Wizz Air, Easyjet and IAG: Short sellers circle London-listed airlines
Stock pickers are increasingly taking out short positions against London’s listed airlines, as a number of challenges threaten to curtail one of the industry’s most lucrative periods in memory.
Net short positions totalling 4.1, 0.88 and 0.7 have been placed against Wizz Air, Easyjet and British Airways owner the IAG, according to new data published by the Financial Conduct Authority (FCA).
Firms including Marshall Wace, the hedge fund founded by GB News baron Paul Marshall, London-based Qube Research and Technologies and Arrowstreet Capital, are betting that booming travel demand won’t offset a number of other challenges facing the European airline industry.
A total of five short sellers have bet against the three major European airlines that hold listings on London’s FTSE 100 and FTSE 250 indexes.
Wizz in particular has struggled to capitalise on soaring passenger numbers as it grapples with long-running engine problems, route cancellations tied to conflicts in the Middle East and Ukraine, and high aircraft leasing costs.
The wider low-cost market faced turbulence over summer after Ryanair, Europe’s largest airline by passenger numbers, forecast “materially lower fares” over the peak summer period, alongside a sharp dip in profit.
It sparked a sell-off in airline stocks, although the Dublin carrier’s concerns did not end up materialising as seriously as first forecast.
Shares in Wizz Air have fallen over 40 per cent this year to date. Easyjet’s stock has stayed broadly level, down just over 0.2 per cent since January.
On the other hand, shares in the IAG, the airline conglomerate which counts British Airways as a key subsidiary, have risen over 25 per cent.
That’s despite growing criticism over its operational performance since the end of the Covid-19 pandemic. Last week, the airline also announced plans to axe hundreds of long-haul flights from its winter schedule, due to aircraft shortages caused by delays in receiving spare parts.
A Wizz Air spokesperson said: “We do not comment on stock market activity. Our focus is on cost so that we can deliver the lowest fares to our customers while our growing fleet will unlock new destinations, better schedule options and higher operational reliability.
“Our ultra-low cost strategy is underpinned by one of the youngest, most fuel efficient fleets in the industry, expanding margins, enabling sustainable growth and unlocking incredible value for customers and shareholders.”
Easyjet declined to comment. The IAG have been approached for comment.
Marshall Wace declined to comment.