Wizz Air claims to be well prepared for recovery from the Covid crisis despite warning of annual losses of almost €600 million.

The Hungarian low cost airline group said it expected net losses of between €570 million-€590 million for the year to March 31.

The full year underlying loss is expected to be between €475 million-€495 million, with the only exceptional item being the loss related to discontinued fuel hedges, amounting to an estimated €95 million.

The airline is not in a position to provide guidance for the year ending March 31, 2022 “because of the uncertainties around travel restrictions”.

However, Wizz Air indicated a strong liquidity position with a total cash or cash equivalents of €1.6 billion.  

The predicted losses compare with rival easyJet’s projected winter half-year loss of as much as £730 million.

Wizz Air said in a trading statement that the start of the current financial year “continues to be marked by travel restrictions across our region and we expect only a gradual traffic recovery into late summer 2021, following what is expected to be a period of good progress of national vaccination plans across key markets”. 

Capacity continues to be actively adjusted to travel conditions “with a focus on cash contribution positive flying”.

Aircraft allocation is being reviewed on a market-by-market basis as opportunities arise. The carrier operates a fleet of 137 Airbus aircraft. 

“In parallel we continue to be focused on our cost base and on our liquidity measures to minimise the cash burn rate of the company in this period of transitioning out of Covid-19,” Wizz Air said.

Chief executive Jozsef Varadi said: “Despite the continued impact of the pandemic, we are well-prepared with one of the strongest balance sheets in the airline industry, flying one of the youngest and most efficient fleets and having a well-defined, proven business model.

“Our agility and relentless focus on costs and cash are significant competitive advantages.

“Our network expansion and the investments we have made in our fleet over the past 12 months ensures we are well placed for a return to normal operations and we are convinced we are now even better positioned to be a structural winner in the European aviation sector.”

He praised staff for rising “to the continued challenges in the last 12 months facing our company and the entire industry, with great determination, endurance and agility in order to continuously adjust and adapt to ever-changing conditions and circumstances as the Covid-19 pandemic impacted us in ways no one could predict or plan for”.

Full year financial results are due to be released on June 2.