• Wizz Air downgraded to a Sell
• Citi analyst anticipates another year of losses
• Expects short-haul carriers to see softening pricing power

After a positive December update, Wizz Air was hit with a downgrade from Citi Group on Tuesday, with Citi Group expecting another year of losses at Wizz.

Citi analyst Satish Sivakuma downgraded Wizz Air to Sell from Neutral and kept an unchanged price target of 1,700p. Sivakuma anticipates another year of losses as the company continues to ramp up capacity.

In addition, with inflationary pressures growing in Europe, the analyst told investors in a research note that short-haul carriers are likely to see softening pricing power.

December 2022 saw the airline carry 4.2 million passengers, up 58.4% from December 2021. The majority of Europe has removed any travel restrictions from the pandemic and airlines have seen a major boost in its passenger numbers. However, with inflationary pressures, costs have been rising across the industry.

As a result, the airline is still trading down 55% from one year ago despite a recent recovery over the last three months.

Wizz Air shares are up 1.72% on Wednesday.