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Wizz Air Holdings PLC on Thursday lowered full-year profit guidance after higher foreign-exchange charges hit third-quarter profits despite strong demand and pricing.
The Budapest-based European budget airline now expects to report full-year net profit after tax of €125 million to €175 million at current currency rates, down from guidance of €350 million to €450 million before.
The reduction would have been to €250 million to €300 million before any second half unrealized forex losses, Wizz Air explained.
RBC Capital Markets noted the new guidance is below the Visible Alpha consensus of €237 million.
Shares in Wizz Air were down 8.1% to 1,261.61 pence each in London on Thursday morning.
The warning came as Wizz Air said its pretax loss stretched to €277.6 million in the three months to December 31 from €118.4 million a year prior. Revenue increased 11% to €1.18 billion from €1.06 billion.
Chief Executive Officer Jozsef Varadi said: ‘Wizz Air has continued to navigate the complexity imposed on its operations from the ongoing grounding of some 20% of its fleet, due to the well-documented GTF engine issue. This is reflected in our unit cost performance, with Q3 ex-fuel [cost per available seat kilometer] up 17% year-on-year.’
Varadi said these rising costs and a ‘significant’ €160 million negative currency charge recognised in the quarter meant that the benefits of the stronger demand environment did not flow through to profit.
The currency charge reflects the requirement to mark-to-market the US dollar denominated lease exposure at the prevailing market rate at the end of each quarter.
‘While a non-cash item, it has the potential to introduce significant volatility to our reported profitability,’ Varadi explained. ‘Given the current volatility in FX, the board has approved a hedging program to help mitigate this in the future, the timing of which is yet to be determined given current ruling exchange rates.’
Wizz Air said there is no change to its GTF engine removal forecasts. An average of 40 aircraft are to be grounded in financial 2026.
‘However, this may change depending on the current engine selection negotiations to select the engine for 177 A321NEOs,’ Wizz added. Varadi said ‘underlying demand remains positive’ early in the final quarter, though he noted Easter will fall into the 2026 financial year.
Total passengers carried in the recent quarter rose to 15.5 million from 15.1 million a year prior, with the load factor improving to 90.3% from 87.6%.
Revenue per average seat kilometre climbed to 12% to 3.86 euro cents from 3.43 cents, while total costs per ASK increased 3.6% to 4.25 cents from 4.10 cents.
Varadi said underlying demand remains positive at the start of the fourth quarter, around 62% booked, with revenue per average seat kilometre up 8.3% year-on-year.
Varadi did point out the fourth quarter of this year will be hurt by the timing of Easter which will fall into the first quarter of financial 2026, whereas last year it fell mostly in the fourth quarter of financial 2024. Easter Sunday is April 20 this year and March 31 last year.
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