The European budget airline Wizz Air has plunged to a €576m (£497m) annual loss and warned of further losses to come until travel restrictions are fully lifted. The carrier’s revenue fell by 73% in the 12 months to the end of March, the period covering the first year of Covid-19, and it carried 10m passengers, 75% fewer than a year earlier. The airline said it had carried more than 830,000 passengers in May, while its planes were two-thirds full. “We expect … a transition year where we will experience a slow but gradual recovery, mostly subject to the pace of vaccinations globally including in Europe,” its chief executive, József Váradi, said. Wizz Air expects to fly only 30% of its usual capacity during the three months to the end of June and is resuming all profitable flying it can under current government travel restrictions. Only days after the EU set a deadline of 1 July for lifting quarantine obligations for people who are fully vaccinated against Covid-19, Ryanair lauded the vaccine rollout for the beginnings of a travel recovery in the region. In a trading update, the Irish budget airline said it had carried 1.8m passengers in May on 12,000 flights, almost double the 1 million who travelled with the airline in April. Váradi, however, said that there needed to be “an accelerated and permanent lifting of restrictions” to prevent Wizz Air from sinking to another net annual loss. The airline planned to return to its full flying schedule from spring 2022, when it anticipated a strong trading environment, he said. “We are cautiously optimistic about the recovery of the business, which has started later than what we would have liked as Covid-19 restrictions have remained in place longer than anticipated,” he said. The airline said that frequently changing travel restrictions and coronavirus outbreaks across Europe had led the airline ramping up to 80% of its flying capacity in the summer of 2020 before having to cut its schedule to 20% of normal only a few weeks later. “Wizz Air remains at the mercy of factors outside of its control before it can return to profitability,” said Richard Hunter, the head of markets at the trading platform Interactive Investor. “There are some glimmers of hope among the despair which the pandemic has caused the airlines, and Wizz Air has been busy behind the scenes in preparation of the post-pandemic environment.” The company said it had invested in its fleet during the past year and retained 80% of jobs at the airline, leaving it prepared to take advantage of opportunities in the travel market after Covid-19.