Southwest grounds 128 aircraft; Wizz Air launches IPO

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By TESTCustomwebLP TESTCustomwebLP February 25, 2015 21:14

Southwest grounds 128 aircraft; Wizz Air launches IPO

Southwest Airlines was forced to take 128 aircraft out of service yesterday evening after it confirmed to the FAA that it had missed its mandatory maintenance checks on backup hydraulic systems for one fifth of its fleet.  Many flights were immediately cancelled last night as a result, while officials from Southwest and the FAA discussed plans to complete the maintenance checks and return the aircraft to service. No MRO in the world can cope with 128 aircraft of the cuff and thus this is going to be a drawn-out affair before all aircraft are back in service. This news might hit shares and it is does then there is a good buy-in opportunity but one thing is for sure, Southwest needs to inform the markets and the public about how it is going to ensure such an event does not happen again. This is a good advert for full integrated MRO management if ever there was one.

Wizz Air has priced its £257 million initial public offering (IPO) of 23,360,008 Ordinary Shares at 1150p per ordinary share. Wizz Air will receive approximately £103 million (€140 million) net proceeds from the Global Offer.

József Váradi, Chief Executive Officer of Wizz Air, said: “We are delighted to announce the successful completion of our initial public offering on the London Stock Exchange, one that is a natural home for innovative, growing airlines. The response to the offering and our investment case has been extremely positive. We believe that Wizz Air represents an attractive opportunity reflecting the compelling growth dynamics in the Central and Eastern European air travel markets where a combination of deregulation, above average GDP growth, a growing middle class in an area with a large population is expected to drive higher propensity to air travel and higher low-cost carrier penetration.

“We have always believed that good customer service and low ticket prices are entirely compatible – in fact it has been a key success factor. This reflects the hard work, professionalism and enthusiasm of our staff and I thank them for valuable contribution they have made and will continue to make to the business. Wizz Air looks forward to life as a listed company and continuing its track record of long term value creation for its shareholders,” he added.

Based on the Offer Price, the listed market capitalisation Wizz Air at Admission will be £601 million (€818 million), based on Ordinary Shares only.

Based on the Offer Price, the fully diluted equity value of the Company at Admission will be £1,456 million (€1,983 million) (based on the fully diluted share capital).
The size of the offering was £257 million net of expenses (€350 million).

Admission to the premium listing segment of the Official List and to trading on the main market for listed securities of the London Stock Exchange, and the commencement of unconditional dealings are expected to take place at 8am on 2 March 2015.

As the largest low-cost carrier in Central and Eastern Europe, Wizz Air reported a market share of 37.7% for the six months to 30 September 2014. Wizz Air carried in excess of 8.8 million passengers in H1 2015 and 13.9 million passengers in the twelve months to 31 March 2014. In H1 2015, Wizz Air achieved a 23.5% increase in revenue to €727.3 million, a 37.2% increase in EBITDAR to €254.8 million and a 44.5% increase in net profit to €158.1 million. Wizz Air reported an EBITDAR margin of 35.0% in H1 2015.

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By TESTCustomwebLP TESTCustomwebLP February 25, 2015 21:14