The Wizz Air Group is severely affected by the problems surrounding the Pratt & Whitney engines used in the Airbus A320neo and A321neo aircraft. The fact that some machines cannot be used due to necessary inspections also has financial implications.
The group has to significantly lower its profit forecast. While it was initially assumed that there would be a surplus of between 350 and 450 million euros in the current financial year, we are now talking about 350 to 400 million euros. At the same time, there is hope for compensation payments from Pratt & Whitney parent company RTX.
The Wizz Air financial year ended on March 31, 2024. The problems surrounding the engines are not the only factor that worried CEO Jozsef Varadi. For example, operating conditions in security areas and infrastructure would be difficult at the moment. In general, the “macroeconomic environment” would currently be complicated. Before the attack by the army of the Russian Federation, Wizz Air Group had a large presence in Ukraine. At times there was an offshoot with its own AOC. All routes cannot be operated for safety reasons.
In addition, connections to Eilat and Tel Aviv have been suspended until further notice. It is expected that after the war ends, it will take some time for demand to return to the level that existed before the Hamas attack. In addition, it is also complicated that lucrative flights to neighboring countries of Israel are no longer in demand. These were also considered to be interesting for low-cost airlines due to subsidies that were sometimes granted.
In these cases, things actually went quite well for Wizz Air. Up to and including September 30, 2023, the operating costs amount to 522.9 million euros. This compares to a deficit of 63.8 million euros that was incurred in the previous year due to a lack of fuel hedging.
Varadi believes that the group he leads is well positioned. The sales and profit figures would confirm the efforts and investments of the last few years. The booking figures for winter 2023/24 would be “good”. The main problem at the moment would be the unscheduled inspections of the engines in use on the A320neo/A321neo. The Wizz Air boss assumes that up to 45 machines will no longer be in production by the beginning of 2024.
Varadi is confident that the group will be able to take delivery of around 21 Airbus A321neo ex works by the end of March 2024. This would at least alleviate the current outages. Negotiations regarding financial compensation are also underway with Pratt & Whitney and its parent company RTX. However, no concrete figures have been given yet.
The post Engine problems wreak havoc on Wizz Air Group’s financial figures appeared first on Aviation.Direct.
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