Wizz Air has become the most shorted stock on the London market after warning that the Iran war would wipe out its profits this year. Short interest in the Hungarian budget airline has surged from 8.5% to 13.5% of issued shares since early March, according to data provider Breakout Point.

The low-cost carrier estimates the conflict will reduce its full-year profit by €50 million through grounded planes and higher fuel prices. Major hedge funds including Citadel Advisors, DE Shaw, and WorldQuant have built new short positions in Wizz over the past week. The airline's shares have fallen more than 20% since US and Israel began bombing Iran on February 28.

Wizz has long been a target for short sellers due to its struggles against larger rival Ryanair and industry-wide cost pressures. Before the crisis, the airline had forecast results ranging from a €25 million profit to a €25 million loss for the year ending March 31. CEO József Váradi told the Financial Times the Gulf situation is "more manageable than previous crises," noting only 5% of capacity is affected and most disruptions will be mitigated by summer.