EasyJet 'hanging by a thread', says union official

[Globally Challenged]

https://www.bbc.co.uk/news/business-54303379

[Boeing 7E7]

It was a figure of speech and a sales pitch in order to convince pilots that the negotiated deal between the business and BALPA would be accepted. That’s probably all. But let’s start a multi page thread on pprune about it...

[CW247]

The Free Press will be our undoing. Meanwhile, happy days in China.

[Walnut]

Not helpful for future bookings

[Meester proach]

I understand half their cash reserves have gone ?

If easy can’t survive with their scale there’s not much hope for the rest

[captain g l walker]

So... I suppose the question here is: is easyjet hanging by a thread or is it standard policy for BALPA to lie to its members?

[TimGriff6]

Boeing 7E7

As a paying customer who has kept faith with the airlines and left my money in them partially to help keep the staff's jobs so that they are still there when I can travel again, I hope that this does get a bit of exposure here if only to make people in other airlines realise that making statements like this as a figure of speech in a sales pitch or publicising them is tantamount to shooting yourself in both feet at once and then jumping in a shark infested sea. Don't do stupid things!!

[Serenity]

Not quite as heard

just saved 1,000 pilot jobs by going part time.

if it was that bad the company would not have agreed to the deal, it would have been redundancies.

[SWBKCB]

I hope that this does get a bit of exposure here if only to make people in other airlines realise that making statements like this as a figure of speech in a sales pitch or publicising them is tantamount to shooting yourself in both feet at once and then jumping in a shark infested sea. Don't do stupid things!!

The same applies to the individual who recorded a confidential discussion and leaked it to the press.

The recording comes from the presentation, which was given by the union officials to their members as part of a process to encourage them to take up the airline's offer of part-time working in order to save jobs.
However his presentation to fellow pilots at Easyjet, which was recorded and leaked to the BBC, is a pitch.

[Jamie2009]

I've heard this and he sounded pretty genuine but who knows.... he said they're even selling planes and leasing them back to get cash.

Don't think he leaked it, I have no connection to Easy and I was sent it by a J2 Pilot, think it went far and wide before the media got hold of it.

[Moonwalker]

Easyjet, like Ryanair, is a public company listed on the stock market so anyone with accountant skills can find out how their balance sheet looks like. Just google Easyjet Investor Relations and find a friend that works as an accountant.

[lederhosen]

I am an easyjet frequent flyer and admit the headline made me a little nervous about future bookings. However when you read the rest of what he said it makes perfect sense and had the desired effect (if I understand correctly) of encouraging people to job share/ go part time to try and save jobs.

[macdo]

I was sent this recording and it made fairly depressing listening. However, I suspect that had I been privy to a similar briefing from the Union reps of any other airline in Europe (or further afield) the general gist would have been pretty much the same. In a nutshell, we're burning cash. we've sold the family silver, we've touched all available credit, if something doesn't change next year, we're screwed. It ain't just Easy hanging by a thread.

[Jamie2009]

Given the media speculation perhaps a RNS may land on Monday morning.

[PilotLZ]

Such headlines have the potential of smashing up whatever is left of consumer confidence. The present situation combining shambolic and unpredictable government policy changes and bombastic headlines left, right and center makes flying look like Russian roulette. When, apart from being at risk of having your flight cancelled or being sent into quarantine, you're also faced with the risk of the airline going bust by the time of your trip, it takes a huge deal of determination and a bit of denial to take any non-essential trip. The average traveller will not delve into the fact that hardly any private airline will survive unless this mess is sorted by next summer. The words "hanging by a thread" is all they need to see.

[1+F]

The way some governments are handling the pandemic and no real coordination in aviation yet, I do not see this getting any better quickly.
I even think that a general moratorium on all debt should be considered. Other wise when banks start calling in all debt the wealth will move into a very few hands.

