The company’s results echo the strain flagged by rival Ryanair, and lay bare a widening split in European aviation
Wizz Air said on Thursday that a key measure of airline sales at the budget carrier would fall in its second quarter, as soaring fuel costs and weak fares driven by the Iran war weighed on one of Europe’s more vulnerable airlines.
Shares in the carrier fell more than 5% in early trade.
The carrier also swung to a first-quarter operating loss of €183.3 million ($211.7 million), highlighting the pressure facing European budget airlines as they are forced to absorb ballooning fuel costs while customers still demand cheap seats.
Wizz Air said second-quarter revenue per available seat kilometre would fall by a low single-digit percentage year-on-year, even as it guided for seat capacity growth of up to high-twenties percentage.
The company’s results echo the strain flagged by rival Ryanair, and lay bare a widening split in European aviation where full-service flag carriers are proving far more resilient to the war than budget operators.
Flag carriers, such as Air France-KLM, Lufthansa and IAG, have leaned on affluent travellers still splashing out on premium cabins, buoyed by a stock-market “wealth effect”, while demand has also risen for direct Europe-Asia routes that swerve the Gulf.
“While we continue to see the build-up of forward bookings, the rest of the year is expected to present both industry challenges and strategic opportunities,” Wizz Air CEO József Váradi said in a statement.
The company, whose balance sheet analysts have flagged as among the sector’s most exposed, has insisted it has ample liquidity to ride out the turbulence.
Source: Emirates 24|7