Wizz Air has dramatically reduced its annual profit outlook, despite witnessing its quarterly losses fall by over half amidst an all-time high in passenger numbers. Shares plummeted on this update, dropping close to 12% during early trading hours.
The Hungarian airline disclosed a €75.9m (£63.6m) loss for the quarter ending 31 December, which is approximately 58% less than the same period a year earlier, as reported by .
Revenue increased by 10.5%, reaching €1.18bn, bolstered by unprecedented quarterly passenger figures of 15.5 million and elevated ticket prices.
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Revenues from passenger tickets rose 13% to €626.2m.
However, Wizz Air had to revise its full-year net income forecast downwards from the initial range of €350-€450m to a new bracket of €250-€300m.
Wizz Air CEO Jozsef Varadi attributed the higher demand not correlating with profit levels to "cost headwinds" and a substantial €160m negative impact due to foreign exchange movements.
"While a non-cash item, it has the potential to introduce significant volatility to our reported profitability," said Varadi.
This represents yet another subpar performance report for the budget airline, which has been unable to fully exploit the surge in travel demand due to supply chain challenges and conflicts in the Middle East.
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Complications with engines from Pratt and Whitney have led Wizz Air to ground a considerable portion of its fleet. The company anticipates having around 40 aircraft out of service until 2026.
The share value has witnessed more than a 30% decline over the past year.
"Trading through the remainder of the current fiscal year remains a focus for Wizz’s management team, from maximizing daily revenues to seeking further short and longer-term cost savings," said József Váradi, CEO of Wizz Air. "As we look ahead to F26, we believe that we are at an important inflection point for the business as we transition to a sustained period of growth for the rest of the decade."