Member Info for B777CAPTAIN

Johnbri4

I have also been in the Airline industry all my life.

Any forecasts being a pure guess, I'd change that to an educated guess.

Firstly your examples of yourself buying Airline stocks; you clearly bought at entirely the wrong time. The Airline industry is very cyclical and good companies tend to emerge very strongly from force majeure (black Swan events).

For example:

- If you'd have bought British Airways in the period after 9/11, around the beginning of 2003, you would have bought it at around 90p. If you'd have held it until 2007, you'd have likely sold it for around £5. A 5.5x profit.

- If you'd have bought EZJ in March 2009, you'd have paid £1.60 per share, then if you'd have held it for 5 years, you'd have sold it at around £14. A 9× profit.

-If you'd have bought IAG during covid you'd have likely paid around £1. Now you'd be selling it for about £4.

Quality Airlines can be extraordinarily profitable if you take advantage of the cylicality and imparticularly the black Swan events that occur.

I don't want to bore the other guys on this forum because I've spoken to extreme nauseum about the advantages Wizz have in the medium term over both Ryanair and Easyjet. But as you said, you know the industry. You know that Wizz will have the A321 NEO's and XLR's which are the best most fuel efficient Aircraft. While Ryanair cannot rely on delivery from Boeing to replace their 400 relic B737-800's.

Whilst the Airline industry maybe difficult to predict. I would say that you'll probably not ever get a better bet in your life than Wizz at it's current price.

KPA

Thanks. Waiting for some thread action.

In my opinion, of course £100 is a long way off. As I've said previously, I have an 8 year view, that'll take me into my early 60's.

OK:

Let's say 500 Aircraft by 2031. Prior to Covid each Aircraft Wizz operated made a net profit of €3m. By 2031 each Aircraft in a much scaled up Airline should make a lot more than that. But let's be extremely conservative, each Aircraft make £2m each.

500 Aircraft × £2m = £1B net profit

IAG PE (with very little Growth) = 8 (ish)

That would give Wizz a Market Cap of £8B.

So at that point we have to say that Wizz has generated a lot of Cash. Therefore share buy backs over the years will be very likely. That probably would make the £8B market cap. a £100 share price.

Not unreasonable, I don't think.

Same for the £42 in 2028, very likely.

This is all very conservative and probably gives a £100 share price in 2032.

Lucas

You're still saying 40 grounded? Therefore unlikely to reach 32 by the end of H1 as was discussed during the F25 earnings call?

I don't even think that the real upward movement has even started yet.

The 40% move up from July 24th, IMO, is a technical bounce from an extremely deeply oversold condition.

It's the fundamental.... that Operational profit that will drive the prices.

Keep in mind that Wizz hasn't turned the corner yet. It needs the Operational profit to grow from the same quarter in the previous year for that to happen. The institutional investors have made it clear that this is what they're looking for. They don't give a damn about net profit or free cash flow.

When that Operational profit grows, the PEG will be extraordinarily low. That's when the share price starts to move up.

Now that Syrian Airspace is open to business again -makes East Europe to India much more viable. I think that it's a shame that Varadi allowed himself to be pressured into reducing the XLR order so much.

£42 is just a matter of time.

As is £100.

Norse Atlantic came in Profitable yesterday. That tells you Everything. Every Airline is now Profitable because there simply are not enough Aircraft to meet passenger demand. Airbus and Boeing are so far behind.

If Wizz does reach £15 by the end of this month, that'll be incredibly positive because that'll be a 50% rise since the low of July 24th. Hopefully it will force Barclays (Lobbenberg) into a further upgrade, he's probably the only credible analyst covering Wizz. Finally, due to seasonal factors, there's only one way that Wizz will go from October 15th to Christmas. It does make you think that a Christmas £20 is on the cards.

KPA

I have to respectfully disagree. The guys who post positive information on this forum are not a ramping crew. They are passing accurate information about why the current valuation of Wizz is extremely low.

Previously you had the "shorting crew", who were pedalling misinformation to achieve their goal.

Basic Airline knowledge and arithmetic suggests that this stock will be a £40+ stock in reasonable time. Given no further black Swan events.

Craigo

My view is that you can never ignore seasonal factors because they always occur, every year. Yes, fundamentals may interfere and drive a stock but failing that the standard August and September malaise will occur. September 21st is the average lowest day of the year for stock prices and it's surprising how often it hits close to that date.

Wizz needs institutional buying to drive its price up. I don't think we'll start to see that before the middle of October but then it'll push strongly into Christmas. Hopefully it'll push all the way through to May next year.

