Wizz Air navigates choppy skies as engine issues put a dent in profits

Dubai: Ultra-low-cost Hungarian carrier Wizz Air is navigating a period of turbulence, as a substantial portion of its fleet remains grounded due to persistent engine issues. This has directly impacted the airline’s financial performance, leading to a decline in profits and a revised outlook for its future growth.

According to Wizz Air Holdings Plc’s stock market report for the full year ended March 31, 2025, Wizz Air had 42 aircraft 42 aircraft-on-ground at the end of F25 and 37 as of May 9 on account of issues caused by RTX-owned Pratt and Whitney engines.

By the end of the first half of its 2026 financial year, it expects 34 aircraft to remain grounded, with a repair shop visit expected at around 300 days. The engine issues have limited the airline’s ability to increase capacity. It has issued two profit warnings in the past year.

“You look at the performance of the supply chain, of the industry, and there are cracks all over the place,” Chief Executive Jozsef Varadi told Reuters. Varadi said he expected the airline to be impacted by the engine repair issues for another two to three years.

“We have the benefit of more than a year of experience operating under these unique circumstances – conditions airlines would never experience when demand exceeds supply,” he said in the statement on Thursday.

That said, the Hungarian ultra-low-cost carrier is excited for its future. “The number of grounded aircraft will start reducing in absolute and relative terms, which is why we have reached a transformation point. ASK capacity is back to growing due to the increase in the delivery volume of new aircraft from Airbus,” said Varadi.

He added, “The percentage of grounded aircraft relative to total fleet continues to improve, allowing us to focus on our strategy's key elements, win market share, drive leadership positions and deploy our expertise to mitigate challenges in our sector. We will not relent on defending the ultra-low-cost business model, delivering profitable growth and ultimately stakeholder value.” “While often dismissed as ‘easier said than done,’ the past year’s events tested both our company and management. We emerged stronger, wiser, and better prepared,” he added.

However, the financial fallout has been considerable. Operating profit for the financial year ended March 31 fell 61.7 per cent from a year ago to 167.5 million euros ($191 million), missing the 246 million euros projected by analysts polled by LSEG. Wizz Air has subsidiaries in Hungary, Britain, Abu Dhabi and Malta.

Wizz Air Abu Dhabi carried 3.5 million passengers in 2024, marking a strong year with over 20 per cent year-on-year growth.

Wizz Air’s fleet grew to 231 aircraft by the end of its last fiscal year (F25), adding 26 new A321neo jets and bringing back three older Wizz Air planes. They also used eight short-term wet-leased aircraft for summer 2024 to boost capacity.

Wizz Air plans to add 42 new A321neo and 8 XLR aircraft in the current fiscal year (F26) while phasing out 18 older planes. The airline boasts a young fleet, averaging just 4.7 years old, and most of its aircraft (66 per cent) are the more efficient “neo” models. Overall, Wizz Air has a solid order book for 300 new planes on the way.

However, the engine woes aren’t the only concern. The delivery schedule for new aircraft from Airbus has been pushed back. Wizz Air now expects its fleet to grow to 305 aircraft by March 2028, a reduction from its previous forecast of 380.

Despite these challenges, Wizz Air has seen some positives, including a slight decrease in fuel expenses and an increase in total revenue to €5,267.6 million.

The airline is also actively managing its financial position, including hedging its jet fuel and foreign currency needs and securing new financing arrangements for aircraft. Wizz Air also continues to monitor geopolitical situations, with plans to reintroduce services to Ukraine once they are deemed safe.

Commenting on the outlook and current trading for the company, Váradi said, “Wizz Air is a more resilient business today. Despite the unproductivity of a grounded fleet, we successfully delivered a second consecutive year of profitability. We have the benefit of more than a year of experience operating under these unique circumstances – conditions airlines would never experience when demand exceeds supply.”

He added, “Our unit revenue is 4 per cent higher than last year, supported by our ability to generate higher fares and drive a higher load factor. Our on-time performance and completion rates steadily improve, and our employee satisfaction consistently improves.”