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As a result of the ongoing coronavirus pandemic, EasyJet has announced that it has grounded its entire fleet of more than 300 aircraft. EasyJet stock market has lost another 8% after the announcement amidst internal disagreements.
EasyJet plc (LON: EZJ), a British low-cost airline group that is headquartered at London Luton Airport, has today announced that it will ground its entire fleet of more than 300 aircraft. The airline is responding to the ongoing travel restriction caused by the coronavirus pandemic. As a result, EasyJet (EZJ) stock has dipped another 8% to trade at 546 GBX.
EasyJet Fleet Grounded while EZJ Stock Price Is Falling
In a press statement, the company said, ‘there can be no certainty of the date for restarting commercial flights.’ The company has now put its entire cabin crew staff on the government’s job retention scheme to help them survive the ongoing coronavirus pandemic. This was confirmed after the company reached into a common agreement with the Union Unite on matters regarding its cabin crew members.
The government retention program will assist the workers to get 80% of their salaries from April 1. The company admitted that grounding the entire fleet would significantly reduce its operational cost. EasyJet is now in discussion with lenders in order to allow it to access its liquidity.
In a bid to reassure the investors, EasyJet said:
“We will continuously evaluate the situation based on regulations and demand, and we will update the market when we have a view. We continue to take every action to remove cost and non-critical expenditure from the business at every level in order to help mitigate the impact from the coronavirus. The grounding of the aircraft removes significant cost.”
However, the airline will continue to repatriate customers who are stranded abroad due to the ongoing coronavirus pandemic. As of yesterday, the company had completed its 650th rescue flight, amounting to 45,000 passengers returned home safely.
In a statement, the company said that it will continue working with the government in order to operate rescue plans as requested. Its CEO Johan Lundgren stated:
“I am extremely proud of the way in which people across EasyJet have given their absolute best at such challenging time, including so many crew who have volunteered to operate rescue flights to bring our customers home.”
Internal Disagreements over Airbus Plane Order
As the company grounds its entire fleet due to the ongoing coronavirus travel restrictions, its biggest shareholder disagrees with the board members over Airbus plane orders. Stelios Haji-Ioannou is demanding the carrier to cancel an order of more than 100 Airbus SE narrow-body aircrafts.
He argues that the $5.6 billion cost will drag the company behind even as the coronavirus pandemic cripples its daily operations. Stelios controls more than 34% of the company’s stock is now threatening to remove the directors if they don’t act in his way.