16th Jun 2020 09:04
(Alliance News) - easyJet PLC said Tuesday it has finalised with French airplane manufacture Airbus SE the exact delivery dates for aircraft deferred beyond 2022 as a response to the Covid-19 outbreak.
The FTSE 100 budget airline said that 32 aircraft with original delivery dates between June and December 2021 were deferred.
Eight of the aircraft were deferred from easyJet's 2020 financial year to 2022.
Meanwhile, the remaining 24 were originally deferred beyond December 2022 and will now be delivered in the period from the 2025 financial year to 2027.
All aircraft purchased under the original 2013 agreement are subject to a substantial discount from the list price, which is unchanged. In addition, the agreement has a price escalation mechanism which reflects market inflation in labour and material costs.
Based on this mechanism, the aggregate cash price of the 32 deferred aircraft could rise by up to GBP95 million, but this increase could be offset by the reduced cost of borrowing.
Also easyJet has secured an extension to the deadlines for the exercise of its existing deferral and purchase rights.
The group now has enough flexibility until December to defer two aircraft and the option to not take up to seven aircraft scheduled for delivery between the 2022 financial year and 2026.
"I am pleased to confirm the detail of easyJet's revised aircraft delivery commitments. The 24 aircraft that were originally deferred beyond December 2022, will now be delivered from 2025 to 2027, whilst our significant discount from list price remains unchanged," said Chief Executive Officer Johan Lundgren.
"We have also agreed further flexibility in relation to deferral rights and future purchase options. The changes agreed defer capacity in the medium term while continuing our long-term strategy of replacing our older fleet with the advanced and lower fuel burning A320NEO family," Lundgren added.
easyJet's GBP4.5 billion aircraft order from Airbus has been aggressively opposed by founder and major shareholder Stelios Haji-Ioannou.
In late May, a meeting requisitioned by Haji-Ioannou was convened to remove CEO Lundgren, Chair John Barton, Chief Financial Officer Andrew Findlay, and Non-Executive Director Andreas Bierwirth.
Although all four resolutions were defeated, though easyJet did announce four days afterwards that CFO Findlay would be leaving the group in 2021.
Haji-Ioannou termed the results of the meeting as "voting fraud" claiming that three investors - Invesco, Ninety One UK Ltd and Phoenix Asset Management - which hold 15% of shares collectively were working on behalf of Airbus.
Shares in easyJet were up 5.8% at 812.00 pence on Tuesday in London, while Airbus's shares were 3.1% higher at EUR70.08 in Paris.
By Dayo Laniyan; [email protected]
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