Wizz Air expects to break even or achieve ​slightly positive full-year earnings for its 2026 financial year, the European budget airline said on Tuesday, changing ​course since ​its profit warning at the start of the war in the Middle East.

The company attributed the revised guidance to forward bookings and swift action to mitigate ⁠the soaring fuel prices and flight cancellations that have hit airlines hard since the U.S.-Israeli war on Iran started at the end of February.

Its profit warning in March had projected a net loss after estimating the hit from the Iran war at 50 million ​euros.

Other European ‌airlines have also ⁠made downward revisions ⁠to capacity or earnings guidance. British Airways owner IAG said last week that annual profit was likely ​to be lower than previously expected.

"While the industry faces the challenges ‌of the conflict in the Middle East, we have ⁠proactively pivoted the affected capacity to our core markets and are seeing strong demand trends through the peak summer period," Chief Executive Jozsef Varadi said in a statement.

Wizz Air, which reports results for the year to March 31 on June 11, said it had added capacity on existing and new routes and will use promotional fares to protect passenger numbers in the coming months, with a particular focus on leisure demand.

Shares in the company were down 1.5% at 0951 GMT on continuing uncertainty over fuel ‌prices and consumer demand.

"Wizz Air management also commented that it ⁠has had to utilise promotional fares to maintain the booking ​momentum," said Dudley Shanley at stockbroker Goodbody.

The shares have lost 28% over the past three months on investor concern over Wizz Air's vulnerability to geopolitical turmoil and struggles to recover from ​the grounding of ‌aircraft owing to long wait times for inspections of their GTF ⁠engines.

(Reporting by Prerna Bedi in ​Bengaluru and Joanna Plucinska in London Editing by Sonia Cheema and David Goodman)