ii view: why Wizz Air shares just plunged over 25%

Full year results to 31 March

• Revenue up 4% to €5.27 billion (£4.42 billion)
• Operating profit down 62% to €167.5 million
• Net debt up 4% to €4.95 billion 
• No dividend payments over the year

Chief executive József Váradi said:

"I describe our fiscal year F25 with two words: resilience and transformation. In an environment where rare challenges have become recurrent, Wizz Air has evolved structurally, embedding increased flexibility into our standard operating model. 

“While often dismissed as 'easier said than done,' the past year's events tested both our company and management. We emerged stronger, wiser, and better prepared."

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ii round-up:

Wizz Air Holdings (LSE:WIZZ) today detailed sales and profit that missed City forecasts, with the Eastern Europe focused airline offering only limited guidance for the year ahead given a lack of visibility across its trading seasons.

Revenue for the year to late March rose 4% to €5.27 billion (£4.42 billion), but grounded planes given Pratt & Whitney engine problems and inspections caused a 67% fall in operating profit to €167.5 million. Analysts had been expecting outcomes of €5.29 billion and €246 million respectively. 

Shares in the FTSE 250 company plunged by more than a quarter on the news, having come into these latest results up by around 16% so far in 2025. That was ahead of a 2% gain for the FTSE 250 index year-to-date. Rival low-cost carrier easyJet (LSE:EZJ) is up around 5% in 2025. 

Wizz flies to over 190 airports in more than 50 countries. Having flown a record 63.4 million passengers in the full year 2025 just gone and given current bookings, Wizz currently expects revenue for the year ahead (FY26) to exceed those of 2025.   

While continuing to receive compensation from engine maker Pratt & Whitney, 37 Wizz Airplanes remained grounded as of 9 May due to ongoing inspections and fixes, with 34 aircraft still expected to be out of service come the end of the current first half in late September.

The airline’s costs excluding those of fuel during this latest financial year rose 19% to €3.3 billion, far exceeding a 4% increase in revenues, and largely hit by planes grounded under Pratt & Whitney inspections. Fuel related costs fell 3% to €1.8 billion. 

Wizz management note that “The number of grounded aircraft will start reducing in both absolute and relative terms and this is why we have reached a transformation point.”

The airline’s fleet rose 11% over the year to 231 planes with Wizz expecting that to rise to 263 by the end of FY 2026 and 281 by the end of FY 2027. 

Broker UBS reiterated its ‘buy’ rating on the shares post the news. A first-quarter trading update is scheduled for 24 July. 

ii view:

Making its maiden flight in 2004, Wizz today employs around 8,000 people. The group flies around 830 different routes with competitors including easyJet, Jet2 Ordinary Shares (LSE:JET2) and flights operated by travel company TUI AG (XETRA:TUI1). 

For investors, challenges for industry suppliers such as Pratt & Whitney and Boeing are clearly hindering efficient airline operations. The many factors outside of management’s control such as the weather and air traffic control strikes always makes forecasting financial performance highly challenging. The war between Russia and Ukraine has resulted in the suspension of flights to both, with an expansion of the war still possible, while group net debt of €4.95 billion (£4.15 billion) compares to a stock market value of £1.25 billion. 

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More favourably, consumer demand for travel appears robust given record passenger numbers over this latest year. Compensation from Pratt & Whitney is being received, easing difficulties not of its own making. A high focus on environmental credentials is underlined by a focus on modern efficiency and an average fleet age of just 4.7 years, while actions to hedge against volatile fuel and currencies remain part of its overall strategy.  

In all, an expected easing in Pratt & Whitney engine challenges offers hope. However, more cautious investors may decide to await at least a stabilisation in profits and outlook. 

Positives: 

• Fuel and currency hedging initiatives
• Positive environmental credentials

Negatives:

• Operations hit by challenges at engine maker Pratt & Witney
• Many factors outside of management’s control 

The average rating of stock market analysts:

Hold