Fast track
THE RECOVERY
Annual Report and
Accounts 2021
Who we are
easyJet aims to make travel easy,
enjoyable and affordable for customers,
whether it is for leisure or business.
We use our cost advantage and leading
positions in primary airports to deliver low
fares on an unrivalled network, seamlessly
connecting Europe with the warmest
welcome in the sky.
Our well-established and proven business
model provides a strong foundation to
drive long term shareholder returns.
‘Our promise’ is that we will be:
Safe and responsible
On our customers’ side
In it together
Always efficient
Forward thinking
Navigating 2021
The 2021 financial year has been volatile with
Covid-19 posing the most significant threat to
the aviation industry in its history.
Our business model and actions undertaken
in the year mean that we are poised to
take advantage of growth opportunities
in the future.
easyJet has an outstanding network of #1 and
#2 positions in the primary airports around
Europe, which customers favour. Customers
are increasingly looking for value for money
and are prioritising leisure travel, where we
are particularly well placed.
We were the world’s first major airline to offset
the carbon emissions from the fuel used for all
flights and we continue to work tirelessly to
minimise carbon across our operations.
VISIT OUR WEBSITE FOR MORE
INVESTOR INFORMATION
https://corporate.easyJet.com/investors
A Tribute from the Board of Directors
John Barton
Shortly after the signing of the annual report and accounts
on 30 November 2021, John Barton sadly passed away.
John was our Chairman for nearly nine years, and only
stepped down from the Board on 1 December.
John was a man of great integrity who was very much
respected and liked by everyone across the Company.
He was a distinguished Chair and made an outstanding
contribution to the Company during his tenure.
On behalf of all of his former colleagues at easyJet and the
Board, we send our heartfelt sympathies to John's family.
He will be remembered with greatest respect and admiration.
6 December 2021
What’s inside
Strategic report
Chairman’s Letter
Highlights
Purpose
Chief Executive’s Review
Business Model
Interview With Our Chairman,
CEO, and CFO
Market Review
Our Strategy
Key Performance Indicators
Stakeholder Engagement
Sustainability
Non-Financial Information
Statement
Financial Review
Risk
Governance
Chairman’s Statement on
Corporate Governance
Board of Directors
Airline Management Board
Corporate Governance Report
Directors’ Remuneration Report
Directors’ Report
Statement of Directors’
Responsibilities
Financials
Independent Auditors’ Report to
the Members of easyJet plc
Consolidated Accounts
Notes to the Accounts
Company Accounts
Notes to the Consolidated
Company Accounts
Five-Year Summary
Glossary – Alternative
Performance Measures
Glossary
Shareholder Information
2
4
6
8
12
14
16
18
24
26
38
62
66
78
96
98
102
105
130
154
158
159
170
175
213
216
219
220
222
223
www.easyJet.com
1
C H AIRMAN’S LETT ER
Positioned for
success
The pandemic continued to cast a shadow
over the whole aviation sector throughout
the 2021 financial year with easyJet being
unable to operate its fleet to anywhere
near its full potential. This has put the
whole company under considerable
stress both operationally and financially.
Operationally we have continued to put a
disciplined focus on cash generative flying,
which has made running the flight schedule
extremely challenging and clearly has had
some impact on our customers. Financially
we continued, in the early part of the year,
to raise money through sale and leaseback
deals on our largely owned fleet and
increased borrowings. Of course, this put
everyone in the business under pressure,
added to which the necessary redundancy
programme has made navigating our
way through the year very challenging.
Despite these difficult times easyJet
has maintained focus on preparing for
post-pandemic conditions and driving
the business forward.
Results
The continued restrictions on travel
imposed by governments in response to
Covid-19 have had a devastating impact
on air travel. Our focus has been on cash
generative flying to minimise cash burn
while there was continued uncertainty due
to the constantly changing environment.
Travel restrictions were eased across much
of Europe for the summer period where
easyJet successfully maintained a rapid
approach to match capacity to available
demand, especially across UK domestics
and mainland Europe.
The relaxation of restrictions in the fourth
quarter was positive for easyJet, showing
that the industry is moving forward and
that easyJet is playing a significant role
in this, with encouraging capacity levels
and positive load factor momentum
throughout the summer period. Capacity
levels versus the 2019 financial year in the
quarters were 18%, 9%, 17% and 58% which
demonstrates the momentum building
in the fourth quarter.
Revenue for the full year decreased
to £1,458 million (2020: £3,009 million).
The Group reported a headline loss before
tax of £1,136 million (2020: £835 million)
and basic headline loss per share
of 166.9 pence (2020: 149.7 pence).
Total loss before tax of £1,036 million
(2020: £1,273 million) and a non-headline
gain of £100 million (2019: £438 million
loss) led to basic total loss per share of
159.0 pence (2020: 222.9 pence).
Dividends
easyJet’s dividend policy has been to pay
shareholders 50% of headline profit after
tax. Given that we made a loss this year,
there will be no dividend paid for the
2021 financial year (2020: nil). The
dividend policy will be reviewed by the
Board during the 2022 financial year.
Balance Sheet
As we went through the first part of the
year, the balance sheet came under
pressure as we borrowed a significant
amount. Despite this, we managed to
maintain an investment grade balance
sheet with the ratings agencies. The
rights issue in September considerably
reduced this pressure, although not
returning us all the way back to our
position pre-pandemic. The rights issue
had a take up rate of over 93% which is
an indication of the market’s confidence
in the financial strength of the Company.
Our strong business model,
liquidity and unparalleled network
mean we are well positioned for
growth as we enter the recovery.
John Barton
Non-Executive Chairman
2
easyJet plc Annual Report and Accounts 2021
Our Board
There have been a number of changes to
our Board during the year. Andrew Findlay
stood down as Chief Financial Officer in
February 2021, and we welcomed Kenton
Jarvis as his successor. David Robbie
joined the Board as an Independent
Non-Executive Director in November
2020, and Charles Gurassa, Moya Greene
DBE and Dr Anastassia Lauterbach stood
down as Independent Non-Executive
Directors in December 2020.
Following a thorough search led by the
Nominations Committee, Stephen Hester
joined us as an Independent Non-Executive
Director and Chair designate on
1 September 2021 and will succeed me
as Chair on 1 December 2021. This will
therefore be my last report as your Chair,
having served for nearly nine years on the
Board. It has been a privilege to serve as
Chair over that time, and I am proud of
how easyJet has not only navigated
through the pandemic but has adapted
and built back stronger leaving it
extremely well positioned for the future.
I am delighted to handover to someone
of Stephen Hester’s calibre, and have
been working closely with him to ensure
that there is a smooth transition.
Further details of these changes are
included in the Governance report on
page 96.
Our people
No praise can be high enough for our
employees. They have navigated us
through the most difficult period the
aviation industry has ever seen. The
pressure has been at every level in the
company and I am extremely grateful for
the hard work and dedication all of our
employees have given to easyJet.
The future
This is my last Annual Report before I hand
over to Stephen Hester. I feel I am leaving
easyJet is in a strong position having
navigated some stormy waters. The
future is still unclear with the aftermath
of Covid-19 still with us, however I believe
our unique and established position in the
industry and our strong financials has put
easyJet is a great position to drive strong
shareholder returns in the future.
John Barton
Non-Executive Chairman
There have also been a number of changes
to the Airline Management Board. As
mentioned above, we welcomed Kenton
Jarvis as Chief Financial Officer, Stuart
Birrell was appointed as Chief Data &
Information Officer on 9 November 2020
and Sophie Dekkers was appointed Chief
Commercial Officer on 16 December 2020.
The Governance report on pages 102 to 104
sets out further detail on their experience.
Sustainability
Our overall sustainability goal is to lead and
challenge global aviation towards net zero
emissions while positively impacting our
communities and our people. We continue
to lead on this, as we committed to joining
the Race to Zero while continuing to work
on our Net Zero pathway to 2050.
We were the world’s first major airline to
offset the carbon emissions from the fuel
used for all of our flights, and we continue
to work tirelessly to minimise the carbon
impact of our operations. We are
supporting the development of new
technologies – including hybrid, electric
and hydrogen aircraft – so we can play
our part in reinventing aviation to be
more sustainable in the future. I am pleased
with the progress that I have seen during
the year, for example, at Bristol where we
achieved a 97% reduction in CO2 emissions
during our emissions-free turnaround trial.
No praise can be high
enough for our employees.
They have navigated us
through the most difficult
period the aviation industry
has ever seen.
www.easyJet.com
3
STRATEGIC REPORT
HIGH LIGHTS
Our performance...
Results have been heavily impacted by Covid-19 related lockdowns
and government travel restrictions during the 2021 financial year.
Total (loss)/profit before tax (£m)
Headline (loss)/profit before
tax (£m)
(1,036)
(1,036)
(1,036)
(1,273)
(1,273)
2021
2021
2020
(1,136)
(1,136)
(1,136)
(835)
(835)
2021
2021
2020
2020
2019
2018
2017
430430
445445
385385
2019
2018
2017
Total revenue (£m)
Total ancillary revenue (£m)
2021
2020
2019
2018
2017
1,458
1,458
1,458
3,009
3,009
6,385
6,385
5,898
5,898
5,047
5,047
2021
2020
2019
2018
427427
578578
408408
458 458 458
706706
1,376
1,376
1,2101,210
Basic total (loss)/earnings
per share (pence)
Basic headline (loss)/earnings
per share (pence)
(159.0)
(159.0)
(222.9)*
(222.9)*
2021
2020
2019
2018
2017
88.688.6
90.990.9
77.477.4
(166.9)
(166.9)
(149.7)*
(149.7)*
2021
2020
2019
2018
2017
88.788.7
118.3
118.3
82.582.5
*2020 figure restated due to 2021 rights issue
*2020 figure restated due to 2021 rights issue
Load factor
72.5%
2020: 87.2%
Seats flown
28.2m
2020: 55.1m
On-Time Performance
87%
2020: 84%
4
easyJet plc Annual Report and Accounts 2021
...And our strengths
Unparalleled
network
Number of primary
airports where we hold
a #1 or #2 position1
43
2020: 51
Low-cost
model
Increase in fuel efficiency
of neo aircraft compared
to previous generation
aircraft3
15%
Robust
balance sheet
Cash & money
market deposits2,5
£3,536m
2020: £2,316m
Routes operated2
Cost savings4,9
Net debt2,8
927
2020: 981
£512m
2020: £73m
£910m
2020: £1,125m
Customer
loyalty
Number one airline
brand in the UK,
France & Switzerland2,6
no.1 or 2
Returning customers4,7
80%
2020: 87%
On-Time
Performance
(OTP)
Arrivals within 15 minutes
87%
2020: 84%
Customer
satisfaction
Customer satisfaction
score2
75%
2020: 75%
1. As at 30 September 2021 fewer airports
closed. Airports where easyJet is the number
one or number two carrier based on short-haul
capacity. 2020 has been restated
2. As at 30 September 2021
3. A320neo versus previous generation A320
4. In the year ended 30 September 2021
5. Excluding restricted cash
6. Millward Brown brand tracker
7. Percentage of seats booked by customers
who made a booking in the preceding
24 months
8. Within net debt, borrowings of £300 million
and lease liabilities of £189 million are payable
within one year
9. Incremental cost savings versus 2020,
including sustainable and tactical management
actions
www.easyJet.com
5
STRATEGIC REPORT
PUR POSE
Positioned for the future
Our purpose
Strategic priorities
Our purpose defines who we
are and guides our actions
and decisions.
Seamlessly connecting
Europe with the warmest
welcome in the sky
easyJet aims to make travel easy,
enjoyable and affordable, whether
it is for leisure or business.
Our promise
We have a set of values which
support and guide our strategy.
Safe and
responsible
On our
customers’ side
In it
together
Always
efficient
Forward
thinking
6
easyJet plc Annual Report and Accounts 2021
easyJet has prioritised six strategic initiatives that
will continue to build on our structural advantages
in the European aviation market and enable us to
lead the recovery as travel returns.
These initiatives, underpinned by operational
and digital safety and a continued focus on our
people, will result in strong shareholder returns
being delivered.
Network strategy
for more details please see page 19
Customer excellence
for more details please see page 20
Product portfolio evolution
for more details please see page 21
easyJet holidays
for more details please see page 21
Cost focus
for more details please see page 22
Sustainability
for more details please see page 23
Our Sustainability Strategy
To lead and challenge global aviation towards
net zero emissions while positively impacting
our communities and our people
Tackling
carbon
emissions
We were the world’s first major airline
to offset the carbon emissions from the
fuel used for all our flights, and continue
to work tirelessly to minimise carbon
across our operations
Stimulating
technological
innovation
We are supporting the development
of new technologies to achieve the
decarbonisation of aviation as
quickly as possible
• Offsetting the carbon emissions
• Champion and collaborate to
from fuel and operations
• Continuously reduce the carbon
intensity of our flying
• Advocate smarter regulation
for aviation that rewards
carbon efficiency
achieve our goal of zero emissions
aviation
• Be an informed adopter of
Sustainable Aviation Fuels and
advanced carbon capture
technologies when available and
commercially viable
Going
beyond
carbon
We are working in a range of ways
to take action on sustainability,
beyond our carbon impact
• easyJet holidays strategy
to ensure positive impact
on the environment and
local communities
• Commit to waste and plastic
reduction at easyJet and within
our supply chain
• Engage our colleagues and
our customers in our
sustainability journey
• Diversity, Inclusion and Wellbeing
Strategy
• Support charitable causes that are
important to our customers and
employees
Improving our underlying capability
We have continued to strengthen our organisation structures and expertise on sustainability. Initiatives include: expanding
the Sustainability team; increasing the scope of ESG (Environmental, Social and Governance) reporting; development of an
ISO 14001-compliant Environmental Management System; and additional oversight through committees and working groups,
such as the Environmental Management Review Board.
for more details please see our Sustainability section on page 38
How we measure (KPIs)
We measure our strategic progress through a mix of financial and non-financial KPIs.
Headline
(loss)/profit
before tax
per seat
Headline
(loss)/
earnings per
share
Headline
return on
capital
employed
Customer
satisfaction
On-Time
Performance
CO2 emissions
per passenger
kilometre
for more details please see our KPIs on page 24
www.easyJet.com
7
STRATEGIC REPORT
C H IE F EXECUT IVE’S REVIEW
Fast tracking
the recovery
Overview
It’s too soon to say what impact Omicron
may have on European travel and any
restrictions that may result. However,
we have prepared ourselves for periods
of uncertainty such as this. While we’ve
seen an increase in transfers with some
softening of trading for the first quarter it
is really encouraging to see that we are still
seeing good levels of new bookings for
the second half and we still expect that
the fourth quarter of the 2022 financial
year will see a return to near pre-pandemic
levels of capacity as people take their long
awaited summer holidays.
easyJet has optimised its network and
reallocated aircraft to higher contributing
bases alongside the launch of two
additional seasonal bases. Our new
ancillary products are delivering now,
utilising innovative, industry leading
dynamic revenue management to optimise
returns. We have completed significant
structural cost savings through seasonal
contracts and improved productivity, while
helping our customers navigate travel
during the pandemic with our industry
leading flexible policies.
Having successfully strengthened the
balance sheet, we are fast tracking
strategic investment and growth
opportunities to deliver strong, sustainable
shareholder returns. This is demonstrated
by slot increases at Gatwick as well as
additional slots which we have obtained
in Linate, Lisbon and Porto alongside
the expansion of all seasonal bases in
summer 2022. We will continue to focus on
competing where it really matters, being
relentlessly efficient and only investing
where we can deliver strong, sustainable
returns for our shareholders.
easyJet operated a disciplined flying
programme throughout the 2021 financial
year whilst continuing to deliver cost
savings across every area of the business.
As a result of the continued impact of
Covid-19, easyJet has reported a headline
loss before tax of £1,136 million.
Demand is accelerating with key periods
such as October half term, ski and
Christmas seeing strong performance.
We continue to add capacity and expect
to fly circa 70% of the 2019 financial year
capacity in the second quarter of the 2022
financial year and expect that the fourth
quarter summer capacity will be at near
the 2019 financial year levels. Customers
will look for value as the economy recovers
and short haul leisure demand will lead the
recovery. easyJet will use its inherent
strengths combined with the
improvements made during the pandemic
to grow throughout the recovery, which
is already underway, and beyond.
Revenue
Total revenue decreased by 52% to
£1,458 million (2020: £3,009 million)
with capacity decreasing to 28.2 million
seats (2020: 55.1 million) because of
pandemic-related travel restrictions
and national lockdowns compared to
2020 where only the second half was
impacted by the pandemic.
Passenger revenue decreased by 57% to
£1,000 million (2020: £2,303 million) as we
flew an optimised schedule with a focus on
domestic and continental Europe where there
was the least amount of restrictions over
travel. Passenger RPS (Revenue Per Seat)
decreased by 15% to £35.48 (2020: £41.78).
Ancillary revenue decreased by 35.1%
to £458 million (2020: £706 million) as
capacity reduced. However, ancillary
revenue per seat increased by 20% to
£15.06 (2020: £12.57) as we launched
our new cabin bag proposition as well
as our Standard Plus fare.
Costs
Group headline costs excluding fuel and
FX gains decreased by 29% to £2,232
million (2020: £3,123 million), driven by a
decrease in capacity flown and the material
savings achieved across many areas of the
business. easyJet has delivered £512 million
of savings in the 2021 financial year as a
result of the continued cost focus.
The cost per seat performance was driven
overwhelmingly by the impact of Covid-19,
which has resulted in dramatic capacity
reductions. Airline headline cost per seat at
constant currency increased by 33.0% to
£91.82 (2020: £69.03). Airline headline cost
per seat excluding fuel and balance sheet
revaluations at constant currency increased
by 40.5% to £78.62 (2020: £55.94).
easyJet is emerging from the
pandemic with renewed strength
having transformed the business by
optimising our network and flexibility,
delivering significant cost savings
while also step-changing ancillary
revenue.
Johan Lundgren
Chief Executive Officer
8
easyJet plc Annual Report and Accounts 2021
easyJet will
use its inherent
strengths
combined with
the improvements
made during the
pandemic to grow
throughout the
recovery.
Non-Headline Items
Non-headline items are material non-
recurring items or are items which do
not reflect the trading performance of
the business. These costs are separately
disclosed and further detail can be
found in the notes to the accounts.
A Group non-headline gain of £100 million
(2020: £438 million loss) was recognised
in the year. This consisted of a;
• £65 million gain as a result of the sale
and leaseback of 35 aircraft and 2
engines during the year;
• £61 million credit in relation to our
restructuring programme following
constructive negotiations with our
unions; offset by
• £26 million net charge related to
hedge discontinuation.
Balance Sheet
easyJet maintained a disciplined approach
to capacity and cash management. As a
result, cash burn (on a fixed costs plus
capex basis) during 2021 was £36 million
per week on average, outperforming the
guidance for £40 million per week.
easyJet paid a further £455 million of customer
refunds during 2021 (2020: £863 million).
easyJet’s funding position remains strong
with net debt as at 30 September 2021
of £910 million (2020: £1,125 million).
This comprised cash and money market
deposits of £3,536 million (2020: £2,316
million), debt of £3,367 million (2020:
£2,731 million) and lease liabilities of
£1,079 million (2020: £710 million).
As at 30 September 2021 easyJet has
unrestricted access to £4.4 billion of
liquidity, comprising cash and cash
equivalents plus the undrawn portion of the
UKEF facility and an undrawn $400 million
RCF. The remaining £300 million tranche of
the CCFF was repaid in November 2021.
easyJet has no other debt maturities
outstanding until the 2023 financial year.
Liquidity of £4.4 billion (2020: £2.5 billion),
represents material headroom compared
to our revised liquidity policy being
unearned revenue plus £500 million.
Headline return on capital employed
(ROCE) for 2021 fell to negative 25.5%
(2020: negative 19.9%). Total ROCE is
negative 22.4% (2020: negative 23.0%).
Fleet
easyJet’s total fleet as at 30 September 2021 comprised 308 aircraft (30 September 2020: 342 aircraft) with the decrease driven
principally by the redelivery to lessors of A319 aircraft. The average gauge of the fleet is now 178 seats per aircraft, compared to
177 seats at 30 September 2020. The average age of the fleet increased slightly to 8.6 years (30 September 2020: 8.0 years).
Fleet as at 30 September 2021:
A319
A320
A320 neo
A321 neo
Percentage of total fleet
Owned
Leased
Total
% of fleet
Changes
since Sep-20
Future
deliveries
Purchase
options
Purchase
rights
45
105
30
3
183
59%
52
55
7
11
125
41%
97
160
37
14
308
31%
52%
12%
5%
(17)
(5)
–
–
(22)
–
–
104 1,2
162
120
–
–
61
–
6
–
–
531
–
53
1. Includes the impact of Amendment to the purchase agreement with Airbus signed on 29 November 2021, which increased the number of firm future
deliveries by 19, and reduced the number of purchase options by 14 and the number of purchase rights by 5.
2. easyJet retains the option to alter the aircraft type of future deliveries, subject to providing sufficient notification to the OEM.
As at 30 September 2021, easyJet was storing 12 leased aircraft at zero rent unless flown. These aircraft are therefore not included within
our fleet numbers published as part of the graphs outlining the fleet, but with footnotes to highlight the absence.
Our flexible fleet plan allows us to expand or contract the size of the fleet depending upon the demand outlook.
Number of aircraft
Current contractual minimum
Base plan
Current contractual maximum
Expected deliveries
FY 2022
FY 2023
FY 2024
319
322
322
8
316
–
326
7
313
–
328
18
www.easyJet.com
9
STRATEGIC REPORT C H IE F EXECUT IVE’S REVIEW CONTINUE D
Capital Expenditure
Over the next three years easyJet’s
gross capital expenditure is expected to
be as follows:
Gross capital
expenditure
(£ million)
FY22
FY23
FY24
c.900 c.1,000 c.1,300
Capex in the 2022 financial year is
comprised of new Airbus fleet delivery
payments, safety and maintenance-related
expenditure as well as lease payments.
Our capex projections assume eight
aircraft deliveries in the 2022 financial year,
seven deliveries in the 2023 financial year
and 18 deliveries in the 2024 financial year.
Our People
Despite the challenges of Covid-19 and
resulting restructuring, easyJet still has a
strong reputation as an employer of choice.
The high calibre of our people is a key
source of differentiation for easyJet
compared to our competitors, driving
CSAT and customer loyalty. Our strong
employer reputation attracts and retains
engaged crew, with the spirit to deliver
excellent service. Our Glassdoor rating of
employee satisfaction is 4.2 (out of 5.0),
which is the highest within the travel and
hospitality sector, illustrating our market-
leading position in the labour market.
The 2021 financial year has had a significant
impact on our entire workforce and the
pandemic has changed the way in which
we support Our People. Some of the key
changes and successes delivered include:
1. Constructively worked in partnership
with our employee representative bodies
across Europe to avoid compulsory
redundancies in most markets.
• We have driven changes to right-size
our crew establishment, having
implemented agreements to improve
our seasonality, reduce our crew costs
(e.g. through changed contracts and
pay-freezes) and improve productivity
across our network. Whilst we have
protected jobs where we see future
growth and avoided expensive
compulsory redundancy costs in
most markets, the changes delivered
will continue to support our focus
on productivity in the future.
• We’ve worked with local governments
and union partners in order to claim
£134 million in furlough support.
• Prioritised growth in Spain and
Portugal to give transfer opportunities
for Our People who are at risk in
other geographies.
2. Delivered hybrid working in a safe and
secure way.
• Implemented biosecurity standards
and initiatives to be aligned with
those implemented for our
customers and ensured a safe
working environment for all.
• Successfully implemented our new
hybrid working model across our
network. Over 84% of our affected
employees feel positive about our
approach to hybrid working.
3. Set a platform for enhanced employee
experience and improved our wellbeing
and support
• Undertook multiple ‘You Matter’
campaigns to support the wellbeing
of our people across the network.
• Implemented and refreshed a number
of core employment policies e.g.
Bullying and Harassment, Wellness
and Absence in addition to providing
training for people managers over
these policies.
• Completed our payroll project
(HR Evolution) delivering 98% pay
accuracy throughout the network.
We continue to invest in building out
capability in Workday (our HR
software) to support employee
self-service.
EU Ownership
On 23 December 2020, easyJet
announced that the Board had passed
resolutions as part of its contingency plan
to ensure continued compliance with
EU ownership and control requirements
following the end of the Brexit transition
period on 31 December 2020. Accordingly,
and in line with its contingency plan,
easyJet announced on 4 January 2021
that it had commenced steps to suspend
voting rights in respect of certain shares
held by relevant persons in accordance
with easyJet’s articles of association, so
that a majority of the voting rights in
easyJet are held by EU persons. As at
29 November 2021 the level of ownership
by EU persons was 35.68%. Accordingly
easyJet has suspended voting rights in
respect of certain shares (‘Affected
Shares’) held by Relevant Persons in
accordance with easyJet’s articles of
association (the ‘Articles’) so that a
majority of the voting rights in easyJet are
held by EU Persons. As at 29 November
2021, a majority of the voting rights in
easyJet are held by EU persons.
Those shareholders who own shares
whose voting rights will be suspended at
the AGM will receive a notice (an ‘Affected
Share Notice’) by post from Equiniti, our
Registrars, on or around 14 January 2022
notifying them of the suspension of voting
rights in respect of their Affected Shares.
Shareholders in receipt of an Affected
Share Notice will not be entitled to
attend, speak or vote at the AGM, in
respect of those shares subject to an
Affected Share Notice.
Note: ‘EU persons’ refers to nationals of
EU member states plus Switzerland,
Norway, Iceland and Liechtenstein, but
excludes the UK. ‘Relevant Persons’ has
the meaning given to it in the Articles.
In general terms, ‘Relevant Persons’
refers to non-EU nationals.
10 easyJet plc Annual Report and Accounts 2021
Outlook
Based on current travel restrictions in
the markets in which we operate,
easyJet expects to fly circa 66% of
the 2019 financial year capacity levels in
the first quarter of the 2022 financial
year with load factors expected to be circa
81%. The second quarter of the 2022
financial year capacity is expected to be
circa 70% of the second quarter of the
2019 financial year levels.
easyJet has been ramping up capacity as
customer confidence returns and current
expectations are that the fourth quarter
of the 2022 financial year capacity will
have recovered to around the fourth
quarter of the 2019 financial year
capacity levels.
The targets easyJet has set are; grow
to pre-pandemic capacity by the 2023
financial year, mid teen EBITDAR margins
with low to mid teen ROCE in the medium
term and having a clear roadmap for
easyJet holidays to contribute £100 million
plus profit before tax to the Group.
At this stage, given the continued level
of short-term uncertainty, it would not
be appropriate to provide any further
financial guidance for the 2022 financial
year. Customers are booking closer to
departure and visibility remains limited.
We see a unique
opportunity for
easyJet to win
customers and
take market share
from rivals in this
post pandemic
period.
www.easyJet.com
11
STRATEGIC REPORT BUSINESS MODEL
Our strong foundation
OUR RESOURCES
Financial capital
easyJet has a strong capital base, with a market capitalisation
of £5.0 billion1 and a net debt position of £910 million at
30 September 2021 (2020: £1,125 million). easyJet’s credit
ratings are amongst the strongest in the world for an airline.
Aircraft
easyJet operates a modern fleet of Airbus A320 family aircraft, of
which 59% are owned. We are investing in new generation aircraft
which are more fuel efficient2,3 leading to lower operating costs
and lower carbon emissions over time.
People
easyJet has a highly skilled workforce of over 13,000 people
across Europe, including over 4,000 pilots and 7,000 cabin
crew members.4
Suppliers
easyJet partners with key suppliers to deliver many of its
operational and commercial activities. Our partners are carefully
selected and significant emphasis is placed on managing these
relationships, with the aim of encouraging incremental innovation
and performance.
Slots and brand
easyJet has a valuable portfolio of slot pairs at slot-constrained
primary airports, as well as flying rights across Europe and AOCs5
in the UK, Switzerland and Austria.
BBB-
/Baa3
Credit rating
308
Aircraft4
2020: 342
OVER
13,000
Employees4
2020: >14,000
42
Average payment days
2020: 52
86%
Capacity at
slot-constrained airports6
2020: 89%
Technology and data
easyJet is aiming to become the world’s most data-driven airline.
We are seeing significant benefits already from operational
resilience processes and predictive maintenance. Our revenues
have been benefitting from data projects in late yield initiatives
and dynamic seat pricing.
290m
Visits to all
digital platforms
2020: 510m
1. Based on share price of £6.62 at 30 September 2021
2. 15% fuel-saving per seat A320neo versus previous generation A320
3. Around 50% quieter on take-off and landing than previous-generation aircraft
4. As at 30 September 2021
5. Air Operator Certificates
6. Based on level 2 and level 3 airports as updated by
IATA on 21 October 2021 and defined under IATA
Worldwide Slot Guidelines as at 1 June 2020
12
easyJet plc Annual Report and Accounts 2021
Our robust business model makes it easy, affordable and
sustainable for our customers to travel, which drives growth
and returns for our shareholders.
Airports1
153
2020: 154
Routes1
927
2020: 981
BUSINESS ACTIVITIES
What we do
We are a low cost European
point-to-point airline. We use
our cost advantage, operational
efficiency and leading positions in
primary airports to deliver low fares,
seamlessly connecting Europe with
the warmest welcome in the sky.
easyJet is one of the
largest airlines in the world,
with 308 aircraft and 20 million
customers across 34 countries
and 153 airports.
easyJet holidays was launched
in 2019 in order to offer holiday
packages which encourage the
84% of customers travelling
on leisure to spend more
with us, rather than book
accommodation elsewhere.
How we do it
• Our leading position at slot-
constrained airports with high
customer demand allows us
to deliver profitable growth
and resilient returns over the
long term
• Our cost efficiency is achieved
through long term strategic
partnerships with key airports
and ground handling operators
• easyJet has a focus on providing
services which our customers value
• The easyJet holidays offering has
been tailored to the needs of the
‘easyJet generation’.
Destinations
1. As at 30 September 2021
www.easyJet.com
13
STRATEGIC REPORT IN TE RVIEW WI TH OUR CHAIRMA N, C EO, A ND C FO
leading from
the top
Stephen Hester*
Chair Designate
Q&A with
Stephen Hester
What attracted you to the role of
Chair of easyJet?
SH
I have been an admirer of easyJet
for many years, both from a business
perspective and as a customer. The brand
and customer delivery is exceptionally
strong, and I was attracted by both the
strength of the management team and
the potential there is to deliver value to
all our stakeholders.
What have you learnt about the
business since joining?
SH
I’ve been impressed with the passion,
energy and commitment from the
many colleagues I have been able to meet
so far. Johan and his team have done
really well navigating the uncertainties
of the pandemic, and positioning the
Company well for the future. While it has
been a turbulent and difficult 18 months,
the “orange spirit” is remarkable and
their dedication to serving our customers
is impressive.
What are the things you think
easyJet needs to focus on in
future?
SH
I see so many opportunities for
our iconic company in the coming
years. We have a proven business model,
unrivalled network and loyal customer
base – we need to capitalise on these
competitive advantages. Our rights issue
will allow us to take advantage of strategic
investment and growth opportunities. But
the key task is to create strong shareholder
value which has inevitably suffered during
Covid-19 times. My job is to lead the Board
and support management to successfully
operate easyJet as a “best in class”
company in the years ahead.
What are you most excited
about?
SH
I am convinced we can be
structural winners in the rapidly
evolving European airline industry, serving
customers well and delivering attractive
shareholder value. I’m excited to get
started on the post-pandemic
recovery journey.
My job is to lead the Board and
support management to successfully
operate easyJet as a “best in class”
company in the years ahead.
Stephen Hester
Chair Designate
* Stephen Hester joined the Board on 1 September 2021, and will succeed John Barton as Chair on 1 December 2021
14
easyJet plc Annual Report and Accounts 2021
We are emerging from the financial year with renewed
strength having transformed the business by optimising
our network and delivering significant structural cost
savings while also step-changing ancillary revenue.
Johan Lundgren
Chief Executive Officer
Johan Lundgren
Chief Executive Officer
Kenton Jarvis
Chief Financial Officer
Q&A with
Johan Lundgren
How do you see easyJet
emerging from the 2021
financial year?
JL
We are emerging from the financial
year with renewed strength having
transformed the business by optimising
our network and delivering significant
structural cost savings while also step-
changing ancillary revenue. These initiatives
alongside our strong, investment grade
balance sheet provide easyJet with a
platform to fast track our growth and
deliver strong shareholder returns.
Where do you see easyJet
when looking forward?
JL
There are still challenges ahead with
the pandemic still being with us,
however easyJet has ambitious plans for
profitable growth. We are expanding our
leadership positions at key bases such as
Gatwick and Milan with additional slots
and aircraft for summer 2022. This is
underpinned by having more than 120
aircraft on order with a further 57 purchase
options and rights confirmed to further
build on this in the years to come.
What actions are we taking
for a sustainable future?
JL
We continue to lead the industry
with our testing of Sustainable
Aviation Fuel (SAF) flying and conducting
zero emission turnarounds at Bristol airport.
We also have joined the Race to Zero
backed by the UN and we are progressing
our pathway to Net Zero by 2050.
Q&A with
Kenton Jarvis
Why was £1.2 billion the right
size of equity raise?
KJ
I led a detailed review of our capital
structure when I arrived at easyJet
in order to assess the Group’s long term
capital and liquidity needs. Based on this
review the Board concluded that £1.2 billion
was the optimal size to raise from both a
defensive perspective, to provide financial
resilience from further downside risk, and
from an offensive perspective, positioning
the Group to take advantage of long term
strategic opportunities.
Why was now the right time to
be raising equity?
KJ
I am confident that the rights issue
was the best course of action and
formed part of a prudent and proactive
capital structure management policy to
optimise our balance sheet, accelerate the
Group’s recovery from the pandemic and
enhance our long term strategic position.
What is easyJet’s cost base
coming out of the pandemic?
KJ
Our actions taken to navigate
the pandemic have resulted in
increased debt levels which will in turn
drive additional ownership costs going
forward from increased borrowings, as
well as depreciation and interest charges
from the sale and leaseback transactions.
Industry wide, we are seeing airport and
navigation charges rising as we see third
parties recover their losses from the
pandemic. However, we have taken
action to make structural cost savings
to help partially offset these, through
implementing seasonal contracts for our
crew and insourcing maintenance at a
number of our bases.
www.easyJet.com
15
STRATEGIC REPORT MA R KET REVI EW
Our market drivers
Demand
The airline industry is a cyclical
one, with demand for flights
driven by economic growth.
Demand is also seasonal,
particularly in leisure travel.
During the pandemic, demand has
primarily been driven by the imposition
of travel restrictions and the
uncertainty related to those restrictions.
As we move from the pandemic-
impacted environment into a more
normal travel environment we
anticipate a short term rapid
recovery driven by a combination
of pent up demand before
reverting to a longer term trajectory
driven by economic growth.
Accumulated savings, before reverting
to a longer term trajectory which will be
driven by economic growth. Business
demand will be slower to recover, and
while there will be structural changes,
we expect the majority of business
purpose traffic to return over time.
The aviation industry has also been
subject to other geopolitical events
in recent years, as well as terror
attacks and extreme weather events.
These have both short term and
long term consequences for demand
and the structure of the industry.
Low-cost carriers such as easyJet
continue to take market share from
full-fare legacy carriers.
Fuel
Fuel is one of the biggest costs
which airlines face and one of the
most volatile. Fuel represented 24%
of easyJet’s headline cost base for
the pre-Covid-19 2019 financial year.
The ICE Brent crude oil spot price
has risen from pre-Covid-19 2019
financial year price of $66 to $79 per
barrel at the end of the 2021 financial
year. The price of jet fuel is strongly
correlated with the price of crude oil.
Real GDP growth
(Annual % change)
Global air traffic
Transport Passengers, globally, 1975-2020
Billions
Brent price
6
5
4
3
2
1
0
-1
-2
-3
-4
-5
-6
-7
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
15 16
17
18
19
20
21 22 23 24 25 26
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
Europe
Euro area
European Union
• Most European carriers have
• Short-haul travel is recovering
cut capacity by between 30%
and 60% versus 2019 levels.
• Cash burn during the Covid-19
pandemic has led to high debt
levels across the industry and
state aid in many cases.
faster than long haul post Covid-19.
• Leisure travel is rebounding more
quickly than business travel.
120
100
80
60
40
20
0
2016
$ per barrel
2017
2018
2019
2020
2021
• Many European airlines hedge their
fuel costs. The sudden reduction in
flying during the Covid-19 lockdowns
meant that many airlines had
hedged more fuel than was
subsequently needed.
• Many airlines have incurred one-off
costs to cover these ineffective and
discontinued hedges.
• The scale and flexibility of
our network enabled us to
be efficient with our network
choices, to move capacity in
response to local demand and
to take advantage of changes
in the competitive landscape
during the recovery phase.
• easyJet has remained extremely
• easyJet has continued its fuel
disciplined in focusing on profitable
flying through the Covid-19
pandemic.
• Scheduling has been adapted
dynamically, in order to capitalise
on all available demand.
hedging programme throughout
the year at reduced levels due to
the uncertainty in exposures.
r
e
v
i
r
d
t
e
k
r
a
m
y
e
K
n
o
t
c
a
p
m
I
y
r
t
s
u
d
n
i
r
u
o
i
g
n
d
n
o
p
s
e
r
e
r
a
e
w
w
o
H
16
easyJet plc Annual Report and Accounts 2021
The key factors which influence easyJet and all operators within
the European airline industry.
Environmental and social
Sustainability, in particular the
carbon emissions from flights and
the contribution to climate change,
is a significant issue for the aviation
industry.
According to research by Kantar
Public across six European countries
in September 2021, 78% of European
consumers consider climate change
a very serious problem.
On-Time Performance and
airspace management
European airspace remains a
challenging environment, with a lack
of air traffic resources, capacity
constraints and cost cutting
measures across the network.
As Europe shows signs of recovery,
airline schedule instability, unexpected
demand increase and system
upgrades will present additional
challenges moving forward.
To mitigate the capacity constraints
as we return to pre-Covid-19 levels,
Eurocontrol continues to re-design
the airspace infrastructure with the
intent to create a more efficient and
sustainable network.
Foreign exchange
easyJet is exposed to foreign
exchange rate movements, mainly
resulting from Euro revenues and
US dollar costs, translated into the
Sterling functional currency.
Sterling has strengthened during
the year against both the Euro and
US dollar as risk sentiment recovered
from the earlier months of the
pandemic and the market anticipated
UK rate hikes in the 2022 financial
year. This has a favourable impact on
US denominated costs for the airline
(predominantly fuel, leases and
maintenance) and an adverse impact
on Euro revenues when translated
into Sterling.
Delay minutes
GBP/USD and GBP/EURO
exchange rates over 5 years
2021
2020
2019
2018
2017
2,128,054
2,128,054
5,013,501
5,013,501
24,482,724
24,482,724
24,484,343
24,484,343
15,857,711
15,857,711
1.60
1.45
1.30
1.15
1.00
US dollar to Sterling rate
Euro to Sterling rate
• Individual airlines, airports and
industry groups have set net
zero targets for 2050.
• Aerospace companies are developing
new technologies which could in the
future help to decarbonise aviation.
• Governments across Europe are
considering the policy measures
that will be needed to meet their
own net zero targets.
• In November 2021 we joined the
Race to Zero and committed to
setting an interim science-based
target for 2035 and a net zero
pathway to 2050.
• easyJet was the first major airline
worldwide to offset the carbon
emissions from the fuel used for all
our flights, and we currently remain
the only major airline in Europe to
do so.
• Our full Sustainability Strategy and
further detail is available in the
Sustainability chapter on page 38.
• Air traffic control delays cause a
number of issues from additional
flying time and airport congestion
to inefficient flight planning.
• This leads to increased fuel burn,
increased cost and delays for our
customers.
• easyJet has taken a number of
steps to mitigate the impact of
ATC (Air Traffic Control) delay
by using data and maintaining
a collaborative relationship
with Eurocontrol.
• Disruption costs over the year
have been low, but our historical
Operational Resilience programme,
and tools such as our Self-Service
Disruption Management (SSDM)
tool, have set us up well as the
industry returns to full capacity.
2015
2016
2017
2018
2019
2020
• See page 68 for details of the
impact.
• easyJet has continued its US dollar
hedging programme throughout
the year at reduced levels due to
the uncertainty in exposures.
Foreign currency revenues have
been netted against costs to
manage risk. No additional revenue
hedging was executed in the year.
www.easyJet.com
17
STRATEGIC REPORT OUR STRATEGY
Our Strategy
easyJet has prioritised six strategic initiatives that will continue
to build on our structural advantages in the European aviation
market and enable us to lead the recovery as travel returns.
Network strategy
Customer excellence
Product portfolio evolution
easyJet holidays
Cost focus
Sustainability
p.19
p.20
p.21
p.21
p.22
p.23
18
easyJet plc Annual Report and Accounts 2021
Network strategy
to Covid-19. This represents the first time
that easyJet has ever had four seasons
available for sale at the same time and it
significantly reduced customers’ propensity
to request refunds.
Our focused network strategy can be
summarised as follows:
1. Lead in our core markets
easyJet prioritises slot-constrained airports
as these are where customers want to fly
to and from. In our core markets, we are
able to achieve cost leadership and
preserve scale. We provide a balanced
network portfolio across domestic, city
and leisure destinations. Our scale enables
us to provide market leading networks and
schedules. We are maintaining our focus on
country leadership in the UK, France and
Switzerland and our city focus in the
Netherlands, Italy and Germany.
2. Accelerate investment in
Destination Leaders
We will build on our existing leading
position in Western Europe’s top leisure
destinations to provide network breadth
and flexibility. This will also unlock cost
benefits, enabling us to manage seasonality
and support the growth of easyJet holidays.
It also ensures that easyJet remains top of
mind for customers and is seen as the ‘local
airline’ for governments and hoteliers.
3. Build our network in Focus
Cities
easyJet is building a network of key cities,
broadening our presence across Europe.
This is a low-risk way of serving large
origin markets. We will base assets in
Focus Cities where it makes sense
from a cost perspective.
The scale and flexibility of
our network will continue to
provide us with opportunities
Network positions
easyJet has a strong network of leading
number one and number two positions in
primary airports, which have proven to be
amongst the highest yielding in the market.
This enables us to be efficient with our
network choices, with an emphasis on
maximising returns. We have decisively
reallocated 43 aircraft to higher returning
bases highlighting the strength of our
network These capital reallocations
focused on markets where easyJet is
strong, driving confidence in delivering
higher returns.
We will seek to strengthen these positions
as the competitive landscape evolves, as
demonstrated at London Gatwick where
we are increasing our market share after
reallocating aircraft to this high yielding
base along with the addition of new slots.
The scale and flexibility of our network will
continue to provide us with opportunities
to take advantage as the competitive
landscape develops during the recovery
phase. easyJet’s network is unrivalled and
difficult to replicate. We have a golden
opportunity to continue to take market
share from our main competitors, who fly
120 million seats in our markets and are
facing challenges. As a result of these
challenges they are focusing on long-haul
whilst restructuring and retrenching their
short-haul operations.
To better capture summer leisure
demand, easyJet opened seasonal bases
in Malaga and Faro on 1 June 2021, adding
to Palma which was already an existing
seasonal base. All three seasonal bases
are expanding with additional aircraft for
summer 22 being added. Our destination-
based fleet, also including Barcelona, is
now increasing from 9 in the 2019 financial
year to 21 in the 2022 financial year. These
bases operate leisure routes with aircraft
at the destination airport instead of at
the source market. This allows easyJet to
manage seasonal demand profiles while
reducing our fixed cost base over winter.
This approach provides the flexibility to
shift capacity across multiple source
markets at short notice without impacting
our people.
Our schedule for the summer 22 season
went on sale far earlier than it would have
done under normal circumstances. This
enabled our customers to easily transfer
any bookings which were cancelled due
www.easyJet.com
19
STRATEGIC REPORT OUR STRATEGY ( CONTINUED )
Customer excellence
We want to win our customers’
loyalty, and therefore it is
important we engage with and
understand our customers to
make sure our product and
service remain competitive
Customer Excellence
easyJet aims to deliver a seamless and
digitally enabled customer journey at
every stage:
• Prior to travel – our ‘direct is best’
strategy is led by our digital channels,
with an app/mobile-first mindset.
Initiatives include optimising our web
booking interface; driving app usage
and improving the overall experience;
enhancing self-service booking
management such as changing
passenger details or baggage
booking; improving online redemption
management such as vouchers;
developing full pre-order capability for
retail onboard; and payments innovation.
To help our customers navigate through
Covid-19 travel rules, we launched the
Covid-19 Travel Hub in nine languages,
providing a one stop shop for all
information customers require to prepare
for travel, including easy access to
Covid-19 tests at negotiated rates.
• In airport – moving customers from
kerb to aircraft without the need
for human interaction. This involves
improving boarding in order to improve
CSAT and reduce queuing, which our
new cabin bag policy is helping with.
Streamlining the bag drop and boarding
experience, building a model customer
journey at Gatwick to roll out to other
airports, and pushing for virtual solutions
is enhancing the customer experience
across our airports.
• In flight – our warm welcome and
personal service to get you to your
destination on time. We are committed
to improving On-Time Performance
(OTP) – on time, every time.
This is done by managing suppliers,
empowering crew, implementing
pre-tactical and strategic ATC planning,
carrying out base operating reviews,
building a customer-level data view to
enable targeted offers such as inflight
retail and reviewing the CRM lifecycle for
more relevant customer engagement.
• Support – we aim to give customers
the digital tools to easily self-serve when
things do not go to plan, or to engage
after their flight. As part of this initiative
we have delivered an enhanced
Self-Service Disruption Management
(SSDM) tool to let customers quickly
self-serve in disruption and we
introduced chatbot capability allowing
customers to receive concise information
on biosecurity measures, refunds,
vouchers and travel restrictions without
20 easyJet plc Annual Report and Accounts 2021
having to speak to a customer service
agent. We launched a new social media
strategy, offering more channels for
our customers to contact us, while
increasing their engagement with
us through more relevant and
inspiring content.
Actions delivered as part of our customer
excellence initiative include:
• Protection Promise: giving customers the
flexibility they needed to be confident to
book during the uncertainty of ever-
changing travel restrictions, this includes
fee-free transfer of flights up to two
hours before departure.
• All easyJet flight vouchers can be
redeemed online, quickly and easily
when making a booking.
• Processing time of refunds has been
further decreased to ensure customers
are getting their money back as quickly
as possible.
• The launch of our chatbots, giving
customers the opportunity to get
answers to their queries quickly
and easily without having to pick
up the phone.
This focus on customer excellence has
continued to drive the strength of our
brand and delivered strong customer
satisfaction scores. easyJet remains first
choice low cost carrier (LCC) in the UK,
France, Switzerland and Berlin, best value
airline in the UK and France ahead of other
LCCs and legacy carriers and best value
LCC in Italy, Switzerland and Berlin.
75%
Our customer satisfaction score
for the year is higher than in the
2019 pre-pandemic financial year
In the 2021 financial year, On-Time Performance increased by 3 percentage points to 87%.
This reflects the strides we are taking towards leaving ‘on time, every time’. This is crucially
important for our operational efficiency, as well as customer satisfaction.
OTP % arrivals within 15 minutes7
2021 Network
2020 Network
Q1
94%
80%
Q2
91%
82%
Q3
91%
83%
Q4
84%
94%
FY
87%
84%
Product portfolio evolution
Product Portfolio Evolution
easyJet recognises that the continued
evolution of our product portfolio
represents a significant opportunity to
increase revenue per seat and margins
in the coming years. During the 2021
financial year we have launched a
number of products, including:
• Standard Plus: includes Up front seat
selection, access to easyJet Plus Bag
Drop, Speedy Boarding, one cabin bag
and an additional under seat cabin bag in
one easy fare.
• Cabin Bags: purchased alongside a
premium or standard seat allowing
a large bag to be taken onboard
the aircraft.
• Leisure fare (Essentials): includes a
standard seat and 23kg hold bag.
The Directors believe that the continued
evolution of the Group’s product portfolio
provides the opportunity to build on
spend per customer, delivering enhanced
sustainable returns. The initial performance
from these products has been very
encouraging with a significant spend
per customer being observed.
Further opportunities within easyJet’s
product offering have been highlighted
and will be delivered over the coming
year. Inflight retail, our new retail brand
and proposition is due to be launched in
H2 of the 2022 financial year. This will
involve direct sourcing and contracting
for our on-board retail offering. We have
partnered with dnata and aim to improve
our customer proposition, offering a pre
and during inflight shopping experience.
easyJet holidays
We enjoy strong partnerships with leading
hotels without the need for financial
commitments or inventory risk. 63% of
bookings are with directly contracted
hotels and during the 2021 financial year,
the Group signed over 40 additional
flagship beach hotels which were previously
under exclusive contracts with competitors.
This further optimises the easyJet holidays’
portfolio, whilst also establishing
connectivity with some of the world’s
largest hotel chains including Hilton, Accor,
Radisson and Intercontinental Hotel Group
to improve the range of our cities offering.
Reflecting the strength of the easyJet
holidays business model and the significant
opportunities to grow market share, the
Group sees a clear roadmap to easyJet
holidays contributing annual profit before
tax in excess of £100 million. Our holidays
business has a highly scalable business
model based on low fixed costs (96%
variable1) with strong margins and a
digital platform which will provide a
base for growth.
easyJet holidays
The Group is continuing to build on the
success of the launch of easyJet holidays,
Europe’s fastest growing holiday company,
which offers flexible holiday packages at
the best prices. Customers are drawn to
our trusted brand with over 40% of
easyJet holidays sales coming from flight
customers choosing to upgrade to a
holiday after visiting easyjet.com. With
300 million visits a year to our app and
website, this provides a significant
opportunity going forward. We offer
unbeatable prices with our holidays
being the cheapest like for like on the
market. This coupled with our direct
hotel contracting and low fixed cost
base provides easyJet with a strong
business model to grow and deliver
sustainable returns.
easyJet holidays bookings are underpinned
by an industry leading ‘Protection Promise’
which has meant that the Group has been
able to retain over 60% of customers
whose holidays were affected by the
Covid-19 pandemic in the 2021 financial
year. easyJet holidays also offsets the
carbon emissions directly associated with
its holidays—the fuel used from flights and
transfers, plus the energy from hotel stays.
1. Based on normalised volumes
www.easyJet.com
21
STRATEGIC REPORT £512
million
cost savings delivered the 2021
financial year, of which almost
half are sustainable
• easyJet outsources the majority of heavy
maintenance where it is cost effective.
We have extended our contract with
Lufthansa Technik to 2025 and with
SRT Malta to 2023, delivering cost
savings and simpler work packages.
We have also extended our low-cost
engine shop visit contract out to 2023
and concluded a cost-effective deal on
Leap engines and ongoing support. Our
components deal has been extended to
2027 with additional cost savings and a
Milan parts hub. We have worked closely
with Airbus to create more efficient 6-
and 12-year checks. We have completed
insourcing of line maintenance in Berlin,
Glasgow, Edinburgh and Bristol, which
has delivered cost savings and higher
quality. All line maintenance at Gatwick
is now done in-house, with the addition
of a completed third hangar bay in
March 2021.
132 major ground handling
contracts have been
renegotiated
OUR STRATEGY ( CONTINUED )
Cost focus
easyJet has delivered £512 million of cost
savings in the 2021 financial year, with
almost half being sustainable. These cost
savings help mitigate some of our cost
headwinds. Savings have been delivered
across every cost line. As part of our
continued cost challenge we are identifying
further sustainable savings to strengthen
our competitive advantage.
As a result of highly constructive
relationships with our trade union partners
and our people, we have been able to
deliver significant cost and productivity
savings, including:
• Reducing the number of full-time
equivalent (FTE) crew per aircraft in
all bases (excluding Italy at this stage)
for our summer 2021 flying programme.
This has enabled significant improvements
in our crew ratios and productivity in
preparation for our return to flying
• Minimised redundancy costs by agreeing
innovative part-time and seasonal
contracts with our unions. This improves
productivity on a sustainable basis and
allows the capacity to grow if required,
without needing to hire new people
• Re-balancing of the number of seasonal
contracts we have across the network
• Reductions in base pay in some of our
higher-cost jurisdictions, with easements
in rostering rules also being agreed and
two-year pay freeze agreements in
most jurisdictions
• These measures have reduced our
overall cost of crew whilst addressing
structural and productivity challenges
with our old crew model. They have also
enabled the investment in seasonal
bases in Faro and Malaga which opened
during the 2021 financial year alongside
our existing seasonal base in Palma,
continuing to improve efficiency at a
lower cost base.
• Airports and ground handling costs
represent a major part of our cost base
and have been a particular focus. We
continue negotiations with airports
across our network, to secure the best
long term deals. We have reviewed
ground handling costs on a line-by-line
basis and renegotiated 132 major ground
handling contracts, with permanent
savings achieved in Ground Operations
and Customer Management Centres.
New contracts focus on driving safety
and OTP while reducing costs. We have
achieved a 25% reduction in call centre
costs with new contracts to 2027 and
improved customer service.
22
easyJet plc Annual Report and Accounts 2021
Sustainability
easyJet has committed to joining the Race
to Zero while continuing to work on our
Net Zero pathway to 2050. Sustainability
is of significant and growing importance to
our customers as 78% of consumers say
that they are concerned about the impact
of climate change. This is something that
easyJet views with the upmost importance,
as we aim to pioneer sustainable travel.
