easyJet remains positive that the airline will resume operations by the end of the third quarter. In a trading update, easyJet confirmed that its focus remains on cost management and delivering profitable flying.
Johan Lundgren, CEO of easyJet, commenting on its Q3 trading said that he was encouraged by “higher than expected levels of demand with load factor of 84% in July” and that summer bookings are performing “better than expected”, which has led to the expansion of the fourth quarter flying schedule to c.40% of capacity.
Total group revenue for the quarter ending 30 June 2020 was £7 million. The fleet was fully grounded on 30 March due to the COVID-19 pandemic and flying only resumed on 15 June. easyJet carried 117,000 passengers with a total capacity of 132,000 seats in the remaining two weeks of the quarter. The initial schedule comprised only 10 lines of flying and delivered a load factor of 88.9%.
easyJet’s total headline costs for the quarter ending 30 June 2020 were £332.1 million which is 79% lower than Q3 2019. Operational cost cash burn during the quarter was lower than the previously guided £30 - £40 million per week with a total cash burn for Q3 of £774 million compared to the previously guided £1 billion.
easyJet has launched a major restructuring programme which aims to drive down costs in all areas of the business, including a 30% reduction in headcount.
During the quarter, easyJet raised £419 million on 14.99% total share capital issuance, bringing the total liquidity raised to date since the beginning of the COVID-19 pandemic to over £2.2bn. This comprises £400 million from drawing on its existing revolver, £600 million from the UK government's COVID Corporate Financing Facility, £400 million from two term loans, £405 million in proceeds from a programme of sale and leaseback transactions and the £419 million of equity issuance.
easyJet confirmed that there are further expected sale and leaseback proceeds within the current programme still to be transacted, with gross proceeds expected to be at the top end of the £500 to £650 million guidance range. Following the conclusion of the sale and leaseback programme it is expected that around 50% of the fleet will still remain unencumbered.