easyJet secures £600-million government loan
The airline plans to ‘safeguard against short-term liquidity’
As grounded flights, travel restrictions and airport closures continue to impact the global airline industry, British airline easyJet has made contingency plans to protect itself from short-term liquidity.
Alongside planned furloughing of about 4,000 of 9,000 pilots and cabin crew during April and May, easyJet has secured a £600-million loan from the Covid Corporate Financing Facility (CCFF), the UK’s emergency coronavirus fund set up by HM Treasury and the Bank of England.
easyJet has also drawn down £407 million from its commercial creditors, which will bring its overall cash reserves up to around £2.3 billion.
“Given the possibility of a prolonged grounding, EasyJet will continue to consider further liquidity and funding options,” said easyJet Chief Executive Johan Lundgren.
The airline is also currently in talks with Airbus about reviewing their £4.5-billion contract.
“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,” Lundgren added.
Although easyJet called for special government measures to help it avoid liquidation, the Treasury asserted that it was unwilling to help airlines until many of their wealthy shareholders had done so themselves.
However, easyJet Founder and majority shareholder Stelios Haji-Ioannou has refused to assist. “For the avoidance of doubt, I will not inject any fresh equity in easyJet whilst the Airbus liability is in place,” he said.