By Joanna Plucinska
(Reuters) -Wizz Air on Thursday forecast a low-single-digit decline in full-year revenue and said winter capacity was a “short-term challenge”, even as its first-half operating profit jumped almost 26% to 439.2 million euros ($512.2 million).
The operating profit beat expectations, with analysts polled by LSEG forecasting an operating profit of 367 million euros.
Shares were up 8.4% at 0821 GMT with analysts viewing the adjusted approach as the right move as the airline looks to carry out an ambitious turnaround plan.
European airlines have largely had a mixed quarter, despite cost savings tied to lower fuel costs.
Chief Executive Jozsef Varadi said in a statement they were looking to manage capacity for the upcoming winter season, given the expected drop in unit revenues, but cheered the H1 operating profit win thanks to lower fuel and flight disruption charges.
Bernstein analyst Alex Irving said the decision to cut the capacity forecast was a “sensible move to stabilise operations.”
Wizz Air said last week that it had delayed taking delivery of 88 Airbus jets from 2030 to 2033 as the group looks to cut costs and revive profits.
“We will see the most significant changes to our delivery profile in around 12 months’ time,” Varadi said.
The airline has struggled in recent years to recover its earnings after a slew of disappointing quarters. It has largely blamed its struggles on external challenges, including an issue with Pratt & Whitney engines, a slow repair schedule for those engines and geopolitical challenges in the Middle East and Eastern Europe.
Over the summer, the airline announced it would shut down its Abu Dhabi base, followed by its Vienna base, in an effort to limit costs and centralise its operations.
Wizz Air continues to be a laggard in the European market, with its shares down 39% in the last six months.
($1 = 0.8575 euros)
(Reporting by Yamini Kalia and Shashwat Awasthi in Bengaluru, Joanna Plucinska in London; Editing by Louise Heavens and Ros Russell)
