LON:WIZZ | Wizz Air - Poor Man's Ryan Air? I Doubt It!

28th Jul '15 by Dearg Doom

5 comments 8144 reads

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Market Cap 1.7 Billion

P/E forward 16.3

(Disclosure - I am long this stock )

About the Company

Someone described the Wizz Air company to me as "the poor man’s Ryanair” Never mind, I’m happy, because Wizz Air has been busy successfully adopting a similar business model to Ryanair since 2003.

Wizz Air Holdings is the largest low-cost carrier in Central and Eastern Europe offering 380 routes from 22 bases and carried 16.5 million passengers last year.If you live in countries like Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Kosovo, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Poland, Romania, Russia, Serbia, Slovakia, Slovenia and Ukraine , than Wizz Air might be your first website to check out actual cost and flight availability

Quarterly Interim Management report out tomorrow at 7.a.m

Hopefully should be positive given the positive points mentioned in the June Travel Statistics update on passenger numbers carried and loading factors. The lower oil prices recently won't do any harm going forward. Other favourable points.

First of the new A321 aero plans to be delivered in November 2015.
The new website and mobile app look great.
Really growing business in all directions whether it be to Egypt, Turkey, Russia or UK.
Future fixed costs are reduced somewhat by the likely favourable purchase price demanded for ordering 110 Air Bus 321 in June. List price was £8 billion.

From the companies June Statistics Report issued July 6th issued these few points.

"Wizz Air also expanded its fleet, base and route network including:

· Two new bases opened in Slovakia (Kosice), Bosnia and Herzegovina (Tuzla)

· One new destination added: Birmingham, Wizz Air's eighth UK destination

· Five new routes added: (x1) Hungary, (1x) Poland, (x2) Moldova, (x1) Romania

· Three new A320's have been added to its fleet bringing the current fleet to 62 A320 aircraft"

Wizz Air share price hit above £17.00 for a short time yesterday, than fell away to £16.40 late on. I think this share wants to go up, so I bought a few more share towards the close of business to top up my holdings for the third time.

Investment…

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WarrantStar

29th Jul '15

Hi Dearg
A very interesting article which makes me think Wizz Air is worth me doing further research on. Please could you let us know why the EPS forecast for 2016 is for a nearly 80% drop?

Dearg Doom

Hi Warranstar.

I wrote the article before the release of the trading statement. I needed to review my reason for holding the shares particularly after an additional purchase at close of business yesterday. I also thought it might be interesting experience to put one's head on the block before the event.

In the trading statement released today, the company gives a new profit forecast range from (165m - 175m) range to (175m - 185 m) for y/e 2016.

Passenger growth up more than 20%. However they are not benefiting as much as I thought from the lower oil price due to increase in value of dollar and earlier hedging for oil at higher price.

Hope this helps.

Regards

Dearg Doom

5th Aug '15

Wizz Air Update Share Price 17.28 (up 2.5% today )

July Travel Statistics

"Wizz Air has improved its July passenger numbers to 1.97m, up 20% from 1.64m. Capacity improved 19% to 2.1m seats, from 1.8m. Load factor was 92.7%, from 91.6%."

I could have bought Ryanair years ago in its early growth phase. . I did not like the company however, as it seem to depend too much on Michael O'Leary CEO for cheap advertising stunts described as marketing genius. I thought it would all end in disaster. The big boys would eventually react through price war or that lobbying to governments seeking to protect their own flag bearer would tie Ryanair up in legal knots. How naïve those original thoughts were which persisted with me for years.

Wise words from wiser people rang in my ears to never buy airlines, as there have been more losses in the airline industry overtime compared to all the profits made.

Will I redeem my earlier mistake with my Wizz Air holdings ? Has Wizz Air successfully duplicated Ryanair success and still has room for growth and ambition to go with it? DYOR.

Dearg Doom

jamesdougal

24th Jan '16

My big worry is dilution. There are 48,830,503 convertible shares. That seems to be separate from the shares used to calculate dilution (126,501) which reduces eps for the half year from 3.48 to 1.45.

Edinburgh Investor

25th Mar '18

things seem to be going well, I think I'll take a look at this. Keeps coming up on a few of my screens.

Wizz Air - Poor Man's Ryan Air? I doubt it!

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Dearg Doom

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