Wizz Air’s share price slides as profits plunge amid ‘unprecedented’ disruption caused by air traffic control strikes
- Company’s pre-tax profits fell from £53.7million to £46.3million
- Disruption levels increased by 426% over the period, airline group says
Shares in Wizz Air have fallen over 5 per cent after the budget airline group posted a 14 per cent fall profits for the first quarter.
The group’s pre-tax profits fell from £53.7million to £46.3million amid ‘unprecedented’ disruption triggered by European air traffic control strikes.
The FTSE 250 listed company’s share price is currently down 5.49 per cent or 195.50p to 3,362.50p. The shares fell by around 10 per cent earlier today.
The level of disruption Wizz Air saw increased by 426 per cent over the period, with 145 flights affected.
Dwindling profits: Shares in Wizz Air have fallen over 5 per cent after the budget airline group posted a 14 per cent fall profits
Passengers suffering delays and cancellations push up the group’s compensation costs by 203 per cent to £8million.
Wizz Air and IAG have submitted complaints to the European Commission against France, where air traffic controllers have joined public sector protests over the government’s economic reforms.
Airlines are exploring measures to counter the fallout from the strikes, including keeping spare capacity and crew reserves.
‘We are looking at using or creating more spare capacity in the system for recovery and we are also looking at creating more reserves on the crew side,’ Wizz Air’s chief executive József Váradi said.
Wizz Air expects the disruption to continue and has lowered its full-year capacity growth target from 20 per cent to 18 per cent.
Mr Váradi said: ‘Wizz Air has once again delivered double-digit growth in passenger numbers and revenues, while also delivering ever higher load factors and net profit of €50m in the first quarter.
‘This was a very solid performance given the absence of high yielding Easter traffic which fell into the end of the last financial year as well as a backdrop of significant challenges caused by European air traffic control issues.’
He added: ‘Looking beyond the quarter, we are making exciting progress in continuing to build Wizz into Europe’s lowest cost airline.’
The budget airline’s revenues increased by nearly 18 per cent to £491million, with passenger numbers up 19.7 per cent to 8.6million.
The airline increased its fleet to 102 aircraft with the addition of nine A320 and A321 planes.
Wizz Air’s operations covers 600 routes to and from 44 countries from 25 bases.