June 3, 2020 / 7:07 AM / a month ago

UPDATE 2-Wizz Air says expansion held back by COVID-19 but confident in long term

* Sticks to fleet expansion plan

* Plans for Abu Dhabi JV to be six planes in Oct, up from three

* FY net profit up 30% in yr to end of March

* Too early to provide 2020-21 guidance (Adds CEO comments)

By Sarah Young

LONDON, June 3 (Reuters) - Hungarian low-cost airline Wizz Air said its expansion plans would continue to be held back by coronavirus-related restrictions in its 2020-2021 financial year but it was confident on longer-term growth.

The airline is sticking with its fleet expansion plan, meaning that it will have 9% more seats by March 2021, and its new Abu Dhabi joint venture will be bigger than it originally planned when it starts flights in October.

“COVID-19 is a significant issue, making a significant impact on the industry, but at the same time, it is also creating quite some opportunities for us,” Wizz’s CEO Jozsef Varadi said in an interview on Wednesday.

The coronavirus pandemic has wiped out air travel, forcing airlines to make job cuts, shrink their fleets and ask for state bailouts to survive what they see will be a smaller market for years, but Wizz has fared better than many competitors.

The cash-rich airline has one of the strongest balance sheets in Europe. Focused on eastern Europe, but with a growing presence in western Europe, it says its low fares will help it win market share when travel demand recovers, giving it the confidence to stick with its long-term expansion plans.

While it has announced 1,000 job cuts, it is not delaying aircraft deliveries, as many airlines including easyJet and TUI are doing.

“Whatever we can fly, we’re going to be flying because we’ve seen that there is actually demand out there,” Varadi said.

But for its current financial year to the end of March 2021, he said the chances of overall growth were “remote” and it was too early to provide profit guidance.

He said that Wizz, Europe’s no.3 low cost carrier, expected to fly 60% of its capacity over the summer and 80% from September to March, but plans were subject to the easing of travel restrictions by governments.

That compares to Ryanair, Europe’s biggest low cost carrier, starting to fly at 40% capacity and no.2 easyJet at 30% in July.

For its last financial year to the end of March 2020, Wizz posted underlying net profit of 344.8 million euros ($386 million), up 30% on the previous year, boosted by passenger numbers which were 16% higher and a jump in ancillary revenues. ($1 = 0.8922 euros) (Reporting by Sarah Young; editing by James Davey)

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