Wizz Air cuts 1,000 jobs as LOT pulls out of Condor deal

Emerging Europe’s largest low cost carrier Wizz Air has become the latest airline to cut staff as it tries to lower costs during the coronavirus pandemic.

The airline said on April 14 that it could not provide any guidance for its new financial year, as it announced plans to cut 1,000 jobs – around one-fifth of its total workforce – reduce salaries for remaining staff and return older leased aircraft.

With around 1.5 billion euros of cash on hand, however, the airline is one of the more secure in Europe and is expected to survive the crisis.

Wizz Air has just ended its latest fiscal year, on March 31, and has disclosed that it will take a fourth-quarter charge of €70-80 million relating to hedging losses.

It expects, as a result, to record a net full-year profit of 270-280 million euros for 2019-20. The airline points out that its underlying net profit will be within its earlier guidance of 350-355 million euros.

CEO József Váradi and other senior management staff will take a 22 per cent cut in income for the year, while the salaries of pilots, cabin crew and administrative staff will be reduced by an average of 14 per cent.

“We have taken various initiatives to protect the position of the company in a controlled manner,” says Varadi, adding that Wizz is reviewing the “competitiveness and allocation” of assets.

“We are also working to further improve our strategic, cost and cash position in the aftermath of this crisis to ensure we can deliver our long-term growth target.”

Wizz Air is currently operating at just three per cent of its pre-crisis capacity, with most flight grounded as a result of lockdown restrictions across its main markets.

The Budapest-based airline has, however, been repatriating citizens and transporting medical equipment for east European governments, in a move coupling one-off charter traffic with savvy government relations amid the coronavirus crisis.

“We try to do the right thing,” Váradi told Reuters last week. “Yes, governments and other institutions pay for the flights, but this is not the time to make a profit. The most important issue here is to help.”

Wizz has even operated rescue flights for Hungarians living in the US, even though the airline does not normally fly transatlantic routes.

On April 13, LOT Polish Airlines has pulled out of a bid to purchase German carrier Condor.

State-run Polish Aviation Group (PGL), which owns LOT, agreed in January to buy Condor for about 300 million euros, potentially creating a leading European aviation group with more than 20 million passengers a year.

Condor has been struggling since its former parent, UK travel group Thomas Cook, went into administration last year.

The collapse of the deal is a blow for the Polish government, which has made economic nationalism a key part of its agenda and trumpeted the takeover as a reversal of the trend of the past three decades, when Polish groups were frequently bought by foreign — often German — investors.

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