Low cost carrier Wizz Air, which boasts bases in Skopje, Tuzla and Belgrade in the former Yugoslavia and employs hundreds of locals, has criticised plans by various governments to provide state aid for their national carriers. The airline’s CEO, Jozsef Varadi, told “Bloomberg”, “Most European airlines have been badly mismanaged when it comes to liquidity. Now they’re all begging for state support. Governments should only be stepping up in areas of employment and reducing charges such as air navigation costs”. Interventions could put Europe’s liberalised, market-driven aviation regime back by five to ten years, the CEO said, with many private operators failing as governments favour flag carriers that have struggled to compete with Wizz and other budget airlines.
Serbia has already announced plans to provide an aid package for Air Serbia through recapitalisation or corporate bonds. The governments in Croatia and Montenegro are set to follow suit. Even prior to the coronavirus crisis, all remaining national carriers from the former Yugoslavia were to receive state subsidies. This includes an undisclosed amount for Air Serbia, which would have likely amounted to some twenty million euros as in previous years, twenty million euros for Croatia Airlines as a second instalment of the government’s 2019 cash injection, and 155 million euros for Montenegro Airlines over the coming six years.
According to Mr Varadi, Wizz Air has sufficient liquidity to span one and a half years. He called on states to resist handing out aid that could distort the market by propping up inefficient carriers. Wizz had 1.5 billion euros of cash prior to the Covid-19 crisis and has the same now following cost cuts including a 50% employee pay reduction and zero salary for top executives. Monthly cash burn has been reduced to about ninety million euros and should drop to seventy million euros once a target of cutting variable costs by 80% has been achieved, Mr Varadi said.
Boohoo I'm so sad we can't have a Wizz monopoly :(
ReplyDeleteAnd I am sad that we still live in sozialism when it comes to aviation. :(
DeleteSocialism is what will save you after the Covid19 rampage is over and the devil comes to take his toll. The most hardcore capitalist countries will resort to socialist measures to avoid massive unrest and meltdown of the society.
DeleteIf you lost your job due to a vis major that is totally beyond your control and has impacted everyone, would you prefer to be left destitute on the street or would you like some of this "sozialism",as you put it, to help you stand on your feet again? P.S. You don't need to answer that.
DeleteFull support to the airlines and all the help they can get from the government during this unfortunate situation beyond their control.
Yes every airlines should get the same support. In the end making money for Wizz proves to be of a disadvantage as they will not get any money like the ones that didn´t make it on their own in good times. Not quite fair and as Wizz puts it distorts the market. Is the oil price then also a point in future to look at when deciding how to allocate money as "everyone§ is affected? The market gets quite distorted, Wizz should now look to increase their costs especially related to their employees, as they now can be sure that the state will save them anyway.
Deletevery correct decision to support local airlines, instead of feeding that troll varadi from hungary. i am both hands for goverments and local airlines
DeleteWizz air, very badly company in the world, with this covid-19, and they dont pay back, the tickets, £400 lost for nothing.
DeleteIf any one know where to make a complain, please let me know, tgt_duda@yahoo.com
Just sue them, they are obliged to rebook you, refund you or at least help you out.
DeleteIf the flight is not cancelled - they are not obliged to do anything. If the flight is cancelled, you can easily request refund. Automatically, you get 120% in Wizz credit. You don't need to press single button for this. If you want money back, you can request online.
DeleteWizz is maybe bad in some ways. But guys, don't criticize something that works perfectly!!!
So they want taxes and other charges removed yet they are against governments helping their flag airlines. Right.
ReplyDeleteConsidering Wizz is registered in Hungary, will it be able to use any of the stimulus in other countries? About pay and taxes?
ReplyDeleteprobably not but they could ask Hungary?
DeleteI believe they are
DeleteOrban should write them a massive cheque. With LO being the new sheriff in town I see them suffering quite a bit.
DeleteLO did kind of restrict them in WAW so it seems they know what they are doing.
Deletedare you to explain?
DeleteWizz Air Group is registered in Switzerland. this is why all employees, even pilots contracted by agencies, pay taxes in Swiss. there are also different members of the Group, like Hu, Ro, Pl, UK.
Deleteso just to get things in correct perspective...
They decreased pay by 50%? Ouch
ReplyDeleteBut they didn't fire anyone.
DeleteWhich seems to be the right thing, isn't it? As almost no one is actually working at the moment. It is the same thing all around the world. I don't know what is the situation in JU, OU, YM but then again they don't bother with things such as making money.
DeleteExcuse me but JU does bother and they showed that by restructuring and modernizing both their product and strategy. That said, airports do profit from having JU unlike Wizz which just wants massive discounts and to pay next to nothing.
