Wizz Air And EasyJet Record Sharp Falls In Quarterly Revenue
Wizz Air has vowed to use the coronavirus crisis to win market share from rivals including easyJet, as the no-frills airlines both recorded sharp falls in quarterly revenue.
As most carriers cut fleets and networks, Hungary-based Wizz has been adding new bases and aircraft, with some delayed deliveries, as it presses its competitive advantage.
Wizz Air chief executive József Váradi told Reuters that while Wizz is "not immune" to the travel slump in the short term, "the longer it goes, the better we will emerge" in competitive terms.
Quarterly results from Wizz and easyJet come just as travel recovery hopes suffer new setbacks, with governments imposing new restrictions to contain the spread of COVID-19 variants.
At easyJet, revenue for the quarter that ended on December 30 fell by 88% to £165 million, while it was down 77% to €149.9 million at Wizz, which posted a similar decline in passenger numbers and a €115 million net loss.
Wizz shares were up 4.9%, with easyJet being 4.5% higher, following the posting of the results.
The risk of another lost summer raises "question-marks over liquidity" at easyJet, Davy analyst Stephen Furlong said.
"Wizz with its lower-cost model is burning very little [cash]," Furlong added.
Both airlines are reining in costs, with easyJet trimming its cash burn to £40 million per week, while smaller Wizz burned through €64.6 million a month during the quarter.
EasyJet has £2.5 billion in liquidity, while Wizz has €1.2 billion in cash, excluding €500 million raised in a bond sale this month. Varadi said that this is enough for Wizz to withstand another two years of slump.
EasyJet has reduced its fleet and closed bases since the start of the crisis, while Wizz has added 14 including London Gatwick, where a first aircraft is now stationed.
EasyJet CEO Johan Lundgren implored governments to set out timetables to exit lockdowns and ease booking uncertainty.
While trimming its network, easyJet is "expanding in all the right places at key airports such as Gatwick", Lundgren said, and aims to win business from legacy carriers.
Váradi, who has lambasted regulators for freezing access to take-off and landing slots, said that Wizz has approached airlines including Norwegian Air over potential Gatwick slot trades, as the insolvent carrier shuts down long-haul flights.
Optimism That Some Summer Demand Can Be Salvaged
The Wizz CEO also voiced optimism that some summer demand could be salvaged, and said that it stands ready to ramp up "sea and sun" flights with as little as three weeks' notice.