Up to 1,000 job cuts are being made as Wizz Air faces a profits crunch of up to €80 million due to the impact of the coronavirus crisis over the past three months.
The Hungarian budget carrier warned that its net profit for the year to March 31 would be down to between €270 million-€280 million from previous guidance of up to €355 million.
Traffic in March fell by 34% year-on-year while the airline is operating just 3% of its pre-Covid-19 capacity.
Wizz Air is making 1,000 redundancies – representing 19% of its workforce – while salaries of pilots, cabin crew and office staff will be reduced by an average of 14%.
Senior executives are taking a pay cut of 22%.
“Additional employee furlough measures have also been and will be taken in the short term as necessitated by the travel restrictions due the Covid-19 pandemic,” the carrier warned in a pre-close trading statement.
The airline plans to return 32 older leased aircraft by the end of the 2023 financial year as existing lease contracts expire.
Wizz Air said it was not able to give guidance for its financial performance for the current financial year ending March 31, 2021.
The airline said: ”In the short term, the company continues to actively adjust capacity to market conditions and is reviewing aircraft allocation on a market-by-market basis as opportunities arise.
“As markets normalise, Wizz Air fully expects to maintain its plans to grow capacity by an average of 15% annually.
“Furthermore, the company confirms that the launch of operations of Wizz Air Abu Dhabi is progressing in line with the initial timeline.
“A number of further cost and liquidity measures have been put in place to mitigate the financial impact of Covid-19.
“Wizz Air has been working with suppliers to reduce contracted rates and improve payment terms.”
Chief executive Jozsef Varadi said: “First and foremost, I would like to thank our people for their tremendous support to passengers and communities across all countries during these unprecedented times.
“They have risen to the challenges facing Wizz Air and the industry with grace and determination, especially when it comes to performing repatriation flights for citizens stranded by Covid-19 across the world and delivering key medical supplies to help our countries, communities of caregivers and their patients.
“We have taken various initiatives to protect the position of the company in a controlled manner during the Covid-19 pandemic and are reviewing the competitiveness and allocation of the assets of the company.
“We are also working to further improve our strategic, cost and cash position in the aftermath of this crisis to ensure we can deliver our long-term growth target.
“Wizz Air undoubtedly remains best placed for long-term value creation in the European aviation industry due to its low fare – low cost business model and unique positioning as the market leader in the growing CEE [central and eastern European] market.
“The company is expecting to deliver significant shareholder value, environmental benefits and employment opportunities in the years to come.”