There has been significant progress made
during 2021, demonstrated by our first ever
SAF flight at London Gatwick, using a 30%
blend flight taking off on 19 October 2021.
A SAF blend was then used on all flights
operating from Gatwick to Glasgow
throughout COP26. During the year we
have also conducted an emission free
turnaround trial at Bristol airport where
we saw a 97% reduction in CO2 emissions
using electric powered ground equipment
instead of diesel.
Our Sustainability strategy has three
pillars: tackling our carbon emissions;
stimulating carbon innovation; and
going beyond carbon.
• Tackling carbon emissions: We were
the world’s first major airline to offset the
carbon emissions from the fuel used on
all our flights across our entire network,
and we continue to work tirelessly to
minimise carbon emissions across our
operations. We continue to operate a
fleet of modern, fuel efficient aircraft
and are always looking for more ways
to be fuel efficient and emit less carbon.
Customer awareness of our carbon
offsetting, based on customers who
have flown within the past 12 months,
was 51%, compared to 45% in the 2020
financial year, and the positive difference
in overall satisfaction between customers
who were aware and not aware was 6.3
percentage points. easyJet holidays was
also the first major holiday company to
offset the carbon emissions directly
associated with its holidays – the fuel
from flights and transfers plus the
energy from hotel stays.
• Stimulating carbon innovation: We
are supporting the development of
new technologies to stimulate the
decarbonisation of aviation as quickly
as possible. Offsetting can only be an
interim solution, while zero emissions
technology is developed. We are
collaborating with several industry
leaders to support technological step
change: Wright Electric in their
development of ‘Wright 1’ and a strategic
partnership with Airbus in their ambition
to develop a zero emission commercial
aircraft by 2035. We are excited to see
the growing momentum behind novel
propulsion technologies, including
9 million
individual items of plastic removed
from inflight retail in the 2021
financial year
hybrid-electric, hydrogen fuel-cell
and hydrogen combustion.
There is significant potential for
these technologies, particularly on
short-haul networks such as our own.
• Going beyond carbon: We are
constantly looking for more ways to
take action outside of carbon reductions
including reducing the amount of plastic
used on our services and having crew
and pilot uniforms made from recycled
plastic. By the end of the 2021 financial
year we had already removed over 36
million individual items of plastic from our
inflight retail. We are also aiming to
reduce waste and plastic within our
supply chain. We are implementing a
ISO14001-compliant Environmental
Management System, and can champion
sustainability. We are particularly pleased
that easyJet’s long term work with our
charity partner Unicef, who we have
supported through on-board collections
since 2012, is continuing by funding
COVAX global vaccinations – with
Unicef’s aim being to deliver 2 billion
vaccines by the end of 2021. Hundreds
of easyJet crew members have
volunteered to help at vaccination
centres across Europe, with many
of them having trained to deliver
the vaccines.
We were the world’s first
major airline to offset the
carbon emissions from the
fuel used on all our flights
across our entire network
www.easyJet.com
23
STRATEGIC REPORT KE Y PERFORMA NCE INDICATOR S
Measuring our performance
Headline (loss)/profit
before tax per seat (£)
Headline (loss)/earnings
per share (p)
Headline (loss)/return on
capital employed (%)
(39.87)
(39.87)
(39.87)
(14.68)
(14.68)
2021
2020
2019
2018
2017
4.074.07
6.076.07
4.714.71
(166.9)
(166.9)
(149.7)*
(149.7)*
2021
2020
(25.5)
(25.5)
(25.5)
(19.9)
(19.9)
2021
2020
2019
2018
2017
88.788.7
118.3
118.3
82.582.5
2019
2018
2017
11.411.4
14.614.6
11.911.9
Per seat metrics are for the Airline
business only.
* 2020 restated due to impact of the
2021 rights issue.
Why it is important
Incremental improvements in
profitability ensure that we have a
platform for long term growth while
generating value for all stakeholders.
Why it is important
Delivering sustainable shareholder
value is a fundamental part of our
mindset as we manage our business.
2018 as restated, headline
2017-2018 pre IFRS 16, normalised
operating profit after tax divided by
average adjusted capital employed.
2019-2021 post IFRS 16.
Why it is important
As a low cost business, we
focus on efficiency to produce
customer solutions whilst also driving
operational efficiencies which will
maximise our return on investment.
What we measure
Headline (loss)/profit after tax
divided by the weighted average
number of shares in issue during the
period (adjusted for shares held in
employee benefits trusts).
How we performed
Headline loss per share was
166.9 pence (2020: 149.7 pence loss
per share*), driven by the loss in
the year. Total loss per share was
159.0 pence (2020: 222.9 pence loss
per share*). Both 2020 figures have
been restated due to the rights
issue in 2021.
What we measure
Headline operating (loss)/profit
after tax, divided by average
capital employed.
How we performed
Headline ROCE worsened to (25.5%)
(2020: (19.9%)) driven by
the headline loss recognised in
the year. Total ROCE improved
to (22.4%) (2020: (23.0%)), a smaller
decline impacted by non-headline
sale and leaseback gains and
restructuring provision releases.
Our customer satisfaction index is
based on the results of a customer
satisfaction survey measuring how
satisfied the customer was with their
most recent flight.
How we performed
Overall customer satisfaction was
75%, no change from the 2020
performance. Our continued
focus on customers, the reduced
congestion of European airspace,
and our customer positive reaction
to our Covid-19 safety policies have
contributed to the performance.
What we measure
Headline (loss)/profit before
tax divided by the number of
seats flown.
How we performed
Headline loss before tax per seat was
£39.87 (2020: £14.68 loss). Revenue
per seat decreased primarily due to a full
year impact of Covid-19, with sustained
softness in macro-level demand as
customers’ confidence and ability to
travel have been impacted by
fluctuating infection rates across the
UK and Europe, resulting in local and
national lockdowns and frequent
changes in travel restrictions and
travel advice. This was compounded
by the increase in cost per seat, as our
fixed cost base has serviced a much
reduced schedule.
24 easyJet plc Annual Report and Accounts 2021
Revised calculations in 2019, 2017-2018
restated.
2017, 2018 and 2019 restated to align
to current industry methodology.
Why it is important
Why it is important
Why it is important
Customers have increasing choice
and their expectations are rising.
Ensuring we meet their evolving
needs will position us as the brand of
choice when flying within Europe.
Reliable operational performance
is a key factor in our customers’
perceptions of their experience with
us. Managing OTP and minimising
disruption will positively impact on
the likelihood of our customers
choosing to fly with us on a
repeat basis.
An important part of Our Promise
to be a safe and responsible
airline is to help tackle climate
change. In the short term our
focus is being as efficient as we
can, and to drive carbon
efficiencies.
What we measure
What we measure
What we measure
Percentage of flights which arrive
within 15 minutes of the scheduled
arrival time.
How much carbon dioxide is
produced for each passenger, for
each kilometre they fly with us.
How we performed
Our OTP has increased year
on year to 87% (2020: 84%).
This has been driven by a full
year reduction in congestion of
European airspace, as well as our
strong operational performance.
How we performed
In 2021 our carbon emissions per
passenger kilometre were 81.08g,
up from 70.77g in 2020. Reduced
load factors have driven the
increase in emissions per
passenger, which was
mitigated by our efforts to
be more operationally efficient,
including increased use of the
more efficient neo aircraft and
a focus on flight efficiency
initiatives.
easyJet has six Key Performance Indicators which we use
to measure progress.
Customer satisfaction (%)
On-Time Performance (%)
CO2 emissions per
passenger kilometre
2021
2020
2019
2018
2017
757575
7575
7474
7575
7373
2021
2020
2019
2018
2017
8787
8484
7575
7575
7676
2021
2020
2019
2018
2017
81.08
81.08
70.77
70.77
70.41
70.41
71.5671.56
72.46
72.46
Per seat metrics are for the Airline
* 2020 restated due to impact of the
2018 as restated, headline
business only.
2021 rights issue.
Revised calculations in 2019, 2017-2018
restated.
2017, 2018 and 2019 restated to align
to current industry methodology.
Why it is important
Customers have increasing choice
and their expectations are rising.
Ensuring we meet their evolving
needs will position us as the brand of
choice when flying within Europe.
What we measure
Our customer satisfaction index is
based on the results of a customer
satisfaction survey measuring how
satisfied the customer was with their
most recent flight.
How we performed
Overall customer satisfaction was
75%, no change from the 2020
performance. Our continued
focus on customers, the reduced
congestion of European airspace,
and our customer positive reaction
to our Covid-19 safety policies have
contributed to the performance.
Why it is important
Reliable operational performance
is a key factor in our customers’
perceptions of their experience with
us. Managing OTP and minimising
disruption will positively impact on
the likelihood of our customers
choosing to fly with us on a
repeat basis.
Why it is important
An important part of Our Promise
to be a safe and responsible
airline is to help tackle climate
change. In the short term our
focus is being as efficient as we
can, and to drive carbon
efficiencies.
What we measure
Percentage of flights which arrive
within 15 minutes of the scheduled
arrival time.
What we measure
How much carbon dioxide is
produced for each passenger, for
each kilometre they fly with us.
How we performed
Our OTP has increased year
on year to 87% (2020: 84%).
This has been driven by a full
year reduction in congestion of
European airspace, as well as our
strong operational performance.
How we performed
In 2021 our carbon emissions per
passenger kilometre were 81.08g,
up from 70.77g in 2020. Reduced
load factors have driven the
increase in emissions per
passenger, which was
mitigated by our efforts to
be more operationally efficient,
including increased use of the
more efficient neo aircraft and
a focus on flight efficiency
initiatives.
In addition to the KPIs reported above, easyJet is introducing an additional KPI this year.
Headline EBITDAR margin for 2021: (37.8%). This metric forms part of our future
targets and will be reported on an ongoing basis from this financial year.
www.easyJet.com
25
Why it is important
Why it is important
Incremental improvements in
profitability ensure that we have a
platform for long term growth while
generating value for all stakeholders.
Delivering sustainable shareholder
value is a fundamental part of our
mindset as we manage our business.
customer solutions whilst also driving
2017-2018 pre IFRS 16, normalised
operating profit after tax divided by
average adjusted capital employed.
2019-2021 post IFRS 16.
Why it is important
As a low cost business, we
focus on efficiency to produce
operational efficiencies which will
maximise our return on investment.
What we measure
Headline (loss)/profit before
tax divided by the number of
seats flown.
What we measure
Headline (loss)/profit after tax
divided by the weighted average
What we measure
Headline operating (loss)/profit
after tax, divided by average
number of shares in issue during the
capital employed.
period (adjusted for shares held in
employee benefits trusts).
How we performed
How we performed
How we performed
Headline loss before tax per seat was
Headline loss per share was
Headline ROCE worsened to (25.5%)
£39.87 (2020: £14.68 loss). Revenue
166.9 pence (2020: 149.7 pence loss
(2020: (19.9%)) driven by
per seat decreased primarily due to a full
per share*), driven by the loss in
year impact of Covid-19, with sustained
the year. Total loss per share was
the headline loss recognised in
the year. Total ROCE improved
softness in macro-level demand as
159.0 pence (2020: 222.9 pence loss
to (22.4%) (2020: (23.0%)), a smaller
customers’ confidence and ability to
per share*). Both 2020 figures have
decline impacted by non-headline
been restated due to the rights
issue in 2021.
sale and leaseback gains and
restructuring provision releases.
travel have been impacted by
fluctuating infection rates across the
UK and Europe, resulting in local and
national lockdowns and frequent
changes in travel restrictions and
travel advice. This was compounded
by the increase in cost per seat, as our
fixed cost base has serviced a much
reduced schedule.
STRATEGIC REPORT STA K EHOLDER ENGAG EMENT
Our engagement with
stakeholders
Our stakeholders are a fundamental part of our
operations and are referenced throughout this
report. We have set out on the following pages
details of who our key stakeholders are, how we have
engaged with them and the associated outcomes.
This section also describes how the Board acted in a way
it considers would most likely promote the success of the
Company for the benefit of its members as a whole,
taking into account the factors set out in section 172 of
the Companies Act 2006 (the ‘Section 172 statement’).
Further details of the Board’s activities during the year can
be found in the Governance section on pages 111 to 117.
Despite the continued and ever changing travel restrictions
in place, we were able to fly 20.4 million passengers in 2021.
This includes individuals who booked flight-only trips with
us for leisure or business, as well as those who booked
easyJet holidays.
01. OUR CUSTOMERS
26 easyJet plc Annual Report and Accounts 2021
Key focus
• Safety
• Sustainability
• Choice (time of flying,
destinations, ancillary offerings)
• Ease of booking
• Cost and affordability
• Minimising disruption
• Ease of making changes
Why we engage
A key part of Our Strategy is a focus on customer
excellence, both to win our customers’ loyalty but
also to achieve our purpose of making travel easy,
enjoyable and affordable, whether it is for leisure or
business. Our understanding of who our current and
future customers are, what products they need and
how they perceive easyJet enables us to prioritise our
efforts in driving a positive customer experience and
therefore loyalty, especially given the current
uncertainty in the travel environment.
How we engage
• We regularly survey our customers to find out about
their experiences post travel. We also survey our
customers prior to launching a new product offering.
We monitor sentiment via social media tracking
versus competitors, and brand strength across
Europe via the Brand Tracker.
• Our crew interact with customers on a daily basis,
and this is regularly fed back to management
through crew feedback sessions and online forums.
• We interact with customers via our customer call
centres based in the UK and overseas, and on social
media. This includes when customers need extra
support or help with special assistance requests or
arrangements when travel is disrupted.
• We measure our performance in part through our
customer satisfaction KPI, set out on page 25.
Considerations and outcomes
It is clear that the pandemic has brought with it
increased complexity and uncertainty, both from the
continually changing travel restrictions imposed by
governments across Europe and the need for us to
dynamically manage the schedule, which has resulted
in disrupted travel plans. With the customer at the
heart of everything we do, we introduced a number
of initiatives primarily around making travel easy and
accessible for all and addressing this new, complex
and uncertain travel environment. As a result of
these initiatives customer satisfaction has been 75%.
• The launch of the Covid-19 Travel Hub on
easyjet.com, making it as easy as possible for
customers to stay informed of the latest travel
guidelines to and from the 34 countries on
easyJet’s European network. This has been
continually updated and helps customers navigate
the various requirements and enables them to
plan their trips with confidence.
• Enhancing the industry leading ‘Protection Promise’,
allowing customers more flexibility to book with
confidence with the ability to change their flights up
to two hours before departure, without a change
fee, and transfer to any flights currently on sale.
The schedule was also put on sale earlier than ever
before to provide as much choice to customers as
possible. The easyJet holidays ‘Protection Promise’
was also enhanced to reflect the complexity of the
UK traffic light system in place for much of the year.
• Launching a travel insurance policy which included
Covid-19 cover as standard, covering customers both
ahead of and during their trips, including if they are
unable to return home due to testing positive for
Covid-19 while away.
• Extensive lobbying for the price of testing to reduce,
so that travel would be more affordable and that
the price of testing would not be a barrier for
people being reunited with family and friends
across Europe. We also negotiated a competitively
priced PCR test for our customers through our
partnership with Randox.
• Giving customers the digital tools to easily self-serve
when things do not go to plan, or to engage with
us after their trips. This has included delivering an
enhanced Self-Service Disruption Management
(SSDM) tool, to let customers quickly self-serve if
their travel plans are disrupted, and the ability to
redeem vouchers online.
• Increasing the choice across the network in line
with demand, with a significant number of new
UK domestic routes, as well as new routes across
leisure destinations in our European network.
• Introduction of a new cabin bag policy, giving
customers the ability to select the most appropriate
ticket for their baggage needs and providing
certainty if they want to bring bags on board
subject to availability. This has also helped
improve the boarding process and punctuality.
The safety and wellbeing of our customers is key,
and the Safety Committee continuously monitored
easyJet’s biosecurity standards to ensure we provide
a safe and healthy environment for our customers.
Our biosecurity standards are continuously adjusted as
restrictions change. Policies have also been developed
and tested by the Customer Safety Governance Group
to understand how to continually improve customer
safety and wellbeing.
Customer sentiment and feedback is regularly reported
to and discussed by the Airline Management Board
and the plc Board. The Board has also reflected on the
above initiatives and the impact of the pandemic on
customer behaviour when reviewing the Group’s
longer-term strategy during the year. Consequently,
it is placing an increased focus on accelerating the
digitisation of the customer journey as there is more
work to do, with an investment in commercial systems
and the inflight retail offering amongst others.
www.easyJet.com
27
STRATEGIC REPORT STA K EHOLDER ENGAG EMENT (CONT INUED)
Keeping employees connected to our business and
ensuring they feel supported during this period has
also been a key focus. As a result of our engagement
with them during the year, there have been a number
of initiatives put in place.
• Clear communication has never been more
important. To ensure that employees are provided
with information on matters of concern to them,
and that there is an awareness of the financial
and economic factors affecting the Company’s
performance, Johan Lundgren has continued to
update employees frequently about the ever
changing external environment and what
management and the Board are doing to support
and involve them. This included the launch of a new
communications format; a weekly podcast designed
to talk about the most important issues and provide
an update on key Company-wide highlights.
• A wide range of support for employees’ physical
and mental wellbeing has been made available for
employees, whether they are crew or office based.
Under the umbrella of ‘You Matter’, this support
and guidance has complemented the existing
Employee Assistance Programme. Our summer
‘Be You. Be Kind’ campaign was successful in
promoting our ongoing commitment to create
an inclusive environment.
• The enduring impact of the pandemic has required
adapted ways of working across the business and
our hybrid approach has helped employees deal
with the change both personally and professionally.
We ran training initiatives for all our managers to
support their teams when remote working and
then to manage the transition to hybrid working.
The health and safety of our employees is a
priority, which has led to us adapting the workplace
and putting in place a number of biosecurity
measures to enable a safe phased return to
the working environment.
• As well as a focus on employee wellbeing in the face
of the pandemic, we also continued to drive action
on our diversity and inclusion focus to create an
environment where all employees feel they can be
themselves and belong. We continued to improve
the support available to our LGBTQ+ community.
This included the launch of a ‘Being trans and
transitioning’ at easyJet guide, to help everyone to
feel that their differences are respected and valued,
and that everyone has the opportunity to be the
true version of themselves.
• The Board discussed the impact of the pandemic on
employees regularly. This included a discussion as
part of the new Employee Representative Director
mechanism, where the Board received an update on
feedback from two employee representative bodies.
It was acknowledged that different parts of the
business had been impacted differently, and that
there was a need to bring everyone together and
re-energise the entire workforce, which would be
developed by the People team.
Key focus
• Health, safety and working
conditions
• Wellbeing and mental health
• Training and career development
• Diversity and inclusion
Why we engage
Our people are a critical part of our business and
their famous ‘orange spirit’ a key part of our success.
We want to attract, retain and develop our people
by creating an inclusive and energising environment,
inspiring everyone to learn and grow and do their best
– and helping our ‘orange spirit’ to thrive. Engaging
effectively with them is key to doing this successfully.
How we engage
• We have a number of employee representative
groups across Europe. We also engage with 21
trade unions in seven countries, across 18 Collective
Bargaining Groups, and have continued to engage
with them extensively during the year.
• In addition to undertaking employee surveys and
providing internal social platforms, we have country
and base teams which manage and interact with
staff on a daily basis.
• The Board took the opportunity to review its own
mechanism for engaging with employees during
the year, as set out in the Governance section.
The Employee Representative Directors meet
individually with the Company’s main representative
bodies regularly and with other Works Councils on
a regular basis.
Considerations and outcomes
The high calibre of our people is a key source of
differentiation for easyJet compared to our
competitors, driving CSAT and customer loyalty.
Our strong employer reputation attracts and
retains engaged crew, with the spirit to deliver
excellent service.
Our people have however continued to be significantly
impacted during the year, whether that be as a result
of being furloughed, working from home, or the
restructuring programme. The pandemic has brought
with it challenges around attrition and retention for
some specific head office business functions that
are industry agnostic, such as legal, finance and IT.
As a result of the uncertainty in the aviation industry,
a highly competitive external recruitment market,
and no bonuses being payable, retention issues
have needed to be addressed. As a result, we have
developed a comprehensive strategy focusing on
wellbeing, talent management, reward, recognition,
skills development and the employee experience.
Our Glassdoor rating of employee satisfaction is 4.2
(out of 5.0), which is the highest within the travel and
hospitality sector, illustrating our market-leading
position in the labour market.
28 easyJet plc Annual Report and Accounts 2021
At easyJet, we have a
workforce of over 13,000
employees across nine
countries in Europe,
including 4,000 pilots
and 7,000 cabin crew.
02. OUR PEOPLE
www.easyJet.com
29
STRATEGIC REPORT STA K EHOLDER ENGAG EMENT (CONT INUED)
easyJet partners with key suppliers to deliver
many of its operational and commercial
activities. Our partners are carefully selected,
and significant emphasis is placed on
managing these relationships, with the aim
of encouraging incremental innovation
and performance.
03. OUR Suppliers
30 easyJet plc Annual Report and Accounts 2021
Considerations and outcomes
• Providing certainty both to our suppliers
and in relation to our own cost base led to
a comprehensive review of the supplier
arrangements across operations, including
engineering, maintenance and ground handling,
and customer services. The review was focused on
achieving efficiencies and value for money for both
sides, while providing an element of certainty to
allow suppliers to invest in the services they provide
easyJet. As a result, the Board approved the
extension and updating of contracts with DHL,
Menzies and Groupe Europe in relation to ground
handling at airports across Europe, and with two
suppliers in relation to Customer Management
Centre provision, amongst others.
• Management also negotiated further deferrals of
aircraft purchases with Airbus during the year in
order to provide a significant reduction in capital
expenditure and align aircraft delivery profile with
strategy and cash flow planning, which were
approved by the Board.
• easyJet holidays launched its inaugural Sustainability
Strategy, making a commitment for all its holidays to
directly support sustainable practices by the end of
2025. This will involve its supply chain by committing
to encouraging 100% of its contracted hotels to
achieve certification by a Global Sustainable Tourism
Council (GSTC) accredited certification body or a
certification to a GSTC recognised standard by the
end of 2025. It is only by working collaboratively with
industry and destination partners in this way that this
is possible, building knowledge and sharing best
practice to accelerate industry action on critical
environmental, economic and social issues.
• As we started to ramp up our flying schedule during
the year, we assessed the readiness of our suppliers
across relevant business functions to ensure they
were able to deliver our operations safely and we
continue to engage with key suppliers as the
recovery ramps up. For example the Board
discussed the post pandemic plans directly with
Gatwick Airport management during its base visit.
Key focus
• Compliance with regulations
• Safety
• Consumer protection
• Health and safety
• Treatment of suppliers
• Sustainability
Our current fleet of 308 aircraft is supplied by
Airbus, with all engines supplied by CFM. The fleet
is maintained by maintenance, repair and
overhaul specialists.
Ground-handling agents manage the logistics
operations at airports, such as baggage handling
and aircraft loading and unloading. We have a
strategic partnership with DHL to provide these
services at Gatwick, Bristol and Manchester, and
Menzies in Spain, whilst Swissport manage the
operation in Switzerland and Berlin.
We have a number of other key suppliers, including
critical technology suppliers, fuel providers, engineering
and maintenance providers, aircraft lessors, and
hoteliers for easyJet holidays.
Why we engage
We want to be number one or two in primary airports,
and provide ease, value and affordability to our
customers. This means having an open, constructive
and effective relationship with all suppliers, as we
believe they are integral to the Group’s success.
How we engage
• The Executive Directors engage with senior
executives of our major suppliers on a regular basis
to understand the health of their businesses and
have met or spoken with them during the year.
• We have an established supplier relationship
management framework, which provides a toolkit
and guidance for easyJet managers who lead
relationships with key partners.
• We have a strong strategic relationship with the
primary airports and work with them as strategic
partners. The Board looks to engage with key
suppliers whenever appropriate, and during the
year it used the opportunity of a base visit at
London Gatwick to meet with the management
of Gatwick Airport Limited (see the Governance
section on page 109).
www.easyJet.com
31
STRATEGIC REPORT STA K EHOLDER ENGAG EMENT (CONT INUED)
Key focus
• Understanding the financial and
sustainable performance of the
business
• Creation of long term value
• Share price and dividend returns
Why we engage
Shareholders and investors are the main providers of
capital with which to invest and grow the Group’s
business. Taking account of their views on the
Company’s operational and financial performance
and its strategic direction are an important part
of ensuring we deliver strong shareholder value.
The support of the debt markets is important in
ensuring access to appropriate liquidity.
How we engage
• We engage with our shareholders regularly and
consult with our major shareholders on specific
issues to understand their views. During the year
management and members of the Board led
engagement in advance of the Annual General
Meeting (AGM) held in December 2020, and our
corporate brokers and proxy solicitation agents also
spoke to a significant number of shareholders and
provided feedback to the Board. Despite the AGM
being held with restricted attendance due to the
pandemic, facilities were made available for all
shareholders to ask questions live at the AGM, as
well as submit questions in advance.
• Engagement also took place after key
announcements and financial updates throughout
the year, and prior to and during the rights issue
launched in September 2021. Further details are
included below and on page 108.
• We have an active engagement programme
with institutional investors through our Investor
Relations department, including attendance at
investor conferences, results presentations,
individual investor meetings and engagement
with equity research analysts.
• Our Treasury team actively engage with our banks
and credit rating agencies to ensure they are
updated on the Company’s financial performance
and liquidity.
Considerations and outcomes
• Following engagement with shareholders in advance
of the AGM, we were able to secure their support for
the revisions to the Directors’ remuneration policy to
ensure it remained consistent and aligned with our
strategic priorities. While the resolutions relating to
the appointment and re-appointment of all of the
Directors were passed with the necessary majority,
they received less than 58% in favour. The reasons
for this outcome and the Board’s response are set
out on page 107.
• Moni Mannings, Chair of the Remuneration
Committee, engaged with some of our major
shareholders during the year specifically to discuss
the targets relating to the December 2020 LTIP
(Long Term Incentive Plan) award and when
formulating the changes being proposed to the
remuneration policy, which has provided an
opportunity to incorporate their feedback
around structure and quantum, while answering
any questions they may have had on
the proposed approach.
• The Company announced a 31 for 47 rights issue in
September to raise gross proceeds of £1.2 billion.
Major shareholders were engaged as part of this
process and discussions with them centred around
the timing and how the Board had determined the
quantum of the raise. The rationale for the timing
was explained, noting that the trading environment
remained uncertain and having reviewed the Group’s
long term capital and liquidity needs, the Board had
determined that raising the additional equity at that
time would not only protect the Company’s position
in the European aviation sector and provide
resilience from downside risks, but also improve
management’s ability to deliver long term value.
The factors that influenced the size of the equity
raise were also discussed, including that it would
provide resilience from future downside risks should
the Covid-19 pandemic continue to dampen or delay
the recovery of passenger volumes, and materially
improve the ability to deliver long term value to
shareholders by having flexibility to take advantage
of long term strategic and investment opportunities.
The initial take up was strong at 93%, despite
the biggest major shareholder not participating,
and the rights issue successfully concluded on
28 September 2021.
Further details are set out in the Governance section
which starts on page 96 and Remuneration section
on page 130.
32
easyJet plc Annual Report and Accounts 2021
As a company listed on the
London Stock Exchange, our
shares are publicly traded.
Some of our major
shareholders are set out
on page 156. We also have
bonds issued under our
EMTN Programme.
04. OUR Shareholders
and investors
www.easyJet.com
33
STRATEGIC REPORT STA K EHOLDER ENGAG EMENT (CONT INUED)
We operate out of 28 bases
across Europe and fly from
153 airports. Our head office
is at London Luton Airport,
and we have training centres
for crew in Milan and at
London Luton and London
Gatwick airports.
05. OUR Communities
34 easyJet plc Annual Report and Accounts 2021
Key focus
• Local employment
• Sustainability, including carbon and
other aircraft emissions; aircraft
noise; energy usage; recycling and
waste
• Charitable activity
Why we engage
We value engagement with the communities
where our employees live and operations are based,
as they are important to the effective operation of
our business.
How we engage
• Our country directors and managers lead the
community engagement in their markets. Our
base managers are also part of their airport
community and local discussions at their bases.
• easyJet employs people on local contracts in eight
countries across Europe in full compliance with
national laws and recognising their trade unions.
• As part of our increased focus to highlight our
sustainability efforts, a new social media series
launched in the UK across all our social channels
to create awareness on some of the projects
and initiatives that we invest in as part of our
carbon offsetting programme as well as
measures we are taking within our operation to
reduce our environmental impact. Our Sustainability
team attended various workshops and aviation
panel events to reinforce our focus on
environmental innovation.
• We work with individual airports and air traffic
control teams to implement reduction in cabin waste
and noise mitigation activities that seek to minimise
the impact on local communities. Our employees
also volunteer with local charities and organisations.
Considerations and outcomes
• While many of our crew were unfortunately
furloughed, we wanted to make sure their unique
skill sets were valued and used in other ways.
We worked with the UK Government to offer the
ability for them to support the NHS’s roll out of
the Covid-19 vaccination programme in the UK,
with crew who applied being fast-tracked to
become trained vaccinators. A total of 450 crew
supported the programme.
• On International Women’s Day, easyJet launched a
virtual pilot school visits programme as part of its
Amy Johnson Initiative to encourage more girls to
become an airline pilot. Teachers, schools and
parents are able to request a virtual visit from
an easyJet pilot, who will join classrooms and
assemblies via video link, providing young people
across the UK with the opportunity to find out what
the job of a pilot is really like and importantly, with
many of the airline’s female pilots fronting the
programme, to show them it’s a job for everyone.
• We have partnered with Bristol Airport and other
partners in the region to trial a range of initiatives to
support the long term ambition to achieve net zero
operations at the airport and contribute towards
reducing easyJet’s overall carbon footprint. We are
using Bristol Airport as a test-bed to trial and
implement the latest technological and innovative
solutions for decarbonising our operations and
reducing waste. The aim is that any successful
results from the trials will have the potential to be
rolled out across easyJet’s network. This includes
electric passenger coach transportation, recycling
and waste management, and zero carbon emission
aircraft turnarounds.
• To make our uniforms more sustainable we are
evolving to use a fabric that is made from 100%
recycled plastic bottles and with a 75% lower carbon
footprint. Over the course of five years, our new
uniforms will be responsible for potentially preventing
2.7 million plastic bottles from ending up in land fill or
in our oceans.
• As part of our partnership with Unicef, we have
provided support in their global vaccination effort by
collecting on board for the ‘Covid-19 Vaccines
Appeal’ to allow our customers to support Unicef
and make a difference to the ongoing battle
against Covid-19.
www.easyJet.com
35
STRATEGIC REPORT STA K EHOLDER ENGAG EMENT (CONT INUED)
Key focus
• Compliance with regulations
• Safety
• Consumer protection
• Health and safety
• Treatment of suppliers
• Sustainability
• Quarantine restrictions
Why we engage
Regulators and governments take decisions which
directly impact our operations, as has been clearly seen
during the Covid-19 pandemic. easyJet engages with
them to understand their strategic drivers, understand
the impact of any regulatory changes on the Company
and customers, and ensure that policymakers have an
understanding of our business and the social and
economic benefits it delivers.
How we engage
• The Executive Directors and management, including
our country managers, engage with senior members
of government and regulatory bodies on an ongoing
basis. During the year, this has focused on achieving
proportionate and risk-based restrictions to control
the pandemic, and meeting with members of
governments across Europe to seek support for the
aviation industry, which has been one of the worst
affected by the pandemic.
• Our country managers and directors also engage
with governments in all markets where we have
bases, at both a national and regional level.
• Our Operations team engage with air traffic control
operators and airline associations, such as NATS,
IATA and EASA. We also work with business bodies
across our network, such as A4E – for which our
CEO, Johan Lundgren, has served as chair during
the year – and tourism bodies, such as ABTA and
the GSTC.
Considerations and outcomes
• Management have engaged extensively with
governments, and especially with the UK
Government, during the year to ensure that they
understand the impact of the pandemic on our
business and take appropriate risk-based decisions in
relation to travel restrictions and testing in the best
interests of our customers. This has included
contributing to the Global Travel Taskforce, which
was established to look at the safe and sustainable
return to international travel, and direct lobbying on
matters specific to easyJet. Our employees also
participated in the ‘Speak Up for Travel’ campaign to
raise awareness of the challenges facing the travel
industry. There has been no sector specific support
for the industry, but progress has been made in
removing some of the confusing restrictions around
the traffic light system. We continue to engage to
36 easyJet plc Annual Report and Accounts 2021
try and remove unnecessary and costly testing for
those who are fully vaccinated.
• We also engaged with the European Commission
on the launch of their ‘Fit for 55’ legislative package
and continue to work closely with the European
Commission (and other key stakeholders, including
MEPs) on the details of the legislative package.
easyJet agrees that delivering on climate change is
the most important long term challenge for aviation
and therefore it is critical that any fiscal measures
applied to aviation support this aim. easyJet
supports measures which link taxes to emissions,
price carbon fairly for everyone and ensure all
sources of aviation emissions are covered. Yet it is
also important that all airlines and passengers are
incentivised to fly more efficiently and we believe
that there should be no double taxation, and that
any fuel tax includes the replacement of all the
ineffective passenger taxes in Europe.
• We continue to engage with policy makers across
Europe on how public policy can help airlines to
address their carbon emissions and stimulate the
technological innovation that will be needed for
zero emissions aviation.
• We have engaged with European governments to
ensure that approaches to travel restrictions are
co-ordinated and facilitate the inclusion of the UK in
their travel frameworks.
• Our approach with regulators such as Austro Control
(Austria), the Civil Aviation Authority (UK) and the
Federal Office of Civil Aviation (Switzerland) is open
and transparent, which allows for a constructive
relationship. It also enables us to quickly identify and
address any regulatory concerns at an early stage.
• We have also engaged with the regulators to keep
them up to date on our financial and operational
plans throughout the year.
• We also participate in industry groups and forums
that contribute to public policy development on
sustainability issues. These include: the Aerospace
Technology Institute, the Airspace Change
Organisation Group, Airlines for Europe, Airlines UK,
the Jet Zero Council (UK Government), the Science
Based Targets initiative, Sustainable Aviation (UK),
the Taskforce for Scaling Voluntary Carbon Offsets,
and the World Economic Forum’s Target True Zero.
Section 172 Statement
The Directors are required to act in a way
they consider, in good faith, would most likely
promote the success of the Company for the
benefit of its members as a whole, taking into
account the factors as listed in section 172 of
the Companies Act 2006.
Details of how the Directors have had regard
to their section 172 duty can be found
throughout the Strategic and Governance
reports. We set out on the previous pages
details of who we consider to be our main
stakeholders, how we have engaged with
them during the year and the outcomes of
the process. Further details on how the
Directors’ duties are discharged and the
oversight of these duties are included in the
Governance section on pages 96 to 158.
Our three pan-European airlines are
regulated by Austro Control (Austria),
the Civil Aviation Authority (UK) and
the Federal Office of Civil Aviation
(Switzerland). We engage with
governments, regulators, policy makers,
air traffic control operators, airline
associations and tourism bodies.
06. Regulators
and governments
www.easyJet.com
37
STRATEGIC REPORT SUSTAINABILITY
Our commitment
to sustainability
At easyJet we are continuing to lead
the work towards the decarbonisation
of aviation. Ultimately, we want to use
new aircraft technology to achieve net
zero emissions flying across Europe.
Johan Lundgren
Chief Executive Officer
At easyJet we are continuing to lead the
work towards the decarbonisation of
aviation. Ultimately, we want to use new
aircraft technology to achieve net zero
emissions flying across Europe.
Despite the impact of the pandemic,
sustainability remains a fundamental part
of our business. It is one of the core
priorities within Our Strategy for easyJet.
This year the extreme weather events
that have been seen around the world
are a further warning about the impact of
climate change. Meanwhile world leaders
gathered at COP26 to discuss further
action. At easyJet we are committed to
leading the aviation industry in taking
the action needed.
We are fully committed to the UK and
EU targets of net zero emissions by 2050.
This year I have been the Chair of Airlines
for Europe and was pleased that we were
able to publish Destination 2050, a
European aviation industry roadmap
towards net zero.
In November 2021 we joined Race to Zero,
through which we committed to set an
interim science-based target for 2035,
as well as to reach net zero emissions
by 2050, aligning with the criteria and
recommendations of the Science Based
Targets initiative (SBTi). We will publish
our net zero roadmap that shows how we
plan to do this. We are confident that this
will be deliverable through new technology,
but it will also need a supportive policy
framework from European governments
and regulators.
package holidays we offer, becoming the
first major tour operator to do this too.
Our Sustainability Strategy has three pillars:
tackling our carbon emissions; stimulating
technological innovation; and going
beyond carbon. The plc Board, the Airline
Management Board and I are closely
involved in our progress on this strategy.
We continue to tackle our carbon
emissions today by operating a fleet of
modern, fuel-efficient aircraft and by
always looking for more ways to be even
more fuel and carbon efficient. Our Airbus
A320 / 321 neo aircraft, which have been
joining our fleet since 2017, are 15% more
fuel-efficient per seat than equivalent
previous-generation aircraft. This year we
have established a partnership with Bristol
Airport to trial new technologies to
reduce emissions from our operations,
including an aircraft turn trial using electric
ground vehicles to reduce ground-based
emissions to almost zero.
This builds on our decision in 2019 to
offset all our organisation’s direct carbon
emissions, from both our flights and
ground operations (Scopes 1 and 2).
easyJet was the world’s first major airline
to do this across our entire network and
we currently remain the only major
European airline to do so. We have
continued to offset on behalf our
customers throughout the pandemic.
In May 2021 easyJet holidays also began
offsetting carbon emissions for the
We support the highest standard offsetting
projects, that meet either the Gold
Standard or Verified Carbon Standard
(VCS) accreditation. A key focus is on
projects that support reforestation,
afforestation, and avoided deforestation in
some of the most intense deforestation
hotspots around the world. The loss of
forests is one of the largest contributors to
climate change, so work to protect and
restore forests is a critical part of the
response.
Offsetting is the right thing to do now, but
it can only be an interim solution, in the
period before the zero emissions
technology that is being developed is
available for commercial use.
We also see Sustainable Aviation Fuels
(SAFs) as another interim step in this
journey. With our partner Gatwick Airport
we have been trialling the use of
Sustainable Aviation Fuels on some easyJet
flights from the airport. This was the first
time any airline at Gatwick has used SAFs.
We believe that radical action to address
aviation’s impact on climate change is
needed and so we are also supporting the
introduction of new technologies. We are
working with our partners Airbus and
Wright Electric to accelerate the
development of zero emission
technologies.
38 easyJet plc Annual Report and Accounts 2021
Our strategic partnership with Airbus
supports their ambition to develop a zero
emission, hydrogen-powered commercial
aircraft by 2035.
I was pleased to participate in the Airbus
Summit on sustainable aerospace in
September this year, at which we talked
about the industry and government
collaboration on the research, development
and infrastructure that will be needed to
realise the potential of this technology.
We are also working with Wright Electric
who are developing the Wright 1, a
single-aisle aircraft capable of covering a
distance up to 1,280 km. Wright Electric
is targeting 2030 as the earliest date for
entry into service. In October 2021 we
also established a new partnership with
Rolls-Royce on research into new energy
and power solutions in commercial aviation.
While carbon emissions are by far our
biggest issue to tackle, we also want to
manage our other environmental impacts.
This year we have introduced a new
Environmental Management System (EMS),
made improvements to waste
management in our operations, and added
new environmental requirements to our
procurement process. We have even
introduced a new cabin crew and pilot
uniform that uses a material made from
around 45 recycled plastic bottles for each
outfit. Once rolled out across the airline it
has been estimated this could prevent
around half a million plastic bottles being
wasted each year.
The pandemic has also had an impact on
the people who work at easyJet and we
want to do what we can to support them
through this period. We have provided our
people with more advice about protecting
their mental health and wellbeing.
I am pleased that we have been able to
support our charity partner Unicef in their
work to deliver Covid-19 vaccines to health
workers and vulnerable people across the
world. This summer our onboard collection
for the charity’s vaccine programme raised
over £275,000 which could help to deliver
approximately 189,000 Covid-19 vaccines.
We are absolutely committed to
sustainability. It is a fundamental part of our
business and we know that aviation will
need to continue to do more to address
climate change. I trust our progress this
year shows that we are continuing to take
the action that is needed.
Johan Lundgren
Chief Executive Officer
Destination
Zero Emissions
We’re proud to be a part of the UN’s Race to Zero initiative.
By joining, we’ve pledged our commitment to reaching
net-zero carbon emissions by 2050, and to setting an
interim science-based target for 2035.
We recognise that aviation needs radical changes to keep
the dream of flying alive for generations to come.
In the meantime, we’re taking more measures, both now
and for the future, to reduce our emissions and minimise
our impact on the environment.
easyJet.com/sustainability
www.easyJet.com
39
STRATEGIC REPORT
SUSTAINABILITY (CONTINUED)
Our Sustainability Strategy
To lead and challenge global aviation towards
net zero emissions while positively impacting
our communities and our people
Tackling
carbon
emissions
We were the world’s first major
airline to offset the carbon emissions
from the fuel used for all our flights,
and continue to work tirelessly to
minimise carbon across our operations
Stimulating
technological
innovation
We are supporting the development
of new technologies to achieve the
decarbonisation of aviation as
quickly as possible
Going
beyond
carbon
We are working in a range of ways
to take action on sustainability,
beyond our carbon impact
• Offsetting the carbon emissions
• Champion and collaborate to
• easyJet holidays strategy
from fuel and operations
• Continuously reduce the carbon
achieve our goal of zero
emissions aviation
intensity of our flying
• Be an informed adopter of
• Advocate for smarter regulation
for aviation that rewards
carbon efficiency
Sustainable Aviation Fuels and
advanced carbon capture
technologies when available
and commercially viable
is for travel to make a positive
impact on the environment
and local communities
• Commit to waste and plastic
reduction at easyJet and
within our supply chain
• Engage our colleagues and
our customers in our
sustainability journey
• Diversity, Inclusion and
Wellbeing Strategy
• Support charitable causes
that our important to our
customers and employees
Improving our underlying capability
We have continued to strengthen our organisation structures and expertise on sustainability. Initiatives include:
expanding the Sustainability team; increasing the scope of ESG reporting; development of an ISO 14001-compliant
Environmental Management System; and additional oversight through committees and working groups, such as the
Environmental Management Review Board.
Net zero trajectory
We are fully committed to the UK and EU
targets of net zero emissions by 2050. As
part of Airlines for Europe we have also
helped to develop Destination 2050, a
European aviation industry roadmap
towards net zero.
We also participated in the Aviation
Working Group project-managed by the
SBTi, WWF, the International Council on
Clean Transportation (ICCT), other
stakeholders and other airline peers to map
out what a science-based trajectory and
decarbonisation approach for the aviation
sector. This guidance is available at: https://
sciencebasedtargets.org/sectors/aviation
In November 2021 we joined Race to Zero,
through which we committed to set an
interim science-based target for 2035, as
well as to reach net zero emissions by
2050, aligning with the criteria and
recommendations of the Science Based
Targets initiative (SBTi). We are developing
our own detailed pathway to net zero,
which we will publish in the 2022
financial year.
We are confident that this will be
deliverable through new technology
and a supportive policy framework from
European governments and regulators.
It will be based on a combination of: our
ongoing carbon efficiency measures, fleet
replacement, air traffic management
improvements including the proposed
upgrade of Single European Sky, the use of
Sustainable Aviation Fuels and ultimately
the introduction of zero emissions aircraft
technology.
United Nations sustainable
development goals
Our strategy will contribute towards
the achievement of the United Nations
Sustainable Development Goals, which are
a universal call to action to end poverty,
protect the planet, and ensure that by
2030 all people enjoy peace and prosperity.
Throughout this chapter we have
signposted where our activity contributes
to the goals.
This includes the carbon offsetting for our
flights and holidays. We only invest in high
quality Gold Standard and VCS certified
offset projects, which deliver robust carbon
savings and also a wide range of social and
economic benefits to livelihoods and
biodiversity in developing countries, which
contributes to the UN Sustainable
Development Goals (SDGs).
40 easyJet plc Annual Report and Accounts 2021
easyJet holidays
Since easyJet holidays launched in 2019
it has sought to integrate sustainability
across the holidays business.
In May 2021, easyJet holidays became
the first major UK tour operator to
offset the carbon emissions directly
associated with its package holidays.
This means the fuel used for flights and
in-destination transfers, as well as the
energy used for hotel stays. This
approach to offsetting was also
retrospectively applied to all holidays
since easyJet holidays launched in
November 2019.
Recognising that carbon offsetting is an
interim measure and with an ambition to
raise the bar and lead the industry, in
September 2021 easyJet holidays launched
its inaugural Sustainability Strategy. This
strategy, which is set out below, includes
easyJet holidays’ vision for sustainability
and how they want to realise this.
easyJet holidays has its own sustainability
steering committee, which meets
regularly to discuss and monitor
progress on the strategy.
easyJet holidays this year become a
member of the Global Sustainable Tourism
Council (GSTC). The organisation was
created jointly by UN agencies and
international conservation NGOs to
develop global standards for
sustainability in travel and tourism.
In becoming a member of GSTC,
easyJet holidays has committed to
support hotels it works with to achieve
certification by a GSTC accredited
certification body or certification to a
GSTC recognised standard. easyJet
holidays was also the first major UK tour
operator to sign up to The Future of
Tourism Coalition which has a global
mission to place destinations at the
centre of recovery strategies.
VISION
easyJet holidays Sustainability Strategy: A world where travel makes a positive impact
on the environment and local communities
MISSION
When it comes to sustainability we want to raise the bar, positively shake things up and lead the industry. To make
sustainability part of our everyday culture, enabling us, our partners, and you to reduce your footprint, and make a positive
impact on the people and places that make our destinations so special.
Create better holiday
choices
by making sustainable travel
affordable and accessible
to everyone
PILLARS
Keep our holidays
special
by maximising the benefits and
minimising the negative impacts
of tourism
Commitment
We will enable all holidaymakers to
have authentic travel experiences
that directly support sustainable
practices
Commitment
We will support 100% of our hoteliers
to achieve a GSTC-recognised
certification and support locally owned
and run businesses and activities
Provide
holidays that
are carbon
conscious
Inspire
holidaymakers
to take
meaningful
actions to
sustain the
world’s natural
and cultural
resources
FOCUS AREAS
Protect
natural
environments,
wildlife and
natural
resources when
developing and
managing
tourism
activities
Amplify
positive social
and economic
impacts of
tourism in
destinations to
support
livelihoods and
community
development
Transform travel for
everyone
by embedding sustainability into
business decisions and behaviours
and driving meaningful change in
the industry
Commitment
We will embed sustainability into
our culture and business decisions
while using our influence to move
the industry forward
Empower
our people to
make choices
that are
grounded in and
guided by our
commitment to
sustainability
Pioneer
initiatives to
bring the
industry
together and
accelerate
action on
critical issues
Sustainable Development
Goals Lab
In November 2021 easyJet holidays and
the University of Oxford launched a
partnership to establish the Oxford
SDG Impact Lab, to work together to
identify challenges and opportunities
for sustainable tourism.
At the Oxford SDG Impact Lab selected
students will be mentored and trained to
deliver academically rigorous, evidence-
based reports whose aim is to improve
key areas of social and environmental
development in a number of destinations
where easyJet holidays operates. Twenty
graduate students, mainly from the social
sciences and humanities, will be supported
and mentored by Oxford University staff,
as well as a dedicated team of experts
from easyJet holidays.
The programme will culminate in
September 2022, when the students will
deliver their recommendation reports.
easyJet holidays will then decide which
projects it will champion, to develop and
support sustainable practises in its focus
holiday destinations.
www.easyJet.com
41
STRATEGIC REPORT SUSTAINABILITY (CONTINUED)
How we manage
sustainability
plc Board and Airline
Management Board
The plc Board and the Airline Management
Board regularly consider sustainability
issues. For example, topics covered
reviewing and guiding climate related
strategy and monitoring and overseeing
progress against goals and targets for
addressing climate related issues,
amongst others.
The Group Markets & Marketing Director
is responsible on the Airline Management
Board for the delivery of the Sustainability
Strategy for the airline and easyJet
holidays. The strategies are intended to
mitigate risk and create opportunity
through environmental and social
sustainability principles, considering
the differing challenges and priorities
across our business.
Sustainability Steering
Committee
The Sustainability Steering Committee
monitors the progress being made on the
strategies. The Committee has met eight
times this financial year and attendees
include the Chief Financial Officer, the
Chief Commercial Officer, the Group
Markets & Marketing Director, the Group
General Counsel & Company Secretary, the
Director of Flight Operations, the Director
of Airport Development & Procurement,
the Director of Tax & Fuel Procurement,
the HR & People Development Director and
the Director of Sustainability and the
Sustainability team.
Sustainability team
We have a dedicated Sustainability team,
led by the Director of Sustainability who
reports to the Group Markets & Marketing
Director. The team works with
management across the business to
develop and implement the Sustainability
Strategy across the airline and works
alongside the easyJet holidays team on
their sustainability activities.
The team now includes three specialist roles:
• Carbon Manager – Managing and
mitigating the carbon impact of our
operations and reporting our progress,
as well as driving carbon innovation
across the business
• Sustainability Manager – Implementing
our Environmental Management System,
improvements to waste management
and recycling, as well as ensuring the
minimisation of single use plastics and
sustainability in procurement.
• Sustainable Business Manager –
Strengthening our ESG reporting to
ensure easyJet continues to meet
disclosure expectations.
Remuneration targets on
sustainability
Sustainability targets form part of the
remuneration package for the CEO and
CFO for this financial year.
These targets focus on the implementation
of our new Environmental Management
System, management of the Company’s
carbon emissions, partnerships on new
technology development and further
progress in the carbon offsetting
programme.
Business key performance
indicator on carbon emissions
Our ‘carbon emissions per passenger
kilometre’ KPI, which is externally verified,
is one of the business’s KPIs and
is the responsibility of our Director of
Flight Operations. The Director of Flight
Operations also leads our work in developing
sustainable aviation focused partnerships
with organisations and on internal initiatives
to stimulate technological innovation.
More information on our latest
performance on this KPI is on page 47.
Environment Policy
and Environmental
Management System
Our Environment Policy sets out how the
business manages and minimises our
environmental impact and covers the
activities of all who work for and on
behalf of easyJet, including contractors,
sub-contractors and temporary staff.
The Environment Policy is available at:
https://corporate.easyjet.com/
We have this year established an
Environmental Management System to
manage and continually improve our
environmental performance in a
systematic way.
We also joined the IATA Environmental
Assessment Program, which is aligned with
the ISO 14001:2015 environmental
management standard, and established an
Environmental Management Review Board
which is chaired by the Chief Operating
Officer. Further information about this
is on page 53.
Risk
Since 2018 we have included sustainability
risks in the Risk section of our Annual
Report, as these were deemed material.
The risks include carbon trading and
increased taxation, while severe weather
as a result of climate change is now
incorporated into safety, security and
operations risk profile. Our response
plans are monitored regularly through
our governance structure.
For a detailed explanation of our
sustainability risks, including climate-
change-related risks, and how these are
managed, please refer to the Risks section
on page 78. This year we have also
strengthened our Task Force on Climate-
Related Financial Disclosures (TCFD)
reporting – there is an expanded table
on pages 58 to 61.
42
easyJet plc Annual Report and Accounts 2021
Sustainability in our supply chain
We continue to work closely with partners
in our supply chain to ensure high
sustainability standards. This year we have
updated our Supplier Code of Conduct and
implemented a new standard Request for
Proposal template within our procurement
process, to proactively screen suppliers’
management of sustainability and their
environmental risk.
Our Supplier Code of Conduct is also
based on easyJet’s Code of Business
Ethics and requires our suppliers and
their sub-contractors to operate to these
ethical standards. Further information
is on page 57.
We are also working with suppliers on
specific initiatives and trials to reduce
easyJet’s environmental impact and that
of our supply chain. Examples of these are
highlighted later in this chapter, such as our
sustainability partnership with Bristol Airport
(page 44), our SAF trial with Gatwick and
fuel suppliers (page 49) and easyJet
holiday’s work with hotel partners
(page 57).
“Cambridge’s Resilience Framework supported easyJet
to manage their climate change risks and opportunities.
Our platform’s analysis provides quantified results to
inform easyJet’s strategic decision making and
future growth planning, while balancing investment
requirements driven by evolving regulations,
consumer demands, and technology innovations.”
Dr Andrew Coburn,
Chief Scientist, Cambridge Centre for Risk Studies
Customers
We regularly communicate with our
airline and holidays customers about
sustainability, including during the booking
process and whilst on-board our aircraft.
This focuses on our work to reduce the
carbon impact of our operations, our
carbon offsetting for all our flights, and
the development of new technology to
decarbonise aviation. We also have a
dedicated, customer-facing website
area about sustainability issues:
https://www.easyjet.com/sustainability.
Our customer insight has found that
customers who are aware that their flight
has been carbon offset also have a higher
overall satisfaction with easyJet. The
difference in overall satisfaction between
the groups of customers who were aware
and not aware that their flight was carbon
offset was 6.3 percentage points in this
financial year. Customer awareness of our
carbon offsetting, based on customers
who have flown with easyJet in the last
12 months, was 51.4%, compared to
44.9% in the 2020 financial year.
Cambridge risk project
This financial year we have worked with the
Cambridge Centre for Risk Studies (CCRS),
an enterprise risk management specialist,
on the business risk from climate change in
both our direct and indirect operations.
