Wizz Air CEO expects smaller airline industry after pandemic

The world will have a smaller airline industry as a result of the coronavirus crisis with many privately funded carriers set to go under and governments throwing “good money after bad” to keep national champions afloat, Wizz Air’s CEO WIZZ.L said.

Worst hit will be traditional carriers relying on a hub-and-spoke network and business traffic, but Wizz expects demand for its own cheap fares and direct routes to snap back quickly once the pandemic fades, the Hungarian airline’s co-founder 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 AIR.PA aircraft, Chief Executive Jozsef Varadi added.

Co-founded in 2003 by Varadi, a former head of Hungary’s defunct national carrier Malev, Wizz Air is one of Europe’s largest budget carriers with a focus primarily on central and eastern parts of the continent.

Speaking in a webinar hosted by the UK-based Aviation Club, he bemoaned a lack of political coordination over travel restrictions and other measures to tackle the crisis and urged policymakers to pay more attention to the economic impact.

Dozens of countries worldwide, including France and Germany, have given various forms of public support or taken increased government stakes in their flag carriers to help them survive the crisis, which has sharply reduced travel demand.

But the industry has also faced a tangle of inconsistent travel and quarantine rules which airlines partially blame for putting people off taking the reduced number of flights.

“As far as Wizz is concerned, the moment COVID falls away I think we will be back to 2019 levels,” Varadi said.

“We can go very quickly, but the issue is not underlying consumer demand; the issue is restrictions imposed by governments.”

Wizz is operating on half normal traffic now, he said.

While aircraft deliveries are down sharply as airlines struggle to preserve cash, Wizz Air has continued to add to its Airbus fleet during the crisis. Together with India’s IndiGo INGL.NS it makes up about a quarter of Airbus deliveries.

Finance remains available for the small number of airlines like Wizz that have investment-grade status, Varadi said.

He also said Wizz was open to other foreign ventures after forming a startup in Abu Dhabi and expanding in the UK, where it would continue to invest after Brexit.

Wizz Air Abu Dhabi, a joint venture between the Hungarian budget airline and Abu Dhabi state holding company ADQ, has received an air operator certificate, though its launch has been hampered by a coronavirus ban on foreign visitors. [nL8N2H80C8]