EasyJet PLC yesterday grounded its entire fleet after completing customer-repatriation flights, and said it is in talks to build a cash cushion to see it through the gap in business caused by the coronavirus.
The restart scheduled flights would depend on government restrictions as well as demand, the UK discount carrier said.
Airlines across the globe have been shocked into survival mode by the coronavirus, which has caused an abrupt halt in travel as countries cut off access to fight the disease.
Photo: AFP
EasyJet too has been parking planes and idling staff to conserve cash, while operating a handful of repatriation flights.
Irish rival Ryanair Holdings PLC last week said it planned to ground more than 90 percent of its fleet in coming weeks.
EasyJet said it completed repatriation flights on Sunday.
Cabin crew would get 80 percent of their pay under a government program, and the company, based in Luton outside of London, is looking for ways to increase its access to cash.
The carrier said it has a strong balance sheet and no maturities until 2022.
“We are in ongoing discussions with liquidity providers who recognize our strength of balance sheet and business model,” EasyJet said in a statement.
Airlines worldwide could take a US$252 billion hit to revenue this year from the pandemic, the International Air Transport Association said last week, warning of a pending liquidity crunch.
The industry group urged governments to take “massive action” to keep the industry functioning.
EasyJet, whose debt is rated at “BBB” by S&P, has about ￡1.6 billion (US$2 billion) of cash and US$500 million of undrawn and committed credit facility, which expires next year, S&P Global said in a report on March 20.
The carrier has about ￡250 million to ￡300 million in lease payments due every year, S&P said.
While the UK has ruled out a broad bailout for the aviation industry, it has created a ￡330 billion program for state-guaranteed loans, which is open to companies with investment-grade credit ratings.
EasyJet could also potentially raise cash with a sale-and-leaseback transaction to finance its fleet of Airbus SE A320 family jets, which S&P estimates is worth more than ￡4 billion.
EasyJet separately is under pressure from its founder, Stelios Haji-Ioannou, who has urged the carrier for years to halt its expansion.
He has threatened to remove the board if it does not cancel an order for more than 100 Airbus planes, Sky News reported.
The carrier is working with its suppliers to defer and reduce payments, where possible, including on aircraft expenditure, it said in a separate statement in response to the interview.
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