Huge Losses At Wizz Air?
- 30 Nov 2009 5:00 AM
"No-frills airline Wizz Air has had almost EUR 10 million in consolidated losses in the 2009 fiscal year, a Czech newspaper claimed. The management commented only as much as the Hungarian subsidiary was profitable, however the Ukrainian and Bulgarian branches were generating losses.
Discount airline Wizz Air has accumulated losses on a major scale, contrary to its widely communicated message that the company has broken even and is generating profit, Reuters reported, citing the website of Czech newspaper Mlada Fronta Dnes. The latter claims Wizz Air has had EUR 9.5 million in losses in the last fiscal year of 2008/2009, which compares with EUR 2.6 million loss a year earlier.
During its five years of operation, Wizz Air has never made a profit, with losses totalling EUR 78 million. Vice President John Stephenson first refused to comment, then told the newspaper that the Hungarian subsidiary is profitable while the Bulgarian and Ukrainian branches have not yet broken even.
Portfolio.hu viewpoint
Considering that Wizz Air was launched only 5 years ago and has been steadily growing, coupled with an unfavourable industry environment for airlines in recent months, it is not surprising that the airline has been making losses in the past few years. Airlines generally suffered huge losses in the wake of the oil price hike in 2008, immediately followed by a deepening crisis and recession environment. It is a good sign that Wizz Air was launching new flights and purchased new aircraft when all others in the sector were reducing capacities."
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