The boss of Wizz Air today voiced “cautious optimism” over the near recovery of full operations by the summer despite winter Omicron headwinds.
Chief executive Jozsef Váradi issued the projection as the central and eastern European budget carrier reported a deeper operating loss for the three months to December 31 of €213.6 million against €141.9 million in the same period in 2020.
He warned of “slightly higher” losses in the current quarter amid ongoing travel uncertainty.
While the carrier blamed travel restrictions for affecting demand, Wizz Air’s third quarter passenger carryings of 7.8 million rose by more than 200% year-on-year.
Varadi said: “Wizz Air continued its recovery during the third quarter and well exceeded 2019 passenger and capacity levels in the peak holiday traveling period, despite the emergence of the Omicron variant.
“Our operating loss was €213.6 million as travel restrictions continued to affect demand as we continued to ramp up our workforce, fleet, bases and routes to support our path to full utilisation and pre-Covid 19 cost structure by late spring 2022.
“Our liquidity remained strong and closed at €1.4 billion at the end of December 2021.”
The airline acquired an “important portfolio” of slots at Gatwick in December “that will enable us to grow to a base of five aircraft and will increase access to customers in the crucial London and south of England market.” Varadi added.
“As of spring, this will enable us to offer customers competitive ticket prices to a host of well-known and emerging destinations on our new A321neo fleet.”
Reviewing current trading, he said: “We continued our investment in recruitment and training, bringing in more than 1,500 talented people since the start of last summer.
“In January 2022 we counted already 5,550 employees, surpassing our pre-pandemic number of colleagues, in support of our growth ambitions.
“Our fleet also continued to grow and we ended the quarter with 150 aircraft, having taken delivery of eight new A321neo and returning two A320ceo aircraft.”
He added: “Throughout the third quarter we continued to stimulate demand with pricing, whilst staying agile in adjusting capacity that is not cash-contribution positive.
“The emergence of the Omicron variant and renewed travel restrictions impacted our trading performance late in the quarter and we expect demand in January, February and part of March to be impacted by ongoing travel uncertainty.
“As such, Wizz Air anticipates the operating loss for Q4 F22 to be slightly higher than the operating loss of €213.6 million for Q3 F22.
“Despite the short-term headwinds, we are cautiously optimistic for a continued recovery into spring and near-full utilisation from summer onwards.
“We continue to back our strategic choices to invest in our fleet, grow our bases and routes, and lower our unit cost in order to take advantage of the market created in the wake of Covid-19.
“We are on track to have 170 aircraft fully utilised this summer, in a more connected and diversified network and with 6,700 people engaged in what they do best, which is to provide superb service at unbeatable prices aboard the youngest and most sustainable and efficient fleet of narrow-body aircraft operated in Europe today.”
- Wizz Air’s results were described as a “beacon of hope” as the airline industry has high aspirations for a brighter 2022.
The reaction came from Jonathan Sullivan, travel industry managing director for strategy and consulting firm Accenture.
He said: “Because leisure travel is notoriously seasonal, the key differentiator in airlines’ long-term survival will be the ability to offer and deliver more services and products that tempt and delight customers.
“While that sounds simple, the industry must overcome the obstacle of its dated underlying systems. Modern digital systems are essential to digitally sell and manage a broader variety of add-on services, including from third parties. These systems also need to gracefully cope with the reality that travel plans may be changed or rescheduled at short notice.
“Also, workforce planning and management systems need to weather seasonal ups and downs by balancing recruitment, training, rosters, sickness and retention.
“Travel brands now matter more than ever. At this key moment in travel’s bounce-back, the industry must avoid the temptation to over-optimise, squeezing supply chains or lowering service quality.
“To thrive, airlines must lean into their brand identities; to inspire and excite people about the opportunities of travel and create an experience worth repeating.”