I know, when you want to trade, you want to trade but in reality it's sit on your hands time.

Nick

Always a chance but I think things will be attached more closely to fundamentals now than they were in 2022. I think that in 2022 there was still a lot of money sloshing around as a result of governments increasing the money supply due to Covid.

I'm sticking to £42 by summer 2028.

Joo

The bonus is something to consider.

Wizz will become very profitable post GTF Engine issue. Varadi is highly likely to initiate a share buy back along the lines of Rolls Royce or Barclays.

Joo

You'd like to think so wouldn't you but I suspect that he'll get an additional 3 years from the board due to the delay in deliveries from Airbus.

FROM CHATGPT:

Wizz Air’s sale-and-leaseback transactions show up as debt on the balance sheet because of IFRS 16 accounting rules for leases.

Here’s what’s going on step-by-step:

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1. What is a sale-and-leaseback?

Wizz Air sells an aircraft to a lessor (leasing company).

Immediately leases it back, usually under a long-term lease agreement.

This frees up cash while still allowing them to operate the aircraft.

---

2. Why IFRS 16 matters

Before IFRS 16 (effective Jan 2019), many leases were “operating leases” kept off the balance sheet, so the lease cost just appeared in expenses.

Under IFRS 16, almost all leases—including aircraft leases—are treated as if Wizz Air owns the asset and owes money for it.

The lease obligation is recorded as a "lease liability" — essentially a form of debt — and the leased asset is recorded as a "right-of-use asset".

---

3. How it appears in the accounts

Lease liability = Present value of future lease payments (similar to debt).

Right-of-use asset = The aircraft’s value for the period they have the right to use it.

Each lease payment is split into:

Interest expense (on the lease liability)

Reduction of lease liability (like repaying a loan)

---

4. Why it’s classed like debt

Even though Wizz Air doesn’t “own” the aircraft, IFRS 16 treats the lease as financially equivalent to borrowing money to buy it.

This makes the balance sheet more transparent by showing the full economic obligations.

Investors can then see the true leverage of the business, including commitments to lessors.

---

💡 Example from Wizz Air’s latest report:

You’ll see large figures under "Lease liabilities" in both current and non-current liabilities. These are the accounting “debt” created by sale-and-leaseback deals.

---

If you like, I can pull Wizz Air’s latest balance sheet and show exactly how much of its “debt” is lease liabilities vs. traditional loans. That would make the picture much clearer.

This is an accounting policy that started in 2019.

Lucky

In recent earnings calls Varadi has divided the debt into 2 blocks, financial debt and the Aircraft lease debt. What he's said clearly is that all financial debt will be gone by 2027.

Other guys on this forum who are more accountant minded than myself can explain why an Aircraft lease is now shown as debt. This, as I understand, is a relatively new accounting policy (chat GPT explains well).

Airlines have always leased Aircraft and will Always lease Aircraft.

The benefit of the Aircraft which Wizz have leased and have orders for within the next few years is that they are the cleanest and most fuel efficient. This attracts both benefit in terms of lower fuel cost and lower maintenance costs, it also means that under EU ESG guidelines they are taxed less.

You compare this with the only competitor to Wizz, Ryanair, who own their own Aircraft but who are running around with over 400 very old and high cost B737-800's (I have said a lot about this in previous posts, particularly why old Aircraft have such significant maintenance costs).

Once Wizz Airs financial debt is gone, Wizz Air's costs per Available seat km (CASK) is only slightly higher than Ryanairs but this is more a reflection of the fact that Ryanair operate from more secondary Airports than Wizz. Airports that are generally less popular with customers.

Lucky

He's pretty well quoted all the items that the guys on this forum have brought up over the last couple of weeks. It's nice to read though.

I'm well over 50 and I'd definitely invest in Wizz, I don't know what's wrong with him.

Stan.

Wow. Good Work.

I'm going to keep talking 30's or 40's because that's where, IMO, it's headed. Not in the very short term but in the next 2-3 years.

Just as British Airways after 9-11 was headed from £1-£4 in the following 3 to 4 years (very rough figures because I'm too tired to put in any research now)

And

IAG from it's Covid 90p to the current £3.70.

A fully operational Wizz has an inherent value and that value is around the £40 mark.

Stan

I read your post. American Airlines bonds at 8.5% sounds good.

I'm not interested in investing in the stock of Airlines in America because the Unions are so powerful and are able to hold the Airlines to ransom. When Warren Buffet says that he won't ever invest in Airlines, he's talking about the US.

Craigo

You'll be up £350k if you hold for the £40. And it is coming. Not for 2-3 years though (I suspect).