The airline industry is expected to see some bailouts and consolidation this year or next, as carriers look for emergency relief amid the deepening coronavirus pandemic, a chief executive said on Wednesday.
“I’m expecting quite a lot of changes in terms of market consolidation to take place in the next six to 12 months,” Wizz Air CEO Jozsef Varadi said.
Varadi also said that low-cost carriers are going to come out of the crisis much quicker than other operators in the market, as consumers and businesses tend to cut back on unnecessary travel-related spending in recessionary times.
Wizz Air is confident that it will be on the road to recovery in a year, while long-haul operators could take up to three years to recover from the devastation caused by coronavirus.
“I think we will be back in the game in a year. It might take two to three years for others to come to reasonable levels again,” he said during a live session at the Arabian Travel Market (ATM).
Wizz Air is currently preparing to operate international flights out of Abu Dhabi after closing a deal with Abu Dhabi Development Holding Company. The services will be operated by Wizz Air Abu Dhabi and connect the UAE with a number of European destinations, including Romania, Budapest and Bucharest.
The airline said it will go ahead with the flight services as announced despite the pandemic, citing that it has enough liquidity to survive the downturn.
“If we don’t fly a single service or passenger in the next 24 months, we will still be in business. Our cash balance or liquidity enables us to go through this crisis no matter what. Of course we are not immune, but we’re going to get through it because of the cash available to us,” said Varadi.
Varadi is also confident about their entry into the UAE’s low-cost market, citing that their business model is significantly different from the ones already established in the country.
“The model that we bring in is significantly different from other low-cost models. We are not tying up with the legacy carriers… We are a very focused and very cost-conscious business,” said Varadi.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
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