The grounding of the entire Wizz Air fleet due to the coronavirus epidemic is a distinct possibility, the budget airline warned.
Around 85% of the Hungarian low cost carrier’s 121 aircraft have been taken out of service due to unprecedented travel restrictions and slump in demand.
Chief executive Jozsef Varadi admitted that the situation is posing a “significant threat” on the aviation industry and called on governments to take “non-discriminatory steps” to benefit all airlines.
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“This will enable an industry and environment that is healthy, efficient and more environmentally sustainable and will serve passengers through enhancing the mobility of people,” he added.
In an operational update, Wizz Air said: “The company continues to operate 15% of its capacity and remains operational in Romania, Hungary and Bulgaria, but the grounding of the entire fleet remains a distinct possibility over the next period, as potential additional travel restrictions and social distancing policies issued by authorities may make international flying for commercial purposes either untenable or impossible.
“The health and safety of crew and passengers remains Wizz Air’s top priority. We continue to partner with the relevant authorities and follow their guidelines.”
Additional cuts to third-party spending, overheads, discretionary spending and non-essential capital expenditure have been introduced.
“In addition, we have implemented measures to secure our strong cash position working with vendors, suppliers and authorities,” the airline added.
“We have rolled out a series of voluntary working hour reduction options and leave options with our employees.”
Board members and the executive leadership team will be foregoing salaries for five weeks, including the month of April.
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“Through all of these extraordinary and unparalleled events, we have had tremendous support of our people across all countries we operate in to put these interventions in place and to be ready to restart full operations as soon as travel restrictions allow for this,” Wizz Air added.
The carrier is expected to provide a trading statement ahead of its full year results, due to be released on May 21.
Varadi said: “Our ever-disciplined attitude to cost and cash enables Wizz Air to take decisions that are right for crew, passengers and communities even in the context of demand and travel restrictions due to the Covid-19 pandemic in Europe.
“Wizz Air’s ultra-low cost business model and our strong balance sheet provide a solid foundation and a significant competitive advantage in the current challenging environment for airlines, while also making us a long-term structural winner in the aviation sector.”
The carrier remains confident it can resume flights “as soon as reduced travel restrictions and governmental policies allow commercial operations”.
The airline added: “Whilst difficult to predict the duration of the pandemic, given the significant balance sheet strength and liquidity, as well as the company’s ultra-low cost business model, Wizz Air is confident in its ability to survive even a potential prolonged grounding substantially beyond the current estimates for the impact of Covid-19 in Europe.”