Wizz Air is sticking to its ambitious expansion plans despite the collapse in air travel as the bullish low-cost carrier positions itself for a recovery in passenger numbers next year.
The Hungarian airline’s chief executive Jozsef Varadi said that while he was preparing for a “difficult” winter dominated by travel restrictions, he expected demand for flying to return by the beginning of April.
“Coming out of winter and going into spring we will start seeing some improvements,” he told the Financial Times. “We will see demand coming up quickly and strongly.”
Wizz has announced plans to open 13 bases including at London Gatwick and Doncaster Sheffield airports since April, betting that it can exploit the crisis to raise its footprint across European airports while rivals retrench.
“Many of the existing carriers will have a hard task to revamp their operations, it will take them ages and some will never get there,” Mr Varadi said.
Shares in Wizz rose 2 per cent to £35.52 by early afternoon on Thursday, and have lost just 8 per cent this year, significantly outperforming rival carriers such as easyJet and British Airways owner International Airlines Group.
The airline is pushing for European aviation authorities to reinstate “use it or lose it” slot rules that strip airlines from lucrative landing rights if they do not fly their planned schedules. The rules have been suspended until next year to stop carriers having to operate empty flights to defend their slots, in a move welcomed by the majority of the airline industry.
But Mr Varadi said the suspension had stopped him from a “significant investment” in London’s struggling Gatwick.
Given free rein to hoover up slots, he said Wizz could eventually operate 15 to 20 aircraft from the airport, up from just one currently.
Despite the bullish tone, Wizz is not immune to the struggles facing the industry. The carrier has had to slash its flight plans for the winter like its competitors, and sank to a €237m loss before tax for the six months to September 30. The company made €385m in profit for the same period last year.
Analysts expect Wizz to fly only between 25 per cent and 30 per cent of its planned schedule through the winter, compared with 40 per cent for Ryanair and 25 per cent for easyJet.
Revenue at the low-cost airline fell 71 per cent in the first half to €471m, though the group said it had €1.6bn of cash in reserve.
“This provides Wizz with more than enough liquidity to trade through a bleak winter,” said Mark Simpson. an aviation analyst at Goodbody.
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