Wizz Air's near-term revenue dips and Iran war clouds outlook
Wizz Air Faces Revenue Challenges Amid Geopolitical Tensions
Revenue Forecast and Industry Disruption
June 11 (Reuters) - Wizz Air forecast lower revenue per available seat kilometre for the fiscal first quarter on Thursday as the Iran war disrupts the airline industry and clouds the budget carrier's longer-term visibility into next year.
Operating Profit and Market Response
Its operating profit, however, beat analyst expectations, driving the share up 4%, making it briefly the best performer on the FTSE midcap index.
Impact of the Iran War and Route Suspensions
Guidance Withdrawal and Capacity Impact
The company, based in Hungary, did not provide fiscal 2027 guidance, citing the war and protracted closure of the Strait of Hormuz that has forced Wizz Air to suspend routes, accounting for about 5% of its overall seat capacity.
Revenue Per Available Seat Kilometre (RASK) Outlook
The airline expects first-quarter RASK, an industry gauge of sales, to fall by a mid-to-high single-digit percentage in the three months to the end of June, before stabilising to roughly flat in the second quarter to September.
Strategic Response to Market Conditions
Capacity Adjustments and Promotions
Since warning of a net loss from the impact in March, Wizz Air has added capacity to existing and new routes and increased promotions to support leisure demand in the crucial summer holiday season.
Pricing Strategies for Budget Travellers
It has also cut prices for budget travellers on routes with lower demand, particularly to destinations such as Cyprus and Egypt.
Financial Performance and Analyst Expectations
Year-End Operating Profit
For the year ended March 31, 2026, Wizz Air reported an operating profit of €139.7 million ($161.3 million), beating analysts' expectations of €88.51 million, according to data compiled by LSEG.
CEO Statement and Strategic Focus
Core Market Focus and Operational Discipline
"We will continue to focus on our core markets, restore full fleet utilisation as engine availability improves, maintain discipline in capacity growth and cost control," CEO József Váradi said in a statement.
($1 = 0.8662 euros)
(Reporting by Raechel Thankam Job in Bengaluru; Editing by Mrigank Dhaniwala and Barbara Lewis)
