Wizz Air’s Earnings Impacted by Engine Problems and Grounded Planes

Wizz Air’s Earnings Impacted by Engine Problems and Grounded Planes

Wizz Air reported a net profit of €213.9 million for the fiscal year 2025, representing a significant 41.5% decline compared to the previous year. The Hungarian low-cost carrier also recorded a comprehensive profit of €225.8 million, falling short of its €250–300 million target. Earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased by €58.9 million to €1.1 billion, despite a 3.8% increase in total revenue to €5.3 billion and a record 63.4 million passengers carried.

Operational Challenges and Financial Performance

Chief Executive Officer József Váradi characterized the year as one of “resilience and transformation,” emphasizing the airline’s structural adaptations to persistent challenges. He noted that Wizz Air has embedded greater flexibility into its operating model to navigate an environment where rare disruptions have become frequent. A significant obstacle this year was the grounding of Airbus aircraft due to inspections of Pratt & Whitney GTF engines. By the end of fiscal 2025, 42 aircraft were grounded for engine checks, with an additional three planes grounded in Ukraine. The airline anticipates that approximately 34 aircraft will remain out of service through the first half of the next fiscal year. These disruptions have elevated operational costs and may delay fleet expansion plans, prompting a reassessment of the A321XLR fleet strategy as engine issues begin to ease.

The airline’s difficulties are compounded by broader industry headwinds, including rising costs, supply chain constraints, and weakening demand amid economic instability and global uncertainties. Despite these challenges, Wizz Air maintained profitability for a second consecutive year. Váradi highlighted the unique circumstances faced by the airline, stating, “Despite the unproductivity of a grounded fleet, we successfully delivered a second consecutive year of profitability. We have the benefit of more than a year of experience operating under these unique circumstances—conditions airlines would never experience when demand exceeds supply.”

Strategic Outlook and Market Response

Looking forward, Wizz Air has unveiled an ambitious plan to expand its presence in Ukraine, aiming to launch up to 150 routes and offer 15 million annual seats within three years, contingent on the restoration of peace. This initiative forms part of the airline’s broader strategy to adapt to a volatile market environment and position itself for future growth.

Despite these strategic efforts, investor confidence remained subdued. Following the earnings announcement, Wizz Air’s shares declined approximately 23.5% in morning trading, reflecting market concerns over ongoing operational challenges and the uncertain outlook for the airline industry.