UK Shares Rise on Travel, Banking Boost; Retail Sales Data Ease Taper Fears

The blue-chip FTSE 100 index rose 0.3%, with banking shares gaining after a series of brokerage upgrades and price target hikes.

Asia-focused banks HSBC Holdings and Standard Chartered jumped 1.8% and 0.5%, respectively, after Barclays raised price targets on the stocks. RBC also upgraded HSBC to “outperform” from “sector perform”.

However, gains on the FTSE 100 were capped by miners Rio Tinto and Anglo American, which slipped 2.7% and 3.6% after Morgan Stanley cut its price targets on the stocks.

The domestically focused mid-cap FTSE 250 index advanced 0.5%.

British retail sales dropped 0.9% on the month in August versus a Reuters poll for a rise of 0.5%, after data earlier this week pointed towards a sharp recovery in the jobs market and a spike in inflation.

Investor focus will now be on the outcome of Bank of England’s (BoE) policy meeting next week.

“Next week’s policy decision should reaffirm that some tightening will be needed over the next few years to keep inflation (and the economy) in check. But we don’t expect the BoE to conclude that there is a sufficient case yet for near-term rate hikes,” Deutsche Bank economist Sanjay Raja said.

Airlines Wizz Air, Ryanair Holdings and British Airways owner IAG, and holiday company TUI AG rose between 1.2% and 4.7%, as Britain was set to consider easing its COVID-19 rules for international travel.

“The hope will be that a shift in the rules is the precursor to people jetting off for autumn and winter getaways,” said Russ Mould, investment director at AJ Bell.

Wickes Group jumped 5.6% to the top of FTSE 250 index after Deutsche upgraded the DIY retailer to “buy” from “hold”.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Devik Jain in Bengaluru; Editing by Uttaresh.V and Shounak Dasgupta)

Wizz Air Sees Summer Capacity Close to Pre-Pandemic Levels

By Sarah Young

Britain is set to exempt fully vaccinated travellers from the European Union from quarantine in the coming days, which Wizz Air Chief Executive Jozsef Varadi said would help Britain to catch up with the bloc.

“Continental Europe has been more open for travel and as a result, demand has reacted much quicker and much more robustly for summer,” Varadi told Reuters.

Wizz Air shares jumped 6% to 4,927 pence in mid-morning trading on Wednesday on the positive summer outlook. They were also boosted by Varadi saying that Wizz could surpass its pre-pandemic size by the end of the year depending on how restrictions pan out.

“We should be getting well above 100%, and personally, I would hope that we will get there before Christmas,” Varadi said.

Wizz did not provide any more detailed guidance, citing the unpredictability of the pandemic. Larger rival Ryanair on Monday had raised its forecast for full-year traffic on strong bookings.

Varadi said staffing levels were ready to respond to the pick-up in flights, dismissing claims made by Ryanair on Monday.

Wizz said that bookings from elsewhere in Europe were outpacing those from the UK, echoing a trend noted by larger rival easyJet last week.

The UK usually accounts for about 15 to 20% of Wizz’s business. The airline has expanded from its eastern European base both west to Britain and Italy, and east into Abu Dhabi, and continued to add new aircraft during the pandemic, when many competitors have cut their fleets.

For the three months to the end of June, Wizz’s first quarter period, it flew 33% of its pre-pandemic capacity, a total of 2.95 million people, and reported an underlying net loss of 118.7 million euros ($140 million).

($1 = 0.8468 euros)

(Reporting by Sarah Young; Editing by Kate Holton, Costas Pitas and Jane Merriman)

Wizz Air Faces Investor Showdown Over Potential 100 Million stg CEO Bonus

The airline’s board says the bonus proposal is needed to help retain Jozsef Varadi, whom it says is “the leading global airline CEO” and wants to sign a new five-year contract.

Several shareholder advisory groups have urged investors to vote against the proposals on future bonuses.

Glass Lewis said the company’s “new value creation plan” (VCP) for the CEO and other senior leaders had the potential for “excessive payouts”.

The maximum payout was considered excessive, said Institutional Shareholder Services, adding that “no compelling explanation has been provided to justify the quantum”.

Under the VCP, Varadi will be set a target to double the company’s share price over the next five year period. There are also environmental, social and governance objectives attached to the payout. Over the last five years, Wizz’s share price has risen by over 200%.

Varadi, 55, co-founded Wizz in 2003. The airline has since grown rapidly, spreading from its core eastern European markets of Poland, Hungary and Romania into Britain, Italy and other parts of western Europe.

Wizz has continued to take delivery of planes during the pandemic and add new routes while some rivals have contracted, but like many airlines COVID-19 has caused it problems.

Michael O’Leary, boss of rival Ryanair, has also faced battles over pay. His five-year bonus plan, worth up to 100 million euros if targets related to share price and profitability are hit, scraped through with 50.5% support in a shareholder vote in 2019.

Wizz’s annual meeting takes place at 1300 GMT on Tuesday in Geneva, Switzerland.

($1 = 0.7253 pounds)

(Reporting by Sarah Young; Editing by Mark Potter)

Europe’s Wizz Air Expects to Fully Recover From Pandemic Next Year

(Fixes typo in headline, no other changes)

Speaking at the virtual Paris Air Forum, Jozsef Varadi repeated recent comments that the Hungary-based airline would fly more seats this summer than it was flying two years ago before the pandemic struck.

“From my perspective, 2022 should be a fairly robust year in terms of delivering not just the volume of traffic but also the financial performance attached to it,” he said.

“I’m looking at 2022 as a year of full recovery for Wizz Air.”

Speaking alongside Varadi, Air France-KLM CEO Ben Smith said he had been pleasantly surprised at the demand among travelers visiting friends and family.

“We are hoping to run about 60-65% of capacity this summer.”

(Reporting by Laurence Frost and Alexander Cornwell, editing by Louise Heavens)

Wizz Air Warns of More Losses in Current ‘Transition Year’

The ultra-low-cost carrier faces another “transition year” as travel curbs linger on, Chief Executive Jozsef Varadi said on Wednesday, as the company posted a 576 million euro ($703 million) net loss for the 12 months ended March 31.

“Unless we see an accelerated and permanent lifting of restrictions we expect a reported net loss in full-year 2022,” Varadi said.

Wizz expects to fly around 30% of its pre-crisis capacity in its current first quarter, the Hungarian airline said, returning to full schedules only in its 2022-23 financial year.

The underlying full-year loss excluding fuel hedging deficits amounted to 482 million euros, Wizz said, on a 73% revenue decline to 739 million euros.

Liquidity stood at 1.617 billion euros as of March 31, with the company burning cash at a rate of 84 million euros for the last quarter. The cash and earnings numbers were in line with unaudited results published in an April 15 trading statement.

($1 = 0.8189 euros)

(Reporting by Laurence Frost in Paris and Yadarisa Shabong in Bengaluru; Editing by Rashmi Aich and Muralikumar Anantharaman)