Member Info for B777CAPTAIN

Love the podcast. He says that Wizz Air's order's are for big aircraft with lot's of seats to fill. To be fair, with all of those seats, Wizz Air is already hitting around the 92% load factor mark, and in fast growing regions. Filling the seats does not seem to be a problem.

One of my former managers told everyone that they had to call him "Red 5" because that was his call sign in the Red arrows. So to say that we're a self important bunch, where did that come from? 🙄

Yes James.

To be honest I don't consider myself important. The system asked me for a nickname. That was the first thing that came to mind. I was more interested in typing the message that I was thinking about at the time.

Anyway. Self important, that's fine.

Stille.

I don't know anything about Honda trail bikes.

Stille:

The Boeing's which I fly are totally safe. B777-300 with GE-90-115BL engines.

I've been a bit misleading talking about the UK to India with my previous post. In the winter time you'd have to factor in at least a 100kt headwind (probably more) coming back from the India to the UK, it won't make it. Summer would be fine and other places such as Milan to India would be fine.

I notice criticism of the procurement of the XLR rather than more NEO's. I disagree.

One of the analysts suggested that the XLR would require Pilots to take additional ETOPS training. Let me tell you, that is total nonsense. ETOPS in the European context is only required for the North Atlantic. Varadi will not touch the North Atlantic with a barge pole, he knows that it's business suicide (for reasons which I can explain).

The XLR will be invaluable on routes from the UK to Jeddah and Medina. There are 3.8m Muslims in the UK, while one Hajj per lifetime is the minimum, Muslims generally want to do a few. But add to that another Pilgrimage called Umrah which is year round. Many Muslims would like to do that annually. I think that just out of the UK you'd have great business for 10 XLR's. Bases at Birmingham, Manchester, East Midlands and Gatwick would work well.

On top of that, India is the largest growth market in the World. For the XLR the UK to Mumbai or Delhi is possible.

Then consider what you can do from the rest of Europe.

Taut:

I think (could be wrong) that wet lease this year has been used to cover delayed XLR arrivals, presumably those Wet lease costs will be compensated for by Airbus but ? on that.

GaryDav.

I like getting in below £12 as well. I did it last September. Obviously I'm not a trader, I'm holding wizz for the long term.

I'm in two minds, I like Wizz going up in value but it'll be great to buy more at the end of this month for under £12.

I accept that Panmure are looking after other people's money, Khoo (Panmure Wizz analyst) has a record of making his investors 13%/yr. It's his job to price in unlikely additional costs, he's a conservative fund analyst/manager.

It seems to me that Panmures forecast is based on the costs continuing to increase at the rate they have been increasing. I think that is extremely pessimistic, aircraft will start coming back to line this year and as they do grounding costs will reduce.

I think that if you say that each operational aircraft will earn a net profit of £1m, that bakes a lot of negativity into the cake, £192m. Add to that £100m in reduced costs regarding the wet lease, you're looking at an F26 profit of £300m. That would be a forward PE of 4 and if realised, should give a share price of £18.

That's not where we want to be but it'll be a start for next year. I'll be back around break even.

On Oil Prices, Varadi learned his lesson the hard way. They are now hedged 71% for F26. Higher oil prices may attract Airline investors out of less hedged Airlines into Wizz.

I don't like to say that the bottom is in because so much is driven by market sentiment and so little by common sense. In the Mid term this will be an amazing investment.

My guess as to what happened on June 5th is that RBC capital pulled the plug on Wizz after seeing something they didn't like in the earnings report, they sold everything which drove the price significantly lower. Unfortunately in this day and age a lot of shareholders trade with leverage even 10×, so the margin calls will have come in thick and fast.

The same earnings report in the 1990's may have only caused a 5% dip in the share price.

I think that the good returns from this stock are about 3 years away. It's clear that the groundings are adding significantly to costs BUT the company remains profitable with each operating aircraft making about £1,000,000. I don't believe any of this "quality of profit " nonsense.

My view is this, my current average price is £19.30

I'm hoping to average down to £18.15 in the next few months. £18.15 is the high of 2025 (there or thereabouts).

If I'd have bought at the high this year with a 5 year view and a £70 price target, yes I'd be annoyed but it wouldn't be the end of the world. I'm trading on my understanding of the fundamentals and believe that £70 is only a matter of time.

True about being down since the IPO, but to be fair they were doing fine until Covid and then the current issues regarding engines, Ukraine and Israel cannot be blamed on management.

Management get blame for not hedging fuel and currency. Not moving the aircraft they had based in Ukraine out quickly enough.

Morgan

Are you meaning sub £10?

The current price is £11.74.

Morgan:

I think that the July Earnings is going to change things massively, for better or worse.

Varadi is in a corner, he has to provide guidance. The share price will move to 6× that figure (possibly).

My feeling is that the Airline industry is having a good summer. Due to the fact that I have high loads on all flights that I operate and all flights that I've been passenger on. Yields seem high as well.

The whole thing is totally ridiculous though. You have no idea where fair value is.

July 24th 2025, Q1 results. Let's say due to a good Easter (no Q1 Easter last Q1 report) and good follow-up couple of months, they report a €100m profit. I think Q1 last year was around €1m. That represents a 10,000% increase from last year's Q1.

Where does the share price go?

Davethehorse:

They have €1.7B in cash. They're a profitable company. The PE is around 6.

Even they Debt/Equity ratio is irrationally high (due to extraordinarily low share price).

IMHO, they don't need to raise money.

If you consider that costs went up 10% with additional costs mostly directly related to the GTF engine issues, that took out very roughly €400m of net profit. The net profit would have been around €600m. That means that this company is capable of producing a net profit of of over €3m per operational company aircraft. That is phenomenal in the low cost market.

I don't consider the debt at all because the interest is paid by the time you get to net profit on the balance sheet. The net profit is currently artificially low because of the groundings and consequently the market cap is artificially low.

With 305 aircraft all operating in 3 years time, the net profit should be around €900m. With a favourable PEG and a reducing DEBT/EQUITY this stock should be trading on a PE of 10 at that point. That would make this around a £70 stock.