EasyJet in state aid talks with European governments

The budget airline also made an appeal for cash to the UK Government before the second lockdown was announced

EasyJet has opened talks with the Germany and other European governments to secure state aid.

The Luton-headquartered carrier, one of the biggest operators in Germany, is holding “constructive talks” with officials in Berlin, boss Johan Lundgren has revealed. 

The airline said the talks were part of a number of negotiations with governments on the Continent. 

Mr Lundgren told German magazine Wirtschaftswoche: "The talks are proceeding constructively.” 

The publication said discussions with German ministers were "apparently about several hundred millions of euros", though Mr Lundgren declined to specify exact figures. 

The discussions follow a plea from Mr Lundgren to the UK Government a month ago to provide financial support. 

The request to Whitehall was made before Boris Johnson banned non-essential travel with the introduction of a second lockdown.

In October he said UK taxpayer support for airlines and airports was "far off what other European countries have been doing".

EasyJet insiders confirmed that German talks were ongoing but insisted that it was over a "low figure".

The airline has already tapped shareholders and lenders for additional investment and cut more than 4,000 jobs to preserve cash. 

But the second lockdown is likely to put fresh strain on the finances of the FTSE 250 company, which is burning through about £700m a quarter.

A spokesman for easyJet said: "As a pan-European airline, as you would expect we have regular contact with all governments in the countries where we operate and employ people around the support measures available to all eligible companies. No formal request for funding has been made. We continue to talk to all of these governments on an ongoing basis."

Airline bosses wrote to Rishi Sunak, the Chancellor, on Wednesday to request financial support for the sector. 

"With the travel ban, airlines are now in effect closed businesses, and sadly in a much weaker position to face this period compared to the beginning of this crisis. Airlines are capital intensive operations with a high cost base beyond their employees, and were not able to meaningfully recover over the summer season," a letter from trade body Airlines UK read.

Fellow budget airline Wizz Air posted a €237m loss in the six months to September, a swing of more than half a billion euros after posting a €385m profit in the corresponding period last year.

However, chief executive Jozsef Varadi remained bullish of the London-listed airline’s fortunes, saying he saw “light at the end of the tunnel” with the prospect of the virus easing in the spring alongside the introduction of a vaccine.

Wizz also announced that Enrique Dupuy de Lome Chavarri, the former finance chief at British Airways’ owner IAG, was joining its board.

Meanwhile, Lufthansa, once Europe’s biggest airline, said it would lose €350m a month in the fourth quarter despite implementing “strict cost savings”.

It agreed a €9bn bailout from the German government in May and said it had more than €10bn in cash reserves.

Nevertheless, boss Carsten Spohr said: “We want to return to a positive operating cash flow in the course of the coming year.”

The UK Government has declined to offer the aviation industry bespoke support with the exception of Flypop, a low-cost carrier set up by a former Lehman Brothers investment banker. It has received more than £1m from a taxpayer fund to help businesses hit by Covid. 

Flypop has not been granted a UK operating licence and does not have any aircraft.