Wizz Air warns of 2022 loss unless restriction lifting accelerated

Budget airline Wizz Air (WIZZ) logged an underlying net loss of €482m for the year ended in March, as travel restrictions continued across much of Europe. Chief executive József Váradi warned that the group expects to report another net loss in 2022, unless restrictions are permanently lifted. However, the airline is “cautiously optimistic about the recovery” and expects to fly around 30 per cent of its fleet in the first quarter.

Passenger numbers fell by three-quarters in the full year as much of the fleet was grounded, but traffic improved to 0.83m passengers in May, up from 0.57m in April. Total cash at the end of the year stood at €1.6bn, and its monthly average cash burn rate was €61m in the 2021 financial year. The shares have rallied substantially since November and give the group an enterprise value of just over 13 times forecast adjusted cash profits for 2022, a premium to its historical average and one that leaves any further recovery prospects looking fully priced in. Hold.