Wizz Air has announced it is making 1,000 staff redundant as
part of its plan to save cash during the coronavirus pandemic, representing 19
per cent of its workforce.
The Hungarian low-cost carrier said it will also be taking
temporary furlough measures, while the chief executive, board of directors and
all senior officers will take a 22 per cent pay cut for the whole of FY21.
Pilots, cabin crew and office staff will have their wages reduced by 14 per
cent on average.
Outlining the plans in a post-closing trading statement, Wizz Air said it
expects Q4 losses to reach €70-80 million, specifically related to hedging
losses for the months of March to May. Despite this, it expects its net profit
for FY20 to be €270-280 million ¨C down from the previous guidance of €350-355
million.
Wizz Air said it has a ¡°very strong balance sheet and
excellent liquidity with €1.5 billion of cash¡±.
Other cost-cutting measures the carrier will implement include
gradually returning 32 older leased aircraft by the end of FY23 as existing
contracts expire and working with suppliers to reduce contracted rates and
improve payment terms.
Traffic across the airline was down 34 per cent year on year
in March, and the carrier said it is only currently operating 3 per cent of its
pre Covid-19 capacity.
Wizz Air has been working with governments to offer
repatriation flights for passengers in Europe, Central Asia, North Africa and
North America and has also operated a number of special flights between China
and Hungary to transport essential medical supplies to its home market.
The airline said it expects to follow through with plans to
grow capacity by an average of 15 per cent annually despite the virus outbreak,
and is still going ahead with the launch of a subsidiary based in Abu Dhabi in
the second half of this year.
CEO Jozsef Varadi commented: ¡°Wizz Air undoubtedly remains best
placed for long-term value creation in the European aviation industry due to
its low fare-low cost business model¡¡±