Wizz Air profits slumped as a fifth of their planes were grounded due to issues with their engines and shares fell by around a quarter.
The Hungarian budget airline said that despite “significant challenges” they are flying more passengers.
In the year to the end of March, Wizz Air reported operating profit of €167.5 million, this is a 62% fall compared to €437.9 million the year before.
Jozsef Varadi, Wizz Air’s chief executive, said: “Despite the unproductivity of a grounded fleet, we successfully delivered a second consecutive year of profitability.
“The number of grounded aircraft will start reducing in both absolute and relative terms and this is why we have reached a transformation point.”
Susannah Streeter, head of money and markets for Hargreaves Lansdown, said: “The airline is still mired in problems, and although management have said the number of grounded aircraft will start reducing, the issues are expected to linger for two to three years.
“There’s clearly significantly more opportunity for the company to seize, with so many more people ringfencing budgets to spend on holidays.
“But until the company can fly away from its operations problems, investor sentiment is set to remain subdued, especially given the concerns about potential geopolitical turbulence which are also clouding its route ahead.”
Garry White, Chief Investment Commentator at Charles Stanley said, “Wizz Air’s annual profit was lower than its reduced guidance from January, when it issued its second profit warning of the financial year.
“The company is facing rising costs after grounding a significant proportion of its aircraft due to problems with Pratt & Witney engines.
“The tone of the statement, however, was upbeat. Despite its many challenges, the airline remains profitable – and the number of grounded aircraft will start reducing in both absolute and relative terms in the current financial year.
“Two of the airline’s key markets – Ukraine and Israel – are in crisis, so its operations will continue to be negatively impacted by the situations there. It could be some time before services in these markets return to normal. Nevertheless, the current financial year looks set to see an improvement, as the grounding issue is slowly resolved.”
