LONDON (Reuters) - Budget airline Wizz Air (WIZZ.L) said on Wednesday it had benefitted from the troubles of other airlines to grow more quickly than expected, although concerns over future costs took the shine off record quarterly results.
Wizz Air chief executive Jozsef Varadi said the collapse of Monarch last year had allowed the airline to expand operations at London Luton airport, while it had also moved capacity into Vienna after Air Berlin (AB1.DE) went into administration.
“We are growing more than what we would have expected even six months ago,” he told Reuters.
The Eastern-European focused carrier said it had nudged up its full-year capacity growth forecast to 24 percent from 23 percent. Wizz secured Monarch’s take-off and landing slots at Luton airport in November.
Wizz said it carried 24 percent more passengers in the three months to Dec. 31, its fiscal third quarter. Profit was a record 14 million euros (12.27 million pounds)
, up 3.6 percent.
The airline maintained its outlook for full-year net profit in a range of 265-280 million euros.
After a strong run that saw the stock double last year and hit a record high on Monday, Wizz shares fell 2.2 percent in early trade.
Analysts at Goodbody said that while the third quarter was strong, an unchanged outlook implied the fourth quarter would be worse than expected, and added the airline could face headwinds from rising fuel costs.
“The immediate focus on growth vs yields, and the comparative under-hedged fuel position means we leave our recommendation as Hold,” the Goodbody analysts said in a note.
Wizz has hedged less of its future fuel requirements than Ryanair (RYA.I), Investec said in a note, so needs to increase near-term yields by more to offset higher fuel costs.
Wizz’s Varadi said the reduction of industry capacity that might have boosted fares and yields had been rapidly filled by other carriers, including Wizz.
He said Wizz was looking at increasing its presence in Italy after Alitalia went into administration, but would not necessarily bid for any parts of the carrier.
“Our interest is the Italian market. Not necessarily Alitalia ... We have not expressed any interest for Alitalia,” Varadi said, adding any opportunities would be in the Italian carrier’s short-haul rather than long-haul business.
“We just want to understand the situation, but we haven’t made up our mind on anything here.”
Reporting by Alistair Smout; Additional reporting by Tricia Wright; Editing by Jane Merriman and Mark Potter