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Coronavirus: EasyJet raises £419m in battle to survive crisis

·Finance and policy reporter
·2-min read
A large number of easyJet aircrafts are parked on the tarmac of the Geneve Aeroport, in Geneva, Switzerland, Monday, March 30, 2020. EasyJet, a British low-cost airline, on 30 March 2020 said it is ground its entire fleet of more than 300 planes amid ongoing Coronavirus COVID-19 crisis. The new coronavirus causes mild or moderate symptoms for most people, but for some, especially older adults and people with existing health problems, it can cause more severe illness or death. (Salvatore Di Nolfi/Keystone via AP)
EasyJet raised cash through issuing new shares. Photo: Salvatore Di Nolfi/Keystone via AP

EasyJet (EZJ.L) has raised around £419m ($520m) by issuing new discounted shares, shoring up its finances as the airline industry battles to survive the pandemic.

The budget airline has already announced plans to slash around 4,500 jobs, after warning it does not expect demand to reach pre-virus levels for another three years.

It said in a statement it had placed new shares worth around 15% of its existing shares at a 5% discount on their value at the close of trading in London on Wednesday (24 June).

The company said it had consulted with major shareholders on the move, and was “pleased by the strong support it has received.”

READ MORE: EasyJet slashes up to 4,500 staff in ‘knee-jerk’ job cuts

EasyJet’s planes began to fly again in mid-June, but with a heavily limited schedule. Many airlines have criticised the UK government’s 14-day quarantine for new arrivals including Brits coming home to the UK, claiming it is deterring travel.

Its decision to slash up to a third of its entire workforce last month sparked a backlash from union leaders, who called it a “kick in the teeth.”

The announcement in late May did not specify the number of workers affected, but it is thought likely to affect up to 4,500 workers.

READ MORE: Airport baggage firm Swissport slashes 4,500 jobs

EasyJet’s annual report at the end of last year said it had 15,000 employees across eight countries in Europe, including 4,000 pilots and 9,000 cabin crew.

Other airlines including British Airways and Ryanair have announced thousands of job cuts, while plane engine maker Rolls-Royce and baggage handler Swissport have also confirmed mass lay-offs.

The share issue sent the company’s traded shares tumbling more than 5% on Thursday.