Wizz Air (Hungary) (Budapest) has reported a first quarter net profit of €32.9 million ($36.1 million), up 12.5% compared to €29.2 million ($32.0 million) in the same quarter a year ago.
Revenue was up 12.7% at €332.5 million ($365.0 million), compared to €295.2 million ($324.1 million) for the same quarter a year ago.
The airline also gave guidance on its full-year outlook:
With the continued expansion of our network, Wizz Air expects to grow capacity by around 17% in the 2016 financial year, spread evenly across the year. We continue to believe that there will be no earnings benefit from the decline in fuel prices over the last 12 months as the US dollar has strengthened against the euro over the same period and, as expected, lower fuel prices are feeding through to lower unit revenues. We expect the downward trend in unit revenues to continue for the foreseeable future.
Nonetheless, our forward bookings indicate robust demand for the peak summer period. Increased visibility over this important trading period means we now expect to deliver an improved outcome for the full year. Our current expectation is for Group post tax profit (excluding unusual and exceptional items) to be in the range of €175 million and €185 million. While we have limited visibility on the second half of the year, our current expectations for full year performance are summarized below:
For the second quarter (July to September 2015) of the 2016 financial year, we expect to grow capacity, in terms of ASKs, by around 16% and anticipate a modest rise in load factor compared to the same period in the prior year. Despite continued downward pressure on unit revenues, both operating margins and underlying net profit margins are expected be modestly ahead of the prior year.
József Váradi, Wizz Air Chief Executive said:
“The first quarter has been an exciting period for Wizz Air. We have continued to grow our network and increase our passenger numbers throughout the period while maintaining an industry leading, ultra-low cost base. Today we are pleased to announce a record set of results for the first quarter with a strong performance against all key operating and financial performance measures. We are particularly pleased to have announced the signing of a memorandum of understanding relating to an order, subject to shareholder consent, for 110 Airbus A321 neo aircraft, worth in excess of $12.5 billion at current list prices. This order will provide us with aircraft to continue delivering strong growth for the next decade.
We continue to deliver against our ambition to make safe, reliable, affordable air travel available to everyone in Central and Eastern Europe. Our ultra-low cost model gives us a clear cost advantage versus most of our rivals, including many other low cost airlines, and as a result we are able to offer our passengers low fares and sustain a relatively high growth rate compared to other carriers. We have a strong balance sheet, proven management team, best-in-class fleet and leading market position in CEE. This winning formula leaves Wizz Air well placed to continue to deliver significant growth and returns for our shareholders”.
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The company also gave additional details on its latest planned order with Airbus:
On June 18, 2015 the Company announced that it had signed a memorandum of understanding (MOU) with Airbus S.A.S. to purchase 110 A321neo aircraft (below), with the first deliveries in 2019. The memorandum of understanding includes an option to purchase up to 90 A321neo additional aircraft and provides for the cancellation of 10 A320ceo due for delivery in 2018 under existing agreements. Wizz Air also has the right to substitute A320neo aircraft for A321neo aircraft depending on its needs. Completion of the order will be subject to the successful negotiation of a final purchase agreement and, thereafter, to Wizz Air shareholder approval.
This order will enable Wizz Air to deliver its fleet expansion plan and replace over 50 aircraft scheduled to leave the fleet between 2019 and 2024. By the end of this period Wizz Air expects to have a fleet totalling 154 aircraft, with significant flexibility to adjust up or down subject to market conditions. Apart from providing the capacity necessary to serve the long term growth potential of the CEE market, the order will provide for significantly lower operating costs through cabin innovations, the latest engine technology and other efficiency improvements. As with the 230-seat A321ceo, the first of which will be delivered later this year, the 239-seat A321neo will be deployed primarily on higher volume routes.
In other news, Wizz Air has announced an upgrade to its first-to-board Priority Boarding service to include the option of bringing on board a small personal item. This continues Wizz Air’s tradition of adding services designed to enhance passenger convenience and satisfaction.
With the upgrade, passengers with Priority Boarding, purchased as a stand-alone option or as part of a Plus Fare or WIZZ Privilege Pass, will have the choice to bring a small personal item on board in addition to either a small or large cabin bag.
Priority Boarding, which allows passengers to board their flight ahead of general boarding, can be added to Basic Fares for just €3 per seat and flight if purchased online, €4 if purchased at the airport.
The Plus Fare, which includes Priority Boarding, was launched in May 2015 to address the needs of comfort conscious travellers and comprises the flight fare, seat selection including premium seats, airport check-in, WIZZ Flex for flexibility on flight changes, a large cabin bag, and one checked bag.
The WIZZ Privilege Pass was launched in January 2014 as a yearly membership program for frequent travellers. For an annual fee of €99, pass holders enjoy seat selection including premium seats and unlimited priority boarding and a large cabin bag on every flight.
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