Source - Alliance News

Wizz Air Holdings PLC on Monday said it expects a ‘material’ profit in the second quarter but cautioned it will trim flight utilisation over the summer as with grapples with recent travel chaos.

The Budapest-based budget airline said it continued to ramp up its operations against a ‘challenging macro and operational backdrop’ during the first quarter of the current financial year.

Shares were down 4.0% at 1,784.00 pence each on Monday morning in London, with the stock among the worst mid-cap performers in early dealings.

For the first quarter to June 30, Wizz Air said it registered a €285 million operating loss but expects a ‘material’ operational profit in the second quarter on strong summer demand.

During this period, available seat kilometres were 30% higher versus the same period in financial 2020, growing sequentially month-on-month as most Covid restrictions were lifted and as capacity reallocation related to the war in Ukraine started to take effect during the course of the quarter.

Revenue per available seat kilometre for the first quarter was down 10% from financial 2020, with net fares in line with financial 2020. However, the first-quarter load factor of 85%, down 9 percentage points, reflected the efforts of Wizz Air to ‘pass through higher input cost in its fares’. In addition, ancillary revenue for the quarter was up 14% over financial 2020.

Looking ahead, Wizz Air expects revenue and pricing momentum to continue to improve in its second quarter, from July to September. Load factors as of July have improved to above 90% and the fare environment remains strong, it added, with industry capacity reducing and consumer demand for the summer looking healthy.

However, it warned: ‘To be able to avoid cancellations and secure a more punctual operation to our customers, we have further improved the agility and resilience of our network including adjusting schedules where we have seen a higher occurrence of issues...In total for the peak summer period we expect to reduce utilization a further 5% versus the plan outlined at the full year results to reduce the impact of ongoing external disruptions. We now expect summer ASK growth to be around 35% versus F20.’

Wizz’s update came as London’s Heathrow Airport warned it will ask airlines to cancel more flights this summer if it does not believe previous schedule reductions will sufficiently reduce disruption.

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