Barton expects EasyJet share sale to proceed

EasyJet chairman John Barton said he expects shareholders to approve the British carrier's £419 million share sale, providing a financial buffer as it contends with a slow recovery from the coronavirus shutdown. The Luton, England-based airline received proxy votes worth 60 per cent of share capital in favour of the conditional part of a 703 pence-a-share equity raise announced last month, Barton told investors on Tuesday.

EasyJet needed a simple majority to push ahead with the proposal. Final results will be announced later on. After the equity increase, EasyJet has said it will have more than £3 billion of cash, including funds raised from sale-and-leaseback transactions on its aircraft. Liquidity has been boosted by a slightly lower-than-expected cash burn as more customers opt to take vouchers for cancelled flights instead of asking for refunds. The UK’s biggest discount carrier was among the first European airlines to start increasing flights as lockdowns eased, in the hope of salvaging the tail end of the summer season.

Lower frequencies

EasyJet plans to operate 50 per cent of its usual routes in July and 75 per cent in August, though lower frequencies mean capacity will be down about 30 per cent in the third quarter of the year.

EasyJet's bid to counter the impact of the virus has been further complicated by feuding with the founder and largest shareholder, Stelios Haji-Ioannou, who has used the crisis to press a long-held demand for the airline to cancel a large aircraft order with Airbus SE. Following the share sale, Haji-Ioannou's stake in the carrier will drop below 30 per cent, the company said last month. On Monday, EasyJet's pilots said they would hold a vote of no confidence in chief operating officer Peter Bellew this week, after the carrier said that it was considering cutting a third of its aviator positions and closing three bases in the UK, including London's Stansted airport. – Bloomberg