EasyJet says it can survive a lengthy fleet grounding

FILE PHOTO: Easyjet planes are seen parked at Luton airport after Easyjet announced it has grounded its entire fleet, as the spread of the coronavirus disease (COVID-19) continues, Luton, Britain, March 30, 2020. REUTERS/Matthew Childs

LONDON (Reuters) – British low cost airline easyJet (EZJ.L) said it would be able to survive a lengthy fleet grounding during the coronavirus pandemic due to the steps it had taken to shore up its finances.

The airline said that it had the ability to shrink its fleet through leases and planned to sell six old aircraft, giving it flexibility depending on the shape of future demand.

Looking to the future, it also said that bookings for winter are well ahead of the equivalent point last year.

Airlines across the world are battling to stay afloat at a time when lockdowns and travel bans have brought air travel to a near-halt and as deep uncertainty remains over the pace of an eventual recovery.

EasyJet said that given the level of continued uncertainty, it was not possible to provide financial guidance for the remainder of the full 2020 financial year.

“However, we continue to take every step necessary to reduce cost, conserve cash burn, enhance liquidity, protect the business and ensure it is best positioned for a return to flying,” it said.

With its various funding initiatives, it expects to have generated total additional liquidity of around 1.85-1.95 billion pounds ($2.31-$2.43 billion), leading to a notional cash balance of about 3.3 billion pounds.

EasyJet forecast a first half to March 31 headline loss before tax of 185 million pounds to 205 million pounds ($231-$256 million). That would be an improvement on a loss of 275 million pounds in the same period last year.

($1 = 0.8013 pounds)

Reporting by Sarah Young; editing by James Davey and Kate Holton

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