Summary
- Wizz Air reversed its FY2023 loss on the back of strong travel demand.
- Nevertheless, the airline was still impacted by the Pratt & Whitney engine issues and the geopolitical conflicts within the Middle East.
- In FY2025, the low-cost carrier plans to enhance its profit and average load aspects.
Wizz Air, the Hungary-based low-cost carrier with subsidiaries in Malta, the United Arab Emirates (UAE), and the UK (UK), has almost completely reversed its full-year operating loss from FY2023 despite affected by grounded aircraft related to the Pratt & Whitney PW1100G problems.
Long-term trend of high travel demand
In line with József Váradi, the chief executive officer (CEO) of Wizz Air, a defining characteristic of the airline’s financial 12 months, which ended on March 31, 2024, was a sustained healthy demand for air travel across its markets. In consequence, this signaled to Wizz Air that the post-pandemic surge has now evolved right into a longer-term trend, with the airline being strongly positioned to answer demand, which has resulted in the present year-end profit.
Photo:Â Antonello Marangi | Shutterstock
Váradi added that the outcomes were achieved within the context of supply chain disruptions related to the accelerated removals and subsequent inspections of the Pratt & Whitney PW1100G engines, also generally known as the Geared Turbofans (GTF).
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Exceptional full-year metrics
The CEO continued that despite its challenges all year long, its workforce delivered exceptional service, reflected across operational, financial, and worker metrics. Váradi was thankful to the low-cost carrier’s employees, who embodied the Wizz Air spirit through through the 12 months.
The airline earned €5 billion in revenue ($5.4 billion), ending the financial 12 months with an operating profit of €437.9 million ($475.2 million). Wizz Air’s net profit was €365.9 million ($397 million), in comparison with a net loss in FY2023 of €535.1 million ($580.5 million).
Photo:Â Markus Mainka | Shutterstock
Wizz Air carried 62 million passengers, a rise of 21.4% year-on-year (YoY), with a median load factor of 90.1%, growing by 2.4% YoY. Meanwhile, capability, measured in available seat kilometers (ASK), grew by 24.5%, despite the airline having needed to ground aircraft as a result of problems related to the GTF engines, which power its Airbus A320neo aircraft family fleet.
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45 grounded aircraft
In line with Wizz Air, at the top of the fiscal period, it had 45 aircraft on ground (AOG), which grew to 47 jets by May 17. To melt the impact of the AOG situation, it agreed to material compensation with Pratt & Whitney.
Still, the low-cost carrier detailed that it can have around 50 grounded Airbus A320neo and A321neo aircraft through the first half of FY2025. In FY2024, Airbus delivered 39 A321neo aircraft, while the airline prolonged 13 leases and secured 11 additional aircraft leases while also receiving 20 spare PW1100G engines.
Photo:Â Wizz Air
In consequence of the continuing AOG situation, Wizz Air stated that its YoY capability growth shall be flat for the primary six months of FY2025 and the complete 12 months, which sounds counterintuitive considering that the airline plans to grow its fleet as much as March 2025.
The low-cost carrier detailed that as of March, it had 40 Airbus A320ceo, six A320neo, 41 A321ceo, and 121 A321neo aircraft. In March 2025, Wizz Air plans to have 34 A320ceo, six A320neo, 41 A321ceo, and 147 A321neo, in addition to one A321XLR aircraft in its fleet.
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Spare PW1100G engine deliveries
In an update related to the engine problems, Wizz Air detailed that its first aircraft was grounded for inspections in September 2023, adding that its assumption could be that engine turn-around times (TAT) during shop visits could be 300 days.
To mitigate the impact of the engines that might should be inspected, the airline has been taking delivery of spare GTF engines, with around eight to 10 spares being delivered by the top of June. By the top of the summer, Wizz Air plans to have as much as 50 additional spare engines.
Ch-aviation data showed that every one of Wizz Air’s Airbus A320neo family aircraft are powered by GTF engines, certainly one of the 2 options for the sort. The opposite option is the CFM International LEAP 1-A, which is a three way partnership between GE Aerospace and Safran Aircraft Engines.
Photo:Â Markus Mainka | Shutterstock
The Pratt & Whitney PW1100G inspections were announced by RTX, the parent company of the engine marker, in July 2023. Then, RTX disclosed that Pratt & Whitney discovered a rare condition within the powder metal used to construct certain engine parts, which is able to require operators to remove engines for inspections.
On March 27, the Federal Aviation Administration (FAA) published a final rule airworthiness directive (AD) that expanded the mandated angled ultrasonic inspection (AUSI) of the high-pressure turbine (HPT) 1st-stage disk and HPT 2nd-stage disk to incorporate mandatory AUSIs of high-pressure compressor (HPC) Seventh-stage integrally bladed rotor (IBR–7) and HPC Eighth-stage integrally bladed rotor (IBR–8). The March directive superseded two previous ADs that were published in October 2022 and August 2023.
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Growing profitability
Despite that headwind, which could end in Wizz Air’s full-year capability growth being flat YoY, the airline estimated that in FY2025, it expects a net profit of €500 million ($542.8 million) to 600 million ($651.3 million). Its average load factor may very well be around 92% through the financial 12 months. In line with Váradi, while the airline’s current challenges should persist through the next fiscal 12 months, Wizz Air’s agile, resilient, and well-positioned business model should mitigate the negative impacts of the external headwinds.
Photo: Tupungato | Shutterstock
The CEO shared that the present trading indicators are positive, with higher ticket sales YoY during Q1 FY2025 and Q2 FY2025. At the identical time, Váradi shared that Wizz Air will proceed using available levers to mitigate any further challenges that the carrier could face within the upcoming months.
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