2nd Jun 2021 09:52
(Alliance News) - Wizz Air swung to an annual loss as lockdown restrictions curtailed operations, and the budget carrier called on Wednesday for a permanent lifting of travel curbs.
Despite the challenging environment for the aviation industry, the Budapest-based budget airline said it remained "cautiously optimistic" about the recovery of the business, with encouraging trends being experienced.
For the financial year ended March 31, Wizz Air swung to a pretax loss of EUR566.5 million from a profit of EUR294.1 million the year before on revenue of EUR739.0 million, down 73% from EUR2.76 billion. Ancillary revenue fell by 67% to EUR412.6 million, representing 56% of total revenue.
The low-cost carrier said that in financial 2021, passengers carried fell 75% to 10.2 million from 40.0 million the year prior. It had a 64.0% load factor, down from 93.6% in financial 2020. More recently, in May, Wizz Air carried 832,538 passengers with a 66.1% load factor.
Looking ahead, Chief Executive Officer Jozsef Varadi said he expects the carrier to fly around 30% of capacity in the first quarter of financial 2022.
Further, Varadi said that unless there is an "accelerated and permanent lifting of restrictions", he expects to post a reported net loss during 2022. For 2023, Varadi sees a strong trading environment and plans to operate at full capacity as the pandemic subsides.
Varadi said: "We are cautiously optimistic about the recovery of the business, which has started later than what we would have liked as Covid-19 restrictions have remained in place longer than anticipated. Therefore, [financial 2022] will continue to be a transition year. Whereas the recovery pattern continues to be difficult to forecast, the trends are encouraging and we are ready as ever.
"We have prepared the company to be an even more formidable player and to take advantage of the next phase of market opportunities that await post pandemic. The investments we have made in our fleet and in our network over the past 12 months will soon yield results."
Looking ahead, Wizz Air is expecting first quarter capacity to be at 30% of levels seen a year prior and is resuming all cash-contributing flying, subject to travel restrictions. The company foresees a return to profit and strong trading environment for financial year 2023.
In other news, Wizz Air announced it will convert all of the 17.4 million convertible shares held by Indigo Hungary LP and Indigo Maple Hill LP's into ordinary shares on a one-for-one basis.
American investment firm Indigo now will have a 24% stake in Wizz Air. However, it has agreed to not vote with respect to more than a 17.5% stake at Wizz Air's 2021 annual general meeting. Last year, the AGM was held in July.
Wizz Air shares were down 1.7% at 4,797.00 pence early Wednesday in London.
Wizz Air also on Wednesday announced the formation of a new board committee structure, which will include the creation of a Sustainability & Culture Committee focused on employee engagement and environmental, social and corporate governance.
By Will Paige; [email protected]
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