Quote from Alex bobby on June 5, 2025, 5:40 AM

Wizz Air Faces Profit Decline Amid Engine Troubles and Grounded Fleet

Wizz Air, the Hungarian low-cost airline known for its aggressive expansion across Europe, has reported a sharp decline in profits for the fiscal year 2025, attributing the setback to ongoing engine issues and grounded aircraft. Despite these hurdles, the company maintained a tone of cautious optimism, highlighting its resilience and structural transformation in a turbulent aviation landscape.

Profit Hit Amid Turbulence

The airline posted a net profit of €213.9 million, marking a significant 41.5% drop compared to the previous year. Comprehensive profit was also below expectations at €225.8 million, missing its own guidance range of €250 million to €300 million. Meanwhile, EBITDA (earnings before interest, taxes, depreciation, and amortisation) came in at €1.1 billion, down by €58.9 million from the last fiscal period.

In his official statement, CEO József Váradi described the financial year using two key terms: “resilience” and “transformation”. He acknowledged that the company faced “rare challenges” that had increasingly become the norm, forcing Wizz Air to adjust its operating model accordingly.

“In an environment where rare challenges have become recurrent, Wizz Air has evolved structurally, embedding increased flexibility into our standard operating model,” Váradi said.

Engine Problems Grounding Growth

The most significant operational challenge for Wizz Air during the fiscal year was the forced grounding of dozens of aircraft, due to ongoing inspections and repairs related to GTF (Geared Turbofan) engines—a model supplied by Pratt & Whitney that has faced global scrutiny for its durability issues.

As of the end of fiscal year 2025, Wizz Air reported 42 aircraft grounded due to these engine inspections, in addition to three jets grounded in Ukraine due to geopolitical constraints. Looking forward, the airline expects to have about 34 aircraft grounded by the end of the first half of the next fiscal year.

This significant reduction in operational capacity has created ripple effects across the airline’s network, affecting scheduling, route planning, and ultimately, profitability.

Passenger Growth and Revenue Up

Despite the setbacks, Wizz Air saw a 3.8% increase in total revenue, reaching €5.3 billion. Even more impressively, the airline reported a record number of passengers, with 63.4 million travellers carried across its network. This growth suggests strong market demand for affordable air travel—even amid operational hiccups.

The increase in passengers and revenue has been a double-edged sword, however. With a grounded fleet, the airline has faced limitations in fully capitalising on high travel demand. Váradi addressed this, stating:

“Despite the unproductively 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.”

Market Reaction and Stock Performance

Investors, however, were less optimistic. Wizz Air shares dropped 23.5% in daily trading by mid-morning (CEST), reflecting concerns about ongoing engine issues and reduced operational capacity. The sharp decline indicates that while the airline has weathered the storm for now, confidence in its short-term outlook remains shaky.

Strategic Shifts and Long-Term Focus

In response to these challenges, Wizz Air has committed to a longer-term transformation strategy. This includes more fleet flexibility, better route diversification, and increased emphasis on operational resilience. The airline is also reportedly working closely with engine suppliers and regulators to speed up the inspection and repair process.

Additionally, Wizz Air's cost discipline and low-cost operating model remain central to its strategy. It continues to expand into new markets while maintaining one of the lowest unit costs among European carriers. This positions the airline well to rebound once its fleet is fully operational again.

Final Thought

While Wizz Air’s financial year 2025 was marked by engine-related disruptions and a significant drop in profits, the airline’s record passenger numbers and strategic resilience signal potential for recovery. CEO József Váradi’s message was clear: challenges may be ongoing, but Wizz Air is evolving into a more adaptable and robust business.

Still, the reality of grounded planes and missed profit targets cannot be ignored. With nearly three dozen aircraft expected to remain inactive into the next fiscal year, the airline faces continued headwinds.

The coming months will be crucial as the company seeks not just to stabilise operations, but also to reassure investors and regain market confidence. If Wizz Air can effectively navigate its engine woes and continue serving its growing customer base, a return to stronger profitability may be on the horizon.