EasyJet grounds entire fleet as coronavirus pushes airlines to brink

British Airways extends credit facility, while Virgin Atlantic requests UK state aid

EasyJet says   grounding its aircraft removes significant cost.  Photograph: AFP

EasyJet says grounding its aircraft removes significant cost. Photograph: AFP

 

British low-cost airline EasyJet said it had grounded its entire fleet of over 330 aircraft and had no visibility on when it could restart flights, highlighting the heavy strain on airlines trying to survive to fly again after coronavirus.

EasyJet also said on Monday that it would furlough its 4,000 UK-based cabin crew for two months, meaning they will not work from April 1st but will be paid 80 per cent of their average pay under a government job-retention scheme.

The health emergency has brought European air travel to a standstill, meaning airlines have no revenues and face a battle to survive.

Some UK airlines had been hoping for an airline-specific state aid package, but Britain told them last week that it will only consider stepping in once they had exhausted all other possible options, such as raising capital from existing investors.

EasyJet said on Monday it was focused on short-term liquidity, including removing cost from the business and working with suppliers to defer and reduce payments where possible, including on aircraft expenditure, and was in ongoing discussions with liquidity providers.

The airline said that grounding its aircraft removed significant cost.

Meanwhile, British Airways extended its revolving credit facility by one year to June 2021, with $1.38 billion currently available under it, giving the carrier some flesh to weather out hardships due to coronavirus, its parent company IAG said. IAG’s total cash and undrawn facilities are currently €9.3 billion.

Separately, small regional UK carrier Loganair, which flies between Scottish islands and the mainland, said on Monday that it would approach the government for financial help this week, having already tried to ask its owners for help.

“I do think that, like the vast majority of UK airlines, we will be going back to take up that invite for further conversation with the treasury in the coming days because we have to,” Loganair chief executive Jonathan Hinkles told BBC radio.

Cabin crew

EasyJet said in its statement it had struck the deal to furlough cabin crew with Unite, a union. Asked about a potential similar deal with its pilots, EasyJet said it continued to talk to Balpa, the UK pilots’ union.

Virgin Atlantic has already requested state aid in addition to the coronavirus package made available to all British companies.

Virgin Atlantic, which is based in the UK and is 51 per cent owned by Richard Branson’s Virgin group and 49 per cent owned by US airline Delta, made a proposal to the government’s adviser Rothschild and is hoping to get a response by the end of this week or early next week, a source told Reuters on Monday.

It was not clear whether Virgin could receive commercial loans and guarantees, or whether the government could take a stake in the airline. – Reuters