Wizz Air cuts 1000 jobs, expects market demand to return in 2022

Central European low cost carrier, Wizz Air, says it is not considering deferring the 12 aircraft orders due for delivery in 2020. Furthermore, the carrier has said that it expects market demand to return in 2022. Wizz Air also states that it will be cutting 1000 jobs and will adjust salaries to maintain liquidity.

Wizz Air Airbus A321 registered HA-LXI. Photo by Jero Vida │ AeroNewsX

Wizz Air, which removed 97% of its originally scheduled operation, has a fleet of over 100 aircraft and would normally carry approximately 40 million passengers each year. Wizz Air says it will keep its aircraft orders with Airbus for deliveries due this year, despite anticipating market demand to return by 2022.

The Hungarian carrier said it did not have plans to permanently reconfigure aircraft as of yet but said that once air travel regains momentum, it will operate its planes one-third empty in order to maintain social distancing. When the industry returns to normal, Wizz Air plans to cap its yearly capacity growth at 15%.

The CEO, in a telephone interview with Reuters said: "We would basically be blocking a third of the airplanes, so 180 seater would be come a 120 seater, and the 230 seater would become more like 160 seater,"

With EUR1.5 billion in cash reserves, Wizz Air said it was in a strong position against the coronavirus pandemic, which has forced many airlines into bankruptcy. Large airline groups such as Lufthansa Group and Air France-KLM have said they are losing EUR24 million and EUR25 million a day respectively.

Wizz Air assured that it expects its results, for the financial year ending 31 March, to be in line with guidance ranging between EUR350 million and EUR355 million. Nevertheless, it also predicts an exceptional charge of somewhere in the range of EUR70 million to EUR80 million. It anticipated a statutory net profit of EUR 270-280 million for the financial year.

In order to improve liquidity, Wizz Air will cut 1000 people which represents 19% of its workforce. Furthermore, board members and managers will take a 22% pay cut, while reductions for pilots, cabin crew and administrative staff average 14%.

The Wizz Air joint venture to form an Abu Dhabi-based subsidiary is “progressing in line with the initial timeline".