Proactive Investors - The Israel-Palestine conflict adds a new challenge for Wizz Air Holdings PLC (LON:WIZZ), on top of its uncertainties from the GTF engine problems.
Barclays (LON:BARC) highlighted data which showed 11.3% of Wizz Air’s available seat kilometres were deployed on routes to and from Israel, Egypt and Jordan, ahead of easyJet (LON:EZJ)'s 10.1% and Ryanair (LON:0RYA)'s 3.0%.
The bank expects trading in Wizz's other Middle East markets to face some incremental weakness as a result of the geopolitical instability.
However, recalling how relatively sanguine Western European travellers were in the face of the outbreak of the Ukraine conflict, it thinks it is likely any softening of demand elsewhere in the Middle East would be transitory, provided the conflict does not spread.
Nonetheless, the broker has lowered financial 2024 net profit estimates by 7% anticipating weakness on mid-east flying.
Also weighing on the budget airline operator is the very great uncertainty about how the required checks on the GTF engines from Wizz's A320NEO family aircraft will get done.
Pratt and Whitney's parent company RTX indicated aircraft would require between 250 and 300 days to be checked while Wizz has 104 Pratt and Whitney powered aircraft and outsources all its engine maintenance.
It stays ‘underweight,” with a reduced price target of 1,500p, down from 1,800p.