Coronavirus: EasyJet to increase cash reserves to £2.3bn

Easyjet coronavirus

EasyJet is expected to have access to cash reserves of approximately £2.3bn by 9 April, the company has said in its latest statement. 

EasyJet has successfully secured £600m of Commercial Paper through the Covid Corporate Financing Facility (CCFF).

The UK low-cost airline has also requested to fully draw down on its $500m Revolving Credit Facility, secured against aircraft assets.

Given the possibility of a prolonged grounding, the airline has said that it “will continue to consider further liquidity and funding options”.

EasyJet and BALPA have collaboratively reached an agreement on furlough arrangements for its pilots, effective from 1 April 2020.

Last week, EasyJet announced that it had reached an agreement on furlough arrangements for its cabin crew and training instructors, also effective from the start of April. 

Following the FCA’s recent update on reporting guidelines, the airline will release a trading update in the second half of April and a half year results announcement on 30 June 2020.

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.”

Last week, EasyJet announced that it has grounded its entire fleet of 330-plus aircraft “as a result of the unprecedented travel restrictions imposed by governments in response to the coronavirus pandemic”.

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