EasyJet has warned the government it may need further financial support through the state as it braces itself to get a brutal winter that will trigger billions of pounds in losses.
Sky News has learned that the low-cost airline has signalled during recent interactions with Whitehall that its balance sheet can require a state loan or additional form of financing if the coronavirus outbreak continues to decimate its schedule throughout the coming months.
More details of any request it got made to the government were unclear upon Wednesday, although an insider stated easyJet was not in need of an “emergency loan”.
An industry resource said that the company, which has already utilized £600m through the Bank of England’s Coronavirus Corporate Financing Facility, had been taking “a prudent approach” towards the management of its balance sheet right after reporting a £325m third-quarter pre-tax loss.
EasyJet will be scheduled to publish a pre-close investing update on Thursday morning.
The particular Luton-based carrier said in May it would need to cut up to 30% from the workforce, since when an UK discussion process has led to 1300 non-reflex redundancies.
Last 30 days, it said it was reducing the schedule during the final quarter from the year by a greater margin compared to originally anticipated because of weak customer confidence, the absence of an airport terminal testing regime in the UK and pandemic-related measures in force across Europe.
EasyJet has consistently called, as well as other airlines, for government assistance by means of air passenger duty relief as well as the implementation of a testing regime from airports – with the first phase towards one finally announced simply by ministers on Wednesday.
Coronavirus: nine hundred airport jobs go – because testing task force gets lukewarm response
However , the signal to the govt that it may seek further taxpayer support reinforces the precarious condition of the finances of many companies which were regarded as robust prior to the pandemic.
Since the outbreak, easyJet offers raised £400m from shareholders by way of a placing, and hundreds of millions of lbs more by selling and renting back part of its fleet.
Last month, the air travel disputed an account given by union authorities of a meeting with its finance key in which they said he gave all of them the impression that easyJet had been “hanging by a thread”.
The company has fought a working battle this year with its founder, Friend Stelios Haji-Ioannou, who has demanded the particular cancellation of a major Airbus purchase and threatened to seek the removal of the majority of its board.
Sir Stelios, exactly who launched easyJet in 1995 plus floated it on the London Stock market five years later, said previously in the year that the company will be insolvent by August unless this cancelled the order.
In practice, although he lost the shareholder vote in May aimed at eliminating easyJet’s chairman, John Barton, plus Johan Lundgren, the chief executive, most of the directors have since decided to keep anyway.
Sir Stelios did not participate in the summer share putting, meaning that the stake held simply by him and his family was diluted to below 30%.
He also sold a number of stocks this year for the first time since 2015.
In a statement on Wed evening, an easyJet spokeswoman stated: “easyJet continues to review its liquidity position on a regular basis and will continue to evaluate further funding opportunities, should the need arise. inch