Wizz Air, a low-cost carrier from Hungary, can definitely boast about the way their company has handled the crisis so far. Its base portfolio has expanded massively by 11 bases throughout Europe, expanding from its Central and Eastern European shell into a trans-European low-cost carrier. A new subsidiary in Abu Dhabi, despite being delayed, will go ahead. In a gloomy sky, Wizz Air became a shining star of the industry – yet not everyone is bright about the airline’s adventures throughout the pandemic.
In particular, its unions. The company was not previously known for overly friendly ties with its employees’ representatives, but the way it has handled the relationship with the backdrop of the continuing expansion has resulted in a relationship with a strain that is as big as the San Andreas Fault.
Lay-offs and pay cuts
In April 2020, the airline waved goodbye to around 1,000 employees, as Wizz Air operated only 3% of its total capacity throughout March 2020. The company foresaw that, much like everyone else, it would have to cut costs, despite its robust liquidity situation. Prior to the breakout, it had a substantial amount of liquidity. So much so, that in March 2020, the company’s own chief executive József Váradi boasted to Hungarian media about the fact that Wizz Air could be grounded for three years before it ran out of cash.
Váradi was very critical of state-aid as well, commenting that most Europe-based airlines were badly managed. Instead, governments “should only be stepping in areas of employment and reducing charges such as air navigation costs,” he told Bloomberg in April 2020. Nevertheless, Wizz Air was eligible and applied for the United Kingdom’s COVID Corporate Financing Facility (CCFF) to bolster its financial position.
The 1,000 layoffs were the equivalent of 19% of the airline’s total workforce. Wizz Air was also under fire for its fire and rehire practice, especially as it announced a hiring campaign for its Abu Dhabi subsidiary in July 2020. Former employees, including pilots, had to follow “the same application process as a new joiner to comply with GDPR restrictions and also to meet the EASA mandate to be psychologically tested prior to employment.”
As a cherry on top, deep pay cuts were introduced by the airline in August 2020.
“We are not immune to the crisis either,” stated Váradi in an interview with the aeroTELEGRAPH in June 2020. “So we have to lay off employees as short-term measures,” he added. Despite the fact, Wizz Air still plans to grow in 2021, and “will need to hire pilots and cabin crews again.” The executive disclosed the airline’s firm stance against unions, which “are killing the business.”
“If the unions try to catch us and to kill us, we simply close the base and move on. That’s the beauty of being an airline with the diversity and flexibility we have in our network: We can simply move our aircraft to another place.”