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Cuts H1 capacity growth forecast to 25% from 30%
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Q1 net profit 61.1 mln euros, in line with consensus
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Shares drop more than 6%
LONDON, Aug 3 (Reuters) - Wizz Air's capacity growth will be slower than expected as it grapples with supply chain and engine issues, the company said on Thursday, sending its shares down more than 6%, even as it reported higher profits in line with consensus.
Airlines have struggled to increase capacity to meet the growth in demand as travel rebounded from the pandemic. Aircraft deliveries have been slowed as suppliers face issues such as staff shortages and bottlenecks in sourcing materials.
Wizz, which flies Airbus planes, faced additional problems after Pratt & Whitney said in July more than 1,000 engines needed to be removed from Airbus planes and checked for microscopic cracks.
Twelve engines operated by Wizz Air are set to be inspected from mid-September, Chief Executive Jozsef Varadi told Reuters.
The combination of issues led the carrier to cut its growth forecast for available seat kilometres to 25% from 30% for the first half of its financial year, covering April-September.
Wizz Air shares fell 6.6% in early trade, having gained around 16% so far this year.
"This 5% (capacity) adjustment aims to address continued infrastructure and supply chain limitations facing the industry," Varadi said in a statement.
He added it was uncertain whether more engine inspections might be announced soon.
Despite the constraints, the Hungarian airline is on track to meet its full-year profit guidance of 350-450 million euros, it said in a statement, and is planning to continue growing its fleet as fast as it can.
Varadi said the Pratt and Whitney inspections would be absorbed in the less busy second half of the year, limiting some of the impact.
"Luckily this new inspection is not affecting the peak summer performance of the airline which is critical," he said.
Varadi insisted, however, that Wizz Air was set to continue growing, even if plane deliveries might slow. On Wednesday, Airbus said it had won an order from Wizz for 75 additional A321neo aircraft.
Wizz said on Thursday it wanted to expand into Georgia, North Macedonia and Poland and that it was adding ten aircraft to its fleet over the coming weeks and 32 by the end of 2024.
It posted a first quarter net profit of 61.1 million euros ($67 million), in line with consensus, and carried a record 15.3 million passengers.
Its first quarter operating profit of 79.9 million euros compared with a loss of 284.5 million a year earlier.
