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Wizz Air’s profits fell more than 40% last year as low-cost carriers worked to ground planes due to engine issues and fell 26% on Thursday.
The London-listed airline said its annual net profit to the end of March was reduced by 41.5% to 213.9 million euros from the previous year, due to higher costs and capacity constraints caused by the lack of 40 aircraft being discontinued.
The airline said the costs of maintenance, materials and repairs rose almost 16% as they were forced to hire spare planes to close the fleet gap and extend the lifespan of older aircraft. That increase weighed its revenue despite a record number of 63.4 million passengers and a decline in fuel costs over the year.
The Pratt & Whitney engine problem is due to concerns about powdered metal contaminants used to manufacture turbofan engines, and since RTX-owned engine manufacturers began recalling the engine for its inspection in 2023, Wizz Air’s growth plans have been limited.
Wizz Air is Europe’s worst airline, and issued two profit warnings last year. Full-year revenues increased 3.8% to 5.3 billion euros.
Wizz CEO József Váradi said despite the issues the carrier provided profitability for the second year in a row, adding that the group was operating under a “unique situation.”
However, engine issues have had a “deep impact” on the carrier’s “cost performance”; he said.
The airline agreed to a new compensation package with Pratt & Whitney, who received private compensation from engine manufacturers last summer for aircraft losses. This package covers the direct costs of Wizz related to grounded and expected aircraft.
Wiz expects 42 aircraft to be grounded at the end of March, with around 34 planes on the ground by the end of first half of 2026.
Váradi said the career this year was withheld due to the problems of “engine recovery” and the unpredictability of geopolitical uncertainty.
He hopes for another two or three years of disruption, saying by 2027 “most aircraft will be retrieved and flew.”
“2027 will be a turning year,” he added, saying “we are still standing” despite the turbulence.
