EasyJet raises another £203.6 million via aircraft sale and leaseback

EasyJet raises another £203.6 million via aircraft sale and leaseback
Written by:
Wajeeh Khan
14th August, 10:41
  • EasyJet raises another £203.6 million via aircraft sale and leaseback.
  • UK adds France, Malta, and the Netherlands to its quarantine list.
  • The budget airline's latest deal was with Jin Shan 37 Ireland Company.

The British airlines have taken a massive hit due to the Coronavirus pandemic that wreaked havoc on travel and tourism in recent months. Amidst the chaos, EasyJet (LON: EZJ) has been committed to boosting liquidity to improve its balance sheet.

In an announcement on Friday, EasyJet said it resorted to aircraft sale and leaseback to raise £203.6 million. It also expressed plans of continued efforts to explore further opportunities to shore up its finances. EasyJet also raised £419 million via a share sale in June. The British airline also announced in June that its pre-tax loss had widened to £353 million in the first half of the current fiscal year.  

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UK adds France, Malta, and the Netherlands to its quarantine list

While airlines are slowly resuming flights, COVID-19 restrictions are still in place and are likely to weigh on performance in the upcoming months. After introducing a two-week quarantine on all non-essential travel to Spain last month, the United Kingdom also added France, Malta, and the Netherlands on Thursday to its quarantine list. France marks a prominent holiday spot for Britons.

Despite the upgraded quarantine rules, easyJet said on Friday that its full schedule will remain operational in the upcoming weeks. According to the low-cost airline, leaseback or sale of 23 of its aircraft has raised £608 million in total so far. EasyJet said on Friday:

“EasyJet will continue to review its liquidity position on a regular basis and will continue to assess any further funding opportunities.”

EasyJet’s performance in the stock market

Its latest sale and leaseback agreement was with Jin Shan 37 Ireland Company (an affiliate of BOCOMM Leasing) that entails 5 A321neo jets that resulted in a cash boost of £203.6 million. The deal concludes easyJet’s sale and leaseback plan that it had originally announced earlier this year in May.  

Shares of the company opened about 4.5% down on Friday. The stock continued to decline and tanked another 3% to 565 pence per share in the next hour. Compared to its year to date low of 475 pence per share in March, easyJet is still trading roughly 20% up.

EasyJet’s performance in the stock market was reported largely upbeat in 2019 with an annual gain of about 30%. At the time of writing, the Luton-based budget airline has a market cap of £2.60 billion and a price to earnings ratio of 9.60.  

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