The onset of coronavirus and the imposition of national lockdowns across Europe has prompted easyJet (EZJ) to ground its whole fleet. easyJet also conducted the last of its rescue flights yesterday, having recently carried out more than 650 repatriation journeys.
The airline said that it was unable to provide a date for the restart of its commercial flights. easyJet took the decision to ground the majority of its flights earlier this month from 24 March onwards in a bid to rein in its variable costs. easyJet has now said that it is in discussions with lenders, and has also agreed furlough arrangements that will place cabin crew on 80 per cent of their average pay for two months starting 1 April.
This news does not come as a surprise given the precarious position of all airlines, which were told last week by the government that only ‘bespoke’ support for each business would be forthcoming, rather than an industry-wide deal. easyJet has also been the subject of a notable surge in short interest according to Castellain Capital’s ShortTracker - at the time of writing, 6.19 per cent of the airline’s shares were being shorted. Until we receive detail on a possible government rescue package for easyJet, gathering short interest and a lack of income for the foreseeable future leave us bearish on the company’s prospects. Sell at 574p.
Last IC View: Hold, 1,333p, 19 Nov 2019