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Yahoo
6 days ago
- Business
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Wizz Air misses profit estimates, delays return of grounded jets
By Joanna Plucinska and Shashwat Awasthi (Reuters) -Wizz Air missed first-quarter profit estimates on Thursday as the budget airline struggles with plane groundings and warned that grounded jets would return to service a year later than expected. The company's shares were down 3.5% by 0734 GMT. It said existing problems with RTX-owned Pratt & Whitney engines, which caused the grounding of some planes, had been compounded by the "poorer than specified" performance of the GTF engines, leading to significantly less time in service before needing inspections. No-one at P&W could immediately be reached for comment. Wizz has struggled in recent years to compete financially with other European carriers as it grapples with the engine challenges. The groundings have limited its ability to increase capacity to meet demand and it has issued two profit warnings in the past year. Wizz said it had 41 aircraft grounded due to GTF engine-related inspections as of June 30, and now expects the affected planes to return to the air in the financial year ending March 2027, a year later than previously predicted. "Our management team has demonstrated a high degree of adaptability in recent years when faced by severe challenges, and this year will likely continue to call on that strength as we refocus our business," CEO Jozsef Varadi said in a statement. Wizz reported an operating profit of 27 million euros ($31.8 million) for the three months to June 30, compared with 87 million projected by analysts polled by LSEG and down 38.3% from a year ago. NEXT GENERATION Varadi told Reuters he was hopeful the next generation of GTF engines would not suffer some of the ongoing issues. "Towards the end of this year, Pratt & Whitney is bringing in the second version of the engine and much improved technology," he said. There was no explicit outlook offered for the year, but some analysts pointed to positive signs, given attempts to cut costs and build a better maintenance partnership with P&W. Still, mid-term growth goals are set to be revised down. "Despite the near-term cuts, we do see some early 'green shoots' in the results around strategy and upcoming structural action being taken," JP Morgan analysts said in a note. Wizz, founded in Hungary, expanded first into western Europe, before opening a base in Abu Dhabi six years ago, and is pinning its hopes for future growth on a major expansion into the Middle East. But it announced its exit from Abu Dhabi last week, blaming recent geopolitical instability for frequent airspace closures and disruptions, which have hit travel demand and meant there was no hope for recovery at the loss-making unit. "No customer likes flying over rockets," Varadi said, adding that demand was impacted by political events in the region, challenges to engines in the hot environment and a lack of access to lucrative India and Pakistan routes. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
18-06-2025
- Business
- Yahoo
Transatlantic airfares slump as Western Europeans skip US travel
By Doyinsola Oladipo and Joanna Plucinska NEW YORK/LONDON (Reuters) -Airfares from Europe to the United States have dropped to rates not seen since before the pandemic, as travelers from Western Europe lead a pullback in travel to the U.S. that is expected to continue through at least July. Overseas arrivals to the United States fell 2.8% in May from a year ago, according to preliminary data from the U.S. National Travel and Tourism Office within the U.S. Department of Commerce. Travel from Western Europe fell 4.4% in May although travel from Eastern Europe rose 4.6% in the same period. Forward bookings suggest sustained declines are on the horizon, with total inbound bookings to the U.S. in July down 13% year-over-year, according to OAG Aviation, an analytics firm. Transatlantic airfare has been declining since the first quarter when Europeans started reconsidering travel to the U.S. after President Donald Trump suggested annexing Greenland, launched a global trade war, and issued orders that focus on stricter border policy. A stronger dollar has also deterred some trips. In March, travel from Western Europe fell 17% year-over-year, according to the NTTO. Average round-trip economy airfares for over 50 routes from the U.S. to Europe in the first quarter were down an average of 7% year-over-year, with rates to fly between Atlanta, Georgia, and London, down 55%, according to data from Cirium, an aviation analytics firm. As American consumers have been bargain-hunting and waiting closer to their departure dates to finalize travel plans, the decline in demand from Europe is another factor contributing to cheaper travel. "Fewer seats filled by European travelers to the U.S., and a slower pace of growth in U.S. outbound to Europe than last year, will tend to cast 2025 as a tougher year to make money on transatlantic routes," said Aran Ryan, director of industry studies at Tourism Economics, a subsidiary of Oxford Economics. This summer, the price of round-trip tickets from the U.S. to Europe is down 10% compared with a year ago, travel booking app Hopper said. Average fares of $817 per ticket are in line with prices to Europe in the summer of 2019 before the pandemic. Major carriers, including Air France KLM and Germany-based Lufthansa, expect slowing activity. Lufthansa CEO Carsten Spohr said the company expects weaker demand in the third quarter, while Air France KLM CEO Ben Smith said the company is seeing a "slight pullback" in transatlantic traffic and will slash prices to keep cabins on its transatlantic flights full. Airlines including Lufthansa and U.S. air carrier United Airlines say higher demand from U.S. travelers flying to Europe is offsetting the decline of Europeans flying the opposite direction. United said international bookings from Europe fell 6% in the first quarter, but added that U.S.