Wizz Air eyes more growth, sees travel demand holding up

Plans to grow capacity by 35% this winter

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CEO says bookings are holding up strongly

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Q2 core earnings 374 mln euros

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Shares down 6% after strong run into results

LONDON, Nov 2 (Reuters) - Budget airline Wizz Air said it planned to grow its capacity by 35% this winter and was confident that demand for travel would remain strong despite consumers across Europe facing rising bills.

Wizz's upbeat forecast chimes with the outlook from other European airlines including British Airways-owner IAG and Lufthansa, which have all said they are seeing continued growth in ticket sales.

Chief executive Jozsef Varadi said on Wednesday that bookings were holding up strongly: "So far we are seeing no indication of a drop in demand so we remain confident."

The planned growth in capacity compared to pre-pandemic levels means Hungary-based Wizz will join larger low-cost rival Ryanair as one of the few European airlines to exceed their pre-COVID size.

But it is lower than the 40% capacity growth that analysts had been expecting, reflecting Wizz's caution over the resilience of its operations following airport disruption which hurt it last spring, and partly to protect unit revenues.

Shares in Wizz, whose biggest markets are Poland and Romania while it is growing in Britain and Italy, traded down 6% to 1,626 pence in early deals on Wednesday, erasing some of the gains of 23% over the previous week.

Davy analyst Stephen Furlong suggested the drop was partly driven by concerns over the macro-economic outlook.

"You obviously have a company which is going for a lot of growth in this type of market," he said.

Wizz posted core earnings for its seasonally strong June-September quarter of 374 million euros ($369 million), recovering from the 154 million loss recorded in the previous quarter when staff shortages at airports led to flight cancellations.

Recent media reports suggest there could be consolidation of Europe's airline industry, but Varadi said he didn't see Wizz as a takeover target given that Indigo Partners own about an 18% stake.

"I don't think we are a target, or we can be a target on that basis," he said. ($1 = 1.0129 euros) (Reporting by Sarah Young, Editing by Paul Sandle and Elaine Hardcastle)