The Swiss low-cost airline based in Meyrin, Geneva. EasyJet has launched its rights to raise more than £450 million as the company seeks to shore up its cash reserves in the face of the Covid-19 crisis.
The issue, worth up to 15% of its current share capital, will need shareholder approval, potentially drawing more opposition from the company’s founder and main shareholder Sir Stelios Haji-Ioannou.
The airline also reported bigger first-half losses for the six months to 31 March, on Tuesday, but insisted it had been on track for a much improved performance before the effects of coronavirus hit.
The airline made a pre-tax loss of £353m, compared with £272m in the same period in 2018-2019, but said £160m of the deficit was down to hedging against fluctuations in fuel prices, which backfired as fleets were grounded in the spring.
EasyJet has already raised £1.7bn in additional funding during the crisis and expects to have a cash balance of more than £3bn after the placing – enough to survive a nine-month grounding, according to its latest estimates of cash burn.
Its use of state assistance, including a £600m loan from a Treasury and Bank of England fund, has raised eyebrows after it paid a £174m dividend to shareholders in March.
However, aviation demand is not expected to reach levels seen in 2019 for at least two years.
The airline said last month it would cut 4,500 jobs, and does not expect demand to recover to pre-pandemic levels until 2023.
“We have been decisive in meeting the challenges of the pandemic by cutting costs, vastly reducing our capex while retaining our industry leading fleet flexibility,” easyJet chief executive Johan Lundgren said.