Album Image
Live on JSR Hits
Album Image
Live on JSR Classics

easyJet begins a Sale and Lease agreement on 6 A320neos

Written by JetStream Radio Events on July 04, 2020 at 2:19 PM UTC

This article should take 2 minutes to read. 

I will make this article very easy to read, excuse the pun but I thought it was only fitting since we’re talking about easyJet here, Europe's leading low-cost carrier. I am sure you have seen their aircraft, somewhere in your life, bright orange and an all-Airbus fleet. During Coronavirus easyJet has been struggling financially with one example being the parking of some of their aircraft for 11 weeks which has cost the airline about $1.24 billion.

But don’t worry Irish leasing company SMBC Aviation Capital is coming to the rescue. On June 26th easyJet announced that they would be selling some of their A320neos (aged between six months and two years old) to SMBC Aviation Capital to boost extra funds to help them through this time. Now, these aircraft aren’t gone they entered into what is known as a leaseback agreement where even though the airline doesn’t own the aircraft they can still use it and the deal lasts for 110 - 122 months. Pretty smart move. This helps the airline improve its liquidity status and generate close to $255 million, which will go towards May's goal ($616m - $802m).

From what they have already received through these aircraft's sale, it would be reasonable to assume that they will probably continue to sell more of their aircraft to SMBC Aviation Capital since they already have a relationship with them. It just makes sense to do that. They have also said that they will sell an additional $74 million worth of shares and they received an emergency loan from the UK government in April which amounted to $740 million.

With all of these good things happening for the airline they have still said that 30% of their workforce will be laid off which equals 4,500 employees. They also hope to be at 75% of their usual network by August, which is a far stretch considering that is less than a month away. It may be possible to assume that easyJet may continue to enter into leaseback agreements since it would raise much-needed funds but have that many loans would cause plenty of problems under the hood. Still, hopefully, this is enough to help save the world's favourite orange airline.