Central European budget carrier Wizz Air has obtained confirmation that it can take advantage of the UK government’s support scheme for companies affected by the coronavirus crisis.
Wizz Air says it has been assured it is an “eligible issuer” under the Covid Corporate Financing Facility.
The airline has not specified the quantity of funding available, referring simply to the government’s indicative limits for issue of commercial paper. These limits are based largely on credit ratings.
Wizz Air’s credit rating was listed by Moody’s as ‘Baa3’ and by Fitch as ‘BBB’ before the crisis, which suggests – according to the financing facility’s criteria – that it would qualify for an initial £300 million.
The carrier says it “remains focused” on strengthening its “robust balance sheet”, pointing out that it ended March with €1.5 billion of cash.
This figure was cited by Moody’s in March as evidence of a “very strong liquidity position”. The ratings agency described the company as having a “stronger profitability” and “much better prepared” to weather the crisis than many of its European competitors – although it also stated that Wizz has no unencumbered aircraft that it could monetise in the event of a prolonged period of grounding.
UK budget carrier EasyJet, which had achieved higher pre-crisis credit ratings than Wizz, disclosed in early April that it was issuing £600 million of commercial paper under the government scheme.