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Wizz Air posts first-half loss as 'challenging' winter beckons
Wizz Air claims to have laid foundations for a "swift recovery" from the Covid crisis, despite sinking to a substantial first-half (H1) loss ahead of what it predicts will be a "particularly challenging" winter.
The budget carrier on Thursday (5 November) posted a €145 million (£130 million) statutory loss for the six months to 30 September after passenger numbers plummeted more than 70% to just 6.5 million during H1.
Elsewhere, Wizz’s H1 earnings fell 97% from €607 million (£550 million) to €17.3 million (£15.5 million) and its revenue 72% from €1.67 billion (£1.5 billion) to €471 million (£425 million).
Total cash, meanwhile, amounted to €1.56 billion (£1.4 billion) at the end of H1, down from €1.82 billion (£1.65 billion) a year ago, which chief executive Jozsef Varadi attributed to "disciplined cost management" during the coronavirus crisis.
"Protection of the company’s liquidity position is our top priority and we expect, despite the projection of a difficult winter for the industry, to end the full-year at a solid liquidity position with an ability to respond to surging demand within weeks as a result of a strongly diversified network and a full integrity of its supply chain," said Wizz.
Varadi also stressed that while he acknowledged the challenges that lie ahead, Wizz would "generate a head start" by expanding into new markets and retaining its staff base, ready for the post-Covid recovery.
In an H1 trading update, Wizz said that while it would aim to prioritise cash-positive flying, this would likely be "minimal" if current Covid travel restrictions and lockdowns persist into winter. It also said it had the flexibility to "swiftly" adjust capacity according to market conditions.
Wizz expects cash burn of around €70 million (£63 million) a month if it had to ground its entire fleet through to the end of its 2020/21 full-year.
The carrier has, however, pledged to continue investing in fleet renewal during the second-half of the year to boost its competitiveness and commitments to sustainability.
Varadi added: "During the winter period, we expect conditions to be particularly challenging with ongoing travel restrictions due to Covid-19 as well as the seasonal drop in demand for travel. We will continue to focus on cost management and strive to maintain cash-positive flying with a disciplined approach towards capacity.
"Notwithstanding the challenges that lie ahead of us during the remainder of this fiscal year, we have laid the foundation for a swift recovery – in addition to expanding into new markets, we intend to retain all our current staff base and thereby generate a head start for when demand returns.
"We are confident we will emerge as a structural winner, enabling Wizz Air to grow profitably in the years to come."
James Chapple
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