Cyprus Mail 7 January 2021 - by Reuters News Service
Wizz Air will cut its flying plans for January because of new lockdowns in Britain, its chief executive Jozsef Varadi said, adding there was little visibility for the coming months but travel demand should return by summer.
Earlier on Thursday, larger competitor Ryanair cut its annual traffic forecast by around 5 million passengers, also blaming lockdowns.
During December, Varadi said Wizz flew 35% of 2019’s capacity. He forecast that the new lockdowns in the United Kingdom, one of Wizz’s three biggest markets alongside Romania and Poland, would mean capacity would fall to 25% in January.
Varadi, who co-founded Wizz in Hungary in 2003, said Wizz’s longer term growth story remained intact, and the airline should bounce back.
“I think if restrictions get removed by summer, I would say that summer 2021 would not be far away from summer 2019 from our perspective,” he said. “But you would not see that happening at many of the other airlines.”
Since the pandemic struck, some larger airlines have scrambled to raise the funds to survive a period of almost no flying. EasyJet, British Airways and Lufthansa all plan to shrink.
But Wizz entered the crisis well-funded, like Ryanair, with which it vies for the title of Europe’s lowest-cost airline.
Wizz says its 1.6 billion euros ($1.96 billion) in cash means it can survive for two years even if all planes are grounded.
The pandemic is still a challenge. Wizz axed 1,000 staff and for the six months ended September, sank to a loss of 145 million euros. The stock is down 13% over the last year.
Wizz spent the last five years expanding beyond its eastern European base across the United Kingdom and western Europe and has continued to grow its fleet despite the pandemic.
Since last March, it has opened 260 new routes and 13 bases, including one at Gatwick, London’s second biggest airport, where it is keen to expand.
Next week, it will head further east with the launch of Wizz Air Abu Dhabi, an airline connecting the Gulf region and Europe.
Wizz has also beefed up its board and management team. The former chief financial officer of British Airways-owner IAG joined the board in November and easyJet’s former chief commercial officer is expected to join later this year.
While there was limited visibility on bookings for the next three to five months, summer bookings were “very encouraging” said Varadi.
“Clearly, people’s expectations are that by summer, this is all going to be behind us,” he said, citing vaccination programmes.
The arrival of the vaccine prompted Ryanair to forecast in November that the summer would be “very impressive”, while easyJet has been more cautious.
Meanwhile Ryanair slashed its annual traffic forecast by around 5 million passengers on Thursday, saying fresh lockdowns in Britain and Ireland targeting a highly contagious new variant of COVID-19 would leave the countries with “few, if any” flights.
The Irish low-cost carrier, Europe’s largest, also harshly criticised public health measures, saying Irish travel curbs were “inexplicable and ineffective” and called on Ireland and Britain to accelerate the pace of vaccine rollouts.
Both governments have said the rapid spread of a new, more transmissible coronavirus variant forced strict curbs on travel and say they are distributing vaccines as fast as they receive them.
The British and Irish measures “will result in few, if any, flights being operated to/from Ireland or the UK from the end of Jan until such time as these draconian travel restrictions are removed,” Ryanair said in a statement.
The airline will significantly reduce its flight schedules from Jan. 21 until the end of the current lockdown, it said.
As a result, Ryanair said it had cut its traffic forecast for its financial year, which ends on March 31, from its current forecast of “below 35 million” to between 26 and 30 million passengers.
“Ryanair does not expect these flight cuts and further traffic reductions will materially affect its net loss for the year to 31 March 2021 since many of these flights would have been loss making,” the statement said.
It added that air traffic in January would fall to under 1.25 million passengers, and that the new COVID-19 restrictions could cut February and March traffic to as little as 500,000 passengers each month.
Ryanair shares opened down 1.3%.
The British government on Wednesday introduced legislation that would enable its current lockdown to remain in place until the end of March although Prime Minister Boris Johnson said he did not expect the full national lockdown to continue until then.
The Irish government on Wednesday said people should remain home except for essential journeys until at least the end of January, but deputy prime minister Leo Varadkar said hospitality businesses needed to face the likelihood they would be closed until the end of March.
Ryanair criticised Ireland’s travel curbs, which include the requirement of a COVID-19 test for people arriving from Britain but not from the neighbouring British region of Northern Ireland.
