Budget flight firm Wizz Air says it has lost £489million in the past 12 months.
The devastating figures plummeted from a pre-tax profit of £254million down to the airline industry being battered during the Covid-19 pandemic.
It carried just 10.2 million passengers in the 12 months to the end of March, down by three-quarters from the year before.
Chief executive Jozsef Varadi said: ‘This was probably one of the most challenging years for the aviation industry, heavily impacted by Covid-19 related regulations.
‘Wizz Air’s (annual) revenue was down 73%.
‘Despite these unprecedented challenges, we stayed in control of our cost structure, preserved our cash position and maintained our investment grade balance sheet.’
Wizz Air chief executive Jozsef Varadi said it was air industry’s ‘most challenging year’
Crew checks cabin ahead of the flight on-board a passenger aircraft operated by Wizz Air
A woman with a child by a check-in desk at Pulkovo International Airport for a Wizz Air flight
Wizz Air had attempted to attract a younger clientele less than a year ago after inking a deal with reality star Gemma Collins to front their brand.
She was seen in a sheer pink frilled coat and £830 Dolce & Gabbana shades filming one of their new adverts after signing the ‘six-figure’ contract.
Commenting on the latest results from Wizz Air Julie Palmer, partner at business rescue firm Begbies Traynor, said: ‘Before the pandemic Wizz Air was flying high and making a solid return for investors while attracting holidaymakers with its clever savings due to choosing less popular routes and smaller airports. However, this high flier has suffered the same fate of all those dealing in holidays over the past 12 months with its profits wiped out by being grounded as holidays became a distant dream during the pandemic.
‘But there is hope on the horizon for this budget airline. It has a good structure and at its core it is a strong and viable business if the pandemic is taken out of the equation. This will be a comfort to investors and lenders will also be more liable to loosen the purse strings as a result. The success of a vaccination programme which is now convincing countries to open their borders as tourism efforts ramp up will also add to the optimistic outlook on the horizon, but budget airlines rely on volume of passengers as well as a clever choice of profitable routes to make money – these are tricky to achieve with social distancing.
Reality star Gemma Collins was unveiled as the face of Wizz Air after signing ‘six figure’ deal
Last year it was reported that Gemma had inked a new partnership with the budget airline as she shared the exciting news to Instagram in July
Ryanair boss boss Michael O’Leary (pictured) said he is still not certain it will break even over the next 12 months, adding that this will depend on the speed of the pandemic recovery
HEATHROW RECORDS 97% DROP IN PASSENGER NUMBERS IN APRIL
The number of passengers travelling through Heathrow last month was down by around 97% compared with April 2019, the airport has announced.
It expects passenger demand will ‘remain weak’ until governments around the world ‘deem it safe to lift travel restrictions’.
Heathrow recorded an 18.3% year-on-year decline in demand to 14.6 million passengers between January and March, while earnings before tax and interest fell by 22.4% to £315 million.
The airport insisted its financial position is ‘robust’, with £3.2 billion in liquidity, which is ‘sufficient to maintain the business at least over the next 12 months, even with no passengers’.
It is calling for the UK to lead the way in developing a common international standard for safe air travel.
Chief executive John Holland-Kaye said: ‘Heathrow is proud to serve Britain by remaining open for repatriating UK citizens and critical supplies of PPE (personal protective equipment).
‘When we have beaten this virus, we will need to get Britain flying again so that the economy can recover as fast as possible.
‘That is why we are calling on the UK Government to take a lead in setting a common international standard for safe air travel.’
‘Added to several other challenges including Covid safety costs and inflationary pressures such as rising fuel costs and the airline, and its competitors, are not steering clear of turbulence just yet and will need a future free of restrictions to thrive again.’
Wizz Air’s figures are just the latest in a depressing year for the airline industry.
International travel has been left on its knees by restrictions brought in to try and halt the rampage of coronavirus.
EasyJet last month blasted the confusion over summer holidays as it racked up a mammoth £701million loss.
The airline will fly fewer planes at the start of the summer than planned amid mixed messages from the Government over its traffic light system for international travel.
The introduction of the red, amber and green list rules was supposed to clarify what holidaymakers and other travellers could do. Instead, it has triggered widespread anger and confusion.
And Ryanair has posted the biggest annual loss in its 35-year history after being battered by the restrictions.
After the pandemic sent passenger numbers plunging, the budget airline swung from an £860million profit to a £701million loss in the year to March 31.
That was after revenues tumbled from £7.3billion to £1.4billion.
British Airways plans to cut the jobs of a quarter of its pilots and could abandon Gatwick Airport altogether in a bid for post-coronavirus survival.
The news was revealed yesterday in a memo, written by the head of BA’s Gatwick operation and seen by BBC News.
Last month owners IAG announced some 12,000 redundancies – after it furloughed more than half of its 45,000 workers.
Under the plan, BA would cut 1,130 captain and co-pilot jobs from its headcount of 4,346, the IAG-owned airline’s head of flight operations told the BALPA union in the letter.
The letter, written on April 28, reads: ‘In a short space of time the situation has significantly deteriorated.’
It adds that BA may yet be forced to suspend the few services still running from London Heathrow.
‘There are no clear signs of improvement in air passenger demand,’ it adds. Passenger numbers are expected to halve compared to 2019, with the likes of Flybe already going into administration before full lockdown measures were in place in Britain.
How coronavirus has affected airlines so far this year
Flybe: Europe’s largest regional airline collapsed on March 5 after months on the brink, triggering 2,400 job losses and left around 15,000 passengers stranded across the UK and Europe. Flybe’s owners, a consortium including Virgin Atlantic, the Stobart Group and hedge fund firm Cyrus Capital, blamed coronavirus for hastening the ailing airline’s collapse. Flybe operated up to 50 UK routes, accounting for 40 per cent of all domestic flights, and was used by 9.5million passengers a year.
British Airways: The International Airlines Group, which also includes Iberia and Aer Lingus, said on March 16 that there would be a 75 per cent reduction in passenger capacity for two months, with boss Willie Walsh admitting there was ‘no guarantee that many European airlines would survive’.
easyJet: The airline with 9,000 UK-based staff including 4,000 cabin crew grounded its entire fleet of 344 planes on March 30. The Luton-based carrier said parking all of its planes ‘removes significant cost’ as the aviation industry struggles to cope with a collapse in demand.
Loganair: The Scottish regional airline said on March 30 that it expects to ask the Government for a bailout to cope with the impact of the pandemic. Loganair will go to the government despite being told by Finance Minister Rishi Sunak last week that airlines should exhaust all other options for funding, before asking for help.
Jet2: The budget holiday airline has suspended all of its flights departing from Britain until April 30. A number of Jet2 flights turned around mid-air last month while travelling to Spain when a lockdown was announced in the country.
Virgin Atlantic: The airline said on March 16 that it would have reduced its lights by 80 per cent by March 26, and this will go up to 85 per cent by April. It has also urged the Government to offer carriers emergency credit facilities worth up to £7.5billion.
Ryanair: More than 90 per cent of the Irish-based airline’s planes are now grounded, with the rest of the aircraft providing repatriation and rescue flights.