Wizz Air says Omicron has dented recovery, but optimistic for spring and summer
Wizz Air says the Omicron variant of COVID-19 has dented its recovery plans, with travel demand over the first three months of 2022 set to be hit by ongoing uncertainty.
This setback will also mean further losses in the final quarter of its financial year, Jozsef Varadi, chief executive of the low-cost carrier, said in a statement on January 26, 2022.
“The emergence of the Omicron variant and renewed travel restrictions impacted our trading performance late in the quarter and we expect demand in January, February and part of March to be impacted by ongoing travel uncertainty,” he predicted.
The eastern-European focused carrier reported an operating loss of €213.6 million ($241 million) for its third quarter to December 31, 2021, compared with a year-ago loss of €142 million ($160 million). It had previously predicted losses of around €200 million ($226 million) for the quarter.
Wizz said the higher losses were down to ramping up operations, while the pandemic continued to affect demand. Like rival Ryanair, Wizz said it had been stimulating demand by offering lower ticket prices. The carrier said average ticket revenue per passenger decreased to €20.84 ($23.52) in the third quarter from €30.11 ($33.98) the previous year.
“Wizz Air continued its recovery during the third quarter of F22 and well exceeded 2019 passenger and capacity levels in the peak holiday traveling period, despite the emergence of the Omicron variant,” Varadi commented. “In total, we carried 7.8 million passengers with a load factor of 77.1%. During peak weeks our capacity reached 110% of 2019 ASKs.”
Looking ahead to the fourth quarter of its financial year, Wizz said it expected the operating loss to be slightly higher than the one it just reported for the third quarter due to Omicron uncertainty. It had previously said it could make a loss in the fourth quarter.
The carrier said it was “cautiously optimistic” for continued recovery into Spring and “near-full” utilization from summer onwards.
The comments seem more downbeat than when Wizz reported second-quarter results in November 2021.
At that time, it was planning to return to full operations from Spring 2022. In a presentation on its website on January 26, 2022, Wizz said Omicron had “dented” recovery.
“Despite the short-term headwinds, we are cautiously optimistic for a continued recovery into Spring and near-full utilization from Summer onwards,” Varadi said. “We continue to back our strategic choices to invest in our fleet, grow our bases and routes, and lower our unit cost in order to take advantage of the market created in the wake of COVID-19.”
Varadi also highlighted plans by Wizz to grow its operations at Gatwick after acquiring slots from Norwegian Air in December 2021.
Wizz said it was planning to operate 170 aircraft this summer, compared with 150 at the end of its third quarter. The airline wants to operate 500 aircraft by the end of the decade.
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