Wizz Air chief Jozsef Varadi declared the Covid crisis “our time” as he outlined plans for expansion this week despite reporting a loss of €108 million for the three months to June.
Varadi, Wizz Air chief executive, issued a bullish quarterly results statement, saying: “We are operating more than 70% of pre-Covid capacity when the whole industry has recovered to 40%.
“We believe we’ll be a structural winner of the situation. We are able to cope with the situation better than our competitors. We could take a bit more risk given the liquidity and low-cost advantage we have.”
Varadi told analysts: “Our fleet continues to grow. By the end of fiscal year 2022 we will add 39 aircraft. We are looking at market and airport opportunities. We are going to be deploying quite a bit of new capacity. Almost every airport in Europe is in discussions with us.
“Last time there was an economic crisis in 2008-09 we did not have the capacity to benefit. Now we have a significant pile of cash. This is our time.”
Varadi argued: “We are a point-to-point short-haul carrier and that traffic will come back much earlier than intercontinental and connecting travel.
“We fly the youngest passengers in the industry and younger travellers will come back earlier than the elderly and take advantage of a situation where they can fly much cheaper.
“We also rely on migration traffic. Our business is hardly exposed to business travel. So it is not surprising we have recovered to 70% of capacity.
“We are going to be seeing fewer players in the market, and we will be growing business by 40%-50% over the next three years. We are going to be much more formidable. We will have a free run to gain a bigger scale. We will take advantage of the slowdown.”
Varadi conceded the current market “is a roller coaster”, saying: “There are significant uncertainties. The situation may get better or worse country by country.”
But he suggested: “Europe is now a better place for airlines. There are still restrictions in place, [but] now we see more coordination coming into play.”
He insisted: “We’re managing the business for cash, not flying for the sake of flying.
“The fare environment is volatile. It’s not driven by underlying demand, it’s driven by Covid restrictions. But people are prepared to pay for more flexibility.
“There is some improvement in the booking curve. For the last two months, we got 90% of revenue in the last seven days. Now it is over two to three weeks.”
Varadi acknowledged the carrier had cut its network, saying: “We moved 22 aircraft. We are trimming about 20%-25% of our existing network.”
But he insisted: “We have not closed a base. We’ve been trimming frequencies.”
However, Ryanair chief executive Michael O’Leary said this week: “Wizz talks a lot about expansion, but does not talk about where it has reduced [capacity].
“We are looking at opportunities where Wizz is reducing capacity, because beneath the noise they are just moving deckchairs around in a lot of cases to get away from competing with us.”
Wizz reported a cash balance of €1.6 billion at the end of the quarter.