Belfast Telegraph

Wizz Air blames strikes for cancellation surge and 14% drop in profits

The low-cost airline said pre-tax profits dropped to 52.1 million euros in the first quarter.

Wizz Air has blamed air traffic control strikes for a surge in cancellations and passenger compensation costs that knocked first quarter profits by 14%.

The budget airline logged a near 18% rise in revenue to 553.4 million euros (£491 million) in the three months to June 30, thanks in part to a 19.7% rise in passengers to 8.6 million.

However, pre-tax profits tumbled to 52.1 million euros (£46.3 million) from 60.5 million euros (£53.7 million) a year earlier.

The company pinned the decline on “unprecedented” disruptions caused mainly by European air traffic control (ATC) strikes, which it stressed were “completely beyond the control of airlines”.

It led to a 426% rise in cancellations at WizzAir, impacting 145 flights in the first quarter.

Passenger delay and compensation costs consequently surged 203% to 9.1 million euros (£8 million).

Wizz Air expects disruptions to continue and has lowered its full-year capacity growth target from 20% to 18%.

The news sent shares down more than 3.5% in morning trading.

With these disruptions likely to continue into autumn and on the back of a continued rise in fuel prices in the first quarter the company took the decision to trim its full-year growth target Jozsef Varadi

Chief executive Jozsef Varadi said: “Wizz Air has once again delivered double-digit growth in passenger numbers and revenues, while also delivering ever higher load factors and net profit of 50 million euro in the first quarter.

“This was a very solid performance given the absence of high yielding Easter traffic which fell into the end of the last financial year as well as a backdrop of significant challenges caused by European air traffic control issues

“With these disruptions likely to continue into autumn and on the back of a continued rise in fuel prices in the first quarter the company took the decision to trim its full-year growth target.”

The airline is among four which have filed legal complaints with the European Commission over the ATC strikes which they claim are breaching the “fundamental principle of freedom of movement within the EU”.

Wizz Air, British Airways owner IAG, Ryanair and easyJet have also lodged legal challenges with the commission against France after its industrial action caused tens of thousands of flights to be cancelled this year, impacting millions of passengers.

The ATC strikes are costly for airlines and hugely disruptive for passengers, especially in France, as many UK flights need to use the country’s air space or fly longer routes to avoid it.

Ryanair and easyJet have laid bare the impact of the strikes on their own businesses in recent weeks, with around 2,000 flights cancelled in June alone as a result of the action.

Ryanair has warned over job losses for more than 100 pilots and 200 cabin crew amid plans to cut its Dublin-based aircraft fleet by 20%, blaming recent pilot strikes.

Luton-based easyJet revealed last week it had taken a £25 million hit from the disruption as it was forced to pay passengers compensation.

More than 16,000 flights were delayed in the first half of 2018 due to ATC strikes, affecting more than two million passengers, according to Eurocontrol figures.

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