The budget airline easyJet has raised around 419 million pounds through a share placing for helping to bolster the finances after the coronavirus or COVID-19 pandemic devastated the travel industry.

The new equity is going to help boost its liquidity for about three million pounds, easyJet mentioned, enabling it to survive for many more months even if they are grounded again, and giving it a strong position to tackle with 'protracted recovery scenarios'.

EasyJet's planes returned to the air in mid-June, but with minimal service. On Thursday, it said it would resume flights to Paris, Barcelona and Milan from Britain from July 1, as it restarts services from Manchester and London's Luton airport. The airline is hoping to ramp up flying as the year goes on, but demand is being hampered by UK quarantine rules and consumer nervousness.

easyJet Raises 419 Million Pounds

EasyJet
EasyJet Pixabay

Airlines are hoping Britain agrees on travel deals with other countries to allow restriction-free movement between some European countries. A review of quarantine rules is due on June 29. EasyJet said it had placed a total of 59.5 million new ordinary shares at 703 pence apiece, after announcing the move late Wednesday.

Its shares were down 5.4 percent to 699.9 pence at 0915 GMT on Thursday. They have approximately halved in value since the start of the year. EasyJet has said it does not expect passenger demand to recover to pre-pandemic levels until 2023 and is planning to axe up to 4,500 jobs. Bernstein analyst Daniel Roeska said the airline was already making progress with cost-cutting.

"EasyJet has a compelling proposition of lower cost structures and strong positions in better markets," he said in a note. British Airways, owned by IAG, has said it needs to shed 12,000 jobs and there has been media speculation that IAG could also raise new equity. Qatar Airways, IAG's biggest shareholder, has said it would inject equity into IAG if needed.

(With agency inputs)