-originating demand made up for the pullback. Rival Delta Air Lines said 80% of its long-haul international demand originates from the U.S., and fares in the region are "significantly higher" than in the rest of the world. Lufthansa said it plans to market its transatlantic flights to more Americans given the higher demand, despite travel from Western Europe showing moments of recovery. Travel from the region to the U.S. increased 12.1% in April before falling again in May, according to data from the NTTO. As of mid-May, there are 4.3% more international flights scheduled to depart from U.S. airports for international destinations this summer, said Hopper. "We feel really good about the transatlantic market," American Airlines CFO Devon May said at a Wolfe Research transportation and industrials conference in May. Sign in to access your portfolio
Yahoo
12-06-2025
- General
- Yahoo
Factbox-The world's worst air crashes in recent years
LONDON (Reuters) -At least 30 people were killed when an Air India plane bound for London with 242 people on board crashed minutes after taking off from India's western city of Ahmedabad on Thursday, with the toll expected to climb, authorities said. Below are some of the fatal crashes that have occurred in recent years. 2025 UNITED STATES More than 60 people were killed when an American Airlines regional passenger jet collided with a U.S. Army Black Hawk helicopter on January 29 and crashed into the frigid Potomac River near Ronald Reagan Washington National Airport. 2024 SOUTH KOREA Jeju Air international flight 7C2216 crashed at Muan International Airport on Dec. 29, 2024, killing all 175 passengers and four of the six crew in the deadliest air disaster on South Korean soil. KAZAKHSTAN Azerbaijan Airlines international flight J2-8243, an Embraer E190, crashed on December 25 after being diverted from Russia to Kazakhstan, killing 38 people. Azerbaijan's President Ilham Aliyev said in December the plane had been damaged by accidental shooting from the ground in Russia. Moscow has not confirmed this. JAPAN A Japan Airlines (JAL) plane collided with a smaller Coast Guard aircraft on the runway of Tokyo's Haneda airport on January 2. All 379 people aboard the JAL plane, an Airbus A350-941 flight, escaped the burning airliner. Five of six crew on the smaller aircraft were killed. 2022 CHINA A China Eastern Airlines Boeing 737-800 crashed into a mountainous region in the southwestern Guangxi region on March 21, 2022, killing all 132 people on board, in China's deadliest aviation disaster in 28 years. 2020 IRAN Iran's Revolutionary Guards shot down a Ukraine International Airlines (UIA) Boeing 737-800 on Jan. 8, 2020 shortly after it took off from Tehran Airport, killing all 176 people on board. Iran's civil aviation body blamed a misaligned radar and an error by an air defence operator. 2019 ETHIOPIA A Boeing 737-MAX 8 Ethiopian Airlines jet crashed on March 19, 2019 minutes after takeoff from Addis Ababa for Nairobi, killing all 157 people on board. Soon after, the Boeing 737 MAX global fleet was grounded over safety concerns. 2018 INDONESIA A Boeing 737 MAX Lion Air plane crashed into the Java Sea soon after taking off from Jakarta on October 29, 2018, killing all 189 people on board. 2014 MALAYSIA Malaysian Airlines Flight MH17 departed from Amsterdam for Kuala Lumpur on July 17, 2014, and was shot down over eastern Ukraine as fighting raged between pro-Russian separatists and Ukrainian forces. All 298 passengers on board were killed. Malaysia Airlines Flight MH370 went missing on its way from Kuala Lumpur to Beijing on March 8, 2014. The remains of the Boeing 777 and the 239 people have not been found. (Compiled by Joanna Plucinska; Editing by Andrew Heavens)
Yahoo
29-04-2025
- Business
- Yahoo
Lufthansa confirms 2025 outlook, braces for possible trade fallout
By Joanna Plucinska and Rachel More BERLIN (Reuters) -German airline Lufthansa on Tuesday confirmed its operating result forecast for 2025, but warned that it was closely monitoring the possible impact of trade tensions with the United States. European airlines are entering the first-quarter earnings season with increased investor anxiety over demand as global economic worries stemming from U.S. President Donald Trump's tariff threats drag on U.S. air travel. "Despite all the geopolitical uncertainties, we therefore remain on course for growth, are optimistic about the summer, and are sticking to our positive outlook for 2025," CEO Carsten Spohr said in a statement. Earlier this month, U.S. carrier Delta pulled its 2025 financial forecast, pointing to Trump's tariff threats as a drag on demand. Virgin Atlantic also said it had seen a slowdown in travel to Britain from the U.S. Air France-KLM, which reports first-quarter results on Wednesday, earlier this month said that it would consider cutting economy fares in an effort to support potentially lagging transatlantic