Wizz expects travel restriction uncertainty until year’s end

Low cost carrier Wizz Air, which boasts bases across the former Yugoslavia, expects for travel restrictions and entry bans introduced by governments without much prior warning to have an impact on its business within the next five months. The carrier has been forced to temporarily suspend over a dozen routes from Skopje, Belgrade, Tuzla, Ohrid, Pristina and Podgorica due to travel restrictions imposed onto nationals from these markets by other European states. “An upcoming period within the range of five months will feature a lot of uncertainty and the industry will have to learn how to be flexible in adapting to new route networks and adjusting capacity,” Wizz Air’s CEO, Jozsef Varadi, said.

Varadi noted his airline has already embarked on a strategy to mitigate the effects of the ongoing pandemic. He cited the expansion of its Airbus A321 fleet in Belgrade, the establishment of its first Russian base in St Petersburg along with the restart of its Kiev base, the launch of 14 new routes between Ukraine and Italy, the resumption of flights from markets such as Hungary and Macedonia, as well as its venture into the Middle East. In the coming period, Wizz Air plans to launch nine new routes from Belgrade, introduce its first year-round service to Croatia and commence new flights to Montenegro. “We have been trimming capacity in our existing markets, but at the same time we have also created a new network of routes and operating bases, so we are opening six or seven new bases just as we speak,” Varadi said. The airline is now flying at 77% of its 2019 levels. The carrier noted that even with the Coronavirus, it expected to grow its capacity by roughly 9% this year.

Commenting on Wizz Air’s strategy, which has vastly differed from its competitors during the ongoing crisis, Varadi noted: “The very worst situation for us is when we don’t operate. The moment we operate, we only operate on a cash contribution basis. You have to run your businesses for the long run and liquidity and cash are critical components of your business model. We all know that short-haul flying is a commodity business and in a commodity business the lowest cost prevails and now we’re the lowest cost producer so I think our competing position has just gotten better.”

He added: “Ten years ago, when the last economic crisis hit the world, we were simply not strong enough and not big enough to take advantage of the situation. This time round I think we have the scale. We have the financial capacity to actually benefit from this and be one of the winners in this situation.”