This work began with an assessment of the
potential physical and transition risks to our
business operations. As well as the CCRS
experts, the assessment included input
from teams across easyJet: Company
Secretariat, Finance, Flight Operations,
Investor Relations, Markets, Network,
People, Policy, Risk, Strategy, Sustainability,
and Treasury. The work with CCRS
confirmed the summary risks that were
outlined in our 2020 financial year
Annual Report.
The output of this project will strengthen
easyJet’s response to our climate risk
and controls frameworks. It has also
informed our responses to the
requirements of the Task Force on
Climate-related Financial Disclosures.
Employee engagement
We have continued to communicate our
commitment and action on sustainability
to our employees.
This has included regular updates from
our Chief Executive Officer and the wider
AMB to all employees, updates and articles
in our employee communications, and
discussions about sustainability and
presentations from the Sustainability team
within departmental and leadership forums.
This year we carried out an employee
survey about sustainability, which received
nearly 500 responses. The results showed
a strong interest in sustainability, support
for easyJet to take further action and a
desire for further information about the
Company’s work in this area.
www.easyJet.com
43
STRATEGIC REPORT SUSTAINABILITY (CONTINUED)
Bristol Airport partnership
This year we have formed a sustainability
partnership with Bristol Airport and other
partners in the region to trial a range of
initiatives to support the long term
ambition to achieve net zero operations at
the airport and contribute towards
reducing easyJet’s overall carbon footprint.
We are using Bristol Airport as a test-bed
to trial and implement the latest
technological and innovative solutions for
decarbonising our operations and reducing
waste. The aim is that any successful
results from the trials will have the potential
to be rolled out across easyJet’s network.
Trials which are underway or planned include:
• Electric ground power units
• Electric passenger coach transportation
• Recycling and waste management
• Employee carbon-saving initiatives
• Supply chain carbon reductions
• Zero carbon emission aircraft turnarounds
• NEO aircraft deployment and
fleet optimisation
• Continuous descent approaches – in
which the aircraft descends towards the
runway at a continuous rate, rather than
descending in stages, which can reduce
fuel usage
We are also supporting the development of
a regional hydrogen economy in the south
west of England to prepare the way for
hydrogen powered zero emissions aircraft
during the next decade.
CDP climate change
In 2020, we participated in the CDP climate
change questionnaire programme and
scored a “C” ranking. We have participated
in the programme again this year and the
results of this detailed assessment are
expected to be published by CDP in late
2021. Our full CDP submission and score is
available on CDP website at www.cdp.net.
Public policy
We continue to engage with policy makers
across Europe on how public policy can
help airlines to address their carbon
emissions and stimulate the technological
innovation that will be needed for zero
emissions aviation.
Our Sustainability Governance framework
seeks to ensure that all direct and indirect
activities that engage on policy are
consistent with our Sustainability Strategy.
The Sustainability team works closely with
easyJet’s Regulatory Affairs Group and
Public Affairs team, who seek to provide
policy makers with information about
easyJet’s work on sustainability and how
airlines can work with governments to
address the impact of aviation on
climate change.
We believe that the aviation industry
needs to achieve net zero by 2050 and
are committed to both the EU and UK
net zero 2050 targets.
This year we have supported the EU’s ‘Fit
for 55’ proposal, a new policy framework
which aims to reduce net greenhouse
gas emissions by at least 55% by 2030,
compared to 1990 levels, and becoming
a climate-neutral continent by 2050.
We have also contributed to the UK
Government’s consultation on its ‘Jet Zero’
strategy for net zero aviation.
An overview of our public policy priorities
on sustainability are on the next page.
Materiality
In 2019 we completed a materiality
assessment about sustainability issues
for our airline business.
The assessment was carried out by an
independent sustainability firm in
consultation with easyJet. It included
in-depth interviews with key stakeholders,
including investors, suppliers, regulators,
corporate customers, employee
representative groups and trade unions,
and Non-Governmental Organisations
(NGOs). Customer and employee views
were also sought through surveys.
The results of the materiality assessment
were published in our 2019 and 2020
financial year Annual Reports and are
available at https://corporate.easyjet.com
The assessment confirmed that the most
material sustainability issue for the airline is
carbon emissions. We have continued to
address this, including through the project
with the Cambridge Centre for Risk Studies
on environmental risks and the activities
described in the rest of this section of the
Annual Report.
Our sustainability partnership
with Bristol Airport includes
trialling initiatives such as the
use of electric ground
vehicles and power units.
44 easyJet plc Annual Report and Accounts 2021
Sustainability public policy priorities
Governments will need to help the
aviation industry to meet ambitious
emissions reduction goals by
championing financial and regulatory
support for green technologies and
investments in zero emission aircraft.
Zero emission flying can only be
brought closer through coordinated
action which should focus efforts on
three key areas:
1. Governments need to support the
development of hydrogen supply
and infrastructure at airports,
alongside investments into
renewable energy to support
the creation of green hydrogen
for aviation.
2. Governments will need to provide
financial incentives to support the
development and scaling up of zero
emission technology, but also should
be directing funds raised through
aviation taxes into the research and
development that is required.
3. Airlines choosing to become early
adopters of the new technology
should be incentivised through
reduced airspace charges and airport
charges. There should also be tax
exemptions and airport slot
prioritisation for airlines operating
zero emission aircraft.
We have also identified specific
policy actions.
Investing and supporting the
development of new technology now:
• Support for the development of zero
emission aircraft (ensuring that the
current focus on SAF is not at the
expense of zero emission
technology)
• Revenue raised from aviation taxes
should be used to help fund R&D
into hydrogen technology
• Support for the development of
hydrogen supply and infrastructure
at airports
• Make investments into renewable
energy (wind, solar etc.) to support
the creation of green hydrogen
for aviation
Ensuring there are incentives for the
adoption of new technology in the
future:
Provide financial incentives to support
the development and growth of zero
emission technology, including:
• Tax exemptions for zero emission
aircraft
• Airspace charges should be
modulated to incentivise early
adopters of hydrogen powered
aircraft
• Slot priority – airlines which fly
hydrogen powered aircraft should
be prioritised for peak slots at
primary airports
• Cost reduction of airport charges
for zero emission aircraft
And in the meantime:
• It is crucial the European Commission
and national governments deliver on
objectives for the Single European
Sky. Allowing airlines to fly more
direct routes could reduce European
aviation’s emissions by up to 11%
• Offsets should be formally
recognised – as an interim step until
new technologies are available at
scale – this is something all carriers
can start doing today
• All airlines need to be part of
decarbonisation, not just those flying
short-haul or within the European
Economic Area. This means giving
equal treatment to all airlines, such
as including long-haul flights in
policies such as the EU Emissions
Trading System, the EU’s proposed
fuel tax, and any SAF mandates.
EU Fit for 55
This year we welcomed the ambition of
the EU’s ‘Fit for 55’ package and set
out how effective aviation tax reform
would support this.
We support measures which link taxes
to emissions, price carbon fairly for
everyone and ensure all sources of
aviation emissions are covered.
However, there can be no double
taxation, any fuel tax must include the
replacement of all the ineffective
passenger taxes in Europe with a
combination of a fuel tax for intra-EU
flights and a flight tax for long-haul
flights that reflects their emissions.
This way all airlines and passengers
are incentivised to fly more efficiently.
Everyone needs to play their part in
tackling climate change, including
long haul flights which create the
majority of emissions.
The European Commission’s proposal
for a fuel tax only for intra-EU flights
means it falls short in this regard as it
does not address long-haul and does
not replace the current ineffective
passenger taxes. Both would be
required for our full support, so we
have called on the Commission to
address these next. Eurocontrol
figures demonstrate that just 6% of
flights (the long-haul ones) create 51%
of the emissions from European
aviation. Taxing everyday normal
people, while excluding wealthy
business class passengers emitting
most of the CO2 on long-haul trips, is
unfair and therefore we will continue
to push for equal treatment.
Stakeholder groups
In addition to our direct engagement
with policy makers, we also participate
in industry groups and forums that
contribute to public policy development
on sustainability issues. These include:
the Aerospace Technology Institute,
the Airspace Change Organisation
Group, Airlines for Europe, Airlines UK,
the Global Sustainable Tourism Council,
the Jet Zero Council (UK Government),
the Science Based Targets initiative,
Sustainable Aviation (UK), the
Taskforce for Scaling Voluntary Carbon
Offsets, and the World Economic
Forum’s Target True Zero.
www.easyJet.com
45
STRATEGIC REPORT SUSTAINABILITY (CONTINUED)
Tackling Carbon Emissions
Key SDGs
Overview
We continue to focus on reducing our
organisational carbon footprint (Scope 1
and 2 emissions), which has been a long
term priority. We have been transitioning
our fleet to more modern, fuel-efficient
aircraft. While we did not take any new
Airbus neo aircraft in this financial year,
deliveries will resume in the 2022 financial
year. Maximising fuel efficiency, and
optimising passenger loads as much as
possible, has been and remains a key
focus area.
We continue to offset all the carbon from
our operational carbon footprint as an
interim measure, while new technologies
are developed. This year we have formed
a new partnership with Rolls-Royce to
commence collaborating on sustainable
aviation technology solutions. We have also
been increasing our targeted messaging to
customers about these issues, and our own
people as we all have a role to play to
tackle these sustainability challenges.
Mapping our carbon emissions
The measurement and reporting of our
carbon emissions are aligned to the
European Union’s Emissions Trading
System (EU ETS), the Greenhouse Gas
(GHG) Protocol and the recommendations
of the Task Force on Climate related
Financial Disclosures – refer to the
dedicated table below. They also meet
the requirements of the UK Government’s
Streamlined Energy and Carbon Reporting
regulations, 2019.
The GHG Protocol categorises emissions
in three scopes:
• Scope 1 – direct emissions from owned
and leased assets (typically combustion
of fossil fuels)
• Scope 2 – indirect emissions from
imported energy used in owned assets
(typically grid electricity)
• Scope 3 – all other indirect emissions
resulting from upstream and
downstream business activity, e.g. supply
chain, business travel, aircraft
components, etc.
This year we have again worked with The
Carbon Trust, a global climate change and
sustainability consultancy, on our carbon
mapping and reporting work.
Our carbon emissions are calculated and
expressed as a suite of carbon dioxide
equivalent (CO2e) figures in metric tonnes.
We use the operational control approach,
in which we include emissions from
activities where we control the operation
and use published, up to date emission
factors issued by competent authorities,
(e.g. UK Government departments
including BEIS and DEFRA).
The 2021 financial year carbon mapping
work estimated that 99.87% (2020:
99.96%) of easyJet’s organisational (Scope
1 and 2) carbon emissions was as a result
of the use of aircraft fuel across our fleet.
Greenhouse gas and energy performance
Global emissions
UK only emissions
803,463
760
804,223
FY21
Global emissions
(excl. UK)
1,311,498
28
1,311,526
FY20
Global emissions
(excl. UK)
2,069,375
143
2,069,518
Global emissions UK only emissions
2,177,784
833
2,178,617
4,247,159
976
4,248,135
1,145,845
5,393,980
3,238,837,186
3,576,743
5,292,183,044
122,794
17,138,339,131 8,787,980,066 8,350,359,065
560,946
3,570,851
4,131,797
3,242,413,929 5,292,305,838
17,142,470,928
3,146,196
8,791,550,917 8,350,920,011
easyJet plc
gCO2/RTK
81.08
easyJet plc
gCO2/RTK
810.77
FY21
easyJet plc
gCO2/RTK
81.89
FY21
easyJet plc
gCO2/RTK
818.9
easyJet plc
gCO2/RTK
70.77
easyJet plc
gCO2/RTK
N/A
FY20
easyJet plc
gCO2/RTK
71.48
FY20
easyJet plc
gCO2/RTK
N/A
Scope 1 – tonnes of CO2e
Scope 2 – tonnes of CO2e
Total Scope 1 & 2 – tonnes of CO2e
Scope 3 – tonnes of CO2e
Total carbon footprint – S1, 2 & 3
tonnes of CO2e
Scope 1 energy use (kWh)
Scope 2 energy use (kWh)
Total energy use (kWh)
Scope 1 & 2
Carbon offsets in tonnes of CO2e
2,114,961
788
2,115,749
585,443
2,701,192
8,531,020,231
3,699,537
8,534,719,768
2,120,772
Carbon emissions/revenue passenger km
Intensity metric
Carbon emissions/revenue passenger km
Carbon emissions/revenue tonne km
Intensity metric
Carbon emissions/revenue tonne km
46 easyJet plc Annual Report and Accounts 2021
Total carbon emissions
Our total carbon dioxide equivalent
emissions from the fuel used in our flights
was 2,112,906 tonnes in the 2021 financial
year, compared to 4,264,435 in the 2020
financial year.
This total figure for the 2021 financial year
is significantly reduced compared to the
previous year due to the reduced flying
that took place due to the effects of
the pandemic.
Carbon emissions methodology
In addition to our primary intensity metric
expressed as grams of carbon dioxide
equivalent per passenger kilometre, we
have also included grams of carbon
dioxide per revenue passenger kilometre.
However, as in the past we have reported
in grams of carbon dioxide per revenue
passenger kilometre, we have continued
to include this.
For the first time this year, we have
also included our carbon emissions per
passenger km per Revenue Tonne
Kilometre as this metric is used by
some stakeholders and investors.
During the 2021 financial year, we have
expanded the scope of our reporting to
include fugitive emissions from chillers
and air conditioning equipment which
is included in Scope 1.
In the 2020 financial year, we reviewed and
updated our carbon intensity calculation
methodology, so that it aligned more
closely with established industry
methodologies. The methodology used
follows the protocols outlined in the BS EN
16258 – 2012, “Methodology for calculation
and declaration of energy consumption
and GHG emissions of transport services
(freight and passengers)” document. This is
the methodology that airlines with
operations within the EU and beyond follow
to comply with the EU’s Emissions Trading
System requirements.
We have adopted the convention of using
Great Circle Distance (GCD) plus a fixed
correction factor of 95km for each sector
in this reporting year, as recommended by
the EU ETS reporting methodology. This is
also in line with the ICAO Carbon Emissions
Calculator Methodology. This approach is
intended to better reflect the actual
distance flown in each flight. Completed
flight data, fuel in tanks, fuel density,
booked (revenue) passengers and GCD are
recorded for each flight. Internal checking
processes are applied to data on a regular
basis for the purpose of ensuring data is of
a high, robust quality for internal and
external reporting requirements.
We have used UK Government’s
Department for Environment, Food & Rural
Affairs’ GHG Conversion Factors for
Company Reporting, which were last issued
in June 2021.
Non-carbon dioxide effects
We know that aviation also contributes
to non-carbon dioxide climate effects in
the atmosphere and despite recent
studies highlighting these effects, more
robust research is required to provide
further guidance on how best to tackle
these impacts.
Emissions per gram per
passenger kilometre since 2016
2021
2020
2019
2018
2017
2016
81.08
81.08
70.77
70.77
70.41
70.41
71.5671.56
72.46
72.46
73.96
73.96
In a trial with partners at
Gatwick Airport, some
easyJet flights have been
powered by Sustainable
Aviation Fuels.
Carbon emissions per passenger
kilometre
Our intensity metric is expressed as grams
of carbon dioxide equivalent (gCO2e) per
passenger kilometre (RPK). This is a
measure of on average how many grams
of carbon dioxide equivalent are emitted
for each kilometre travelled by each
passenger on an easyJet aircraft.
In 2021 financial year our carbon dioxide
emissions per passenger kilometre was
81.08g, compared to 70.77g in the 2020
financial year.
The effect of the Covid-19 pandemic on
aviation has also had a significant effect on
this intensity metric. The main reason for
this is that our load factor, the average
proportion of seats occupied on each
flight, has reduced. This means that the
carbon emissions from each flight are
shared between a smaller number of
passengers. This effect was more
significant in the 2021 financial year than
the 2020 financial year as the previous
financial year included the period October
2020 to February 2021 before the start of
the pandemic in Europe.
We have been able to somewhat reduce
this effect by prioritising the use of our
more efficient A320 / A321 neo aircraft,
which are typically 15% more efficient per
seat kilometre flown compared to the
aircraft that they replaced. However, this
has not prevented the intensity metric from
increasing above pre-pandemic levels.
In 2017 we set a target of a 10% reduction
in carbon dioxide emissions per passenger
kilometre from our flights by the end of the
2022 financial year, compared to our 2016
figures. The effects of the pandemic have
significantly affected our progress towards
this target and currently we do not expect
to meet this planned reduction in 2022.
Third party verification
Our intensity metrics are verified by a
third-party specialist auditor, Verifavia.
Verifavia used a reasonable assurance
approach to review easyJet’s 2021 financial
year aircraft fuel burn, Revenue Passenger
Kilometre, Revenue Tonne Kilometre and
associated output CO2 and CO2e KPIs.
Whilst this verification approach only
focuses on our airline emissions, these
equated to 99.87% in the 2021 financial
year of our Scope 1 and 2 carbon footprint.
Verifavia’s detailed assurance
statement is available at
http://corporate.easyjet.com/.
www.easyJet.com
47
STRATEGIC REPORT Sustainable Aviation Fuels
We believe Sustainable Aviation Fuels
(SAFs) will be part of our decarbonisation
pathway, as and when they become more
widely available and affordable. However,
we do not see SAFs as the ultimate
decarbonisation solution for short-haul
aviation, since current pathways are not
zero emissions.
At present, SAFs are typically several times
the price of jet fuel, but forecasts predict
that this differential will drop as SAFs scale
and are adopted.
In the long term they are best suited to
long-haul flying where there may not be
alternatives to using SAFs. We support the
development of genuine zero emissions
technologies for short-haul and are
optimistic that we could begin flying our
customers on planes powered by
hydrogen-combustion, hydrogen-electric or
a hybrid of both by the mid to late-2030s.
SUSTAINABILITY (CONTINUED)
Efficient aircraft
We operate a fleet of modern, efficient
Airbus A320-family aircraft. In 2017 we took
delivery of our first Airbus A320neo aircraft
(New Engine Option technology) and in
2018 our larger capacity Airbus A321neo
aircraft entered into operation, offering 49
additional seats per aircraft and further
reducing fuel-burn per passenger flown.
The “neo”-type aircraft (both A320 and
A321 variants), are Airbus’ new generation
of narrow-body aircraft, replacing the
“ceo”-type (Current Engine Option) variants
of the same model. Equipped with CFM
International’s LEAP-1A engines, these new
generation aircraft have at least a 15%
proven fuel-burn efficiency over their
previous generation aircraft, a 50% lower
noise footprint during take-off and landing,
and also offer a up to 50% margin on NOx
emissions versus CAEP/6 Standard.
This new generation of aircraft currently
make up 16% of our fleet and will continue
to increase as we take delivery of the
aircraft on our orderbook and retire our
older aircraft. During the period of reduced
utilisation due to the Covid-19 pandemic,
we focused our operation on flying these
more efficient neo-type aircraft and our
smaller gauge Airbus A319 aircraft,
whilst storing and parking our older
A320ceo aircraft.
Whilst we did not have any new aircraft
deliveries in the 2021 financial year, we will
take delivery of eight neo aircraft in the
2022 financial year, seven in the 2023
financial year and plan to take 18 in the
2024 financial year. easyJet is the largest
single brand operator of Airbus neo
aircraft in Europe.
In addition to the neo-technology aircraft,
since 2013 our A320ceo aircraft have been
delivered with “Sharklet” wingtips (also
standard on the neo variants), reducing
drag and fuel-burn by 2-3% per hour flown.
To further increase the efficiency of our
A320 fleet, 93% of our A320 fleet has
either been delivered in, or retrofitted to
the increased density Spaceflex
configuration. This space-saving layout
reconfigures unused space in the rear
galley to increase space in the cabin,
freeing up space for six additional seats.
The seats of these aircraft have also been
converted to the slim-line lightweight
Recaro design (also standard on all of our
neo deliveries), further reducing the weight
(and fuel-burn) of the aircraft.
Number of aircraft by type
Aircraft type
A319
A320
A320neo
A321neo
Total
Number
97
160
37
14
308
Percentage
of fleet
31.5%
52.0%
12.0%
4.5%
100%
Efficient operations
We continue to operate our aircraft as
efficiently as possible and are always
looking for efficiency improvements. This
includes adjusting standard operating
procedures, which helps to reduce fuel
usage and therefore carbon emissions.
All measures are taken only when safe and
practical to do so, within the constraints of
the operational environment.
Initiatives include:
• The use of single-engine taxi procedures
on arrival and departure
• Nowcast inflight weather uplinks.
This advanced wind-selection algorithm
improves flight trajectory and reduces
fuel burn
• Optimisation of the climb speed to cruise
altitude, which facilitates reaching a
more fuel-efficient phase of flight sooner
• Optimised flap configuration on the
approach to landing, allowing the aircraft
to be more aerodynamically efficient
• The use of ground power by our aircraft
when on-stand at airports, reducing the
use of the aircraft’s auxiliary power unit
(APU) to cut noise, fuel and emissions
• Engine washing to remove debris, which
improves the air turbine efficiency. This
year we carried out 349 engine washes.
• Reviewing and optimising the amount of
discretionary fuel uplifted on each flight.
Captains always have the final decision
on the fuel required for flight and safety
remains the highest priority
We also continue to retrofit our aircraft
with the latest fuel efficiency upgrades,
including a wiring modification to enable
single engine taxiing without using the APU
and a descent profile optimisation upgrade
for the flight management system which
supports more fuel-efficient descents.
48 easyJet plc Annual Report and Accounts 2021
London Gatwick SAF trials
In a trial with partners at Gatwick
Airport, some easyJet flights have been
powered by Sustainable Aviation Fuels
(SAF). This was the first time any airline
at Gatwick has used SAF. The trial was
delivered in partnership with fuel
supplier Q8Aviation, Gatwick Airport
and SAF producer Neste.
Q8Aviation delivered the first supply of
Neste MY Sustainable Aviation Fuel™
on 19 October 2021 and the trial
involved 42 flights in total. While the
initial volume of SAF was relatively
small, the initiative is an initial step
towards extending the use of
Sustainable Aviation Fuel at the airport.
Neste’s MY SAF is produced from 100% renewable and
sustainable waste and residue raw materials, such as used
cooking oil and animal fat waste. In its neat form and over its
life cycle, MY SAF can achieve a reduction of up to 80% of
greenhouse gas emissions compared to fossil jet fuel use.
Energy and carbon
efficiency activity
As part of our ground-based energy
efficiency measures, we have continued to
roll out new, more-efficient LED lighting
across the Luton head office campus and
completed the conversion of all outside
lighting at Hangar 89 at London Luton
Airport.
During the Covid-19 pandemic and local
lockdowns across our European network,
we made the decision to mothball the
majority of our office sites including our
Head Office in Luton and our largest site,
Hangar 89, at London Luton Airport to
reduce unnecessary energy usage.
In the 2021 financial year, the percentage
of renewable sources of electricity our
business used across our buildings and
airport partner locations increased as
more locations switched their
procurement choices. In the 2021
financial year, this equated to 52% of
our total electricity demand.
Carbon offsetting
Decarbonising our flights is a huge
challenge that requires a variety of
solutions. As we continue to support
development of new aircraft technology
and improve fuel efficiency, we also want
to take what other action we can now.
This is why, since November 2019, we have
offset 100% of our organisation’s direct
carbon emissions, from both our flights and
ground operations (Scope 1 and 2), while
we work to reduce emissions structurally in
the medium and long term. We carefully
select projects that actively take carbon
out of the atmosphere or avoid the release
of additional carbon.
easyJet was the world’s first major airline
to do this across its entire network and we
currently remain the only major European
airline to do so.
Offsetting is a powerful tool to tackle
current unavoidable emissions while driving
finance to impactful, vital projects that
offer environmental benefits, but also
provide capital and low-carbon technologies
to local economies. These projects are key
to protect and restore ecosystems, tackle
deforestation and enhance biodiversity while
improving the health and livelihoods of
millions of people who need it most.
At easyJet we do not see carbon offsets
as an alternative solution to our carbon
reductions efforts. Carbon offsetting is a
tool for speeding up climate action and
an interim measure, in addition to our top
priority being carbon reductions. That’s why
we’re also working right now with industry-
leading technology partners, Airbus and
Wright Electric, to accelerate the
development of zero emission technologies
and we are optimistic that we could begin
flying our customers on planes powered by
hydrogen-combustion, hydrogen-electric or
a hybrid of both by the mid to late 2030s.
easyJet also engages with policymakers
and lawmakers to help ensure the
regulatory environment supports the
adoption of zero-emissions aircraft in
commercial aviation.
We employ a rigorous process to select the
schemes we buy credits from. Our portfolio
of projects all meet either the Gold Standard
or VCS (Verified Carbon Standard)
certification, which are globally recognised
and respected for their standards of
offsetting. Their certifiers check projects
to ensure the carbon reductions they are
claiming would not have happened without
the project, and that by reducing carbon
emissions in one place they do not
inadvertently increase them elsewhere.
The schemes include nature-based credits
such as reforestation, afforestation, and
avoided deforestation, including borehole
rehabilitation and cookstoves projects, in
some of the most intense deforestation
hotspots around the world. These projects
are effective in reducing deforestation, but
they also work with local communities to
deliver programmes for alternative income
generation which incentivises the protection
of forests over the long term.
Taskforce on Scaling Voluntary
Carbon Markets
We are a participant in the Taskforce on
Scaling Voluntary Carbon Markets
(TSVCM), an initiative launched in 2020 by
Mark Carney, the former Governor of the
Bank of England and now UN special envoy
for climate action and finance, sponsored
by the Institute of International Finance.
TSVCM’s objective is to set a clear pathway
towards scaling voluntary carbon markets
while ensuring they are well governed,
transparent, verifiable and robust. A newly
formed independent governance body,
composed of representatives from 12
countries, with 40% from the developing
world, will review the work already
conducted by the taskforce and engage
experts from a wide range of sectors
where concerns about integrity have arisen.
Representatives of indigenous and local
communities are also part of the
governance body.
Offsetting for our flights
In the 2021 financial year we retired 2.12
million carbon credits to offset the carbon
emissions of the fuel used in all our
flights. Since we began offsetting in
November 2019, we have retired
5.27 million carbon credits.
‘Retiring’ a carbon credit means it is taken
off the market — never to be traded again.
First Climate and Carbon Clear Ltd (Eco
Act) procured these credits on our behalf;
and the related retirement certificates are
available at https://corporate.easyjet.com/.
easyJet holidays offsetting
In May 2021, easyJet holidays began
offsetting carbon emissions from its
package holidays, comprising the fuel used
for flights and in-destination transfers, as
well as the energy used from hotel stays.
easyJet holidays was the first major tour
operator to do this. The offsetting was also
retrospectively applied to all holidays since
easyJet holidays launched in
November 2019.
100%
of easyJet’s CO2 footprint
(Scopes 1 and 2) offset since
November 2019
www.easyJet.com
49
STRATEGIC REPORT SUSTAINABILITY (CONTINUED)
The Pulau Borneo project
Borneo, in Central Kalimantan, Indonesia, is
the third-largest island in the world and
home to the world’s oldest tropical
rainforests. Known for their rich biodiversity,
their forests shelter thousands of endemic
animal, reptile, insect and plant species.
They have also experienced the destructive
effects of heavy logging and conversion to
land use, such as palm oil. Local
communities have proven to be the best
guardians of their territories, living in
balance with their environment, but as
forest resources become depleted, villagers
feel forced to leave their communities
looking for security and job opportunities.
As part of our offsetting scheme and
environment protection efforts, easyJet
has been supporting one of the local
initiatives, the Pulau Borneo Project, which
for over a decade has successfully
defended 64,500 hectares of carbon and
biodiversity – rich lowland peat forest from
conversion to palm oil plantations, which
surround the project area and the adjacent
Tanjung Puting National Park, a UNESCO
Biosphere Reserve. The project protects
over 120 threatened and endangered
species in the project area and supports
over 10,000 forest-dependent community
members living in and along the boundaries
of the project, who have traditionally held
no formal land tenure.
Working hand in hand with local staff from
the Tanjung Putting National Park, the
project supports the protection of forests
in the project area from illegal logging,
hunting of endangered species, forest fires
and other illegal activities. 54 forest patrols
were conducted in 2020, ensuring the
protection of carbon and biodiversity
stocks against degradation and
deforestation.
Pulau Borneo is the world’s first forest
conservation project registered to the
Sustainable Development Verified Impact
Standard (SD VISta). SD VISta was
developed by Verra, a leading standards
organisation created to help countries,
businesses and civil society achieve
ambitious sustainable development and
climate action goals, enabling projects to
assess and report the sustainable
development benefits they generate
directly against the UN Sustainable
Development Goals (SDGs). Verified by a
easyJet’s carbon offsetting
has been supporting the
Pulau Borneo Project in
Indonesia, which is defending
large areas of peat forest.
©EcoAct-InfiniteEARTH
50 easyJet plc Annual Report and Accounts 2021
third-party assessor, the project has
demonstrated its progress against the
SDGs transparently and rigorously,
keeping driving finance to support and
scale up its high-impact activities.
When Covid-19 pandemic reached the
remote communities in the area, where
basic health services were lacking, the
Pulau Borneo project was able to
provide additional support. This included
the provision of face masks, public
health information displays and a
‘floating clinic’ to provide frontline care
to communities in the area.
Project impacts up to 2020
(These are of the overall project – not
just activity supported by easyJet)
Community
• 2,173 households now have water
filters, improving sanitation and
protecting their lives. Clean and safe
drinking water is now accessible
through 3 Water Purifying Systems
• 1,800 households with no access to
electricity now have a solar light that
helps them cook at night or assists
children in the studies after dark while
reducing air pollution exposure.
• Two solar power plants installed in
two villages
• Floating health clinic built and
operational, assisting 800 people
• Two libraries built; $150,000 worth
scholarship fund established
Forest and wildlife impacts
• 47,237 hectares of High Conservation
Value, High Carbon Stock peat forest
ecosystems (64,500 total hectares)
have been prevented from being
converted to palm oil
• Pulau Borneo has planted
approximately 350,145 trees, sourced
from community nurseries that the
project funded and paid the
communities to plant
• Significant investment in fire
prevention and suppression has been
made, specifically involving
communities directly in the
educational, training and preparation
process
• Pulau Borneo has partnered with the
Orangutan Foundation International
to rescue and rehabilitate orangutans
that have wandered into villages. At
least a dozen individuals were
reported and have been rescued from
surrounding villages and palm oil
estates since the project’s inception.
25 additional individuals have been
repatriated into Pulau Borneo.
Stimulating technological innovation
Key SDGs
Overview
We want to lead the decarbonisation of
aviation, and ultimately achieve zero
emission flying across Europe. We believe
that radical action to address aviation’s
impact on climate change is needed and so
we are supporting the introduction of new
technologies.
We are working with our partners, including
Airbus and Wright Electric, to accelerate
the development of zero emission
technologies.
Partnerships
Airbus
In 2019 we signed a Memorandum of
Understanding with Airbus for research on
electric, hybrid-electric and hydrogen
aircraft. The aim is to study operational and
infrastructure opportunities and challenges
with new propulsion technologies.
In September 2020, Airbus unveiled three
hydrogen-powered concept planes: a
turbofan, a turboprop and blended wing
body fuelled aircraft concept. Airbus’
intention is to launch the ZEROe aircraft
programme with a full-scale prototype by
late 2020s – for entry into service by 2035.
The ZEROe concept aircraft enables
Airbus to explore a variety of configurations
and hydrogen technologies that will shape
the development of our future zero
emission aircraft.
All three ZEROe concepts are hybrid-
hydrogen aircraft. They are powered by
hydrogen combustion through modified
gas turbine engines. Liquid hydrogen is
used as fuel for combustion with oxygen.
In addition, hydrogen fuel cells create
electrical power that complements the
gas turbine, resulting in a highly efficient
hybrid-electric propulsion system. All of
these technologies are complementary,
and the benefits are additive.
A team from easyJet, including our CEO,
participated in the Airbus Summit on
sustainable aerospace in September this
year. The event brought together the
aviation industry and stakeholders to
discuss the actions that will be needed to
deliver this technology.
Airbus has unveiled three
hydrogen-powered concept
planes: a turbofan, a
turboprop and blended wing
body fuelled aircraft concept.
© AIRBUS 2020 - All rights reserved - IIVS
Aerospace Technology Institute and FlyZero
demands and market opportunity of
potential zero carbon emission
aircraft concepts.
Captain David Morgan, Director of
Flight Operations, and Bristol based
First Officer Debbie Thomas are both
members of the Aerospace Technology
Institute and involved in the FlyZero
programme.
Debbie is currently on a secondment
working within the FlyZero project as an
Aircraft Modeller to help accelerate the
aviation path to zero carbon aircraft.
Before retraining as a commercial pilot,
Debbie worked as an aerospace
engineer for 16 years in modelling and
simulation. She is now bringing this
experience, as well as her perspective
as a pilot, to the FlyZero project.
The UK Aerospace Technology Institute
(ATI) last year established the FlyZero
initiative to help the UK aerospace
industry develop a zero carbon emission
aircraft by 2030.
The FlyZero programme brings together
around 100 people seconded from
industry and academia and has received
a £15 million grant from the UK
Department for Business, Energy and
Industrial Strategy (BEIS). FlyZero is
conducting a detailed and holistic study
of the design challenges, manufacturing
www.easyJet.com
51
STRATEGIC REPORT UK Sustainable Aviation
easyJet is a member of Sustainable
Aviation (SA), a coalition of UK airlines,
airports, aerospace manufacturers and air
navigation service providers. As a group,
SA has committed to achieving net zero
emissions by 2050, through an
international approach, working with
governments around the world and
through the UN.
In June 2021 Sustainable Aviation
announced new interim decarbonisation
targets of at least 15% by 2030 and 40%
by 2040, having reaffirmed its
commitment to net zero by 2050.
Sustainable Aviation’s roadmap includes the
use of SAFs, airspace modernisation to
deliver more efficient flying, the
commercialisation of carbon removal
technologies, and new low and zero carbon
technologies – powered by hydrogen-
combustion, hydrogen-electric or a hybrid
of both – becoming mainstream in
the 2030s.
SUSTAINABILITY (CONTINUED)
Wright Electric
Since 2017 we have been working with
Wright Electric to support the development
of a zero emission aircraft.
We believe that hydrogen will play a big
part in future zero emission technology, as
hydrogen has the ability to be combusted
directly or converted to electricity via a fuel
cell. High power electric motors are
therefore likely to play an important role in
future zero emission aircraft, either
independently or as a hybrid, together with
hydrogen combustion.
Wright is currently engineering electrical
systems at the megawatt scale which will
be necessary for commercial aircraft. These
components will form the power plant of
Wright’s revolutionary Wright 1 aircraft.
In September 2021 Wright announced that
it had successfully produced and started
testing a two megawatt electric powertrain
motor, which it believes is the most
powerful electric propulsion motor of its
kind in development and a key component
for a zero emission aircraft system.
This follows the successful testing of its
next-generation inverter technology
earlier in 2021.
Wright is then moving to the next phase of
development including integration with an
in-house developed highly efficient inverter,
high altitude chamber testing, and
gathering testing data for future aircraft
certification. Wright remains committed to
pushing the development of the electric
powertrain to meet the requirements of
the aerospace community, with progressive
development over the next two years.
Wright commenced ground testing in 2021,
and has said it will focus on propulsion fan
development in 2022 and flight testing will
commence as early as 2023.
UK Jet Zero Council
Our Chief Executive Officer, Johan
Lundgren, is a member of the UK
Government’s Jet Zero Council. Members
of our Sustainability, Policy and Operations
teams also participate in discussions within
the Council and its working groups.
The Jet Zero Council brings together the
UK Government and industry to accelerate
the development of a UK Sustainable
Aviation Fuel industry and commercialise
zero emission flight.
The current focus areas of the Jet Zero
Council are:
• Zero emissions aircraft – accelerate
the design, manufacture, testing,
certification, infrastructure and
commercial operation of zero emission
aircraft and aviation systems in the UK
through sustained investment in applied
research and development and fostering
greater collaboration across sectors.
• Sustainable Aviation Fuels – accelerate
the delivery of SAF by supporting the
investment in first-of-a-kind SAF plants,
supporting research and development
of new pathways and driving down
production costs through upscaling
and innovation.
World Economic Forum’s Target
True Zero Aviation
The World Economic Forum’s Target True
Zero initiative is working to accelerate the
deployment and scaling of zero emission
aviation, including electric and hydrogen
flight technologies.
easyJet is participating in the initiative,
along with other partners such as Airbus, ,
Boeing, Rolls-Royce, Schiphol Airport,
Wright Electric, Zeroavia, McKinsey and
Company, and the Aviation Impact
Accelerator at the University of Cambridge.
This initiative is looking at what is needed
to unlock the potential of true zero
emission aviation in the areas of
technology, industry dynamics,
infrastructure and supply chain, regulation,
and public acceptance.
Rolls-Royce
We are collaborating with Rolls-Royce to
research and progress thinking on the
operational and economic implications of
deploying new energy and power solutions
in the commercial aviation sector.
New forms of propulsion and energy will
require new infrastructure and operational
requirements. The solutions are complex
and require the ecosystem to be adapted
at all levels.
The work will bring together key
stakeholders operating across the aviation
value chain (in addition to Rolls-Royce and
easyJet subject matter experts) who will
model and understand the implications of
deploying new energy such as hydrogen
at scale. These will be key avenues of
enquiry to address over the time horizon
of the project.
52
easyJet plc Annual Report and Accounts 2021
Going beyond carbon
Key SDGs
Overview
We know that our environmental impact is
wider than carbon emissions and we
continue to assess, address and minimise
our environmental impacts beyond carbon.
This year we have focused on the
implementation of the Environmental
Management System (EMS), improvements
to waste management in our operations,
and documenting sustainability
requirements in our procurement.
We have also continued to implement our
Diversity and Inclusion Strategy and
incorporated Wellbeing to provide holistic
support for people who work at easyJet.
Environmental Management
System
To improve our environmental performance
in a structured, systematic, and
documented way, we joined the IATA
Environmental Assessment Program
(IEnvA), an EMS accreditation programme
specifically developed for the airline sector
by airlines, IATA, and leading experts in the
aviation environmental sustainability. IEnvA
provides airlines with a guidance, aligned
with internationally accepted environmental
management standard ISO 14001:2015, to
effectively address significant
environmental sustainability matters that
face the aviation industry today.
We began implementation of our EMS in
2020 and established a dedicated
Environmental Management Review Board.
The Board is chaired by the Chief
Operating Officer (COO), and attendees
include the Director of Flight Operations,
the Director of Cabin Services, the Director
of Inflight Retail, the Director of Engineering
& Maintenance, the Director of Safety,
Security & Compliance, the Director of
Ground Operations, the Director of Airport
Operations and Navigation, the Director of
HR Shared Services and the Director of
Sustainability. The Board meets twice a
year to review the performance of the EMS
and to ensure that it continues to be
effective in meeting objectives and targets,
addresses key operations and business
activities, and provides an efficient
framework for continual improvement.
To implement and embed the EMS into
day-to-day activities, a cross functional
EMS Working Group has been created,
which is chaired by the COO. The working
group includes representatives from Flight
Operations, Safety, Security & Compliance,
Engineering & Maintenance, Property,
Inflight Retail, Ground Operations, and Crew
Operations. The Groups meets on a
quarterly basis and is responsible for
championing environmental improvement
and delivering environmental initiatives,
improving environmental policy and
procedures integration in their
departments. 15 Environmental Action
Plans have been developed across all areas
to maintain environmental compliance,
prevent pollution, and drive continuous
environmental improvement.
Airlines are able to phase the
implementation of the IEnvA programme
with recognition as a Stage 1 or Stage 2
Operator. In September 2021 we were
internally assessed against the IEnvA Stage
1 standards, which was followed by an
external assessment by a team of IEnvA
Assessors (that consists of one IOSA Lead
Auditor and one certified ISO 14001
auditor) . We are committed to achieve
Stage 2 recognition in the 2022 financial
year.
Waste management
A variety of waste streams are generated
in our operations and we are committed to
reducing waste across all our activities, by
applying the waste hierarchy to reduce the
impact of any residual waste. In our offices
we segregate recyclable waste streams
such as paper and cardboard, aluminium
cans and plastics, and food waste.
In our Engineering and Maintenance
operations we ensure hazardous waste is
handled appropriately and we are working
towards increased segregation of
hazardous and non-hazardous waste.
We also generate waste onboard our
flights. Approximately 50% of waste
generated on our flights is recyclable,
which includes plastic bottles, aluminium
cans, cardboard, and paper, and we are
committed to segregate and recycle as
much as possible.
Single use plastics
We have made changes to our inflight food
and drink products and service to help
reduce the amount of single-use plastic
used on our flights.
Since 2020 these changes have now
avoided the use of over 36 million items
of plastic.
Waste generated in easyJet
operations (excluding on-board
waste)
Waste type
Card
Crushed empty oil tins
Food
General commercial waste
Waste oil & fuel
Scrap metal
Wood pallets
Hazardous waste
Mixed
WEEE
Total waste
Onboard waste projection
Metric
FY21
Weight
(by tonnes)
112.74
5.79
9.60
139.21
5.18
1.96
0.88
35.89
3.02
0.45
314.72
FY20
3.39
Total onboard waste
(thousand tonnes)*
Waste per passenger
(kg/pax)**
1.61
0.08
0.07
* Total onboard cabin waste generated,
including recycling, general waste and
International Catering Waste, split out
separately, is unavailable. Average generated
waste per passenger was calculated based on
the total waste generated from aircraft
operations at Luton Airport, for which data is
available, and the number of arriving
passengers. Average waste per passengers
was extrapolated using all passengers flown to
estimate total waste generated onboard.
** Average calculated based on total waste
generated at Luton Airport and the number of
arriving passengers. Splitting out between
short, medium and long-haul service type is
not available.
Onboard waste
We are not directly responsible for the
disposal of onboard waste, which is
typically handled by our ground handling
and cleaning contractors. Waste is taken
to appropriate disposal facilities at airports,
with some materials being recovered for
recycling and some being sent to landfill or
incinerated. The interpretation and
enforcement of International Catering
Waste (ICW) legislation at both the local
airport and national policy level often
means that all waste generated onboard is
deemed as ICW upon arrival, meaning that
materials are being unnecessarily sent to
incineration or deep landfill, when they
could be recycled. Consequently, many
airports do not provide recycling facilities.
www.easyJet.com
53
STRATEGIC REPORT SUSTAINABILITY (CONTINUED)
Our new pilot and cabin crew
uniforms are produced using
fabric made from 100%
recycled plastic bottles. The
material for each uniform
uses around 45 bottles.
elasticity, a four-way stretch, improving
fit and freedom of movement for
enhanced comfort and durability.
This development can lead to it being
long lasting for the wearer, reducing the
need for more uniform items to be
produced in the long term.
Beyond the new fabric, plastic has also
been replaced in all clothing-related
packaging in favour of recyclable and
biodegradable materials.
Going paperless
Our Engineering and Maintenance Part 145
Quality Department significantly reduced
the need to print and re-scan documents in
order to support easyJet engineers with
their personal aircraft maintenance
licence applications.
A new procedure was introduced, which
was approved by the CAA, reducing the
need to print all application documentation,
including supporting information such
certificates, logbooks and identification
documents and to perform application
verification by applying a wet stamp on
every page and countersigning it.
Over the last year we initiated dialogue with
our partners at our 12 largest airports to
drive improvements in waste segregation
and increasing recycling rates. In
partnership with Bristol Airport, a recycling
trial was set up in December 2020 and a
new dedicated waste facilities were made
available for our segregated onboard waste
(in December 2020). The airport authority
provides regular feedback, which is
communicated back to our cabin crew, to
ensure onboard waste is segregated and
disposed of responsibly, and in line with our
Environment Policy.
We issue regular communications to our
cabin crew community to emphasise the
importance of waste segregation and a
new training module was created,
explaining segregation procedures and
what happens to recyclable waste once it
is taken off the aircraft. This module will be
used in all cabin crew new entrants and
recurrent training.
Hazardous waste
Hazardous and non-hazardous waste is
generated in our Engineering &
Maintenance operations. We are
committed to ensuring all waste is handled
in a responsible manner and as much
waste as possible is segregated.
Cardboard is re-used for transporting
engineering parts, both in the main hub
and in outstations, and cleaning clothes are
made from recycled clothing materials.
Over the next year we will be working
further to align the waste procedures
and standards across all locations, and
we will be setting reduction and
improvement targets.
In the 2021 financial year, we began
discussions with the Aircraft Interior
Recycling Association (AIRA) – a total
aircraft interior support company that
provides environmentally responsible ways
to recycle end of life interiors and waste
materials. AIRA will review disposal options
for end of life aircraft interior materials and
plastic parts, with the view to establish
which parts and materials can be
processed and recycled if collected
separately, rather than being disposed to
landfill. We will be running a trial project
starting early 2022.
Recycled uniforms
This year we started introducing a new
cabin crew and pilot uniform created with
unique high-tech material, each made from
around 45 recycled plastic bottles. The
roll-out across the airline is estimated to
prevent around half a million plastic bottles
from ending up as plastic waste each year.
The new fabric, adapted to the easyJet’s
current style, was first trialled last year for
suitability in the cabin and flight deck
environments. Compared to the non-
recycled alternative, it is more abrasion-
resistant. It also provides even more
54 easyJet plc Annual Report and Accounts 2021
On a single application this could have
previously amounted to between 300 to
600 pages. This has not only significantly
reduced the need to print but also
improved processing efficiency and time.
There is now a review of further processes
to streamline engineering station
procedures to move towards paperless
systems with only a paper back-up as
required by the regulator.
Aircraft noise
The noise from our aircraft can affect
those who live near airports or under flight
paths. We work with individual airports and
air traffic control teams to implement noise
mitigation activities that best fit each
location. Our pilots also use flying
techniques that reduce the impact of
aircraft noise, such as continuous
descent approaches.
The new generation Airbus A320neo and
A321neo aircraft are 50% quieter during
takeoff and landing than the equivalent
previous generation aircraft. The LEAP-1A
engines on these aircraft meet the most
stringent noise standards, ICAO’s Chapter
14 regulations.
We have also carried out a retrofit
programme to address a sound, associated
with A320 family aircraft of all airlines, due
to the airflow under the wing.
Sustainable construction – Berlin
new hangar
In September 2021 construction began of
our new maintenance hangar at Berlin
Brandenberg Airport. The hangar, which
will be our first maintenance hangar outside
of the UK, is due to be operational at the
end of 2023.
“Delivering Covid-19 vaccines around the world is the biggest
health and logistics operation in history, but easyJet’s summer
collection has provided vital support for our appeal. Once
again, easyJet employees have gone above and beyond with
their fundraising efforts, raising over £275,000 an incredible
amount which could help to deliver approximately 189,000
vaccines around the world. Thank you to everyone at easyJet,
we’re incredibly grateful for your support.”
Gordon Glick
Deputy Executive Director for Partnerships at The UK Committee for
Unicef (Unicef UK)
The hangar will conform with latest
November 2020 GEG Law
(Gebäudeenergiegesetz) and thereby
meets the EU Energy Performance
Directive 2020.
The plans include a highly energy efficient
underfloor heating system, with heating
supplied from a district heat system.
Unicef charity partnership
We have a pan-European charity
partnership, Change for Good, with Unicef,
the world’s leading children’s organisation.
Our cabin crew make onboard appeals for
customers to make donations in support of
Unicef’s work to protect children around
the world from disease and keep them safe
during emergencies.
In summer 2021 we restarted our onboard
appeals for Unicef to support the charity’s
Covid-19 Vaccines Appeal, in which Unicef
aims to support the delivery of 2 billion
Covid-19 vaccines, tests, and treatments for
health workers and the most high-risk
people around the world. An individual
donation from a customer of just £2/€2
could help Unicef deliver one dose of one
of the Covid-19 vaccines.
For the first time we took donations by
card payment, rather than cash. We also
encouraged customers to donate online
directly to Unicef through prompts in the
easyJet mobile app and through
advertising on aircraft seatbacks.
During the summer 2021 appeal, which
took place through July, August and
September, we were able to raised over
£275,000 due to the efforts of our cabin
crew and the generosity of our customers.
Since our partnership with Unicef began in
2012 it has raised over £15 million.
Our summer 2021 onboard
charity appeal supported
Unicef’s Covid-19 Vaccines
Appeal and raised over
£275,000.
www.easyJet.com
55
STRATEGIC REPORT SUSTAINABILITY (CONTINUED)
Diversity, Inclusion and Wellbeing
This year we have continued to focus on
our people priorities, including the ongoing
impact of the pandemic on people who
work at easyJet. We have evaluated our
previously introduced Diversity and
Inclusion Strategy and incorporated
Wellbeing to provide a holistic strategy. It is
focused on creating an environment of
inclusion where everyone can be
themselves and people can look after their
own and each other’s wellbeing.
Firm foundations
Data led design of best practice policy and
process, embedding our responsibility for
inclusion and wellness at easyJet
• Our overall engagement through our
anonymous listening platform, with
regular surveys, encourages our
colleagues to score ‘I feel I can be myself
at easyJet’ and ‘easyJet cares about my
health and wellbeing’. The reporting
includes verbatim comments and is
broken by function to help us identify
opportunities to continue improving and
ensure every team has an inclusive
environment. A survey we conducted in
June 2021 showed a 7% increase to
score 8/10 for these subjects, which, in
the context of the impact of the
pandemic, is a very positive outcome.
• Our submissions for our UK Gender Pay
Gap and the final year of the Hampton-
Alexander report (on female
representation in senior roles) were
skewed this year given the organisational
changes and the implementation of
furlough as a result of the pandemic. Our
performance for Gender Pay Gap was a
median gap of 12% and a mean gap of
7.4%. The submission can be found on
our website at https://corporate.easyjet.
com/corporate-responsibility/gender-
pay-reports. For the Hampton-Alexander
report submission in November 2020,
our AMB representation remained on
target at 33%, while our AMB direct
reports fell by 9 percentage points to
29% due to the consequences of the
organisational changes during the
pandemic.
• As part of our commitment to Diversity
and Inclusion, we treat every applicant in
our recruitment processes equally,
including those with accessibility
requirements. We also support our
employees who experience difficulties or
disability once in our employment, such
as providing reasonable adjustments to
the workplace to support everyone in
achieving their potential. However, for
our two largest communities, pilots and
cabin crews, there are a range of
regulatory requirements on ability which
all applicants and employees must
comply for operational safety reasons.
Gender
Gender makeup of easyJet employees as
at 30 September 2021
plc Board
30% (3)
70% (7)
Airline Management Board1
33% (3)
67% (6)
Senior Managers2
26% (11)
74% (32)
All Employees
41% (5640)
59% (7992)
Female
Male
1. The Airline Management Board is our “Executive
Committee” for the purposes of the FTSE
Women Leaders/Hampton-Alexander review
2. Defined in accordance with the Companies
Act 2006 which includes those with
responsibility for planning, directing or
controlling the activities of the company as
well as persons who were Directors of our
subsidiary undertakings
Open and honest communication
Engaging campaigns and supporting
materials, designed utilising feedback from
our listening channels, articulating what we
mean by inclusion and wellness at easyJet
• Our central framework for all
conversations, named ‘You Matter’, sets
a consistent approach in conversations
on Diversity, Inclusion and Wellbeing and
links directly to our core business ‘People
Priority’. Our Hub and our chat forum
encourages everyone to get involved
and share stories and activities across
the business. This has seen a 15% growth
in engagement this year.
• Our regular campaign plans recognise
and educate on a variety of events.
For example, recognising International
Day of Transgender Visibility by sharing
educational guides on the importance of
pronouns for an inclusive environment,
and launching our diversity data
monitoring campaign ‘Care to Share’,
whilst celebrating Black History Month.
• Our Trailblazer Community, who are our
passionate advocates for all things
diversity, inclusion and wellbeing, are a
single group of allies who help spread
the word and educate on all activity
across easyJet. Our Trailblazer
conference this year included
educational experience by working with
our external specialist partners;
recognising we have lots we can learn
we have engaged with specialists to help
educate us, inform our process and
policies and being a critical friend to
help us improve.
56 easyJet plc Annual Report and Accounts 2021
Increasing confidence
and capability
We upskill our people to instigate cultural
change, creating an employee sense of
belonging, an environment of inclusion and
supporting wellness needs at easyJet
• We have delivered a variety of learning
interventions across the business this
year, specifically on elements of health
and wellbeing in the pandemic time
supported by our Employee Assistance
Programme (EAP) partner for clinical
expertise, ensuring our colleagues are
aware of the support available for
themselves and their families through
these difficult times. We have also
evaluated mental health learning for
our colleagues and managers and are in
the process of rolling this out.
• Our inclusive behaviours e-learning and
our mandatory diversity, equality and
inclusion training continues to be
available for all colleagues across
the business.
Supporting services
and partners
We focus on expert input and support for
our resources, tools and services. Reflecting
the different needs across our communities
• We have worked closely with Business in
the Community to help us with our
commitment to the Race at Work
Charter. This year we have improved our
capability to collect diversity data in an
inclusive manner and encourage our
colleagues to ‘Care to Share’ their
personal information where legally
reasonable across the network. Our
aspiration is to reach 70% declaration
rate in the coming year across all our
new fields.
• We produced our Transitioning at
easyJet Toolkit along with other
guidance into other key policy
documents and communication
campaigns.
• In the UK Glassdoor platform our
Diversity & Inclusion rating has increased
in the last year from 3.4 to 4.2, scored
out of 5. Additionally, for the second
year running we were rated first in the
Transport sector for Britain’s Most
Admired Companies, including the
Diversity and Inclusion category.
