Sky’s the limit as easyJet piles up the cash
Luton based airline easyJet is stockpiling cash to last out the coronavirus pandemic that has already forced it to ground its fleet and furlough cabin crew.
It has been successful in its issuance of £600 million of commercial paper through the Covid Corporate Financing Facility (CCFF).
easyJet has also issued a utilisation request to fully draw down on its $500m revolving credit facility, secured against aircraft assets. It means that by this Thursday (April 9) easyJet should have access to cash reserves of around £2.3 billion. And that may not be the last spin of the money-go-round. Given the possibility of a prolonged grounding, easyJet says it will continue to consider further liquidity and funding options.
easyJet and BALPA, the British Airline Pilots Association, have collaboratively reached an agreement on furlough arrangements for its pilots and that is effective immediately.
Following the FCA's recent update on reporting guidelines, easyJet will release a trading update in the second half of April and make a half-year results announcement on June 30.
easyJet CEO Johan Lundgren said: “We remain absolutely focused on ensuring the long-term future of the airline, reducing our costs and preserving jobs, to make sure easyJet is in the best position to resume flying once the pandemic is over.
“We are pleased that we have now reached agreement with both Unite and BALPA regarding furlough arrangements for UK-based easyJet pilots and crew.
“Our current priority is to safeguard short term liquidity, so we have borrowed from the CCFF and drawn down on our revolving credit facility in order to increase our liquidity in the event of a prolonged grounding of the fleet.
“The CCFF provides businesses with access to funds at the commercial rates which were available before the coronavirus crisis and any UK company that had an investment grade rating before the crisis can apply for this funding.”
The company’s UK share price soared almost 14 per cent (66.50p) to 541.50 on the news. easyJet has a market cap of £2.15 billion.