- Impacted by conflicts in Israel and Ukraine
- Shares down 48% over one year
- Geared turbofan (GTF) woes continue
Shares in Wizz (WIZZ) fell by 25% to £12.48 in morning trading as the European budget carrier reported an annual profit lower than its reduced guidance from January, when it issued its second profit warning.
The company also said it could not give a full year 2026 outlook at this time ‘due to the lack of visibility across their trading seasons.’
REVENUE AND PASSENGER GROWTH
For the year to the end of March 2025, Wizz Air reported a 3.8% increase in total revenue to €5.3 billion.
It also said it carried a record 63.4 million passengers during the year 2025, up from 62 million the previous year.
During the period, Wizz Air took delivery of 26 new A321neo aircraft and also secured three former Wizz Air aircraft on dry leases, while 6 A320ceo aircraft were redelivered, ending the fiscal year with a total fleet of 231 aircraft.
However, despite the growth in its fleet, passenger numbers and revenue, the company reported a net profit of €214 million, down more than 40% compared to €366 million a year earlier and worse than it had previously forecast.
GEARED TURBOFAN WOES
The European budget carrier is facing rising costs from the ongoing grounding of some 20% of its fleet due to its GTF engine issue.
In 2023, 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.
As of 9 May this year, Wizz Air had 37 aircraft on the ground because of GTF engine-related matters, and the company expects 34 aircraft to remain grounded by the end of the first half of full year 2026.
Wizz Air is working with Pratt & Whitney the manufacturer of the GTF engines to resolve the issue.
At the end of 2024, Wizz entered into a commercial support agreement with Pratt & Whitney, covering the two-year period for the calendar years 2025 and 2026.
The compensation package, which covers Wizz's direct costs associated with the aircraft which have been and those which are expected to be grounded, is similar to the levels of the previous agreement in place during 2024.
WHAT DID THE CEO SAY?
Chief executive József Váradi commented: ‘Despite the unproductivity of a grounded fleet, we successfully delivered a second consecutive year of profitability.
‘Our unit revenue is 4% higher than last year, supported by the combination of our ability to generate higher fares and drive a higher load factor.
‘Our on-time performance and completion rates are steadily improving, and our employee satisfaction consistently improves.
‘The number of grounded aircraft will start reducing in both absolute and relative terms and this is why we have reached a transformation point.’
EXPERT VIEW
Russ Mould, investment director at AJ Bell said: ‘Wizz Air is not having the best of times as costs go up, part of its fleet is grounded due to engine issues, and earnings plummet. The airline described its past year as ‘resilience and transformation,’ whereas the market reaction suggests ‘awful’ might be a better word to use.
‘Wizz Air used to be the aggressive growth player in the industry, with talk that it tried to buy EasyJet in 2021. The tables have now turned, and it is being left behind. With its shares trading at a fraction of their peak, failure to resolve its problems could see Wizz turn from predator to prey.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Ian Conway) own shares in AJ Bell.
