Budget airline Wizz Air has reported a drop in its annual earnings after taking a £43.1 million hit due to the current war in Iran. Still, the airline has seen a record number of passengers in recent months, despite the pressures placed on the aviation industry at large by the ongoing conflict.
Why has Wizz Air taken a hit?
Following the outbreak of conflict between the U.S. and Israel against Iran, Wizz Air was forced to cancel many of its flights to the Middle East. These included routes to Tel Aviv, Israel, and to countries near the conflict, such as Cyprus. The airline estimates that these cancellations resulted in approximately £43.1 million in lost earnings.
The airline has also stated that it faced several one-off costs during the year, including maintenance and repairs from the phase-out of an older fleet and the delivery of new aircraft, and a 16% rise in crew costs.
Additionally, soaring fuel costs driven by the crisis in the Middle East are a source of economic strain for many airlines, with some carriers, such as easyJet, warning that some flights will see price increases as a result.
What next?
Despite the strain caused by the conflict, the airline has stated that it flew 69.7 million passengers in the year to the end of March, a 10% increase from the year before.
Chief executive of Wizz Air, Jozsef Varadi, said in a statement:
“We have continued to grow and serve an increasing number of customers. Equally, the defining feature of the year was the set of strategic decisions we made to position the business for long-term resilience and competitiveness. This has proven to be the right direction, working well in a balanced environment as well as at times of volatility, which the industry experienced towards the end of the financial year due to the Middle East crisis.”
The airline has also said that it is unable to provide an outlook for the year ahead, partly because of the uncertainty stemming from the conflict and the closure of the vital shipping route of the Strait of Hormuz.
Have you ever flown with Wizz Air before? Do you think the airline can recover from the financial hit? Let us know your thoughts in the comments below!
