Wizz Air losses widen but says operations starting to ‘normalise’

Low-cost carrier Wizz Air has reported widening losses in the first half of the year but said its operations were starting to “normalise” after months of disruption.

In the July to September quarter the group returned to profit, but over the six months to September 30 it made an operating loss of €63.8mn, according to results published on Wednesday. This compares with a €51.9mn loss for the same period in 2021.

Revenue over the period more than doubled, from €880mn to €2.19bn.

Severe disruption because of staff shortages and problems at airports pushed Wizz to an operating loss of €284mn for April to June, the first quarter of its financial year.

Chief executive József Váradi said the carrier, a fast-growing rival to low-cost operators such as Ryanair, was now in a position to become profitable.

“Our operational performance has recently normalised and we are now back in line with our historically low levels of cancellations and flight disruptions,” Váradi said.

Wizz Air’s shares fell 85p — 4.9 per cent — to £16.50 in morning trading in London. Shares have now declined by 65 per cent over the past year.

The airline operated 86.9 per cent of its capacity in the first half, against 75.3 per cent for the same period of 2021 but below the levels of above 90 per cent typical for low-cost airlines. Váradi predicted that Wizz would return to pre-Covid utilisation levels by spring next year.

The company, which has been hit hard by rising energy costs, has said it expects to return to hedging against fuel price rises by April next year.

It said on Wednesday that it expected to limit the increase in its non-fuel cost per available seat kilometre (CASK) — an industry standard measure of costs — for the October to March half of the current financial year to a relatively modest single-digit percentage rise above pre-pandemic levels.

Wizz Air, which is based in Budapest, has announced expansion plans in the Middle East and set up a joint venture in Abu Dhabi. It increased its fleet by 24 aircraft to 168 by the end of the quarter, focusing its growth on larger, longer-range A320neo and A321neo aeroplanes.

The strength of the US dollar forced Wizz Air to revalue some assets, creating what it called an “unrealised” foreign exchange loss of €285mn for the first half, against €16.5mn for the same reason in the first half of 2021. The effect deepened the reported loss for the first half to €384mn, from €121mn a year earlier.