Will easyJet need to raise more capital?

Question

Accepted Answer

EasyJet Does Not Currently Anticipate Needing Additional Capital

EasyJet's chief executive, Johan Lundgren, has stated that the company does not believe it needs to raise more money at this moment, despite reporting a historic £1.27 billion annual loss. The airline has been actively managing its finances through the pandemic by increasing debt, securing shareholder funds, and selling aircraft.
Vaccine News Sparks Booking Surge

Positive developments regarding a coronavirus vaccine led to a significant increase in bookings, with a 50 per cent jump reported on the day of the announcement. This news also contributed to a 45 per cent rise in EasyJet's share price over the preceding week, offering a brief positive outlook amidst the ongoing travel downturn.
Financial Measures and Cash Burn Improvement

To navigate the financial challenges posed by the pandemic, EasyJet has undertaken several measures, including tapping shareholders for additional capital and selling off aircraft. The company has also extended its borrowing under the Covid Corporate Finance Facility, which allows for staggered repayments and eases pressure on its balance sheet. Furthermore, the airline reported an improvement in its quarterly cash burn, reducing it to £651 million from £774 million in the prior period.
Continued Uncertainty and Operational Capacity

Despite the positive booking response to vaccine news and improved cash burn figures, EasyJet acknowledges the significant short-term uncertainty surrounding the travel industry's recovery. Lockdowns in key markets such as England, France, and Germany mean the airline is currently operating at approximately 20 per cent of its planned capacity. This volatility prevents the company from providing specific financial guidance for the near future.

Reading history

Hide →

This history is cleared when the page is closed.

Will easyJet need to raise more capital?

Loading

Was this article helpful?

Helpful

Not helpful

Report an issue

1

0

0

Share with friends