Wizz Air reports first profitable year since pandemic despite Middle East conflict, AOG impact

After a string of net losses following the wake of the COVID-19 pandemic, Wizz Air has returned to profitability in the full financial year ending March 31, 2024. It reported a net profit of €365.9 million, swinging from its net loss of €535.1 million in the previous financial year. It also tops its net profit for the full financial year 2019/20 of €344 million, as Wizz Air had begun to take ""various initiatives"" to ""safeguard"" against the COVID-19 pandemic, which was spreading globally towards the end of that financial period. Its total revenues for this last financial period was up 30% year-on-year (YoY) to €5.1bn, while its operating expenses (excluding fuel) increased 15% to €2.8bn. Its fuel costs had decreased 5% YoY to €1.9bn in the fiscal year. Operating profit was €437.9 million, swinging from a loss of €466.8 million in the previous year. ""Sustained healthy demand for air travel across our markets was a defining feature of [the 2024 financial year],"" said Wizz Air CEO Jozsef Varadi, ""signalling that the surge witnessed post pandemic has evolved into a longer-term trend in consumer behaviour."" The airline carried 62 million passengers, up 21.4% YoY from 51.1 million, with passenger ticket revenue increasing 38.5% YoY to €2.8bn. Furthermore, it had grown its fleet to 208 aircraft throughout the year, up from 179 a year prior, after receiving deliveries of 39 new A321neos. Its load factor increased 2.4 percentage points to 90.1%. Despite positive results, the year was not without its challenges. The continuing conflict and tensions in the Middle East impacted its full year revenue by approximately €80 million. In addition, the GTF engine issues resulted in 45 aircraft-on-ground (AOG) at the end of the financial year; 47 aircraft as of May 17, 2024. It expects approximately 50 AOG by the end of the first half of the next fiscal year. Though, the airline said it had received ""significant OEM compensation"" in the 2024 fiscal year for the GTF issues, ""mitigating the operational and financial impact on the business"". In its report it said it had received €198.6 million in credits and compensation from suppliers. The airline added it expects to secure further compensation in the fourth quarter of the fiscal year 2025. At the end of the year, Wizz Air held total cash of €1.6bn. Its net debt as of March 31, 2024, was €4.8bn, up from €3.9bn in the previous fiscal year, while its net debt to EBITDA decreased from 29 at the end of the last fiscal year to 4.0. Its outlook for fiscal year 2025 expects load factors to be 92%, with net income in the range of €500-600 million and revenues to see a high single digit increase. Following the positive results, Wizz Air's shares soared over 7% on May 23, 2024.