EasyJet rescue hopes get a shot in the arm from vaccine

easyjet

EasyJet has been swamped with ­rescue offers following the announcement of a coronavirus vaccine, with boss Johan Lundgren insisting the ­low-cost airline is “in a good place” after a turbulent year.

The Luton-based operator, prior to the pandemic the second biggest ­carrier of passengers within Europe, loaded up on £3.1bn of debt to survive the pandemic. Some £1.4bn of these loans must be repaid over the next 14 months.

Frenzied discussions with the UK and other governments to secure state aid have run alongside talks with banks and other funds. City crisis experts from AlixPartners were parachuted in to help with cash flow forecasting.

But Mr Lundgren, chief executive, indicated that there had been an important shift ahead of easyJet’s annual ­general meeting of shareholders this Wednesday. Since the vaccination ­programme was announced he has received “quite a lot of calls from banks that want to help out and support”.

“The key thing for us is to have options. Because if you have options, you also can make sure that you have options with what to do with the ­company at any point in time. So we are in a good place,” he added. “When the ­people and the institutions are looking at the good news coming through, and news of the vaccination is part of that, there is clearly interest from a lot of people to participate and support a company they believe in.”

Low-cost rivals Ryanair and Wizz Air have recovered in the second half of the year despite rolling travel restrictions being imposed, with shares 8pc and 15pc higher respectively since January.

EasyJet stock is more than 40pc down in the year to date, however. In November the airline posted a £1.3bn annual loss with auditors red-flagging its finances.

The airline raised £450m from investors in June in a rights issue. Mr Lundgren played down industry speculation that he may have to go back to shareholders for more cash.

He said: “We access a variety of sources and we haven’t struggled in order to get the terms that we believe are acceptable.

“For every airline, all of the sector has been taking on debt. We want to make sure that we can come out of this, when the recovery comes, [we will be] in a leading position; paying debt off as soon as possible.

Andrew Lobbenberg, an aviation analyst at HSBC, said: “We think the market is overly cautious on easyJet, whose holiday business looks particularly well set for 2021.”