Yahoo Finance New UK lockdowns push easyJet to scale back capacity
EasyJet (EZJ.L) has announced that the new lockdown in England has forced it to scale back flying capacity, which had already been reduced by similar measures taken in France and Germany.
The budget airline said that it would now fly no more than 20% of capacity for the rest of the year.
In October, amid a surge in restrictions and COVID-19 cases, easyJet laid out a plan to fly at 25% capacity, its updated 20% guidance for the rest of the year falls below that. Easyjet’s competitor Ryanair (RYA.L) is aiming to fly at 40% capacity.
Like many airlines, easyJet is scrambling to save cash at a time when the aviation and travel sectors face a mountain of hardships, including thousands of job cuts amid flight restrictions and lockdowns.
The low-cost carrier also said that it has raised around £131m ($172m) in cash from a sale and leaseback deal of 11 aircraft. This is on top of the £900m it has already raised this year.
After the deals, covering 11 planes it will own 141 aircraft or 41% of its fleet.
It said the latest sale and leaseback deals were with two counterparties, ACS Aero 2 Beta Limited, which bought ten A320s and JLPS Holding Ireland Limited which bought one A320.
“EasyJet will continue to review its liquidity position on a regular basis and will continue to assess further funding options, including those that exist in the robust sale and leaseback market,” a company statement said.
READ MORE: Ryanair posts first summer loss in decades as CEO slams UK government 'mismanagement'
It comes after, Ryanair posted its first losses over the summer in decades, as passenger numbers plummeted amid the pandemic, on Monday.
Ryanair’s results highlighted their fading fortunes since European governments began tightening restrictions in September, which “heavily curtailed travel to/from much of central Europe, the UK, Ireland, Austria, Belgium and Portugal.”
It cut its expectations for full-year traffic to 38 million travellers, “at most 40%” of the previous year’s traffic. Previously it expected 60%. Losses are also expected to be higher in the second half of the year than the first.
UK prime minister Boris Johnson on Saturday announced a host of new measures aimed at curtailing the rising number of COVID-19 infections, including a four-week England lockdown from 5 November until 2 December.
The measures mean that pubs, cafes and restaurants will shut, except for takeaway and delivery services. but schools and colleges and construction sites will remain open.
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