ii view: Wizz Air passenger numbers soar

Down 55% in 2022, shares for this low-cost airline have taken off in 2023. Buy, sell, or hold?

Passenger number update

ii round-up:

Low-cost European airline Wizz Air Holdings (LSE:WIZZ) today announced that it had carried 4.27 million passengers over the month of March. 

That’s an increase of 72% from March last year and comes as Covid restrictions have disappeared and airlines have ramped up their flights, or capacity.

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Shares in the FTSE 250 airline fell by around 4% in UK trading having come into this latest news up by over 50% year-to-date. The price of oil and therefore jet fuel rose as Opec+ announced surprise production cuts. Rival airline easyJet (LSE:EZJ) also retreated having gained by a similar during 2023. The 250 index itself is down by just over 1% year-to-date. 

Wizz Air flies to over 190 airports in more than 50 countries, including many destinations across Central Europe. It halted flights to Russia, Ukraine and Moldova following Russia’s invasion of Ukraine.  

The airline’s load factor, or the proportion of available seats filled with passengers, came in at 92.2% for the month, up from 86.2% in March last year. 

The Budapest headquartered company also announced planned new routes including London Luton and Gatwick airports to Istanbul, Turkey; and from Milan, Italy to Cairo, Egypt. 

Full-year results are scheduled for 8 June. 

ii view:

Wizz Air made its maiden flight in May 2004 flying from Katowice in Poland to London Luton. Today it operates a fleet of 180 Airbus A320 and A321 aircraft, carrying 51 million passengers over the last year across more than 900 different routes. 

For investors, both geopolitical and economic factors need to be remembered, including potential for the war in Ukraine to spill over into neighbouring countries. Rising interest rates and elevated costs could see business meetings cancelled in favour of virtual meetings, while many factors outside of management’s control such the weather and the price of oil also warrant consideration.  

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On the upside, an appetite to travel following the global pandemic is clearly evident, an expansion of its network and aircraft numbers is ongoing, while the young age and fuel efficiency of its aircraft fleet provide it with high environmental credentials.

For now, and while caution remains sensible, a consensus analyst estimate of fair value at close to £32 per share implies optimism in City circles.

Positives: 

• Focus on costs
• Positive environmental credentials

Negatives:

• Operations hit by Ukraine conflict
• Many factors outside of management’s control 

The average rating of stock market analysts:

Strong hold