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Wizz Air sees earnings contract in first quarter as air traffic disruptions bite

The airline reported underlying earnings of €151.4mln for the period, down from €155.9mln in the same period last year, despite a growth in revenues to €553.4mln from €469.3mln
Wizz Air aircraft
The airline said "unprecedented" disruption had caused a 426% increase in cancellations

Wizz Air Holdings PLC (LON:WIZZ) has seen a contraction in its earnings for the first quarter as air traffic disruptions led to a spike in cancellations and passenger compensation costs.

The FTSE 250 airline reported underlying earnings (EBITDAR) of €151.4mln for the period, down from €155.9mln in the same period last year, despite a growth in revenues to €553.4mln from €469.3mln.

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

The group’s underlying margins also contracted to 27.4% from 33.2% in the first quarter of 2017, although both the number of passengers carried and the load factor grew in the period, to 8.6mln from 7.2mln and to 92.1% from 91.2% respectively compared to the same period a year ago.

Despite the growth in revenues, the airline said an “unprecedented” number of disruptions caused mainly by European air traffic control disputes had led to a 426% increase in cancellations to 145 and a 203% increase in passenger delay and compensation costs to €9.1mln.

In its outlook for the rest of the financial year, the company forecast an increase in its load factor of 1 percentage point, with a net profit estimate of between €310mln-€340mln, around 12.7% higher than its €275mln profit for the 2018 financial year at the lowest estimate.

József Váradi, Wizz Air’s chief executive, said that the company had delivered “a very solid performance” despite the “significant challenges caused by European air traffic control issues”.

He added that the airline had expanded its fleet beyond its milestone of 100 aircraft during the quarter and that the firm was confident of delivering its net profit estimates for the full financial year.

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