Shares in budget airline Wizz Air (WIZZ) briefly rose this morning before falling back as it firmed up plans to expand into the Middle East.
The FTSE 250 firm finalised an agreement with the Abu Dhabi Developmental Holding Company to form a joint venture called Wizz Air Abu Dhabi, which will begin operating from Abu Dhabi International Airport in the autumn.
AIR TRAVEL BOOM
The aviation market in the United Arab Emirates (UAE) and across the Middle East is expanding rapidly. When the joint venture is up and running Wizz Air Abu Dhabi will be one of only two low cost carriers operating from the airport, which handled more than 22.4m passengers in 2018.
‘Wizz Air's mission feeds into Abu Dhabi's diversified economic strategy as we aim to stimulate traffic by creating demand to the benefit of growing Abu Dhabi's touristic and economic diversity’, said Wizz Air chief executive Jozsef Varadi.
The new airline will focus on establishing routes to markets in which Wizz Air has existing, high growth operations, mainly in Central and Eastern Europe.
AIRLINES SELL-OFF
Wizz Air’s share price opened 0.5% higher on the news this morning before dropping back 2.9% to £33.18, as it continues to be caught up in the airline sell-off.
Like all airlines at the moment, the coronavirus is likely to make a big impact on Wizz Air’s booking demand and passenger numbers ahead of the key summer trading period.
The firm was one of the biggest losers in the FTSE 350 last week, with its shares plunging 23%.
It did however fall less than the likes of tour operator and airline TUI (TUI), which fell 30%, as well as rival EasyJet (EZJ) which tumbled 27% and British Airways owner International Consolidated Airlines (IAG), which dropped 24%.
