Wizz boss offloads shares as reported loss doubles

Wizz Air’s shares have fallen by 15% over the past year, as the budget airline has struggled with low vaccination rates in its eastern European markets and the continuing impact of Covid-19 on the demand for travel. Despite a sense of cautious optimism emerging as the pandemic picture improves, the airline sector remains riddled with uncertainty — recent results from operators demonstrate this well. Wizz’s latest trading update, covering the three months to December 31, is a case in point. While passenger numbers spiked by 243% to almost 8mn flyers and revenue soared by 173% to E408m against the comparatives, Wizz’s reported loss more than doubled to E268mn due to steep increases in fuel costs and other operating expenses. This included E31m of foreign exchange losses, as the euro weakened against the dollar. Despite the headline loss, Wizz is making concrete progress with expansion plans. The company secured additional slots at London Gatwick airport in December which will enable it to increase passenger numbers in a key UK market. Over 100 new routes have been announced this financial year, and by summer 2022 Wizz hopes to have 170 aircraft in action across its network — 20 more than at December 31. Shortly after the trading update was released, chief executive József Váradi offloaded GBP4m worth of Wizz shares. Vaxco Holdings Limited, an entity closely associated with Váradi, sold the shares on January 31. Wizz’ management expects the results for Q4, the first three months of 2022, to be hit by the “ongoing travel uncertainty” caused by the Omicron variant and a higher operating loss is forecast. The company’s relatively low-cost base, however, puts it in a strong position for the sector’s rebound. The last two years have been a bumpy ride for ecommerce retailer Asos. Its share price shot up 70% from its pre-pandemic level when people were in lockdown at home. However, when rising shipping costs started to kick in during the middle of 2021 profit margins started to shrink. Revenue growth has now also slowed against tough comparators and the share price has dropped below where it started before Covid-19 arrived in the UK. In the four months to the end of 2021, the gross margin fell 400 basis points to 43% because Asos needed to sell slow-moving summer clothes. Discounts are needed to shift shorts and skirts during the dark, cold winter. On top of this, air freight has been needed which is even more expensive than regular shipping costs, which are still around five times higher than pre-pandemic levels.<br/>