By Laurence Frost and Sarah Young
LONDON (Reuters) – Wizz Air vowed to use the coronavirus crisis to win market share from rivals including easyJet, as the no-frills airlines both posted 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.
While Wizz is “not immune” to the travel slump in the short term, Chief Executive Jozsef Varadi told Reuters on Thursday, adding “the longer it goes, the better we will emerge” in competitive terms.
Quarterly results from Wizz and easyJet came 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 ended Dec. 30 fell by 88% to 165 million pounds ($225 million), while it was down 77% to 149.9 million euros at Wizz, which posted a similar decline in passenger numbers and a 115 million euro net loss.
Wizz shares were up 4.9% at 1628 GMT, with EasyJet 4.5% higher following 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 pounds per week, while smaller Wizz burning through 64.6 million euros a month during the quarter.
EasyJet has 2.5 billion pounds in liquidity, while Wizz has 1.2 billion euros in cash, excluding 500 million euros raised in a bond sale this month. Varadi said this was 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.
Johan Lundgren, easyJet’s CEO, 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.
Varadi, who has lambasted regulators for freezing access to take-off and landing slots, said Wizz had approached airlines including Norwegian Air over potential Gatwick slot trades, as the insolvent carrier shuts down long-haul flights.
The Wizz CEO also voiced optimism that some summer demand could be salvaged, and said it stood ready to ramp up “sea and sun” flights with as little as three weeks’ notice.
($1 = 0.7320 pounds)
($1 = 0.8256 euros)
(Reporting by Laurence Frost in PARIS and Sarah Young in LONDON; Additional reporting by Paul Sandle; Editing by Jane Merriman, Alexandra Hudson and Alexander Smith)
