Wizz Air open to M&A approaches, CEO says

Wizz Air Holdings Plc Chief Executive Officer Jozsef Varadi said he’s prepared to embrace acquisitions should a compelling deal emerge as travel rebounds from coronavirus lockdowns.

Varadi declined to comment on the fast-growing discount carrier’s reported approach for EasyJet Plc last month. While any takeover would need to maintain Wizz’s cost discipline, the Budapest-based company is “not resistant” to M&A, the CEO said in an interview.

“Given our low-cost business model we are not a natural consolidator and it doesn’t come to us intuitively, but that’s not to say that we won’t be looking at opportunities as they arise,” the CEO said Tuesday.

EasyJet said last month that it rejected a buyout approach from an unnamed suitor—Wizz, according to people familiar with the matter—as too low. Analysts said a deal would make sense, with the U.K. carrier’s strength in Western Europe complementing Wizz to the east. 

While Wizz isn’t set up for consolidation like diversified network carriers such as British Airways owner IAG SA, it’s considered around 20 potential deals over a decade or more, Varadi said. “We are not blind when it comes to how the market is going,” he said.

EasyJet at the time described the offer as conditional, all-stock and low-premium. The airline had revenue almost three times that of Wizz before the pandemic but has been slower to bring back flights, held back by travel curbs in its home market. 

CEO Johan Lundgren said Tuesday that EasyJet too is looking for growth opportunities, and wouldn’t rule out M&A.

Other topics from Varadi interview:

• Wizz has a mandate for growth based on a recent incentive plan, which sets a target for it to become 2 1/2 times bigger, Varadi said. That’s likely to translate into further large aircraft orders, he said, while declining to comment on any ongoing talks with Airbus SE.
• Bloomberg reported last month on the potential purchase of at least 100 more Airbus narrow-bodies. Any Wizz buy is likely to be part off a joint acquisition with other carriers in the portfolio of Bill Franke’s Indigo Partners, Varadi said.
• Wizz plans to offer between 90% and 100% of 2019 capacity during the current quarter, slightly down on the three months through September, when it operated 103% of pre-pandemic seating, Varadi said. EasyJet said in a trading update Tuesday that its figure will be about 70%.