EasyJet boosts cash flow by selling planes for £300 million
Tuesday, 27 October 2020
British airline EasyJet boosted its cash flow in view of the crisis in the aviation sector due to Covid-19 by selling nine aircraft for over £300 million (over €330 million), the company announced on Tuesday.
The aircraft, Airbus 320s, will go to companies specialising in aircraft leasing, according to a press release. EasyJet will sign a contract with those companies to lease the aircraft back and continue to use them for almost 10 years.
The first transaction, with Wilmington Trust SP Services, will generate cash sales proceeds of approximately £146.5 million, according to Aviation24, and the second, with Sky High 112 Leasing Company Limited, will generate around £159 million in cash proceeds.
EasyJet decided on the sale after seeing a very high level of demand from aircraft rental companies wishing to acquire aircraft, it explained.
Once the operations are completed, EasyJet will fully own 152 aircraft, representing about 44% of its fleet.
In order to survive the crisis set on by the coronavirus pandemic, EasyJet has considerably strengthened its cash position in recent months to a total of £2.4 billion since the start of the outbreak, not counting Tuesday’s announcement.
EasyJet raised £419 million through a new share issue and secured a £600 million loan from the UK government. The company has also renegotiated Airbus orders.
The recovery observed during the summer does seem to be compromised by the second wave of the pandemic and more vigorous restriction measures in Europe and the quarantine imposed by the United Kingdom on travellers from various countries.
EasyJet will only run at 25% of its planned capacity between October and December, the first quarter of its 2020-2021 fiscal year.
The group also suffered the first annual loss in its 25-year history for the 2019-2020 financial year, which ended at the end of September.