Shares in low cost airline Wizz Air (WIZZ) fell 1% to £48.31 as it swung to a deep annual loss after the pandemic sent passenger volumes plunging, and expects another loss next year.
Net losses for the year to 31 March 2021 amounted to €576 million, compared to a year-on-year profit of €281.1 million. Revenue sank 73% to €739 million as passenger volumes tumbled 75% to 10.2 million.
‘This was probably one of the most challenging years for the aviation industry, heavily impacted by Covid-19 related regulations,’ chief executive Jozsef Varadi said.
He added: ‘We are cautiously optimistic about the recovery of the business, which has started later than what we would have liked as Covid-19 restrictions have remained in place longer than anticipated.’
WIZZ EXPECTS 2022 LOSS BUT ‘STRONG ENVIRONMENT’ IN 2023
For its current financial year the company expects to post another net loss, unless there’s an accelerated and permanent lifting of restrictions, though this could prove a forlorn hope as governments look to contend with the threat posed by Covid variants. The airline is set to fly around 30% of its capacity in the first quarter to 30 June.
For its 2023 financial year starting next April, Wizz Air is forecasting a ‘strong trading environment’ with a plan to operate at full capacity.
Despite the big loss this year and expectations of another next year, Wizz Air is still better placed than most in its industry with €1.6 billion in cash at the end of March and monthly average cash burn of €61 million.
The firm, like its rival Ryanair (RYA), is expected by analysts to emerge from the pandemic as a long-term winner, and has been able to expand into new regions during the crisis and take delivery of new, more fuel-efficient aircraft which it hopes will cement its cost advantage over its rivals.
