(Nov 13): Wizz Air Holdings plc reduced its full-year capacity outlook as the low-cost carrier plans to slow its growth trajectory and stabilise operations after engine maintenance issues grounded a portion of its fleet.
Shares rose as much as 9% in London on Thursday morning, the most since July, after the Hungary-based airline said in half-year results that it expects 10% growth year-on-year in fiscal 2026. That compares with the 20% it predicted in June.
“You can’t grow a business of this scale 20 to 30%,” Chief executive officer Jozsef Varadi told Bloomberg Television. “That would have undermined financial performance on a structural basis, so that was the reason we corrected the growth rate.”
The problems with engines made by RTX Corp’s Pratt & Whitney unit have plagued Wizz since 2023, forcing the carrier to ground some of its all-Airbus SE fleet. That has driven up costs and prompted Wizz to slow aircraft deliveries and rein in expansion plans in the Middle East and South Asia.
Wizz reported revenue in the first six months of €3.34 billion, which was in line with estimates compiled by Bloomberg. The airline forecast that revenue for the full year could decline by a low single-digit percentage point.
Analysts said that although Wizz faces cost pressures in the second half of the year, the slower growth outlook should benefit the carrier in the long run.
See also: Emirates dashes hope for new Airbus A350 order amid engine woes
“This in our view is a sensible move towards steadying operations and margins on the flying it operates,” Alex Irving, an analyst at Bernstein, said in a note.
Wizz expects to have 30 to 35 planes on the ground this year and between 25 and 30 aircraft in fiscal 2027. Varadi said he remains “fairly confident” that the engine problems will be over towards the end of 2027.
“We went over-bullish on adapting a new technology,” he said. “We underestimated the risks associated with this.”
See also: Emirates throws weight behind Boeing with top-up order for 777X
The airline agreed to defer 88 Airbus deliveries into the next decade, confirming a report by Bloomberg News. The deal kicks in next year, which will leave Wizz will some overcapacity in its system, Varadi said in an interview.
Despite the capacity cut, Wizz still expects to have about 15 million passengers this year. Varadi said he’s focusing the growth mainly in central and eastern Europe, the UK and Italy.
The stock has fallen about 20% so far this year, compared to a 43% rise at Ryanair Holdings plc and a 14% decline at EasyJet plc.
EasyJet will be the last major European discount airline to report earnings, which are scheduled for Nov 25.
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