
Budget airline Wizz Air has suffered a significant setback, announcing a sharp decline in its first-quarter profit and subsequently slashing its annual profit forecast. The company reported a 44% slump in operating profit for the period ending June 30th, a figure that fell well short of analyst expectations. The primary culprit behind Wizz Air’s financial woes is the ongoing issue with Pratt & Whitney engines.
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A total of 46 aircraft in the airline’s fleet are grounded this summer due to mandatory engine inspections, severely impacting its operational capacity. To mitigate the disruption, Wizz Air has resorted to securing wet leases, incurring additional costs. Despite these challenges, the airline maintains a bullish outlook on passenger demand and reiterates its plans for substantial capacity growth in the coming years, fueled by a steady stream of new Airbus aircraft deliveries.
However, the revised annual profit forecast now projected between 350 million and 450 million euros, represents a significant downgrade from the previous estimate of 500 million to 600 million euros. Investors reacted negatively to the news, sending Wizz Air's share price plummeting by 15%. The airline's struggles echo broader difficulties faced by the aviation industry, which has been grappling with production delays from both Boeing and Airbus.
Boeing, in particular, has been beset by safety concerns, exacerbating its delivery challenges. As Wizz Air navigates these turbulent waters, it faces the formidable task of restoring investor confidence while simultaneously addressing the operational hurdles posed by engine issues and capacity constraints.