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Wizz Air has warned of more tough times before its recovery can take off.

The budget airline said Wednesday (January 26) it expected fourth-quarter losses to be worse than Q3's $241 million.

It blamed the resurgent health crisis for putting travelers off, and expected it to affect demand in the coming months.

Wizz and other budget airlines have endured a tough 12 months.

They have faced governments changing restrictions all year.

Wizz is now looking towards Britain to help fuel its recovery.

It said demand there had jumped since the government announced an easing of controls.

The Hungarian firm is also optimistic about the outlook for later this year, and has acquired more landing slots to be ready for any recovery.

That should help it compete with rival Ryanair.

The Irish airline said earlier this month it had seen traveler confidence levels improve in recent weeks.

But Ryanair warned it expected fares to rise for budget airlines due to lower available capacity.

Wizz Air shares were up around 4% in early trade.