Wizz Air cuts staff by 19%
The airline's remaining staff have taken a pay reduction close to 15%
The UAE’s low-cost carrier Wizz Air has announced in a release that it has opted to reduce the size of its workforce and lower the salaries for those remaining. Wizz Air Holdings Plc explained that the economic impact of COVID-19 has been severe for the carrier, forcing it to take cost-cutting measures.
The airline explained that “despite its best efforts,” 1,000 people have been made redundant, representing 19% of the entire workforce. Additional employees have been furloughed during the travel restrictions in the UAE, while staff across all departments have had salaries lowered. Its CEO, board of directors and senior officers will all see a 22% cut, while pilots, cabin crew and office staff will have pay reduced by 14%.
During March 2020, year-on-year traffic was down by 34% for Wizz Air and it is currently operating at 3% of its pre-COVID-19 capacity. For Q4 of F20, the carrier expects to see losses of between €70 and €80 million.
Despite these projections, the carrier has assured that it has a strong balance sheet, giving it a much greater chance to survive the pandemic. At the end of March 2020, the company had €1.5 billion in cash, giving it excellent liquidity. The carrier also expects to uphold its target of 15% annual growth.
Wizz Air chief executive József Váradi commented: “We have taken various initiatives to protect the position of the Company in a controlled manner during the COVID-19 pandemic and are reviewing the competitiveness and allocation of the assets of the company. 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 undoubtedly remains best placed for long-term value creation in the European aviation industry due to its low fare - low cost business model and unique positioning as the market leader in the growing CEE market. The company is expecting to deliver significant shareholder value, environmental benefits and employment opportunities in the years to come.”
Wizz Air’s announcement was made during the same week the International Air Travel Association (IATA) updated its projections for the aviation industry this year. IATA has suggested revenues in the sector could fall by as much as US$314 billion if travel restrictions continue.