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(Sharecast News) - Wizz Air said in an update on Monday that it will suspend all flight operations from its Abu Dhabi base from 1 September as part of a strategic realignment that would see the ultra low-cost carrier concentrate on its core central and eastern European markets, along with selected western European countries.
The FTSE 250 airline's move marked a significant shift in strategy, as it faced growing operational and geopolitical headwinds in the Middle East.
Wizz Air said it intended to exit the Abu Dhabi joint venture entirely following a reassessment of market dynamics and challenges in the region.
The airline cited engine reliability issues in hot and harsh operating environments, repeated airspace closures linked to geopolitical volatility, and regulatory barriers that constrained market access and growth.
It said those challenges had undermined the viability of its low-cost model in the gulf, and prevented the business from achieving profitability on par with its European operations.
"We have had a tremendous journey in the Middle East and are proud of what we have built," said chief executive Jzsef Vradi.
"I thank our highly dedicated employees for their relentless efforts and commitment for developing the Wizz brand in new and dynamic markets.
"However, the operating environment has changed significantly."
Vradi said supply chain constraints, geopolitical instability, and limited market access had made it increasingly difficult to sustain the airline's original ambitions.
"While this was a difficult decision, it is the right one given the circumstances.
"We continue to focus on our core markets and on initiatives that enhance Wizz Air's customer proposition and build shareholder value."
Wizz Air said affected passengers would be contacted directly with options for refunds or alternative arrangements, while those who booked through third parties should liaise with their agents.
Other operations within the Wizz Air group would not be not impacted by the suspension.
The company said the redeployment of resources to core European markets, including Austria, Italy and the UK, would support long-term sustainable growth and capital discipline.
At 1004 BST, shares in Wizz Air Holdings were up 1.36% at 1,045.9p.
Reporting by Josh White for Sharecast.com.