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Wizz Air shares take off as it sees further profit growth after strong 2018 performance

Wizz Air reported a 22.1% increase in net profit to a record €275mln for the year to end of March 2018
Wizz Air
Wizz Air says it had a solid start to the new financial year

Wizz Air Holdings PLC (LON:WIZZ) shares flew higher after the budget airline said it expects profits to rise further this year by keeping costs low and increasing its market share.

The carrier expects to gain market share as it benefits from the some of its competitors reducing capacity due to higher fuel prices.

For fiscal year 2019, the group has forecast net profit of €310mln to €340mln and believes its ability to keep costs down and offer lower fares across its expanding network will lead to a 20% increase in passenger numbers to 36 million.

“As usual, this guidance is dependent on the revenue performance for the all-important summer period as well as the second half of FY 2019, a period for which the Company, like most airlines, currently has limited visibility,” said chief executive József Váradi.

Shares whizzed up 5% to 3,304p in early morning trading.

Alongside the upbeat guidance, Wizz Air reported a 22.1% increase in net profit to a record €275mln for the year to end of March 2018.

READ: Low-cost airlines Wizz Air and Ryanair carry more passengers in March

Revenue jumped 24% to £1.95bn as the number of passengers rose by 24.7% to 29.6 million. Revenue per available seat kilometres (RASK) edged up 0.4% to €3.76 while available seat kilometres rose 23.6%.

The load factor, the ratio of available seats to passengers, edged up 1.3 percentage points to 91.3%.

Wizz Air ended the period with cash of €1.14mln, including €980mln free cash flow.  

READ: Wizz Air secures UK flying licence as it prepares for Brexit 

Váradi said the company had a solid start to the new financial year with RASK expected to be broadly flat in the first quarter, a “good performance given the absence of Easter traffic, which fell into the last financial year”.

Earlier this month, the carrier kicked off its contingency plan for Brexit by setting up a UK subsidiary and securing a British air operator’s certificate (AOC) to ensure it still has flying rights in Britain after its leaves the European Union.

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