EasyJet extends U.K. loan as new lockdowns prolong virus hit

EasyJet Plc extended the terms of a government-backed loan in the U.K. to bolster liquidity as a new wave of coronavirus lockdowns crimps travel in Europe.

Britain’s biggest discount airline posted a loss of 835 million pounds ($1.1 billion) for the year through September, within a range already announced, and said in a statement Tuesday that it will fly no more than 20% of its usual capacity in the three months through December.

EasyJet is bracing for what carriers expect to be a brutal winter, with many markets still closed and a Covid-19 vaccine not yet distributed. The Luton, England-based firm had cash of 2.3 billion pounds as of Sept. 30 and said it will continue to review its liquidity, including further funding opportunities, while seeking to refinance all upcoming maturities.

“There’s very little flying going on across Europe,” Chief Executive Officer Johan Lundgren said on Bloomberg Television. “We’re in a good position but we will continue to review all the options that are out there. We don’t know how long restrictions are going to be in place.”

EasyJet shares traded little changed at 774.20 pence as of 8:05 a.m. in London. They’ve declined 45% so far this year.

Under renegotiated terms with the U.K., EasyJet will stagger repayment of 600 million pounds borrowed under the Bank of England’s Covid Corporate Financing Facility, with half now due in March and the rest in November.

Discussions are also ongoing with governments in “almost all” European countries where EasyJet operates to tap available support, with the airline having already received help through furlough programs and other measures.

The U.K. carrier has also boosted reserves by selling aircraft and disposing of slots at London Stansted airport, which it’s vacating, to rival Ryanair Holdings Plc.

Lundgren said there’s still strong underlying demand for travel, with recent announcements on vaccine developments producing an immediate boost in bookings.

The CEO said EasyJet could help with vaccine distribution programs and that he’s written to U.K. Prime Minister Boris Johnson offering to participate.