Our future focus is to continue to ensure
our diversity monitoring enables us to make
the right decisions for our communities and
embed our commitments around policy,
Business ethics
Ethical supply chain management
Our Supplier Code of Conduct is based on
easyJet’s Code of Business Ethics and
requires partners to comply with easyJet
societal and environmental standards, and
to ensure the compliance of any sub-
contractors. In line with the UK Modern
Slavery Act, it prohibits modern slavery and
human trafficking.
easyJet holidays also encourages all its
direct hotel partners to actively work
towards certification that meets the Global
Sustainable Tourism Council (GSTC)
standards. Hotels with GSTC-recognised
certifications have been independently
certified against GSTC criteria which
address the key elements of social,
environmental, cultural, and economic
sustainability. easyJet’s Sustainability
Director, Jane Ashton, is also a member of
the GSTC Board.
Modern slavery
Our Modern Slavery Working Group is
responsible for the development and
implementation of our modern slavery
strategy. The Working Group was
established in 2016 and is composed of
senior management representatives from
relevant functions across the business.
It continues to monitor and assess the
effectiveness of the steps we are taking in
addressing modern slavery.
The human rights and modern slavery
clauses in our Supplier Code of Conduct
policy specifically require suppliers to
respect internationally recognised human
rights, including those expressed in the
United Nations International Bill of Human
Rights, and the internationally recognised
rights and principles set out in the
International Labour Organization’s Core
Conventions and Declaration on
Fundamental Principles and Rights at Work.
Our suppliers are also required to have at
all times a written policy in relation to such
matters and to ensure the policy’s effective
implementation within their organisation.
More information is available in our latest
Modern Slavery Act statement at https://
corporate.easyjet.com/.
process and upskilling. As well as a
continued commitment to broadening the
health and wellbeing support across our
network, our Trailblazer team and line
managers continue to be critical in our
ambition to create an inclusive and
energising environment where everyone
can learn and grow.
Although the aviation industry is not
predicted to reach previous levels of
demand until at least 2024, which
means we will not be recruiting in the
same numbers as pre-pandemic, we are
committed to looking at the best ways we
can make the pipeline of future aviation
talent more diverse.
Virtual pilot school visits
In March 2021 we launched a virtual pilot
school visits programme. Teachers, schools
and parents have been able to request a
virtual visit from an easyJet pilot, to join
classrooms and assemblies via video link,
providing young people across the UK with
the opportunity to find out what the job of
a pilot is really like and to explain that it can
be a career that anyone can consider.
Since 2017 easyJet pilots have visited over
400 schools and colleges across Europe,
which has helped to provide visible role
models for young people.
Special assistance
We provide our special assistance service,
in partnership with airports and their special
assistance providers on the ground, for
customers who need some additional help
when they are travelling.
Customer satisfaction amongst passengers
using special assistance has continued to
be higher than the average across all
customers. Customer satisfaction amongst
special assistance customers this financial
year was 87% (based on customers who
selected ‘completely’, ‘very’ or ‘quite’
satisfied), compared to 74.6% for all
customers (2020: 83.6% for customers
using special assistance, compared to
75.2% for all customers).
In 2012 we established the easyJet Special
Assistance Advisory Group (ESAAG), to
provide expert advice on special
assistance issues. While the Group has not
met during the pandemic, we continue to
work with the Chair of the Group, Lord
David Blunkett.
Human trafficking
All airlines and transport providers are at
risk that their services could be used by
human traffickers. We have training for all
our cabin crew and pilots on how to
identify and report possible human
trafficking.
Ethics policies and oversight
We have in place ethical and compliance
policies, covering topics including bribery
and corruption, gift giving, anti-fraud,
human rights and modern slavery.
These policies and our commitment to the
Human Rights statement are available to
all employees on the easyJet intranet.
All new entrants to easyJet receive
mandatory ethics training during the
onboarding process. All employees are
also required to complete annual online
refresher training covering ethical
behaviour, anti-bribery and corruption.
A Business Integrity Committee acts as a
cross-company forum to consider ethics
policies and management and this has
continued to meet this year. The
committee receives reports of suspected
unethical behaviour, identifies Group-wide
trends, and monitors follow up. The
committee’s remit includes disciplinary
issues or grievances raised with HR,
environmental concerns and
suspected fraud.
Whistleblowing
All employees of easyJet and our suppliers
should feel able to raise concerns about
any safety, legal or ethical issues. If they
feel unable to report these concerns to a
manager, we also provide a confidential
whistleblowing process.
The ‘Speak Up, Speak Out’ service is run
independently of easyJet and reports can
be made openly or anonymously. The
service is available by phone and online
reporting in all countries we serve.
All reports are investigated and followed up
as necessary by a dedicated easyJet senior
manager responsible for business integrity.
The Board oversees the whistleblowing
process with the assistance of the Audit
Committee. In addition, the Business
Integrity Committee is a management
forum on whistleblowing. It receives
summaries of all reported concerns
and monitors any ongoing concerns and
ensures that the proposed outcomes of
investigations are fair, transparent and
robust, with root causes identified and
remedial actions agreed.
www.easyJet.com
57
STRATEGIC REPORT SUSTAINABILITY (CONTINUED)
Task force on Climate-related
Financial Disclosures
Governance
(a) Describe the board’s oversight of
climate-related risks and
opportunities
Climate-related issues are addressed on a
regular basis by the Airline Management
Board (AMB), the equivalent of an
Executive Committee (ExCo) that is led
by the Chief Executive Officer (CEO).
The AMB reports upwards to the plc Board.
The CEO sits on the plc Board and is
responsible for climate-related issues.
The AMB’s members (which includes the
CFO & CEO) are collectively responsible for
assessing and managing climate-related
risks and opportunities, as well as driving
the performance of the airline against
strategic KPIs and managing the allocation
of central funds and capital.
(b) Describe management’s role in
assessing and managing climate-
related risks and opportunities
Climate-related issues were included as
specific agenda items four times at the
AMB, and were discussed regularly at the
plc Board during the 2021 financial year.
This included regular updates from the
CEO, and a formal presentation from the
Strategy
(a) Describe the climate-related risks
and opportunities the organisation
has identified over the short,
medium and long term
Ongoing development of the Corporate
Risk Management Framework is a constant
at easyJet, ensuring a unified and
collaborative risk management approach
and risk management best practice across
the Group. easyJet defines our short,
medium and long term time horizons for
climate risk as follows:
• short – 0-1 year
• medium – 1-5 years
• long – 5-20 years
The key risks identified using the risk
framework by the business and
subsequently reviewed by the Board fall
into seven broad themes – one of these
thematic areas is environment and
sustainability team. Topics usually covered
reviewing and guiding climate-related
strategy and monitoring and overseeing
progress against goals and targets for
addressing climate-related issues,
among others.
easyJet has a dedicated sustainability
board called the Sustainability Steering
Committee. The Committee meets on
average, eight to ten times a year and
comprises senior management attendees
including Group Markets & Marketing
Director, CFO, Chief Commercial Officer,
Group General Counsel & Company
Secretary, Director of Flight Operations,
Director of Airport Development &
Procurement, Director of Tax & Fuel
Procurement, HR & People Development
Director and the Director of Sustainability.
Members are collectively responsible for
driving the performance of the airline
against strategic KPIs and managing the
allocation of central funds and resource
to improve our performance and the
consideration of and disclosure of
climate-related risks and opportunities.
During the 2021 financial year, the
Sustainability Steering Committee
(chaired by the Group Markets & Marketing
Director, AMB member) reviewed and
discussed climate-related risks and
opportunities from both a qualitative and
quantitative perspective and these were
presented and discussed upwards to the
AMB. The Group Markets & Marketing
Director, in their capacity as Chair of the
Sustainability Steering Committee,
approved the task to model the future
trajectory of gCO2/revenue per passenger
kilometre (RPK) for the airline through to
2050 (a task that feeds into the modelling
of our net zero ambitions).
Refer to the section below on Metrics and
targets for further information regarding
our net zero pathway.
Focus areas for the 2022
financial year
• easyJet is planning further
engagement and involvement of
Board-level colleagues and managers
across the business to increase the
visibility, knowledge and performance
of climate change issues. This will
include a series of risk workshops to
assign further responsibilities.
sustainability as outlined in the risk section
on page 85. The risks include:
part of the Safety, Security and Operations
thematic area.
Carbon trading schemes – i.e. adverse
changes to these schemes including the
existence and/or cost of the scheme (i.e.
pertaining to a climate transition risk).
Increased taxation – i.e. future policy
measures and regulation to tackle the
impact of aviation on climate change could
impact easyJet’s business if they impose
limitations and cost on how easyJet
operates and the services it can provide
(i.e. pertaining to a climate transition risk).
Significant operational disruption – in the
2021 financial year, we incorporated the
impacts of climate change on our business
and operations into a risk focused on
significant operational disruption – i.e.
climate change-related weather disruption
(i.e. pertaining to physical climate risks) as
easyJet worked in partnership with the
Cambridge Centre for Risk Studies (CCRS)
using methodology and scenarios from
their Climate Resilience Analytics
Framework. The scope of work included
addressing the business risk from climate
change in both our direct and indirect
operations, across our value chain. The
work commenced in the early part of the
2021 financial year whereby an assessment
was made, using workshops and interviews
with key internal stakeholders, regarding
the potential financial risks to our business
operations across the dimensions of
physical and transition risks. CCRS then
undertook scenario modelling of each
climate risk against easyJet’s current
commercial and physical footprint (see
below for more information).
58 easyJet plc Annual Report and Accounts 2021
CCRS modelled the potential financial
impacts of transition risks (e.g. the
changing landscape of climate and carbon
taxes, charges and regulatory changes
introduced by countries in our network) as
well as physical risks (see below) for various
climate scenarios to determine the
sensitivity of impacts to different future
global socioeconomic and temperature
projections (see below for a full explanation
of the scenarios used). easyJet relies on a
number of key estimates including the
ability to meet its strategic plans, future
fuel and carbon tax prices and the ability
to pass on cost price increases to
the customer.
Transition risks
There are several transition risks that are
prominent, as easyJet develops its business
and operations in a changing landscape.
They include:
• Changes in Consumer Sentiment
• Legislation and Policy Changes (e.g.
future climate and carbon-related taxes)
• Technology Developments (including
Sustainable Aviation Fuels and
aircraft innovation)
• Investor Sentiment and the increase
of the ESG Agenda
• Consumer and/or Regulator
Liability Claim
Physical risks
The CCRS work highlighted the acute
and chronic physical risks that could
impact our business. In summary, these
related to the increased impact to our
business from severe weather like
flooding, snowstorms etc.
Opportunities
The specific opportunities easyJet has
identified include:
• resource efficiency, i.e. the use of more
efficient aircraft which help to reduce
our fuel burn, carbon compliance and
other direct costs
• shift in consumer preferences – this
(b) – Describe the impact of climate-
related risks and opportunities on
the organisation’s business, strategy
and financial planning
In terms of financial planning, easyJet
defined what it deemed to be substantive
financial or strategic impact on our
business during the 2021 financial year with
respect to the climate change risk
quantification. The quantification will further
assist in defining thresholds for what
constitutes a risk of “major concern” e.g.
substantive financial or strategic level of
impact and “above risk tolerance” against
this metric – the overall company
materiality principal of 1% of total assets
equating to a threshold of £21.5m is listed
in this annual report.
For a full explanation of this materiality
threshold in the context of risk
quantification, refer to section 2.1b and for
a full explanation of our climate-related
risks and opportunities on our business and
strategy, please refer to section 2.1, 2.2, 2.3
& 2.4 of our 2021 CDP climate change
submission which is available on the CDP
website at www.cdp.net.
(c) Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-
related scenarios, including a
2°C or lower scenario
Overview of scenario analysis
CCRS quantified our climate change risks
using a 5-year Enterprise Value at Risk
(5yrEV@Risk) metric which shows how the
risks would impact discounted cashflows
over five years within a given confidence
interval, e.g. 95%, in line with how we define
short and medium term time horizons for
climate risks. However, the quantification
and supporting research and analysis will
further assist in the allocation of resource
and capital to manage these risks beyond
these time horizons.
The scenarios used were as follows:
could allow easyJet to build brand loyalty
by demonstrating our commitment to
reduce emissions and tackling climate
change
• Current Policy (climate-related policies
that governments have in place today,
resulting in >3°C temperature rise by
2100)
• reducing future direct costs by
supporting technological step change
– we recognise the need for our industry
to transition to a low-carbon operation
which is why we are collaborating in
several partnerships to support
technological step change to make zero
emissions technology a reality – whether
hydrogen, electric or a hybrid of these
technologies to power the aircraft of
the future.
• Stated Policy (policies that governments
have committed to in their Nationally
Determined Contributions but are not
yet implemented and fall short of Paris
Agreement requirements, 2.5°C)
• Paris Agreement-aligned mitigation
(2°C); and
• Paris Ambition (radical policy action to
Net Zero by 2050, 1.5°C).
These scenarios incorporate socioeconomic
projections from the Shared
Socioeconomic Pathways (SSPs).
To assess physical risk, the changes in
expected annual impacts (in terms of
likelihood and severity of extreme weather
events) were analysed on a 20-year time
horizon (2040) relative to the present day
(recent historical period) through financial
models. Individual risk scenarios were
modelled to assess the various mechanisms
through which physical hazards (e.g.
extreme temperatures, water stress, floods,
and storms) impacts easyJet, including
disruption to operations and to market
demand. A middle-of-the-road scenario
was chosen – Representative
Concentration Pathway (RCP4.5) – noting
that there is limited variability in physical
risks across different RCPs within the near
to mid-term time horizon (20 years).
The CCRS risk analysis confirmed and
elaborated on the summary of risks that
management had outlined in our 2020
financial year Annual Report and CCRS
specifically quantified the financial value at
risk over a five-year time horizon across
various global emission pathways. Financial
modelling enabled assessment of the
magnitude of individual transition and
physical risks identified and the relative
materiality of these different climate risks
over the same time horizon. For example,
across the transition risk dimensions of
policy, market, technology, reputational,
and liability risk, as well as acute and
chronic physical risks.
To read the full suite of cost estimates
associated with the risks and opportunities,
refer to section 2.3 and 2.4 of our 2021
CDP submission. Outputs from the various
scenario analyses modelled by CCRS
included within the quantitative
assessments of the financial impacts to
easyJet can be reviewed in detail in section
3.2a of our 2021 CDP submission. Further
information is contained in Notes to the
accounts, 1b.(ii) Critical accounting
estimates on pages 184 to 185.
Focus areas for the 2022
financial year
• Regular involvement from Corporate
Risk and easyJet’s Sustainability team
will ensure progress is maintained and
risks are managed within easyJet’s
Corporate Risk Framework.
• easyJet will closely track the outputs
from COP26 including any latest
developments regarding climate
scenarios and will review these in the
context of having joined Race to
Zero, a global UN-backed campaign
to achieve net zero carbon emissions
by 2050.
• easyJet plans to present its net zero
roadmap in the 2022 financial year.
www.easyJet.com
59
STRATEGIC REPORT Focus areas for the 2022
financial year
• easyJet will be engaging with senior
managers across the business to
create and embed action plans to
address priority climate-related risks
and opportunities and implement key
controls and mitigation strategies.
• Regular involvement from Corporate
Risk and easyJet’s Sustainability
teams will help ensure progress is
maintained and risks are managed
within easyJet’s Corporate Risk
Framework.
SUSTAINABILITY (CONTINUED)
Risk management
(a) Describe the organisation’s
processes for identifying and
assessing climate-related risks
and opportunities
easyJet conducted a risk quantification
exercise within a new risk framework to
stress test our corporate risk register in the
2021 financial year – which included risks
arising from climate change. easyJet
worked in partnership with the Cambridge
Centre for Risk Studies and used a “5-year
Earnings Value at Risk (5yrEV@Risk)” metric
which shows how the risks would impact
discounted cashflows over five years within
a given confidence interval, e.g. 95%.
For further information on easyJet’s
management of sustainability risks, see the
Risk section on page 85.
(b) Describe the organisation’s
processes for managing climate-
related risks and opportunities; and
(c) Describe how processes for
identifying, assessing and managing
climate-related risks are
incorporated into the business
overall risk management.
An effective corporate risk management
framework has a simple, yet effective
methodology. This helps encourage
engagement at, and across, appropriate
levels of the organisation. The methodology
at the heart of the new corporate risk
management framework is what is
commonly known as the “bow tie”
approach. This encourages a range of
internal stakeholders (e.g. risk, strategy and
finance teams) to consider risk in a
structured and consistent way, with the
unwanted or unexpected event at the
centre. The risk bow ties are reviewed on a
regular basis to ensure stakeholders are
aware of the current causes and
consequences, and that the most
appropriate controls are in place and being
effective. Potential causes and
consequences of this event are then
identified together with an assessment of
the controls and mitigations that may
reduce the likelihood or impact of the
unwanted or unexpected event with a
specific focus on prioritising those risks with
a material financial impact.
easyJet will next review each transition risk
identified in conjunction with the current
climate change risks detailed in our
Principal Risks section (see page 78).
The action is to determine individual
strategies and assign risk ownership
through the Corporate Risk Framework.
The Board is ultimately responsible for
determining the nature and extent of the
principal risks. However, in similar fashion
to the current physical climate change
risks, ownership of these risks and their risk
management controls and capabilities sit
across the Group. This is in addition to
discussion of key risk topics and events,
including emerging or changing risks, at
the Airline Management Board, Audit
Committee and plc Board.
For a full explanation regarding our
approach and processes to manage
climate-related risks and opportunities,
please refer to section 2.1, 2.2, 2.3 & 2.4 of
our 2021 CDP climate change submission
which is available on the CDP website at
www.cdp.net.
60 easyJet plc Annual Report and Accounts 2021
Focus areas for the 2022
financial year
• The business will commence
programmes of work to move it
towards a pathway of net zero
carbon emissions by 2050 and
easyJet plans to present its net zero
roadmap in the 2022 financial year.
Metrics and targets
(a) Disclose the metrics used by the
organisation to assess the climate-
related risks and opportunities in line
with its strategy and risk
management process
easyJet worked in partnership with the
Cambridge Centre for Risk Studies (CCRS)
to model the potential financial impacts
from various climate-related scenarios –
five in total – to determine the different
temperature increases according to e.g.
Paris aligned reductions, BAU projections
etc. Results of the analysis are quantitative
assessments of financial impacts to
easyJet for each of the risk scenarios,
across various emissions pathways. For
further information about the metrics used
for the financial quantification of our
climate-related risks and opportunities,
please refer to section 2.3 & 2.4 of our
2021 CDP climate change submission
which is available on the CDP website
at www.cdp.net.
(b) Disclose Scope 1, Scope 2, and if
appropriate, Scope 3 GHG and the
related risks.
easyJet has disclosed its full value chain
emissions in this Annual Report, for the
second consecutive year. Refer to page 46
to read our comprehensive GHG and
Energy Performance Table, incl. Scope 1, 2
& 3 emissions. For a full explanation of our
GHG risks, please refer to section 2.3 of
our 2021 CDP climate change submission
which is available on the CDP website
at www.cdp.net.
(c) Describe the targets used by the
organisation to manage climate-
related risks and opportunities and
performance against targets
The business has an intensity (efficiency)
target – to achieve a 10% reduction in
carbon dioxide emissions per passenger
kilometre on our flights by 2022, compared
to a 2016 baseline figure – i.e. the end of
next financial year. This metric, using grams
of carbon dioxide per revenue passenger
km is a headline KPI for the business and
an important yardstick of our on-going
efficiency improvements. The impact of
the Covid-19 pandemic, including aircraft
deferrals and reduced load factors, has
significantly affected our progress towards
our 10% efficiency target and currently we
do not expect to meet this planned
reduction in 2022.
In November 2021 easyJet joined Race to
Zero, a global UN-backed campaign to
achieve net zero carbon emissions by 2050
at the latest. By joining Race to Zero, we
have committed to set an interim science-
based target for 2035 as well as to reach
net-zero carbon emissions by 2050,
aligning with the criteria and
recommendations of the Science
Based Targets initiative (SBTi). easyJet
plans to present its net-zero roadmap
in the 2022 financial year.
Report footnote: The Cambridge Centre for Risk Studies Climate Resilience Analytics Framework is used by global companies to facilitate strategic and
financial decision making from climate change. The Centre’s rigorous scenario-based framework integrates a wide range of threat classes including financial,
geopolitical, technology, environmental, social and governance with the latest international standards in climate science to provide a competitive view of a
corporation’s balance sheet. The Cambridge Centre for Risk Studies is based within the University of Cambridge Judge Business School. The Centre works
closely with business partners in tackling complex issues of management science in risk.
www.easyJet.com
61
STRATEGIC REPORT NON- FINANCI AL INFORMATION ST ATE ME NT
Non-financial
information statement
The table below and the information incorporated by reference comprises our Non-Financial Information Statement required by s414CA
and 414CB of the Companies Act 2006. Details of our business model can be found on page 12.
Related principal risks and
impact of business activity
• The impacts of climate
change on our business
and operations, carbon
credit programmes,
regulation, taxation and
changing customer and
employee expectations
are recognised as one of
easyJet’s principal risks.
Refer to pages 79 and
85 to 86 for a detailed
view of our environmental
and sustainability risks.
• During the year we have
worked in partnership
with the Cambridge
Centre of Risk Studies
(CCRS) to identify the
business risks from
climate change in both
our direct and indirect
operations. More
information on CCRS
Scenario Analysis are
included in our TCFD
report on pages 58 to 61.
Policies
1. Environmental matters
• Our Group-wide
Sustainability Strategy is
to lead and challenge
global aviation towards
net zero emissions while
positively impacting our
communities and our
people, recognising the
need to transition to a low
carbon economy and the
need for aviation to play
its part.
• Our Environment Policy
sets out our approach to
managing and minimising
our environmental impact.
• easyJet holidays offsets
the carbon emissions from
its package holidays and
launched its inaugural
Sustainability Strategy
during the year. This
includes a commitment
that all of its holidays
would directly support
sustainable practices by
the end of 2025 and
encouraging 100% of its
contracted hotels to
achieve certification by a
Global Sustainable
Tourism Council (GSTC)
accredited certification
body or a certification to a
GSTC recognised
standard by the end of
2025.
• Our Supplier Code of
Conduct requires partners
to comply with a number
of environmental
standards.
Due diligence and implementation
• The Sustainability Steering
Committee monitors the
progress being made against
the Group-wide Sustainability
Strategy. The plc Board and
AMB regularly discuss climate-
related matters and oversee
progress against goals and
targets for addressing climate-
related issues. For more
information on our Sustainability
Strategy and how we manage
sustainability, please refer to
pages 38 to 61.
• During the year we have
implemented an Environmental
Management System (EMS) to
manage and improve our
environmental performance in a
systematic way. The EMS
implementation is internally and
externally audited. The external
audit is done against the IEnvA
program requirements, which is
aligned to international
standard ISO 14001. The internal
audit is carried out by both the
easyJet Compliance Team and
by a team of IEnvA Assessors
(consisting of one IOSA Lead
Auditor and one certified ISO
14001 Auditor).
• Progress against environmental
targets is reported to the AMB
at regular intervals. The
Environment Policy is available
at https://corporate.easyjet.com/
• easyJet holidays Sustainability
Strategy is managed and
implemented by a formal
easyJet holidays Sustainability
Committee, which holds
monthly meetings and
objectives to monitor the
progress and delivery of
the Strategy.
Outcomes of policies and
related KPIs (where applicable)
• As part of our commitment to UK
and EU targets of net zero
emissions by 2050, we have
helped develop a European
aviation industry roadmap towards
net zero (“Destination 2050”).
• We supported and engaged on
the EU’s ‘Fit for 55’ policy
framework to achieve a 55%
reduction in carbon emissions by
2030 and net zero emissions by
2050. We agree that delivering on
climate change is the most
important long term challenge for
aviation and therefore it is critical
that any fiscal measures applied to
aviation support this aim.
• We are developing our own
detailed pathway to net zero. As
part of our decarbonisation
pathway, we have partnered with
Gatwick Airport to trial the use of
Sustainable Aviation Fuels for a
number of flights.
• easyJet holidays became the first
major UK tour operator to offset
the carbon emissions directly
associated with its package
holidays. For more information
refer to page 49.
• We have adopted the
recommendations of the
Task Force on Climate-related
Financial Disclosures (TCFD) to
improve our stakeholders’ ability to
assess climate-related risks and
opportunities.
• Refer to page 46 for our
greenhouse gas emissions data.
• Progress against environmental
targets, including carbon emissions
per passenger kilometre, is
reported on page 47.
62 easyJet plc Annual Report and Accounts 2021
Policies
2. Employees
• Our People Handbook and
Code of Ethics promote a
culture that encourages
open lines of
communication and free
access to information.
• We have a Diversity,
Inclusion and Wellbeing
strategy.
• Our Equal Opportunity
and Fair Treatment Policy
encourages our
employees to make the
best use of their skills and
experience and ensure we
treat staff, potential staff
and the public fairly.
• Our “Speak Up, Speak Out”
whistleblowing process
enables easyJet
employees and suppliers
to be able to raise
concerns about any
safety, ethical or legal
issues.
Due diligence and implementation
• The People team are responsible
for the majority of employee-
related policies and ensuring they
are followed, regularly reviewed and
refreshed.
• Employees are required to
complete mandatory training on
joining the Company and annual
refresher training to ensure that
they are trained and up-to-date on
key policies.
• We use our Employee Engagement
Platform, Peakon, to understand
how these policies are being
perceived in practice and to get
employees’ views and feedback on
working at easyJet.
• Progress against diversity and
inclusion targets is reported
regularly to the AMB and annually
to the plc Board’s Nominations
Committee to ensure we have a
workforce that reflects the diverse
customers we serve and the
diverse communities within
which we operate.
• As part of our Diversity, Inclusion
and Wellbeing Strategy we treat
every applicant in our recruitment
processes equally, including those
with accessibility requirements. We
also support our employees who
experience difficulties or disability
once in our employment.
• Our whistleblowing processes are
overseen by a Business Integrity
Committee, which also identifies
any cross-company trends. They
are also reviewed by the Audit
Committee and plc Board on a
quarterly basis.
• The Business Integrity Committee
acts as a cross-company forum to
consider ethics policies. The
Committee receives reports of
suspected unethical behaviour,
identifies Group-wide trends, and
monitors follow up. The
Committee’s remit includes
disciplinary issues or grievances
raised with HR, environmental
concerns and suspected fraud.
• The Board discusses the employee
voice independent of management
through the Employee
Representative Director mechanism.
Outcomes of policies and
related KPIs (where applicable)
• To ensure employees are
Related principal risks and
impact of business activity
• Our people are
fundamental to our
success and a key
category of principal
risk is around our
people, further
information on which
is set out on pages
94 and 95. Industrial
Action and talent
acquisition and
retention are
recognised as principal
risks and we seek to
control and mitigate
those risks in order to
reduce their impact.
communicated to clearly, a weekly
podcast was launched,
‘VoiceNote’, where Johan
Lundgren updates employees
about the changing external
environment and what
management and the plc Board
are doing to support them.
• Our Diversity and Inclusion
Strategy was revised to include
Wellbeing, in order to provide a
holistic strategy in the light of the
impact from the pandemic.
• We have developed a central “You
Matter” framework to provide a
suite of tools and services to help
employees look after their own
health and wellness, connect with
each other and plan for the
future. For more information on
our Diversity, Inclusion and
Wellbeing Strategy, please refer to
page 56.
• Our regular employee surveys
help us understand how
employees view working at
easyJet. A survey we conducted
in June 2021 showed a 7%
increase in scoring on employee
health and wellbeing. For more
information on employee
engagement, please refer to
page 28.
• As a result of the pandemic we
adopted different ways of working
and our hybrid approach has
helped employees balance their
work and family life and enabled a
safe and phased return to work.
• To engage with the wider
workforce and to increase the plc
Board’s visibility amongst
employees, we reviewed the
employee engagement
mechanism in the year. For more
details on how we enhanced the
employee voice in the boardroom,
please refer to page 109.
• As part of our refreshed ‘Speak
Up, Speak Out’ (SUSO)
programme, we engaged an
external provider to offer an
independent and confidential
hotline to our employees,
contractors and third-party
suppliers if they need to raise
any concerns.
www.easyJet.com
63
STRATEGIC REPORT NON- FINANCI AL INFORMATION ST ATE ME NT ( CO NT I NUE D)
Due diligence and implementation
• Our cabin crew make onboard
appeals for customers to make
donations in support of Unicef’s
work to protect children around the
world from disease and keep them
safe during emergencies.
• Implemented an Environment
Management System to work in
different ways to take action on
sustainability, beyond our
carbon impact.
• The Special Assistance Advisory
Group (ESAAG) considers and
monitors easyJet’s special assistance
service, including customer
satisfaction amongst those customers
using the service.
Policies
3. Social matters
• easyJet has a pan-
European partnership,
‘Change for Good’ with
Unicef to support its work.
• Sustainability activities
including carbon
emissions, waste
management, aircraft
noise and recycled
uniforms.
• We want to support those
customers that may need
special assistance on
board our aircraft.
• As set out under
Employees, we have a
Diversity and Inclusion
strategy and Equal
Opportunity and Fair
Treatment Policy.
Related principal risks and
impact of business activity
• Social impact matters
are not considered to
be principal risks.
However, these
matters are
considered by the plc
Board as part of its
stakeholder
engagement
programme, further
information is set out
on pages 26 to 37.
Outcomes of policies and
related KPIs (where applicable)
• Given the impact of the pandemic,
we pivoted our appeal for
Unicef to support its Covid-19
Vaccines Appeal, which aims to
support the delivery of 2 billion
vaccines, tests and treatments
for high risk people around
the world.
• We introduced new cabin crew
and pilot uniforms made from
recycled plastic bottles.
• We partnered with Bristol
Airport in a project to pilot best
practice cabin waste separation
and recycling, with a view to
engaging our crews and many
more airports to reduce cabin
waste to landfill.
• Customer satisfaction amongst
passengers using special
assistance has continued to be
higher than the average across
all customers. Customer
satisfaction amongst special
assistance customers this
financial year was 87% (based
on customers who selected
‘completely’, ‘very’ or ‘quite’
satisfied), compared to 74.6%
for all customers (2020: 83.6%
for customers using special
assistance, compared to 75.2%
for all customers). While the
Group has not met during the
pandemic, we continue to work
with the Chair of the Group,
Lord David Blunkett.
• Although the aviation industry is
not predicted to reach previous
levels of demand until at least
2024, which means we will not
be recruiting in the same
numbers as pre-pandemic, we
are committed to looking at the
best ways we can make the
pipeline of future aviation talent
more diverse.
64 easyJet plc Annual Report and Accounts 2021
Policies
4. Human rights
• easyJet is committed to
human rights, both in its
business and its supply
chain. This includes
observance of the
principles set out by the
International Labour
Organisation Declaration
on Fundamental Principles
and Rights at Work.
• We have a Supplier Code
of Conduct, which is
based on easyJet’s Code
of Business Ethics and
requires partners to
comply with easyJet
societal and environmental
standards, and to ensure
the compliance of any
subcontractors. In line with
the UK Modern Slavery
Act, it prohibits modern
slavery and human
trafficking.
5. Anti-corruption and
anti-bribery
• Code of Ethics, which
includes ethical and
compliance policies,
covering topics that include
bribery and corruption, gift
giving and fraud.
• ‘Speak Up, Speak Out’
policy.
• Supplier Code of Conduct.
• Gifts and Hospitality
Register.
Due diligence and implementation
• The Modern Slavery Working Group is
responsible for the development and
implementation of our modern slavery
strategy.
• All supplier contracts include a clause
requiring them to comply with the
Supplier Code of Conduct and
Modern Slavery Act.
• The plc Board reviews easyJet’s
policies on modern slavery, due
diligence processes and the way
we assess and manage modern
slavery annually.
• Suppliers must submit an annual
slavery and human trafficking report
setting out steps taken to ensure that
slavery and human trafficking is not
taking place in supply chains or in any
part of their business.
• Employees are required to undertake
mandatory training on modern
slavery.
Outcomes of policies and
related KPIs (where applicable)
• Both induction training and
annual refresher training at a
Group level ensures the workforce
is continually mindful of human
rights and modern slavery.
• Ensuring policies form part of
our process with new and
potential suppliers in turn
enhances the Group’s actions
to mitigate and prevent modern
slavery and human trafficking.
• We consulted with a number of
expert stakeholders, such as
not for profit organisations and
investors, in developing our
strategy to tackle modern
slavery. We shared with them
our modern slavery policy and
strategy and their constructive
feedback helped us to further
improve our approach to
tackling the issue.
• Ethical and compliance policies are
monitored by the Business Integrity
Committee and People team.
• All existing and new employees
receive mandatory ethics training
annually and upon joining the
business.
• Risks associated with bribery and
corruption are reviewed quarterly by
the Audit Committee.
• A Gifts and Hospitality Register
ensures any gifts or hospitality
received are recorded and monitored
in line with regulatory requirements.
• Ensuring appropriate controls
are in place to monitor and
mitigate bribery and corruption,
both external and internal, has
ensured a zero tolerance
approach is maintained
throughout the Group.
• In order to understand
industry-wide trends, the
Business Integrity Committee
set up a UK Airline Fraud Forum
and has invited several UK
airlines to attend.
Related principal risks and
impact of business activity
• Modern slavery was
included as a key
topic in this year’s
Safeguarding
Workshop – an
internal cross-
functional workshop
aimed at assessing
safeguarding risks
faced by easyJet to
stimulate discussion
and prioritise any
future management
action.
• We continue to look
at the Global Slavery
Index to support our
analysis of geographic
risks and assess
whether the country/
area have a high
prevalence of modern
slavery or other labour
rights violations.
• Compliance and
regulatory risks are
recognised as a
principal risk. More
details can be found
on pages 90 to 91.
www.easyJet.com
65
STRATEGIC REPORT FINANCIAL REVIEW
Our Financial Results
Our focus over the winter season was on raising
liquidity, implementing strong cost control
measures and cash generative flying to minimise
cash burn and as we entered the Summer peak
easyJet successfully maintained this disciplined
approach by matching capacity to rising demand
across UK domestics and mainland Europe.
Kenton Jarvis
Chief Financial Officer
Financial overview
£ million (Reported) – Group
Group revenue
Headline costs excluding fuel, balance sheet FX and ownership costs
Fuel
Headline EBITDAR
Balance sheet foreign exchange gain
Other ownership costs
Group headline loss before tax
Headline tax credit
Group headline loss after tax
Non-headline items
Non-headline tax credit/(charge)
Group total loss after tax
£ per seat – Airline only
Airline revenue
Headline costs excluding fuel, balance sheet FX and ownership costs
Fuel
Headline EBITDAR
Balance sheet foreign exchange gain
Other ownership costs
Airline headline loss before tax
Headline tax credit
Airline headline loss after tax
Non-headline items
Non-headline tax credit
Airline total loss after tax
2021
1,458
(1,638)
(371)
(551)
9
(594)
(1,136)
236
(900)
100
(58)
(858)
2021
50.54
(56.62)
(13.16)
(19.24)
0.32
(20.95)
(39.87)
8.39
(31.48)
3.53
(2.07)
(30.02)
2020
3,009
(2,561)
(721)
(273)
–
(562)
(835)
110
(725)
(438)
84
(1,079)
2020
54.35
(45.74)
(13.09)
(4.48)
–
(10.20)
(14.68)
1.92
(12.76)
(7.98)
1.52
(19.22)
Due to the continued impact of Covid-19, in the 2021 financial year easyJet flew 20.4 million passengers (2020: 48.1 million), down 58%
on the prior year. As a result, Group headline loss before tax was £1,136 million for the year ended 30 September 2021 (2020: loss of £835
million) and Group total reported loss after tax for the year was £858 million (2020: loss of £1,079 million).
With a full year impact of Covid-19 driving reduced flying and the softer macro-level demand, Group revenue for the full year decreased
by 51.6% to £1,458 million (2020: £3,009 million), and Airline revenue per seat for the year fell 7.0% to £50.54 (2020: £54.35), and by
66 easyJet plc Annual Report and Accounts 2021
6.4% at constant currency. It should be noted that Covid-19 restrictions started in March 2020 and therefore did not impact the first half
of the 2020 comparative financial year when easyJet delivered revenue per seat 9.6% higher than 2019 and load factors of 90.3%.
The ongoing restrictions on travel imposed by governments in response to Covid-19 have continued to adversely impact air travel.
Our focus over the winter season was on cash generative flying to minimise cash burn. During the second half of the year, there was
continued uncertainty due to the changing environment, however travel restrictions were eased across much of Europe. easyJet
successfully maintained a disciplined focus and agile approach on matching capacity to available demand especially across UK domestics
and mainland Europe.
As a result, cash burn (on a fixed costs plus capex basis) during 2021 was £36 million per week on average, outperforming the guidance
for £40 million per week. Strong cash management also meant that operating cash generation was broadly flat in H2 with a £10 million
cash outflow versus £1,438 million in H1.
Group headline costs excluding fuel, balance sheet FX revaluations and ownership costs for the full year fell by 36% to £1,638 million
(2020: £2,561 million), mainly as a result of the reduced level of flying. Airline headline cost per seat excluding fuel, balance sheet FX
revaluations and ownership costs increased to £56.62 (2020: £45.74), driven by lower volumes, with fixed costs being spread over lower
flown capacity. easyJet’s cost reduction programme which was implemented in 2020 continues to achieve significant savings with the
Group also benefitting from the extension of furlough schemes in the UK and across Europe.
Group fuel costs of £371 million were £350 million lower than the 2020 financial year (2020: £721 million) primarily as a result of the
reduced flying. Airline fuel cost per seat of £13.16 (2020: £13.09) was in line with the prior year. There was an underlying decrease in the
market price of fuel by 3.7% which was offset by the comparative benefits of the carbon credits asset sales in 2020. When considering
easyJet’s fuel and US dollar hedging programme, the effective fuel price decreased by 4.1% to £469 per tonne (2020: £489 per tonne).
Group ownership costs increased by 4.1% to £585 million (2020: £562 million) predominantly driven by increased interest costs as a result
of higher levels of debt, partially offset by lower maintenance related depreciation as a result of the reduction in flying volumes.
A Group non-headline gain of £100 million (2020: £438 million loss) was recognised in the year. This consisted of a £65 million gain as a
result of the sale and leaseback of 35 aircraft and 2 engines during the year, a £61 million credit in relation to our restructuring
programme; offset by a £27 million net charge related to hedge discontinuation and ineffectiveness.
All per seat metrics are for the Airline business only as the inclusion of hotel-related revenue and costs from the holidays business
will distort the revenue per seat and cost per seat metrics as these are not directly correlated to the seats flown by the Airline
business. The segmental note within the consolidated financial statements shows the contribution of each operating segment
towards the Group’s performance. All seats flown relate directly to the Airline business and are therefore included in total for the
per seat metrics. The overall contribution of the holidays segment to the financial performance of the consolidated Group for the
year ended 30 September 2021 was not significant. As a result, presenting the Airline-only financial performance metrics below
does not materially distort the financial performance of the Group as a whole.
Amounts presented at constant currency are an alternative performance measure and not determined in accordance with
International Financial Reporting Standards but provide relevant and comparative reporting for users.
The Group total tax credit for the year was £178 million (2020: £194 million credit). The effective tax rate for the year was 17.2%
(2020: 15.3%).
Loss per share and dividends per share
Basic headline loss per share
Basic total loss per share
Diluted headline loss per share
2021
2020*
Change in
Pence per share
Pence per share
pence per share
(166.9)
(159.0)
(166.9)
(149.7)
(222.9)
(149.7)
(17.2)
63.9
(17.2)
During the year a rights issue, which gave rise to £1,197 million net proceeds, resulted in the prior year basic and diluted loss per share
needing to be restated.
Basic headline loss per share was 166.9 pence (2020: loss per share 149.7 pence) and basic total loss per share was 159.0 pence (2020:
loss per share 222.9 pence) driven by the losses for the year. Weighted average shares in issue in the 2021 financial year were 539 million
(diluted 544 million) (2020: 484 million, diluted 489 million, restated due to the rights issue from 407 million, diluted 412 million).
In line with easyJet’s dividend policy of a pay-out ratio of 50% of headline profit after tax, the Board did not recommend the payment
of a dividend in respect of the year ended 30 September 2021 (2020: £nil). No dividend payments have been made in the year (2020:
43.9 pence per share was paid for the 2019 dividend). The dividend policy will be reviewed by the Board during the 2022 financial year.
* Restated as a result of the 2021 rights issue.
Return on capital employed (ROCE)
Headline Return on capital employed
Total Return on capital employed
2021
(25.5%)
(22.4%)
2020
(19.9%)
(23.0%)
Headline ROCE for the year was (25.5)%, a decline of 5.6 percentage points on the prior year, driven by the increased loss for the year.
Total ROCE for the year was (22.4)%, in line with last year. The total ROCE improvement is mainly driven by the non-headline sale and
leaseback gain and restructuring credit impact on operating profit.
ROCE is calculated by taking operating loss, less tax at the prevailing UK corporation tax rate at the end of the financial year, divided by
average capital employed. Capital employed is shareholders’ equity less net debt.
www.easyJet.com
67
STRATEGIC REPORT FINANCIAL REVIEW (CONT INUE D)
Exchange rates
The proportion of revenue denominated in currencies other than Sterling remained broadly consistent year on year, although the
proportion of Sterling revenue has declined as a result of a faster recovery in demand across Europe. The proportion of US Dollar by
currency has changed significantly year on year as a result of the US Dollar exchange impact of sale and leaseback proceeds. Average
effective exchange rates include the impact of hedging:
Sterling
Euro
US dollar
Other (principally Swiss franc)
Average exchange rates
Euro – revenue
Euro – costs
US dollar
Swiss franc
2021
34%
52%
0%
14%
Revenue
2020
42%
47%
1%
10%
2021
42%
21%
32%
5%
2021
€1.14
€1.16
$1.16
CHF 1.21
Costs
2020
50%
31%
13%
6%
2020
€1.13
€1.15
$1.39
CHF 1.26
The Group’s foreign currency risk management policy aims to reduce the impact of fluctuations in exchange rates on future cash
flows; however, the timing of cash flows can be different to the timing of recognition within the income statement resulting in foreign
exchange movements.
As a result of the reduced flying programme the Group’s near term exposures for jet fuel and foreign currency were significantly reduced.
This caused a proportion of derivatives previously hedge accounted for to be discontinued from hedge relationships. The full fair value at
the time of discontinuation recorded in the income statement as a non-headline item and subsequent movements in fair value recorded
as headline items.
To minimise the effects of over-hedging going forward, easyJet temporarily reduced its operational hedging activity throughout the year.
Please see note 25 for further detail on hedging activities during the year.
Headline exchange rate impact
Favourable/(adverse)
Total revenue
Fuel
Headline costs excluding fuel
Prior year balance sheet revaluations
Headline total before tax
Non-headline exchange rate impact
Favourable/(adverse)
Non-headline costs
Non-headline total before tax
Euro
£ million
(7)
–
17
–
10
Euro
£ million
7
7
Swiss franc
£ million
(2)
–
4
3
5
Swiss franc
£ million
–
–
US dollar
£ million
–
1
8
2
11
US dollar
£ million
(19)
(19)
Other
£ million
(1)
–
(1)
–
(2)
Other
£ million
–
–
Total
£ million
(10)
1
28
5
24
Total
£ million
(12)
(12)
There was a £12 million favourable (2020: £9 million favourable) impact on total loss due to the year-on-year changes in exchange rates.
A £24 million favourable (2020: £29 million favourable) impact on headline profit was partially offset by a £12 million adverse (2020:
£20 million adverse) impact on the non-headline items.
Financial performance
Revenue
Passenger revenue
Ancillary revenue
Total revenue
Group
£ million
1,000
458
1,458
2021
Airline
£ per seat
35.48
15.06
50.54
Group
£ million
2,303
706
3,009
2020
Airline
£ per seat
41.78
12.57
54.35
The total number of passengers carried decreased by 57.6% to 20.4 million (2020: 48.1 million), driven by a reduction in seats flown of
48.8% to 28.2 million seats (2020: 55.1 million) as a result of lower levels of flying due to the ongoing impact of Covid-19 on travel
restrictions. Load factor decreased by 14.7 percentage points to 72.5% (2020: 87.2%).
During 2021 the airline industry has continued to be heavily disrupted by Covid-19, which has resulted in sustained softness in macro-level
demand as customers’ confidence and ability to travel have been impacted by fluctuating infection rates across the UK and Europe,
resulting in local and national lockdowns and frequent changes in travel restrictions and travel advice.
With an annualised impact of Covid-19, Group revenue for the full year decreased by 51.6% to £1,458 million (2020: £3,009 million), and
Airline revenue per seat for the year fell 7.0% to £50.54 (2020: £54.35), and by 6.4% at constant currency. It should be noted that during
the first half of the 2020 comparative financial year, easyJet delivered very strong underlying trading, with Covid-19 restrictions affecting
the second half.
68 easyJet plc Annual Report and Accounts 2021
As a result of reduced travel restrictions, revenue rose 94.4% to £1,218 million for the second half of the 2021 financial year compared to
the second half of last year (H2 2020: £627 million).
Our dynamic capacity management and contribution forecasting allowed us to adapt our schedule to maximise profitable flying and to
mitigate costs, with our flexible policies providing customers the reassurance to book. During the fourth quarter travel restrictions have
begun to stabilise and to ease, which has led to an improvement in new bookings towards the end of the quarter for 2022 departures.
During the year we launched our new cabin bag proposition as well as our Standard Plus fare, which have provided us the tools to
enhance our ancillary customer proposition and to deliver ancillary revenue per seat of £15.06, 19.9% higher than last year (2020: £12.57).
Headline costs excluding fuel
Airline headline cost per seat excluding fuel increased by 38.1% to £77.25 (2020: £55.94) and increased by 40.6% at constant currency.
Operating costs and income
Airports, ground handling and other operating costs
Crew
Navigation
Maintenance
Selling and marketing
Other costs
Other income
Ownership costs
Aircraft dry leasing
Depreciation
Amortisation
Net finance charges
Balance sheet foreign exchange gain
Headline costs excluding fuel
Group
£ million
2021
Airline
£ per seat
Group
£ million
2020
Airline
£ per seat
446
495
102
222
60
319
(6)
1,638
5
456
24
109
(9)
585
2,223
15.01
17.56
3.62
7.90
1.94
10.80
(0.21)
56.62
0.20
16.18
0.74
3.83
(0.32)
20.63
77.25
938
629
206
278
107
426
(23)
2,561
1
485
18
58
–
562
3,123
16.88
11.42
3.74
5.04
1.70
7.38
(0.42)
45.74
0.02
8.81
0.30
1.07
–
10.20
55.94
2020 Group Other costs and Other income have been restated to reflect the grossing up of the sale and leaseback gains and losses.
Operating costs and income
Group headline costs excluding fuel were £2,223 million (2020: £3,123 million), a decrease of 28.8% or £900 million on the prior year. The
holidays business contributed £54 million to headline costs in 2021 (2020: £45 million), mainly driven by marketing spend, headcount
costs and costs directly related to holidays provided in the year.
Airline headline cost per seat excluding fuel increased by 38.1% to £77.25 (2020: £55.94) and increased by 40.6% at constant currency.
Most of the headline cost per seat adverse variance was driven by the full year impact of significantly reduced flown capacity resulting in
fixed costs being spread over fewer flown seats. Partially offsetting this was the benefit of furlough support from the UK and European
governments and easyJet’s cost reduction programme which continues to achieve significant savings.
Group headline airports, ground handling and other operating costs decreased by 52.5% to £446 million. Airline cost per seat decreased
by 11.1% to £15.01, and by 8.5% at constant currency driven by reduced load factors compared to last year.
Group headline crew costs decreased by 21.4% to £495 million, with Airline cost per seat increasing by 53.8% to £17.56, and by 55.1% at
constant currency, partly driven by reduced job retention scheme support, but mainly reflecting significantly reduced productivity due to
lower flying levels.
Group headline navigation costs decreased by 50.4% to £102 million resulting from decreased sectors flown, with Airline cost per seat
decreasing by 3.0% to £3.62 and by 0.4% at constant currency due to network mix.
Group headline maintenance costs decreased by 19.9% to £222 million, with Airline cost per seat increasing by 56.6% to £7.90, and by
56.6% at constant currency, reflecting reduced capacity where fixed costs remain.
Group headline other costs decreased by 25.1% to £319 million, with Airline cost per seat increasing by 46.3% to £10.80, and by 46.9% at
constant currency. The significant driver in the increase in the cost per seat is a result of fixed costs being spread over lower flown
capacity. In addition to the capacity impact, there were a number of asset write-offs as a result of focus on spares and projects.
Ownership costs
Group depreciation costs have decreased 6.0% to £456 million (2020: £485 million) primarily due to both lower maintenance related
depreciation as a result of the reduction in flying volumes , an increased benefit arising from discounting the maintenance provision due
to changes in underlying interest rates, and the reduction in our fleet size, partially offset by a revision to our aircraft depreciation policy.
Group net finance charges have increased from £58 million in 2020 to £109 million in 2021, due to increased interest payable from
additional debt facilities and increased leased aircraft resulting in higher lease-related interest.
www.easyJet.com
69
STRATEGIC REPORT FINANCIAL REVIEW (CONT INUE D)
Fuel
Fuel
Group
£ million
371
2021
Airline
£ per seat
13.16
Group
£ million
721
2020
Airline
£ per seat
13.09
Group headline fuel costs of £371 million were £350 million lower than 2020. Airline fuel cost per seat of £13.16 was 0.5% higher than last
year, and by 0.7% at constant currency.
Group fuel costs of £371 million were £350 million lower than the 2020 financial year (2020: £721 million) primarily as a result of reduced
flying. Airline fuel cost per seat of £13.16 (2020 £13.09) was broadly in line with the prior year, despite a one off credit in last year of £55
million which came from the sale of EU ETS credits. There was an underlying decrease in the pre hedge cost of fuel by 3.7% driven by
lower fuel usage from reduced burn per block hour offset by increased market price. When taking into account easyJet’s fuel and US
dollar hedging programme, the effective fuel price decreased by 4.1% to $469 (2020: £489 per tonne).
The impact of the Sterling/US dollar exchange rate movement on fuel costs was £1 million favourable (2020: £14 million favourable).
easyJet continues to participate in the EU Emissions Trading System (EU ETS) and Swiss Emissions Trading System (CH ETS). As a result
of Brexit, easyJet has also participated in the UK Emissions Trading System (UK ETS) from January 2021. These systems require easyJet’s
carbon footprint to be offset by submitting carbon allowances to the relevant Environment Agencies. The charge of the ETS systems is
included within fuel costs.
The Group uses jet fuel derivatives to hedge against sudden and significant increases in jet fuel prices to mitigate volatility in the income
statement in the short term.
As a result of the reduced flying programme the Group’s near-term exposures for jet fuel and foreign currency were significantly
reduced. This caused a proportion of derivatives previously hedge accounted for, to be discontinued from hedge relationships. The full
fair value at the time of discontinuation was recorded in the income statement as a non-headline item and subsequent movements in fair
value recorded as headline.
To minimise the effects of over-hedging going forward, easyJet temporarily reduced its operational hedging activity throughout the year.
Non-headline items
Non-headline items are non-recurring items or items which are not considered to be reflective of the trading performance of the business.
Restructuring credit/(charge)
Sale and leaseback gain
Fair value adjustment
Impairment charge
Balance sheet foreign exchange loss
Non-headline items before tax
Group
£ million
61
65
(26)
–
–
100
2021
Airline
£ per seat
2.19
2.28
(0.94)
–
–
3.53
Group
£ million
(123)
38
(311)
(37)
(5)
(438)
2020
Airline
£ per seat
(2.22)
0.69
(5.69)
(0.68)
(0.08)
(7.98)
Group non-headline loss before tax items of £100 million credit comprise:
• a £61 million credit in relation to our restructuring programme. The credit primarily relates to the remeasurement of provisions following
constructive negotiations with our trade unions (2020: £123 million charge).
• a £65 million net gain as a result of the sale and leaseback of 35 aircraft and 2 engines in the year (2020: £38 million net gain as a result
of the sale and leaseback of 33 aircrafts).
• a fair value adjustment relating to a £26 million net charge related to discontinued hedges and ineffectiveness (2020: £311 million charge).
During the 2021 financial year foreign exchange gains or losses arising from the re-translation of monetary assets and liabilities held on
the balance sheet have been recognised as headline items and will no longer be reported as non-headline items. No reclassification has
been made to the prior year due to the immaterial value.
70 easyJet plc Annual Report and Accounts 2021
Summary net debt reconciliation
Operating loss
Depreciation and amortisation
Increase/(decrease) in unearned revenue
Other net working capital movement
Net capital expenditure
Net proceeds from sale and leaseback of aircraft
Repayment of capital element of leases
Increase in lease liabilities
Loss on disposal of intangibles, property, plant and equipment
Net tax received
Net decrease/(increase) in restricted cash
Other (including the effect of exchange rates)
Net proceeds from issue of ordinary share capital
Purchase of own shares for employee share schemes
Ordinary dividend paid
Decrease/(increase) in net debt
Net debt at the beginning of the year
Net debt at end of year
2021
£ million
2020
£ million
Change
£ million
(910)
480
232
(638)
(149)
836
(261)
(369)
(30)
1
5
(120)
1,144
(6)
–
215
(1,125)
(910)
(899)
503
(455)
263
(695)
702
(230)
(132)
(30)
13
(15)
(52)
409
(7)
(174)
(799)
(326)
(1,125)
(11)
(23)
687
(901)
546
134
(31)
(237)
–
(12)
20
(68)
735
1
174
1,014
(799)
215
Net debt as at 30 September 2021 was £910 million (2020: £1,125 million) and comprised cash and money market deposits of
£3,536 million (2020: £2,316 million), debt of £3,367 million (2020: £2,731 million) and lease liabilities of £1,079 million (2020: £710 million).
