Shares in budget airline Wizz Air (WIZZ) have dropped 2% to £38 despite the carrier reporting a 91% increase in half-year profit.
Pre-tax profit for the six months through September rose to €387.9m from €202.8m in the same period the previous year.
Increases in fuel and staff costs (up 24.8% and 20% respectively) were more than offset by an 11.4% rise in passenger ticket revenue and a 38.8% increase in ancillary revenue.
Ancillary revenue - money generated from a passenger’s extra spending once they’ve bought their ticket - is particularly important for airlines.
Ticket prices can fluctuate depending on market response, but the price of other services the airline provides remains relatively stable.
The more money it can bring in through checked bags, individual seat assignments, hotel commissions and so on, the less it will be impacted by issues like rising fuel prices.
Total revenue climbed 22% to €1.67bn and earnings before interest, tax, depreciation and amortisation (EBITDA) rose 20% to €609.1m.
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While Wizz Air narrowed its full year net income guidance to €335-350m compared with €320-350m previously, investors were unimpressed as the top end of the firm's guidance was still below the consensus forecast of €356m.
Commenting on the tighter estimate range, Wizz Air chief executive Jozsef Varadi said, ‘On the back of a strong first half we will be accelerating second half growth to 22%.
‘Notwithstanding this faster pace of growth and the genuine macro-economic challenges which always exist, the more recent supporting market conditions mean we are seeing our business tracking towards the top end of our current net profit guidance range which gives us confidence to tighten the range to between €335 million and €350 million for the full year.’