Travelers are holding back and booking summer vacation flights later due to the Iran war, but the appetite is still strong.
“We’ve seen maybe some uncertainty initially in April, but now we see that that’s recovering a little bit and that people are booking later,” Yvonne Moynihan, Wizz Air‘s UK managing director, told Business Insider on Monday.
“So what we see is the trend is ‘wait and see,'” she added.
Wizz is a budget airline headquartered in Hungary that serves over 200 destinations across Europe, West Asia, and North Africa. It carried over 63 million passengers in the last financial year and is Europe’s third-largest budget carrier, behind Ryanair and easyJet.
Last month, Ryanair CEO Michael O’Leary said there had been “a big surge in bookings on short-haul airlines within Europe,” while bookings to the Middle East had dropped.
Moynihan said that Wizz had also seen this trend, with trips to Spain being particularly popular. For this year’s summer season, the airline launched seven new routes between there and London.
In the US, airlines have raised baggage fees, and bosses have spoken about raising ticket prices to pass increased fuel costs onto their customers.
However, Moynihan said Wizz is cutting prices to stimulate demand.
US airlines are more exposed to rising fuel prices as they don’t hedge against fuel costs with financial derivatives. Meanwhile, Wizz has hedged 70% of its fuel needs for the summer period.
Wizz’s share price is down 33% since the start of the year and is the second-most-shorted stock on the London market, according to data from the UK’s financial regulator. The airline warned last month that the Iran war would cost it 50 million euros ($58 million), having previously expected to make up to 25 million euros in net profit for the financial year.
On Monday, Wizz said it was well-placed to remain resilient despite the war as it has over £2 billion ($2.7 billion) in cash.
The head of the International Energy Agency warned earlier this month that Europe has “maybe six weeks of jet fuel left,” but Wizz CEO József Váradi said: “I don’t think we’re going to be running out of fuel.”
“We don’t see the doomsday scenario that is being reported,” Moynihan told Business Insider.
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