Recession and Covid-19 Impact on Cost Management; Wizz-Air Company, case study

Abstract

Recession, an inevitable economic phenomenon that is difficult to be predicted by the scientists of the time, a pandemic which hits the economic-financial sphere of a certain region or in global form, but as this phenomenon spreads, what are its consequences? What is the right and most effective way today for an entity to successfully meet this challenge? One of the most appropriate forms is the role that cost and management accounting management has in the entity performance, as well as the decisions taken by their managers, as it is the latter who manage to "predict" the consequences of this economic downturn and enable its survival.The purpose of the paper is to study the role of cost and management accounting in a recession situation, specifically the economic downturn caused by the Covid-19 pandemic. This is done by analysing how managers managed to cope with such situations and what decisions they have taken. Other important elements which have been studied are variable and fixed cost during recession. The methodology of the study is descriptive, comparative and analytical based on the secondary data obtained from statistical institutions in Albania and especially the focus is on the airline company, "Wizz Air", which is part of the transport sector. This sector, being related to travelling, is among the most affected by the pandemic situation, because of travel restrictions applied in recent years. A regression analysis is used to see the relation between costs and between employees number and employee cost and how Wizz Air company has reduced some possible costs. According to this analysis appropriate conclusions have been shown.