DeleteYou gave me a good laugh. FYI Wizz is paying for everything, without any discount, which is not a case with JU.
DeleteAnon 06:47
DeleteSo, what that has to do with pay cuts? Everyone is cutting pays or people, what is better? Not to mention that your comment is not true.
Many companies simply sent people on unpaid leaves. Wizz salary has some components - basic + sector payment + extras. Now, employees get only basic.
DeleteAgree with Wizz. Let the market sort itself out.
ReplyDeleteNo thanks, the market never works out in the end for the consumers. It's easy for them when they distorted the market thanks to billions invested by Indigo.
DeleteBut Wizz's destiny is not ruled by the market. They are backed by a filthy rich private equity fund that can easily keep them afloat in difficult times. It's easy for them to say that others should not receive anything and be left to the mercy of the market.
DeleteFirst, let's have equal rules for everyone: governments can't inject money into airlines AND private equities can't inject money into airlines. Then let's see what the market will say.
Yes, yes, I know the mantra... taxpayer money is not the same as private money. You can take that if you wish BUT don't say it's the MARKET that sorts it out - because it's not. It's cash injections that have nothing to do with the market.
Don't forget that they also have many PSO routes from Hungarian Governmen + special financial benefit like in SKP.
DeleteReal "market player"
^ And Croatia Airlines and Air Serbia don't have PSO routes from their respective governments on top of state aid?
DeleteThey do but they do not complain that other airliners should not be supported. Unlike W6
Delete" yes, I know the mantra... taxpayer money is not the same as private money. You can take that if you wish BUT don't say it's the MARKET that sorts it out - because it's not. It's cash injections that have nothing to do with the market."
DeleteSuch a small difference, taxpayer's money and private money. My god, we are still in Tito state of mind and even thinking how better we are then stupid filthy capitalists.
So Denmark is living in Tito's time because they said they will do whatever it takes to save SAS? Or Italy? Is their government also stuck in the era of Communism, or France? Maybe Merkel is secretly a Titoist for supporting Lufthansa no matter what? What about the US and their $50 billion injection into the airline business? Why didn't they let the market sort itself out. What utter nonsense and rubbish.
DeleteGovernment is a shareholder in many airlines and as such they have the right to provide investments for their businesses especially if taxpayers profit from having that company around.
Wizz Air distorted the market when their sugar daddy bought them 200 brand new A320 series aircraft. I am sorry but if that wasn't market distortion then I don't know what is.
Denmark, Germany, US are at least trying to save healthy companies. Not the case in Italy, Ex Yu and many more. And that's exactly what Varadi said. And by the way, being Germany, USA or Denmark doesn't mean that they not wrong.
DeleteW6 are 100% right. Every airline is currently affected but that shows just how fragile the financial situation is with governmental airlines such as JU and AZ for instance who it seems rely entirely on the state in cases of emergency and not on their current savings. Pretty saddening.
ReplyDelete+1
DeleteSame with YM and OU.
I wonder what criteria you used to name JU and AZ only
DeleteThe criteria of "da komsiji crkne krava"
DeleteA lot of airlines (AZ especially) rely on the state not only in cases of emergency.
DeleteWizz is constantly complaining about something.
ReplyDeleteWhen was the last time they wrote in their financial report their results were hindered by the fact they had to overhaul on er two engines?
DeleteWell for the first ten years they were hiding their financial reports so there was no need to come up with excuses.
DeleteI agree. Stop finding money pits. Remove state taxes and charges to make it equal to all, private and state owned companies.
ReplyDeleteI agree and enough with discounts for W6!
Delete^ same should apply to others then. At least with Wizz you get affordable prices.
DeleteDiscount is when you get same thing for less, not when you elect to save money by not buying everything on the menu? Right?
DeleteWhat's with the hate towards Wizz here by some? They pretty much opened the doors to LCC travel in many ex-Yu countries. You should be grateful they are around.
ReplyDeleteLove for overpriced national airlines offering same service standards is bigger.
DeleteIn Belgrade they are not cheap like €400 to Paris in summer. What doors did they really open?
Delete^Many, starting with the fact they bring Belgrade Airport over 800,000 passengers per year and pay for all services in full.
DeleteMore people travel thanks to Wizz, and that's a fact. For instance, last December I went to Copenhagen with my wife because we were able to fly BEG-MMX for 40€ p.p. return. We definitely wouldn't have taken that particular weekend trip if we had had to pay regular Air Serbia fares to CPH. So usually it works out to the customers' advantage.
