Wizz Air’s financial performance is still languishing in the loss zone. As we know, Wizz Air has previously been credited with assisting passengers in getting out of Ukraine in the early stages of the Russian invasion. However, the airline has also been mired in controversy. In August last year, the airline was forced to back down in launching service from Abu Dhabi (United Arab Emirates) to Moscow (Russia). Since then, the airline has been making more efforts to boost its popularity. It has been opening up new routes to countries such as Romania. In addition, it has been offering customers discounts ahead of the spring, summer and winter vacation holidays this year. Nevertheless the company still appears to be making losses.
It has been challenging for any airline in the aviation industry. As we know, the pandemic years have taken a terrible toll on all airlines as flights were drastically reduced due to Covid restrictions. To make matters worse, when pandemic restrictions were lifted, airports struggled to meet the surge in flight demand. This is because many staff had been laid off during the pandemic when demand was less, and therefore there was a severe staff shortage as airports and airlines struggled to re-recruit. As a result, many airlines had to restrict flights to reduce congestion at airports. When the Russians invaded Ukraine, the situation became even worse for airlines as the resulting sanctions meant fuel prices rose to higher levels. In addition, European airlines, in particular, found the problem harder as they had to plan new routes to circumvent Russia as planes were subsequently banned from flying in Russian airspace.
Wizz Air’s Financial Performance
Regarding Wizz Air’s financial performance, in the 12 months up to 31st March 2023, the company made a net loss of 535.1 million euros. Even though the company continues to make losses, Wizz Air’s financial performance appears to be better than the previous year. The 12 months up to 31st March 2022, the company made a net loss of 642.5 million euros. This means that Wizz Air’s loss has been reduced by approximately 17%. This shows that the situation is at least improving for the company.
In terms of Wizz Air’s revenue (total money received), the company made 3.8957 billion euros. This is approximately 2.3 times the 1.6634 billion euros earned in the previous year. This shows that Wizz Air’s financial performance has resulted in a greatly increased demand from customers. Wizz Air’s revenue has more than doubled, whereas the net loss has only reduced by around 17%, indicating that cost control is a real problem for the company. As we know, the war in Ukraine and the subsequent rise in fuel prices may have taken a severe toll on the company.
The Company’s Response
In response to Wizz Air’s financial performance, William Franke, the company’s Chairman, reiterates that the price of jet fuel has impacted profits. In addition, he also talks about the fact that a bonus payment was made to top staff to help them deal with rising costs of their own. The company’s Chief Executive Jozsef Varadi has said that it will focus on delivering an ultra-low-cost business model. This means he will effectively make cost the center in the formation of a strategy as to how the company is run. It will focus on using fuel-efficient aircraft and ensure it will conduct its operations (activities that provide services to customers, such as the deployment of flights) as efficiently as possible.
As one can see, Wizz Air’s financial performance continues to be loss-making. However, the dramatic improvement in revenue when compared to the previous year is encouraging. This shows that Wizz Air has been more successful at attracting customers than last year. Its major efforts, therefore, will no doubt be in controlling its costs. The company has recognized the problems of increased costs and plans to improve the situation. We have to wait to see how this progresses.
