easyJet PLC easyJet agrees delivery dates on deferred aircraft (0793Q)
June 16 2020 - 3:00AM
UK Regulatory
TIDMEZJ
RNS Number : 0793Q
easyJet PLC
16 June 2020
16 June 2020
easyJet plc
('easyJet')
easyJet agrees delivery dates on deferred aircraft
On 9th April 2020, easyJet announced the net deferral of 24
aircraft deliveries versus our previously disclosed fleet plan.
easyJet and Airbus have today finalised the exact delivery dates
for aircraft deferred as a direct response to COVID-19.
In total, 32 aircraft with original delivery dates between June
2020 and December 2021 were deferred. As 8 aircraft were deferred
from FY2020 to FY2022, the net number of deferrals from the
Financial Years 2020, 2021 and 2022 was 24 aircraft (being 32 less
8), as announced on 9th April 2020. These 24 aircraft were
originally deferred beyond December 2022 and it has now been agreed
that these aircraft will be delivered from FY2025 to FY2027.
All aircraft purchased by easyJet under the terms of the
original 2013 Airbus agreement are subject to a very substantial
discount from the list price which remains unchanged. Within the
2013 agreement a price escalation mechanism is used to reflect
market inflation in labour and material costs(1) . By applying this
inflationary mechanism, the future aggregate cash price of the 32
deferred aircraft, at their future delivery dates, could increase
by up to c.GBP95 million(2) the large majority payable between
FY2025 and FY2027. Any increase would be materially offset by the
reduced cost of borrowing associated with the significant cashflow
benefits in the next 16 months arising from these deferrals
(including consequential changes to the schedule of pre-delivery
payments).
As part of these agreements, easyJet has also secured for nil
consideration an extension to the deadlines for the exercise of
existing deferral and purchase rights.
easyJet now has the flexibility until December 2020 to defer two
aircraft and the option to not take up to seven aircraft currently
scheduled for delivery between FY2022 and FY2026. easyJet has also
secured additional flexibility with respect to its existing
purchase options of 13 aircraft, by agreeing an extension to the
deadline for the exercise of such options from November 2020 to
November 2021 (in respect of seven aircraft) and to November 2022
(in respect of six aircraft). These changes complement our
pre-existing deferral rights.
Johan Lundgren, easyJet CEO said:
"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 FY2025 to
FY2027, whilst our significant discount from list price remains
unchanged. 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."
(1) As set out in the circular sent to shareholders prior to
easyJet entering into the 2013 agreement with Airbus.
(2) GBP47 million relating to the original deferral of 8
aircraft to delivery in FY2022 and 24 aircraft to delivery beyond
December 2022, and GBP48 million relating to the further deferral
of these 24 aircraft to deliver in FY2025 to FY2027.
For further details please contact easyJet plc:
Institutional investors and analysts:
Michael Barker Investor Relations +44 (0)7985 890 939
Holly Grainger Investor Relations +44 (0)7583 101 913
Media:
Anna Knowles Corporate Communications +44 (0)7985 873 313
Edward Simpkins Finsbury +44 (0)7947 740 551 / (0)207 251 3801
Dorothy Burwell Finsbury +44 (0)7733 294 930
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END
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