Debt increased by £636 million largely driven by two new sources of debt, partially offset by repayments in the year. A new five-year
term loan facility of $1.87 billion (circa £1.4 billion) was entered, underwritten by a syndicate of banks and supported by a partial
guarantee from UK Export Finance under their Export Development Guarantee scheme. easyJet drew down $1.05 billion of this in the
period. In addition, a €1.2 billion 7-year bond was issued in the period under the Euro Medium Term Note (EMTN) programme. During the
year repayments of £300 million from the Covid Corporate Financing Facility (CCFF), $500 million Revolving Credit Facility and circa
£400 million of term loans were made.
Unearned revenue increased by £232 million during 2021, reflecting increased forward flying bookings in the last quarter of the year and
pent up demand for travel, compared with a £455 million year on year decline in 2020 as a result of the pandemic.
The movement in Other net working capital of £638 million over 2021 relates to an increase in current intangible assets (mainly due to
increased ETS carbon allowances held), a reduction in provisions (mainly due to lower maintenance, restructuring and disruption
provisions), derivative financial instruments (driven by exchange rate movements and jet forward curve) and a decrease in trade and
other payables reflecting a reduction in revenue refund accruals and APD deferrals offset by increased levels of flying.
Net capital expenditure decreased by £546 million to aid cash preservation and as a result of no final delivery payments made for the
acquisition of aircraft in the year (2020: 14 aircraft). The number of aircraft in the fleet decreased from 342 as at 30 September 2020 to
308 as at 30 September 2021 (which excluded 12 aircraft held under power by the hour agreements).
Net proceeds of £836 million were received as a result of the sale and leaseback of 35 aircraft and 2 engines in the year (2020: £702
million from 33 aircraft).
Lease liabilities and capital repayments on lease liabilities have both increased during the year. This is driven by the increased sale and
leasebacks completed in the year of 35 aircraft and 2 engines (2020: 33 aircraft).
Corporate tax receipts in the year amounted to £1 million (2020: £13 million).
A rights issue in the year gave rise to £1,197 million of net proceeds, with £1,144 million of cash received in the year. As at 30 September
2021, there were £91 million of proceeds outstanding, which have been subsequently received. Costs of £38 million were incurred on the
rights issue and were still payable as at 30 September 2021. During the 2020 financial year an equity placing raised £409 million
proceeds net of associated costs.
www.easyJet.com
71
STRATEGIC REPORT FINANCIAL REVIEW (CONT INUE D)
Summary consolidated statement of financial position
Goodwill and other non-current intangible assets
Property, plant and equipment (excluding RoU assets)
Right of use (RoU) assets
Derivative financial instruments
Equity investments
Other assets (excluding cash and money market deposits)
Unearned revenue
Trade and other payables
Other liabilities (excluding debt)
Capital employed
Cash and money market deposits*
Debt (excluding lease liabilities)
Lease liabilities
Net debt
Net assets
* Excludes restricted cash
2021
£ million
582
3,639
1,096
203
30
619
(846)
(1,128)
(646)
3,549
3,536
(3,367)
(1,079)
(910)
2,639
2020
£ million
597
4,409
644
(327)
33
364
(614)
(1,242)
(840)
3,024
2,316
(2,731)
(710)
(1,125)
1,899
Change
£ million
(15)
(770)
452
530
(3)
255
(232)
114
194
525
1,220
(636)
(369)
215
740
Since 30 September 2020 net assets have increased by £740 million. This reflects the rights issue undertaken in the year, offset by the
loss for the year and increased debt.
Goodwill and other intangible assets have decreased by £15 million predominantly due to amortisation of computer software.
The net book value of property, plant and equipment excluding right of use assets, has decreased by £770 million due to the sale and
leaseback of 35 aircraft and 2 engines during the year.
At 30 September 2021, right of use assets amounted to £1,096 million (2020: £644 million) and lease liabilities amounted to £1,079 million
(2020: £710 million) which reflects additions during the year as a result of aircraft sale and leasebacks, as well as the impact of lease
payments and extensions.
There has been a £530 million movement on net derivative financial instruments with a closing net asset balance of £203 million (2020:
£327 million liability). This movement is largely due to mark-to-market gains on jet fuel contracts as well as many out-of-the-money jet
trades held at the end of the previous financial year having matured. This gain was partially offset by a loss on cross-currency interest
rate swaps.
The equity investment of £30 million (2020: £33 million) represents a 13.2% shareholding in a non-listed entity, The Airline Group Limited,
which has a shareholding of 41.9% in NATS Holdings Limited – the provider of UK air traffic control services for the UK. This investment is
held at fair value, with movements recognised in other comprehensive income.
Other assets have increased by £255 million, mainly driven by increased current intangible assets driven by an increased number of ETS
credits held, and increased trade and other debtors driven by amounts receivable from the rights issue.
Unearned revenue increased by £232 million reflecting increased forward flying bookings driven by pent up demand for travel.
Trade and other payables have decreased by £114 million reflecting a reduction in revenue refund accruals and APD deferrals offset by
increased levels of flying.
Other liabilities have decreased by £194 million, mainly driven by a reduced maintenance and restructuring provisions. Other liabilities also
include a £37 million post-employment benefit obligation in relation to a Swiss retirement benefit scheme (2020: £45 million).
Debt has increased by £636 million mainly as a result of two new debt facilities, a €1.2 billion bond issuance and $1.05 billion drawn
down from a $1.87 billion term loan facility with repayments of £300 million from the Covid Corporate Financing Facility (CCFF), the
$500 million Revolving Credit Facility and circa £400 million of term loans being made in the year.
As at 30 September 2021, the Group is unable to assess the likely outcome or quantum of the claims of the investigation by the ICO
(Information Commissioner’s Office), group action and other claims following the cyber-attack in May 2020 and no provision has been
recognised. (See note 1 under critical accounting judgements – contingency liability recognition).
72
easyJet plc Annual Report and Accounts 2021
Key statistics
Operating measures
Seats flown (millions)
Passengers (millions)
Load factor
Available seat kilometres (ASK) (millions)
Revenue passenger kilometres (RPK) (millions)
Average sector length (kilometres)
Sectors
Block hours (’000)
Number of aircraft owned/leased at end of year
Average number of aircraft owned/leased during year
Number of aircraft operated at end of year
Average number of aircraft operated during year
Number of routes operated at end of year
Number of airports served at end of year
Financial measures
Total return on capital employed
Headline return on capital employed
Airline total loss before tax per seat (£)
Airline headline loss before tax per seat (£)
Airline total loss before tax per ASK (pence)
Airline headline loss before tax per ASK (pence)
Revenue
Airline revenue per seat (£)
Airline revenue per seat at constant currency (£)
Airline revenue per ASK (pence)
Airline revenue per ASK at constant currency (pence)
Airline revenue per passenger (£)
Airline revenue per passenger at constant currency (£)
Costs
Per seat measures
Airline headline cost per seat (£)
Airline non-headline (income)/cost per seat (£)
Airline total cost per seat (£)
Airline headline cost per seat excluding fuel (£)
Airline headline cost per seat excluding fuel at constant currency (£)
Airline total cost per seat excluding fuel (£)
Airline total cost per seat excluding fuel at constant currency (£)
Per ASK measures
Airline headline cost per ASK (pence)
Airline non-headline cost per ASK (pence)
Airline total cost per ASK (pence)
Airline headline cost per ASK excluding fuel (pence)
Airline headline cost per ASK excluding fuel at constant currency (pence)
Airline total cost per ASK excluding fuel (pence)
Airline total cost per ASK excluding fuel at constant currency (pence)
2021
2020
28.2
20.4
72.5%
33,348
23,594
1,184
155,664
311
308
331
239
198
927
153
(22.4%)
(25.5%)
(36.33)
(39.87)
(3.11)
(3.41)
50.54
50.90
4.37
4.40
71.37
71.86
90.41
(3.53)
86.87
77.25
78.62
73.72
74.66
7.64
(0.30)
7.34
6.53
6.62
6.23
6.19
55.1
48.1
87.2%
62,380
58,914
1,132
311,477
613
342
337
157
237
981
154
(23.0%)
(19.9%)
(22.66)
(14.68)
(2.04)
(1.34)
54.35
54.35
4.82
4.82
62.61
62.61
69.03
7.98
77.01
55.94
55.94
63.92
63.92
6.16
0.70
6.86
5.01
5.01
5.71
5.71
Increase/
decrease
(48.9%)
(57.5%)
(14.7ppts)
(46.5%)
(60.0%)
4.6%
(50.0%)
(49.3%)
(9.9%)
(1.8%)
52.2%
(16.5%)
(5.5%)
(0.6%)
0.6ppt
(5.6ppt)
60.3%
171.6%
52.5%
154.5%
(7.0%)
(6.4%)
(9.4%)
(8.7%)
14.0%
14.8%
(31.0%)
144.2%
(12.8%)
(38.1%)
(40.5%)
(15.3%)
(16.8%)
(24.0%)
142.5%
(6.9%)
(30.4%)
(32.2%)
(9.1%)
(8.5%)
www.easyJet.com
73
STRATEGIC REPORT FINANCIAL REVIEW (CONT INUE D)
Going Concern and Viability Statement
Assessment of prospects
The Strategic Report on pages 2 to 95 sets out the activities of the Group and the factors likely to impact its future development,
performance and position. The Finance Review on pages 66 to 77 sets out the financial position of the Group, and Group cash flows,
liquidity position and borrowing activity. The notes to the accounts include the objectives, policies and procedures for managing capital,
financial risk management objectives, details of financial instruments and hedging activities, and exposure to credit risk and liquidity risk.
In accordance with the requirements of the 2018 UK Corporate Governance Code, the Directors have assessed the long term prospects
of the Group, taking into account its current position and a range of internal and external factors, including the principal risks. The
Directors have determined that a three-year period is an appropriate timeframe for this viability assessment. In concluding on a three-
year period, the Directors considered the reliability of forecast information, duration and the impact of Covid-19 and longer term
management incentives.
The assessment of the prospects of the Group includes the following factors:
• The strategic plan – which takes into consideration market conditions, future commitments, cash flow, expected impact of key risks,
funding requirements and maturity of existing financing facilities (see below)
At 30 September 2021
Eurobonds
Commercial Paper (Covid Corporate Financing Facility)
Revolving credit facility
Term loan facility
Maturity date
Available funds
(drawn and undrawn)
February 2023
October 2023
June 2025
March 2028
November 2021
September 2025 (*)
January 2026
€500m
€500m
€500m
€1,200m
£300m
$400m
$1,870m
The Commercial Paper (Covid Corporate Financing Facility) was repaid on 18 November 2021.
* Option to extend to September 2027 at lenders consent
• The fleet plan – the plan retains some flexibility to adjust the size of the fleet in response to opportunities or risks
• Strength of the balance sheet and unencumbered assets – this sustainable strength gives us access to capital markets
• Risk assessment – see detailed risk assessment on pages 78 to 95
Impact of Covid-19
The impact of the Covid-19 pandemic continues to have a wide impact across the travel industry. Restrictions on travel and quarantine
requirements continue to be imposed by governments across our markets. The speed of vaccine programmes, efficacy of vaccines,
along with differing governmental testing requirements continues to result in lower expected customer demand and load factors in the
short term when compared to historical levels of flying prior to the pandemic.
Since the start of the pandemic, the Group has successfully raised circa £7 billion of liquidity through a diverse range of funding sources.
Since the 30 September 2020 year end this includes raising $1.1 billion of sale and leaseback proceeds, securing a five year term loan
facility of $1.9 billion underwritten by a syndicate of banks and supported by a partial guarantee from UK Export Finance, issuing a seven
year bond of €1.2 billion, a rights issue raising £1.2 billion and securing a new revolving credit facility of $400 million. Term loans of £400
million, £300 million of the CCFF and the $500 million revolving credit facility were repaid and cancelled in the period. The bond issuance
was heavily oversubscribed which demonstrates external confidence in the easyJet business model and balance sheet.
Cash collateralisation triggers for key credit card acquirers have been renegotiated to reduce the risk of collateralisation.
The Directors have reviewed the financial forecasts and funding requirements with consideration given to the potential impact of severe
but plausible risks. easyJet has modelled a base case representing managements best estimation of how the business plans to increase
flying which assumes a phased increase to the schedule over the forecast period, returning to near 2019 financial year levels by the
second half of the 2022 financial year and full recovery by the second half of the 2023 financial year.
74
easyJet plc Annual Report and Accounts 2021
Stress testing
The corporate risk management framework facilitates the identification, analysis, and response to plausible risk, including emerging risks
as our business evolves, in an increasingly volatile environment. Through our corporate risk management process, a robust assessment of
the principal risks facing the organisation has been performed (see pages 78 to 95) and the controls and mitigations identified.
Due to the ongoing uncertainty created by the global Covid-19 pandemic, there remains a risk that the recovery from the pandemic
could affect our markets, leading to travel restrictions being imposed at short notice and reducing customer confidence in travel.
Accordingly, easyJet has considered the severe but plausible downside scenarios based on the potential impact of risk factors on the
Group’s future performance and liquidity, including combinations of government lockdowns and international travel bans, leading to a
prolonged recovery period, reduction in revenue yield, lower load factors, cash collateralisation of unearned revenue by card acquirers,
and a reduction to anticipated forward bookings.
Both individually and combined these potential risks are unlikely to require significant additional management actions to support the
business to remain viable, however there could be actions that management would deem necessary to reduce the impact of the risks.
The stress testing scenarios identified in the table below show that there is sufficient liquidity assuming the refinancing of the existing
bonds.
Going concern statement
In adopting the going concern basis for preparing these financial statements, the Directors have considered easyJet’s business activities,
together with factors likely to affect its future development and performance, as well as easyJet’s principal risks and uncertainties.
After taking into account the net proceeds of the rights issue, the new revolving credit facility and the other sources of funding
described above, easyJet has unrestricted access to £4.4 billion of liquidity and has retained ownership of 59% of the total fleet with
44% being unencumbered. This presents an improved liquidity position of £2.1 billion since 30 September 2020 year end.
In modelling the impact of severe but plausible downside risks, the Directors have considered travel restrictions including government
lockdowns and international travel bans, leading to a prolonged recovery period, reduction in revenue yield, lower load factors, cash
collaterisation of unearned revenue by card acquirers, and a reduction to anticipated forward bookings.
After reviewing the current liquidity position, financial forecasts, stress testing of potential risks and considering the uncertainties
described above and the committed funding facilities, the Directors believe it appropriate to continue to adopt the going concern basis
of accounting in preparing the Group financial statements without the inclusion of material uncertainty which has been removed since
the interim financial statements as at 31 March 2021 and the full year financial statements as at 30 September 2020.
www.easyJet.com
75
STRATEGIC REPORT FINANCIAL REVIEW (CONT INUE D)
Viability Statement
Based on the assessment performed, the Directors have a reasonable expectation that the Company and the Group will be able to
continue in operation and meet all liabilities as they fall due up to September 2024. In making this statement, the Directors have made
the following key assumptions:
1. easyJet has access to a variety of funding options including capital markets, aircraft financing and bank or government debt. The
downside stress testing demonstrates that the current funding with refinancing of the existing bonds would be sufficient to retain
liquidity.
2. In assessing viability, it is assumed that the detailed risk management process as outlined on pages 78 to 95 captures all plausible
risks, and that the mitigating actions are implemented on a timely basis and have the intended impact.
3. The impact of Covid-19 is not more prolonged or significant than the severe but plausible downside stress testing performed. More
severe scenarios, either through multiple risks occurring concurrently or risks which are not able to be mitigated by management
actions to the extent expected, do not occur.
4. There will not be another prolonged grounding of a substantial portion of the fleet.
The key risks that are most likely to have a significant impact of easyJet’s viability are shown below along with how the risk has been
considered in the stress testing and what actions are in place to mitigate against the identified risk. The principal risks have continued to
be assessed for any changes in the risk environment.
Risk theme
Asset efficiency
and
effectiveness
Impact on viability
1. Unavailability of slots or
partial fleet
2. Single aircraft type
operation
Risks considered and stress testing performed
• Schedule reductions/cancellations or
partial grounding leading to reduction
in revenue of 10% (1,2)
Management action and Board considerations
• Robust effective cross functional
governance structures (1)
• Work closely with Airbus to retain some
• Loss of market share due to increased
flexibility in fleet planning (2)
to customer demand (5)
stakeholders (3,4)
• Sustainability strategy and governance
structure implemented (3,4,5,6)
• Emission reduction or offset
programmes (3,4,5)
• Work with relevant industry bodies and
• More fuel efficient A320 and A321 neos
(3,4,5,6)
• Regular engagement with easyGroup
holdings and proactive management of
brand-related issues (7)
• Compliance framework in place
including mandatory training (8)
• Strategic planning to ensure flying
schedules are responsive to demand
and contribution positive (9)
• Consideration of various sensitivities
and stress testing to the forecast
presented to the Board on an on-going
basis (9,10,11)
• Review funding requirements and
opportunities in scenarios considered
(10)
• Finance Committee regular monitoring
of hedging policies to reduce exposure
to market price exposures for fuel and
foreign exchange (11)
Environment
and
sustainability
Legislative/
regulatory
landscape
competitor capacity (1)
• Significant increase in costs (1)
• Closure of existing ETS scheme
leading to increased cost (4)
• Increased cost of carbon offsetting
and introduction of eco-taxes (3,4,6)
• Reduction in revenue of up 10% due
3. Future environmental
legislation
4. Changes to carbon trading
scheme
5. Reputational damage
6. Increased taxation
7. Brand licence impact
8. Failure to comply with
• Loss of brand licence (7)
• Sustained adverse media coverage
requirements
leading to reduction in revenue of up
to 10% (7,8)
• Significant spike in costs
operationally (8)
• Material legal and settlement
costs (8)
Macro-economic
and geopolitical
9. Supply/demand imbalance
including slower recovery
from Covid-19
• Slower return to previous flying levels
and low levels for the next financial
year. Impact of management
initiatives (9)
• Modelling excluding uncommitted
10. Refinancing risk and access
to alternative financing
when required
funding (10)
11. Market price risk: increase
in fuel price, foreign
exchange rates, carbon
prices and inflation rates
• Fuel sensitivities to $800/MT, adverse
foreign exchange rate movement by
5% and fluctuating carbon prices.
Cost inflation estimates increased up
to 3% (11)
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easyJet plc Annual Report and Accounts 2021
Risk theme
People
Impact on viability
12. Industrial action
13. Talent recruitment and
retention within the Group
Risks considered
• Operation disruption and increase of
costs (12,13)
• Sustained inability to deliver strategic
initiatives leading to a reduction in
revenue (12,13)
• Reduction in revenue of up to
10% (12)
Safety, security,
and operations
14. Major flight safety, security
incident or health and
safety incident
15. Supply chain challenges
• Operational disruption and increase of
costs (14)
• Significant media coverage and
reduction in future revenue of up to
10% (14)
Technology and
cyber
16. Failure of critical
technologies
17. Data breach and
Ransomware
• Fines/regulatory sanctions (14)
• Inefficient use of aircraft/crew
leading to increased costs (15)
• Material legal and settlement
costs (17)
• Immediate loss of website and
reduction in revenue of up
to 10% (16,17)
Management action and Board considerations
• Positive and on-going relationship
with trade unions and employee
workforce (12)
• Regular employee surveys and action
groups to focus on well-being, talent
and retention (13)
• Creation of Retention programme (13)
• Hybrid working (13)
• easyJet Safety Board meet monthly.
Functional Safety Action Groups in
place across the business (14)
• Hull and Liability insurance in place (14,
15)
• A safety policy is published (14)
• Regular Board updates on Cyber
Security (17)
• Dedicated Information Security
team (17)
• Ongoing monitoring of critical
technologies and interdependencies
(16)
• IT governance structure (16,17)
• IT major incident management
team (16,17)
• Cross functional committee to address
customers legal and regulatory
concerns (17)
www.easyJet.com
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STRATEGIC REPORT RI SK
Risk management
Our corporate risk management
framework
The Board approves the strategy for
easyJet, including strategic initiatives
and objectives, and ensures suitable
oversight and governance through
several management methods, including
monitoring and reporting, strategic reviews,
oversight committees and deep dives into
specific risk areas.
The Board is ultimately responsible for
determining the nature and extent of the
principal risks it is willing to take to achieve
its strategic objectives, its risk appetite, and
maintaining the Group’s systems of internal
control and risk management.
The Audit Committee, on behalf of the
Board, is accountable for reviewing and
assessing the risk management processes.
The Risk and Assurance team, which
reports jointly to the Chair of the Audit
Committee and CFO, ensures that robust
processes are in place for identifying and
assessing the Company’s emerging and
principal risks.
The Risk and Assurance team is responsible
for creating, implementing, and delivering
the corporate risk framework and reporting
the principal and emerging risks to the
Board. The team maintains a programme
of risk monitoring with each function to
ensure that risks are managed within the
framework and to promote cross-functional
management of risks. A key element of the
corporate risk framework is ensuring that
new risks and lessons learned from across
the business are fed back into the risk
management process and are shared
across all functions. During 2021,
supplementary financial modelling and
analysis was performed by the Judge
Business School at Cambridge University to
model the corporately reported risks for a
variety of interlinked scenarios. This analysis
supported further deep dives into risk areas
across the business, for example the
impacts of climate change.
Each function across easyJet is responsible
for understanding and managing its risks,
whether they are categorised as principal,
functional or emerging. Functions manage
the risks arising from their functional plans,
which incorporate easyJet’s strategic
initiatives. This includes identifying and
assessing the controls and competencies in
place to manage or mitigate risks.
Ongoing development of the corporate risk
management framework is a constant at
easyJet, identifying risk management best
practice across the Group and ensuring a
unified and collaborative risk management
approach. The Risk and Assurance team
identify topics and relevant lessons learned
from across industry, both within the
aviation sector and beyond. These lessons
are used to identify emerging risks and
further enhance the easyJet corporate risk
framework. These lessons are fed into the
functional risk plans through continual
dialogue with functional risk contacts.
easyJet continues to use the bow-tie
methodology to identify the cause, effect,
and risk management control of each
principal risk. The information collated using
the bow-tie methodology is used to set a
framework of assurance activity. The Risk
and Assurance team will work with relevant
functions to ensure that risk information
remains relevant and control deficiencies or
gaps are identified, and development
actions are implemented.
Risk transfer opportunities are developing.
The Risk and Assurance team is tasked
with identifying risks that could be
beneficial to transfer from easyJet’s
balance sheet to another party e.g. an
insurer. This involves analysis of the risk and
associated risk management controls and
capabilities, to identify attractive solutions
to jointly manage or transfer risks with the
benefit of increased intelligence from
third-party risk partners. This ranges from
risk analysis and solution development to
additional risk management expertise.
Emerging risks
Identification of emerging risks is a
responsibility of both the Risk and
Assurance team as well as each function
within easyJet, leveraging risk and subject
matter experts across the Group. If an
emerging risk is identified by the Risk and
Assurance team it is raised with the
relevant function. An example of this in
practice is the risks arising from climate
change. The Risk and Assurance team
worked in partnership with our
Sustainability team to identify, analyse,
quantify and evaluate the climate change
risks that easyJet is facing. This was
supported with further analysis from Judge
Business School at Cambridge University.
Further detail is found below.
78
easyJet plc Annual Report and Accounts 2021
Our risk profile
The Board has responsibility to ensure that
risks are identified and mitigated where
possible. Whilst easyJet can monitor risks
and prepare for adverse scenarios, the
ability to affect the core drivers of many
risks is not within the Group’s control (for
example adverse weather, pandemics, acts
of terrorism, changes in government
regulation and macro-economic issues).
The principal risks and uncertainties faced
by the Group include the following types
of risks:
• Safety, security, and operations – the
delivery of a safe and secure operation
which meets the needs and expectations
of our customers, including the impacts
of epidemics and pandemics.
• Technology and cyber – the availability,
security, compliance and performance
of website and critical technologies, and
the protection of Company and
customer data.
• Environment and sustainability – the
impacts of climate change on our
business and operations, carbon credit
programmes and regulation/ taxation.
• Asset efficiency and effectiveness
– making the best use of capacity/ slots
and fleet mix in the right airports at the
right prices, and driving value through
our supply chain.
• Legislative/ regulatory landscape
– being aware of, and compliant with,
legislation and regulation affecting
our business.
• Macro-economic and geopolitical
– events that can affect our financial
performance including supply/ demand
imbalance, general economic trends and
the impact of fuel cost, foreign exchange
rates, and counterparty performance.
• People – having the right people
through talent acquisition, retention,
engagement, and succession planning.
As with all businesses, our principal risks
and uncertainties are continually evolving.
Climate change: Physical and transition risks
Climate change presents significant
financial impacts to easyJet from both
physical and transition risks. In the next five
years, in light of the challenge of
coordinating global climate action, modest
political, economic, and social changes will
drive financial impact. More significant
action to stimulate a low-carbon transition
will accelerate the rate of transition and
increase the magnitude of impacts to
the business.
easyJet currently has the following risk
management controls and capabilities to
limit the impacts of climate change:
• Inclusion of Airbus neo aircraft into the
fleet which are 15% more fuel efficient
per seat than the standard variant;
• Offsetting of the carbon emissions,
funded by easyJet, from the fuel used on
every plane flown. For package holidays
provided by easyJet holidays, we have
extended the offsetting to cover the
carbon emissions from the fuel used for
transfers, and from the energy for hotel
stays;
• A range of fuel and carbon saving
initiatives, for instance operating flights
at high load factors, flying point-to-point
and using only one engine when taxiing
on the ground; and
• Disruption management measures
include advanced winter planning,
standby crews and aircraft, as well as the
continual review of flight plans to ensure
the optimal routings.
To limit the impact of our carbon
emissions, easyJet has already taken
several steps:
Compliance with regulatory
requirements/standards: Our participation
in the EU, UK and Swiss Emissions Trading
System (ETS) drives us to focus on
continuing to be as efficient as we can; i.e.
by investing in transitioning our fleet to
more modern, fuel efficient aircraft; using
technological developments and flying
techniques to operate them in ways which
avoid unnecessary use of fuel and
therefore carbon emissions.
A focus on energy efficiency: easyJet
operates from sites across Europe including
a large office and engineering operational
presence in Luton in the UK and Berlin in
Germany. Living up to ‘Our Promise’ to be
Safe and Responsible informs how we
operate day-to-day and that includes our
ground-based operations. We have
initiatives in place focused on deploying the
latest energy-efficiency technologies and
procedures to reduce our ground-based
emissions. For more information, refer to
page 49.
Stimulating low-carbon product R&D:
easyJet supports the development of
innovative aviation technologies, working
with industry partners to reinvent aviation
over the long term to achieve net zero
carbon emissions. easyJet has a
partnership with Airbus to jointly research
the opportunities and challenges of
introducing planes powered by hydrogen-
combustion, hydrogen-electric, or a hybrid
of both for short-haul flying in Europe by
the mid-late 2030s. Furthermore, easyJet
has been supporting Wright Electric over
the last five years, which is aiming to
produce a zero carbon emissions
commercial aircraft which could be used
for short-haul flights. easyJet also engages
with policymakers and lawmakers to help
ensure the regulatory environment
supports the adoption of zero emissions
aircraft in commercial aviation.
Compensating for our emissions: As
announced in November 2019, we were the
world’s first major airline to offset the
carbon emissions from the fuel used for all
flights. We are doing this by offsetting the
carbon emissions from the fuel used for all
our flights, our ground-based operations
and package holidays, through schemes
certified by the highest verification
standards. Since then, we have gone
further, offsetting our organisational carbon
emissions (Scope 1 & 2) and, for package
holidays, offsetting the carbon emissions
from the fuel used for transfers, and from
the energy for hotel stays.
Only programmes which meet either the
Gold Standard or Verified Carbon Standard
(VCS) certifications are supported,
including projects that protect against
deforestation and renewable energy
projects. Certifiers ensure reductions
claimed by individual programmes would
not have happened without that project
and that reducing carbon emissions in one
place does not inadvertently increase
emissions elsewhere.
We know that offsetting is an interim
solution and so we also continue to strive
to reduce our carbon emissions and
support the development of new
technologies. Therefore, during 2021,
easyJet worked in partnership with the
Cambridge Centre for Risk Studies (CCRS)
to conduct a detailed assessment to
identify the physical and transitional climate
change risks it is facing. Our climate
change risks were quantified using a 5-year
Enterprise Value at Risk (5yrEV@Risk)
metric which shows how the risks would
impact discounted cash flows over five
years within a given confidence interval,
e.g. 95%. The quantification and supporting
research and analysis will further assist in
the allocation of resource and capital to
manage these risks.
In the near-term horizon, the potential
range of impacts is driven mainly by
transition risk. In the next five years,
transition risk is likely to evolve rapidly with
developments in regulation, energy supply/
demand, legal process, etc. There is
significant variation in transition risk across
emission pathways, with the most
ambitious mitigation strategies resulting in
the greatest risk.
There are several transition risks that are
prominent, as easyJet develops its business
and operations in a changing landscape.
They include:
• Changes in Consumer Sentiment
• Legislation and Policy Changes
• Technology Developments
(incl. SAFs and aircraft innovation)
• Investor Sentiment and the increase of
the ESG Agenda
• Consumer and/ or Regulator Liability
Claims
The five transition risks above were
identified through easyJet’s corporate risk
management framework, in addition to the
physical disruption arising from climate
change (physical risk). The physical risks
were reviewed and incorporated into
current principal risks, specifically
Significant Operational Disruption and
Pandemic.
Plans are in place to review each transition
risk in conjunction with the current climate
change risks detailed below in the principal
risks. The action is to determine individual
strategies and assign risk ownership
through the corporate risk management
framework. In similar fashion to the current
physical climate change risks, ownership of
these risks and their risk management
controls and capabilities sits across the
Group and ultimately with the Airline
Management Board.
An update on easyJet’s climate change
transition risks will be provided at the 2022
Financial Half Year Trading Update.
www.easyJet.com
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STRATEGIC REPORT RI SK (CONTINUED)
SAFETY, SECURITY AND OPERATIONS
easyJet’s number one priority is the safety and security of its customers, colleagues, and contractors. The delivery of a safe and secure
operation which meets the needs and expectations of our customers is critical to our business.
Risk
Significant Safety or
Security Event
• The Safety Committee
(a committee of the
easyJet plc Board)
provides oversight of the
management of easyJet’s
safety processes and
systems.
• The easyJet Safety Board,
chaired by the CEO and
including the Chief
Operating Officer (deputy-
Chair) and AOC
Accountable Managers, is
responsible for directing
overall safety and security
policy and governance.
The Safety Board meets
every month to review
safety performance and
any emerging security
issues.
Risk Owner
• Chief Operating Officer
Commentary and areas of focus
• easyJet’s number one priority is the safety and security of its customers, people, and contractors.
• Inactivity and managing the safety risks arising from it have been a focus during the recovery
phase of the pandemic. Emphasis has been placed on identifying training needs amongst our
people and third-party contractors.
• Enhancements have been made to operations and base risk management processes to improve
reporting capabilities and feedback.
• This risk remains unchanged.
Potential causes
• Flight safety incident
• Health and safety incident
• Major security threat
Potential consequences
• Significant injury/ loss of life
• Sustained adverse media coverage
• Reduction in future revenue
• Fines/ regulatory sanctions
• Operational disruption
• Significant spike in costs
• Share price movement
Controls and mitigations to prevent or reduce the impact of the risks
• Functional Safety Action Groups from across the airline are chaired by the appropriate senior
manager and are responsible for the identification, evaluation, and control of safety-related risks.
• The easyJet Safety Board meets quarterly to review safety, security and compliance performance
across all Air Operator Certificates (AOCs). Chaired by the CEO and attended by the three AOC
accountable managers.
• Safety Review Boards are held monthly by each AOC, chaired by the AOC accountable manager
and are often attended by the local regulator.
• A Safety Policy is published that promotes the incident reporting process and supports this safety
culture.
• easyJet operates a Safety Management System that includes leading software systems to:
• report incidents and identify events;
• identify hazards and threats and take appropriate risk-mitigating actions;
• collect and analyse safety data (enabling potential areas of risk to be projected); and
• enable learning from easyJet and industry events/incidents to be captured and embedded into
future risk mitigations.
• Timely, credible, and reliable information upon which to base operational decisions.
• easyJet has a Crisis Management framework that provides emergency response and crisis
management capabilities, supported by trained personnel and regular exercises.
• Hull (all risks) and liabilities insurance (including spares) is held.
• Security cleared specialists continually review geopolitical developments across the easyJet
network in particular those countries deemed to be higher risk and report back to the Board any
areas of concern.
• easyJet maintains an inspection regime of all our airports to ensure the security elements are
being effectively managed.
• easyJet continually reviews and develops its safety management processes.
80 easyJet plc Annual Report and Accounts 2021
Risk
Significant Operational
Disruption
• Non-cancellation
disruption events reduced
significantly in 2021 due to
reduced air traffic control
and airport congestion.
Risk Owner
• Chief Operating Officer
Commentary and areas of focus
• Pandemic related reduced traffic demand resulted in the European air traffic control system
seeing significant reduction in Air Traffic Management delays.
• Climate change related weather disruption is increasing but managed in part through a
partnership with the Met Office, which supports with weather prediction.
• Significant work has been undertaken to improve easyJet’s preparedness, including a move to
exception management and improved decision-making tools.
• Phase 1 of a Self-Service Disruption Management tool was launched in summer 2021 that provides
greater control to customers in the event of disruption.
• Increased use of the Crisis Policy due to the pandemic has resulted in improvements and greater
understanding. The result is easyJet is better prepared to deal with significant disruption events
should they occur, which will limit the financial and customer impact.
• easyJet continues to face disruption challenges but the pre- and post-event preparedness has
positioned the operation well and reduced this risk.
Potential causes
• Adverse weather
• Physical impacts of climate change
• Industrial action
• Technology failure
• Destructive cyber-attack (i.e. ransomware)
• Supplier failure
• Infrastructure failure
• Airspace/ airport restrictions/ closure
• Increasing passenger disruption due to Covid-19
Potential consequences
• Customer dissatisfaction
• Compensation and welfare payable to customers
• Inefficient use of crew/aircraft
• Adverse media coverage
• Share price movement
Controls and mitigations to prevent or reduce the impact of the risks
• Maintaining operational resilience through:
• appropriate resilience into the flying schedule;
• aircraft and crew standby;
• reporting on the day of operations, including customer communication;
• airport performance and strategic supply chain;
• air traffic control system lobbying and flight planning enhancements; and
• the use of data across the operation to predict and manage events and aid decision support.
• Liquidity buffer to better manage the impact of downturns in business or temporary curtailment
of activities.
• Business interruption insurance which provides some cover for very significant shock events such
as extreme weather, air traffic management issues and loss of access to key airports. The policy
would allow us to claim in the event of a very substantial number of cancellations. This is included
within our definition of liquidity.
• Significant focus on risk mitigation of and preparedness for a destructive cyber-attack, including
running a cyber crisis exercise for senior Crisis Team and AMB.
www.easyJet.com
81
STRATEGIC REPORT RI SK (CONTINUED)
SAFETY, SECURITY AND OPERATIONS (continued)
Risk
Pandemic
• The risk associated with a
pandemic is among the
most significant in terms
of severity. Covid-19
represents a paradigm
shift in both severity and
likelihood.
• Countries’ legislation
affects airlines’ business
with decisions to reopen
borders without
restrictions.
• Vaccine availability,
efficacy and people’s
perception of risk are all
factors that must be
considered.
• The presence of virus
variants is an example of
high predictive volatility.
Risk Owner
• Chief Financial Officer
Commentary and areas of focus
• Prior to the Covid-19 pandemic, at least four infectious diseases occurred in recent years: SARS,
Avian Flu, H1N1, and Ebola. The most significant differences between these epidemics and
Covid-19 are they were short-lived, local, epidemiologically less severe, and with a much lower
transmission index.
• Previous epidemics did not result in severe restrictions (lockdowns or route closures) and so
Covid-19 has created a new benchmark in responding to epidemics and pandemics.
• easyJet responded quickly and decisively on customer, people and third-party contract health
and financial perspective.
• easyJet follows guidance from WHO and the International Civil Aviation Organisation (ICAO),
which provides standards and recommended practices for civil aviation authorities and national
governments, as well as the European Aviation Safety Agency, the European Centre for Disease
Prevention and Control and country specific health authorities such as Public Health England.
• We developed a Pandemic Playbook, that ensured a collaborative response and management of
operational, financial, business continuity and recovery factors.
• Financial resilience was maintained through the raising of circa £7 billion of liquidity from a diverse
range of sources, including a 5x oversubscribed Euro Bond at competitive pricing and a sale and
lease back programme.
• Through the Covid-19 pandemic, we became adept at responding to rapidly changing market
conditions and now have industry-leading agility to add new capacity and pivoting our schedule
to capitalise on shifts in demand in future epidemic and pandemic events.
The likelihood of another epidemic and pandemic event occurring has increased but, through the
actions we have taken to manage the impacts of Covid-19 and increase preparedness, easyJet is
better prepared for future events.
Potential causes
• Global travel and physical connectivity
• Urbanisation
• Climate change
• Increased human/animal contact
• Health worker shortages
Potential consequences
• Suppressed customer demand
• Sustained adverse media coverage
• Reduction in future revenue
• Increased regulatory requirements and scrutiny
• Operational disruption
• Significant spike in costs
• Share price movement
Controls and mitigations to prevent or reduce the impact of the risks
• A Biosecurity Standards Group is in place and includes safety and security experts including
our company doctor and representatives from across the airline. The Group is responsible for
developing and maintaining our single set of easyJet biosecurity standards, which set out the
requirements to ensure a safe and healthy environment for our people, customers, and contractors.
Standards are translated into our Standard Operating Procedures (SOPs) and Communications.
• The Pandemic Playbook, which acts in partnership with our Incident & Crisis Management Playbook
and Communicable Disease Action Group, led by the Head of Safety and with representation
from key functions, is responsible for detection, assessment, and treatment of pandemic and
epidemic events. Treatment includes appropriate escalation.
• A Communicable Disease Policy, that promotes the incident reporting process, supports this
safety culture.
• Governance structure including a Steering Committee (SteerCo) involving the Chief Financial
Officer, Chief Operating Officer, Chief Commercial Officer and Director of Strategy, to manage
pandemic and epidemic events. The SteerCo is responsible for strategic oversight and
communication with the Board. It maintains focus on long-term recovery.
• Maintaining balance sheet strength.
• Dynamic planning and capacity management process to manage supply and demand
fluctuations.
82 easyJet plc Annual Report and Accounts 2021
TECHNOLOGY AND CYBER
The nature of these risks, easyJet’s reliance on technology (particularly online devices) and the ever-increasing sophistication of serious
organised crime groups, terrorists, nation states and even lone parties means that, despite all the mitigation detailed, easyJet will
inevitably retain an element of vulnerability regarding the availability, confidentiality and integrity of its information and data.
Risk
Cyber Attack
• The aviation sector is
facing into an increasingly
sophisticated and
persistent cyber threat
and easyJet is continually
defending its operation
against disruption from
attackers. The risk from a
human operated
ransomware attack and/
or data breach has
increased exponentially.
Ransomware is a type of
malware that holds
computers or files to
ransom. To regain access,
the victim is required to
pay a large fee. Double
exploitation (where
ransomware is coupled
with a data breach) is a
growing threat. Prevention
of ransomware is a
strategic priority for
easyJet.
Commentary and areas of focus
• easyJet is continually defending its operation against disruption from sophisticated attackers. The
risk from a human operated ransomware attack and/ or double exploitation ransomware has
increased exponentially.
• Given easyJet’s position we remain an attractive target. This results in us needing to continually
mature and enhance our controls, intelligence gathering and protection methods and testing our
defences regularly using industry experts. To help our people keep pace with the rapidly changing
threats we face we regularly educate and raise awareness of cyber threats across our community.
• The external risk environment continues to increase, however easyJet continues to invest in, and
test, our cyber defences:
• attacks were well defended – known aviation attacking group attempts were blocked;
• we continue to educate and raise awareness of cyber threats across our community.
• We operate a risk-based improvement process leveraging the NIST framework as our aligned
industry standard.
• We continuously invest in Digital Safety through our Digital Safety Programme, whereby we
evolve with the threat landscape.
Potential causes
• Cyber attack
• Data breach
• Third-party incident
• User error
• Misconfigured systems
• A data breach involves the
unauthorised access to
customer or employee
data. Protecting that data
and its privacy remains a
priority for easyJet.
Risk Owner
• General Counsel and
Company Secretary
Potential consequences
• Sustained adverse media coverage
• Fines/regulatory sanctions
• Third-party liability/class actions
• Reduction in future revenue
• Operational disruption
• Significant spike in costs
• Share price movement
• Loss of colleague/customer trust
Controls and mitigations to prevent or reduce the impact of the risks
• A data and cyber risk governance structure exists to regularly review the data and cyber risk
landscape and determine required action to take place to manage risk effectively.
• Dedicated Digital Safety team who provide assurance over third parties, proactively monitor
threats, and respond to incidents.
• Employee education and awareness programme including a network of champions, online
training, and awareness campaigns.
• External threat intelligence monitoring.
• Security logging and monitoring.
• Vulnerability scanning and penetration testing.
• Digital Safety programme to ensure compliance and ensure data control and protection.
• Credit card data is protected through PCI DSS compliance as a Level 1 Merchant.
This is revalidated annually by an external body, to which we (and they) attest.
• Digital Safety is discussed monthly at our AMB and quarterly at our plc Board. Additionally, as part
of our governance processes, the Digital Safety Board meets quarterly to discuss matters related
to our Cyber security.
www.easyJet.com
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STRATEGIC REPORT RI SK (CONTINUED)
TECHNOLOGY AND CYBER (continued)
Risk
Failure of Critical
Technology
• easyJet relies on several
critical technologies that
are key to the delivery of
essential business
processes.
Risk Owner
• Chief Information and
Data Officer
Commentary and areas of focus
• Critical technologies include, but are not limited to, operational, commercial, and financial systems.
A critical technology failure includes any technical failure which is sufficient to interrupt critical
business operations (which may include one or more systems).
• System unavailability or a failure can also lead to loss or corruption of data.
• easyJet seized the opportunity during the period of reduced flying resulting from the Covid-19
pandemic to improve the IT environment e.g. airport network refresh and a data centre upgrade.
• The external environment does present an increase in risk; however, this has been managed
through improvements to the IT environment.
Potential causes
• Destructive cyber-attack (i.e. ransomware)
• Hardware failure
• Aged infrastructure
• Data centre outage
• Third-party outage
• Technological dependency failure
• IT change
Potential consequences
• Sustained adverse media coverage
• Reduction in future revenue
• Fines/regulatory sanctions
• Operational disruption
• Significant spike in costs
• Share price movement
Controls and mitigations to prevent or reduce the impact of the risk
• Monitoring and alerting of availability of critical technologies and their inter-dependencies.
• Security logging and monitoring.
• Vulnerability scanning and penetration testing.
• Non-damage business interruption insurance in place to limit financial impact of operational
disruption.
• IT Change Management Process embedded to assess risk of all changes to technology including
changes made by third-party providers.
• Critical technologies are cloud hosted, hosted across two data centres or at third-party provider
locations with necessary failover protocols and security perimeters in place.
• IT Major Incident Management team is in place to respond rapidly to any unforeseen critical
technology incidents including those of a security nature.
• IT Supplier Relationship Management process to ensure that third-party services and associated
risks are regularly reviewed and assessed.
• easyJet is progressing the delivery of a hosting and network programme that will further improve
the resiliency of core infrastructure and cloud connectivity capabilities.
• IT and Digital Safety Policies and Standards that set out the technical and organisational measures
for keeping our data and systems safe, as well as management of our IT assets.
• As an Operator of Essential Services under the Network and Information Systems regulation in the
UK, we have to comply with the requirements laid out in the Cyber Assessment Framework for
Aviation which focuses on critical systems availability.
84 easyJet plc Annual Report and Accounts 2021
ENVIRONMENT AND SUSTAINABILITY
The environment and sustainability risks include the impacts of climate change on our business and operations, carbon credit
programmes, regulation/taxation, and changing consumer and colleague expectations. easyJet’s promise is to be a safe and
responsible airline. This is what guides our approach to sustainability, whether that be related to climate change, health and safety,
diversity, or employee engagement. An update on easyJet’s climate change transition risks will be provided at the 2022 Financial
Half Year Trading Update.
Risk
Carbon Trading
Schemes
• Adverse changes to
carbon trading schemes,
including the existence
and/or cost of the
scheme.
Risk Owner
• Chief Financial Officer
Commentary and areas of focus
• Changes to carbon trading schemes, including the existence and/or cost of the scheme, have the
potential to create financial consequences by changes to existing cap and trade schemes (e.g.
EU ETS) i.e. the reduction of free allocations, would translate into an increase in the cost of
compliance for our business.
• easyJet continues to develop its climate change agenda and has taken industry leading positions
with both its carbon offsetting programme and use of the New Engine Option (neo), which
produces 15% fuel saving compared to the Current Engine Option (ceo). easyJet has identified
carbon pricing mechanisms as a transition risk.
• However, based on the external environment easyJet sees the potential for carbon credit pricing
to increase depending on how quickly governments wish to meet emissions targets, which will
result in additional cost.
Potential causes
• Political change
• Uncertainty driven by Brexit
• International alignment
• External pressure groups
Potential consequences
• Closure of existing scheme
• Loss of free allocations, leading to significant cost impact
• Introduction of new schemes
• Inability to hedge in line with fuel policy
Controls and mitigations to prevent or reduce the impact of the risks
• easyJet influences future and existing policy and regulations which affect the airline industry
through several different channels, including working with relevant industry bodies to assist in this.
• easyJet looks to optimise fuel usage to reduce emissions and therefore reduce the potential
impact of those schemes, for example ensuring optimal routings as well as using climb, descent
and landing techniques to improve efficiency.
• easyJet has an appropriate hedging strategy.
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STRATEGIC REPORT RI SK (CONTINUED)
ENVIRONMENT AND SUSTAINABILITY (continued)
Risk
Increased Taxation
• Future policy measures
and regulation to tackle
the impact of aviation on
climate change could
impact easyJet’s business
if they impose limitations
and cost on how easyJet
operates and the services
it can provide.
Risk Owner
• Chief Financial Officer
Commentary and areas of focus
• Fuel is one of the biggest direct costs for easyJet. The business maintains a focus on operational
efficiency to save fuel and CO2. Increased taxation has been included as part of our Climate
Change transition risk portfolio.
• Expansion of other aviation-based taxes e.g. for departing passengers, could translate into greater
compliance costs.
• The financial impact of this risk is increasing due to external pressures applied by various countries
across our network.
Potential causes
• Political change
• External pressure groups
• Customer demand
Potential consequences
• Significant increase in cost of existing aviation taxes/levies
• Future expansion of taxes/levies
• Policies to constrain growth/capacity
• Increasing noise curfews
• Pressure on margins
Controls and mitigations to prevent or reduce the impact of the risks
• By engaging with key stakeholders, easyJet seeks to reach a common understanding on the drive
to impose policy measures and regulation to address the impact of aviation on climate change.
This includes advocating for fair and proportionate measures which incentivise airlines to be
efficient and which cover all sources of aviation emissions.
• easyJet continues to explain its environmental performance, and the further action it is taking, to
its customers and other stakeholders. For example, this has included highlighting the introduction
of the A320neo and A321neo aircraft and their reduced emissions compared to previous
generation aircraft, and work with partners regarding new technologies to radically reduce the
carbon footprint of flying.
• easyJet can operate flexible routings in the event of constraints being brought in.
• The new generation Airbus A320neo and A321neo aircraft are 50% quieter during take-off and
landing than the equivalent previous generation aircraft.
86 easyJet plc Annual Report and Accounts 2021
ASSET EFFICIENCY AND EFFECTIVENESS
We maintain our competitive cost advantage by making the best use of capacity/slots and fleet mix in the right airports at the right
prices and driving value through our supply chain.
Risk
Airport Infrastructure
• Flying to primary airports
is an important element of
our customer proposition.
The airports to which we
fly may already be or may
become congested.
Risk Owner
• Chief Commercial Officer
Commentary and areas of focus
• Due to lower volumes of traffic across the European air traffic network, congestion did not play a
significant part in the day to day operation. However due to changing travel restrictions, traffic
flows moved at relative short notice, which in some cases caused more localised traffic issues at
major destination airports.
• With flying volumes expected to increase throughout 2022, easyJet is anticipating congestion to
return to pre-pandemic levels and will rely on the existing controls and mitigations to manage
the risk.
Potential causes
• Increased competitor capacity
• Environmental restrictions/pressure restricting airport expansions
• Delays in airport infrastructure expansion
• Increase in airport charges
• Changes in regulation
• Ineffective slot management
• Ineffective management of the airport operational environment
Potential consequences
• Weakened customer proposition
• Loss of market share
• Inefficient use of crew/aircraft
• Significant increase in costs
Controls and mitigations to prevent or reduce the impact of the risks
• Where easyJet is affected by industrial action or other service interruption by a key supplier,
resources are deployed to manage this as effectively as possible.
• Sophisticated processes and systems to ensure slot transactions are made in an efficient and
effective manner.
• Effective cross-functional governance to ensure optimal business decisions are made.
• easyJet closely monitors airport capacity through a dedicated airport development team. The
team works with airports to ensure the development of appropriate capacity for easyJet in a cost
efficient and timely manner.
• Managing aircraft gauge to improve our ability to grow.
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STRATEGIC REPORT RI SK (CONTINUED)
ASSET EFFICIENCY AND EFFECTIVENESS
Risk
Continuity of Services
• easyJet is dependent on a
mixture of critical
technology and processes,
employees, buildings/
facilities and third-party
suppliers. A loss of one or
more of the above
components could lead to
significant disruption to
operations and could have
an adverse reputational,
financial or legal impact.
Risk Owner
• Chief Operating Officer
Commentary and areas of focus
• During 2021, significant enhancements were made to our Crisis Framework and our approach to
dealing with service continuity risks.
• The Crisis Policy was developed to operate in a hybrid working environment, so Crisis Team
members can manage crises remotely. In addition, the Crisis Centre was upgraded to support our
hybrid working environment.
• Our Safety Risk team reviewed all critical suppliers ahead of the restart to flying to ensure they
were prepared, and the inactivity risk was well managed by identifying and addressing training
requirements.
• Our Procurement Process was enhanced to include specific questions on suppliers’ business
continuity plans and to identify and assign appropriate ownership.
• With the enhancements made, increased use of the Crisis Policy and Procedure and a more
flexible approach available, easyJet is better positioned to respond to continuity risks during 2022
and beyond.
Potential causes
• Failure of critical technology
• Destructive cyber-attack (i.e. ransomware)
• Significant external incident (weather, activism, terrorism)
• Failure of third party
• Industrial action
Potential consequences
• System unavailability for customers and/or staff
• Inability to access key buildings/facilities
• Sustained adverse media coverage
• Unavailability of critical staff
• Reliance on inadequate supplier recovery plans
• Brand/reputation impact
• Operational disruption
Controls and mitigations to prevent or reduce the impact of the risks
• The four key areas of business resilience (IT and processes, people, premises, and suppliers) all
form part of easyJet’s functional business and airport Business Continuity Plans.
• Critical IT systems are identified with ongoing efforts to match the business needs with recovery
capabilities. The risk of system unavailability is now mitigated further, thanks to the adoption
of the cloud and the select use of externally hosted systems, in addition to easyJet’s two
data centres.
• Incident Management Teams are in place 24/7 to manage low level IT incidents. If there is a major
incident or an escalation of an incident that has a wider impact on other parts of the business and
stakeholders, then it can be escalated into the Crisis Management framework via the Network
Duty Manager.
• Time-critical staff have been identified via Business Impact Assessments and Business Continuity
Plans, with regularly tested recovery desks allocated at alternate locations, should the usual place
of work be unavailable. An increased provision of laptops and tablets also enables greater mobility
and remote ways of working.
• Procurement processes include risk assessments aligned with business objectives. These require
relevant third parties to have their own Business Continuity/ Disaster Recovery plans and we are
implementing a process to review a sample of these each year.
• Maintain close working relationships with key stakeholders including, but not limited to, airport
authorities and slot coordinators, lobbying where appropriate.
88 easyJet plc Annual Report and Accounts 2021
Risk
Non-Delivery of
Strategic Initiatives
• The business continues to
undertake several
initiatives to support its
strategy.
Risk Owner
• Chief Data and
Information Officer
Commentary and areas of focus
• Market volatility arising from Covid-19 and its impacts, the external environment and organisational
priority changes are having a negative effect on delivery of strategy initiatives. However, internally
we have improved the control environment through greater ownership, improved business
planning, reporting and involvement of subject matter experts.
• This risk remains stable.
Potential causes
• Inappropriate resource dedicated to change delivery and oversight
• Changes in organisation’s priorities (may be driven by internal or external factors)
• Scope change/time available
• Approach and methodology for complex programmes
Potential consequences
• Business benefits not realised
• Financial underperformance
• Inefficient use of resource
Controls and mitigations to prevent or reduce the impact of the risks
• Complex, large-scale programmes have been initiated and prioritised through the Enterprise
Project Management Office.
