EasyJet extends terms of UK government-backed loan

Airline staggers repayment of £600m borrowed in order to boost liquidity

EasyJet is bracing for what carriers expect to be a brutal winter. Photograph: Hannibal Hanschke/AFP via Getty

EasyJet is bracing for what carriers expect to be a brutal winter. Photograph: Hannibal Hanschke/AFP via Getty

 

EasyJet extended the terms of a government-backed loan in the UK to bolster liquidity as a new wave of coronavirus lockdowns hit travel in Europe.

Britain’s biggest discount airline posted a loss of £835 million for the year through September and said in a statement that it would fly no more than 20 per cent of its usual capacity in the three months through December.

EasyJet is bracing for what carriers expect to be a brutal winter, with many markets still closed and a Covid-19 vaccine not yet distributed. The Luton-based airline had cash of £2.3 billion as of September 30th and said it would continue to review its liquidity, including further funding opportunities, while seeking to refinance all upcoming maturities.

Under renegotiated terms with the UK, EasyJet will stagger repayment of £600 million borrowed under the Bank of England’s Covid Corporate Financing Facility, with half now due in March and the rest in November.

The carrier has also boosted reserves by selling aircraft and disposing of slots at Stansted airport in London to rival Ryanair Holdings.