[macdo]

Seems as though they are fighting back before the markets warm up on Monday, although I suspect this recording was known about in the city a few days ago, judging by the trajectory of easy shares last week.
https://uk.finance.yahoo.com/news/easyjet-aviation-pilots-redundancies-balpa-coronavirus-134403998.html

[Buster the Bear]

Why would you want to leak that info, unless you wanted to damage the airline? Tabloids will pick this up, next thing, you have a Monarch, Thomas Cook and Flybe threatening as customer confidence is shattered.

[Tartiflette Fan]

1+F

Well that sounds fairly crazed. Why should airline problems simply be off-loaded onto other shoulders ?

How do you regard banks as " a few hands " ? What difference is there to all this debt ( money ) being in the hands of a few whoare running airlines ?

[macdo]

Buster the Bear

All true, but a change of sentiment drives the share price down and people make money out of that. Just as they did with all the airlines you mention, whether there really is a problem is neither here nor there for the money people.

[Groundloop]

he said they're even selling planes and leasing them back to get cash.

Easyjet have done that for years. When they first took delivery of their A319s they had got such a good price from Airbus (from ordering over 100) that they sold them to the leasing company for more than they had paid Airbus for them.

[Doors to Automatic]

EasyJet are sound long term as long as this Covid nonsense doesn’t last beyond one Summer. If they run out of cash they can issue more shares. With this crisis likely to see the demise of smaller carriers they will be in pole position to benefit from a future upturn. EasyJet, Ryanair and Wizz will be net gainers when all this has worked through.

[Gypsy]

So... I suppose the question here is: is easyjet hanging by a thread or is it standard policy for BALPA to lie to its members?

It is IMHO, standard policy for the Company to lie to the pilots and their reps.

[oceancrosser]

Groundloop

Pretty normal in sale/leaseback deals. Short term financial gain, but then the airline pays lease rates based on the higher sales price. So it evens out over time.

[rotorwills]

Doors to Automatic

the issue facing us is exactly this virus and how long it is going to be around. By many accounts their are fears that it will continue for years. It's a very scary thought for us in aviation as well as other industries. Suggesting that COVID is nonsense and that a particular airline can just issue shares is so out of the real world it's exasperating. This virus could be fateful for many airlines, and will certainly have an adverse impact on the whole economic world. I wouldn't myself put EasyJet in the same bracket as RyanAir for making gains. By many accounts Easyjet may not survive this pandemic. To my knowledge RyanAir, being completely cutthroat in a business sense are the most well placed airline company. Never worked for them for that reason, but you have to admire their ruthlessness. EasyJet are saddled with massive overhead costs just as Jet2 which is probably worse, the silence from them is deafening. Legacy are the best bet for survival, and if you don't understand why then you should go back to school.

[rotorwills]

oceancrosser

no it doesn't even out over time, that's a rubbish statement, some party has to pay. Just to be clear the leasing company isn't the one that pays. Fundamental business practice.

EasyJet are labelling and leasing to help cash flow at this time, they just delay the hit.

give me a break!

[Doors to Automatic]

rotorwills;

As I said, as long as things are back to normal by next Summer (which will hopefully be the case but is not guaranteed), then the likelihood is that easyJet can survive by increasing cash through a number of ways, one of which is to issue more equity. If COVID is around for years, then it is indeed a different matter. I disagree that legacy airlines are in a better position. Their high fixed costs (particularly but not exclusively) centred around operating hubs and long haul networks make them more, not less vulnerable than LCCs.

[nickler]

That is a veeery optimistic statement.
We are currently getting our ax hardly beaten in Europe and the winter season with the seasonal flu will only make things more complex in terms of tracing covid infections.
A vaccine will "hopefully" be out by beginning of 2021 but it will take a considerable amount of time to reach a decent level of the population, 1 year minimum.
Therefore I strongly believe we are looking at summer 2022 (best case scenario) as a more or less normal summer.

[guy_incognito]

rotorwills

I don't work for Jet2, but I do hold shares in them. From what I've read in their financial report, they seem to be well placed to weather this fiasco. They own a lot of their own aeroplanes, with no lease costs, and as far as I know have a large number of seasonal (cabin) crew. I wouldn't say that they have "massive overhead costs", certainly not compared to easyJet or IAG.