travel. The transatlantic route is key for global airlines, maintaining some of the highest revenue and demand and helping airlines like IAG-owned British Airways maintain solid results. Lufthansa said demand in the U.S. sales region was continuing to rise. In March, the airlines group carried around 25% more passengers from the U.S. to Europe. Still, the company said it has set up "a task force to closely monitor current developments and, if necessary, respond quickly and flexibly to any weakening in demand, for example by adjusting capacity." Lufthansa is counting on the lucrative route as it faces pressure to revive its core airline, bogged down by wage talks and high pay, and find new sources of revenue as it struggles to compete with Chinese carriers in Asia. "Macroeconomic uncertainties, particularly the trade tensions between the U.S., the EU and other regions, are making it difficult to forecast the coming quarters accurately," the German flag carrier said in a statement. For the first three months of 2025, Lufthansa reported an adjusted loss before interest and taxes (EBIT) of 722 million euros ($822.14 million), roughly in line with a company-compiled forecast. ($1 = 0.8782 euros) Sign in to access your portfolio
Yahoo
23-04-2025
- Business
- Yahoo
Economic worries could weigh on airline results as European bookings drop
By Joanna Plucinska LONDON (Reuters) -European airlines are set to report first-quarter results in the coming weeks, offering outlooks for the lucrative travel season amidst growing worries that economic uncertainty could slow demand and threaten earnings. That comes after the European Travel Commission noted in a study published Wednesday that Europeans are making fewer travel plans for this summer on the continent, particularly among the Gen Z demographic. "For European airlines, the key risk is to demand and unit revenues, whilst an area of upside is from lower fuel prices," Ruairi Cullinane, an analyst at RBC, said in a note. That marks the first sign of a potential slowdown in what was seen as unrelenting travel demand after the COVID pandemic subsided, leading to a strong return to profit for much of the airline business. Global economic instability triggered by U.S. President Donald Trump's tariff threats are leading to worsening European recession fears, with many worrying that consumer and travel spending could suffer as a result. Analysts say while the risk of a shift in demand was present, sizeable drop-offs in demand had yet to be noted. "Demand indicators are not all flashing red," Cullinane told Reuters. Lufthansa reports on Tuesday and Air France-KLM reports on Wednesday, with analysts expecting some backlash to an outlook based on a later Easter date pushing a key earnings period back in the financial year. While airlines aren't seeing clear negative outcomes yet, about 10% fewer Gen Z travellers are planning trips between April and September of 2025 compared to last year given their sensitivity to higher costs, the survey showed. "Over the past few years, Gen Z has generally been more cautious with their travel intentions, planning fewer trips than their older counterparts," said Eduardo Santander, Chief Executive of the European Travel Commission, adding that more Europeans were travelling for specific events. "We've also noticed a slight decline in pleasure trips." Overall planned trips for the time period down 3% for all Europeans, with leisure travel in particular set to see an 8% drop compared to 2024. Ryanair had warned that they may see modest ticket price growth this summer but could fail to recover losses from last year, while Air France-KLM said it would consider cutting economy fares to boost transatlantic travel. In particular, Europeans are already booking fewer trips to the United States since U.S. President Donald Trump entered office in January this year over fears tied to political risk and possible immigration challenges. A senior European airline industry source said there had been some wavering in international demand immediately following the imposition of sweeping tariffs by Trump in early April, with some potential passengers holding back until the political uncertainty settled down. But analysts told Reuters they weren't overly concerned on airline results just yet. Carriers are keeping capacity growth moderated with demand "robust enough" to maintain reasonable yields for airlines, Stephen Furlong an equity research analyst at Davy said. Still, investors were "keenly focused" on possible spillover from North American ticket softness into the intra-European market, Dudley Shanley, research analyst at Goodbody, said. COOLER CLIMES Extreme weather and rising temperatures are also driving a shift in demand, with an 8% drop in interest to summer travel to the south Mediterranean compared to last year. Still, Italy and Spain remain as among the most popular destinations in the region among Europeans. Some 28% of Europe's tourists are more keen to travel to milder climates in an effort to avoid spiralling temperatures, with interest in travel to Northern, central and eastern Europe rising year-on-year, the study showed. "With climate change impacting travel decisions and patterns, tourism businesses in warmer areas should promote indoor activities during warmer hours and focus their marketing and sales plans on milder shoulder seasons," the survey said. (Additional reporting by Tim Hepher; editing by David Evans) Sign in to access your portfolio
