RE: Reality15 Jul 2025 18:34
Garydav2
If you look at the standards, we're talking about significant one-time losses, up to 20% of the contract value. This is also a loss of credibility, which affects the assessment of potential investors and investment partners. As for renegotiating the aircraft contract, we're also talking about significant costs. We shouldn't expect other aircraft types to be delivered on the same date as those originally ordered. It would be good if we didn't have to join the back of the queue. New aircraft aren't a problem for now, but in the second half of 2026 we should deal with an increase in passenger transport, although this depends largely on political factors. If so, the lack of a new fleet, combined with the lack of negotiated new agreements and connections, will become a major problem for Wizzair. Wizzair's payments connected to this situation will likely weigh on the next two quarters, unless the management decides to make this payment in the books in the following quarter. But I don't think so, because given the current financial situation, such a move is a balancing act when it comes to financial credibility. The debt is on the rocks. A further deterioration (which I estimate the chances of at over 60%) could shake the Wizzair debt market, necessitating the aforementioned new share issue or debt secured both by the company's assets and by a discounted offer to acquire a block of new shares. Such a situation would sharply reduce the market valuation of Wizzair shares and risk a hostile takeover of Wizzair through bankruptcy. Any problems with interest payments can result in specific creditor behavior. The example of how a prosperous company, due to poor investment decisions and a battle with institutional investors, becomes insolvent bankrupt, and how shareholders are robbed, is CINE. This was a company with a much longer history and, at one time, a higher market valuation than Wizzair. I will repeat this again and again. The source of Wizzair's prolonged problems is its flawed and authoritarian management policy, which discriminates against large shareholders. Wizzair will pay the price for this when it faces ongoing liquidity problems. And these will increase in the near future as it burns through cash. This risk is perceived by rating agencies, which describe the level of investment risk in the company's debt. The effects are visible in the share price.