Wizz Air Holdings PLC (AIM:WIZZ) offered investors a glimpse of how the grounding of its jets, as Pratt & Whitney engine issues are investigated, was affecting trading on Thursday.
Though the airline flew a record 15.1 million passengers over the three months to December, constraints from the groundings, alongside disruption from the war in the Middle East, took their toll.
A €105.4 million (£89.9 million) loss was recorded for the period, compared to a €33 million profit last time around.
“It’s clearly been a challenge with engine inspections ongoing, which have forced it to alter schedules to deal with the disruption,” Hargreaves Lansdown analyst Susannah Streeter said.
Wizz Air was among short-haul operators to have enjoyed a post-pandemic boost in demand, alongside rivals such as easyJet PLC and Ryanair Holdings PLC (LSE:RYA), despite wider cost-of-living pressures.
However, Wizz Air is estimating capacity growth will at best be flat this year, as new aircraft deliveries only manage to mitigate the effects of the groundings.
These themselves have been enforced as thousands of Pratt & Whitney engines have needed inspecting for supposed microscopic contaminants used in parts of the power units.
According to Wizz, 13 of its 180-plus Airbus aircraft were grounded as of 31 December, stretching to 33 as of 24 January.
Compensation has been received for the third quarter, the airline added, though groundings are likely to take 40 aircraft out of service by the year-end.
Some 30 million to 32 million people will likely travel with Wizz this year therefore, with Third Bridge analyst Olly Anibaba noting there was a “possibility of lingering engine issues” hitting summer traffic.
Streeter added that the desire to travel was there for Wizz to capitalise on when groundings were dealt with.
“Its destination choices are in demand and can be fully exploited once it can get the full fleet off the ground again,” she said.
This, alongside Wizz’s plans to resume flights to the Middle East and the fact that full-year net income expectations were maintained at €350 million to €400 million, should provide encouragement, she added.