Wizz Air Reports 50 Percent Net Profit Increase

European low cost carrier Wizz Air reported a 50 percent increase in its first quarter net profit as its rapid expansion continued.

In the quarter to end June the airline made a EUR€58.1 million (USD$66.9 million) net profit, a record for the period, from the previous year’s €38.6 million.

Revenue rose 28.6 percent to €469.3 million as the LCC increased passenger numbers by 25 percent to 7.2 million, and ancillary passenger revenue by almost 7 percent per passenger.

“The Company experienced a particularly strong performance from Easter traffic in the first quarter,” the company’s chief executive József Váradi said. “This first quarter performance together with encouraging summer bookings and the favourable fuel price environment are setting the Company up for a strong year.”

Passenger ticket revenue in the quarter was up 25.3 percent to €263.6 million and ancillary revenue increased by 33.5 percent to €203.1 million.

Operating expenses came in at €404.7 million from €318.3 million in 1Q17, as staff costs increased by 22.9 percent to €33.9 million. Fuel costs rose to €117.1 million, from €93.8 million, with the average fuel price paid up by just 0.8 percent from 1Q16. The airline said the overall fuel cost increase was inline with its increased flying hours.

Váradi said that airlines “tend to compete away the benefit of lower fuel prices with extra capacity” and that the airline remained “cautious on the prevailing yield environment in the second half of the financial year.”

Cost per available seat km (CASK) rose 2.1 percent to 3.23 euro cents, principally from the effect of heavy maintenance depreciation of its all-leased fleet, plus euro currency weakness against the US dollar.

Passenger traffic in revenue passenger km terms (RPKs) was up 26.9 percent on an ASK capacity increase of 24.5 percent. The resulting load factor rose by 1.7 percentage points to 91.2 percent.

Wizz Air added 13 aircraft during the quarter to bring its fleet total to 83. The airline will add to its all-Airbus A320-family fleet with an additional order made during the quarter of ten Airbus A321ceos. The new order brings its outstanding order total to 138 aircraft.

Looking forward, Wizz Air expects ASK capacity to grow by 23 percent in the current financial year, with unit revenue “slightly positive”. Unit costs are expected to rise by 1 percent this year.