The budget airline Wizz Air is planning to limit its growth in Britain after weakening demand for flights sent its share price plunging almost 17pc.
Wizz – a major rival to Michael O’Leary’s Ryanair – became the latest European airline to reveal lacklustre results on Wednesday, with profits almost wiped out in the three months through June, sending the stock to its biggest decline since the start of Covid lockdowns in March 2020.
József Váradi, Wizz chief executive, said sluggish sales in the UK and Western Europe will lead the airline to reassess where it stations new jets next summer. Deployment is likely to be skewed more to Central and Eastern Europe, where demand remains robust.
Britain, where Wizz competes with carriers including Ryanair, easyJet and Jet2 in the intensely competitive low-cost market, may get some additional flight times and perhaps a few more routes, he said, but is unlikely to benefit from the opening of further bases.
The company has its biggest British hub at Luton, where it stations 11 planes, with a smaller one at Gatwick that is home to five. Bases in Cardiff and at Doncaster Sheffield Airport were opened after the pandemic but have since closed.
Wizz also serves Birmingham, Leeds Bradford, Glasgow and Aberdeen airports with aircraft based elsewhere.
Mr Váradi said: “Clearly from an overall market perspective, demand is suffering. All our competitors are struggling, as we’ve seen from Ryanair and Lufthansa recently.
“Western Europe is becoming a more saturated market. But this is not unique to airlines. We’re seeing softening consumer demand across many sectors.”
Full-year revenue and profit will be lower than previously predicted, Wizz said. The London-listed company’s shares fell 18pc, the steepest decline on the FTSE 250 index.
The carrier’s situation was complicated by the recall of dozens of Airbus A320-family jets with faulty Pratt & Whitney engines.
An average of 46 of the planes were out of service during the quarter, leading Wizz to draft in eight others from specialist providers in order to defend its market share.
Mr Váradi said: “That came with costs and in hindsight we could probably have saved on those leases.”
A rolling programme of repairs should mean the number of idled aircraft drops below 40 next summer, he said. At the same time, Wizz is scheduled to take delivery of 70 more planes.
While net profit slumped 98pc to €1.2m (£1m), the capacity restrictions at least meant that Wizz fares held up.
Ryanair said last week that ticket prices fell 15pc in the quarter as it resorted to deep discounting to fill its planes, sending the stock down as much as 18pc.
On Wednesday Lufthansa reported a 40pc drop in operating profit for the three months, trimmed its full-year guidance and launched a restructuring programme, saying prices had declined amid what it called a “normalisation” of fares following the post-pandemic travel boom.
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