30, 2023, but revised its net income projection to a range of €350–€400 million, prompting a decline in its stock value.
The financial results, disclosed on Wednesday, led to a 6.3% decrease in Wizz Air’s share price, according to Reuters. The airline attributed the narrowed forecast to external factors, citing macroeconomic uncertainty and issues in infrastructure and the supply chain, for which the company has limited visibility.
One significant challenge mentioned by Wizz Air was the impact of engine issues with RTX (RTX.N) engines. In September, the engine manufacturers advised grounding 600 to 700 engine units for inspection. For Wizz Air, this resulted in the grounding of 45 aircraft, starting on January 15, 2024, and spanning 18 months.
József Váradi, Wizz Air’s CEO, commented on the revised net income guidance, stating, “We are narrowing our F24 net income guidance, initially set in June 2023, to a range of EUR 350-400 million.” Despite the challenges faced by the airline, Váradi expressed confidence in Wizz Air’s ability to achieve its profitable growth ambitions.
Established in 2003, Wizz Air saw a 25% increase in passenger numbers, carrying over 33 million travelers in the reported period. In October, the airline announced an expansion of its route offerings, with a particular focus on destinations in Italy.
However, amidst its operational successes, Wizz Air is grappling with criticism concerning its customer service. A survey has even ranked it as the worst airline in terms of how it deals with clients. Despite these challenges, Wizz Air remains steadfast in its commitment to strategic growth and profitability, emphasizing its resilience in the face of external pressures.