logo-loader

easyJet cuts winter capacity again, raises US$169.5mln with sale and leaseback

Last updated: 09:08 06 Nov 2020 GMT, First published: 07:48 06 Nov 2020 GMT

easyJet plc - easyJet cuts winter capacity again, raises US$169.5mln with sale and leaseback

easyJet PLC (LON:EZJ) said it will not fly more than 20% planned capacity in the quarter to December in light of new restrictions across Europe.

Last month it said it would fly around a quarter of planned capacity but that was revised following the new restrictions in the UK.

READ: easyJet raises £305mln with sale, leaseback of nine aircraft

The firm also raised US$169.5mln through the sale and leaseback of 11 aircraft with two counterparties.

Ten A320 family aircraft were sold to ACS Aero 2 Beta for US$124.5mln, and the aircraft will be leased back for an average term of 58 months, creating lease obligations of £66.8mln.

The net book value of the aircraft at the date of transaction was £117.9mln.

The budget airline also sold one A320 family aircraft to JLPS Holding Ireland for US$45mln.

The transactions come at a cost of £6.4mln due to increases in interest charges and depreciation.

Once these are completed, the carrier will retain 141 fully owned and unencumbered aircraft, representing 41% of the fleet.

Last week, easyJet raised US$398mln with the sale and leaseback of nine aircraft to strengthen its balance sheet ahead of a tough winter.

"The sale and leasebacks improve liquidity, but also add to costs, so forecasts will be downgraded, and operating such a low level of capacity in the first quarter means that losses are also likely to be higher than forecast for that period," analysts at Peel Hunt noted.

"easyJet is inefficient relative to peers and has scope to reduce costs substantially."

Shares rose 2% to 447.6p on Friday morning.

--Adds analyst comment, shares--

FTSE rises ahead of Easter weekend, JD Sport gains on upbeat outlook -...

The FTSE 100 gained on the final morning of this shortened Easter trading week. Festive cheer was limited though, as Thames Water confirmed shareholders would not provide it with a £500 million rescue package, prompting speculation over the London supplier’s future. On a more positive...

51 minutes ago