[1+F]

Tartiflette Fan.

I was not proposing debt relief but a debt moratorium and not for airlines only, the global economy is affected and a few years ago private citizens bailed out banks big time. It is time they reciprocated not by accepting defaults but by deferring payments to allow a sensible transition for companies and individuals into some normality.

Banks and the people who run them are but a few.

[Crewing Gimp]

“EasyJet are saddled with massive overhead costs just as Jet2 which is probably worse, the silence from them is deafening.”

Why’s is it a bad thing Jet2 don’t feel the need to air their laundry in public? The company has already made cut backs in staffing and aircraft, to be ready and make it through to S21.

EasyJet’s overhead cost of 300+ aircraft Either grounded or flying around with 20 pax to quarantine destinations.
Jet2 overhead cost of 75 aircraft flying to available Covid safe destinations.

I know who will burn through cash reserves quicker!

This leak is bad news, which it still astounds me why someone would feel the need to put it out in the public domain.

If this continues through S21 - no one survives without government intervention.

[PilotLZ]

I would be curious to see some numbers in terms of route flexibility for EZY and LS. The latter seem to have been very good with this so far, successfully rerouting lots of the traffic from the quarantined markets to the free-travel ones (e.g. by adding quite a lot of extra flights to Cyprus and Turkey in place of the cancelled ones to Spain). "Meeting the demand" is too broad a term. Sometimes it needs this sort of significant adjustment of the offering instead of flying empty into destinations with almost inexistent demand for the sake of maintaining presence there.

[oceancrosser]

rotorwills

Methinks someone forgot to take their pills this morning...
Of course the leasing company gets their share based on the higher price they bought the aircraft at. The airline gets short term cash benefit but pays for it. All the way.

[Moonwalker]

Such headlines have the potential of smashing up whatever is left of consumer confidence. The present situation combining shambolic and unpredictable government policy changes and bombastic headlines left, right and center makes flying look like Russian roulette. When, apart from being at risk of having your flight cancelled or being sent into quarantine, you're also faced with the risk of the airline going bust by the time of your trip, it takes a huge deal of determination and a bit of denial to take any non-essential trip. The average traveller will not delve into the fact that hardly any private airline will survive unless this mess is sorted by next summer. The words "hanging by a thread" is all they need to see.

Completely agree. Personally I have stopped booking my flights with Norwegian.. .I just don't know if they will be around in 3-4 months or not. Travellers want confidence that their flights will happen when they book. This is not the kind of marketing you want if you look at booking 2021 summer travels.

[rotorwills]

Money is a determine factor for the consumer, if you want to book a holiday or flight next year then one should do it as no one can see into the future of wether the flight/holiday will go ahead or not. It's all about the amount of cash available to consumers. If one has the means to book one or two holidays then they should as they will be refunded for any cancellation. The world is not stopping, but don't think we are going to have a vaccine available anytime soon, some have posted to be early next year, Early 2021 is when they may start the first vaccine challenge trials. A vaccine is not going to save us anytime soon. It's about living with it and adjusting to the demands of financial survival of our airlines. I referred earlier to legacy airlines being better place onky due to the fact they will WILl be bailed out by taxpayers money. Some airlines seem to have lost the plot and are trusting in the words coming out of political bodies. My advice is trust in what you see and not what you are preached by elected officials who quite frankly have not a clue of what's really happening in the real world. Mean to say five months ago the UK would have a world class track and trace up and running back then, and still it's not working. The PM can't even answer a question today on who can meet who where and now PR Dept saying it was a mistook. Hmmm. We all want our airlines to survive but boy some of them haven't woke up to smell the coffee. Going to be more painful for some of our esteemed colleagues. KBO.

[Down in front]

Will they be refunded .... or will they have a sneakily issued voucher instead (https://www.bbc.com/news/business-54059004)?