Wizz Air is gearing up for a strong summer after its first annual profit in three years lifted the European low-cost airline’s London-listed shares on Thursday.

Hungary-based Wizz has benefited from robust demand as it navigates challenges including flight cancellations last year due to the Middle East conflict and engine inspections that have grounded parts of its fleet.

“As we enter F25, demand for air travel remains robust, with no sign of abating in the near term, supporting a higher yield environment as capacity across the whole industry remains constrained,” CEO Jozsef Varadi said.

Varadi said that inflationary pressures, rising costs and strained supply chains amid geopolitical instability would persist in the coming year, but efforts to control costs would fuel growth along with a strong summer season.

The airline expects current year net income in the range of 500-600 million euros. Wizz reported a net profit of 365.9 million euros ($396 million) for the year ended March 31 after three consecutive years of losses.

The company, which recently celebrated 20 years since its first flight, carried a record 62 million passengers during the year. Its shares climbed as high as 2,096 pence and were last up 4.9 per cent to 2,060 at 0817 GMT.

“Wizz Air has strong medium-term growth credentials backed by its A321neo orderbook and exposure to faster growing Eastern European and Middle Eastern markets,” RBC analysts said.

“We expect 2024/25E to be a supportive environment to grow fares, and also see attractions in cost leadership among European airlines on a costs per available seat kilometre (CASK)-basis, alongside Ryanair.”

Rival Ryanair, Europe’s largest by passenger numbers, reported annual profit slightly ahead of analysts’ expectations earlier this week, while easyJet reported first-half losses in line with its expectations.