Wizz Air swings to quarterly loss as jet fuel costs soar

Budget airline Wizz Air has said it swung to a loss in an "extremely volatile" period following the Middle East conflict which has sent fuel costs soaring.

The Hungarian airline warned that the industry is set to face challenges for the rest of the year.

It recorded an operating loss of €183 million ($211 million) between April and June, down from a profit of €27.5 million for the same period last year.

Wizz said this largely reflected a jump in jet fuel costs, linked to the increase in global oil prices – with Brent crude oil peaking above $120 a barrel in late April.

Its fuel expenses jumped by 39% compared with last year, to €610.5 million.

The airline said this reflected 87% higher market prices, which it managed to partially mitigate through its own cost actions.

The increased expenses for jet fuel have slammed the industry, with easyJet, British Airways owner IAG and Ryanair all reporting a fall in profits in recent weeks.

Wizz previously said it took a €50 million hit from the Iran war after having to cancel flights to Tel Aviv in Israel and other routes to the Middle East and Cyprus in March.

While many flights have resumed, the company said it was reallocating flying from longer-haul Middle East routes to shorter European markets.

The weaker earnings update came despite its passenger numbers soaring by a quarter to 21.2 million over the three-month period.

Total revenues also increased by 5.5% year-on-year to €1.5 billion euros.

Chief executive Jozsef Varadi said: "The industry has been extremely volatile over the June quarter due to conflict in the Middle East, elevated fuel prices, and changes in booking patterns.

"We are focused on strengthening the core network, improving density and reallocating flying from longer-haul Middle Eastern operations into shorter European sectors.

"While we continue to see the build-up of forward bookings, the rest of the year is expected to present both industry challenges and strategic opportunities."