Wizz Air returns with plan to list as lower oil boosts airlines
By Bloomberg
Wizz Air Ltd., eastern Europe’s biggest budget carrier, said it plans to pursue an initial public offering in London seven months after scrapping plans to list, saying cheap oil and a more upbeat industry have made the move more likely to succeed.
The airline aims to raise about 150 million euros ($172 million), 50 million less than last year’s target, and complete the listing in early March. Proceeds from the share sale on the main market of the London Stock Exchange will be used to further strengthen the balance sheet and offer “strategic flexibility,” Vecses, Hungary-based Wizz said in a statement.
Wizz pulled plans to list in June last year after both Deutsche Lufthansa AG and Aer Lingus Group Plc lowered their earnings guidance and tension in the Middle East pushed up fuel prices. The backdrop is now more “favorable,” Chief Executive Officer Jozsef Varadi said, following a plunge in the cost of kerosene and strong results from discount carriers EasyJet Plc and Ryanair Holdings Plc.
“We feel more confident and have better visibility on input costs, especially on fuel,” Varadi said, adding that the competitive landscape is “fairly benign.”
Wizz has a fleet of 54 Airbus Group NV single-aisle planes and flew 8.8 million people in the six months to Sept. 30. Earnings before interest, tax, depreciation and amortization and restructuring increased 37 percent to 254.8 million euros over the period, the carrier said.
The propensity of central and eastern Europeans to fly grew by more than five times since 2002, according to Wizz, a trend that’s prompted carriers based in the west of the continent, such as Ryanair, to take an interest in the market.