• The Enterprise Project Management Office oversees delivery of projects and programmes
ensuring dependencies are managed across the portfolio.
• A project management framework, which sets out approval processes, governance requirements,
and key ongoing processes and controls, is followed by all projects and programmes, and reviews
are undertaken to ensure continuous improvement in this approach.
• Each strategic initiative has an executive sponsor and a Leadership 50 lead assigned and its own
steering group, which provides oversight and challenge to the project, monitors progress against
programme objectives (including budget, benefit realisation and appropriate resource) and
ensures that decisions are made at the appropriate level.
• Key strategic initiatives are managed by dedicated programme management resource with the
right skills and behaviours, complemented by subject matter specialist resource where
appropriate.
• The executive sponsor provides routine updates to the Airline Management Board and can use
this as an escalation channel for any issue resolution.
• The Board also receives updates on key strategic initiatives including any risks or issues to
achieving the key milestones that enable the achievement of the five-year plan.
• The Internal Audit function provides independent programme assurance over our most significant
initiatives, drawing upon independent subject matter expertise where appropriate.
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STRATEGIC REPORT RI SK (CONTINUED)
ASSET EFFICIENCY AND EFFECTIVENESS (continued)
Risk
Single Aircraft Type
Operation
• easyJet is dependent on
Airbus as its sole supplier
for aircraft. The Board
considers that the
efficiencies achieved by
operating a single fleet
type outweigh the risks
associated with easyJet’s
single fleet strategy.
Risk Owner
• Chief Financial Officer
Commentary and areas of focus
• easyJet continues to operate a single type aircraft fleet.
• The operation is set up to manage the risks associated with a single aircraft operation, with
maintenance and fleet management reviewed each year to minimise the potential impact.
• Both the internal and external environment around this risk remain stable.
Potential causes
• Delays in the delivery of new aircraft
• Technical/mechanical issues
• Fluctuating second-hand market
Potential consequences
• Schedule reductions/cancellations
• Grounding of all/part of the fleet
• Loss of customer confidence
• Financial impact when aircraft leave the fleet
Controls and mitigations to prevent or reduce the impact of the risks
• There are 9,032 A320 family (A319, A320, A321) aircraft operating, with a proven track record for
safety and reliability.
• Introduction of the A320neo in part mitigates this single fleet supplier risk as the aircraft is
equipped with a different engine type.
• easyJet continues to work closely with Airbus to ensure full visibility of the delivery schedule for
new aircraft. If there are material delays, appropriate mitigation is put in place; for example,
short-term wet lease arrangements are used to minimise any operational impact.
• easyJet operates a rigorous established aircraft maintenance programme. Maintenance schedules
are approved by the relevant regulatory body.
• easyJet regularly reviews the second-hand market and has several different options when looking
at fleet exit strategies. Sale and leasebacks facilitate the exit of aircraft from the fleet by
transferring residual value risk and provides flexibility in managing the fleet size.
LEGISLATIVE/REGULATORY LANDSCAPE
The airline industry is heavily regulated and there is a continual need to keep well informed and adapt (as required) to any legislative or
regulatory changes across the jurisdictions in which easyJet operates.
Risk
Brand Licence and
Major Shareholder
• easyJet has two major
shareholders (easyGroup
Holdings Limited and
Polys Holdings Limited)
which, as a concert party,
control approximately
15.27% of its ordinary
shares.
• easyJet does not own its
company name or
branding, which is licensed
from easyGroup Ltd. The
licence includes certain
minimum service levels
that easyJet must meet to
retain the right to use the
name and brand.
Risk Owner
• General Counsel and
Company Secretary
Commentary and areas of focus
• Given the size of the shareholding, our major shareholder can influence easyJet’s business in
relation to actions that require shareholder approval.
• Through regular communications, the risk associated with our major shareholders remains low and
stable.
Potential causes
• Shareholder activism
• Actions of easyGroup or other easyGroup licensees
Potential consequences
• Eventual loss of the brand licence
Controls and mitigations to prevent or reduce the impact of the risks
• Active shareholder engagement programme.
• Regular engagement with easyGroup Holdings Limited alongside other major shareholders.
• Representatives from the Board and senior management take collective responsibility for
addressing issues arising from any activist approach adopted by the major shareholder. The
objective is to address issues when they arise and anticipate and plan for potential future activism.
• Quarterly meeting of senior representatives from easyJet and our major shareholders, attended
by the Chief Financial Officer and the Group General Counsel & Company Secretary, to actively
manage brand-related issues as they arise.
• easyJet makes contributions to the joint brand protection fund.
90 easyJet plc Annual Report and Accounts 2021
LEGISLATIVE/REGULATORY LANDSCAPE (continued)
Risk
Changing Legal and
Regulatory Landscape
• Failure to comply with
Commentary and areas of focus
• The legal and regulatory landscape continues to develop in the areas in which easyJet operates.
• The speed of change has increased for both legislation and regulation.
• The easyJet General Counsel Office (GCO), that manages legal and regulatory risks, has
legislation and regulation,
such as local consumer
laws, new case law or
policy changes in relation
to customer
compensation,
environmental or airport
regulation, in the
jurisdictions in which
easyJet operates, or data
protection/ information
protection regulations
could have an adverse
reputational and financial
impact.
Risk Owner
• General Counsel and
Company Secretary
developed over the last year to be more prepared for changes
• Notwithstanding the level of change increasing, this risk remains stable.
Potential causes
• New or changes to existing legislation/regulation
• Employee/agent ignorance
• Rogue employee/agent behaviour
Potential consequences
• Sustained adverse media coverage
• Fines/regulatory sanctions
• Reduction in future revenue
• Operational disruption
• Loss of operating licence
• Significant spike in costs
• Share price movement
• Loss of colleague/customer trust
Controls and mitigations to prevent or reduce the impact of the risks
• Compliance framework including, but not limited to, policies, procedures, and mandatory training
programmes.
• easyJet has an in-house team of legal and regulatory experts to advise on legal issues and
developments,
and to assist the business in interpreting any formal regulatory requirements. Where appropriate,
this expertise is supplemented with specialist external support relevant to a specific discipline
or jurisdiction.
• Panel of external legal advisers, both in the UK and in key easyJet markets, is briefed to keep
easyJet informed of any changes or new legislation and to assist easyJet in developing
appropriate responses to such legislation.
• easyJet influences future and existing policy and regulations which affect the airline industry through
several different channels, including working with relevant industry bodies to assist in this.
• easyJet adapts to new legislation and regulation, where possible adapting existing compliance
frameworks (for example mandatory training programmes and clear policies and
associated guidance).
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STRATEGIC REPORT RI SK (CONTINUED)
MACRO-ECONOMIC AND GEOPOLITICAL
The airline industry can be sensitive to macro-economic and geopolitical conditions. These risk events can affect our financial
performance including supply/demand imbalance, general economic trends, as well as impact of fuel cost, foreign exchange rates, and
counterparty performance.
Risk
Supply/Demand
Imbalance
• easyJet’s success in the
highly competitive
European short-haul
aviation market is built on
our key competitive
advantages: our network,
cost base, brand, digital
innovation, and efficient
and robust capital
structure.
Risk Owner
• Chief Commercial Officer
Commentary and areas of focus
• Covid-19 has impacted the aviation sector by suppressing demand and creating opportunities for
both existing and local start up operators.
• Consolidation creates a more challenging environment with fewer but stronger airlines.
• As the aviation sector emerges from the pandemic, customers may favour value and low fares
over brand loyalty.
• easyJet has emerged as a stronger airline with the ability to respond to rapidly changing market
conditions, having developed industry-leading agility to add new capacity and pivoting our
schedule to capitalise on shifts in demand.
• Despite increased competition, our enhanced scheduling capabilities and developing product and
ancillary offering results in this risk improving.
Potential causes
• Increased capacity
• Industry consolidation
• Increased competition from other airlines and transport providers
• Government interventions
• Fall in consumer demand (including but not limited to macro-economic conditions and
environmental concerns)
• Internal growth plans
Potential consequences
• Loss of market positions (relative market share)
• Pressure on margins
• Adverse financial position
• Share price movement
Controls and mitigations to prevent or reduce the impact of the risks
• Enhancements to our commercial organisation to provide even further focus on existing and new
initiatives to optimise the revenue position.
• Weekly trading meeting to review performance – attended by senior managers, including
members of the AMB.
• Relentless focus on maintaining easyJet’s competitive advantages through network positioning
and brand.
• The Network Development Forum, a cross-functional panel of senior managers, including
members of the AMB, approves the allocation of assets around the network in the context of
expected market conditions.
• Competitor and consolidation activity is monitored in detail by the Network team, enabling
strategic decision making on key market positions.
• Fleet framework arrangements, together with the Group’s leasing policy, provide easyJet with
significant flexibility in respect of scaling the fleet according to business requirements.
• Dynamic planning and capacity management process to manage supply and demand
fluctuations.
92 easyJet plc Annual Report and Accounts 2021
MACRO-ECONOMIC AND GEOPOLITICAL (continued)
Risk
Volatility in Financial
Markets
• easyJet is exposed to a
variety of financial
markets, volatility in which
could give rise to adverse
pressure on the cash
flows of the Group.
Risk Owner
• Chief Financial Officer
Commentary and areas of focus
• Through Covid-19 easyJet’s operational exposures reduced. Hedging positions were managed
through this time so that at any time hedges became more than 100% of exposures, the excess
was closed out. Any new hedging activity was reduced due to uncertainty in exposures. This
approach was approved by the Finance Committee.
• Due to the additional foreign currency debt brought onto balance sheet, easyJet has become
more exposed to FX revaluation through the P&L. Hedging this full risk would have been costly
and would have added more volatility to the liquidity position. It was therefore approved by the
Finance Committee that easyJet would accept some P&L volatility, in exchange for a better
managed liquidity position.
• Hedging positions are maintaining a stable position of jet fuel price. However balance sheet
revaluations are increasing foreign exchange risk.
Potential causes
• Market price risk: volatility in jet fuel prices, foreign exchange rates, carbon prices, inflation rates or
interest rates
• Counter-party risk: default of counter parties used for depositing surplus cash and hedging
• Liquidity risk: inability to raise funds when required
Potential consequences
• Insufficient cash to meet financial obligations as they fall due and/or the inability to fund the
business when needed leading to insolvency
• Significant increase in costs
Controls and mitigations to prevent or reduce the impact of the risks
• The Finance Committee (a committee of the plc Board) oversees the Group’s treasury and
funding policies and activities.
• Treasury policy sets out plc Board approved strategies for market price risk management,
counter-party credit risk management and liquidity risk management. Monthly reporting on all
treasury activity including reporting on compliance with treasury policy.
• Maintaining a liquidity buffer supported by cash and a business interruption insurance policy.
• Ability to access diverse sources of funding to support liquidity requirements.
• Rolling hedging programmes on jet fuel and foreign exchange market price exposure.
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STRATEGIC REPORT RI SK (CONTINUED)
PEOPLE
Having the right people is a key part of Our Plan. In today’s environment, we need to create an inclusive and energising environment that
attracts the right people and inspires everyone to learn and grow.
Risk
Industrial Action
• easyJet, and the aviation
industry in general, has a
significant number of
employees who are
members of trade unions.
• Each of the European
countries in which easyJet
operates has localised
employment terms and
conditions. As such its
pilots, crew and engineers
are members of 21 trade
unions across seven
countries. There are also
an additional seven
consultative bodies
including five Works
Councils and a European
Works Council.
Risk Owner
• Group People Director
Commentary and areas of focus
• Highly constructive relationships with our trade union partners, works councils, and our people
have allowed the business to adapt throughout 2021 and position the business to emerge with
strength from the pandemic.
• Productivity has increased by reducing the number of crew per aircraft.
• Sustainable improvements have been made using part-time and seasonable contracts, which
were agreed with our union partners.
• Agreements with our union partners have been made throughout the last year, with routine
seasonal recruitment taking place to ensure the operation is ready to meet demand. This risk
remains stable.
Potential causes
• Adverse employee experience
• Changes to terms and conditions
• Political unrest
Potential consequences
• Sustained adverse media coverage
• Operational disruption
• Significant spike in costs
• Reduction in future revenue
• Share price movement
• Loss of colleague/customer trust
Controls and mitigations to prevent or reduce the impact of the risks
• easyJet seeks to maintain positive working relationships with all trade unions and other
representative bodies and has a framework in place for consulting and engaging with trade unions
and consultative bodies.
• In the event of industrial action or expected disruption, easyJet has processes to mitigate the
impact to our operations. The Operations department also has specific procedures to deal with
such events.
• Adoption of innovative part-time working patterns.
94 easyJet plc Annual Report and Accounts 2021
PEOPLE (continued)
Risk
Talent Acquisition and
Retention
• In today’s shifting
environment, we need to
place even more focus on
recruiting the right people
and building the right
talent.
Risk Owner
• Group People Director
Commentary and areas of focus
• Retention of critical talent continues to be a risk and is proactively managed, particularly given the
continued uncertainty and challenge of our industry and our inability to offer compelling short-
term financial reward.
Potential causes
• Uncompetitive remuneration packages
• Lack of career progression
• Outdated ways of working
Potential consequences
• Sustained inability to deliver key strategic initiatives
Controls and mitigations to prevent or reduce the impact of the risks
• Creation of retention programme for the 2022 financial year co-sponsored by HR Director,
M&A and People Development and Reward Director.
• Projects making up the programme include:
• Leadership and Management Capability Development
• Talent Development Programme
• Inclusion & Diversity
• Employee Value Proposition
• Wellbeing Framework
• Recognition Principles and Platform
• Reward Approach
• Hybrid working across our office-based communities that support new ways of working with the
right policies, processes, and technology to improve the employee experience.
• Quarterly engagement survey across all communities to gain insight on employee sentiment.
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95
STRATEGIC REPORT C H AIRMAN’S STAT EMENT ON CORP ORA TE GOV E RNA NC E
CHAIRMAN’S STATEMENT ON
CORPORATE GOVERNANCE
Contents of the Corporate
Governance Report
Board and Airline
Management
Board profiles
Our governance
framework
page 98
page 105
Board activity in 2021
page 111
Board Committees and
activities during the year
page 118
Directors’ Report
page 154
The Board has acted decisively to make
sure easyJet navigated the ongoing
impact of the pandemic.
John Barton
Non-Executive Chairman
A large part of the Board’s focus during the
year has therefore remained on liquidity,
with the approval of a new five-year term
loan facility of $1.87 billion under the UK
Export Finance scheme in January 2021,
the issuance of €1.2 billion of bonds under
the Euro Medium Term Note Programme in
March 2021, and the launch of a £1.2 billion
rights issue in September 2021. This was in
addition to a number of sale and leaseback
transactions, and the cost reduction
programme. The Board has acted
decisively to make sure easyJet navigated
the ongoing impact of the pandemic, and
ensure it is well-placed to take advantage
of the strategic investment and growth
opportunities that will deliver strong
shareholder value in future.
The Board has also been focused on
refining its post-pandemic strategy,
ensuring the safe ramp-up of operations as
the flying programme has increased, and
supporting and developing our people
through the pandemic. A fuller summary of
the Board’s activity during the year can be
found on page 111.
Introduction
I am pleased to introduce this report, which
describes the activities of your Board
during the year and our governance
arrangements. This will be my last report as
your Chair, having served for nearly nine
years on the Board when I step down in
December 2021. It has been an absolute
privilege to serve as Chair. easyJet is a
unique, dynamic and customer-centric
business, driven by the passion of its
people. I am proud of how easyJet has not
only navigated so well through the
pandemic, but has adapted and built back
even stronger leaving it extremely well
positioned for the future. I am delighted to
hand over to someone of Stephen Hester’s
calibre. His significant and varied
experience leading major international
businesses in regulated industries, coupled
with his outstanding strategic thinking, will
serve the airline well as it leads the recovery
in the post-pandemic era, complementing
and adding to the skills of the existing
Board and leadership team.
Board activities in the year
Our purpose at easyJet is to make travel
easy, enjoyable and affordable, whether it is
for leisure or business, seamlessly
connecting Europe with the warmest
welcome in the sky. Our ability to deliver
this has continued to be heavily impacted
by the ongoing Covid-19 pandemic. As a
Board, we have remained focused on
guiding easyJet through this period of
sustained uncertainty and ensuring we are
well positioned for the recovery, work
which has been underpinned by our robust
governance framework.
96 easyJet plc Annual Report and Accounts 2021
Brexit
The Board activated its EU ownership
contingency plan to ensure continued
compliance with EU ownership and control
requirements at the end of the Brexit
transition period in December 2020.
Accordingly, easyJet has been required to
suspend voting rights in respect of certain
shares held by non-EU nationals so that the
majority of voting rights in the Company
are held by EU nationals. The work easyJet
has undertaken to prepare for Brexit
means that flying rights between the EU
and the UK have been maintained.
UK Corporate Governance Code
Throughout the year the Board has
followed strong corporate governance
standards and it has been a fundamental
underpin to all of its actions. This is
demonstrated through its full compliance
with the Code. The requirements of the
Code are described throughout this report,
together with explanations as to how we
have complied with its requirements, and
signposts directing you to the relevant
page where more detail can be found on
how the Company has complied with its
various provisions.
The following pages set out details of the
composition of our Board, its corporate
governance arrangements, processes and
activities during the year, and reports from
each of the Board’s Committees.
I wish all at easyJet the very best success
for the future.
John Barton
Non-Executive Chairman
Changes to the Board
The Board keeps its balance of skills,
knowledge, experience, independence
and diversity under regular review, and is
mindful of the best practice requirements
under the UK Corporate Governance
Code 2018 (the ‘Code’ or ‘2018 Code’).
There have been a number of changes to
the Board since the last Annual Report.
Andrew Findlay stood down as Chief
Financial Officer in February 2021, and we
welcomed Kenton Jarvis as his successor.
Kenton brings a wealth of industry
experience and highly relevant skills to
the role and we are delighted to welcome
him. David Robbie joined the Board as an
Independent Non-Executive Director in
November 2020, and Charles Gurassa,
Moya Greene DBE and Dr Anastassia
Lauterbach stood down as Independent
Non-Executive Directors in December 2020.
Stephen Hester joined us as an
Independent Non-Executive Director and
Chair designate on 1 September 2021 and
will succeed me as Chair on 1 December
2021. I have been working closely with
Stephen to ensure that there is a smooth
handover. Stephen and our other new
Board members have also participated in
a comprehensive induction programme.
New appointments are subject to a formal,
rigorous and transparent procedure, led by
the Nominations Committee, and further
details can be found on pages 121 to 123.
Information on the induction process can
be found on page 114.
The issue of diversity, both in the
boardroom and throughout the entire
Group, is taken very seriously by the Board
as we believe this improves effectiveness,
encourages constructive debate, delivers
strong performance and enhances the
success of the business. Ensuring that we
have a culture which promotes and values
diversity, and one which is maintained
throughout the business, is a continual
prime focus and is underpinned by our
Diversity and Inclusion Policy which sets our
objectives. The importance of this area also
forms the basis for Board diversity and
succession planning as we consider
the best constitution of the Board to
successfully take the Company forward.
You can read more about our overall
approach to diversity and inclusion in our
other senior leadership positions and
across easyJet, on page 56.
I would like to take this opportunity to
express my gratitude to all Board members
who served during another challenging year
for the Group.
Stakeholders
The Board takes account of the impact of
its decisions on all our stakeholders be they
customers, employees, suppliers,
shareholders, the communities we operate
in, or regulators, while taking steps to
secure the Group’s longer-term success.
There has been a constant dialogue with
our stakeholder groups, and on behalf of
the Board, I would like to take this
opportunity to thank them all for their
partnership during the year. Working
together has been vital, and will continue
to be so as we seek a sustainable
future together.
easyJet’s people continue to be
fundamental to its success. Moya Greene
DBE had been our Employee
Representative Non-Executive Director
under the Code since January 2019.
When Moya stepped down, the Board took
the opportunity to review the mechanism
by which the employee voice is brought
into the boardroom. You can read about
our revised approach on page 109.
Details of how we have engaged with all
our stakeholders to understand their views
can be found on pages 26 to 37. A
statement on how the Directors have had
regard to the matters set out in section 172
of the Companies Act 2006 can be found
on page 36.
Board performance review
Our last external Board review took place in
2018, therefore our Nominations
Committee oversaw an externally
facilitated review of the performance and
effectiveness of the Board during the year
in line with the Code requirement to do this
every three years. A full report on the
activities and the outcomes of the
evaluation can be found on pages 115 to 117.
www.easyJet.com
97
GOVERNANCE BOA RD OF DI RECT ORS
AN EXPERIENCED AND
BALANCED BOARD
N
N
A
N
R
S
John Barton
Non-Executive Chairman
Stephen Hester
Non-Executive Director and
Chair Designate
Julie Southern
Senior Independent Non-Executive
Director
Nationality:
British
Appointed:
May 2013
Nationality:
British
Appointed:
September 2021
Nationality:
British
Appointed:
August 2018
Key areas of expertise:
Finance, Governance
Key areas of expertise:
Strategy, Finance
Key areas of expertise:
Finance, Aviation
Skills and experience
John has significant board experience
having previously served as Chairman of
Next plc, Catlin Group Limited, Cable and
Wireless Worldwide plc, Brit Holdings plc
and Wellington Underwriting plc. He was
previously Senior Independent Director of
Luceco plc, WH Smith plc, Hammerson plc
and SSP Group plc. He was also the Chief
Executive of insurance broker JIB Group
plc. After JIB’s merger with Lloyd
Thompson, he became Chairman of the
combined Group, Jardine Lloyd Thompson
Group plc, until 2001. John is a qualified
chartered accountant and has an MBA
from Strathclyde University.
Current external appointments
Chairman of Ted Baker plc and
Non-Executive Director of
Matheson & Co Ltd.
Skills and experience
Stephen is a highly strategic and successful
leader with more than 35 years of
wide-ranging experience at major
businesses, bringing a strong track record
of value creation and listed board
experience. Stephen has served as Chief
Executive of RSA Insurance Group plc from
February 2014 to May 2021, as Chief
Executive of Royal Bank of Scotland Group,
Chief Executive of British Land plc and
Chief Operating Officer of Abbey National
plc, as well as holding a number of senior
executive roles at Credit Suisse First Boston
in London and New York. He has also held
senior non-executive positions as deputy
chairman of Northern Rock. Stephen holds
a BA (Hons.) in Politics, Philosophy and
Economics from Oxford University.
Current external appointments
Senior Independent Director of Centrica plc
and Lead Independent Director of
Kyndryl Holdings, Inc.
Skills and experience
Julie has significant board experience and
has held a number of commercially
oriented finance and related roles during
her career. She was Chief Commercial
Officer of Virgin Atlantic Limited between
2010 and 2013, responsible for the
commercial strategy of Virgin Atlantic
Airways and Virgin Holidays. Prior to this,
Julie was Chief Financial Officer of Virgin
Atlantic Limited for 10 years. In addition,
Julie was previously Group Finance Director
at Porsche Cars Great Britain and Finance
and Operations Director at WH Smith – HJ
Chapman & Co. Ltd. She was previously the
Non-Executive Director of Stagecoach
Group plc, Gategroup AG, Cineworld plc
and DFS Furniture plc. Julie holds a BA
(Hons.) in Economics from the University of
Cambridge and is a qualified chartered
accountant.
Current external appointments
Non-Executive Director and Chair of the
Audit Committees of Rentokil Initial plc and
NXP Semi-Conductors N.V., Non-Executive
Director, Chair of the Audit Committee and
member of the Remuneration Committee
at Ocado Group plc.
98 easyJet plc Annual Report and Accounts 2021
Board Committees
Committee Chair
N
Nominations Committee
A
F
Audit Committee
Finance Committee
R
S
Remuneration Committee
Safety Committee
S
F
Johan Lundgren
Chief Executive Officer
Kenton Jarvis
Chief Financial Officer
Dr Andreas Bierwirth
Independent Non-Executive Director
Nationality:
Swedish
Appointed:
December 2017
Nationality:
British
Appointed:
February 2021
Nationality:
German
Appointed:
July 2014
Key areas of expertise:
Travel and Tourism
Key areas of expertise:
Finance
Key areas of expertise:
Aviation, European Perspective
Skills and experience
Kenton was previously CEO of Aviation,
and Business Improvement Director
– Markets, at TUI Group, having held a
number of senior group and divisional
finance roles at TUI since 2003. Kenton
holds a BSc (Hons) in Biochemistry from
the University of Manchester. Before joining
TUI, Kenton was the Finance Director of
Airtours Holidays and held a number of
commercial finance roles at Adidas, prior to
which he qualified as a chartered
accountant with PwC.
Current external appointments
None.
Skills and experience
Andreas previously served as a Director
and Chief Commercial Officer at Austrian
Airlines AG. Andreas also served as Vice
President of Marketing at Deutsche
Lufthansa AG (Frankfurt) and Chairman of
the Supervisory Board at T-Mobile Polska
SA. Prior to this, Andreas was firstly Deputy
Managing Director and later Managing
Director at Germanwings.
Current external appointments
Chief Executive Officer of Magenta
Telekom (formerly T-Mobile Austria).
Chairman of the Supervisory Board of
Do&Co AG and Member of the Supervisory
Board of Telekom Deutschland GmbH.
Skills and experience
Johan has more than 30 years’ experience
working in the travel industry, starting his
career as a tour guide and occupying
various roles in travel marketing and sales.
Prior to joining easyJet in December 2017
as Chief Executive, Johan was the Group
Deputy Chief Executive Officer and Chief
Executive Officer of Mainstream Tourism at
TUI AG. Prior to this Johan was the
Managing Director for the Northern Region
at TUI Travel plc from 2007 until 2011.
From 2003 until 2007, he was the
Managing Director and Chief Executive
Officer of TUI Nordic. Johan led MyTravel’s
businesses out of Canada and Sweden
between 1999 and 2003, prior to which he
was Managing Director of Always Tour
Operations from 1996.
Current external appointments
Senior Adviser, Blackstone (private
equity group).
www.easyJet.com
99
GOVERNANCE BOA RD OF DI RECT ORS (CONT INUE D)
F
A
N
N
S
R
Catherine Bradley CBE
Independent Non-Executive Director
Nick Leeder
Independent Non-Executive Director
Moni Mannings
Independent Non-Executive Director
Nationality:
French and British
Appointed:
January 2020
Nationality:
Australian and French
Appointed:
January 2019
Nationality:
British
Appointed:
August 2020
Key areas of expertise:
Finance, Regulatory
Key areas of expertise:
Information Technology
Key areas of expertise:
Commercial, Legal
Skills and experience
Nick has substantial leadership experience
with deep expertise of print to digital
business transformation within the media
sector. Nick has spent the last eight years
leading Google’s businesses in Australia,
New Zealand and France before moving to
Ireland. Prior to Google, Nick was at News
Corporation, firstly as Chief Operating
Officer of News Digital Media and latterly
as Deputy Chief Executive of national
broadsheet newspaper, ‘The Australian’.
Before that he was Chief Operating Officer
of newspaper group, Fairfax Digital. He has
a degree in pure mathematics from
University of Sydney and an MBA
from Insead.
Current external appointments
Vice President at Google Ireland,
EMEA Headquarters.
Skills and experience
Moni has held a number of non-executive
positions, including as a Board member of
the Solicitors Regulation Authority
(chairing its Equality, Diversity and Inclusion
Committee) and at Cranfield University.
Until 2017, Moni was Chief Operating
Officer of Aistemos Limited, a leading IP
data analytics and strategy company.
From 2000 until 2016, Moni was a Partner
and Head of the International Banking and
Finance Division of Olswang LLP, before
which she held senior positions with Dewey
& LeBoeuf LLP, Simmons & Simmons and
Clifford Chance LLP. Moni also served as a
non-executive director of Polypipe Group
plc (2014 to 2019), Dairy Crest Group plc
(2017 until their acquisition and delisting in
2019) and Breedon Group plc (2019 to 2021).
Current external appointments
Independent non-executive director of
Hargreaves Lansdown plc and Investec
Bank plc, non-executive director and
Chair of the Remuneration Committee of
Cazoo Group Ltd, Deputy Chair of the
charity Barnardo’s.
Skills and experience
Catherine has held a number of senior
finance roles for 33 years in investment
banking and risk management, in the US,
then the UK and finally Asia, starting with
Merrill Lynch for ten years. Latterly she
joined Credit Suisse as Managing Director
for 9 years, first in London since 2003 as
Head of Client Coverage and then in Hong
Kong from 2008 to 2012 as Head of
Equity-Linked Solutions Group for Asia-
Pacific. She finished that phase of her
career as Head of Advisory Global Markets
with Societe Generale Asia until 2014. From
2014 until July 2020, she was a Non-
Executive Director of the UK Financial
Conduct Authority and Chair of its Audit
Committee, a Non-Executive Director of
WS Atkins plc from 2015 until its delisting in
2017, and a Member of the Supervisory
Board, Chair of the Finance and Audit
Committee, and Appointments,
Compensation and Governance Committee
member for Peugeot S.A. from 2016 to
2021. Catherine graduated from HEC Paris
with a major in Finance and International
Economics, and was awarded a CBE
in 2019.
Current external appointments
Non-Executive Director of Johnson Electric
Holdings Limited and Senior Independent
Director of Kingfisher plc. Board Member of
the Value Reporting Foundation and
Co-Chair of its Audit Committee.
100 easyJet plc Annual Report and Accounts 2021
A
F
R
David Robbie
Independent Non-Executive Director
Nationality:
British
Appointed:
November 2020
Key areas of expertise:
Finance, Governance
Skills and experience
David has significant international corporate
and board experience. He was Finance
Director of Rexam plc from 2005 until
2016. Prior to his role at Rexam, David
served in senior finance roles at Invensys
plc before becoming Group Finance
Director at CMG plc in 2000 and then
Chief Financial Officer at Royal P&O
Nedlloyd N.V. in 2004. He served as interim
Chairman, Senior Independent Director and
Chair of the Audit Committee of FirstGroup
plc from 2018 to 2021, and Non-Executive
Director and Chair of the Audit Committee
for the BBC between 2006 and 2010.
David qualified as a chartered accountant
at KPMG and holds an MA in English
Literature from St. Andrew’s University.
Current external appointments
Independent non-executive director and
Chair of the Audit Committee at
DS Smith plc.
Changes to the Board during the
year and up to 30 November 2021:
• David Robbie was appointed on
17 November 2020.
• Anastassia Lauterbach stepped down on
21 December 2020.
• Charles Gurassa and Moya Greene stepped
Board Committees
Committee Chair
Audit Committee
A
F
N
R
S
Finance Committee
down on 23 December 2020.
Nominations Committee
Remuneration Committee
Safety Committee
• Andrew Findlay stepped down on
3 February 2021; Kenton Jarvis joined
the Board on the same date.
• Stephen Hester was appointed on
1 September 2021 and will become Chair
on 1 December 2021, at which point
John Barton will step down.
Diversity in the Board
easyJet recognises the benefits of having diversity across the Board to ensure
effective engagement with key stakeholders and effective delivery of the
business strategy.
Tenure
Gender
0-3 years: 7 (1 exec)
4-6 years: 1 (1 exec)
7-9 years: 2
Male: 7 (2 exec)
Female: 3
Age
Ethnic Group
50-59: 6
60+: 4
White: 9
Mixed/Multiple Ethnic Group: 1
www.easyJet.com
101
GOVERNANCE AI R LIN E MANA GEMENT BO AR D
An Experienced and FOCUSED
MANAGEMENT TEAM
Peter Bellew
Chief Operating Officer
Ella Bennett
Group People Director
Stuart Birrell
Chief Data & Information Officer
Nationality:
Irish
Appointed:
January 2020
Nationality:
British
Appointed:
May 2018
Nationality:
British
Appointed:
November 2020
Key areas of expertise:
Aviation, Flight Operations
Key areas of expertise:
People, Reward and
Digital Transformation
Key areas of expertise:
Data and Information Technology
Skills and experience
Peter has considerable experience across
commercial and operational roles in both
low cost and full-service airlines. Peter
joined easyJet from Ryanair, where he was
Chief Operating Officer responsible for all
aspects of Ryanair’s flight operations,
leading an international workforce of
18,000 and working with HR to build
relationships with European trade unions.
Prior to this, Peter was at Malaysia Airlines
for two years, latterly as the CEO, and
before that he worked at Ryanair for nine
years, where he held a number of roles
including Head of Sales & Marketing and
Director of Flight Operations.
Skills and experience
Ella is a skilled Group HR Director with
strong experience in the UK and
internationally in lean and digital
transformation, large-scale change as well
as talent development and reward. Ella
joined easyJet from Sainsbury’s Argos,
where she led the integration of their
non-food business to create a multi-
product, multi-channel business with fast
delivery networks. Ella was also Group HR
Director at Home Retail Group leading the
people aspects of Argos’ digital
transformation. Prior to this she was a
member of the executive management
team at Fujitsu. She earned her BA (Hons)
in English Literature from the University of
Bristol and her Master’s degree from the
University of London.
Skills and experience
Stuart spent five years as a Director and
Chief Information Officer at Heathrow
Airport Ltd before joining easyJet. He
previously held the role of CIO at Formula
1’s McLaren Technology Group where he
worked in the high-performance
environment building a team of in-house
experts and specialist suppliers. Prior to
that he spent three years at Gatwick
Airport where he successfully separated
the airport systems from BAA and brought
improvements to complex IT foundations
and transformation processes. Stuart brings
with him significant experience and
expertise in IT security, cloud-based
solutions, big data sets and technology
to support business expansion.
102 easyJet plc Annual Report and Accounts 2021
Maaike de Bie
Group General Counsel & Company
Secretary
Sophie Dekkers
Chief Commercial Officer
Thomas Haagensen
Group Markets & Marketing Director
Nationality:
Dutch and British
Appointed:
June 2019
Nationality:
British
Appointed:
December 2020
Nationality:
Danish
Appointed:
May 2018
Key areas of expertise:
Legal, Compliance and Regulatory
Key areas of expertise:
Aviation and Strategy
Key areas of expertise:
Commercial and Operations Management
Skills and experience
Maaike is an experienced international
lawyer with over 25 years’ practical
experience in a variety of sectors.
Maaike joined easyJet in June 2019 from
Royal Mail plc where she was Group
General Counsel accountable for all legal,
compliance, claims management, security
and information governance matters. Prior
to Royal Mail, Maaike was a Legal Director
and part of the governance body of EY
LLP. Maaike also spent six years with
General Electric, five years as General
Counsel for one of its Capital companies in
EMEA and was then promoted into the HQ
office of GE Capital in Europe to lead the
improvement of enterprise risk
management & corporate governance
across EMEA. She has also held senior
international legal positions at the European
Bank for Reconstruction and Development
LLP in London and White & Case LLP in
New York. She obtained her legal degrees
in the Netherlands (in Amsterdam) and
Canada (McGill in Montreal) and is qualified
to practise as a solicitor in both New York
and the UK. Maaike is also a trustee for
Blueprint for Better Business, an
independent charity helping business to be
guided by a purpose that respects people
and contributes to a better society.
Skills and experience
Before joining the Airline Management
Board, Sophie held the role of Customer
Director for easyJet. Prior to this she was
Director of Scheduling for the airline,
implementing systems and process
improvements. She has also led easyJet in
the UK as Country Director for five years,
where she was responsible for driving the
airline’s commercial success and strategic
direction in the UK as well as representing
aviation at both House of Lords and House
of Commons Select Committees. Previous
roles in the airline include Head of Change
Management and Customer Insight, with a
background in customer insight working
with a range of brands from Jaguar Land
Rover to Mars, Unilever and Vodafone.
Sophie was also Non-Executive Director for
Airport Co-ordination Limited from 2017 to
2021 and sat on their Remuneration and
Nomination Committees. Sophie is
easyJet’s business lead on Diversity &
Inclusion, a qualified MindGym coach,
business mentor, and a founding member
of easyJet’s Women’s Network.
Skills and experience
Thomas has over 20 years’ experience in
operations management built in a variety of
roles across Europe. Danish, born and
educated in Switzerland, Thomas began his
career with Tetra Pak working his way up
to Regional Manager of the East Med
where he developed and succeeded in
implementing ambitious growth and
profitability improvement plans. Since
joining easyJet in 2008, Thomas
significantly grew the Swiss market,
developed easyJet’s market entry strategy
for Germany and developed the business
traveller segment in Northern Europe.
Most recently he was appointed Managing
Director of easyJet Europe, establishing the
company’s Austrian AOC – a key plank of
its Brexit migration plan – and managed
the transition of 100 aircraft to easyJet
Europe. Thomas holds a degree in Business
Administration with a focus on
management and marketing from
University of Lausanne.
www.easyJet.com
103
GOVERNANCE AI R LIN E MANA GEMENT BO AR D (CONTINUE D)
Garry Wilson
Chief Executive Officer,
easyJet holidays
Johan Lundgren
Chief Executive
Kenton Jarvis
Chief Financial Officer
Nationality:
British
Appointed:
November 2018
See Board of Directors’ profiles
on page 99
See Board of Directors’ profiles
on page 99
Key areas of expertise:
Travel, Business Transformation and
Global Markets
Skills and experience
Garry is a highly experienced commercial
leader working across international
organisations, and has over 21 years’
experience in the holiday and travel sector.
He joined the business from TUI Group
where he most recently held the role of
Managing Director for Group Product and
Purchasing, leading commercial strategies
across a number of markets and heading a
global team across 20 countries. Prior to
this, Garry worked in a number of senior
commercial roles at TUI Group. He also
held the position of Director of Europe,
Middle East and Africa for American travel
group Orbitz Worldwide (now Expedia Inc.).
Garry has worked extensively with overseas
governments, PwC and the Travel
Foundation to create sustainable tourism
policies to promote major economic
growth and positive social change whilst
minimising negative environmental impact.
He was appointed to the Board of ABTA in
April 2021. He holds a BCom (Hons) degree
in Business Management and Languages
from the University of Edinburgh.
Diversity in the Airline
Management Board
easyJet recognises the benefits of having diversity across the executive
leadership team to inspire innovation and increased performance.
Gender
Age
Male: 6
Female: 3
40-49: 3
50-59: 6
Changes to the AMB during the year and up to 30 November 2021:
• Sophie Dekkers was appointed Chief
• Stuart Birrell was appointed as
Commercial Officer on 16 December
2020, replacing Robert Carey.
Chief Data & Information Officer on
9 November 2020, replacing Sam Kini.
104 easyJet plc Annual Report and Accounts 2021
GOVERNANCE FRAMEWORK
SHAREHOLDERS
CHAIRMAN
The Chairman is responsible for the leadership of the easyJet plc Board (the ‘Board’) and for ensuring
that it operates effectively through productive debate and challenge.
THE BOARD
The Board is responsible for providing leadership to the Group. It does this by setting strategic priorities and overseeing their delivery in a way that is
aligned with easyJet’s culture and enables sustainable long term growth, whilst maintaining a balanced approach to risk within a framework of effective
controls and taking into account the interests of a diverse range of stakeholders. There are certain matters which are reserved for the Board’s decision.
BOARD COMMITTEES
The terms of reference of each Committee are documented and agreed by the Board. The Committees’ terms of reference
are reviewed annually and are available in the Governance section of easyJet’s corporate website at corporate.easyjet.com.
The key responsibilities of each Committee are set out below.
SAFETY
COMMITTEE
To examine specific
safety issues as
requested by the Board
or any member of the
Committee.
To receive, examine and
monitor reports on
actions taken by
departments.
To review and monitor
the implementation of
easyJet’s annual safety
plan.
NOMINATIONS
COMMITTEE
To keep under review
the composition,
structure and size of,
and succession to, the
Board and its
Committees.
To provide succession
planning for senior
executives and the
Board, leading the
process for all Board
appointments.
To evaluate the balance
of skills, knowledge,
experience and diversity
on the Board.
FINANCE
COMMITTEE
To review and monitor
the Group’s treasury
policies, treasury
operations and funding
activities, along with the
associated risks.
AUDIT
COMMITTEE
To monitor the integrity
of the Group’s accounts,
and the adequacy and
effectiveness of the
systems of internal
control.
To monitor the
effectiveness and
independence of
the internal and
external auditors.
REMUNERATION
COMMITTEE
To set remuneration for
all Executive Directors,
the Chairman and the
AMB, including pension
rights
and any compensation
payments.
To oversee
remuneration and
workforce policies and
practices and take these
into account when
setting the policy for
Directors’ remuneration.
Committee report
on pages 119 to 120
Committee report
on pages 121 to 123
Committee report
on pages 124 to 129
Committee report
on page 118
Committee report
on pages 130 to 153
CHIEF EXECUTIVE
Responsible for the day-to-day running of the Group’s business and performance,
and the development and implementation of strategy.
AIRLINE MANAGEMENT BOARD (‘AMB’)
Led by the Chief Executive, the AMB members are collectively responsible for driving the performance
of the Group against strategic KPIs and managing the allocation of central funds and capital.
www.easyJet.com
105
GOVERNANCE C ORPORATE GOVERNANCE REP ORT (CONTINU ED)
COMPLIANCE WITH THE UK
CORPORATE GOVERNANCE CODE
Principles of the UK
Corporate Governance Code
Board leadership
and company
purpose
Division of
responsibilities
Composition,
succession and
evaluation
Audit, risk and
internal control
page 106
page 110
page 113
page 117
Remuneration
page 117
1
2
3
4
5
The UK Corporate Governance Code (the
‘Code’ or ‘2018 Code’) sets out the
standards of good practice in relation to
how a company should be directed and
governed. easyJet follows the principles set
out in the Code, the full text of which is
available at www.frc.org.uk, and is required
to disclose whether it has complied with
the provisions of the Code during the
financial year. The Board is pleased to
confirm that the Company complied with
the Code throughout the year. Our
compliance with key areas of the Code is
summarised below, together with cross-
references, where applicable, to the
relevant sections of this report where more
information can be found. Further details
are set out in this section of the Annual
Report (together with the Directors’
Remuneration Report on pages 130 to 153
and the Directors’ Report on pages 154
to 157).
1 Board leadership and
company purpose
Role of the Board
The Board is collectively responsible for
promoting the long term sustainable success
of the Group, generating value for
shareholders as a whole and contributing to
wider society by fulfilling its purpose. In
exercising this responsibility, the Board takes
into account all relevant stakeholders
including customers, employees, suppliers,
shareholders, the communities we operate
in, regulators and governments, and the
effect of the activities of the Group on the
environment. Further details are set out on
pages 26 to 37.
The Board provides effective leadership by
setting the strategic priorities of the Group
and overseeing management’s execution of
the strategy in a way that enables
sustainable long term growth, while
maintaining a balanced approach to risk
within a framework of prudent and effective
controls. Further information on easyJet’s
principal risks and uncertainties is set out
on pages 78 to 95.
Our purpose
easyJet is a low-cost point to point airline
that provides considerable choice and
affordability for travel across a market
leading European network. The Board
considers easyJet’s purpose as providing this
vital connectivity and in a way that is easy,
enjoyable and affordable – described as
“seamlessly connecting Europe with the
warmest welcome in the sky”.
Air travel provides connectivity on a national,
regional and international scale, enabling
personal connections and economic growth
and development. This connectivity is
important for wider society for a number of
reasons. It facilitates travel for leisure, such
as holidays and tourism and reuniting family
for important events. It also allows travel for
business, providing connectivity between
workplaces and allowing business
relationships and networks to be built.
While the pandemic has accelerated the use
of virtual technologies, physical travel will
remain an important part of the global
economic recovery.
Further information on the way that easyJet
uses its resources to fulfil this purpose and
create sustainable value is set out in our
business model on page 12.
Our culture and values
The Board understands easyJet’s unique
culture, which is open, engaging, positive
and collaborative, and seeks to ensure
these values are integrated into its
decision making and that the policies and
procedures put in place maintain this
culture. Where policies, practices or
behaviour are not aligned with the
Company’s purpose, values or strategy, the
Board and management seek to ensure
that appropriate action is taken.
The culture is underpinned by the values
and behaviours which we call ‘Our Promise’:
• Safe and responsible: safety is our
number one priority
• On our customers’ side: we always think
about the customer and see things from
their point of view
• In it together: we are one team and work
together in all we do
• Always efficient: we will always be
efficient and focus on what matters most
• Forward-thinking: we anticipate what we
need tomorrow and consider how what
we do today might affect us in future.
During the year, the Board used a number
of methods to understand and monitor the
Company’s culture:
• Health and safety – easyJet has a safety
policy that promotes a ‘just culture’ within
the airline, to ensure that any incidents
are openly reported without negative
repercussions for individuals. The Board’s
Safety Committee regularly reviews
internal and external safety incidents
(including near misses) and risks to
ensure appropriate mitigations are in
place and any trends identified, which are
then reported to the Board.
106 easyJet plc Annual Report and Accounts 2021
• Employee engagement – As explained
further on page 109, the Board
considered and approved a revised
approach to its workforce engagement
mechanism in the year. Four Non-
Executive Directors were selected as
Employee Representative Directors to
ensure the employee voice is broadly
reflected in the boardroom. The
Employee Representative Directors
update the Board regularly on their
discussions and the key themes raised.
Employee surveys carried out throughout
the year also help identify key areas
where employees feel that the reality
diverges from the stated culture.
• Whistleblowing – The ‘Speak Up, Speak
Out’ (SUSO) whistleblowing arrangements
ensure that incidents can be openly
reported and areas of concern addressed,
monitored and mitigated as required. The
Audit Committee regularly reviews
reports on the operation and efficacy of
the SUSO policy and updates the Board,
who considers incidents and their
outcome, on an anonymous basis, in line
with the Code. Whistleblowing featured
regularly on the Board’s agenda during
2021 through Audit Committee updates
reporting on significant matters, which
allowed the Board to regularly review the
adequacy of the Whistlebowing policy in
line with its requirement to do so under
the Code. During the year the Board
supported the refreshing and republishing
of the SUSO arrangements.
• Compliance with policies and
procedures – The Board approves and
monitors the effectiveness of a number
of policies to ensure compliance with the
regulatory requirements, for example in
relation to Modern Slavery, Digital Safety
(including data protection and cyber
security), Diversity and Inclusion.
Mandatory training modules, which were
refreshed during the year and all
employees required to complete, ensure
that employees are up to date on key
policies around anti-bribery and
corruption, anti-fraud, competition law,
digital safety, data protection and
modern slavery.
Investing in and rewarding the
workforce
We invest in training and developing our
workforce as set out on pages 56 to 57, and
page 63. We also facilitate participation in
share schemes as set out on page 150.
Engagement with stakeholders
Details of the engagement with all
stakeholders, including customers,
employees, communities, suppliers,
regulators and shareholders, are set out
on pages 26 to 37. Additional information
is set out below.
Shareholders
Understanding the views of our shareholders,
and acting fairly between them, has been a
priority for the Board during the year. The
Chairman, CEO and CFO have updated the
Board on the opinions of investors regularly
and the views of shareholders and market
perceptions are also communicated to the
Board via presentations from the Director
of Investor Relations at least every quarter
and engagement with the brokers and
other advisers.
Annual General Meeting
The Annual General Meeting (AGM) allows
shareholders the opportunity to
communicate directly with the Board and
encourages their participation. Shareholders
are given the opportunity to raise issues
formally at the AGM or informally with
Directors after the meeting. All Directors
attend the AGM where possible and the
Chairs of the Committees are available to
answer questions.
The Company’s 2021 AGM was brought
forward to 23 December 2020 to provide
shareholders with an opportunity to engage
with the Board prior to the end of the Brexit
transition period on 31 December 2020 and
to notify them of the actions easyJet needed
to take to continue to comply with European
ownership and control requirements.
Due to restrictions imposed by the
Government as a result of the pandemic,
shareholders were unable to attend the AGM
in person. The Company put in place
arrangements for shareholders to vote at the
AGM electronically and to attend by
conference call to listen to the business of
the meeting and ask questions in real time.
Alternatively, shareholders were able to
submit questions in advance of the AGM.
While the resolutions relating to the
appointment and re-appointment of all of
the Directors were passed with the
necessary majority, they received less than
58% in favour. As the Board noted when
publishing the AGM results, this voting
outcome was predominantly the result of the
Company’s largest shareholder (and its
related parties) (at the time being the
holders of 28.7% of the issued share capital
of the Company) voting against these
resolutions. The views of the Company’s
largest shareholder and their reasons for
voting against the resolutions relate primarily
to the Company’s fleet strategy, are
well-known to the Board and the Company’s
other shareholders and have been well
publicised. The Board has continued to
engage with the Company’s largest
shareholder since the AGM and
throughout the year.
A circular for the Company’s next AGM,
comprising a letter from the Chairman,
Notice of Meeting and explanatory notes
on the resolutions proposed, will be issued
separately at the appropriate time and will
also be published on easyJet’s corporate
website at https://corporate.easyjet.com/
investors.
Investor engagement during
the year
October 2020
Trading update for year ending 30
September 2020
November 2020
Full Year Results
December 2020
Discussions with investors and
advisory bodies ahead of AGM
January 2021
First quarter trading update
February 2021
Bond issuance
April 2021
Trading update for six months to
31 March 2021
Discussions on remuneration
proposals
May 2021
Half Year Results
July 2021
Third quarter trading update
September 2021
Fully underwritten rights issue
www.easyJet.com
107
GOVERNANCE C ORPORATE GOVERNANCE REP ORT (CONTINU ED)
Stakeholders as part of decision
making – the rights issue
• The ability to use the proceeds to
invest in the customer proposition
and take advantage of growth
opportunities, and strengthening the
ability to continue to invest in
sustainability, was also considered to
be important for customers.
• Additionally, providing resilience and
certainty was felt to be important for
employees, many of whom are also
shareholders.
Outside of the specific events
highlighted above, the Group actively
engages with investors and seeks their
feedback. easyJet has an Investor
Relations function which runs an active
programme of engagement with actual
and potential investors based on the
financial reporting calendar as set out
on the timeline on page 107. This year
the programme has included one-to-
one meetings with institutional
investors, roadshows and conferences.
easyJet has particularly targeted
and engaged with European investors
during the year as part of an enhanced
programme related to
disenfranchisement. There is also
regular communication with institutional
investors on key business issues.
Decision: Launching a 31 for 47 rights
issue in September 2021 to raise gross
proceeds of £1.2 billion.
Considerations: The Board considered
a number of factors when looking at
launching an equity raise during the
year, including the best interests of
customers, employees and investors,
amongst other stakeholders.
• The Board had acted decisively on
liquidity during the pandemic to
ensure that easyJet was well placed
to navigate through the uncertainty.
However, as part of a review of its
capital structure, the Board
concluded that raising additional
equity would be necessary.
• The Board was mindful that
shareholders had supported the
Company previously with participation
in an equity placing, and that the
quantum of the rights issue would
require significant investment by
shareholders. However, it also
considered that the trading
environment remained uncertain and
having reviewed the Group’s long
term capital and liquidity needs,
raising the additional equity would not
only protect the Company’s position
in the European aviation sector and
provide resilience from downside
risks, but also improve management’s
ability to deliver long term value for
shareholders. This included through
having the flexibility to take
advantage of long term strategic and
investment opportunities.
• The Board and its advisers consulted
with a number of major shareholders
both shortly before and during the
proposed rights issue. Discussions
centred around the timing and how
the Board had determined the
quantum of the raise. The rationale
for the timing was explained, noting
the above points. The factors that
influenced the size of the equity raise
were also discussed.
• As a result of this engagement,
management reflected on the
feedback received and articulated the
growth ambitions in their
presentations around capacity,
EBITDAR and ROCE.
Remuneration policy
easyJet consulted with a number of major
shareholders on its Directors’ remuneration
policy prior to the formal approval at the
AGM. Engagement has also taken place
during the year in relation to the
performance targets that will apply to the
2020 LTIP awards, and on our approach to
executive remuneration in advance of any
revised remuneration policy being put to
the next AGM.
Employee Representative Directors
Andreas Bierwirth, Catherine Bradley CBE,
Nick Leeder and Moni Mannings are the
Employee Representative Directors, who
are tasked with engaging with the
workforce in accordance with the Code.
Further information is set out on page 109.
108 easyJet plc Annual Report and Accounts 2021
Stakeholders in the boardroom – employee voice
At easyJet, we have a wide workforce of
over 13,000 employees across nine
countries in Europe, including 4,000 pilots
and 7,000 cabin crew. Our people are key
to the Company’s success, and the
uncertainties brought by the pandemic
means that engagement with them has
never been so important.
Following the Code recommendation that
boards have a specific method for
engaging with the workforce, Moya Greene
was appointed the Board’s Employee
Representative Director in January 2019.
When Moya stepped down from the Board
in December 2020, the Board took the
opportunity to review the approach and
consider if there was a way to enhance the
engagement mechanism using the skills,
expertise and geographic spread of more
of the current Board members.
The Nominations Committee reviewed the
available options, including the choices set
out in the Code. Given the geographic
spread of easyJet’s employees, and the
nature of their working arrangements (with
crew, pilots and M&A populations working
different shift patterns), it was felt that
having more than one Director engaging
with the workforce would increase the
Board’s visibility among employees and
ensure that the views of employees were
captured more effectively. The
Nominations Committee therefore
recommended to the Board that four
Directors be nominated to engage directly
with the workforce, to be known as
Employee Representative Directors.
