BUDAPEST, HUNGARY — Wizz Air bounces back from previous challenges, eyes Profitable year.

Wizz Air, the low-cost airline headquartered in Europe, is forecasting a profitable year, leveraging the revival in post-pandemic travel and overcoming a series of previous obstacles.

The carrier's profit outlook for the fiscal year ending March 2024 presents a stark contrast to the last fiscal year. Several challenges, including a flawed decision to discard fuel hedges, hit the airline hard as conflict in Ukraine triggered a sharp rise in prices.

Fuel cost vulnerability significantly contributed to the airline's net loss of €535mn for the year ending March 31. However, with comprehensive currency and fuel hedges now in operation, the Budapest-based company announced on Thursday its projected net profit for the current fiscal year, estimated between €350mn and €450mn.

Since its inception almost two decades ago, Wizz Air has pursued aggressive expansion, emerging as a strong contender to Ryanair in Europe's budget airline market.

Addressing the absence of hedging, CEO József Váradi acknowledged that fuel costs in the first half of the last fiscal year were entirely "at the mercy of the market" which did not favor the airline.

Váradi attributes the anticipated turnaround from a €535mn loss to profits between €350mn and €450mn to three key elements. Of the approximately €1bn improvement, he expects cost efficiencies to contribute €400mn, better utilization of the fleet and crew to bring in another €200mn, and fuel and currency hedges to provide around €400mn.

Expressing confidence in the financial performance of the airline, Váradi pointed out the positive impact of operational changes and investments.

In line with other low-cost carriers, Wizz Air is investing in the newest generation of single-aisle, fuel-efficient aircraft. The airline is set to acquire 42 Airbus A321neo aircraft, equipped with new, fuel-efficient engines during this fiscal year. It plans to return 16 smaller A320s with older engines to lessors.

The airline's expansion strategy targets Gulf states like the United Arab Emirates and regions in Asia, alongside growth in Western Europe.

Despite anticipated delivery issues at Airbus, Váradi expressed confidence in managing the situation, including the possibility of extending leases of aircraft in its existing fleet.

Wizz Air's shares have risen nearly 50% this year, offsetting some of the sharp decline starting in early 2021, as investors anticipate further improvements in the airline's performance.

The full-scale invasion of Ukraine by Russia in February 2022 compelled Wizz Air to restructure the 10% of its services scheduled for airports in Ukraine or Russia.

For the fiscal year ending March 2023, Wizz Air's revenues more than doubled to €3.9bn as passenger demand rebounded post-pandemic. The company predicts a 30% increase in available seat capacity for the current fiscal year.

Váradi stated that the airline is witnessing robust demand for its services and products.