DeleteIn the last 2 years I took more than 40 flights in and out of BEG. As a 26yo who does support all sorts of improvement and I do like things to be cheap, I will say that only once I actually bought a cheap ticket to somewhere. I flew all LCCs, Qatar, AirSerbia, Alitalia, etc. - numerous airlines, but only once I found a cheap ticket with Transavia. Therefore, this contribution of Wizz's in terms of prices being cheaper over regular airlines is just nonsense. In the EU all LCCs are cheap, yes - here not.
Deleteexactly this, not normal pricing, where everybody is able to reach the other side of the world for peanuts, got us where we are now with pandemic. Wizzair is mentioning that navigational fees should be lowered, in ECAC states, by regulation they need to go down 3% on yearly basis and they represent less than 5 % of overall cost of airline operation. They want everybody to work for peanuts, so they can sell tickets for peanuts so they can horde 1.5 billion € in cash. How sick is that?
Delete@Harbin
DeleteThat is just not true. Maybe if you are thinking that 5 euros is low cost and 40 isn't.
what a bullshit all that "low cost", when you start booking for required dates - you will get 10 euros cheaper, but additionally some sht hole airport, no baggage, no drink no nothing. either you pay 10euro more and fly like a white human without cabal limits. believe me, choosing between vradis_town_overcrowded_bus and finnair or lot or any other airline with a difference of 10euros.. cmon. never saw huge difference like 200euro, usually 10, sometimes 25
DeleteAnd that's why Ryanair, Wizz, Easy... are doing so bad.
DeleteGood riddance to pretend low cost Airlines like Wizz, Ryanair, and Easyjet,!
ReplyDeleteWhat we need is proper flag carriers state owned, not pretend low cost Airlines like Wizz that take state support, charge full service prices, offer nothing in return and don't even want to pay Airports properly.
It's a good time for the aviation industry to correct itself.
This crisis proves the worth of flag carriers and how vital they are to each country.
are you telling us JU and OU are serious airlines?
DeleteAre you implying JU is not a serious airline? When shit hits the fan I'd rather be flying on JU than Wizz Air. That's a fact.
DeleteWizz is not a loyal payer. Airport airport fees, taxes & etc. On most airport, they are not nor can provide the same kind of connectivity as can national carriers, especially for business travellers. In Croatia's example, since their presence is not as intense, they could not do rescue mission in a same way Croatia's national carrier has done. There are two sides of a medal. In good times, they get the best end of things. Now, it's appropriate time for national carriers to get "their break" as strategically those do way more for national connectivity. So, I say to Wizz, stop crying.
ReplyDelete"In Croatia's example, since their presence is not as intense, they could not do rescue mission
Deletein a same way Croatia's national carrier has done."
Same old story. How many hundreds of aircraft are parked in Europe?
Is OU the only airline who could do such flights, or is Croatian government too proud or too incompetent to sent out couple of emails to airlines with 100+ grounded aircraft, if they could do a flight or two for them?
Rescue missions are only one example, as there are many other instances and reasons why national carrier is a better idea than no national carrier. Some countries don't have that choice, and hence Wizz and the likes are an ok substitute. Slovens, for example, destroyed their MICE (meetings, incentives, conferences and events industry) before coronavirus by giving up on Adria. LH group did the bare minimum in terms of the connectivity aferwards - to the extent to which it makes them money, not at the level where flights generate multiple positive effects for the national economy. Air Serbia is a great regional example of how extensive investments become worthwhile in a long run. They have done the best job here so far. From zero to almost a hero.
DeleteNational carriers acummulate losses, but cater to activities that no other airlinse would otherwise care about. Split, Dubrovnik, Zadar, Osijek nor Pula, if performed by some foreign carrier (who would be paid extensively paid anyway) would never have more than 1 x daily domestic connection in summer, let alone during winter. POS program by far does not cover the overall losses, such as the "invisible" losses (fleet exploatation on short legs, more frequent maintenance as a result etc.).
Yeah, really nice practice cut people salaries by 50%! If you have so much money in hand be fair and pay people full salary. The most important factor in company success are how theirs employees are satisfied... I'm guess they are not now.
ReplyDeleteI'm sure they are more satisfied with 50% pay cut than the 36,000 British Airways cabin crew that are about to be sacked.
DeleteSmart businesses will cut expenses the moment the crisis hits, as that's the best way to survive thrugh these times.
DeleteYour typical state-run airline will pretend it's business as usual and spend like there's no tomorrow, and then next month ask for multi-hundred million bailout, as "things were out of their control".
BA is not sacking 36000 staff but suspend them where government will pay 80% of theirs salary and BA 20%.Get some facts b4 you comment.
DeleteWhat do you expect? Not working and getting the same pay? Tito is dead and communism as well. Only if you are not conserned about your finances then you can do whatever you want.
DeleteWell BA crew won't be workign and they will be paid the same, I guess Britain is going the way of Tito. Interesting.
