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Wizz Air eyes Abu Dhabi expansion following quarantine-free travel rules

May 24, 2021

Hungarian airline currently serves 23 routes to 15 countries from its hub in the emirate

Wizz Air's Abu Dhabi-based joint venture airline plans to expand its operations following the emirate's announcement of new quarantine-free travel rules, the Hungary-based carrier's chief commercial officer said.

Wizz Air Abu Dhabi will add capacity in response to the easing travel restrictions and is considering either increasing frequencies to existing destinations or serving new routes from the UAE capital, George Michalopoulos told The National. It is 'too early' to say which destinations will benefit, as the airline will watch how the market responds to the loosening restrictions, he added.

'It will certainly allow us to accelerate our growth plans,' Mr Michalopoulos said. 'There’s no question we will be operating more capacity, the question is will we be going more for depth or more for breadth.'

Wizz Air Abu Dhabi, a joint venture between Wizz Air and Abu Dhabi state holding company ADQ, currently serves 23 routes in 15 countries from its hub at Abu Dhabi International Airport. The joint venture is part of the emirate's push to diversify its economy, boost tourism and enhance its air connectivity.

The loosening of restrictions and the increase in rate of vaccination does make me more upbeat for the upcoming summer

George Michalopoulos, Wizz Air chief commercial officer

Last week, Abu Dhabi's Department for Culture and Tourism said it plans to remove Covid-19 quarantine restrictions for international travellers coming to the emirate from July 1, except for visitors from India, and expand its green travel list to boost tourism in the UAE's capital.

'We do expect that this will drive significant traffic,' the executive said. 'Overall this is great news, it’s going to drive a lot of inbound tourism.'

On Sunday, Abu Dhabi added Azerbaijan, Germany, Kyrgyzstan, Moldova, Spain and the US to its green list, which includes countries from which travellers can fly without having to quarantine in the capital.

Wizz Air held talks last week with the authorities to understand which countries will be added to Abu Dhabi's green list and which will remain on the red list, Mr Michalopoulos said.

'As soon as we have full understanding, we will push it out to our customer base and our media channels to say ‘fly to Abu Dhabi from July 1, no more quarantine requirement’,' he said.

While restrictions need to be removed at both the country of departure and of arrival, the UAE's rapid vaccination rate and Covid-19 cases remaining at a low level will 'certainly be good news', he said.

In January this year, Wizz Air said it aims to carry one million passengers in the first 12 months of its operations if Covid-19 travel restrictions ease. The airline began operations on January 15 with a maiden flight to Athens.

Across its broader network, Budapest-based Wizz Air plans to return 60 to 80 per cent of its available capacity this summer as it prepares for European travel to reopen, Mr Michalopoulos said.

'The loosening of restrictions and the increase in rate of vaccination does make me more upbeat for the upcoming summer,' the executive said.

Travellers including visiting friends and relatives and holiday-makers will be driving pent-up demand for taking trips this summer, he said.

The Covid-19 pandemic has been defined by an 'extremely late' booking curve – though this trend has somewhat eased as traveller confidence has increased, Mr Michalopoulos said.

Like its peers, the airline is promoting attractive fares to stimulate the return of passenger traffic, especially as customers must also bear the cost of PCR tests, he said.

'We will certainly need to do promotional activities to get people back,' the executive said.

The US, which is a couple of months ahead of Europe in terms of vaccination rates, has 'pretty high' load factors and that may be the case for Europe this summer but it is currently difficult to tell, he said.

Wizz Air, which entered the pandemic with a 'strong balance sheet', has raised debt through a two-year loan and a bond issuance and sees no requirement for government support, he said.

In a trading update last month, the airline said it expects to declare a full-year loss of between €570 million to €590m ($694m-$718m) as it had to contend with border closures during the pandemic. However, it added that its liquidity position remained 'strong', with total cash and cash equivalents of more than €1.6 billion at year-end.

Wizz Air was one of the few airlines that continued to take deliveries of aircraft during the pandemic in order to renew its fleet with fuel-efficient and more economically-efficient jets, he said.

The airline may seek to hire more staff if there's a rebound this summer.

'It depends on the ramp-up. We're right-sized for the 60 to 80 per cent capacity this summer, if there's a much stronger recovery then we will need to hire again,' he said.


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