Wizz Air losses narrow as ticket prices rise

Losses at low-cost airline Wizz Air narrowed over the winter as ticket prices rose and demand for travel remained strong despite the economic slowdown.

The UK-listed airline on Thursday reported an operating loss of €155.5mn for the final three months of 2022, down from €213.6mn a year earlier.

Wizz Air’s chief executive József Váradi said passengers were willing to pay higher prices for their seats, with average fares running above both last year and 2019.

Revenue more than doubled compared with the previous year, from €408.4mn to €911.7mn, as the airline carried 12.4mn passengers, up 60 per cent.

Shares in the company fell 7 per cent to £28.12 by late morning on Thursday despite the upbeat news, reversing gains the previous day, which followed easyJet’s bullish forecasts for the rest of the year.

Wizz Air’s costs also rose significantly in the quarter, as it pushed ahead with an ambitious expansion plan that has seen it grow out of its eastern European origins to emerge as a leading player in European aviation.

Total operating costs in the most recent quarter rose 72 per cent to €1.06bn, as a higher fuel bill also added to operating expenses.

Wizz Air said it expected to report a loss for its current financial year, which ends in March, but Varadi said he “remained confident” that the following year would be profitable.

He said booking volumes were ahead of 2022 figures while pricing had been strong, adding to positive commentary from rivals including easyJet and Ryanair, which have both reported surging demand for travel despite the cost of living crisis.

“We remain very upbeat. We see that demand is there and we are expecting a strong revenue and demand environment going into the summer,” said Varadi.

He added that there had been no signs of a slowdown in consumer spending in any of the 54 countries Wizz flew to, and there was strong demand “across the board”.

“It seems people might be prepared to sacrifice on other consumer items . . . other than travel,” he said.

Analysts at Goodbody said the release from Wizz Air contained fewer positive surprises than easyJet’s, and that the quarterly loss was higher than forecast. They also drew attention to Wizz Air’s unit costs, which even excluding fuel were still higher than before the pandemic.

Holiday airline Jet2 on Thursday also added to the burst of positive commentary, as it said bookings strengthened through the winter.

The group said it expected to beat market expectations and forecast an annual profit for the year ending in March of between £370mn and £385mn

Jet2 said ticket prices were “significantly higher” than in the winter before the pandemic, and that “customers’ eagerness to take their much valued and anticipated holidays remains high”.

The company’s shares rose 3 per cent to £12.10.