- Expects to return to profit in year to April 2024
- Competitor airlines are more upbeat on summer travel
- UK airline Jet2 upgrades profit forecast on strong demand
- Shares down 8%
LONDON, Jan 26 (Reuters) - Wizz Air is upbeat on summer demand for travel but more cautious than its competitors, forecasting a return to profit in its 2023-2024 financial year, helped by strong bookings, new capacity and the benefits of hedging fuel costs.
Low cost rivals Ryanair, Europe's biggest airline, and Britain's easyJet have reported record bookings for summer holidays, in a sign that consumers are still keen on trips despite a looming recession.
Asked if Wizz had seen the same, CEO József Váradi said: "Bookings are strong, but I don't want to get over-excited."
He added: "We are seeing the market remaining intact. People continue to go, continue to fly."
Shares in Wizz dropped 8% to 2,771 pence in early Thursday deals, erasing gains made on Wednesday when easyJet's upbeat update lifted the stock.
Separately on Thursday, British airline and holiday group Jet2 upgraded its annual profit forecast after strong demand for winter holidays and said bookings for the summer were encouraging.
For its current financial year to the end of March, Wizz, whose main operations are in central and eastern Europe, is expecting to report a loss, impacted by the Ukraine war, which meant it had to switch capacity away from there last year.
The airline was also unhedged on fuel and foreign exchange costs for much of 2022, dragging on its finances, plus it was affected by disruption at some airports in the summer as they struggled with the pick-up in demand after the pandemic.
For the new financial year, Wizz will benefit from hedging and new capacity, forecasting growth of 25% to 30% this summer versus last, helping unit costs to improve. It is also seeing higher average ticket prices.
"We are very positive about the development and very positive about the outlook going forward," Varadi said.
Wizz said revenue more than doubled to 911.7 million euros ($994.3 million) in the three months to end-December, while passenger numbers increased 59% to 12.39 million.
($1 = 0.9169 euros)
Reporting by Sarah Young Editing by Paul Sandle and Mark Potter
Source: Reuters