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EasyJet will have access to ?2.3bn cash reserves this week

By Michele Maatouk

Date: Monday 06 Apr 2020

EasyJet will have access to ?2.3bn cash reserves this week

(Sharecast News) - EasyJet should have access to cash reserves of around ?2.3bn later in the week, the budget airline said on Monday, after founder Stelios Haji-Ioannou warned it could run out of money by August.
The airline has made a request to fully draw down on its $500m revolving credit facility and said it continues to focus on maximising liquidity in the event of an extended grounding period. It has issued ?600m of commercial paper through the government's Covid-19 corporate financing facility.

This, combined with the draw down on its RCF - secured against aircraft assets - means it expects to have access to cash reserves of about ?2.3bn by Thursday.

"Given the possibility of a prolonged grounding easyJet will continue to consider further liquidity and funding options," it said.

EasyJet also announced an agreement with the British Airline Pilots Association on furlough arrangements for its pilots, which came into effect on 1 April. The agreement on furlough arrangements for cabin crew and training instructors that was announced last week was also effective from the first of the month.

Chief executive officer 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.

"The Covid Corporate Financing Facility 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 news on increased liquidity came after founder and largest shareholder Stelios Haji-Ioannou said easyJet could run out of money by August and urged the company to remove chief finance officer Andrew Findlay. He said this would be "the best way to stop him writing billion-pound cheques plus to Airbus every year".

Haji-Ioannou also said the airline should cancel its ?4.5bn contract with Airbus for more than 100 new aircraft.

At 1430 GMT, the shares were up 13.4% at 538.40p.


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