MARKET REPORT: Airbus planes delay fails to ground Easyjet shares as new Covid strain plunges global aviation industry deeper into crisis
Airline Easyjet has pushed back more plane orders as the new Covid strain threw the global aviation industry deeper into crisis.
Under a new timetable with jet maker Airbus, Easyjet will not receive any new planes in 2021.
And a total of 22 that were due to be delivered between 2021 and 2024 have now been bumped back to 2027 and 2028.
Grounded: Under a new timetable with jet maker Airbus, Easyjet will not receive any new planes in 2021
The arrangement will save cash in the short-term, and comes as serious questions have been raised about how much flight time any of its planes will get next year until a Covid vaccine has been rolled out worldwide.
Any hopes of a Christmas boost have been dashed by the discovery of the strain that has prompted dozens of countries to ban UK travellers.
Easyjet has a whopping £4.5billion order with Airbus to buy more than 100 planes, which has been at the centre of a bitter spat with Easyjet’s founder and largest shareholder, Sir Stelios Haji-Ioannou.
He wants the order cancelled and if the budget airline hoped the deferrals would repair the relationship, it was mistaken.
There are rumours that Easyjet may need to turn to shareholders again to raise more cash, despite selling £420million of stock in June.
Stelios said that as long as Easyjet maintains its relationship with Airbus he is ‘not giving them another penny’, especially when there is ‘no chance of an early restart to normal flying’.
Bosses will be under more fire today at the annual meeting when it is expected to be revealed that Stelios has used his roughly 30 per cent shareholding to vote against the re-election of every board member.
Easyjet rose 2.4 per cent, or 17.8p, to 775p, buoyed by a rebound that lifted other travel and leisure stocks walloped on Monday.
British Airways-owner IAG surged 5.8 per cent, or 8.35p, to 152.25p on the FTSE 100, while among the small-caps conference organiser Hyve jumped 7.9 per cent, or 8p, to 109p and cruise group Saga by 6.7 per cent, or 14.8p, to 236p.
Fellow cruise operator Carnival missed out, however, after a new ship was delivered at a time when sea holidays have been put back in peril. Its shares dipped 0.3 per cent, or 4p, to 1291p.
The Footsie rose 0.6pc, or 36.84 points, to 6453.16, while the FTSE 250 rose 1.3 per cent, or 258.61 points, to 19,950.72, even as ministers failed to strike agreements on Brexit and border reopenings during trading hours yesterday.
While equity traders managed to shrug off the growing lines of lorries in Kent, oil traders were still rattled as the border closures and flight bans on UK nationals looked to upset the rise in oil consumption many had predicted.
Brent crude is still hovering around the $50 a barrel mark. Engineering firm Weir Group rose 0.7 per cent, or 13.5p, to 1955.5p, despite delays to the £341million sale of its oil and gas arm. It was meant to be finished this year but will go through in early 2021 instead.
And in another energy deal, SSE will sell its stake in gas fields in the North Sea to Viaro Energy for £120million. SSE is shifting its strategy to focus on renewable energy and wants to offload £2billion worth of non-green energy assets.
It recently received the all-clear to start building the world’s biggest wind farm off Hull, and is planning to invest £7.5billion in green infrastructure over the next five years. Shares jumped 1.8 per cent, or 25.5p, to 1485.5p.
While Astrazeneca scientists were frantically testing to see if its vaccine would protect against the mutant Covid strain, it suffered a setback with its experimental drug Amgen.
Astra shed 1.5 per cent, or 112p, to 7328p after it failed to meet the goal of a late-stage trial to reduce patients’ dependence on steroids.