EasyJet raises $1.7bn to ease pandemic slump

Photo: EPA

The budget carrier EasyJet announced it had rejected a takeover bid. The company also noted that it planned to fight the pandemic downturn by raising extra cash from investors to buy additional landing slots. The earmarked volume needed to fund the recovery of the airline is $1.7bn.

The low-cost firm did not disclose the bidder for the EasyJet was, but said the all-share approach fundamentally undervalued its business and the potential buyer had since said it was no longer interested in a deal. A source familiar with the matter told Reuters the approach was from budget rival Wizz Air, which declined to comment. EasyJet Chief Executive Johan Lundgren said the approach was "highly conditional in its nature which made it very uncertain in terms of the deliverability of it."

The airline said the planned rights issue would strengthen its balance sheet if the Covid-19 downturn continue and allow the company to take advantage of an expected recovery in Europe's aviation market. "I believe this is really a once in a lifetime opportunity," Lundgren said.

EasyJet is aiming to steal market share from legacy carriers like British Airways and Air France-KLM as they retract their short-haul operations. EasyJet said that over July-September it expected its capacity to be about 57% of pre-pandemic levels. Ryanair flew around 75% of its normal passenger numbers in August, and Wizz flew over 85% that month.

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