RE: Reality20 Feb 2025 13:29
The limited chances of interest rates falling in all of Europe and the US means a significant increase in debt service costs compared to the expected one. The war in Ukraine will certainly also last much longer than everyone thinks and will certainly not end the way Trump would like. In addition, there is the inevitable customs war, and all this will affect the probable higher prices of oil than those assumed, further delays in the delivery of new aircraft (the share of international cooperation hit by new duties here is over 40%). The situation in the Middle East and Israel has not been resolved and remains in suspension. Wizzair will not earn much money on this market for a long time, and the constant suspensions and cancellations of flights cost more than the profits it achieves. As I have already written - the situation of the consumer in the whole of Europe and the whole world does not look the best, along with its prospects. The real costs of life are rising, and soon we will have another arms race, and all this in the midst of an economic war between former allies. This does not allow us to count on an increase passengers in air transport. I think that we will have even greater competition in the aviation market, where potential drops in oil prices will cause even greater drops in ticket prices. In the longer term, even an improvement in consumer sentiment will not allow for an increase in the number of transports, because in reality the fleet of new planes will not saturate the market until around 2030. What kind of world will it be then, none of us is sure. So will companies with a lot of debt survive, and in addition will they record increases in share prices? If we are talking about Wizzair, then for me a success would be survival on the market, without the need to reduce the fleet and the number of connections. All the more so since after the end of the war in Ukraine, the capital and any investments made by Hungarian carrier will probably not be welcomed there and it must be assumed that most of the connections on this market will be taken over by competitors, with Ryanair or EasyJet at the forefront. When investing long-term, you have to be realistic. When speculating on Wizzair shares, you have to be very quick.