easyJet PLC (LON:EZJ) is expecting to have access to £2.3bn in cash reserves by Thursday as the company deployed more financing measures to keep itself afloat during the grounding of its fleet as a result of the coronavirus pandemic.
On Monday, the budget airline said it has issued £600mln of commercial paper through the Covid Corporate Financing Facility (CCFF), a measure introduced by the Bank of England and the UK Treasury to support liquidity among larger firms during the crisis.
The company has also issued a utilisation request to full draw down its US$500mln (£407mln) revolving credit facility, which is secured against its aircraft assets.
easyJet also said it has reached an agreement with the aircraft pilots union, BALPA, on furlough agreements for its pilots, effective from 1 April.
The carrier has also agreed a furlough agreement with its cabin crew and training instructors, which was unveiled last week.
"We remain absolutely focused on ensuring the long-term future of the airline, reducing our costs and preserving jobs, to make sure easyJet is in the best position to resume flying once the pandemic is over. We are pleased that we have now reached agreement with both Unite and BALPA regarding furlough arrangements for UK-based easyJet pilots and crew", said chief executive Johan Lundgren.
"Our current priority is to safeguard short term liquidity, so we have borrowed from the CCFF and drawn down on our Revolving Credit Facility in order to increase our liquidity in the event of a prolonged grounding of the fleet. The CCFF provides businesses with access to funds at the commercial rates which were available before the coronavirus crisis and any UK company that had an investment grade rating before the crisis can apply for this funding”, he added.
easyJet’s fundraising follows comments earlier today by the airline’s founder and largest shareholder, Stelios Haji-Ioannou, who said that the carrier could run out of money by August unless as £4.5bn order for new Airbus planes is scrapped.
Haji-Ioannou is also looking to sack easyJet chief financial officer Andrew Findlay, saying last week that he will seek to remove one board member every seven weeks until the order is cancelled.
The Greek businessman has also criticised the company for seeking government loans, saying the firm should instead acquire cash through equity raises.
Shares in easyJet surged 13.9% to 540.9p in mid-afternoon trading.