The situation in the Middle East is a serious loss for Wizz Air
Among European airlines, Wizz Air may be one of the biggest losers from the escalating conflict in the Middle East: the company has suspended flights to several regional destinations – Israel, Dubai, Abu Dhabi, Amman (and according to press reports, Saudi Arabia) – until March 7.
According to Concorde Securities’ expert assessment, the suspensions have reduced Wizz Air’s capacity by about 10% on a weekly basis. 8-10% of the company’s revenue could be affected, which is particularly unpleasant because normally the next period would be about aggressive growth. If the situation drags on, more aircraft may need to be parked, which would significantly worsen the results.
The risk is further increased by rising fuel prices: according to estimates, the surge in oil prices could mean additional costs of 130-150 million euros in the next financial year. Based on analyst expectations, Wizz Air shares may come under sustained pressure, and a price drop of even 15–20% is not ruled out.
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