WIZZ Air today predicted it was on track for a record summer, even as it fought pilot shortages, spiralling fuel costs, travel chaos at airlines and warned that customers face price rises of at least 10%.
The Ryanair rival, which flies to cities across Europe as well as North Africa and the Middle East, made losses for the year to March of e642 million (£550 million).
That follows an e576 million loss for the previous year – part of a wider picture of many billions lost by the airline sector due to Covid.
Wizz Air carried more than 27 million passengers in the year, up from 10 million last time, as travel opened up. It plans to go for it this summer.
CEO Jozsef Varadi said: “We stand ready to deliver our largest ever summer flying programme and the fastest growth in the industry, enabled by more than 6,000 colleagues across the business.”
Banks under pressure, Melrose surges 7%
GKN owner Melrose Industries leads the FTSE 100 index after it announced plans to return £500 million through share buybacks.
The aerospace-to-automotive engineering conglomerate surged 7% in a session when the FTSE 100 index stuck close to its opening mark at 759. Next and JD Sports Fashion also featured on the risers board, putting back their losses from the previous session.
Banking stocks fell after the Credit Suisse profits warning, with HSBC and Standard Chartered down 2% and 1% respectively.
In the FTSE 250 index, defence countermeasures business Chemring dropped 7% and Wizz Air eased 2% following their respective interim and full-year results. Frasers Group and Marks & Spencer rose 2% as the FTSE 250 overall held firm at 20,398.
Wizz Air encouraged by booking trends
Wizz Air today reported a full-year loss of 642.5 million euros (£546.7 million) and said it expects to be in the red for the current quarter.
However, the low-cost operator is encouraged by recent booking trends.
It said: “Summer demand indicators remain excellent at this point, supported by strong consumer dynamics: an urge to travel, improved household savings ratios in key markets, near-full employment and wage inflation.”
Capacity growth for the first two quarters of the financial year is expected to top 30% and 40% respectively, enabled by a fleet of 182 aircraft.
Chief executive József Váradi added: “The industry is witnessing supply chain issues across airports, including in our network.
“Shortages of staff in air traffic control, security and other parts of the supply chain are impacting airlines, our employees and our customers directly. We are deploying extra resources to minimise disruptions and urge all other stakeholders to do the same.”
Credit Suisse warns of Q2 loss
Credit Suisse has warned of a second quarter loss due to the impact of challenging trading conditions on its investment bank operation.
It said a combination of factors including the Ukraine war, rising interest rates and the unwinding of Covid stimulus measures had created heightened market volatility, weak customer flows and client deleveraging, notably in the Asia Pacific region.
The Swiss bank said low levels of capital markets issuance and a widening in credit spreads had also depressed the investment banking performance in April and May, leading to a loss for the division and for the wider group in the second quarter.
It added: “As we look forward to the second half, the year 2022 will remain one of transition for Credit Suisse.
“Given the economic and market environment, we are accelerating our cost initiatives across the group with the aim of maximising savings from 2023 onwards.”
Asia markets rally, FTSE 100 steady
Asia’s main markets have moved higher after Wall Street recovered from a weak start to record a second positive session in a row.
Hong Kong’s Hang Seng index reached a two-month high by lifting 1.5% and the Nikkei is at a 10 week peak following better-than-expected figures from Japan’s economy.
US markets rallied after Europe’s close, with the Dow Jones Industrial Average, S&P 500 and Nasdaq all finishing the session up by almost 1%.
Wall Street’s improvement came despite retailer Target cutting guidance as it warned that this quarter’s operating margin will be around 2% amid the need for price cuts to reduce inventory.
The calm reaction to the warning reflects the focus on Friday’s US inflation reading, which if higher than the 8.3% forecast may stoke interest rate expectation later this year.
Michael Hewson, chief markets analyst at CMC Markets, said traders continue to sway between recession fears and hopes of a soft landing for the US economy.
He added: “While we’ve seen a modest rebound in equity markets, there remains a significant overhang of uncertainty as to how much further this rebound has to go.”
CMC expects the FTSE 100 index to open 20 points higher at 7,618, having posted a moderate decline yesterday.