Wizz Air UK expansion downgraded.

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RyanairBristol
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Wizz Air UK expansion downgraded.

Post by RyanairBristol » 21 Jul 2016, 12:25

Similarly to Ryanair, Wizz Air have announced this.


Wizz Air is slashing plans to boost flights from the UK in the wake of Britain’s vote to leave the European Union, the low-cost carrier has revealed.

London-listed Wizz, which is the leading budget airline in Eastern and Central Europe, had been seeking to add more services to existing routes to and from Britain. But following the EU referendum, which sent sterling plunging, Wizz has axed those plans and decided to station just two new jets in the UK, instead of the originally intended four.

Wizz is still eyeing new routes from the UK. But its decision to abandon plans to increase frequencies on its established British routes and move its resources elsewhere means its UK capacity will only rise by 15pc during its second-half, instead of the 30pc it had previously envisioned.

Boss Jozsef Varadi said Wizz had been forced into the cuts because of the pound’s weakness, not because demand to fly had fallen after the referendum.

“What we are seeing is the problem of the weakness of sterling, it is down 19pc down year-on-year to the euro and that’s an issue for us given that we report in euros and run the business in euros,” the airline chief said, as Wizz posted first-quarter results. “We’re not seeing any issue with demand or consumer behaviour in the UK.”

Immigration was a major issue in the EU referendum, but Mr Varadi insisted that Budapest-based Wizz, which flies leisure and business passengers, would not be hurt if the UK cut the number of people moving to the country.

“Our business is far more diversified than just shipping migrants,” he said.

Mr Varadi added that, depending on the terms of Brexit, Wizz may need to acquire an air operator’s certificate (AOC) in the UK, which would require it to set-up a holding company here, should leaving the EU result in the country being ejected from the European Common Aviation Area. Gaining an AOC in Britain would ensure Wizz could continue to fly between Europe and the UK without restrictions following Brexit.

The EU vote adds to the woes of British airlines, which have also been hit by a string of terrorism attacks that have shaken the tourism industry, a wave of disruptive air traffic controller strikes in France, and, most recently, the attempted military coup in Turkey.

EasyJet and British Airways' owner International Airlines Group (IAG) swiftly sounded profit warnings following the referendum result and there are worries sterling’s post-Brexit weakness will deter Britons from travelling overseas, as it makes holidays abroad more expensive. The vote has also sparked concerns that leaving the EU will hurt general consumer confidence, with IAG saying that in the run-up to the referendum it had suffered from softening demand.

The aviation industry has responded to the vote by pressing ahead with contingency plans.

EasyJet has started the process of acquiring an AOC in an EU country, which could mean it moves its legal headquarters from Luton to Europe. Ryanair boss Michael O’Leary has also said the Irish carrier will cut investment in Britain.

Despite revealing plans to cut UK investment, Wizz shares climbed as much as 4.8pc to £16.17 in early trade today amid relief the airline was sticking with its guidance of full-year net profits, excluding exceptional items, of between €245m and €255m.

It flew 5.8m passengers in the three months to the end of June, up 17.9pc on a year earlier, and revenues climbed 9.8pc to €364.9m. Pre-tax profits leapt 52.2pc to €52.3m.
Read more:
http://www.telegraph.co.uk/business/201 ... ng-brexit/


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