Wizz Air to stimuate demand with cheap flights
European budget carrier Wizz Air believes it will be able to stimulate demand with ‘ultra-low fares’ once travel starts to resume.
Announcing almost a 30% increase in underlying net profit to €345 million for the year to the end of March, during which passenger numbers rose 16%, Wizz said it was confident it would be able to ‘ramp up operations quickly’.
It revealed that it had cash reserves of €1.5 billion at the end of March, when airlines around the world were forced to ground the majority of their fleets. It has since raised a further £300 million under the UK Government’s Covid Corporate Financing Facility.
Wizz was one of the first airlines to resume flights from the UK, re-launching services from Luton in May.
The airline has placed an order for 20 A321XLR aircraft this year, which will enable it to expand its network to destinations it is unable to reach with its current fleet. It is also pressing ahead with the launch of a new airline, Wizz Air Abu Dhabi, later this year and it has new bases in Albania, Cyprus, Italy and Ukraine
CEO Jozsef Varadi said there are ‘more exciting develpments to come’.
He added: “We have taken various initiatives during the Covid-19 pandemic to safeguard the Company’s cost position and excellent balance sheet with €1.5 billion of cash, one of the strongest in the airline industry. We remain focused on best servicing our markets, while protecting the health of customers and employees. Our new health and safety protocol is designed to ensure that our customers and crew can fly safely during this unprecedented time for the global aviation industry.”
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Commenting on the airline’s results, Peter Knapp, chairman at branding consultancy Landor said: "Wizz Air has shown agility and perseverance through these rocky times, underlined by the fact it was one of Europe’s first airlines to take to the skies again. As its competitors reduce their fleets, Wizz Air is travelling in the other direction and expanding, adding new flights between Britain and Spain and opening a new base in Italy.
"However, a key enabler of the low-cost model – and Wizz Air’s success – is a high load factor and fast turnaround. In this new era of heightened hygiene, health and safety, it will need to balance a very difficult financial equation of capacity versus safety. This will undoubtedly require some type of evolution from the current low-cost model and operation.
"How carriers manage passenger safety through the travel process will become the number one driver of trust and confidence. The airlines that meet new needs fastest will be the ones that bounce back – and Wizz Air could be leading the race."
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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