3rd Update – Wizz Air warns that, beyond fuel cost pressure, operating costs will further increase

Update share price movement, supplement with chart, and add CEO comments on costs and fuel hedging in paragraphs 2-3 and 9

Yamini Kalia/Gianluca Lo Nostro

Reuters, November 12 - Wizz Air (WIZZ.L) said on Thursday it expects full-year unit costs excluding fuel to rise by a mid-single-digit percentage, as airlines not only face surging jet fuel prices due to the war in Iran but also contend with rising labour costs and airport fees.

Chief Executive Officer József Váradi told Reuters that the single largest cost item in the second half of this fiscal year will be over 100 million euros ($111 million) of incremental expenses related to phasing out older Airbus A320ceo aircraft.

Wizz Air shares fell as much as 4% in early trading, but by 09:35 GMT had recovered to trade only slightly lower.

The low-cost carrier, which had earlier held off providing guidance for full-year results due to market uncertainty, now joins peers in warning of the challenges facing the global airline industry.

International Airlines Group, parent of British Airways, ICAG.L this month predicted (link) its capacity would see the first annual decline since 2022, while Ryanair RYA.I said it may (link) freeze staff pay to help offset soaring fuel costs. Many airlines are also raising ticket prices.

Northwest Europe spot jet fuel prices, which serve as the regional benchmark, have fallen 18% this month to their lowest level since August, offering some relief for airlines. However, this drop may have come too late to ease the pressure of the winter season.

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WIZZ confident in fuel hedging strategy

When asked about its fuel hedging strategy, Váradi said the airline is protected whether fuel prices remain high or drop sharply, thanks to a strategy that sets both price floors and caps. The airline has hedged 82% of its fuel needs for this winter and 51% for the period from April to October 2027.

For the third quarter of the fiscal year, Wizz Air said it expects revenue per available seat kilometre—a key measure of pricing power—to grow by a low single-digit percentage year-on-year, with the number of seats offered rising by 19%.

In the six months to September 30, net profit fell by 66.6% to 108.1 million euros ($119.75 million), as fuel costs jumped 33.7% to 1.24 billion euros.

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(1 USD = 0.9027 euros)

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