The carrier said in a Monday trading update (16 March) “unprecedented” travel restrictions and “significantly reduced” levels of customer demand had already forced easyJet to make sweeping cuts to its flight programme.
“These actions will continue on a rolling basis for the foreseeable future, and could result in the grounding of the majority of the easyJet fleet,” said the airline.
EasyJet will operate rescue flights for short periods, where possible, to repatriate customers.
It has also pledged to take every possible action to “remove cost and non-critical expenditure” from the business “at every level”.
“Aircraft groundings will remove significant levels of variable costs,” said easyJet.
The airline insists it maintains a strong balance sheet with a £1.6 billion cash balance, a $500 million credit facility, aircraft worth in excess of £4 billion, and a “large and valuable slot portfolio”. It also has no debt refinancing due until 2022.
“European aviation faces a precarious future and there is no guarantee that the European airlines, along with all the benefits it brings for people, the economy and business, will survive what could be a long-term travel freeze and the risks of a slow recovery,” the airline warned.
“Whether it does or not will depend significantly on European airlines maintaining access to liquidity, including that enabled by governments across Europe.”
The message was reinforced by easyJet chief executive Lundgren, who said the airline was doing everything in its power to rise to the challenge of the coronavirus.
“We continue to operate rescue and repatriation flights to get people home where we can, so they can be with family and friends in these difficult times,” he said, adding government intervention was now vital.
“European aviation faces a precarious future and it is clear that coordinated government backing will be required to ensure the industry survives and is able to continue to operate when the crisis is over.”
EasyJet has declined to provide new full-year financial guidance, citing the continued uncertainly arising from the coronavirus crisis.
