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easyJet raises £305mln with sale, leaseback of nine aircraft

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easyJet PLC (LON:EZJ) announced it raised £305mln (US$398mln) with the sale and leaseback of nine aircraft with two counterparties.

The company is looking to strengthen its balance sheet ahead of the winter, when it plans to fly at only 25% of planned capacity in the quarter to December.

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Once these two transactions are completed, the firm will retain 152 fully owned and unencumbered aircraft, representing approximately 44% of the fleet.

However, they will bring to a one-off charge of £15mln due to increases in interest charges and depreciation.

Like most of its competitors in the travel sector, easyJet has been hit hard by travel restrictions to stop the spread of COVID-19.

In fact, the year to September 30 is expected to see a loss before tax of £815mln-£845mln, compared to the £427mln profit recorded a year earlier.

There are plans to lay off a third of its UK staff while it negotiations with unions in Germany, Portugal and Switzerland are underway as part of a cost-cutting programme.

“easyJet’s ability to tap the sale and leaseback (SLB) market to raise liquidity is positive, especially in light of the toughening outlook for the winter,” analysts at Liberum commented.

“However, we believe that recent SLB activity has been focussed on the newest types in easyJet’s fleet, and its ability to monetise its older aircraft is less certain in current market conditions.”

The sale and leasebacks were agreed with wealth advisory firm Wilmington Trust for five Airbus 320 family aircraft, generating proceeds of £146mln and Sky High 112 Leasing Company for four Airbus 320 family aircraft for £159mln.

Shares dipped 1% to 516.2p early on Tuesday.

–Adds detail–

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