The Board considered this proposed
approach and agreed that four Non-
Executive Directors serve as Employee
Representative Directors. The new
structure was implemented from May 2021
and Andreas Bierwirth, Moni Mannings,
Nick Leeder and Catherine Bradley were
nominated to serve as the first Employee
Representative Directors. They were
selected by the Board due to their
experience, geographic location and
language skills. For biographical information
on these Board members, please see
pages 98 to 100.
The Employee Representative Directors are
expected to meet individually with the
Company’s European Works Council
(‘EWC’) and Management & Administration
Consultative Group (‘MACG’) at least once
a year, and other Works Councils on a
periodic basis. In addition, other more
informal engagement is envisaged,
including informal employee gatherings in
geographic locations or relevant functional
groupings. When interacting with
representative groups, the Employee
Representative Directors are free to
consider the most appropriate combination
of engagement mechanisms to ensure
inclusivity and encourage an open
exchange.
A standing agenda item allows the
Employee Representative Directors to
report to the Board regularly on their
discussions, and they are encouraged
to bring the employee voice into
conversations in the boardroom
whenever possible.
It is important to note that our employees
continue to be able to raise any concerns
confidentially, should they wish to do so,
using easyJet’s whistleblowing (‘Speak Up,
Speak Out’) arrangements.
During the period from May to September
2021, Moni Mannings met with the MACG
group and Catherine Bradley met with
the Spanish Works Council. The themes
raised in these meetings were shared with
the Board at their subsequent Board
meeting and reflected the impact
of the prior 18 months on both groups.
The Board acknowledged the challenges
employees have faced over that time and
the resilience they demonstrated during
the year. The Board noted that the
experience of employees was not uniform
across the workforce, with some
employees having been furloughed for a
significant part of the year and others
working long hours mostly from home to
deal with the numerous challenges the
business faced. It discussed the impact on
employees as well as opportunities to
address this and some of the concerns that
had been raised. It also discussed the fact
that employees were perhaps not as
familiar with the Board or its purpose, and
agreed it would look to address this in the
coming year.
For further details on our engagement with
employees please refer to page 28.
Stakeholders outside of the boardroom – base visit
An understanding of, and connection with,
easyJet’s business are fundamental for our
Non-Executive Directors to enable them to
maximise their contribution to Board
discussion and understand our
stakeholders. With this in mind, we aim to
take the Board to visit one of our European
operations at least once a year. These visits
increase the visibility of the Board and
provide our Non-Executive Directors with a
valuable opportunity to engage with local
management and crew, and gain insight
into how the culture and values of the
business are translated into day-to-day
operations.
The Board’s ability to undertake an
overseas base visit during the year was
impacted by the continued travel
restrictions. However in September 2021
the Board was able to visit easyJet’s
operations at London Gatwick, which is the
Company’s largest base. The Board toured
some of the customer areas to understand
the key points on a customer’s journey
through the airport, and had an opportunity
to meet with local base staff and find out
how they had navigated through the
challenges of the pandemic.
The Board also had the opportunity
to hear first-hand from external
stakeholders by meeting with the executive
management of Gatwick Airport. This
allowed them to gain a deeper
understanding of how Gatwick works with
easyJet to drive commercial benefit.
Particular emphasis was placed on ways to
stimulate a faster traffic recovery post-
pandemic, and how Gatwick can help
support easyJet’s business model of best in
class cost and efficiency when operating at
highly constrained airports.
The Board welcomed the opportunity
to meet and discuss easyJet’s progress and
strategic priorities with the executive and
local management. The visit also proved
helpful for the new Board members to
better understand easyJet’s operation and
views of the local external stakeholders.
Additional details of the engagement with
stakeholders during the year, and the s172
statement, are set out on pages 26 to 37.
www.easyJet.com
109
GOVERNANCE C ORPORATE GOVERNANCE REP ORT (CONTINU ED)
2 Division of
responsibilities
Independence
The Board comprised 10 Directors at the
year-end: two Executive Directors and
eight Non-Executive Directors. Over half of
our Board (excluding the Chairman) are
deemed Independent Non-Executive
Directors and the composition of all Board
Committees complies with the Code.
Additionally, the Chairman and Chair
Designate were considered independent
on their appointment. More information
about the Board members is available on
pages 98 to 101.
The independence of the Non-Executive
Directors is considered by the Board and
reviewed on an annual basis, as part of the
Board effectiveness review. The Board
considers factors such as length of tenure
and relationships or circumstances that are
likely to affect, or appear to affect, the
Directors’ judgement, in determining
whether they remain independent.
Non-Executive Directors do not participate
in any of the Group’s share option or
bonus schemes.
Following this year’s Board effectiveness
review, the Board concluded that all of the
Non-Executive Directors continue to remain
independent in character and judgement
and are free from any business or other
relationships that could materially affect
the exercise of their judgement. The Board
and Nominations Committee also review
Committee membership annually to
ensure that undue reliance is not placed
on any individual.
Roles and responsibilities
The Board has a formal schedule of
matters reserved for its decision. Certain
governance responsibilities have been
delegated by the Board to Board
Committees, to ensure that there is
independent oversight of internal control
and risk management and to assist the
Board with carrying out its responsibilities.
The Board Committees comprise
Independent Non-Executive Directors and,
in some cases, the Chairman. Each
individual Committee’s Chair reports to the
Board on matters discussed at Committee
meetings and highlights any significant
issue that requires Board attention. For a
summary of the roles of each Committee,
see the governance framework on
page 105. The matters reserved for the
Board and the terms of reference of the
Board Committees are available in the
Governance section of easyJet’s corporate
website at https://corporate.easyjet.com.
The roles of Chairman and Chief Executive
are set out in writing, clearly defined and
approved by the Board. These are also
available on easyJet’s corporate website
at https://corporate.easyjet.com. Day-to-
day management responsibility rests with
the Airline Management Board (‘AMB’), the
members of which are listed on pages
102 to 104.
Chairman
The Chairman, John Barton, is responsible
for leadership of the Board and ensuring
effectiveness in all aspects of its role. He is
responsible for setting the Board’s agenda
and ensuring adequate time is available for
discussion of all agenda items, including
strategic issues. He is responsible for
encouraging and facilitating active
engagement by and between all Directors,
ensuring a culture of openness is
maintained and drawing on each of their
extensive skills, knowledge and experience.
Stephen Hester will assume the role of
Chairman on 1 December 2021, at which
point John will step down from the Board.
Senior Independent Director
The Senior Independent Director, Julie
Southern, acts as a sounding board for the
Chairman and acts as an intermediary for
the other Directors when necessary. She is
also available to address shareholders’
concerns that have not been resolved
through the normal channels of
communication with the Chairman, Chief
Executive or Chief Financial Officer. She is
responsible for evaluating the performance
of the Chairman in consultation with the
other Non-Executive Directors.
Non-Executive Directors
The Non-Executive Directors provide an
external perspective, sound judgement and
objectivity to the Board’s deliberations and
decision making. With their diverse range
of skills and expertise, they support and
constructively challenge the Executive
Directors and monitor and scrutinise the
Group’s performance against agreed goals
and objectives. The Non-Executive
Directors are also responsible for
determining appropriate levels of executive
remuneration, appointing and removing
Executive Directors, and succession
planning through their membership of
the Remuneration and Nominations
Committees. The Non-Executive
Directors together with the Chairman
meet regularly without any Executive
Directors being present.
Chief Executive Officer
Johan Lundgren, as Chief Executive Officer,
has specific responsibility for recommending
the Group’s strategy to the Board and for
delivering the strategy once approved. In
undertaking such responsibilities, the Chief
Executive Officer takes advice from, and is
provided with support by, his senior
management team and all Board
colleagues. Together with the Chief
Financial Officer, the Chief Executive
Officer monitors the Group’s operating and
financial results and directs the day-to-day
business of the Group. The Chief Executive
Officer is also responsible for recruitment,
leadership and development of the Group’s
executive management team below
Board level.
Company Secretary
The Company Secretary, Maaike de Bie,
supports and works closely with the
Chairman, the Chief Executive Officer and
the Chairs of the Board Committees in
setting agendas for meetings of the Board
and its Committees. She supports the
provision of accurate, timely and clear
information flows to and from the Board
and the Board Committees, and between
Directors and senior management in order
to ensure that the Board has the
information and resources it needs in order
to function effectively. In addition, she
supports the Chairman in designing and
delivering Directors’ induction programmes
and the Board and Committee
performance evaluations. She also advises
the Board on corporate governance
matters and Board procedures, and is
responsible for administering the Share
Dealing Code and the AGM.
The appointment and removal of the
Company Secretary is a matter requiring
Board approval.
Board meetings in 2021
The Board meets regularly and held 17
meetings during the year, including two
strategy sessions in October and May. It is
standard practice that each regular Board
meeting follows a carefully tailored agenda
agreed in advance by the Chairman, Chief
Executive Officer and Company Secretary.
A typical meeting will comprise reports on
current trading and financial performance
from the Chief Executive Officer and Chief
Financial Officer, legal and governance
updates, safety and investor relations
updates and ‘deep dives’ into areas of
particular strategic importance. A summary
of the key activities covered during the
year is set out on page 111. In addition, to
allow for opportunities for the Board to
engage with senior management to discuss
key elements of the business, two Board
dinners were held.
110 easyJet plc Annual Report and Accounts 2021
BOARD ACTIVITY IN 2021
Strategy, Operations, Finance and Risk
• Held two ‘deep dive’ strategy sessions to discuss the five-year
plan, capital structure, fleet strategy and areas of strategic
focus post pandemic
Safety
• Received and discussed internal and external safety
related events to ensure appropriate mitigation plans
are in place
• Visited London Gatwick and met with employees and
• Received updates on protecting employees and
representatives of Gatwick Airport Limited (see page 109)
• Considered and approved the proposed network strategy
• Considered fleet requirements and approved various
operational and fleet agreements, including revised delivery
profiles under the Airbus agreement
• Received a presentation from management on customers
and customer service improvement
• Received regular updates on the Digital Safety Programme
• Reviewed the Group’s debt capital and funding arrangements
and approved the entry into a new five-year term loan facility
of $1.87 billion and issuance of €1.2 billion seven-year bond
under the Euro Medium Term Note Programme to secure
adequate liquidity
• Considered and approved the launch of the rights issue to
facilitate and accelerate easyJet’s recovery from the impact
of Covid-19
• Discussed the activity around making the cost base more efficient
• Received presentations from the Chief Executive Officer and
Chief Financial Officer and senior management on strategic
initiatives and trading performance and updates on recent
developments in the competitive landscape
• Received and reviewed the status of the Sustainability
Strategy, related climate change issues and efforts to meet
TCFD reporting requirements
• Reviewed and approved the Group’s full-year 2020 and
half-year 2021 results, as well as its quarterly results
• Approved the Group’s 2020 Annual Report including a fair,
balanced and understandable assessment and validated the
effectiveness of the Group’s risk management framework and
internal controls
• Reviewed the principal risks, emerging risks and uncertainties,
and consideration of the risk appetite
• Reviewed and confirmed the Group’s Viability Statement and
going concern status
The Strategic and Financial Review explains this in more detail
on pages 2 to 77. Our Risk Management Framework and
Principal Risks are set out on pages 78 to 95
customers during the Covid-19 pandemic and easyJet’s
related industry leading biosecurity measures
• Received an update on the progress against the 2020
safety plan and to agree safety, security and
compliance priorities
• Received updates from the Chair of the Safety
Committee on its activities.
Safety is a key priority: read more about how we are
ensuring this on pages 119 to 120
People
• Continued to focus on the composition, balance and
effectiveness of the Board, including the appointment
of David Robbie and Stephen Hester and related
Committee changes following the departure of a
number of Directors
• Reviewed Directors’ tenure and external commitments
and composition/membership of Board Committees
• Received an update on progress made against easyJet’s
Diversity and Inclusion strategy
• Received an update on succession planning and
development and update on Talent and Development
actions
• Reviewed the Chairman’s and Non-Executive Directors’
fees
• Held separate Non-Executive Director sessions with the
Chairman to discuss leadership and other Board matters
• Considered the evolution of the role of Employee
Representative Director and agreed to split the
responsibility amongst more than one Director
You can read more about this on pages 121 to 123
Governance
• Received and discussed regular updates on Brexit and
approved the implementation of the EU ownership
contingency plan
• Received reports on engagement with institutional shareholders,
investors and other stakeholders throughout the year
• Conducted an externally facilitated Board evaluation covering
the Board’s effectiveness, processes and ways of working,
identifying areas of future focus
• Received regular reports from the Chairs of the Safety,
Nominations, Audit, Finance and Remuneration Committees
• Reviewed and approved the arrangements for the December
2020 AGM and related arrangements, including the Notice of
Meeting and amendments proposed to the Articles of Association
• Approved the Group’s modern slavery statement for publication
To see how we comply with the UK Corporate Governance
Code please turn to page 106
Customers
Employees
Suppliers
Shareholders
Community
www.easyJet.com
111
GOVERNANCE C ORPORATE GOVERNANCE REP ORT (CONTINU ED)
Attendance at meetings
The Directors’ attendance at the Board and
Committee meetings held during the year
are shown in the table below. The Board
would typically hold 10 scheduled meetings
during the year, including a strategy day,
but due to the ongoing Covid-19 pandemic,
the Board continued to meet on a more
regular basis and as a result the total
number of Board meetings held during the
year was 17. As set out in the table,
attendance rates remained very high.
The core activities of the Board and its
Committees are covered in scheduled
meetings held during the year. Additional
ad hoc meetings are also held to consider
and decide matters outside of the
scheduled meetings. Non-Executive
Directors are encouraged to communicate
directly with each other and senior
management between Board meetings.
In addition to the meetings set out below,
five meetings of the Covid Sub-Committee
(Financing) were held between October
2020 and March 2021 to review and
approve various specific Covid related
financing activities in the period, given the
Board’s focus on liquidity. The Committee
comprised John Barton, Catherine Bradley
CBE, Andrew Findlay (to February 2021),
Kenton Jarvis (from February 2021), Johan
Lundgren, Charles Gurassa (until December
2020) and Julie Southern. It is anticipated
that the Covid Sub-Committee (Financing)
will be disbanded as the Board’s activity
returns to a more normal pattern.
Directors are encouraged and invited to
attend all Board and Committee meetings,
but in certain circumstances meetings are
called at short notice and due to prior
business commitments and time
differences Directors may not always be
able to attend.
Even if a Director is unable to attend a
meeting because of exceptional
circumstances, they continue to receive
the papers in advance of the meeting and
have the opportunity to discuss with the
relevant Chair or the Company Secretary
any matters on the agenda which they
wish to raise. Feedback is provided to the
Directors not able to attend on the
decisions taken at the meeting.
In addition, and in line with the Code, the
Chairman holds meetings with the
Independent Non-Executive Directors
without the Executive Directors present.
There is a standing agenda item at the end
of each Board meeting for the Independent
Non-Executive Directors to meet without
the Executive Directors.
For further information regarding when
Board members joined or stepped down
from Committees during the financial year,
please refer to the ‘Committee changes’
sections in the relevant Committee reports
(pages 118 to 153).
Number of meetings
Executive Directors
Johan Lundgren
Andrew Findlay1
Kenton Jarvis2
Non-Executive Directors
John Barton
Stephen Hester3
Charles Gurassa4
Catherine Bradley CBE
Dr Andreas Bierwirth
Moya Greene DBE4
Dr Anastassia Lauterbach5
Nick Leeder
Moni Mannings
David Robbie6
Julie Southern
Notes:
Board
(Scheduled)
Board
(ad hoc)
Audit
Finance
Nominations
Remuneration
Safety
11
11/11
4/4
7/7
11/11
1/1
2/2
11/11
11/11
2/2
2/2
10/11
11/11
10/10
11/11
6
6/6
3/3
3/3
6/6
2/2
1/2
6/6
6/6
2/2
2/2
5/6
5/6
4/4
6/6
5
–
–
–
–
–
–
5/5
–
–
1/1
–
–
4/4
5/5
5
–
–
–
–
–
1/1
5/5
5/5
–
–
–
–
4/4
–
4
–
–
–
4/4
–
1/1
4/4
–
1/1
–
4/4
–
–
4/4
5
–
–
–
–
–
2/2
–
–
2/2
–
–
4/5
3/3
5/5
5
–
–
–
–
–
–
–
5/5
1/1
–
4/5
–
–
5/5
1. Andrew Findlay stepped down from the Board on 3 February 2021.
2. Kenton Jarvis joined the Board on 3 February 2021.
3. Stephen Hester joined the Board on 1 September 2021.
4. Charles Gurassa and Moya Greene DBE stepped down from the Board on 23 December 2020.
5. Dr Anastassia Lauterbach stepped down from the Board on 21 December 2020.
6. David Robbie joined the Board on 17 November 2020.
Non-attendance at meetings was due to unavoidable prior commitments and some meetings being called at short notice.
112 easyJet plc Annual Report and Accounts 2021
Time commitment and external
appointments
Following the Board evaluation process,
detailed further below, the Board has
considered the individual Directors’
attendance, their contribution, and their
external appointments, and is satisfied that
each of the Directors is able to allocate
sufficient time to the Group to discharge
his or her responsibilities effectively.
As evidenced by the attendance table
earlier in this report, the attendance
remained high and demonstrates the
Directors’ ability to devote sufficient time.
Contracts and letters of appointment
with Directors are made available at the
AGM or upon request. The standard
terms and conditions of the appointment
of Non-Executive Directors are also
available in the Governance section
of easyJet’s corporate website at
https://corporate.easyjet.com.
Executive Directors and the AMB are
permitted to take up non-executive
positions on the board of one other listed
company so long as this is not deemed to
interfere with the business of the Group.
In line with the 2018 Code, Directors are
required to seek Board approval prior to
taking on any additional significant external
appointments and the following were
approved during the year in line with
this requirement:
• Catherine Bradley’s appointment as a
Non-Executive Director of Kingfisher plc
and Board member of the Value
Reporting Foundation (formerly the
International Integrated Reporting
Council (IIRC)).
• Moni Mannings’ appointment as a
Non-Executive Director of Cazoo
Group Ltd.
• Johan Lundgren’s appointment as a
Senior Adviser to Blackstone’s private
equity group, advising on existing and
potential new investments.
Prior to these appointments, the Board
considered the time required, including
whether they would impact their ability to
devote sufficient time to their current role.
The Board considered that the
appointments, and related arrangements to
manage conflicts of interest, would not
interfere with their roles with the Company.
Information and support
All members of the Board are supplied with
appropriate, clear and accurate information
in a timely manner covering matters which
are to be considered at forthcoming Board
or Committee meetings. The papers for
each meeting are made available via an
electronic Board portal along with a wealth
of supporting and reference material.
Directors have direct access to the advice
and services of the Company Secretary,
who is responsible for advising the Board
on all governance matters and ensuring
that Board procedures are complied with.
Where Directors deem it necessary to seek
independent legal advice about the
performance of their duties with the Group,
they are entitled to do so at the Group’s
expense.
3 Composition, succession
and evaluation
The Nominations Committee leads the
process for Board appointments and
makes recommendations to the Board.
The activities of the Nominations
Committee and a description of the
Board’s policy on diversity and inclusion are
on pages 121 to 123.
Appointments to the Board
The Board has processes in place to
appoint Non-Executive Directors who can
apply their wider business skills, knowledge
and experience to the oversight of the
Group, and provide input and challenge in
the boardroom to assist in the
development and execution of the Board’s
strategy. Similarly, Executive Director
appointments are made to ensure the
effective formulation and implementation
of the Group’s strategy.
The Nominations Committee, on behalf
of the Board, reviews the skills of Board
members at least annually, identifying
any areas of skills, experience and
knowledge that can be strengthened
further. All Director appointments are made
by the Board and are subject to a formal,
rigorous and transparent process.
A number of changes were made to the
composition of the Board and its
Committees during the year. In making
these changes, the Nominations
Committee and Board took into account
various considerations including Board
diversity, independence and the
combination of skills, knowledge and
experience of the Directors:
• David Robbie was appointed as
Non-Executive Director on 17 November
2020. David possesses in-depth
international experience and brings a
diverse mix of skills to the Board.
• Dr Anastassia Lauterbach stepped down
from the Board on 21 December 2020.
• Moya Greene DBE and Charles Gurassa
both stepped down from the Board at
the Company’s AGM in December 2020
after serving for three and nine years
respectively.
• Kenton Jarvis joined the Board and
succeeded Andrew Findlay as the Chief
Financial Officer on 3 February 2021.
Kenton brings vast industry experience
and highly relevant skills to the role.
• Following a comprehensive search
process Stephen Hester was appointed
as Non-Executive Director and Chair
Designate on 1 September 2021. Stephen
will succeed John Barton as a Chair on
1 December 2021, at which point John
will step down from the Board after
nearly nine years as Chairman.
Details of the induction programmes for
the new Directors are set out on page 114.
The Board plans to continue to execute
against its succession plans as the
longer-serving members step down and it
is anticipated that there will be further
changes to the Board in the coming year.
Election and re-election
All Board appointments are subject to
continued satisfactory performance
following the Board’s annual effectiveness
review. The Company’s Articles of
Association require the Directors to submit
themselves for election or re-election by
shareholders at every AGM. All continuing
Executive and Non-Executive Directors will
stand for election or re-election at the
Company’s next AGM.
Tenure
The lengths of tenure of the Chairman and
Non-Executive Directors at 30 September
2021 are set out on page 101.
Development
On joining the Board, it is the responsibility
of the Chairman to ensure that all newly
appointed Directors receive a full, formal
and tailored induction, which is organised
by the Company Secretary. The induction
programme covers a range of key areas of
the business including, amongst other
things, the business and functions of the
Group, their legal and regulatory
responsibilities as Directors, briefings and
presentations from relevant executives, and
opportunities to visit and experience
easyJet’s business operations. Details of
the Board induction programme provided
for David Robbie, Stephen Hester and
Kenton Jarvis are set out on page 114.
Directors’ training and development needs
are of key importance in order to discharge
their duties effectively and opportunities
are made available for them to update their
skills and knowledge. Directors are
encouraged to highlight specific areas
where they feel their skills or knowledge
would benefit from further development as
part of the annual Board evaluation
process. Training opportunities are
provided through internal meetings,
workshops, presentations and briefings by
internal advisers and business heads, as
well as external advisers.
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GOVERNANCE C ORPORATE GOVERNANCE REP ORT (CONTINU ED)
Director induction programme 2021
David Robbie, Kenton Jarvis and
Stephen Hester, who were appointed
during the year, followed a tailored
induction programme covering a range
of key areas of the business, a sample
of which is given below. They were
provided with a Board induction pack
containing Company and Board
information to assist with building an
understanding of the nature of the
Group, its business, markets and people,
and to provide an understanding of the
Group’s main relationships. The pack
also included information to help
facilitate a thorough understanding of
the role of a Director and the
framework within which the Board
operates. In addition, they met with key
colleagues across the business and
were provided with a briefing pack
before each session to better
understand the areas of the business.
These meetings were tailored to the
nature of the role that they would be
undertaking. For example in addition to
the meetings set out in this section,
Stephen Hester met with all of the
Board and AMB on an individual basis,
as well as an expanded group of
easyJet colleagues including the
Director of Governmental Affairs, Chief
Pilot and Director of Cabin Services,
amongst others. Stephen also attended
a meeting of the Leadership 50,
comprised of the senior leaders across
the organisation.
Safety and operations
• Attended a session hosted by the
Director of Safety, Security and
Compliance which included briefings
on the regulatory framework, safety
management system, AOC
structures, safety governance,
compliance monitoring and current
risks and priorities
• Met with the Chief Operating Officer
to discuss Summer 21 Readiness
programme framework, cost
efficiency programme in relation to
costs, fleet profile and customer
satisfaction statistics
Governance, legal and
remuneration
• Attended a briefing session with the
Group People Director and Director
of Reward to discuss easyJet’s
approach to reward and our
remuneration policy
• Attended a briefing session with the
Group People Director to discuss
easyJet’s five-year People Strategy,
our inclusion and wellness strategy
and industrial relations landscape
• Met with the Chair of the
Remuneration Committee to
understand the remuneration
framework and received a brief
introduction to the work of the
Remuneration Committee
• Met with the Group General Counsel
and Company Secretary to discuss
and understand the Board and
Committee procedures, compliance
with the Market Abuse Regulations,
legal risk, EU261 and our digital safety
programme, amongst other matters
Finance and audit
• Attended briefing sessions on
easyJet’s trading performance, the
2021 financial year budget, cash burn,
liquidity forecast, cost efficiency
programme and financial controls
with the Director of Financial Planning
& Analysis
• Attended a briefing session with the
Director of Risk & Assurance to
understand easyJet’s Enterprise Risk
Management Framework and internal
audit structure
• Met with the Chair of the Audit
Committee to understand the role of
the Committee
Board and senior management
• Met separately with the Chairman
and Senior Independent Director to
understand the role of the Board and
the individual contribution required
• Met separately with the Chief
Executive Officer and other key
members of the Airline Management
Board, including the Chief
Commercial Officer, Chief Operating
Officer, Group Markets and Marketing
Director and Chief Data and
Information Officer
Business and functions
• Met with the Director of Airport
Development & Procurement to
understand the relationships with
airports and status of our largest
bases
• Met with the Director of Investor
Relations to understand relationships
with major shareholders and the
market environment
• Met with the Director of Treasury to
understand easyJet’s capital structure
and funding obligations
• Met with the Strategy Director to gain
a deeper understanding of easyJet’s
five-year plan and fleet overview
• Met with the Company’s brokers to
understand easyJet from a market
and broker’s perspective
114 easyJet plc Annual Report and Accounts 2021
Board evaluation
2020 – internal evaluation
Given the Board’s activities during 2019/20 were dominated by reacting to the unique challenges posed by the pandemic, a shorter and
more targeted evaluation was undertaken, seeking feedback from Board members on how they felt the Board had collectively
responded to these challenges and how it should evolve its approach in future.
The unprecedented nature of the Board’s activity in the year was noted, including the volume of meetings and the related impact on the
Board and management’s workloads. The key areas identified for increased focus and development during the 2020 financial year were
as set out below.
Areas of focus identified
Areas
Actions taken
Succession planning – continued
focus on succession planning for
Board and senior management, to
ensure that the Board are satisfied
that appropriate plans are in place
The Nominations Committee and Board continued to treat this as a priority during the
year. Four Directors have stepped down from the Board (Charles Gurassa, Moya Greene,
Anastassia Lauterbach and Andrew Findlay) and three new Directors were appointed
(David Robbie, Kenton Jarvis and Stephen Hester) during the year. The Nominations
Committee reviewed the composition and skills of the Board prior to these appointments
and will continue to keep Board and senior management succession under review when
Stephen Hester succeeds John Barton as chair.
Strategic oversight – the Board
would need to focus on the
strategy of the business post the
pandemic and ensuring the
business was well placed to deliver
a strong recovery
Building relationships – Whilst
participating in remote meetings
had worked well, it would be
important for the Board and
management to resume meeting
in person when circumstances
allowed, to help continue to build
relationships particularly for the
new members of the Board
The Board held two deep dive strategy sessions in October 2020 and May 2021, reviewing
the response to the pandemic and the future strategic direction of the Company,
including as part of the preparations for the rights issue in September 2021. The Board will
continue to focus on this in the coming year, led by the incoming Chair.
The Board has held a number of physical meetings where restrictions have allowed,
including the visit to London Gatwick in September 2021. Members of the AMB attended a
dinner with the Board at Gatwick, which allowed new Board and new AMB members to
meet and build relationships. Future meetings and dinners are planned, subject to the
prevailing restrictions at the time.
2021 – external performance review
For the 2021 Board performance review, following an RFP process the Board engaged Lorna Parker and Elaine Sullivan of Manchester
Square Partners (MSP) to conduct an independent evaluation of the performance of the Board and its Committees. easyJet has
previously worked with a separate division at MSP in relation to professional development activities for the AMB, but as the Board
performance review was undertaken by a separate team within MSP, who had no experience of or connection to the Company, no
conflict was deemed to exist. The use of two expert evaluators in Lorna and Elaine was also felt to help bring an independent check and
balance to the review of the Board and its activities. MSP has no other connection with the Group or individual Directors.
The evaluation was designed in consultation with the outgoing Chair, the Senior Independent Director and the Company Secretary, with a
focus on how the Board could capitalise on its strengths but evolve to address the needs of the medium term, including the post-
pandemic recovery. Strong emphasis was placed on the role of the Board, composition and succession, culture and values, dynamics
among Board members and management, and governance and leadership. The process that MSP followed for the review can be found
on page 116.
www.easyJet.com
115
GOVERNANCE C ORPORATE GOVERNANCE REP ORT (CONTINU ED)
• Held briefing sessions with the outgoing Chair, Senior Independent Director and Company
Secretary to understand context and priorities
Preparation
• Review of Board and Committee papers for the previous 12 months and other relevant
documentation, including Strategy papers and the Board Forward Agenda
• Individual interviews were scheduled with all of the Non-Executive Directors, the Chair, Company
Secretary, Group People Director, and one of the Company’s brokers for an external view.
Formal
interviews
• Developed a set of comprehensive questions for the interviews and interviews conducted
with the group identified above.
Board
observation
• Observed the Board meeting held at London Gatwick in September 2021 to observe the
Board dynamics, and also had the opportunity to observe Board’s interaction with
stakeholders.
Reporting
• Key findings and recommendations were shared with the outgoing Chair, the incoming Chair,
the Senior Independent Director and Company Secretary, and a draft report was prepared
for review.
• The final report was circulated to the full Board, with a discussion held during a meeting of
the Board to consider the outcomes and agree recommended actions.
Findings
The review concluded that while the prior 18 months had been one of the most demanding and challenging periods the Board had ever
seen, and despite the number of changes to its membership in that time, the Board had continued to function extremely well and the
dynamics were good. The Board’s culture was seen as open, collegiate and cohesive, and all Board members were well prepared and
engaged, which was particularly noteworthy given the increased demands made on their time with the elevated number of Board and
Committee meetings. It was noted that the Board had been required to shift its focus to shorter term decisions around the balance
sheet, cost control, and safety, which it had done well. The Board’s effectiveness was felt to be demonstrated through the following:
• Strong alignment between the members of the Board on its’ role over the medium term in setting the strategy, culture, understanding
the views of various stakeholders and establishing the right succession plans
• Clarity and alignment among members on both the strategic priorities for the Company and the associated challenges and risks
• Having an open, transparent, supportive but appropriately challenging atmosphere and tone
• A breadth and depth of complementary skills and experience around the Board table
• Effective, efficient and thorough supporting Board and governance processes
The review also concluded that to build on these strengths and set the Board up for success in future, there would be an opportunity to
‘reset and restart’ following the pandemic, with an emphasis on moving from short term crisis management to longer term strategy, with
the Board playing a key role in shaping, debating and testing the ambition, vision and strategy alongside the Executives. The focus areas
and related actions are set out below.
Areas of focus identified
Area
Actions to be taken
Exploring opportunities to allow more open-ended
discussions and collaboration on strategic matters
• The Board forward agendas will be reviewed to ensure that regular,
structured and iterative strategy discussions take place throughout
the year, including one or more dedicated days to discuss strategic
matters
• Continued build on the individual briefings on major decisions ahead of
Board meetings, enabling all Board members to be brought up to the
same knowledge level and enabling better discussions in the
boardroom, while also facilitating relationship building
Increasing time spent together, formally and
informally, to continue to build relationships with
newer members of the Board and Management, and
review the evolution of the Board over time
• In person meetings to be held where possible, with a two day offsite in
June 2022, ideally overseas at a European base subject to any
prevailing restrictions.
• Regular NED only sessions to continue to be held, including dinners
where appropriate
• Other opportunities to increase exposure to management and allow
for informal time spent together will be identified by the Chair, CEO
and Company Secretary.
116 easyJet plc Annual Report and Accounts 2021
Rebalancing the Board forward agenda, with a return
to a more normal forward-looking and strategic
agenda incorporating forward looking matters,
including Strategy; Stakeholders (Customers, People,
Shareholders, Regulators); Sustainability; Brand and
Marketing; succession, culture, diversity and inclusion
Enhancing discussions around risk and risk appetite
as the Board looks to the post-pandemic
recovery phase
Reviewing the remit and membership of the
Board’s Committees to ensure the Board is
focused on value add
• The Board forward agendas to be reviewed to ensure all appropriate
areas were covered, with input sought from all Board members and
kept regularly updated.
• The governance framework, including terms of reference and
Committee memberships, will be reviewed to ensure it is optimised for
the Board’s time to be focused on value add activities
• Board papers to be made more succinct and better articulate the key
issues and judgement calls
Continued focus on Board composition and
succession, with a view to enhancing European and
aviation experience on the Board
• The Nominations Committee to continue to keep the composition,
skills and experience of the Board under review, and is expected to
explore the addition of further non-executive directors to the Board
during the year with European and aviation experience.
Review of the Chairman’s
performance
As part of the external Board performance
review, the performance of the Chair was
also discussed. It was noted that John
Barton’s contribution had been significant
both during the year and over the last
nine years of his tenure, and that he
demonstrated effective leadership.
However, with the transition from John
Barton to Stephen Hester due to take
place in December 2021, the primary focus
of the review was how the Board as a
whole could set itself up for success in
the future.
4 Audit, risk and
internal control
The report of the Audit Committee,
including details of its composition and
activities in the year, is set out on pages
124 to 129.
Financial and business reporting
The Strategic Report on pages 4 to 95
explains the Group’s business model and
the strategy for delivering the objectives of
the Group. The Statement on Directors’
Responsibilities in relation to the Annual
Report and Accounts being fair, balanced
and understandable can be found on page
158 and a statement on the Group as a
going concern and the viability statement is
set out on pages 74 to 77.
Risk management
The Board has overall responsibility for
easyJet’s risk management and systems of
internal control. The Board has carried out
a robust assessment of the principal and
emerging risks facing the Group and how
those risks affect the prospects of the
Group. Please refer to pages 78 to 95 for
further information on the risk
management process and the Group’s
principal and emerging risks and
uncertainties, and pages 76 and 77 for their
impact on the longer-term viability and
prospects of the Group.
Ongoing risk management and assurance
is provided through the various monitoring
reviews and reporting mechanisms that are
embedded in the business operations. The
results of these reviews are reported to the
Audit Committee and the Board, which
consider whether these high-level risks are
being effectively controlled.
Regular operational (including safety),
commercial, financial and IT functional
meetings are held to review performance
and to consider key risks and issues (please
refer to pages 119 and 120 for details of the
Safety Committee).
Executive management meets regularly to
consider significant risks, the status of risk
mitigations and overall business
performance; this ensures key issues are
escalated through the management team
and, if appropriate, ultimately to the Board.
The Directors review the effectiveness of
internal controls, including operating,
financial and compliance controls.
The Audit Committee undertakes an annual
review of the appropriateness of the risk
management processes to ensure that
they are sufficiently robust to meet the
needs of the Group (please refer to
pages 124 to 129 for details of the Audit
Committee’s responsibilities).
Internal control
The Group’s internal control systems are
designed to manage, rather than eliminate,
the risk of failure to achieve business
objectives. By their nature, they can only
provide reasonable, not absolute,
assurance against material misstatement or
loss. The overall responsibility for easyJet’s
systems of internal control and for
reviewing their effectiveness rests with the
Board. The Board has conducted an annual
review of the effectiveness of the systems
of internal control during the year under
the auspices of the Audit Committee.
Further information on the Group’s
internal control systems is set out on
pages 125 to 129.
Audit
Details of the Internal Audit function and
external auditors are provided within this
report on pages 127 to 129.
5
Remuneration
The responsibility for determining
remuneration arrangements for the
Chairman and Executive Directors has been
delegated to the Remuneration Committee.
For further information on the Group’s
compliance with the Code provisions
relating to remuneration, please refer to
the Directors’ Remuneration Report on
pages 130 to 153 for the level and
components of remuneration, and page
143 (the Remuneration Committee Report)
for procedures relating to remuneration.
The Group’s internal control systems
are designed to manage, rather than
eliminate, the risk of failure to achieve
business objectives.
www.easyJet.com
117
GOVERNANCE C ORPORATE GOVERNANCE REP ORT (CONTINU ED)
Board committees
FINANCE COMMITTEE REPORT
The Committee monitored hedging
strategies and adapted treasury
policies in line with prevailing market
conditions.
Catherine Bradley CBE
Chair of the Finance Committee
Membership, meetings
and attendance
• Catherine Bradley CBE (Chair)
• Dr Andreas Bierwirth
• Charles Gurassa
(until 23 December 2020)
• David Robbie
(from 17 November 2020)
The Committee consists of the
Independent Non-Executive
Directors listed above. All members
of the Committee are Independent
Non-Executive Directors. Member
biographies setting out their skills
and experience can be found on
pages 98 to 101.
David Robbie became a member of
the Committee on 17 November
2020 on joining the Board. Charles
Gurassa stepped down from the
Committee and the Board on
23 December 2020. The Company
Secretary acts as Secretary to the
Committee and members of the
executive management are invited
to attend meetings.
The Committee met five times
during the year. Meeting attendance
can be found in the table on
page 112.
The Committee’s terms of
reference can be found on
the Company’s website at
https://corporate.easyjet.com.
I am pleased to present the Finance
Committee (the ‘Committee’) report
covering the work of the Committee for
the year ended 30 September 2021.
The Committee’s key role is to review and
monitor the Group’s treasury policies,
treasury operations and funding activities
along with associated risks. It is responsible
for regulating the treasury activities of the
Company and controlling the associated
risks, determining and approving material
inter-company distributions, and changes to
share warehousing policies and loan facility
arrangements. The Committee is also
responsible for providing approvals in relation
to hedging, International Swaps and
Derivatives Association (ISDA) arrangements,
letters of credit, guarantees in line with the
delegated authority and the Treasury Policy.
Rapidly changing travel restrictions led to
easyJet operating a reduced flying
programme to remain operationally flexible.
This meant changing our existing hedging
strategies. The Committee focused on
ensuring that easyJet’s over-hedged
exposures were closed and that it was able
to manage its exposures to minimise
losses. The key activities of the Committee
are set out below. There were five meetings
during the year and after each Committee
meeting, an update was presented to the
Board on the key issues discussed during
our meetings.
Catherine Bradley CBE
Chair of the Finance Committee
Key activities during the year
The Committee continued to monitor both
the hedging and liquidity policies due to the
uncertainty in the operating environment.
The Committee ensured easyJet maintained
significant levels of liquidity throughout the
year, as well as making sure all hedging
positions were being managed appropriately.
easyJet entered into a number of financing
arrangements throughout the year, significantly
increasing its cash balance. To ensure the
additional cash was invested safely and
securely, the Committee regularly reviewed
the counterparty credit limits to make sure
they were fit for purpose. The Committee
also undertook a deep dive on easyJet’s carbon
exposures, which resulted in easyJet updating
the treasury policy used for purchasing carbon
allowances in relation to Emissions Trading
System (ETS) compliance.
easyJet’s Treasury team maintains a risk
and control matrix, to highlight the key
areas of risk as well as the mitigating
controls in place. During the year, the
Committee received an update on the
treasury controls environment to ensure it
remained effective.
The Committee also approved the
onboarding of two new counterparts
during the year, for onward
recommendation for the Board.
The Committee continued to monitor
activities by receiving regular reports from
the Treasury function setting out details of
cash and deposits, hedging positions for
fuel, foreign exchange and carbon, debt
maturity, interest rate analysis and
monitoring of credit ratings, amongst
other matters.
118 easyJet plc Annual Report and Accounts 2021
Board committees
SAFETY COMMITTEE REPORT
The Committee’s focus has been on
ensuring the safety of customers,
crew and employees remains our
highest priority.
Dr Andreas Bierwirth
Chair of the Safety Committee
On behalf of the Board, I am pleased
to present the Safety Committee
(the ‘Committee’) report covering the
work of the Committee for the year ended
30 September 2021. These pages outline
how the Committee discharged the
responsibilities delegated to it by the Board
over the course of the year, and the key
topics it considered in doing so.
The Committee is responsible for
overseeing the Group’s management of
health, safety, security and regulatory
compliance in line with the Group’s values
and commitment. The primary focus of
the Committee was to oversee the quality
and effectiveness of easyJet’s safety
strategies, standards, policies and initiatives,
together with risk exposures, targets and
performance, in order to ensure that safety
consistently receives the highest level of
Board attention.
The safety of our passengers and
employees remains our highest priority. The
global crisis created by the pandemic has
continued in 2021 due to the uncertainty
caused by new variants of Covid-19 and
associated flying restrictions. During the
year, the Committee was actively engaged
in overseeing easyJet’s preparations for the
safe ramp up in flying as volumes returned
on the relaxation of restrictions. To manage
safety during this time, we have put risk
management and management of change
at the centre of what we do. This approach
has helped us to ensure we are
appropriately organised and resourced.
There were five meetings during the year
and after each Committee meeting,
I provided an update to the Board on the
key issues discussed during our meetings.
Dr Andreas Bierwirth
Chair of the Safety Committee
www.easyJet.com
119
Membership, meetings
and attendance
• Dr Andreas Bierwirth (Chair)
• Moya Greene DBE
(until 23 December 2020)
• Nick Leeder
• Julie Southern
The Committee consists of the
Independent Non-Executive
Directors listed above. Moya Greene
DBE did not stand for re-election at
the Company’s AGM and as a result
stepped down from the Board and
the Committee on 23 December
2020. Member biographies can be
found on pages 98 to 101.
The Committee met five times
during the year. The Director of
Safety, Security and Compliance has
attended all Safety Committee
meetings during the year. Other key
invitees include the Chief Operating
Officer, the Director of Flight
Operations, Director of Engineering
& Maintenance and Head of Safety.
Subject matter experts in flight
operations, engineering and other
functions have attended as required.
Meeting attendance can be found in
the table on page 112.
The Committee’s terms of
reference can be found on
the Company’s website at
https://corporate.easyjet.com.
GOVERNANCE C ORPORATE GOVERNANCE REP ORT (CONTINU ED)
Key activities during the year
Whilst the rate of transmission of Covid-19
decreased from the peaks seen earlier in
2020, there continued to be new cases of
infection in many countries leading to
dynamic and ever changing travel
restrictions, regulations, guidelines and
requirements. The Committee remained
focused on the delivery of a safe and
secure operation which meets the needs
and expectations of our customers.
The Director of Safety, Security and
Compliance reports regularly reports to the
Committee and Airline Management Board
on easyJet’s safety, security and
compliance standards. He has the right of
direct access to Dr Andreas Bierwirth as
Committee Chair and to the Board
Chairman, which reinforces the
independence of safety oversight. The
Committee Chair reports to the Board with
his own assessment of safety management
within the airline throughout the year.
During the year the Committee undertook
a number of significant activities. These
included an overview of easyJet’s readiness
for summer 2021, BAU activities, focus
risks, significant operational changes,
management system developments,
security oversight and influencing
regulators and authorities where and when
appropriate. The Committee also
undertook a review of biosecurity
standards, which include all aircraft having
industry leading filtration systems, the
cleaning and disinfecting of aircraft daily,
and passengers and crew wearing masks
on board all our flights.
Furthermore, the Committee monitored
the safety, security and compliance
priorities including BAU and support
activities, summer readiness framework
and risk management framework to ensure
easyJet remained safe and responsible and
foundations were in place to thrive through
the recovery phase. In addition, the
Committee continued to monitor notable
incidents to ensure process improvements
and mitigating actions had been
undertaken, where necessary.
The Committee received regular reports
from the Director of Safety, Security and
Compliance to ensure the Safety team had
adequate resources and appropriate
information to perform its function
effectively and in accordance with the
relevant professional standards.
The easyJet Safety Board (ESB), which
reports to the Airline Management Board,
supported the role of the Committee in
ensuring the safety risks and issues are
identified and prioritised and action plans
are in place to mitigate any risks. The ESB
met monthly throughout the year, including
during the period of lockdown and when
easyJet operations were scaled back.
Readiness to fly
The Committee received an update on the
easyJet’s readiness programme to ensure
teams were properly resourced with
defined ways of working, crew remained fit
and competent for duty, aircrafts returned
to service and third-party suppliers were
capable to support operations. The
readiness programme also covered the
biosecurity documentation required
throughout the organisation for smooth
operations.
Biosecurity standards
The Committee provided oversight to
easyJet’s biosecurity standards including
creation of easyJet’s Biosecurity Standards
Groups in order to maintain a co-ordinated
set of biosecurity standards across
different countries and health authorities’
requirements. Due to the implementation
of clear masks policy and associated
communications to crew and customers,
easyJet’s biosecurity performance
remained satisfactory.
Safety plan
Another key area of focus was reviewing
progress against the safety plan covering
the safety and security development and
action plans. This included assessment of
key risks and how easyJet was working
with the rest of the industry to ensure
highest safety standards were followed.
Incident and crisis management
To ensure easyJet is able to respond to an
incident or crisis quickly, effectively and
appropriately, the Committee continues to
monitor the outcome of the crisis
management exercise undertaken by the
management. During the year a crisis
management exercise had been facilitated
which demonstrated a good understanding
between different crisis teams and ability
to respond remotely.
Operations
The Committee received updates on the
detailed preparation and delivery of the
ramp up of the flying programme in
Summer 2021. The external environment
continued to remain fluid as lockdown and
travel restrictions evolved around the
network. The Committee took note of the
status of the readiness programme and the
actions taken to manage suppliers to
reduce the safety and operational risks
around the ramp up. The Committee also
received updates on the improvement of
the Integrated Management System to
establish a common approach to Safety,
Security, Compliance and the Environment
across the organisation. This will enable us
to provide safe and responsible journeys
for our customers and a safe working
environment for our employees and
suppliers.
Looking forward
Over the next year, the Committee will
continue to monitor and review the safety
plan which includes operational safety,
health and safety, operations critical IT
systems, environmental safety and
compliance and associated outcomes.
More generally, we will continue to provide
support to management on embedding
the strong safety culture which will ensure
high standards of safety continue to be
delivered across the Group and all its
operating entities.
120 easyJet plc Annual Report and Accounts 2021
Board committees
NOMINATIONS COMMITTEE REPORT
The Committee continues to facilitate
effective succession planning and the
development of a diverse board.
John Barton
Chair of the Nominations Committee
Membership, meetings
and attendance
• John Barton (Chair)
• Stephen Hester
(from 1 September 2021)
• Moya Greene DBE
(until 23 December 2020)
• Charles Gurassa
(until 23 December 2020)
• Julie Southern
• Catherine Bradley CBE
• Nick Leeder
The Committee consists of the
Independent Non-Executive
Directors listed above. All members
of the Committee are Independent
Non-Executive Directors. Member
biographies can be found on pages
98 to 101.
The Chairman of the Board acts as
Chair of the Committee with
members of the executive
management invited to attend
meetings. The Company Secretary
acts as Secretary to the Committee.
The Committee met four times in
the year. Meeting attendance can be
found in the table on page 112.
The Committee’s terms of
reference can be found on
the Company’s website at
https://corporate.easyjet.com.
I am pleased to present the Nominations
Committee (the ‘Committee’) report on the
progress made during 2021.
The main purpose of the Committee is to
ensure plans are in place for orderly
succession of Board and senior
management positions whilst maintaining
an appropriate balance of skills, experience,
independence and diversity. The
Committee regularly reviews the structure,
size and composition of the Board and
makes recommendation to the Board with
regard to any changes.
There were four meetings during the year
and after each Committee meeting, I
provided an update to the Board on the
key issues discussed during our meetings.
There have been a number of changes to
the Board and its Committees during the year.
The Committee oversaw the appointment
process which resulted in the appointment
of David Robbie with effect from 17
November 2020. Dr Anastassia Lauterbach
stepped down from the Board with effect
from 21 December 2020. Charles Gurassa
and Moya Greene DBE stepped down from
the Board on 23 December 2020 following
the AGM after serving nine and three years
on the Board respectively.
As reported earlier and in accordance with
best practice under the Code, I will step
down as the Chairman on 1 December 2021
after nearly nine years on the Board.
Following a comprehensive search process
led by the Nominations Committee, we
appointed Stephen Hester as Chair
Designate and Independent Non-Executive
Director with effect from 1 September 2021.
He will succeed me as the Chairman on 1
December 2021. Stephen has brought over
35 years of wide-ranging experience, a
strong track record of value creation and
listed board experience. Stephen will also
serve on the Committee, which he will chair
in due course. As the outgoing Chair, I did
not participate in the search and selection
process.
With the Board’s succession plans
underway, the Committee has also
reviewed succession planning for the Airline
Management Board and executive
leadership team during the year. Following
an independent search facilitated by
Russell Reynolds we welcomed Kenton
Jarvis as the Chief Financial Officer with
effect from 3 February 2021.
Implementation of the annual Board
evaluation process to assess the
performance of individual Directors and the
effectiveness of the Board and its
Committees is also one of the key
responsibilities of the Committee. The
Committee appointed MSP to undertake
an independent external evaluation process
during the year. I am pleased to report that
the Board was deemed to operate
effectively, and the outcome of the
evaluation and areas of focus are set out
further on page 116 to 117.
John Barton
Chair of the Nominations Committee
www.easyJet.com
121
GOVERNANCE C ORPORATE GOVERNANCE REP ORT (CONTINU ED)
Chairman succession
Under the Code, nine years is the
recommended maximum for the Chair to
serve on the Board. As a result, the
Committee took the appropriate steps to
identify potential successors in preparation
for John Barton’s nine-year tenure coming
to an end. The process was led by the
Committee on behalf of the Board and the
incumbent Chair did not participate. The
Committee worked with executive search
consultants, Lygon Group, to refine the role
description, key attributes sought and
search profile, which included amongst
others: substantial prior board experience,
credibility when representing the business
to the city and investors, experience of
business transformation and managing
cost and capital restructuring, and
experience managing complex
stakeholders. Lygon then undertook a
comprehensive search for prospective
candidates who met the profile.
Given the importance of the appointment,
all Board members were consulted as part
of the shortlisting process. A number of
candidates were selected for the shortlist
and an interview process undertaken by all
Board members.
Following the interview process and after
consideration of the appropriate balance of
skills, knowledge, experience, independence
and diversity on the Board, and the
attributes sought from the new Chair, the
Committee recommended the
appointment of Stephen Hester as Chair
Designate with effect from 1 September
2021 and for him to succeed John Barton
on 1 December 2021.
Board Committee membership
To ensure that the Board Committees
retain the correct balance of skills and
experience, the Committee monitors overall
composition and membership. As a result
of the changes to the Board during the
year, a number of changes to the
membership of Board Committees were
recommended and approved by the Board:
• David Robbie joined the Finance
Committee, Audit Committee and
Remuneration Committee on joining
the Board in November 2020
• Dr Anastassia Lauterbach stood
down from the Audit Committee on
stepping down from the Board on
21 December 2020
• Charles Gurassa stepped down
from the Nominations Committee,
Finance Committee and Remuneration
Committee on stepping down from the
Board on 23 December 2020
• Moya Greene stood down from the
Remuneration Committee,
Safety Committee and Nominations
Committee on stepping down from
the Board on 23 December 2020
• Stephen Hester joined the Nominations
Committee with effect from 1 September
2021 and will Chair the Committee from
1 December 2021.
Employee Representative
Directors
During 2021, in order to strengthen the
employee voice in the boardroom and use
the opportunity to review the mechanism
when Moya Greene stepped down, the
Committee considered the evolution of the
role of Employee Representative Director,
recommending that the responsibility be
shared amongst several Non-Executive
Directors to utilise their experience and
geographic location. This recommendation
was approved by the Board and from
May 2021, four Non-Executive Directors
were nominated as Employee
Representative Directors. Further details
can be found on page 109.
Key activities during the year
Non-Executive Director
appointment
The Committee had previously identified
the need for a number of non-executive
appointments as part of its succession
plans, and during the year it oversaw the
process which led to the recommendation
that David Robbie be appointed as an
additional Non-Executive Director.
Having identified the desired skills and
experience sought in the new Directors and
having due regard to the Board Inclusion
and Diversity Policy, after a selection
process the Committee engaged search
consultants Lygon Group to act on behalf
of easyJet. Lygon Group do not have any
other connection with the Company nor
individual Directors, except where they may
have liaised with them as prospective
candidates for other board positions.
The Committee considered a list of
potential candidates provided by the
search consultant, and took into account
the balance of skills, knowledge,
independence, diversity and experience of
the Board together with an assessment of
the time commitment expected.
Following an interview process, a shortlist
of candidates was discussed by the
Committee and David’s appointment
was recommended to the Board. His
experience further strengthens the diverse
mix of skills and experience on the Board.
The Committee oversaw the induction
programme for David, further details of
which are set out on page 114.
The Committee continues to review
membership and composition of the Board
and it is anticipated that there will be
further changes in the coming year as it
continues to execute against its succession
plans and ensure the mix of skills and
experience remains appropriate.
Chief Financial Officer
Following the resignation of Andrew
Findlay in May 2020, the Board
commenced the search for a new Chief
Financial Officer. Having identified the
desired skills and experience sought from
the new CFO, after a selection process
search consultants Russell Reynolds were
appointed to act on behalf of easyJet.
Russell Reynolds do not have any other
connection with the Company nor
individual Directors, except where they may
have liaised with them as prospective
candidates for other board positions.
Following an interview and referencing
process, a shortlist of candidates was
discussed by the Committee, and Kenton’s
appointment was subsequently
recommended to the Board by the
Committee.
122 easyJet plc Annual Report and Accounts 2021
Succession planning
The Board continues to satisfy itself that
plans are in place for orderly succession for
appointments to the Board so that the
right balance of appropriate skills and
experience is represented, building on the
work previously undertaken. During the
year, the Committee reviewed the balance
of skills, experience, diversity and
independence of Board members, to
ensure appropriate succession plans were
in place. The Committee also seeks to
ensure that there are succession plans and
leadership development plans in place for
the members of the AMB and ELT, noting
that further initiatives are planned in
this area.
