Short sellers target Wizz Air amid budget airline price wars

With the outlook for travel weakening as consumers pull back on spending, short sellers are betting that one budget airline will fare worse than its European peers. Shares out on loan, an indication of short interest, represent 13% of Wizz Air Holdings Plc’s stock available for trading, according to the latest data from S&P Global Market Intelligence. That compares to less than 1% for rivals EasyJet Plc and Ryanair Holdings Plc. Skeptics point to plenty of reasons for the bearish bets: Wizz Air is loaded up with a lot more debt than its competitors, it’s been hit by an engine issue in Airbus SE planes it operates and the Budapest-based carrier flies mainly in and from eastern Europe, putting it close to war-torn Ukraine. The stock, which trades in London, has already fallen 41% this year to 1,311 pence, weighed down by a profit warning in August, and some analysts say it very well could stumble again, given the fare competition among carriers. “There’s a lot of uncertainty about Wizz’s ability to meet full-year guidance,” said Sathish Sivakumar, an analyst at Citigroup Inc. He’s one of five analysts tracked by Bloomberg who has a sell rating on the stock, a stance he has held since October of last year. A Wizz Air spokesperson declined to comment on the bearish bets on the stock. The carrier is among those that have been the hardest hit by engine problems that required its Airbus A321 aircraft to be pulled in early for maintenance. With aircraft availability uncertain, Wizz Air has leased flight-ready planes to preserve its schedule, cutting into profit. It’s also been suffering from price wars, with Ryanair predicting ticket prices could fall even further, while indebtedness is also an issue, said Gerald Khoo of Panmure Liberum, who also has a sell on the stock.<br/>