Wizz Air has reported losses of €121 million ($140 million) for the six months to end-September, after the central European budget carrier was forced to cut prices in order to tempt customers back into the air. Revenue rose to €880 million as the carrier flew 12.5 million passengers, a near-doubling from the same period last year when markets were devastated by Covid-19 restrictions. However, the company remains in "investment mode" as it seeks to ramp up operations ahead of an expected surge next year, the much-hoped-for leap in passenger demand having yet to fully materialise. "We are stimulating demand with pricing given the continued impact of Covid-19. Additionally, FX and commodity markets continue to be volatile and are impacting our financial performance," states chief executive Jozsef Varadi. Wizz expects an operating loss in the three months to end-December of around €200 million, a result which "may carry over" into the new year, depending on operating conditions. "This will round off [financial year 2022] as a true transition year out of Covid-19 with a network, team and fleet fully prepared for the peak F23 season," adds Varadi. Load factors of around 80% are forecast for the final quarter, as the carrier deploys "very strong price stimulation to attract passengers to our service". These dynamics should dissipate as part of a strong rebound from April next year, Varadi told investors. "There is no other airline than Wizz that is able to take advantage of that," he assets. Goodbody aviation analyst Mark Simpson comments that the results are "a lot more cautious than anticipated and will require significant downgrades for this year’s forecasts". He had pencilled in a profit for the period of €56 million. Investment firm Davy calls the results "disappointing", and says the subdued outlook reflects "demand weakness in central and eastern Europe, underutilised assets (impacting unit costs) and an unhedged fuel position". Davy adds: "We remain concerned that consensus estimates are too high and don't appropriately balance fleet and capacity growth with pricing stimulation." Notable in Wizz's results are the presence of ongoing Covid-19-related issues heavily impacting the carrier's performance. Varadi cites a "very tight" sales window, for example, as the carrier has only around 25% booked for the Christmas period, an "aberration" compared with normal booking patterns. The airline has also suffered from shortages in crew that led it to wet-lease some aircraft in the period. Varadi notes that staff shortages across Europe are impacting staff retention and recruitment, and that crews face greater pressure than pilots because of their lower pay rates and greater ability to work across different professions. Wizz also highlights that it will face pressure from rising crude prices, as the company no longer employs fuel hedges having suffered large losses from its use of the instruments in the past.

The global recovery in air passenger traffic advanced at a tepid pace through September, with the number of customers travelling internationally falling back slightly, according to IATA's latest market update. The association recorded slight overall gains in passenger numbers, most of which stemmed from a recovery in domestic travel, particularly in China. "September’s performance is a positive development but recovery in international traffic remains stalled amid continuing border closures and quarantine mandates," says IATA director general Willie Walsh. "The recent US policy change to reopen travel from 33 markets for fully vaccinated foreigners from 8 November is a welcome, if long overdue, development." He adds that reopening of markets in Australia, Argentina, Thailand and Singapore would likewise give the industry a boost. Total demand for air travel in September 2021, as measured in revenue passenger kilometres, was down 53.4% compared to September 2019. This marks an slight uptick from August, when demand was 56% below two-years earlier. Domestic markets were down 24.3% compared to September 2019, compared to a fall of 32.6% in August. International passenger demand in September was 69.2% below September 2019, fractionally worse than the 68.7% decline recorded in August. Walsh comments that supply and demand in the passenger segment is "reasonably balanced", with airlines restoring capacity slightly faster than demand is returning. "The big issue is the pressure on cost bases", he continues, principally relating to fuel. "Higher crude will have an impact on pricing… but I don't think it will stall the recovery." In his view the impact should be felt relatively equally across airlines, and therefore would not lead to distortions in the market. Walsh also renewed his recent criticism of airports for seeking to raise their charges. Responding to a question about whether IATA would resort to legal action to stop them, he said: "Where we can take action we certainly will, in combination with our local members." Turning to an attempt by London Heathrow's operator to increase its charges, action that it is seeking permission to do from the Civil Aviation Authority, Walsh described the move as "outrageous" and says it "has to be resisted". He adds that he is scheduled to speak with the CAA on the issue later today. IATA's update also included data on the air freight market, where global demand as measured in cargo tonne-kilometres was up 9.1% compared to September 2019. Meanwhile, capacity was constrained at 8.9% below pre-Covid levels. Air freight demand has risen as manufacturers turn to the sector to recover lost time due to supply chain disruption, IATA notes. At the same time, the cost of air cargo became more competitive because of price increases for seaborne freight. IATA says that while the average price of air cargo was 12.5 times higher than sea shipping before the crisis, it was only three times higher in September.

Lufthansa subsidiary Swiss posted an adjusted EBIT profit of Swfr 6.7 million ($7.4 million) in the third quarter, rebounding from an EBIT loss of Swfr 148 million during the same period last year. Total revenue increased 91% year on year to Swfr 708 million from Swfr 371 million in the third quarter of 2020, the flag carrier says. Swiss chief financial officer Markus Binkert states: “We were able to both sell our increased capacities and further lower our costs over the summer months. But our third-quarter earnings result is still substantially below its pre-crisis levels.” Load factor for the third quarter amounted to 66%, on capacity that was at 55% of its pre-crisis level, Swiss notes. Swiss carried 3.7 million passengers in the first nine months of 2021, down 15% year on year. Capacity, as measured in available seat-kilometres, was down 3%, while revenue passenger-kilometres fell by 24%. The nine-month seat load factor stood at 51%, 14 percentage points below its prior-year level.