Wizz has made little progress with the ongoing grounding of some 20% of its fleet / Image source: Adobe
  • Guidance cut from €350-€450 million to €250-€300 million
  • Cost headwinds hit European budget carrier
  • Shares down 37% over the past year

Shares in Wizz Air (WIZZ) fell nearly 12% in early morning trading after the European budge carrier cut its full year 2025 profit guidance from a range of €350 million to €450 million to €250 million to €300 million, before any second half unrealised foreign exchange losses.

However, total revenue was up 10.5% to €1.17 billion for the three months to 31 December.

The European carrier also reported record passenger numbers for the period of 15.5 million for the period, compared to 15.1 million last year due to strong demand.

Wizz Air signs deal with US engine maker over grounded aircraft

The company said it would be restarting operations into Israel with routes from Budapest, Sofia, Bucharest, Krakow, London, and Rome to Tel Aviv from the beginning of March.

GFT ENGINE WOES CONTINUE

The company has made little progress with the ongoing grounding of some 20% of its fleet ‘due to the well-documented GTF (geared turbofan) engine issue’ said Wizz’s CEO Josef Varadi.

Originally, Wizz grounded 13 aircraft due to powder metal issues in the PW1100G-JM GTF, but this number had risen to 33 by the end of January 2024

Wizz said however ‘this may change depending on the current engine selection negotiations to select the engine for 177 A321NEOs.’

On a positive note, the company is expected to take delivery of 137 A321s over the next three years ending full year 2028.

‘Given lease returns, the fleet is now forecast to grow from a forecast 230 aircraft as at the end of March 2025 to 305 aircraft as at end March 2028; this compares to the previous forecast of 380 aircraft at that end date.’

EXPERT VIEW

Russ Mould, investment director at AJ Bell said: ‘Wizz Air shares traded close to all-time lows after flagging cost headwinds. The airline has dramatically fallen out of favour with investors since 2021.

‘Previously the market lapped up the narrative around rapid expansion; now, there is considerable scepticism because of high debt levels, cost pressures, engine problems and fierce competition.’

DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Martin Gamble) own shares in AJ Bell. 

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Issue Date: 30 Jan 2025