Wednesday , December 2 2020

EasyJet sells jets to add $400m to cash reserves


EasyJet Plc sold more jets to aircraft lessors, raising almost $400 million to pad its finances against a surge in Covid-19 cases that’s pushed a travel recovery into next year.
The UK discount airline said it sold nine Airbus SE A320 jets in two transactions, and will lease the planes back for almost 10 years, according to a statement. Following the transaction, the carrier will own 152 aircraft, or 44% of its fleet, it said.
Airlines have used sale-leaseback transactions to make up for a cash shortfall after the coronavirus pandemic caused a slump in travel, slamming revenue. The deal will provide EasyJet with about 1.3 months of additional liquidity, Morgan Stanley analysts Carolina Dores and Alexandra Thrum said in a research note.
“The transaction is positive, albeit a small one, as it reflects easyJet’s asset valuation and access to different sources of funding,” they wrote.
Before the deal, EasyJet had raised more than 2.4 billion pounds ($3.1 billion), including 608 million pounds from
similar jet sales and 419 million pounds from an equity
While EasyJet entered 2020 with one of the industry’s strongest balance sheets, rising infections have spurred fresh lockdowns and travel restrictions across Europe. That’s added to the strain on carriers already reeling from a weak summer.
The airline reported its
first-ever annual loss, and scrapped dividend payments, while pulling back on its winter schedule including its presence in Italy.

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