LONDON (Reuters) - European budget airline Wizz Air WIZZ.L said on Thursday it was positioning itself for an expected recovery in air travel in the spring, buoyed by its cash-rich position which should see it through a tough winter.
Hungary-based Wizz Air, which in recent years has expanded from eastern into western Europe, has so far withstood the pandemic better than some larger airlines, continuing to add new routes and take delivery of new aircraft.
The airline vies with Europe's biggest carrier Ryanair RYA.I for the title of lowest-cost player, and like Ryanair sees some opportunity during the downturn for growth while competitors such as easyJet EZJ.L, British Airways ICAG.L and Lufthansa LHAG.DE are planning to shrink.
Chief Executive Jozsef Varadi said that after months of restrictions due to the pandemic, which pushed the carrier into the red in the first half of this year, he saw “light at the end of the tunnel” from spring when the second wave of the virus is expected to ease and a vaccination could be available.
“People want to travel. The moment restrictions fall away, demand explodes,” he said, saying that his focus was on laying the foundations for that recovery by adding new bases, routes and keeping current headcount.
“I would be expecting a more positive movement on capacity ... once we are approaching spring and going into summer.”
Wizz expects to fly 30% to 50% of last year’s capacity over the winter period, Varadi said, compared to Ryanair’s plans to fly 40% and easyJet on 25%.
With 1.6 billion euros (1.4 billion pounds) in cash, Wizz could survive for two years even if it did not fly said Varadi, adding that there were no plans to ground the fleet despite new lockdowns across Europe.
That cash-rich position contrasts with the situation at some competitor airlines. Air France and Air Europa have been rescued by governments, while easyJet and British Airways-owner IAG have raised new cash from shareholders.
For the six months to Sept. 30, Wizz reported an underlying net loss of 145 million euros, on passenger numbers which plunged 71% due to coronavirus travel restrictions.
That was a slightly bigger first-half loss than analysts had forecast and shares in Wizz were down 2.5% at 3,403 pence at 0842 GMT. They have fallen 13% this year, holding up better than other airline groups in Europe.
Reporting by Sarah Young, Editing by Paul Sandle and Susan Fenton
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