Wizz Air faces profit drop after grounding many planes

In Hungary, Wizz Air has encountered significant financial challenges as it reported a drastic decrease in annual profits, confirming a 62% drop in operating profits amounting to €167.5 million or £141 million. The airline linked this downturn to the grounding of nearly a fifth of its fleet, as a result of persistent engine issues. Specifically, Wizz Air had to ground an average of 44 aircraft throughout the year, a considerable number that underscored the severity of the engine issues affecting its operations. These engines are manufactured by Pratt & Whitney, a US aerospace company known for producing reliable aviation components. Despite these challenges, Wizz Air noted a record-breaking 63.4 million passengers flew with them during the year, which contributed to an overall revenue increase of 3.8%. This achievement stands in stark contrast to their profit slump, indicating that while operational challenges were severe, demand for low-cost flights remained robust among European travelers. The airline’s management, led by Chief Executive Jozsef Varadi, acknowledged the "significant challenges" they faced but maintained a positive outlook regarding their capability to serve more passengers than in previous years. At the end of 2024, Wizz Air secured a two-year compensation agreement with Pratt & Whitney with the intention of alleviating some financial burdens incurred from the grounded Airbus A320neo aircraft. This compensation package is expected to provide support for the operational and financial impacts, though it won’t fully cover the difficulties faced by the airline. Management expressed confidence in the gradual reduction of grounded aircraft, with 37 planes on the ground last month, and an expectation that only approximately 34 would remain grounded by the end of September. The ongoing issues with their engines not only resulted in financial losses but also tested Wizz Air's operational resilience. Varadi emphasized that despite the challenges of managing an unproductive fleet, Wizz Air managed to achieve profitability for the second consecutive year. Establishing a transformation point in its operations, management indicated that steps are being taken to improve fleet productivity and overall operational efficiency moving forward.