EasyJet eyeing Gatwick slots if BA plan falters – report

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EasyJet PLC is already planning what to do with the proceeds of its GBP1.2bn rights issue, according to reports.


The carrier announced the cash call last week alongside a statement that it had rejected a bid approach from rival Wizz Air.


At the time, Johan Lundgren, chief executive, said conditions at present are a “once in a lifetime opportunity”.


“As the European aviation market recovers post-Covid-19, opportunities will arise at airports,” the airline’s statement added.


Reports today suggested the carrier is looking to buy up British Airway’s slots at Gatwick if the FTSE 100 group’s plans for a new low-cost carrier at the airport fail to materialise.


BA needs an agreement with its unions on new working conditions and contract terms and has warned it will scrap its short-haul operation at Gatwick if it is blocked, potentially leaving its slots there up for grabs.


EasyJet is also said to eyeing expansion in France at Paris Orly, where AirFrance is expected to give up some slots as part of a deal for financial support from the French government, though more capacity in Germany is not being considered, said today’s report.


Shares in easyJet today reflected the heavy discount its investors had to swallow to get its rights issue away.


Terms of the issue were a hefty 31 for 47 at a price of 410p, a 48% discount to the market price at the time with a theoretical ex-rights price in the prospectus of 638p.


The shares went ex-rights today and were trading at 583p, implying a drop of around 9% since Thursday’s announcement, though the shares were up about 1.3% today.


EasyJet, Wizz Air merger a good idea says rival


Ryanair’s boss Michael O’Leary, meanwhile, has suggested that easyJet and Wizz Air merging is a good idea.


A combination between Wizz and easyJet would make sense given they both run all-Airbus fleets and work in largely separate geographies, he told the FT.


If they don’t, he sees a possible situation where both are bought by bigger rivals such as IAG, which owns British Airways and Iberia.


O’Leary also warned that airfares will be “dramatically higher” next summer once demand returns to normal.


There will be huge demand for holidays, he says with fewer flights causing a surge in prices for holidaymakers.


“I think there will be a dramatic recovery in holiday tourism within Europe next year. And the reason why I think prices will be dramatically higher is that there’s less capacity,” O’Leary said.


“Take out Thomas Cook (6 mln seats), Flybe – (8 mln seats), Norwegian (nearly 24mln seats) — Alitalia’s reducing its fleet by 40%t. There is going to be about 20% less short-haul capacity in Europe in 2022 with a dramatic recovery in demand,” he told reporters.


Shares in Ryanair rose 2% to EUR15.80 and IAG 0.3% to 145.7p.

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