Low cost airline Wizz Air has made clear it expects demand for flights to remain strong even as consumers grapple with a cost of living crisis after it enjoyed a record quarter.
The Hungary-based airline increased passenger numbers by 25 per cent to 15.3 million in the three months to June 30, compared with 12.2m last time.
Accompanied by a rise in ticket prices and a fall in fuel costs, the growth in passenger numbers helped Wizz Air return to the black in the quarter after facing cost and operational challenges in the year to March 31.
Wizz Air chief executive József Váradi said yesterday: “We continue to observe positive trading in the second quarter”. He noted that ticket revenues and load factors are increasing.
The update provides further evidence that consumers are maintaining spending on travel although budgets are coming under pressure following sharp increases in the price of essentials including food.
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EasyJet and Ryanair have issued strong trading updates in recent weeks.
Wizz Air has signalled confidence in the prospects for the Scottish leisure travel market by announcing plans to launch a service linking Edinburgh with Tirana in Albania from December.
The airline operates four services linking Edinburgh and Aberdeen to countries in Eastern Europe.
Wizz Air’s core market is central and eastern Europe but it is expanding in Western Europe and in the Middle East. The airline is investing heavily in its fleet.
Airbus said on Wednesday that it had received an order for an additional 75 of its A321neo aircraft, taking the total on order to 434.
Mr Váradi claimed: “The A321neo’s unparalleled economic efficiency and remarkably low carbon footprint underpin our commitment to provide affordable and sustainable travel options for our customers.”
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But Wizz Air has faced challenges for all Mr Váradi’s confidence.
Last week the UK Civil Aviation Authority said it had taken enforcement action against Wizz Air following significant concerns over high volumes of complaints about how it compensated customers following flight delays or cancellations.
The CAA said Wizz Air had engaged with the regulator and has committed to introduce changes to its policies, procedures and passenger communications.
In response Wizz Air said it and other airlines in Europe had faced unprecedented operating challenges last summer citing air traffic control disruptions, airport constraints and staff shortages across the supply chain.
Wizz Air said it had learned from the experience and had taken significant steps to make its operation more robust and customer-centric.
Mr Váradi said yesterday that the industry faced continued infrastructure and supply chain limitations.
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Wizz Air suffered a shareholder revolt at its annual general meeting on Wednesday amid concerns about its proposal to give Mr Váradi more time to qualify for the £100m bonus he is in line for subject to conditions.
More than 25 per cent of general meeting votes cast opposed resolutions concerning the relevant value creation plan and the company’s directors’ remuneration policy.
After the resolutions were passed, Wizz Air said its board remained of the view that the leadership of Mr Váradi is central to delivering the company’s recovery in the coming years. Wizz Air’s board will continue to consult with major shareholders on remuneration and wider governance matters.
Wizz Air’s revenues increased by 53% in the first quarter, to €1.2 billion from €0.8bn.
Analysts at the Davy brokerage noted ticket revenues were supported by strong pricing momentum.
Wizz Air made an €80 million quarterly operating profit compared with a €285m loss last time.
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The load factor Wizz Air achieved increased to 91.2% from 84.7%. It is expected to increase to 94%.
Wizz Air had 182 planes at the end of the quarter.
Shares in the London-listed company closed down £0.48 at £23.14.
Mr Váradi has until 2028 for Wizz Air shares to reach the £120 level at which he will qualify for the £100m bonus, against 2026 previously.
Wizz Air made a €467 million operating loss in the year to March as disruption to flights compounded the challenges posed by the surge in fuel costs last year which followed the launch of Russia’s all-out war on Ukraine. Oil and gas prices have eased in recent months amid fears about the outlook for the global economy.
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