Wizz Air Abu Dhabi looks to expand after introduction of quarantine-free travel

Wizz Air Abu Dhabi plans to expand its operations after the emirate announced new Covid-19 quarantine-free travel rules last week, its chief commercial officer said.

The airline will add capacity and is considering plans to increase the frequency of flights to existing destinations or establish new routes, George Michalopoulos, who is based in Hungary, told The National.

“It will certainly allow us to accelerate our growth plans,” he said. “The question is: will we be going more for depth or more for breadth?”

It is “too early” to state which destinations it will focus on as the airline has yet to evaluate how the market responds to the loosened restrictions, he said.

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 airline is part of the emirate’s push to diversify its economy, boost tourism and enhance air connectivity.

Abu Dhabi's Department of Culture and Tourism last week said it plans to remove quarantine restrictions for inbound travellers from July 1, apart from visitors from India, which is battling a devastating second wave of the pandemic.

The emirate also said it plans to expand its green list – a group of countries from which travellers are not required to quarantine on arrival – to attract tourists.

"We do expect that this will drive significant traffic," said Mr Michalopoulos. "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.

Mr Michalopoulos said Wizz Air held talks last week with the emirate’s authorities to understand which countries would be added to the green list and which ones would not.

“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 programme and low number of Covid-19 cases will “certainly be good news”, he said.

Wizz Air announced plans in January to carry one million passengers in the first 12 months of operations once Covid-19 travel restrictions are eased. The airline began operations on January 15 with a maiden flight to Athens.

Across its broader network, Wizz Air plans to restore between 60 per cent and 80 per cent of its available capacity this summer as it prepares for European travel to resume, said Mr Michalopoulos.

“The loosening of restrictions and the increase in the rate of vaccinations does make me more upbeat about the coming summer,” he said.

Travellers, including those visiting friends and relatives and those going on holiday, are expected to drive travel demand this summer, he said.

The pandemic has been defined by an “extremely late” booking curve, although this trend has somewhat eased as traveller confidence has increased, said Mr Michalopoulos.

As with its competitors, the airline is offering discounts to win over passengers, who are already saddled with the cost of PCR tests, he said.

“We will certainly need to do promotional activities to get people back,” said Mr Michalopoulos.

The US, which is a few months in front of Europe in terms of vaccination rates, has “pretty high” load factors and that may be the case for Europe this summer. However, 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. There is no requirement for government support, said Mr Michalopoulos.

In a trading update last month, the airline said it expects to declare a full-year loss of between €570 million and €590m ($694m and $718m) after taking a hit from border closures during the pandemic.

However, its liquidity position remains “strong”, with total cash and cash equivalents at more than €1.6 billion at the end of last year.

Wizz Air was one of the few airlines that continued to take delivery of new aircraft during the pandemic to renew its fleet with fuel-efficient jets, he said.

The airline may seek to hire more staff if there is a travel rebound this summer.

“It depends on the ramp-up. We are right-sized for the 60 per cent to 80 per cent capacity this summer. If there is a much stronger recovery, then we will need to hire again,” said Mr Michalopoulos.

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