Brexit plans and share ownership, principal risks, airline

easyJet plc – annual report – 30 September 2017

Industry: transport

Chief Executive’s review (extract)

BREXIT PLANS AND SHARE OWNERSHIP

In July easyJet announced that it had established a new airline, easyJet Europe, which is headquartered in Vienna and will enable easyJet to continue to operate flights both across Europe and domestically within European countries after the UK has left the EU (regardless of the outcome of talks on a future UK-EU aviation agreement). The new structure means that easyJet will become a pan-European airline group with three airlines based in the UK, Switzerland and Austria. All of these will be owned by easyJet plc which itself will be EU owned and controlled, listed on the London Stock Exchange and based in the UK.

It is a requirement of EU law that an EU member state may only permit an air carrier to operate airline services if the majority of its share capital is owned and the carrier is effectively controlled by member states of the EEA or their nationals. Therefore easyJet will propose changes to its Articles of Association, to be put to shareholders at its Annual General Meeting in February 2018, that will ensure easyJet plc is able to remain EU owned and controlled at all times after the UK has left the EU as required under EU law.

easyJet’s Articles of Association already contain existing provisions to give the Directors powers to limit the ownership of the Company’s shares by non-UK nationals and a number of powers to enforce this limitation. easyJet intends to amend these provisions, pending shareholder approval, such that they apply to non-EU holders of easyJet shares (which will exclude UK holders once the UK has left the EU). It is currently anticipated that the permitted maximum in respect of non-EU holders of easyJet shares following this change will be set at slightly less than 50%. Full details of the proposed changes to the articles of association will be included in the Notice of Annual General Meeting to be posted to shareholders in January 2018.

easyJet begins from a position of strength, with close to 50% of its shares already held in the hands of EEA nationals (excluding UK-only nationals) and the Company has already begun a more rigorous investor relations programme across Europe with the intention of increasing EEA (non-UK) ownership above 50% prior to the UK’s exit from the EU. As such, easyJet has no current intention of using these proposed powers, in respect of non-EU holders of easyJet shares but considers these changes an important step in ensuring that easyJet plc has the ability to maintain EU ownership and control at all times should it need to do so and thus secure its future operations in Europe for the long-term.

easyJet is working with the UK government, EU institutions and their member states to ensure that flying rights between the UK and the EU are maintained. 

Principal risks and uncertainties (extract)

COMPLIANCE AND REGULATORY (extract)

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