viewWizz Air Holdings

Wizz Air shares fly higher as it swings to quarterly profit

The budget airline reaffirmed its guidance for full-year net profit but cut its estimate for revenue per seat kilometre

Wizz Air
Wizz Air said it has "limited visibility" for the rest of the year

Wizz Air Holdings PLC (LON:WIZZ) swung to a net profit in the first quarter as revenue growth offset higher costs.

The central and eastern Europe-focused budget airline posted a net profit of €72.4mln for the three months to June 30, compared to a loss of €29.3mln a year ago.

Revenue gained 25.4% to €691.2mln as passenger numbers rose 20.1% to 10.4mln.

READ: Wizz Air the lowest CO2 emissions airline and plans to further reduce environmental impact

Ticket revenue grew 14.8% to €379.3mln and ancillary revenue, which includes sales from add-ons such as seat selection and extra bags, increased 41.1% to €311.9mln.

Total costs were up 25.5% to €598.6mln, led by higher fuel costs.

The load factor – the number of passengers compared to the number of seats available – edged up 1.7% to 93.7%.

Chief executive József Váradi said Wizz Air remains “optimistic” for the current financial year as the company raised its capacity growth estimate but lowered its guidance on revenue per available seat kilometre (RASK).

“Higher fuel prices are supporting a stronger fare environment as weaker carriers withdraw unprofitable capacity and as a consequence, Wizz Air raised its full year capacity growth rate from 16% to 20%,” he said.

“Notwithstanding this faster pace of growth, we are confident to reconfirm our full year guidance of €320mln to €350mln net profit for the year. 

“As usual, this guidance is dependent on the revenue performance for the remainder of the all-important summer period as well as the second half of FY 2020, a period for which the company, like most airlines, currently has limited visibility.”

The group said it now expects RASK to be “slightly positive” in 2010, compared to its previous expectation for “low single digit” percentage growth.

Shares rose 5.5% to 3,805p in morning trading. 

Quick facts: Wizz Air Holdings

Price: 3226 GBX

Market: AIM
Market Cap: £3.32 billion

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