Wizz Air hit by sterling slump after referendum

Wizz Air hit by sterling slump after referendum

Wizz Air today revealed a €6.6 million hit due to the post-Brexit referendum slump in the value of the pound.

However, rising passenger numbers helped the budget carrier’s half-year profits rise by more than 37% to €262.5 million.

Carryings for the six months to September 30 were up by 17.4% to 12.5 million as the airline opened new routes and added six Airbus A321s to bring its fleet up to 73 aircraft.

Wizz Air said there were “no signs of demand weakness on routes to/from the UK on the back of the UK’s decision to leave the European Union”.

But the airline added: “The negative translation effect on British pound revenues due to Brexit in the first half is estimated at €6.6 million, this was absorbed by the strength of the rest of our network.”

Chief executive Jozsef Varadi said: “We remain highly committed to the UK market and continue to deliver double-digit growth on our UK network.

“Nevertheless our highly diversified network enabled us to quickly absorb capacity we reallocated in reaction to the weak sterling following the Brexit vote.”

The central and eastern European carrier expects a full year net profit of between €245 million and €255 million based on increased capacity of around 20% year-on-year.

Varadi said: “I’m pleased to report another strong all-round performance by Wizz Air during the first six months of our financial year ended 31 March 2017, which has seen passenger numbers increase 17% to 12.5 million passengers and profit margins grow.

“In the same period, we announced 70 new routes to/from 28 different countries, highlighting not only the significant opportunities available to us in central and eastern Europe but also the diversity of our network growth.

“Looking forward, while we expect fares to continue falling across the sector over the full year on the back of low fuel prices, our ability to continue to reduce ex-fuel costs means we can re-confirm our previously stated full year guidance for underlying net profit of between €245 million to €255 million.

“Our ultra-low cost model, reinforced with a delivery stream of brand new A321 aircraft, gives us a clear cost advantage versus most of our rivals.”

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