Wizz Air expects normal operations from July
Low cost carrier Wizz Air, which boasts bases in Skopje, Tuzla and Belgrade in the former Yugoslavia and employs hundreds of locals, expects normal operations, which have been hit by the coronavirus Covid-19 outbreak, to be reinstated by July. The airline’s CEO, Jozsef Varadi, said, “The situation in April will be similar to the one in March and which flights get cancelled could change day by day but normal services could be restored by July. Wizz Air is operating 20% fewer flights than scheduled and out of its 121 planes, ten are grounded. No employees have been laid off, but some staff have been placed on leave”, Mr Varadi said. Wizz Air has been forced to suspend all operations in the former Yugoslavia due to the closure of airports at its three main markets in the region.
Mr Varadi noted the no frills airline is in a good position to weather the crisis. “According to industry studies, Wizz Air is one of the strongest airlines in the world in terms of liquidity and solvency. So, when the crisis really hits, it will hurt others much more than us. If we wouldn’t fly a single flight, we could still finance ourselves for about three years. Many of our competitors have only one to two months of liquidity, many are already trying to get loans or are negotiating with governments for financial aid, otherwise they will not be able to survive. And even if they get that help, their plans will change dramatically because the money will have to be repaid. We expect that weaker airlines will disappear or continue to weaken, while stronger ones will be able to run into significantly better market positions after the crisis”, the CEO said.
The head of Wizz Air believes airlines such as Norwegian Air Shuttle, Alitalia and even Lufthansa will face significant problems in the coming months. “Several airlines have serious liquidity problems. The credit market has crashed, so they won’t be able to raise money there. If someone wants to borrow today, it costs considerably more than two months ago. On the other hand, banks aren’t sure if they should even lend money to airlines at this point. This is a basic problem, but it is currently difficult to predict what will happen to these companies”. He added, “We have always lived by a “cash is king” principle, leaving big reserves. The aviation industry is susceptible to numerous shock situations, just to mention epidemics, the conflict in Ukraine or the current crisis. We may call it Wizz Air’s management philosophy, but I think this industry should operate with significantly more cash than would normally seem reasonable. On one hand, it makes us more resilient in times of crisis or even in a weaker economic environment. On the other hand, we can act immediately if a strategic opportunity opens up”.
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