Wizz Air (LON: WIZZ) has released its annual results and the shares are up 2%. That is, the results are well in line with expectations, there have been no surprises here. In more detail those results are: “Total revenue increased by 134 per cent to €3,895.7 million, compared to €1,663.4 million in F22. EBITDA was positive at €134.3 million, registering an increase by €157.6 million over a loss in F22. Operating loss was broadly flat at €466.8 million in F23 compared to €465.3 million in F22. Net loss for F23 was €535.1 million, an improvement of €107.4 million compared to the F22 net loss.”
We might expect that Wizz could return to profit with such a rise in revenuers but that's not quite how management are running the company. They are still trying to expand as fast and as far as they can financially afford to. So, increased revenues leads to more expansion, not profit. They are though suggesting that they'd like to get to an actual profit next year.
The issue here that's most interesting - given that these results are largely in line with expectations - is what this means for the other airlines we might be invested in, Easyjet and IAG.
Wizz Air share price from London Stock Exchange
The larger issue is in considering what this tells us about the aviation market more generally. After lockdown there were two possible responses. One would be that we'd simply got out of the habit of taking trips and therefore air travel simply did not recover. That seems, from these figures, not to be what did happen. Instead we're all clambering aboard as we used to. Therefore Easyjet should also show a significant increase in passenger volumes and revenues.
That's not enough though. For both Wizz and Easyjet the purpose is to get the person there so that the person can have the fun - they're about leisure travel more than anything else. And for leisure travel it pretty much has to be the person having the leisure doing the travelling.
IAG's situation is a little different. For the profit driver there is business travel. And here lockdown does seem to have changed behaviour. We're seeing it in work from home, the drop in commuting and the prices of office buildings. IAG's finances aren't going to recover in the same way unless business travel fully comes back. On that the jury is still out.
This is obviously not a complete analysis of the Wizz Air results but it's the bit that we find most interesting. They tell us that Easyjet should also be doing well, that the leisure parts of IAG should too. But whether IAG is going to fully recover is something as yet still unknown.