Coronavirus: EasyJet raises an extra £203m from aircraft sales

Edmund Heaphy
·Finance and news reporter
·2-min read
The extra funding brings to £608m the total that the airline has raised from the sale of 23 of its aircraft.
The extra funding brings to £608m the total that the airline has raised from the sale of 23 of its aircraft. Photo: Salvatore Di Nolfi/Keystone via AP

EasyJet (EZJ.L) said on Friday that it had raised an additional £203m ($266m) from the sale and leaseback of its aircraft, as it further bolstered its balance sheet in the wake of the coronavirus crisis.

The extra funding brings to £608m the total that the airline has raised from the sale of 23 of its aircraft, and comes on top of a further £1.8bn that it has raised through other means.

EasyJet drew down £600m in funding from the Bank of England’s Covid Corporate Financing Facility, and last month raised around £419m by issuing new discounted shares. It also drew down £800m from an existing credit facility and two term loans.

The newest tranche of funding comes from a sale and leaseback deal with an Irish subsidiary of BOCOMM Leasing, a Chinese aviation leasing firm.

The deal, which will see EasyJet lease five Airbus (AIR.PA) A321neo aircraft until they are in service for 10 years, nets EasyJet some $266m in cash.

READ MORE: UK airports braced for travel chaos after France quarantine ruling

Airlines such as EasyJet are confronting an unprecedented crisis in coronavirus. The budget airline has already announced plans to slash around 4,500 jobs, after warning it did not expect demand to reach pre-virus levels for another three years.

EasyJet said it would continue to review its finances and liquidity arrangements, and did not rule out the possibility of raising further cash to shore up its finances.

“EasyJet will continue to review its liquidity position on a regular basis and will continue to assess any further funding opportunities,” the airline said in a statement.

READ MORE: European stocks dip on rising infections and UK quarantine rules

The news that the UK government has added France to its quarantine list serves as a further blow to the airline, which earlier this month ramped up its summer flight timetables despite heightened uncertainty about the measures.

Announcing the move, chief executive Johan Lundgren said that bookings for the rest of the summer were higher than expected, prompting the airline to expand its schedule to about 40% of capacity in its fourth-quarter between July and September, rather than the 30% expected last month.

Shares in EasyJet, like those of other airlines, fell sharply on Friday following the UK government’s announcement. They were down almost 7% by mid-morning.