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Wizz Air jets ahead with expansion plans

The budget airline is bidding for the spots at Luton left vacant by Monarch Airlines as part of its goal to increase capacity, as well as looking at routes within mainland Europe
November 8, 2017

Wizz Air (WIZZ) isn't letting overcapacity fears in the European airline sector get in the way of its ambitious expansion plans. It wants to increase its own capacity by 23 per cent by the end of FY2018 and load factor by 1 percentage point. It could do this by bidding for the four aircraft spaces left empty by the now collapsed Monarch Airlines at London Luton airport, where Wizz Air opened a UK base earlier this year. Each spot would allow for between 20 and 24 additional routes from the UK to Europe. The airline is also looking at where to add routes within mainland Europe.

IC TIP: Buy at 3,082p

So far Wizz Air has been able to keep up with its rapid expansion without sacrificing its capital structure. In the first half, the airline increased the number of passengers it carried by a quarter to 15.6m, while maintaining a 25 per cent net profit margin. It started flying 57 new routes, bringing the total number of routes operated to 550, to 43 countries from 28 bases.

Analysts at Investec expect pre-tax profit of €295m (£261m) in the year to March 2018, giving EPS of 219¢, up from €237m and 179¢ in FY2017.

WIZZ AIR (WIZZ)   
ORD PRICE:3,082pMARKET VALUE:£3.16bn
TOUCH:3,080-3,083p12-MONTH HIGH:3,404pLOW: 1,505p
DIVIDEND YIELD:nilPE RATIO:8
NET ASSET VALUE:1,212¢NET CASH:€ 1.2bn
Half-year to 30 SepTurnover (€bn)Pre-tax profit (€m)Earnings per share (¢)Dividend per share (¢)
20160.9263443nil
20171.1301445nil
% change+24+15--
Ex-div:na   
Payment:na   
£1=€1.13