Last checked at (Sharecast News) - Budget airline easyJet said it had signed two new taking its liquidity to more than ?3bn, as it said it could last nine months with its fleet grounded.
The low-cost carrier added it would take no new aircraft deliveries in 2021 as the war of words with founder and majority shareholder Stelios Haji-Ioannou intensified earlier in the week over a 107 plane order with Airbus.
It expected to report a first half pre-tax loss of ?360m - ?380m but pulled full year guidance due to uncertainty from the coronavirus pandemic which has hammered the global airline industry.
EasyJet, which has grounded its entire fleet, said bookings for the the coming winter were ahead of last year.
The company on Thursday said it expected to have generated total additional liquidity of around ?1.85bn - ?1.95bn, leaving it with a notional cash balance of about ?3.3bn through government measures and the sale and leaseback of planes. The new loans are worth ?400m.
"These decisive actions mean that easyJet is well positioned to endure a prolonged grounding," said chief executive Johan Lundgren.
The company forecast an interim loss before tax of ?185m - ?205m, narrowing a loss of ?275m a year earlier. It also expected to take a hit of up to ?185m on overhedging of fuel.
Haji-Ioannou's lawyers wrote to the Financial Conduct Authority alleging the airline had breached the UK's Market Abuse regulation and listing rules as it did not obtain shareholder approval before agreeing a deferral on 24 Airbus planes.
Sir Stelios, who holds a 36% stake in the company, argues the order, which he thinks will cost easyJet ?4.5bn, should be cancelled to save cash as the industry battles its biggest crisis in decades.
Late on Thursday he took fresh aim at the board, whom he now refers to as "scoundrels", dismissing the cancellation of any new deliveries next year, claiming ?1.5bn would still go to Airbus in the next nine months.
"In nine months from now, or say December 2020, even the scoundrels admit that the company will run out of money," he said. "What the scoundrels are not telling us at all is how much money the company will burn each week after the resumption of flying which will be well in excess of the ?40m per week that they state that they burn whilst the fleet is grounded."
"There is no way the demand for passenger flying in 2021 will be the same as 2019. Holders of easyJet ticket vouchers for future flying should also be worried that they may never get to use them next year and will not see their money back."
AJ Bell investment director Russ Mould said the carrier's cash position was a "stark illustration of the industry's perilous position that even ?3bn would only cover it for a nine-month grounding of its fleet".
"What is unpredictable at this stage is what a recovery in the aviation industry might look like, and how business and leisure travellers might adjust their behaviour once the current pandemic is contained," he said.
"There is also the longer term concern over the impact of air travel on the environment. Chief executive Johan Lundgren will need to call on all his 30-plus years of experience in the travel sector if he is to pilot EasyJet through this crisis."
18 Apr 2024 08:20
easyJet posts significant reduction in winter losses
(Sharecast News) - Low-cost airline easyJet reported a significant reduction in its winter losses in an update on Thursday, of more than £50m year-on-year, as demand for flights and holidays continued to rise, particularly for the upcoming summer season.
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