Budget carrier Wizz Air warned it would continue to lose money next year unless Covid travel restrictions were lifted permanently as it reported a 576m net loss for the year due to plunging revenue and passenger numbers.
Hungary-based Wizz said it expected to fly around 30% of capacity in the first quarter of the current year and was resuming all cash contributing flying subject to government imposed restrictions. It had 1.6bn in cash at the end of March and a monthly average cash burn of 61m over the past 12 months.
“Furthermore, unless we see an accelerated and permanent lifting of restrictions we expect a reported net loss during 2022. For 2023 we see a strong trading environment and we plan to operate our full capacity,” said chief executive József Váradi.
The loss compared with a profit of 281m a year ago, the carrier said on Wednesday. Revenue fell 73.2% to 739m in the year to March 31 as passenger numbers slumped 74.6% to 10m.
Wizz carried 833,000 passengers last month, compared with 207,000 a year ago at the height of the pandemic’s first wave. The load factor was up 4.9 percentage points to 66.1%.
“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,” Varadi said.
Airlines such as Wizz and fellow low-cost rival Ryanair have invested in more capacity. The Hungarian carrier now has 43 aircraft bases operating or announced, compared with 25 before the pandemic, and is buying more new fuel-efficient jets, with its fleet up by 16 aircraft to 137 at fiscal year end.
Hargreaves Lansdown analyst Susannah Streeter said the industry’s hopes for a swift summer recovery had been hit by fresh strains of Covid emerging in parts of the world.
“It has meant that the lights have been stuck on amber for many travel destinations for longer than expected, throwing holiday plans into disarray,” she said, adding that Wizz was also hampered by slow vaccine rollouts in eastern European destinations “although lighter travel restrictions compared to the UK do put it in a slightly more resilient position”.
“It’s also been flexible in its reaction to ever changing rules, by nimbly ramping up to 80% capacity last summer before reducing back down to 20% only weeks later,” she added.
