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Wizz maintains full-year guidance, though fourth-quarter outlook unclear

11/04/2015 | 04:49am

LONDON (Reuters) - Eastern European-focused budget airline Wizz Air maintained its annual profit guidance, and said while third quarter bookings were robust it had limited visibility over the final period, and its CFO was stepping down.

Like other European airlines, Wizz Air had a bumper summer, helped by a lower fuel price and strong seasonal demand, prompting it in September to upgrade its forecast profit range for the year by 8 percent at the mid-point.

But the outlook for the winter months is less clear.

Hungary-based Wizz Air plans to increase capacity by 19 percent in the six months to the end of March at a time when lower fuel prices are feeding through into lower ticket prices. Ryanair, Europe's biggest low-cost airline by passenger numbers, is talking of a fare war and eyeing more growth in Eastern Europe.

"Overall we see similar uncertainties in terms of profitability as we saw last winter," said Wizz Air chief executive Jozsef Varadi, whose new five-year contract was also announced on Wednesday.

"There are uncertainties in the market as well as uncertainties in macro conditions."

The airline also said in a separate statement on Wednesday that its chief financial officer Mike Powell was stepping down for personal reasons after eight years in the role. The search for his replacement was underway, it said.

Shares in Wizz Air, which have soared 31 percent in the last six months, were down 4.2 percent at 0912 GMT.

Investec analyst Robert Murphy put the fall in the stock price partly down to Powell's departure, calling him a very highly regarded CFO.

"That will be weighing on investors in the near term," he said.

The fall in Wizz Air's shares came despite it posting a 34 percent rise in underlying net profit to 205.9 million euros (145.76 million pounds) and sticking to guidance for annual underlying net profit in the range of 190 million euros and 200 million euros.

"Maybe the market just wanted a bit more even though it knew it wasn't going to get it in terms of an upgraded guidance," Murphy said.

(Reporting by Sarah Young; Additional reporting by Marton Dunai in Budapest; Editing by Susan Fenton)

Stocks treated in this article : Ryanair Holdings plc, Wizz Air Holdings PLC
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