DeleteBritish airways is actually cutting 80% of pay so you are wrong.
DeleteRightfully so.
ReplyDeleteOf course they have no problem with liquidity since they became a boutique airline. Its often cheaper to travel officially legac carriers then Wizz which is only certainly affordable if you buy 6+ months in advance.
ReplyDeleteIt's not just a couple of Balkan governments trying to protect their airlines. Governments all over the world are choosing to support their national airlines and in some cases nationalize them if needed. They are not stupid. There is no doubt once this crisis is over times will be much tougher for LCC airlines. Now it is clear what is valuable and what we can live without.
ReplyDeleteThe only thing is that some good airlines will be saved and some already dead incompetent ones also.
Deletehttps://www.forbes.com/sites/deandonovan/2020/03/30/how-the-airline-industry-will-transform-itself-as-it-comes-back-from-cornonavirus/#1135598067b9
DeleteIt is getting quite clear that we will see a regulated airline industry after all this ends.
ReplyDeleteI understand this is an airlines forum. But do any of you understand what is going on globally. This is once in 100 years event that will cause epic collapse in global business. If you add that world has never been interconnect as it is now, this domino effect has already started. I fully get it that this is ex-yu board, but rest assure many, many airlines will simply not survive, much bigger than JU, OU etc. If SRB/CRO/MON governments do not have enough money to support them, they will chuckle them and divert funds to essential projects for the country's survival. If they have the funds, then OK. Problem is we do not know who has the funds and who has not. On a side note, even the top econ. minds are scrambling now to gauge this calamity and figure out all the scenarios. They have no clue (I do not blame them) as this is not financially driven, but rather bio-driven event. Airlines will be the most impacted of them all. Even when this thing settles, rest assure not everyone will start to travel, it will take time, hence you have overcapacity issues and adjusting to 'new normal'. Problem is no one knows what the 'new normal' is. So I am very skeptical that if this goes on, SRB/CRO/MON governments will have enough money to cover all the 'holes'. If they do, great. I think that JU especially is worth saving, OU would be if they had smart management, but those guys struggled during good times. Point is simple, no one knows if there will be money to save good/bad ones, when all this is over.
ReplyDeleteWiz, have you enough fund? As your Orban for such.
ReplyDeleteIndigo Partners wanted to sell Wizz stock when coronavirus just started to expand outside of China, why would they do it if they think airline has a bright future in post-corona world? Card carrying capitalist Warren Buffet did not invest in Ryan/Wizz/Frontier/Spirit but he did in traditional US airlines. France is ready to nationalize AF/KL if needed to save them. Wizz is big and loaded at this point but prolonged pandemic or 2nd virus wave can change that. Governments investing in national airlines are expected to introduce laws and create stricter, regulated airline markets to protect those investments. Airlines bigger and more respected than Wizz have gone bankrupt, like PanAm. No wonder Wizz CEO is frustrated.
ReplyDeleteIndigo selling their stock in Wizz had nothing to do with Corona. Go check.
DeleteGood, ignore the rest and put sunglasses on, future is so bright.
Deleteyou should really check why they had to sell first .. if you know where to look
DeleteBasically not too much difference compared to problem Pablo Escobar had, they couldn't move cash out fast enough while appearing to be within legal 49% limits. Same for IPO, to pump more cash out of EU. Send to offshore tax havens. Well, you insisted on explanation.
DeleteIndiGo probably saw Wizz Air's inability to come on top in Vienna which led them to realize Wizz will never be more than a purely gasterbajter shuttle. They have reached their maximum, this is as good as it gets for them.
DeleteIt was because of Brexit. And Wizz is doing well in Vienna.
DeleteBrexit transition doesn't kick in until year end.
DeleteSo?
DeleteHaving followed news from Hungary in recent weeks, I should assume that the Hungarian army has marched into Wizz Air headquarters by now and taken over. This statement may well be the first product of the takover.
ReplyDeleteThey are refusing to compensate persons who booked flights in May. This way they enrich themselves. They insist people need to travel and are not providing refunds beyond April 30th.
ReplyDeleteLet's see what wizzair is proposing: let the big airlines go down. Okay.
ReplyDeleteSo after they went down and market opens up again I really hope wizzair can provide immediate connection to US, Asia, Africa with its long haul
fleet.
Ahh I forgot they have 0 of them. So the F Varadi is talking about.
Every country should help their own companies. Wizz air is a piece of shit that wants to profit of this unfortunate situation to obtain monopol on south eastern countries. So mr.Varadi you should better suck our d...s instead of telling us how would you like to destroy state owned companies.
ReplyDeleteOf course Wizz wants to profit, that's why it was established. And your language is really not decent.
Delete