Wizz Air’s CEO has said today that, because of the COVID-19 crisis, the world’s aviation industry will be much smaller. He doesn’t expect the industry to return to pre-pandemic levels, and he sees many privately funded airlines going under.
Post-pandemic aviation will be a smaller industry
In a report by Reuters today, Wizz Air’s CEO, Jozsef Varadi, said that many privately owned airlines would fail as governments continue to throw “good money after bad” to keep their national airlines afloat, resulting in a smaller airline industry. Traditional airlines that rely on a hub-and-spoke network and business travel will be the worst hit.
Addressing a webinar hosted by the UK-based Aviation Club, Varadi accused governments of lacking political coordination with regard to travel restrictions and other policies for tackling the crisis. He called for policymakers to be more aware of the economic impact on the industry.
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In the face of vastly reduced demand for travel caused by the coronavirus crisis, many governments worldwide, including Germany and France, have provided various forms of financial backing or increased their stakes in national carriers in attempts to help them survive the fallout from the crisis.
However, the airline industry has had to deal with the confusion of inconsistent travel rules and quarantine measures. The airlines partially blame the inconsistencies for deterring people from traveling on the reduced flights that are available.
Wizz Air expects its demand to recover quickly
Despite his gloomy forecast, Mr Varadi anticipates that demand for Wizz Air’s direct routes and cheap fares to bounce back when the coronavirus begins to fade. He said,
“Wizz aims to widen a gap in unit costs compared to the rest of the airline industry thanks to regular deliveries of new Airbus aircraft. As far as Wizz is concerned, the moment COVID falls away, I think we will be back to 2019 levels. We can go very quickly, but the issue is not underlying consumer demand; the issue is restrictions imposed by governments.”
Wizz Air is currently operating around half of its normal traffic. But, while aircraft deliveries are significantly down as airlines cancel or defer orders as they strive to preserve cash, Wizz has continued to add to its fleet during the pandemic. Along with India’s IndiGo, the Hungarian carrier accounts for around a quarter of Airbus deliveries.
Wizz is open to further expansion
Co-founded by Mr Varadi in 2003, Wizz Air is now one of Europe’s biggest low-cost airlines. It primarily focuses on central and eastern European destinations. Varadi says that the airline is open to new foreign ventures.
Wizz has expanded in the UK, where it will continue to invest post-Brexit. It has also recently formed a startup in Abu Dhabi in a joint venture with ADQ, an Abu Dhabi state holding company. Wizz Air Abu Dhabi has been given an air operator certificate and it received its first aircraft in September. But the launch has been delayed twice by a travel ban on foreign visitors because of coronavirus.
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