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Wizz Air forecasts better annual profit range as rivals struggle

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By Reuters
Wizz Air forecasts better annual profit range as rivals struggle
FILE PHOTO: A Wizz Air passenger airplane flies past a Waxing Crescent moon, Harpenden, Britain, September 16, 2018. REUTERS/Peter Cziborra   -   Copyright  PETER CZIBORRA(Reuters)
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(Reuters) – Wizz Air Holdings Plc <WIZZ.L> on Wednesday raised the bottom end of its annual profit forecast, as the budget airline benefits from a strong first-half while struggling rivals cut expansion plans.

Wizz, which mainly has flights to central and eastern Europe, said net profit for the financial year 2020 would be between 335 million euros to 350 million euros (288.5 million pounds to 301.4 million pounds). It had an earlier range of 320 million euros to 350 million euros.

Net profit for the six months ended Sept. 30 rose 87.1% to 371.5 million euros.

“The more recent supporting market conditions mean we are seeing our business tracking towards the top end of our current net profit guidance range, which gives us confidence to tighten the range,” Chief Executive Officer József Váradi said in a statement.

Wizz Air reported an 17.9% increase in first-half passenger numbers to 22.1 million, higher load factors, with excluding-fuel unit costs down 3%.

Fuel unit costs, however, increased 5.3% year-on-year.

Wizz, which competes with Lufthansa’s <LHAG.DE> Eurowings brand at central European airports such as Vienna, is performing well in a strained industry that is being plagued by weaker demand, rising fuel costs, competition, strikes, bankruptcies and the grounding of Boeing’s MAX 737 fleet.

British Airways parent IAG <ICAG.L> has warned that its full-year profit will be hit by a pilots’ strike at the UK carrier, while Lufthansa <LHAG.DE> is ready to go into arbitration to resolve a long-running staff dispute.

Ryanair <RYA.I> also expects further delays to its MAX 737 deliveries.

In July, Varadi said that Wizz, whose fleet is powered by Airbus <AIR.PA>, was increasing its capacity plans.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Bernard Orr)