The boss of Wizz Air has voiced “cautious optimism” over recovery from Covid-19 as the budget airline reported an annual net loss of €576 million.
The eastern and central European carrier saw passenger numbers slump by 75% to just 10.2 million in the year to March 31.
This compared to 40 million in the previous 12 months when a profit of €281 million was achieved.
Staff numbers were cut by 19% across all departments and salaries trimmed by an average of 14% in April 2020 as part of efforts to reduce costs as the pandemic hit.
The airline bolstered its financial position by raising £300 million under the UK government’s Covid Corporate Financing Facility (CCFF) to be repaid in 2022. The company also raised €500 million from a eurobond maturing in January 2024.
Wizz Air claimed to be among the first airlines in Europe to offer automated refunds for cancelled flights due to the pandemic.
It is now handling 95% of cash conversion refund requests within a week.
The airline finished the year with total cash of €1.6 billion, representing a cash burn of €84 million during the last quarter, according to chief executive Jozsef Varadi.
Wizz Air expects to fly around 30% of capacity in the current quarter and is resuming all “cash contributing” flying subject to government imposed restrictions. Carryings in May totalled 833,000 on capacity of 1.2 million seats.
But a further loss is expected in the 12 months to March 2022 “unless we see an accelerated and permanent lifting of restrictions,” Varadi warned.
He projected a “strong trading environment” the following year when the airline plans to return to full capacity.
Reviewing the past 12 months, Varadi said: “This was probably one of the most challenging years for the aviation industry, heavily impacted by Covid-19 related regulations.
“Passenger and revenue figures reflect the sharp cut back in capacity throughout the year as a result of travel restrictions across Europe.
“Agility has been key in navigating the year. We expanded from 25 to 43 operating or announced bases, which inherently increases flexibility.
“We continuously realigned capacity with ever-changing restrictions, ramping up to 80% capacity in the span of weeks over summer 2020 and then down to 20% only weeks later.
“Our swift and decisive actions, taken at the onset of the Covid-19 pandemic, allowed us to better protect our financial position, and 80% of Wizz Air jobs, in a context of a 75% business decline.
“These decisions were not easy and the work delivered by our colleagues in this past year was nothing short of heroic.”
Looking forward, he added: “We are cautiously optimistic about the recovery of the business, which has started later than what we would have liked as Covid-19 restrictions have remained in place longer than anticipated.
“Therefore, F22 [financial year 2022] will continue to be a transition year.
“Whereas the recovery pattern continues to be difficult to forecast, the trends are encouraging and we are ready as ever.
“We have prepared the company to be an even more formidable player and to take advantage of the next phase of market opportunities that await post pandemic. The investments we have made in our fleet and in our network over the past 12 months will soon yield results.”