Wizz Air’s Share Price Fell 7.86% on Q3 Results, Traffic Numbers

The Wizz Air Holdings PLC (LON: WIZZ) share price fell 7.86% after releasing a trading update for the third quarter of its 2024 financial year, which marks the three months to 31 December 2023. The budget airline carried 15.1 million passengers, which increased from last year’s 12.4 million passengers. Over the calendar year 2023, the company catered to 60.3 million passengers.

The company's load factor, a key metric in the airline industry, also showed a slight improvement, rising to 87.6%, marginally up from 87.3% in the previous year. However, there was a downturn in unit revenue (Revenue per Available Seat Kilometer or RASK), which declined by 8.0% year-on-year. 

This decrease was attributed to the combined effects of capacity growth and the redistribution of traffic to Israel. Financially, the company reported a positive shift in its earnings before interest, taxes, depreciation, amortisation, and restructuring or rent costs (EBITDA) for the third quarter. EBITDA stood at €18.7 million, aligning with the company's pre-pandemic performance.

On the cost side, the unit cost (Cost per Available Seat Kilometer or CASK) saw a year-on-year reduction of 8.9%, primarily driven by lower fuel expenses. Excluding fuel costs, the CASK still showed a decrease of 1.1% due to higher utilisation and structural efficiencies. The company's total cash balance was robust at €1.7 billion.

Operational metrics for the quarter were mixed. While the flight completion rate remained steady at 99.3%, mirroring last year's performance, the on-time performance saw a significant improvement, increasing to 72.2% from 62.3% in the previous year. 

Total fleet utilisation also increased to 11:35 hours compared to 10:31 hours in the previous year. Operational utilisation was even higher, reaching 12:15 hours.

The company also resumed its operations in Israel, with new routes starting in early March from Budapest, Sofia, Bucharest, Krakow, London, and Rome to Tel Aviv. Regarding its fleet, there was no change in the projections for GTF engine removals. As of 31 December 2023, 13 aircraft were grounded, increasing to 33 by 24 January 2024. 

The company received compensation from the original equipment manufacturer (OEM) for the third quarter and anticipates approximately 40 aircraft will be grounded by the end of F24, with ASK capacity expected to remain stable year-over-year.

Wizz Air share price.

The Wizz Air share price fell 7.86% to trade at 1870.5p from Wednesday’s closing price of 2030.0p. Following the Wizz Air trading update, analysts at Barclays lowered their price target for the low-cost airline to 1,750p per share from 1,800p, keeping an underweight rating on the stock.