Member Info for Sapi72

According to financial times:

Airline/ Employees per aircraft (approx.)

Ryanair ~40–45

Wizz Air ~38–42

easyJet ~55–60

That is more than encouraging. It seems Yeslam has right and Wizz is the most effective (without grounded planes off course). Fuel and staff is the most effective, operative leasing cost/ financing deteriorate the picture but still some gap should remain in favour of wizz.

Captain has right. If Ryanair can make 12£ profit per passenger, Wizz can do the same or 10£. If it is true, the calculation is rather conservative. Though compared to today's price it is hard to imagine. But for shares - especially when there is temporary difficulties - the pricing can jump very soon, in 1-2 years or so. See European banks, Hochtief or infrastructure builders, or hardware/chip makers. And there will be a story in 2-3 years that only 2-3 carriers can remain in Europe on the market in longer terms besides the big 3 (IAG, Air France-KLM, Lufthansa), but those will continue the HUB service instead of point-to-point service.

For me the question that any takeover attempt would materialize until then while the share is cheap. I.e.: Easyjet now or after partly sold to MSC, with its cash and can have more, using the same planes (Airbus), wants to adjust its business model and swallow Wizz. Obviously on much higher price level, above 20-25. We will see.

Midas, 55% hedge was the case on 31 December, Varadi mentioned 70% in CAPA yesterday.

AI about Boeing Asus Airbus comparison:

The Airbus A321neo (A321N) is generally more fuel-efficient per seat than the Boeing 737 MAX 8 and 10, boasting 31% to 39% better fuel burn per seat compared to older 737-800 models, largely due to its higher capacity and advanced engines.

Without beginning to dispute if you criticize any comment please deepen in into facts.

Guys,

on the top, Druzba oil pipeline is working again. which means Hungary, Slovakia, Croatia, Slovenia, Austria will have enough JET1 fuel (Slovnaft oil refinery is one of the modernest and effective in producing JET1 fuel). I hope Poland will receive enough from PKN/Norway. Romania receives oil to OMV Petrom from pipeline (Azerbaijan, Kazakhstan) so Wizz Air can fly at least... London is in far the worst situation but closer to USA/Norway so I think it will be resolved as well. Italy receives oil from Libya.

I think Ryanair has much bigger problems by the way in providing enough JET 1 fuel to old Boeings which eats 30% more than the modern Wizz Airbuses and in West-European bases.

Too much skeptical noise. As usual if a company has temporary difficulties. We will not meet in this forum with the skeptical ones in 2-3 years time...

I expect either takeover above 40 GBP or organic increase by resolving issues, but then limit is the sky (or 100 GBP).

Do not forget the Ebitda analysis from November: 5000 debt (leasing) + 1300 equity currently. EBITDA should be 1600 (could be easily 1900, see marketscreener)at least in 2 years, *7 =11.200. If debt remains this level, equity will be 6200. Which is SP above 60. If debt increases, something less, but they have huge cash balance.

See you in 2027 when I will first think of selling on that level.

Happy New Year! And see Grenke also!

Https://www.streetinsider.com/Analyst+PT+Change/Wizz+Air+Holdings+%28WIZZ%3ALN%29+%28WZZAF%29+PT+Raised+to+GBP12+at+JPMorgan/25678027.html

Tromso could be affected in winter under this special conditions. Tallin, Vilnius, Oslo have more than -10 usually. No too much fortunately.

Https://www.msn.com/en-in/autos/news/pratt-whitney-in-talks-over-airbus-engine-needs-beyond-2025/ar-AA1QyGi7?apiversion=v2&domshim=1&noservercache=1&noservertelemetry=1&batchservertelemetry=1&renderwebcomponents=1&wcseo=1

It would be interesting modelling wizz financials with less than half depreciation and less interest…assuming total fleet produces sales…I bet it would be more profitable as RYA as I empahsize they have CEE HQ with less staff/office/etc costs and more effective aircrafts. But it is not for now or so.

