8th Jun 2022 14:28
(Alliance News) - Wizz Air Holdings PLC warned of further losses heading into the key summer holiday season as the travel sector grapples with flight cancellations, high fuel prices and staff shortages.
Wizz Air on Wednesday posted a widened annual loss, but the budget airline pledged extra resources to help deal with the chaotic travel disruption seen at airports.
The stock was down 10% at 2,484.00 pence on Wednesday, the worst performer in the FTSE 250.
For the financial year ended March 31, revenue was EUR1.66 billion, up from EUR739.0 million in financial 2021, but its pretax loss widened to EUR641.5 million from EUR566.5 million.
Looking ahead, Wizz Air believes it can return to pre-Covid productivity during the next financial year but warned of an operating loss for the first quarter of the next financial year and refrained from providing guidance beyond that period.
"The industry is witnessing supply-chain issues across airports, including in our network. Shortages of staff in air traffic control, security and other parts of the supply-chain are impacting airlines, our employees and our customers directly. We are deploying extra resources to minimize disruptions and urge all other stakeholders to do the same, having customers' best interests always in mind," said Chief Executive Jozsef Varadi.
Wizz Air also highlighted that the price of a plane ticket might jump by close to 10% this summer as European travellers try to get away after two years of heavy travel restrictions.
Varadi expects this to increase even further, to "upper single digits" in the company's second quarter, which runs between July and September.
On Monday, Wizz Air reported higher passenger numbers for May than it carried before the pandemic. The firm said it carried 4.1 million passengers last month. The figure was well above the virus-reduced total of 840,445 in May 2021, and higher than the 3.5 million passengers it carried in May 2019.
Wizz Air's results come as travel agents get inundated with telephone calls from customers worried that their summer holidays will be disrupted as flight chaos continues.
Thousands more airline passengers saw their travel plans thrown into disarray this week due to flight cancellations as the sector struggles to cope with staff shortages. Even passengers whose flights have gone ahead reported being stuck in airport queues for several hours.
"There is no way of glossing over the issue that a growing number of people are likely to be ditching plans to fly this summer as they don't want the hassle of flight delays, cancellations and long queues. There is also the issue that air fares are going up and more people have less money in their pocket each month after paying the bills, so they might not be able to afford to travel," said AJ Bell's Russ Mould.
"Add in disruption with air traffic control and you've got a chaotic backdrop which means airlines could experience a third consecutive summer of misery. That explains why Wizz Air is not providing further financial guidance for its current year," Mould added.
By Arvind Bhunjun; [email protected]
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