EasyJet has reached an agreement with Airbus to defer delivery of 24 A320-family jets as the UK budget carrier moves to conserve cash amid 90 percent service cuts due to the Covid-19 pandemic. The deferrals cover 10 deliveries scheduled for EasyJet's 2020 fiscal year, 12 slated for FY2021 and two for FY2022. As a result, during FY2021 the airline will take no aircraft deliveries. It retains an option to defer five more deliveries in FY2022. The exact dates the aircraft ultimately get delivered remain subject to market conditions and further negotiation, said EasyJet.
The airline said leases on another 24 airplanes come due for renewal over the next 16 months, giving it further flexibility to either defer or cancel deliveries.
"Our industry is facing unprecedented challenges which require unprecedented action,” said EasyJet CEO Johan Lundgren in a written statement. “As we have consistently said, we remain completely focused on improving short term liquidity and reducing expenditure across the business. Today I am pleased to announce that we have agreed with Airbus to amend our delivery schedule by deferring the purchase of 24 aircraft, providing a significant boost to our cash flow and a vast reduction to our near-term capex program.”
The agreement came amid increasing pressure from the airline’s founder and biggest shareholder, Stelios Haji-Ioannou, to cancel an order for 107 A320neo-family jets. The company also confirmed on Thursday that it would hold a general shareholders' meeting Haji-Ioannou had demanded take place as he called for the ouster of CFO Andrew Findlay and board member Andreas Bierwirth.
The move by EasyJet comes a day after Airbus announced plans to cut rates of its A320 family to 40 per month from a peak of 60 in 2019 as part of a one-third cut in production across its product line. The company delivered 35 aircraft in March, down from 55 in February, reflecting customer requests for delivery deferrals and what Airbus called other factors related to the pandemic.