Wizz Air Holdings has reported that unrealized foreign exchange (FX) losses, the cost of disruptions and the lower utilization in the quarter, combined with the pricing environment especially in April and May 2022 drove an operating loss of €285m for the quarter and a net reported loss of around €450m.
The strength of the USD at the end of the quarter (1.04 vs. EUR) compared to the start of the quarter (1.11 vs. EUR) drove an unrealized FX loss on the company of €136m. This is a non-cash impact. The impact is driven by a revaluation of the USD lease liabilities on Wizz’s balance sheet.
Wizz Air ASKs for the quarter were 30% higher versus F20, growing sequentially month-on-month, while RASK for the quarter was down -10% versus F20, with net fares in line with F20 but load factor at 85%, down nine ppts, reflecting the efforts of Wizz Air to pass through higher input cost in its fares. RASK sequentially improved month on month with April and May at -14% versus the respective month in F20, and June RASK was at -1.5% on the back of higher net fares (+6% vs F20).
Ancillary revenues for the quarter were up 14% over F20, or 34.2 EUR/pax (up 4.1 EUR/pax vs F20), and, ticket fares were down 12% versus F20.
Fuel CASK for the quarter was up 94% versus F20 driven behind an average fuel price of 1,239 USD/mT. Wizz has recently announced F23 ‘insurance’ hedge coverage levels, which have been completed, and, a return to systemic hedging starting as of F24.
Ex-Fuel CASK for the quarter was up 16% versus F20, at 2.62cts versus 2.27cts in F20, of which disruptions drove a 0.22cts increase versus F20, an increase of around 50m EUR. The balance of the ex-Fuel CASK increase versus F20 was largely driven by a 10% lower than historical utilization during the quarter, given the gradual ramp up month on month.
Wizz Air’s liquidity improved to around €1,570m at the end of the first quarter.
Despite the factors impacting Q1 F23, Wizz Air states that it is expecting a material operational profit in the second quarter of the FY (July – September) as revenue and pricing momentum is expected to continue to improve.
Noting the need to avoid cancellations and secure a more punctual operation, Wizz Air said that it had “further improved the agility and resilience of our network including adjusting schedules where we have seen a higher occurrence of issues (e.g. slot allocation issues, turn-around timings). In total for the peak summer period we expect to reduce utilization a further 5% versus the plan outlined at the full year results to reduce the impact of ongoing external disruptions. We now expect summer ASK growth to be around 35% versus F20”.