Hungarian discount carrier Wizz Air dropped after the carrier said its outlook is clouded by stiff competition for passengers and a potential threat from air-traffic control strikes.
Profit will still rise this year, to as much as €350 million ($390m), as Wizz Air seeks to grab market share from rivals battling higher fuel costs. Investors had hoped for more, according to Morgan Stanley, and Wizz Air stock fell as much as 6.9 per cent.
European discount airlines including market leader Ryanair are warning of a tough trading environment this summer, with fuel prices combining with weak economic growth to hurt profit margins. Wizz joined its larger Irish rival in cautioning that there is little visibility for the second half of the 2020 fiscal year, which encompasses the winter period.
Achieving the profit goal will depend on the peak summer period, and whether there’s disruption from strikes at airports, Wizz said in a statement on Friday.
“We are starting to have good visibility and so far so good - we will outperform last year’s performance,” chief executive Jozsef Varadi said in an interview with Bloomberg. “We are seeing some pressure on fares, but we are generating revenue on additional services and products.”
Wizz is not interested in taking over the airline business of beleaguered UK holiday company Thomas Cook, but may be interested in some assets if they become available, Varadi said.
Wizz shares were down 2.9 per cent on Friday morning in London. The stock has gained 11 per cent this year, valuing the carrier at €3.61bn. Ryanair has fallen 2.7 per cent.
