European budget carrier Wizz Air is confident of returning to profit and pre-Covid utilisation in the next financial year after more than doubling its revenues in its latest financial quarter.
Wizz posted revenues of €912 million ($994 million) for the three months ending December 2022, the third quarter of its current financial year. That compares with €408 million at the same stage last year. The improvement was driven by a year-on-year 59% jump in passengers to 12.4 million and a 50% increase in unit revenues.
Wizz Air chief executive Jozsef Varadi says: ”Throughout the period, we witnessed a solid pricing environment, supported by robust demand across our broader and more diversified Wizz Air network.” That included further expansion of its services into Saudi Arabia during the quarter.
While the airline recorded an operating loss of €156 million for the third quarter, unrealised currency gains enabled Wizz to post a net profit of €34 million – a second consecutive quarterly net profit. This was driven by the strengthening euro currency resulting in a revaluation of US dollar leasing liabilities, helping to reverse loss incurred in the first half.
Wizz, which tempered its original capacity expansion plans and aircraft utilisation rates to improve its operational efficiency amid ramp-up challenges, says this helped cut flight disruption costs compared with the previous two quarters.
The airline expects to post an overall net loss for the 12 months ending March 2023 – a third consecutive year in the red – but remains confident that it will be profitable for the year to March 2024.
“We have been encountering significant challenges through the current year, but we are very confident that now the ship is moving in the right direction,” Varadi said during a third-quarter results call on 26 January. “So we have turned the corner and you should be expecting a lot more normalised performance…comparable with pre-Covid times.”
The airline flags improving load factors and expects to see the load factor gap versus 2019 levels continue to close in the coming quarters ”as our recent network investments start to mature”. Wizz load factor of 87% for the third quarter was up 10 points on the previous year, but that is still five points below pre-pandemic levels.
“More generally, we continue to see evidence of solid fare environment as average fares…are trading above 2019 and 2022 levels. As we reach the end of January, we are seeing booking volumes coming in ahead of 2022, which is in line with expectations,” Varadi adds.