Wizz Air trims winter capacity, but sets 2030 growth targets

Wizz Air Reduces Winter Capacity, Announces 2030 Growth Targets Amid Industry Challenges

Wizz Air's Strategic Adjustments and Industry Context

Winter Capacity Cuts and Revenue Outlook

Sept 17 (Reuters) - Budget carrier Wizz Air said on Thursday it had cut winter capacity by 5%, joining rivals in scaling back growth plans amid the Iran war, although a stronger-than-expected summer prompted it to raise its near-term revenue outlook.

Shares in the airline were up 3.4% at 985.5 pence by 0840 GMT.

Industry-Wide Impact of the US-Iran War

The US-Iran war has triggered the airline industry's biggest cost shock since the COVID-19 pandemic. Latvian carrier airBaltic became the first European airline to file for bankruptcy earlier this week due to fallout from the conflict.

Resilience of Full-Service vs. Low-Cost Airlines

While full-service airlines have generally proved more resilient than low-cost operators, whose business models depend on cheap fares, even major US airlines have reduced planned flight schedules as higher fuel prices threaten earnings.

Wizz Air's Financial Position and Growth Plans

Liquidity and Fuel Hedging

Wizz is among the better-positioned carriers, with liquidity of more than €2.2 billion ($2.5 billion) and fuel hedging covering 80% of its requirements over the next 12 months at about half the current market price.

2030 Growth Targets

The airline set out medium-term targets of €10 billion in revenue and a 10% margin on earnings before interest and tax by fiscal 2030. It plans to operate a fleet of 335 aircraft and carry 127 million passengers a year by that date.

Current Operations and Fleet Size

Wizz currently operates 269 aircraft and flew 69.7 million passengers in fiscal 2026.

Market Forecasts and Industry Reactions

Upgraded Revenue Forecast

Ahead of its capital markets day on Thursday, the Hungarian airline upgraded its second-quarter forecast for revenue per available seat kilometre (RASK) — a key industry measure. It now expects the metric to be flat year on year versus a previous forecast for a low single-digit decline.

"The slightly better pricing backdrop is a welcome development, especially in the context of the very high capacity growth by Wizz Air," Goodbody Stockbrokers analysts said.

Competitor Responses

Rival Ryanair also nudged up its outlook for average fares last week, saying they could rise slightly this winter following a "mild upturn" since July, although the forecast remained heavily dependent on oil prices.

Additional Information

($1 = 0.8718 euros)

(Reporting by Yamini Kalia in Bengaluru and Joanna Plucinska in London. Editing by Louise Heavens and Mark Potter)