Wizz Air flies in the face of challenging conditions with record profits as it shrugs off concern over Brexit hitting demand

Rebecca Smith
No turbulence here
No turbulence here (Source: Getty)

Budget airline Wizz Air has announced soaring full-year results, saying the Brexit vote hasn't dampened demand to or from the UK.

Shares in the airline followed suit, up 11.66 per cent in afternoon trading.

Read more: Wizz Air sets up new base at London Luton as it underlines commitment to UK

The figures

Passenger numbers were up 19 per cent to 23.8m, revenue up 10 per cent to €1.57bn (£1.36bn) and profit for the year up 28 per cent to a record €246m, while the Hungarian low-cost airline said underlying net profit edged higher to €225m amid "industry wide yield pressures".

Ticket revenue was up two per cent to €916m, while load factor also increased by 1.9 percentage points to 90.1 per cent.

Wizz Air is forecasting net profits of next year around 250m-270m, though that guidance was "heavily caveated by the revenue performance for the all-important summer period, as well as the second half of FY2018".

Why it's interesting

The airline sector has been experiencing some turbulence in the wake of the Brexit vote and the following decline in sterling, while uncertainty remains over what will be negotiated on the Open Skies front.

Wizz Air said that, despite the UK's decision to leave the European Union, there were "no signs of demand weakness" on routes to or from the UK. It noted that sterling's fall has hit revenues to the tune of €17m, but said that was absorbed by the rest of the airline's route network.

The low-cost carrier has been expanding the number of routes it operates, with 113 added, and opened four new bases last year. It announced earlier this year that one of its upcoming new additions will be a base at London Luton airport.

Mark Irvine-Fortescue at Panmure Gordon said Wizz Air has "the raw ingredients and market conditions to take its successful proposition to a whole new scale".

The airline's flying performance sent fellow airlines higher too, as shares in British Airways owner IAG and EasyJet both edged up after Wizz Air's results.

What the company said

Wizz Air's chief executive, Jozsef Varadi, said: "We continue to drive our cost base lower to maintain one of the highest profit margins of any European carrier, something to which the exceptional operational and financial performance of our new A321ceo aircraft contributed.

"The resilience of our ultra-low cost business model combined with our growing, diversified network and our ever stronger balance sheet places Wizz Air in a unique position to exploit the significant market opportunity that exists in the CEE market of over 300m people."

Growth will continue as a top priority for us and we plan to increase capacity by around 23 per cent and carry nearly 30m passengers in FY2018.

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