Wizz Air

Hungarian ultra-low cost carrier group, Wizz Air (Wizz) full-year results’ expectations missed expecations and the recent share price move was exacerbated by an unexpectedly weak ex-fuel unitary cost outlook. Wizz is suffering from a disproportionate share of its fleet being grounded (one in five planes) due to Pratt & Whitney engine issues that need to be resolved by the engine manufacturer. These are affecting several cost lines and largely explain the weak cost performance. 

The groundings will become less material over time as the fleet grows with unaffected new planes and as the grounded fleet is serviced and returns to operation. We believe that the fleet’s engine teething issues will eventually become an advantage due to superior fuel efficiency and capabilities offered by Wizz’s Airbus A321neo aircraft versus previous generation models as well as Boeing equivalents. Wizz is expected to operate one of the youngest and most efficient fleets of any major European airline over the next decade. Wizz now trades on less than 6x 2026 earnings. 

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