Wizz H1 depreciation for 243 fleet is 542 mEUR, RYA for 636 fleet is 687 mEUR, from quarterly reports. Please check figures but it means wizz depreciation is 2,23 mEUR per planes vsus 1.08 mEUR fir RYA. Significant…

This is Ryanair accounting policy for plane depreciation. It says all…and on the top after 10 years you can adjust residual value due new plane prices increase, which reduces the annual depreciation cost even more…

Straight-Line Depreciation

• Ryanair depreciates aircraft on a straight-line basis. 

• The depreciation charge is based on “cost less estimated residual value.” 

2. Useful Life

• The useful life for their Boeing aircraft is 23 years from the date of manufacture. 

• This is a significant assumption — Ryanair notes that they base this on its historical experience, manufacturer sources, and third-party valuations. 

3. Residual Value

• The estimated residual value of each aircraft is 15% of the market value at delivery. 

• This 15% figure comes from independent valuations plus Ryanair’s past disposal experience. 

Thanks Yeslam,

Anyway it seems that more financial lease and less SLB would be done if operational profit and free cash flow allow. Under financial lease they are/became the owner at the end and this is the target.

And the question is the self part of financial leases from own funds, I think they increase it to decrease/ not increase net debt level. I do not know whether it was something about in earnings call transcipt.

I do not know whether anyone is aware of Wizz could have had even more operational profit if all planes had been in SLB transaction. But Varadi refrained from reaching even higher operational profit and went to financial lease/JOLCO path, which would produce less depreciation in the future (planes are in the books as well as liabilities, depreciation is shared for useful life instead of leasing period). There is no SLB profit though.

Wizz uses financial lease/JOLCO for half of the new planes now, I am curious what is the proportion of operational leased/financially leased planes in the fleet.

It also shows how confident Varadi is about Wizz profit-producing ability if he does not want to squeeze out SLB option but focus on longer term profitability instead.

If they did not purchase the planes entirely, paid higher portion in financial lease or JOLCO instrument otherwise net debt would have not decreased.

Under financial lease or JOLCO they have to capitalize the plane into fix assets and can decide about useful life of depreciation (20 years or so) instead of depreciating them (rights of use) in accordance with leasing contract (8-12 years and residual value).

So they are the owners in this financial lease instrument. And they can have the gain after selling it at the end I think as well.

RYA owns planes and due to lower depreciation they can produce effective cost level.

And purchasing planes does not increase debt as well…and they are cash-rich, PDP is coming back from Airbus for deferred plane purchases and opCF is good so the direction is good.

Yeslam,

On the top it seems that a part of new planes were bought and not under SLB. So they stayed away from more tempting SLB profit for longer term lower depreciation -driven profit.

Actually net debt /Ebitda will decrese below 4. It will trigger at least outlook change from negativ to stable or positive.

Captain,

These guys in the forum rather think about 10-20% gain. They will sell Wizz if reaching it. Though they have low average price they will never realize as much profit as they could have if keeping it for longer. My price is about 16-17 on average. The share was very cheap at 23 as well under normal circumstances. Just be patient!

Captain,

my average is 16.5 or so, I have been buying from 20 till 11. All the investment fund (except from the new ones) have the average price above 20. Even at Brexit the minimum price was 15-16 p. As I already mentioned analyst see only short term and can not differentiate financial and IFRS 16 debt. I am Hungarian, though I do not know Varadi in person, I think far the most talented CEO in airlines. To manage the situation in the last 2 years was not easy for him, but company remained profitable. Strange that SP plummeted when the picture is clearer.

But having CEE overhead cost and ask competitive European prices is far the most effective business model in Europe. It can not be compered to EZY or particularly US airlines as they have to pay higher wage/slots/overhead, etc so they can not maintain low cost base. Wizz Air can, in 1-2 years it will be apparent.

Regarding debt from January 2026 they will not have financial debt, just IFRS 16-related NPV of future operative lease as debt. Strange that it is interpreted always as debt as though it is based on operative lease contract, they will just pay as lease fee preriodically. Somewhat different from bank loan or bond issued. Until 2019, when operative lease liability had been an off balance sheet item, wizz had been considered a cash-rich company…though currently it is now with2 billion EUR disposable, due to new IFRS 16 standard wizz seems as massively indebted…they can not pay back operative leasing debt in advance. What they can do is to buy planes instead of leasing them, avoiding further leasing-related debt, and which is their intention as far as I know for the future.