4th Mar 2020 09:30
(Alliance News) - Budget airline Wizz Air Holdings PLC on Wednesday said it has implemented measures "to address the financial implications of covid-19".
Separately, FTSE 250-listed Wizz Air announced the conversion of shares by Indigo Hungary LP and Indigo Maple Hill LP, along with share dealings and the removal of share restrictions.
Shares in Wiz Air were up 2.2% at 3,460.00 pence in London on Wednesday morning.
The outbreak of covid-19, a form of coronavirus which originated in China, has reduced air travel demand in Europe in March, especially in areas most affected by the virus. Consequently, Wizz Air said it has adjusted its flight schedule from March 11 to April 2 of 2020, predominantly to destinations in Italy.
Measures taken so far to address covid-19's "financial implications" have included cutting overhead and discretionary spending significantly, as well as leveraging staff across its network so as to pause recruitment along with "non-essential travel".
Additionally, Wizz Air said it is "working with suppliers to reduce cost" and is "considering further adjusting network capacity in the magnitude of 10%" in the first quarter of its financial year ending March 2021.
"At this point in time it is difficult to predict the extent and the duration of the outbreak and the impact on the next financial year, however we remain confident that as the situation normalizes, Wizz Air will continue its highly successful trajectory," Wizz Air said.
A pre-close end trading statement will be published before its financial 2020 close period starting April 1.
Wizz Air Chief Executive Jozsef Varadi said: "Our ever-disciplined attitude to cost enables Wizz Air to partly offset some of the headwinds due to the covid-19 outbreak, which have driven a temporary decline in demand and an increase in the cost of disruption as we put the well-being of passengers and crew first.
"Wizz Air's ultra-low cost business model and our strong balance sheet and liquidity provide a solid foundation and a significant competitive advantage in the current challenging environment for airlines, making us a structural winner in the aviation sector in the long term."
Indigo Hungary, closely associated with Wizz Air Chair William Franke, has converted 9.6 million convertible shares to ordinary shares while Indigo Maple Hill - also a Franke associate - converted 2.9 million shares. Both conversions took place on Tuesday.
These conversions left Indigo Hungary Management LLC, which includes Indigo Hungary and Indigo Maple Hill, with a 67% Wizz Air stake, down from 79% previously.
Following these conversions, Wizz Air has removed share restrictions. These restrictions were announced in April 2018 and effectively barred non-qualifying nationals from buying ordinary Wizz Air shares. However, after the conversion, Wizz Air's ownership by non-qualifying nationals fell to 44% and restrictions were removed.
In addition to the conversions, Indigo Hungary sold 9.6 million shares in a placing at GBP40.15 per share for a total of GBP383.9 million on February 6 while Indigo Maple Hill sold 2.9 million shares in a placing at that same time and price for GBP116.1 million.
By Anna Farley; [email protected]
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