Wizz Air cuts full-year profit forecast

Central European budget carrier Wizz Air has cut its full-year net profit forecast by around 8%, citing weaker-than-expected fares and other negative effects.

The airline expects its underlying net profit for the year to reach Ђ225-235 million, some Ђ20 million down on the previous estimate.

It disclosed the revision as its third-quarter underlying profit after tax fell by more than 20% to Ђ13.5 million.

Wizz says it expects a Ђ10 million impact from fares in the fourth quarter, plus another Ђ5 million relating to operational disruption and Ђ5 million from adverse macro effects.

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Chief executive Jozsef Varadi points out that the “unusually severe” weather in Central Europe has affected operations over the winter.

Revenues were up by nearly 10% to Ђ341 million in the three months to 31 December 2016, but unit revenue fell by 9.4%. Unit costs, excluding fuel, were unchanged.

But Wizz Air’s planned capacity hike for the year of 20% lies at the upper end of its earlier forecasts, and the airline expects a “modest” improvement in load factor for the year.

Varadi insists that the combination of a “very low fares” environment and increasing fuel prices represents “excellent trading conditions” for the carrier, enabling it to “continue securing its market leadership position”.

He stresses that the current financial year, despite the lower profit forecast, will be “very good” for the airline and he is “excited” about prospects for 2017-18.