A £600m state lifeline for easyJet
EasyJet has secured a £600m loan from the Treasury and Bank of England’s emergency coronavirus fund.
The first major UK airline bailout has taken place, says Gwyn Topham in The Guardian. No-frills carrier easyJet has secured a £600m loan from the Treasury and Bank of England’s emergency coronavirus fund. It has also promised to borrow another £407m from commercial creditors.
Nonetheless, easyJet’s founder Stelios Haji-Ioannou still thinks that it still could run out of cash in the near future, insisting that predictions that large-scale international flights could resume by June are “wildly optimistic”. He thinks that the loan simply “pushes the insolvency boundary back from August to late-autumn, early winter”.
Meanwhile, the battle between Haji-Ioannou and the easyJet board over a £4.5bn contract easyJet has signed with Airbus shows no sign of letting up, says Nikou Asgari in the Financial Times. Although Haji-Ioannou argues that the “long-term viability” of the low-cost airline rests on the Airbus order being cancelled, the board has refused to terminate the contract, arguing that they can change the delivery dates. Haji-Ioannou has now said he wants to oust easyJet’s chief financial officer, Andrew Findlay.
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EasyJet is unlikely to be the only British airline needing state aid, says Oliver Gill in The Daily Telegraph. Virgin Atlantic has been discussing an emergency loan, but agreeing a bailout that “did not leave the British taxpayer at risk” has proven to be “problematic”. Not only has Virgin “struggled with profitability” but its decision to lease rather than own its planes means that there is “little security to put up against a state loan”.
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Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
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