Budget carrier EasyJet has taken steps to borrow funds from the UK government’s corporate financing facility, established to assist companies during the coronavirus crisis.
EasyJet chief executive Johan Lundgren says the airline’s “priority” is to “safeguard short-term liquidity”.
He says the company has been successful in issuing £600 million of commercial paper through the government scheme, known as the Covid Corporate Financing Facility.
The airline has also requested to fully draw down on a $500 million revolving credit facility – secured against aircraft – which will take its overall cash reserves to £2.3 billion by 9 April.
“Given the possibility of a prolonged grounding EasyJet will continue to consider further liquidity and funding options,” it adds.
EasyJet has reached agreement to furlough pilots, under an arrangement which will date from 1 April, following a similar pact for cabin crew.
It has not specifically referred to the continuing dispute between the board and major shareholder Stelios Haji-Ioannou, who has been demanding – in a strongly-worded letter – that EasyJet address a large outstanding order for Airbus jets.
Haji-Ioannou argues that the airline should not be taking a government loan “only to pass it on to Airbus” but should cancel the contract and pursue fresh equity from market investors, adding that he is not prepared to provide more capital unless the Airbus deal is terminated.