14th Apr 2020 09:47
(Alliance News) - Wizz Air Holdings PLC on Tuesday said it will slash 1,000 jobs and cut salaries of remaining staff, including the chief executive and members of the board, as part of an effort to mitigate the financial impact of Covid-19-related travel restrictions.
Shares were up 1.2% at 2,770.00 pence each in London.
The central and eastern Europe-focused low-cost airline also said underlying net profit for the financial year that ended March 31 will be in line with the company's "latest guidance" range of between EUR350 million and EUR355 million. Statutory net profit is estimated between EUR270 million to EUR280 million.
In financial 2019, the company recorded net profit, excluding discontinued operations, of EUR295 million. Total net profit amounted to EUR292 million.
The Budapest, Hungary-registered company has decided against giving guidance for financial 2021 due to the virus situation, but noted that it has one of the strongest balance sheet in the airline industry with EUR1.5 billion in cash at March-end.
Wizz Air is currently operating just 3% of its pre-Covid-19 capacity. Its March traffic fell 34% year-on-year due to the virus outbreak.
"As markets normalise, Wizz Air fully expects to maintain its plans to grow capacity by an average of 15% annually. Furthermore, the company confirms that the launch of operations of Wizz Air Abu Dhabi is progressing in line with the initial timeline," the company explained.
As part of its cash savings measures, Wizz Air has decided to gradually return 32 older leased aircraft by the end of financial 2023, as lease contracts expire.
The company also has put employees on furlough. The 1,000 jobs cuts, which represent 19% of the company's total workforce, are separate from the furlough programme. Wizz Air called the redundancies a "difficult step" that it was taking "despite its best efforts" to avoid them.
It also has decided to reduce the remuneration of the Chief Executive Jozsef Varadi,, the board and all senior executives by 22% for financial 2021. Salaries of pilots, cabin crew and office staff will be reduced by 14% on average.
Varadi said: "We have taken various initiatives to protect the position of the company in a controlled manner during the Covid-19 pandemic and are reviewing the competitiveness and allocation of the assets of the company. We are also working to further improve our strategic, cost and cash position in the aftermath of this crisis to ensure we can deliver our long-term growth target".
By Tapan Panchal; [email protected]
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