Wizz Air reported a sharp decline in annual profits, with net earnings falling to just €1.3 million. The Hungarian budget airline attributed the slump to the Iran war and subsequent flight cancellations to the Middle East.

The €212 million plunge in net profit

Wizz Air's financial results for the year ending March reveal a staggering collapse in net profit, which dropped from €213.9 million to a mere €1.3 million. According to the report, the London-listed Hungarian group also saw its operating profit slide by 16.6 per cent to €139.7 million.

This financial volatility suggests that while Wizz Air is capable of generating massive passenger volume, its bottom line remains highly sensitive to one-off costs and external shocks. The near-total erasure of net profit highlights how quickly geopolitical instability can override operational growth for low-cost carriers.

A €50 million blow from Tel Aviv cancellations

The conflict involving Iran led to the suspension of flights to Tel Aviv and other destinations across Cyprus and the Middle East.. As reported, these cancellations alone cost Wizz Air an estimated €50 million in lost earnings during the month of March.

This incident mirrors a broader trend where budget carriers, which often operate on razor-thin margins and high aircraft utilization, are disproportionately affected by sudden airspace closures. unlike legacy carriers with more diversified global networks, Wizz Air's heavy reliance on Eastern European and Middle Eastern corridors leaves it exposed to regional flashpoints that can ground entire fleets overnight.

Record 69.7 million passengers vs. shrinking margins

Despite the geopolitical turmoil, Wizz Air achieved a significant operational milestone by flying a record 69.7 million passengers over the year. This surge in travel demand pushed total revenue up 8.4 per cent to €3.16 billion.

However, the airline has had to battle rising overheads, including a €50 million hit from soaring jet fuel prices. while Wizz Air stated it has managed these costs through hedging and a strong pipeline of summer bookings, the gap between record revenue and plummeting net profit underscores a struggle to convert passenger growth into actual earnings.

Why Wizz Air suspended guidance for the coming year

In a move that signals continued uncertainty, Wizz Air has suspended its financial guidance for the upcoming year. The airline cited a "lack of visibility" caused by the ongoing conflict in the Middle East, leaving investors without a clear roadmap for recovery.

Several critical questions remain unanswered. It is unclear exactly when Wizz Air intends to resume full operations in Tel Aviv or if the airline is considering pivoting its fleet to more stable regions to mitigate future risks. Furthermore,the report does not specify if the airline expects further fuel price volatility to offset the gains from its record passenger numbers.

Market reaction remained cautiously optimistic, as shares in Wizz Air rose 3.36 per cent to 999.50p on Thursday morning, despite the stock having lost 18 per cent of its value over the previous year.