Wizz Air swings to third-quarter loss amid Covid restrictions

Hungarian low-cost airline Wizz Air said on Thursday that it swung to a loss in the third quarter as revenues were dented by Covid-related restrictions.

In the three months to the end of December 2020, the company swung to an underlying net loss of €114.5m from a profit of €21.1m in the third quarter a year prior, with revenue down 76.5% to €149.9m. Passenger numbers tumbled 77.3% to 2.27m.

Wizz pointed to a sharp drop in capacity due to the Covid-19 crisis and said ticket revenues fell 79.7% to €68.3m, while ancillary revenues were down 72.9% to €81.6m.

The airline said it was not in a position to provide guidance for the financial year 2021 due to the ongoing uncertainty caused by the pandemic. It also said capacity levels are likely to remain depressed in January, February and part of March in view of current restrictions.

Chief executive József Váradi said: "We remain focused on optimising our cost structure and cash burn. Since the period end we have further enhanced our liquidity position with a €500m 3 year bond issued on 19 January 2021 on favourable terms and reflecting our investment grade credit rating. Wizz Air is even better positioned to deal with the uncertainties associated with Covid-19 and now with vaccinations being rolled out across our key markets we believe 2021 will be a transition year out of the Covid-19 crisis.

"The initiatives we are implementing in our business have a very singular focus: enabling the company to emerge from the Covid-19 context as a structural winner. Our ambition is to fully restart our operations as soon as travel restrictions reduce, at all times protecting the health of customers and employees."

At 0945 GMT, the shares were up 1% at 4,248p.

Neil Shah, director of research at Edison Group, said: "Although WizzAir’s results aren’t particularly positive, unlike other carriers, investor’s in Wizz will have a sense that the company has a plan.

"The airline is one of the few that have bolstered its fleet during the pandemic, have a robust cost structure and continues with an ambitious expansion plan. Investors will be keeping a close eye on Wizz’s new base openings throughout the year and if they manage to keep up the levels of cash in the balance sheet."