Election and re-election
of Directors
The effectiveness and commitment of
each of the Non-Executive Directors is
reviewed annually as part of the Board
evaluation. The Committee has satisfied
itself as to the individual skills, relevant
experience, contributions and time
commitment of all the Non-Executive
Directors, taking into account their other
external appointments and interests held.
The Board is recommending the election or
re-election of all of the continuing Directors
at this year’s AGM. Details of the service
agreements for the Executive Directors and
letters of appointment for the Non-
Executive Directors, and their availability for
inspection, are set out in the Directors’
Remuneration Report on page 151.
Diversity and inclusion
The Committee and Board are committed
to ensuring that together the Directors
possess the requisite diversity of skills,
experience, knowledge and perspectives to
support the long-term success of the
Company. In this regard, the role of
diversity in promoting balanced and
considered decision making which aligns
with the Group’s purpose, values and
strategy is fully recognised. All Board
appointments are made on an objective
and shared understanding of merit, in line
with required competencies relevant to the
Company as identified by the Committee,
and consistent with the Company’s
Diversity and Inclusion Policy (‘Policy’).
The Policy covers diversity and inclusion
across the Company, but in relation to the
Board it specifically notes that:
• easyJet recognises the importance of a
diverse Board, bringing together an
appropriate mix of skills and experience
to ensure the future success of our
business. We understand the richness a
diverse Board brings in providing the
range of perspectives, insight and
challenge needed to support good
decision making and create a positive
culture in the organisation.
• When considering the optimum make-up
of the Board, all of the aspects of
diversity will be appropriately reviewed
and balanced where possible.
• The diversity of the Board will typically
be reviewed on an annual basis as part
of the annual performance evaluation.
• New appointments to the Board will be
made on merit, in the context of the
requirements of the Board at that time.
The Nominations Committee will identify
suitable candidates based on merit
against objective criteria and with due
regard for the benefits of diversity on
the Board including social and ethnic
background, cognitive and personal
strengths as well as diversity of gender.
Where there is a known requirement to
improve the diversity of the Board, the
Nominations Committee will ask to
see a higher proportion of candidates
fitting the diversity criteria. However,
the final selection will, as stated, always
be on merit.
Following the appointment of a new Chair
and the conclusion of the Board
performance review, the Committee will be
reviewing the composition of the Board in
the coming year with due regard to the
Company’s Board Diversity and Inclusion
Policy and taking into account the
recommendations set out in the Hampton-
Alexander Review (which recommends
that at least 33% of board and executive
committee members of FTSE 350
companies should be female), the
McGregor-Smith Review and the
Parker Review (which recommends
at least one director from an ethnic
minority background for FTSE 100
companies by 2021).
At the start of 2020 the Board had a
45% female representation, exceeding
the 33% recommended by the Hampton-
Alexander Review and one Director from
an ethnic minority background. Following
the changes to the Board during the year,
at the year end the female representation
was 30% (three out of ten). When John
Barton steps down from the Board on
1 December 2021 the level of female
representation will increase to 33%
(three out of nine). We continue to
have one Director from an ethnic
minority background.
The Nominations Committee also oversees
the development of a diverse pipeline for
future succession to Board and senior
management appointments, including
reviewing the gender balance of senior
management and its direct reports.
Where there is a known desire to improve
diversity at a certain level or in a certain
function in the organisation, the recruiting
team will ask to see a higher proportion
of candidates fitting the diversity criteria.
However, the final selection will always
be on merit.
As at 30 September 2021, the AMB
has 33% female representation, and
amongst their direct reports female
representation is 26%.
easyJet’s People team monitors the
Group’s diversity on at least an annual
basis and highlights any areas of concern
to the AMB. The Sustainability section of
the Annual Report on page 56 reports in
further detail on the approach being
taken to diversity and inclusion, and
the implementation of the policy across
the Group.
Board evaluation
In line with the Code, the Board conducts
its annual evaluation exercise via an
independent external facilitator once every
three years. The last externally facilitated
evaluation was conducted in 2018 and
consequently an external evaluation
facilitated by Manchester Square Partners
was conducted during the financial year
to evaluate the performance of the Board,
its Committees and the Chairman in line
with the Committee’s terms of reference.
Further details can be found on pages
115 to 117.
www.easyJet.com
123
GOVERNANCE C ORPORATE GOVERNANCE REP ORT (CONTINU ED)
Board committees
AUDIT COMMITTEE REPORT
The Committee continues to monitor
the integrity of the financial
information for the benefit of our
shareholders.
Julie Southern
Chair of the Audit Committee
Membership, meetings
and attendance
• Julie Southern (Chair)
• Catherine Bradley CBE
• Dr Anastassia Lauterbach
(until 21 December 2020)
• David Robbie (from 17 November 2020)
The Committee consists of the
Independent Non-Executive Directors
listed above. All members of the
Committee are Independent Non-
Executive Directors. Member biographies
can be found on pages 98 to 101.
The Board has confirmed that it is
satisfied that Committee members have
recent and relevant financial experience
and offer a depth of financial and
commercial experience including the
travel sector in which the Company
operates. The Board also confirmed that
Julie Southern has recent and relevant
financial experience.
David Robbie became a member
of the Committee with effect from
17 November 2020 and Dr. Anastassia
Lauterbach stepped down as a member
of the Committee on 21 December 2020.
The Company Secretary acts as
Secretary to the Committee.
The Committee met five times during
the year, with members of senior
management required to attend as and
when appropriate. Meeting attendance
can be found on page 112. The
Committee also met with the internal
and external auditors and Director of Risk
and Assurance separately after each
meeting. In addition, the Committee
Chair holds regular private sessions with
the Chief Financial Officer and the senior
finance team, the Director of Risk and
Assurance and the external audit team,
to ensure that open and informal lines of
communication exist should they wish to
raise any concerns outside formal
meetings.
The Committee’s terms of reference can
be found on the Company’s website at
https://corporate.easyjet.com.
I am pleased to present the Audit
Committee (the ‘Committee’) report for the
year ended 30 September 2021.
grateful for the continued commitment
and professionalism of the finance team in
the face of a very heavy workload in 2021.
During the year the Committee continued
to play a key role in assisting the Board in
fulfilling its oversight responsibility.
The Committee oversaw and supported
the development of financial control
improvements in light of the Government’s
proposed audit and governance reforms.
The Committee also spent time reviewing
the internal controls over financial reporting
to ensure that the additional stresses
imposed by the impact of Covid had been
properly managed. It was clear that the
level of flight cancellations and
amendments continued to drive an
extraordinary workload in revenue
management in particular and the
committee were pleased to see additional
resources deployed to ensure that we
could still have confidence in the underlying
accounting. The Committee are very
The Committee played a key role in
providing independent oversight of any
impacts on the risk management processes
and internal control frameworks and
challenging management on the significant
accounting judgements made as a part of
our financial reporting and going concern
statements.
We engaged with the FRC as part of their
thematic review of climate disclosures
during the year, responding to questions
they had on the information set out in our
2019 Annual Report and Accounts. Further
details can be found on page 126.
We have considered the processes
underpinning the production and approval
of this year’s Annual Report and Accounts,
and also assessed the viability of the Group
over a three-year period.
124 easyJet plc Annual Report and Accounts 2021
There were five meetings during the year
and after each Committee meeting,
I provided an update to the Board on the
key issues discussed during our meetings.
I have also met separately with the external
audit partner and key management on a
number of occasions during the year, and
the Committee met with the external
auditors after each Committee meeting
without management present.
Julie Southern
Chair of the Audit Committee
Role of the Committee
The principal roles and responsibilities of the Committee are set out in its terms of reference, and include, but are not limited to:
Financial reporting
• monitor the integrity of the financial statements of the Company and the Group, preliminary results
and announcements
• review the appropriateness and consistency of significant accounting policies
• review and report to the Board on significant financial issues and judgements
Internal control
and risk management
• carry out a robust assessment of the Group’s emerging and principal risks on an annual basis
• review the effectiveness of the Group’s risk management system and the assurance reports from
management on the internal control and risk management system
Compliance,
whistleblowing
and fraud
Internal and
external audit
• review the adequacy and security of the Group’s arrangements for employees to raise concerns about
possible wrongdoing in financial reporting or other matters on behalf of the Board
• review and approve the role and mandate of Internal Audit, monitor and review the effectiveness of
its work and carry out a periodic assessment of the effectiveness of the Internal Audit function
• consider and make recommendations to the Board, to be put to shareholders for approval at the
Annual General Meeting (AGM), in relation to the appointment, reappointment and removal of the
Company’s external auditor
• oversee the relationship with the external auditor
The Committee’s full terms of reference are approved annually and are available on the Company’s website at https://corporate.easyjet.com.
Key activities during the year
The main areas of Committee activity
during the 2021 financial year included the
planning, monitoring, reviewing and
approval of the following areas:
Financial reporting
• The integrity of the 2020 full year and
2021 half year financial statements
relating to the financial performance and
governance of the Group, and
considering the disclosures against the
FRC guidance on reflecting the impact
of the pandemic.
• The material areas in which significant
judgements were applied, based on
reports from both the Group’s
management and the external auditor.
Further information is provided in the
Significant judgements section on
page 127.
• The information, underlying assumptions
and stress-test analysis presented in
support of the Viability Statement and
Going Concern status
• The consistency and appropriateness of
the financial control and reporting
environment
• The fair, balanced and understandable
assessment of the Annual Report and
Accounts for the 2020 financial year and
the 2021 half year statement.
• Engaging with the FRC in relation to
thematic review of climate disclosures in
the 2019 Annual Report
• Reviewing the financial reporting
processes and disclosures, including the
non-audit services undertaken by PwC,
as part of the prospectus for the £1.2
billion rights issue
Internal financial controls and
risk management
• Development of financial control
improvements as part of the financial
control framework and a risk
management framework to provide
greater clarity to strategic planning and
investment decisions
• The adequacy and effectiveness of the
Group’s ongoing risk management
systems and control processes, through
an evaluation of: the risk and assurance
plans; Internal Audit review reports; risk
assessments; information and cyber
security threats; and business continuity
and control themes
• The Group’s risk environment, including a
robust review of the Company’s principal
risks and uncertainties and including
appropriate consideration of emerging
risks
• Business integrity measures including the
‘Speak Up, Speak Out’ process,
addressing any unethical behaviours,
overseeing and conducting individual
investigations into whistleblowing
concerns
• Receiving an update on the Company’s
payroll improvement programme
• Receiving regular updates on the Group’s
Digital Safety Programme
Internal Audit effectiveness and
review of activities
• An assessment of the effectiveness and
independence of the Internal Audit
function, including consideration of:
• key Internal Audit reports
• stakeholder feedback on the quality of
Internal Audit activity
• Internal Audit’s compliance with
prevailing professional standards
• the implementation of Internal Audit
recommendations
Relationship with external auditor
• Reviewed the scope of, and findings
from, the external audit plan undertaken
by PricewaterhouseCoopers LLP (‘PwC’)
as the external auditor
• The effectiveness of the external audit
process
• The assessment of the performance,
continued objectivity and independence
of PwC
• Ensuring the successful transition to a
new lead audit partner to help ensure
PwC’s objectivity and independence
• Ensuring PwC’s non-audit work on the
rights issue did not compromise PwC’s
independence and due process was
followed
• The level of fees paid to PwC for
permitted non-audit services
• The reappointment of PwC as external
auditor
• Compliance, whistleblowing and fraud
• Reviewing whistleblowing reporting,
reports on anti-bribery and anti-
corruption procedures, reports on
procedures for fraud and loss prevention
and reports on credit card fraud,
together with monitoring and
investigations.
www.easyJet.com
125
GOVERNANCE C ORPORATE GOVERNANCE REP ORT (CONTINU ED)
Fair, balanced and
understandable
The Committee assessed and
recommended to the Board that, taken as
a whole, the 2021 Annual Report and
Accounts (which the Board subsequently
approved) are fair, balanced and
understandable and provide the necessary
information for shareholders to assess the
Group and Company’s position and
performance, business model and strategy.
In reaching this conclusion, the Committee
considered the overall review and
confirmation process around the Annual
Report and Accounts, including:
• the input of subject matter experts, the
AMB and other senior management and,
where applicable, the Board and its
Committees
• the processes and controls which
underpin the overall review and
confirmation process, including the
preparation, control process, verification
of content, and consistency of
information being carried out by internal
financial controls specialists
• review of the Annual Report and
Accounts held by senior management
and other Subject Matter Experts to
focus solely on the reporting being fair,
balanced and understandable.
The Committee was provided with, and
commented on, a draft copy of the Annual
Report and Accounts.
In carrying out the above processes, key
considerations included ensuring that there
was consistency between the financial
statements and the narrative provided in
the front half of the Annual Report, and
that there was an appropriate balance
between the reporting of weaknesses,
difficulties and challenges, as well as
successes, in an open and balanced
manner including linkage between key
messages throughout the document.
Financial and business reporting
Through its activities, the Committee
focuses on maintaining the integrity and
quality of our financial reporting,
considering the significant accounting
judgements made by management and the
findings of the external auditors. The
Committee assesses whether suitable
accounting policies have been adopted and
whether management has made
appropriate estimates and judgements. The
Committee reviewed accounting papers
prepared by management which provided
details of significant financial reporting
judgements. The Committee also reviewed
the reports by the external auditors on the
half-year, Q3 and full-year results, which
highlighted any issues arising from the work
undertaken on the audit.
The Committee’s process included the
comprehensive review of financial issues
through the challenge of management,
consideration of the findings of the external
auditors and comparison with other
organisations. The significant issues
considered in relation to the financial
statements are detailed below.
Reporting controls
Management is responsible for maintaining
adequate internal control over the financial
reporting of the Group. A summary of the
Group’s financial results and commentary
on performance measures is provided to
the Board each month. Controls are in
place over the preparation of financial data
including: balance sheet reconciliations,
review meetings on key balances and
commentary on variances to forecast and
prior periods. On a monthly basis, senior
management, including the Group Financial
Controller and Chief Financial Officer,
review the management reporting packs.
The Annual Report and Accounts are
produced by the Group Financial Control
team based on submissions from individual
teams across the business including
Investor Relations, Finance, HR, Company
Secretariat and Risk and Assurance. The
report contributors are required to maintain
supporting evidence for their submissions
and ensure they are reviewed. The figures
are then independently validated by the
Group Financial Control team and the Risk
and Assurance team perform sample tests
of tying disclosures back to supporting
evidence.
The Annual Report and Accounts are
reviewed by the AMB, Board of Directors
and Audit Committee for accuracy and to
ensure a fair, balanced and understandable
view is presented. Senior members of the
Finance team including the Chief Financial
Officer, Chief Accountant and Group
Financial Controller meet with the Audit
Committee to present key events and
discuss areas of judgement or estimates as
outlined below. In-depth presentations on
significant areas are provided throughout
the year as appropriate.
The Finance team have regular proactive
conversations with the external auditors on
topics which are of audit relevance. The
external auditors perform audit procedures
and challenge of the Annual Report and
Accounts and present their findings to the
Audit Committee.
The Going Concern and Viability
Statements are on pages 74 to 77.
Financial Reporting Council
Engagement
As part of the FRC’s thematic review of
climate disclosures, the FRC Conduct
Committee wrote to the Company with
questions relating to information within our
2019 Annual Report and Accounts. These
questions primarily related to seeking clarity
about how the climate transition had been
taken into account in estimating the
carrying value and useful life of certain
assets. easyJet responded to the FRC’s
questions providing clarifying information
and noting specific enhancements it was
planning to make to its 2020 Annual
Report and Accounts that would address
the questions and comments raised.
These enhancements included expanding
the notes to the accounts to incorporate
additional information about how
management took account of the impact
of climate change and their use of stress
testing in areas of critical judgements and
estimates. The enhanced disclosures
around risk, sustainability and TCFD
disclosures, and the Viability Statement
were highlighted. The presentation of this
information has also been considered
when preparing these Annual Report
and Accounts.
The FRC requested that in disclosing this
engagement we note the limitations of
their review, namely that it was based on
their reading of the Annual Report and
Accounts and did not benefit from a
detailed knowledge of our business
or an understanding of the underlying
transactions entered into. They also noted
that their review provided no assurance
that the report and accounts are correct
in all material respects but rather that the
FRC’s role is not to verify the information
provided but to consider compliance with
reporting requirements.
Having provided the clarifications and
noting the specific enhancements made to
the 2020 Annual Report and Accounts, the
review was concluded satisfactorily.
As part of its process for monitoring the
standards of audit work, the Audit Quality
Review team of the Financial Reporting
Council (FRC) reviewed PwC’s audit of the
Group accounts for the year ended 30
September 2020, with the FRC report
received in November 2021. The key finding
for improvement related to the audit
approach to flight bookings that utilised
credit vouchers and ensuring they
originated from cash receipts. PwC has
confirmed that it has amended its
approach for the year ended 30
September 2021 to address this FRC
review finding.
126 easyJet plc Annual Report and Accounts 2021
Risk and assurance
Details of the risk framework and the
principal risks and uncertainties are set
out on pages 78 to 95.
The Audit Committee is responsible for
overseeing the work of the Internal Audit
function. It reviews and approves the scope
of the Internal Audit annual plan and
assesses the quality of Internal Audit
reports, along with management’s actions
relating to findings and the closure of
recommended actions. The Audit
Committee also considers stakeholder
feedback on the quality of Internal Audit’s
work and the Internal Audit function is
subject to an independent External Quality
Assessment (EQA) every five years in line
with the Institute of Internal Auditors
Standards. The last EQA was conducted in
2017. Given the disruption to operations
caused by the pandemic and the related
impact on internal audit activity, the
Committee considered that an
independent internal quality assessment
should be undertaken during the year, as
an external review would not add
significant value. The outcomes of the
review were discussed by the Committee,
including changes made to the internal
audit charter and processes, but with no
significant concerns raised. It is anticipated
that an external EQA will be undertaken in
the next two years once activity was less
affected by the pandemic.
During 2021, a carefully targeted internal
audit plan was agreed and undertaken
across easyJet’s operations, systems and
support functions, with subsequent reports,
including management responses,
recommended action plans and follow-up
reviews being considered by the Audit
Committee during its meetings.
In order to safeguard the independence of
the Internal Audit function, the Director of
Risk and Assurance (who heads up the
Internal Audit function) is given the
opportunity to meet privately with the
Audit Committee without any other
members of management being present.
Risk management and
internal control
The Board as a whole, including the Audit
Committee members, considers the nature
and extent of easyJet’s risk management
framework and the risk profile that is
acceptable in order to achieve the Group’s
strategic objectives. The Audit Committee
has reviewed the work undertaken by
management, the Committee itself and the
Board on the assessment of the Group’s
emerging and principal risks, including their
impact on the prospects of the Group. As a
result, it is considered that the Board has
fulfilled its obligations under the Code in
relation to risk management and internal
controls. Further details on the Group’s
principal risks and uncertainties and their
Significant judgements
Going concern
Given the continued uncertain nature of
the current economic environment, the
Committee reviewed the assumptions
made in reaching the going concern
conclusion, including the financial
forecasts, liquidity position, the output
of the stress testing performed and the
consideration of risks and uncertainties,
as well as the enhanced going concern
disclosure.
Carrying value of assets
The Committee considered whether the
carrying value of goodwill, landing rights
and aircraft assets held by easyJet should
be impaired. There is judgement in the
assumptions underlying the calculation
of the value in use of the business being
tested for impairment – primarily whether
the forecasted cash flows are achievable,
the potential impact of climate change
on those cash flows, and the overall
macroeconomic assumptions. The
Committee addressed these matters
using reports received from management
outlining the basis for assumptions used,
the stress testing performed on the
calculation of the value in use and other
relevant information used to support the
carrying value of assets. The forecasted
cash flows used in the calculation were
presented to the Board.
Aircraft maintenance provisions
The Committee reviewed the
maintenance provision at the year end.
A number of judgements are used in the
calculation of the provision, primarily
pricing, utilisation of aircraft and timing
of maintenance checks. The Committee
addressed these matters using reports
received from management which
underpin the basis of assumptions
used. The Committee also discussed
with the external auditors their review
of the assumptions underlying the
estimates used.
impact on the prospects of the Group are
set out on pages 78 to 95.
easyJet’s system of internal controls, along
with its design and operating effectiveness,
which includes the Group’s financial
reporting process, is subject to review by
the Audit Committee, through reports
received from management, along with
those from both internal and external
auditors. Any control deficiencies identified
are followed up, with action plans tracked
by the AMB and the Committee.
Other key judgemental accruals,
provisions and contingent
liabilities
The Committee reviewed the level and
calculations of key accruals and provisions
which are judgemental in nature, including
customer claims in respect of flight delays
and cancellations, and the restructuring
provision. The Committee also considered
the appropriateness of the recognition of
contingent liabilities as at the year end.
The Committee addressed these
matters using reports received from
management which set out the key
assumptions used and the judgements
involved. The Committee also discussed
with the external auditors their review
of the assumptions underlying the
estimates used.
Deferred tax asset
The Committee has considered the
recoverability of the deferred tax
asset based on the expected future
taxable income of the Group. The
Committee reviewed a report received
from management outlining the basis
of key assumptions used and the
judgements involved.
Fleet accounting
The Committee have considered the
appropriateness of the estimates used
for the useful economic life and residual
value of aircraft. The Committee
considered these matters using reports
received from management and external
experts which underpin the estimations.
The Committee also discussed with
the external auditors their review of
the assumptions underlying the
estimates used.
Anti-bribery and whistleblowing
The Code includes a provision that there
should be a means for the workforce to
raise concerns and that the Board should
routinely review this mechanism and the
reports arising from its operation. The
Board and Audit Committee receive regular
reports on this subject, and the Audit
Committee assists the Board in ensuring
that adequate arrangements are in place
for the proportionate and independent
investigation of such matters and for
appropriate follow-up action, with the
findings being regularly reported to the
Board.
www.easyJet.com
127
GOVERNANCE C ORPORATE GOVERNANCE REP ORT (CONTINU ED)
The Group is committed to the highest
standards of quality, honesty, openness
and accountability. The Group and all
operating companies have whistleblowing
policies in place. Employees are
encouraged to raise concerns under the
policy and any concerns raised are
investigated carefully and thoroughly to
assess what action, if any, should be taken.
The Business Integrity Committee is a
management forum on whistleblowing. It
receives summaries of all reported
concerns; it monitors any ongoing
concerns and ensures that the proposed
outcomes of investigations are fair,
transparent and robust, with root causes
identified and remedial actions agreed. Any
matters of significance are reported to the
Audit Committee and the Board, along with
a comprehensive full year report. The
Board supports the objectives of the
Bribery Act 2010 and procedures have
been established to ensure that compliance
is achieved. These set out what is expected
from our colleagues and stakeholders to
ensure that they protect themselves, as
well as the Group’s reputation and assets.
Training has been provided to the Board,
senior management and all employees and
is refreshed on a regular basis. Any breach
of the Bribery Act will be regarded as
serious misconduct, potentially justifying
immediate dismissal.
External auditor
PwC, as the external auditor, is engaged to
conduct a statutory audit and express an
opinion on the financial statements. Its
audit includes the review of the systems of
internal financial control and data which are
used to produce the information contained
in the financial statements. PwC was
reappointed as auditor of the Group at the
AGM held on 23 December 2020. The last
tender process was undertaken in 2015 for
the year ended 30 September 2016.
The current external audit engagement
partner is Owen Mackney, Senior Statutory
Auditor, who took over the role during the
year from Andrew Kemp. The external
audit plan and the £1.1 million fee proposal
for the financial year under review (2020:
£0.8 million) was prepared by PwC and
presented to the Committee for
consideration and approval.
External auditor effectiveness and
independence
Senior management monitors the external
auditor’s performance, behaviour and
effectiveness during the exercise of its
duties, which informs the Audit Committee’s
decision on whether to recommend
reappointment on an annual basis.
The Audit Committee also assesses
the effectiveness, independence and
objectivity of the external auditor by,
amongst other things:
• considering all key external auditor
plans and reports; in particular those
summarising audit work performed on
significant risks and critical judgements
identified, and detailed audit testing
thereon
• having regular engagement with the
external auditor during Committee
meetings and ad hoc meetings (when
required), including meetings without any
member of management being present
• the Committee Chair having discussions
with the Senior Statutory Auditor ahead
of each Committee meeting
• understanding the extent to which the
auditor challenges management’s
analysis
• considering FRC audit quality inspection
reports
• following the end of the financial year,
each Committee member completing
an auditor effectiveness review
questionnaire.
The Committee was satisfied that the
external audit had provided appropriate
focus to those areas identified as the key
risk areas to be considered by the Audit
Committee and that the auditors had
challenged management as part of the
process. It had also continued to address
the areas of significant accounting
estimates. On this basis, and considering
the views of senior management, the
Committee concurred that the external
audit had been effective and that PwC
remained independent.
External auditor objectivity
To preserve objectivity and independence,
the external auditor does not provide
consulting services unless this is in
compliance with the Group’s Non-audit
Services Policy which reflects the applicable
audit regulations and the FRC’s Revised
Ethical Standard 2016. This policy is
available in the Governance section of
easyJet’s corporate website at corporate.
easyjet.com.
In the 2021 financial year, PwC undertook
audit-related non-audit services for the
Company, as set out in note 3 to the
financial statements. In addition, they
undertook the non-audit work below in
relation to the rights issue.
Rights issue
As part of the preparations for the rights
issue announced in September 2021,
certain non-audit assurance was required
of the financial information presented in
the prospectus. Management felt that PwC
would be best placed to undertake this
work if appropriate safeguards could be
put in place, and this was discussed and
approved by the Committee prior to work
taking place. The fees for the non-audit
work were £1.2 million and agreed by the
Committee. This resulted in the 70% fee
cap (70% of the average of the UK/Group
fees paid in the last three consecutive
financial years for the statutory audit)
being exceeded, therefore approval was
sought from the FRC for PwC to perform
the work. The FRC provided such approval
and granted dispensation for PwC to
perform the work before the services
commenced. A number of measures were
implemented to ensure that the objectivity
of PwC as auditors of the Company was
safeguarded:
• The non-audit work was led by an
independent PwC partner and team
members not involved in the audit, and
subject to review by an independent
review partner.
• The services were performed on a
one-off basis, and were clearly set out in
an engagement letter.
• All fees for the additional reporting
accountant services were invoiced and
settled in full before the audit work was
finalised.
128 easyJet plc Annual Report and Accounts 2021
assessment criteria. Due to the tender
undertaken in 2015, and the rotation of
the Audit Partner in 2020, the Committee
believes that a tender being undertaken
in the 2024/25 financial year remains
appropriate and is in the best interests of
shareholders. The Company confirms that
it has complied with the provisions of the
Statutory Audit Services for Large
Companies Market Investigation
(Mandatory Use of Competitive Tender
Processes and Audit Committee
Responsibilities) Order 2014 relating to
tendering and non-audit services.
Looking forward
The Committee will continue to consider
the financial reporting of the Group and
review the Group’s accounting policies and
annual statements. In particular, any major
accounting issues of a subjective nature will
be discussed by the Committee.
The Committee will also continue to
review internal and external audit activity
and the effectiveness of the risk
management process.
• A Quality Review Partner would be
involved in the audit, and be responsible
for performing a further review over the
performance of the audit.
• A clearance panel including a further
three independent partners was held
prior to completion of the non-audit
work to provide an additional level
of review.
The one off nature of these non-audit
services and that they were assurance
based was also deemed to ensure that the
objectivity of PwC was safeguarded.
External audit tendering
PwC was first appointed to audit the
Annual Report and Accounts for the year
ended 30 September 2006, and has
therefore served a 15-year term. Under
applicable audit legislation, companies are
required to have a mandatory tender of
auditors after 10 years, or 20 years if there
is a competitive re-tender at 10 years.
During the 2015 financial year, the
Committee led a tender process for
external audit services, following which the
Audit Committee agreed to recommend
that the Board reappoint PwC as, on
balance, it performed best against the
Committee’s pre-agreed selection and
External audit tendering timeline
2006
PwC appointed
2015
Full competitive
tender; PwC
reappointed for year
ending 30 September
2016
2024/2025
Competitive tender to
take place unless
carried out earlier
2020
Mandatory
appointment of new
external audit lead
partner after five
years to sign off on
the 2021 financial year
(see the ‘External
auditor’ paragraph
above)
2026
PwC cannot continue
beyond financial year
end 30 September
2025 and a
competitive tender
will take place
(if not already
effected prior to
this date)
www.easyJet.com
129
GOVERNANCE DI RE CTORS’ REMUNERATIO N R EPORT
Annual statement by the Chair
of the Remuneration Committee
This has been a busy year for the Committee as we
have reviewed the impact of the pandemic upon
our people and the remuneration framework,
together with a review of the Remuneration
policy and the considerations of the rights issue.
I am delighted that I have had the opportunity to
engage with our major shareholders over the year
to discuss these topics.
Moni Mannings
Chair of the Remuneration Committee
On behalf of the Board, I am pleased to
present the Directors’ Remuneration Report
(the ‘Report’) for the year ended 30
September 2021, my first as Chair of the
Committee. This has been a challenging
year due to the pandemic and the impact
this has had on our teams, as well as our
financial performance. Many individuals
continued to be placed on furlough and
everyone faced the lockdowns that
continued for much of the year across
Europe. This has impacted on individuals
reward opportunities during this year both
in terms of salary increases and bonus, and
as a Committee we have been mindful of
this. We have taken this into account, along
with the impact on our shareholder
experience, in all our considerations.
This Report contains:
• The proposed Directors’ remuneration
policy, including our new Restricted
Share Plan (RSP) to be approved at the
2022 AGM; and
• The annual remuneration report
describing how the existing policy has
been put into practice during the last
year, and how the new policy will be
implemented in 2022.
Performance and reward
outcomes for the 2021
financial year
Annual bonus
In light of continued market uncertainty,
the annual bonus targets were set
separately for the first and second half of
the financial year to allow flexibility and
agility. The measures selected for the
bonus aligned with our key priorities for the
year and were EBITDA (30%), cost
reduction programme (20%), free cash
flow (20%), customer satisfaction (10%)
and individual performance (20%).
Recognising the importance of our
ESG agenda, individual targets included
sustainability measures as well as
measures linked to strategy execution.
Due to the continuing restrictions on
airline travel and the impact of this on our
performance no annual bonus in respect
of the year ended 30 September 2021
will be paid.
LTIP
Awards granted in 2018 were due to vest
based on performance to 30 September
2021. Awards were based on a combination
of performance conditions, being three-
year average headline ROCE, total headline
EPS and relative TSR compared to FTSE
51-150 companies measured over the three
financial years to 30 September 2021.
The stretching performance targets for the
2018 LTIP award, which were set before the
pandemic, were not met and therefore this
award will lapse.
2020 LTIP awards
In December 2020 the Committee made
awards to the executives under the LTIP.
Due to the prevailing uncertainty at the
time of award, and in line with the flexibility
provided in the Investment Association’s
Covid-19 guidance, the decision was made
to delay target setting for up to six months
when we hoped the long term economic
situation would be clearer. However, with
lockdowns ongoing within the UK and
much of Europe in early 2021 along with
Membership, meetings,
and attendance
• Moni Mannings (Chair from 8
October 2020)
• Charles Gurassa (until 23
December 2020)
• Moya Greene DBE (Chair until 8
October 2020 and member until
23 December 2020)
• Julie Southern
• David Robbie (from 17 November
2020)
There were three changes to the
membership of the Committee
during the year as set out above.
The Company Secretary acts as
Secretary of the Committee.
Other key invitees include the
Chief Executive, the Group People
Director, the Reward Director, the
Chief Financial Officer, and external
advisers as relevant.
Member biographies setting out
their skills and experience can
be found on pages 98 to 101.
The Committee met five times
during the year. Meeting attendance
can be found in the table on
page 112.
The Committee’s terms of
reference can be found on
the Company’s website at
https://corporate.easyjet.com.
130 easyJet plc Annual Report and Accounts 2021
What is in this Report?
This Report describes the
implementation of easyJet’s
remuneration policy for Executive
and Non-Executive Directors and
discloses the amounts earned
relating to the year ended 30
September 2021. The Report
complies with the provisions of the
Companies Act 2006 and supporting
regulations. The Report has been
prepared in line with the provisions of
the UK Corporate Governance Code
and the requirements of the UK
Listing Authority Listing Rules.
The Directors’ remuneration policy
(set out on pages 136 to 142) will be
put to shareholders in a binding vote
at the forthcoming AGM and, if
approved, will formally supersede the
current policy with immediate effect.
The Annual Statement by the Chair
of the Remuneration Committee
(set out on pages 130 to 133) and the
Annual Report on Remuneration
(set out on pages 143 to 153) will
together be subject to an advisory
vote at the forthcoming AGM.
windfall gains when the market recovers
and determine a fair outcome based on
the performance of easyJet over the entire
performance period.
I consulted with a number of major
shareholders on behalf of the Committee
regarding this approach who were
supportive.
New Restricted Share Plan
During the year the Committee undertook
a detailed review of our Directors’
remuneration policy to ensure that the
remuneration arrangements we have in
place will support long term strategic
decision making, directly align management
with the interests of shareholders, are
appropriate to support the business as we
continue to recover from the pandemic,
and that they motivate Executive Directors,
the Airline Management Board and the
broader management population to drive
the business and reward them in line with
the shareholder experience.
After careful consideration and
consultation with our largest shareholders,
the Remuneration Committee has
concluded that a Restricted Share Plan is
the best approach for the Company going
forward to align management with
shareholders, support the execution of our
strategy and the creation of long term
sustainable shareholder value. We will
therefore be putting forward a revised
Directors’ remuneration policy to the 2022
AGM incorporating such a plan. Details of
the other changes proposed are set out on
the following pages.
continued restrictions on travel, there was
still a high level of uncertainty over the
medium-term outlook.
Our LTIP awards were normally based on
headline ROCE (40%), headline EPS (40%)
and relative TSR (20%). However, the
continued external uncertainty meant that
the previous approach for the LTIP of
setting a mix of three-year financial targets
was very challenging and was likely to
remain so for some time. In light of this, the
Committee concluded that setting financial
targets for the 2020 LTIP award would not
be fair and could result in either unduly
difficult or easy targets driven by external
events rather than management action.
The Committee’s view was that in the
circumstances, shareholder alignment is a
key measure of success where
management will benefit if shareholders do
and vice versa. It was therefore decided
that the 2020 LTIP award would be based
100% on TSR performance. The Committee
believes basing the award 100% on TSR is a
clear and simple approach and ensures
that the vesting outcome is fully aligned
with the shareholder experience. It also
removes the need to set financial targets in
uncertain economic times whilst providing
clarity for management and shareholders.
In line with best practice and shareholder
expectations the Committee shall retain
discretion to adjust the vesting outcome
where outcomes are not considered to be
reflective of underlying financial or
non-financial performance of the business,
the performance of the individual or where
the outcome is not considered appropriate
in the context of the experience of
shareholders or other stakeholders.
Similarly, the Committee will consider
whether it is appropriate to make any
adjustments to ensure that the Executive
Directors do not benefit unduly from
After careful consideration and consultation with our
largest shareholders, the Remuneration Committee has
concluded that the LTIP should be replaced with a
Restricted Share Plan. We believe that this is the best
approach for the Company going forward to support the
execution of our strategy and the creation of long term
shareholder value.
www.easyJet.com
131
GOVERNANCE DI RE CTORS’ REMUNERATIO N R EPORT (CONTI NUE D)
Rationale for a Restricted Share Plan
The Committee believes that amending the policy to include a Restricted Share Plan (RSP) is appropriate for easyJet for the following
reasons:
Reason
Rationale
easyJet is an asset
heavy business that
requires long term
decision making
Aligns management
and shareholders for
long term sustainable
value creation
easyJet’s performance
is heavily influenced by
external factors
The Company is focused on making long term investments to drive long term sustainable value
creation. The Committee believes that three-year performance targets risk creating too much focus
on delivering for the medium rather than the long term.
We believe that an RSP, which does not rely on hitting three-year targets, will better support the
longer-term decision making required to deliver superior long term shareholder value creation
The past two years have been challenging and we are grateful to shareholders for their support,
particularly in relation to the recent rights issue.
Going forward we want to have a remuneration framework which clearly aligns management with our
shareholders for long term value. The Committee believes that the RSP will better align management
with the experience of shareholders through the alignment of reward outcomes with the share price.
The airline and travel sector is exposed to external factors outside of management’s control which
make it challenging to set realistic but stretching performance targets for the Company over the long
term. This includes for example changing governmental requirements, the impact of Covid-19 or
security issues. This has led to significant variability of previous LTIP outcomes (set out in the chart
below). This variability, which has been largely impacted by external factors rather than underlying
operational performance, has impacted the motivational impact of the LTIP for management.
An RSP would simplify our approach to reward policy, strongly aligning the interests of management
with those of shareholders and thereby improving the motivational impact of incentives.
easyJet's historical LTIP payouts (% of max)
Vesting levels (%)
100100
100100
100100
9292
7070
3232
1515
00
00
00
2012
2013
2014 2015
2016
2017
2018
2019 2020 2021
Medium-term
uncertainty in the
sector and business
Given the difficulties in rebuilding the sector, simplifying our approach to remuneration will act as a
retention tool across our management teams as we navigate out of the initial impact of the Covid-19
pandemic and take the necessary steps required to ensure the business recovers.
RSP Awards have been
used before in the
business for more
junior roles
Given the strategic rationale, we are already issuing RSPs within the wider workforce as an effective
component on the reward framework. Implementing Restricted Share Plan Awards for the Executive
Directors would ensure a consistent approach with other employees where RSP awards have already
been used and so better align executive pay across the Airline Management Board and other
executives and managers in the business.
Fits with easyJet’s
reward principles
Including an RSP ties in with easyJet’s remuneration principles i.e. simple and cost effective, aligned
with business strategy and further aligns executives with shareholders and other stakeholders in the
business.
132 easyJet plc Annual Report and Accounts 2021
Operation of the RSP
The following provides a summary of how
the RSP will operate:
• Award size: The maximum award will be
125% of salary for the CEO and 100% of
salary for the CFO. This is a 50%
reduction compared to the current long
term incentive opportunity under the
LTIP (250% and 200% of base salary for
the CEO and CFO respectively). This
reflects best practice and shareholder
expectations.
• Time horizons: Awards will vest 100% on
the third anniversary of the award and
will then be subject to a two-year holding
period, so that the total time horizon is
five years for the entire award.
This approach is illustrated here:
Y1
Y2
Y3
Y4
Y5
100% vests after 3 years
holding period
Whole award subject to holding period of 5 years
`
• Performance underpins: Awards will be
subject to the following performance
underpins measured over the vesting
periods. If any underpin is not met, the
Committee will consider whether it is
appropriate to reduce the portion of the
award vesting, based on its judgement
of the context. Having carefully
considered the strategic imperatives
for the business at this time, the
proposed underpins for the awards
proposed for the 2022 financial year are:
1. That easyJet does not fall below its
minimum liquidity target (such that a
credit risk is triggered) through the
vesting period.
2. Satisfactory governance performance
including no ESG issues that result in
material reputational damage to the
reputation of the Company (as
determined by the Board).
3. The Committee will operate a further
underpin such that if the Company’s
performance taken as a whole materially
underperforms what might reasonably
have been expected for the sector for
reasons attributable to management
action or inaction, the Committee will
at its discretion reduce the award
quantum appropriately.
The Committee intends to review the
underpins to be applied in subsequent
years.
I consulted with a number of our major
shareholders on behalf of the Committee
regarding the move to a Restricted Share
Plan. During these discussions shareholders
recognised and understood the rationale to
implement an RSP and provided their
feedback on the suggested approach. This
feedback has been considered carefully by
the Committee.
Other aspects of remuneration
Base salary
In light of the circumstances of the
business and our commitments under our
CCFF and UKEF financing, Executive
Directors will not receive a salary increase
for the year ended 30 September 2022.
Salaries will therefore remain at £740,000
for the CEO and £520,000 for the CFO.
Annual bonus
The operation of the annual bonus will
continue broadly unchanged although we
will revert back to being based on full year
targets. The maximum opportunity will
continue to be 200% of base salary (Chief
Executive) and 175% of base salary (Chief
Financial Officer).
For the year ended 30 September 2022
the annual bonus will be based 30% on
EBITDAR performance, 50% on a balanced
scorecard of financial and operational
objectives including Free Cash Flow,
Ancillary Yield, Cost Programme
Performance and CSAT and 20% based on
individual performance. Individual
performance includes measures linked to
our sustainability strategy, recognising the
increasing importance of this to the
business, as well as measures linked to
easyJet holiday’s performance and
employee engagement. The Committee
has chosen to use a balanced scorecard
approach to assessing performance for
50% of the bonus this year to ensure that
we are providing a balanced incentive to
drive performance across a range of areas.
The Committee will consider performance
against each measure and determine an
appropriate total outcome for the
scorecard at the end of the year. At least
40% of the scorecard will be linked to
financial measures ensuring that at least
50% of the overall bonus is linked to
financial measures. In addition, as in
previous years, a safety underpin applies
such that the Committee may scale back
the bonus earned (including to zero) in
the event that there is a safety event
which it considers warrants the use of
such discretion.
Any payment will be additionally
assessed against the requirements for
the UKEF.
Rights issue
In September 2021 the Board undertook a
rights issue raising £1.2bn to facilitate the
Group’s recovery from the impact of the
pandemic and to materially improve
easyJet’s ability to deliver long-term value
to shareholders through providing the
Group with the flexibility to take advantage
of strategic and investment opportunities.
We thank our shareholders for their
support in this process.
In accordance with standard practice we
have adjusted outstanding share awards
to reflect the impact of the rights issue.
We will also be reviewing targets for
outstanding incentive awards for the
impact of the rights issue to ensure that
the degree of stretch remains appropriate.
Board changes
During the year we were delighted to
welcome Kenton Jarvis who joined us as
CFO on 3 February 2021. In the 2020
Directors’ Remuneration Report we outlined
that we had provided Kenton with a
combination of buy-out awards to replace
awards he forfeited on leaving his previous
employer. Having considered this approach
further, the Committee and Kenton agreed
that, taking into account the likelihood of
vesting of the forfeited share awards, share
buy-out awards would not be granted at
this time. The cash buy-out awards,
totalling £300,000, are due to be paid,
net of appropriate withholdings, in the
December 2021 payroll. Also, following his
appointment, in May 2021 Kenton was
granted a normal award of 200% of base
salary under the LTIP. This award was
granted on the same terms and linked to
the same performance conditions as
the LTIP awards granted to other senior
executives in December 2020 as
outlined above.
On behalf of the Committee I would like
to thank shareholders for their continued
support during 2021 and ahead of the
next AGM.
Moni Mannings
Chair of the Remuneration Committee
www.easyJet.com
133
GOVERNANCE DI RE CTORS’ REMUNERATIO N R EPORT (CONTI NUE D)
Remuneration
at a glance
Reward principles
The Remuneration Committee’s primary objective is to design a remuneration framework which promotes the long-term success of the
Group. For some time, we have been guided by the following reward principles:
Principle
Application in remuneration framework
Simple and
cost effective
To establish a simple and cost-effective reward package in line with our low-cost and efficient business
model.
Aligned with
business strategy
To support the achievement of our business strategy of long term sustainable growth and returns. The
combination of our annual bonus plan based on a mix of financial, operational and strategic targets and
our new long term Restricted Share Plan ensures that value is delivered to shareholders and that Executive
Directors are rewarded for the successful and sustained delivery of the key strategic objectives of the
Group.
Sustainable
long term success
Total remuneration is weighted towards elements which align with sustainable long term shareholder value
creation. This ensures that there is a clear link between the value created for shareholders and the amount
paid to our Executive Directors.
Mindful of the
wider stakeholder
experience
Notwithstanding the financial performance of the business, overall remuneration outcomes will be mindful
of the wider stakeholder experience to ensure Executive Director remuneration remains fair, responsible,
and sustainable.
SINGLE TOTAL FIGURE OF REMUNERATION (£’000)
Johan Lundgren (Chief Executive)
2021
2020
Kenton Jarvis (Chief Financial Officer)1
2021
£794
£755
XX
£363
£0
£100
£200
£300
£400
£500
£600
£700
£800
£900
£1000
Fixed
Bonus
LTIP
1. Appointed on 3 February 2021
134 easyJet plc Annual Report and Accounts 2021
Executive Director remuneration policy – at a glance
Element
Salary
Policy
Implementation of policy for the 2022 financial year
Increases normally up to the average
workforce level (though may be increased
at higher rates in certain circumstances,
for example where a new Executive
Director has been appointed to the Board
at a lower than typical market salary to
allow for growth in the role).
In line with the wider workforce pay freezes, the salaries for Johan
Lundgren and Kenton Jarvis will not be increased during the 2022
financial year. Salaries will therefore continue to be £740,000 for the
CEO and £520,000 for the CFO.
Benefits and
pension
Modest benefits with pension provision
aligned to the wider workforce.
Annual bonus
Maximum opportunity is 200% of base
salary (Chief Executive) and 175% of base
salary (Chief Financial Officer). One-third
of bonus is deferred into shares for three
years. Majority based on financial metrics.
Withholding and recovery provisions
apply.
Restricted
Share Plan
(RSP)
Normal maximum awards of 125% of
salary (Chief Executive) and 100% of
salary (Chief Financial Officer). Up to
150% of salary in exceptional
circumstances.
Three-year performance period plus
two-year post-vesting holding period.
Awards will be subject to performance
underpins measured over the vesting
periods. Withholding and recovery
provisions apply.
Share
ownership
guidelines
250% of salary (Chief Executive) and
200% of salary (Chief Financial Officer).
Expected to retain 50% of post-tax shares
vesting under the RSP and 100% of
post-tax deferred bonus shares until
guideline is met.
Pension allowance of 6.15% of salary (being the cash alternative to a
7% employer contribution less the equivalent value of UK employers’
national insurance contributions) plus modest benefits aligned to the
market.
Maximum will remain at 200% of base salary for the Chief Executive
and at 175% of base salary for the Chief Financial Officer. The bonus
for the 2022 financial year will be based 30% on EBITDAR
performance, 50% on a balanced score card of Company
performance targets including free cash flow, cost control, customer
feedback, operational performance and ancillary revenue, and 20%
on individual performance including measures linked to sustainability,
strategy and employee engagement. The Committee will review
performance against these measures and has the discretion to
determine the appropriate level of award at the end of the financial
year based on performance achieved. As in previous years a safety
underpin applies such that the Committee may scale back the bonus
earned (including to zero) in the event that there is a safety event
which it considers warrants the use of such discretion.
The normal maximum award will be 125% of salary for the Chief
Executive and 100% of salary for the Chief Financial Officer.
Performance underpins will be: (i) That easyJet does not fall below
its minimum liquidity target (such that a credit risk is triggered)
through the vesting period; and (ii) Satisfactory governance
performance including no ESG issues that result in material
reputational damage to the reputation of the Company (as
determined by the Board). If the Company does not meet one or
more of the underpins the Committee would consider whether it
was appropriate to scale back the level of payout under the award
to reflect this. The Committee would retain discretion to determine
what level of scale back, if any, was appropriate.
The Committee will also operate a further underpin such that if the
Company’s performance taken as a whole materially underperforms
what might reasonably have been expected for the sector for
reasons attributable to management action or inaction, the
Committee will at its discretion reduce the award quantum
appropriately.
The Committee will review the appropriate underpins to be used for
each award.
Similarly, the Committee will consider whether it is appropriate to
make any adjustments to ensure that the Executive Directors do not
benefit unduly from windfall gains when the market recovers and
determine a fair outcome.
250% of base salary for the Chief Executive and 200% of base
salary for the Chief Financial Officer. These guidelines will apply to all
new Director appointments and all current Directors not under
notice.
Post cessation
share
ownership
guidelines
Chief Executive and Chief Financial Officer
required to hold up to 100% of their
shareholding requirement for two years
after leaving office.
Executive Directors will be expected to maintain a minimum
shareholding equal to the guideline (or their actual shareholding if
lower) for two years following stepping down as an Executive
Director. These guidelines will only apply to any shares from incentive
awards for all new and current Directors not under notice.
www.easyJet.com
135
GOVERNANCE DI RE CTORS’ REMUNERATIO N R EPORT (CONTI NUE D)
Directors’ remuneration policy
This part of the Directors’ Remuneration
Report sets out easyJet’s Directors’
remuneration policy. This revised policy
will be put to shareholders for approval
in a binding vote at the AGM on
10 February 2022 and will be effective
from this date. The Committee’s current
intention is that the policy will operate
for a three-year period.
As outlined in the Remuneration
Committee Chair’s statement, following
extensive consideration and consultation
with shareholders, the Committee has
concluded that going forwards replacing
our existing LTIP with a Restricted Share
Plan (RSP) is the best approach to
support the execution of our strategy
and the creation of long term shareholder
value. Under the RSP the awards will be
lower, however vesting will be subject
to the achievement of performance
underpins only rather than stretching
performance targets.
Other than the introduction of the RSP
there are no other major changes to this
policy compared to the 2020 Directors’
remuneration policy. Minor changes have
been made to the wording of the policy in
certain areas to aid operation and to
increase clarity.
Role of our Remuneration
Committee
The Remuneration Committee has
responsibility for determining remuneration
for the Executive Directors, the Chairman
of the Board, and members of the Airline
Management Board. The Committee takes
into account the need to recruit and retain
executives and ensure that they are
properly motivated to perform in the long
term interests of the Company and its
shareholders, while paying no more than
is necessary. In addition, the Committee
will review and be appraised on the
application of the remuneration policy
for senior management and all employee
populations across the Group to ensure
that decisions remain mindful of the wider
employee experience.
In determining the new Directors’
remuneration policy, the Committee
followed a robust process which included
discussions on the content of the policy at
Remuneration Committee meetings during
the year. The Committee considered the
input from management and independent
advisers, as well as extensively consulting
on best practice with major shareholders
and proxy and advisory services.
Considerations when
determining the remuneration
policy
The primary objective of the Group’s
remuneration policy is to align
management interests with the long term
interests of shareholders and to promote
the sustainable long term success of the
business by operating pay arrangements
which are appropriately competitive.
When setting the policy for Executive
Directors’ remuneration, the Committee
takes into account total remuneration
levels operating in companies of a similar
size and complexity as well as companies
in the wider aviation and travel & leisure
sector, the responsibilities of each individual
role, individual performance and an
individual’s experience.
Our overall policy, having given due regard
to the factors noted above, is to weight
remuneration towards elements which
aligns management with sustainable long
term shareholder value creation. This is
typically achieved through setting base pay
at a competitive level, offering modest
benefits with pension provision at similar
levels to the wider UK workforce, and
providing the potential to earn a
performance based annual bonus linked
to Group financial and strategic or
operational targets. An award of
restricted shares supports long term
decision making and aligns management’s
interest with those of shareholders.
Considering the views of
employees when determining the
remuneration policy
In setting remuneration for the Executive
Directors, the Committee takes note of
the overall approach to reward for
employees in the Group. Salary increases
will ordinarily be (in percentage of salary
terms) no higher than those of the wider
workforce (other than in circumstances
described below).
Effective 1 January 2019, the Group
appointed Moya Greene as their Employee
Representative Director to enhance the
voice of the employee in the boardroom.
As set out on page 109, the Board revised
this mechanism during the year and
appointed four Non-Executive Directors as
Employee Representative Directors. The
Employee Representative Directors are
expected to meet individually with the
Company’s European Works Council
(‘EWC’) and Management & Administration
Consultative Group (‘MACG’) at least once
a year, and other Works Councils on a
periodic basis. In addition, other more
informal engagement is envisaged. A
standing agenda item allows the Employee
Representative Directors to report to the
Board regularly on their discussions, and
they are encouraged to bring the employee
voice into conversations in the boardroom
whenever possible, including any matters
that may contribute to the decision making
of the Committee.
During the year Moni Mannings met with
the MACG to discuss a range of topics and
answer their questions. Feedback was
received on the reward framework at
easyJet and what changes may be
considered in the future to support
retention and engagement.
In addition, the Group People Director
and Reward Director meet with the EWC
and MACG to update them on reward
activities, answer questions and receive
feedback, which is then reported to the
Committee. During 2021 the Reward
Director specifically met with the MACG
to discuss the rights issue and the reward
structure at all levels and with the EWC
to update them on the impact of the
rights issue on employee share schemes,
together with other reward related
questions. Feedback received at these
meetings has directly resulted in some
changes and enhancements to the benefit
offering for employees.
The Committee also considers
developments in best practice expectations
from institutional investors’ and the views
expressed by shareholders during any
dialogue when making executive
remuneration decisions.
Considering the views of
shareholders when determining
the remuneration policy
easyJet remains committed to shareholder
dialogue and takes an active interest in
voting outcomes. We consult extensively
with our major shareholders when setting
our remuneration policy or when
considering any significant changes to our
remuneration arrangements. The
Committee also considers shareholder
feedback received in relation to the
Directors’ Remuneration Report each year
following the AGM. This, plus any additional
feedback received from time to time, is
then considered as part of the Committee’s
annual review of the remuneration policy
and its implementation.
136 easyJet plc Annual Report and Accounts 2021
Remuneration structure
The table below sets out the main components of easyJet’s remuneration policy:
Element, purpose
and link to strategy
Base salary
To provide the core
reward for the role.
Set at a sufficient level
to recruit and retain
individuals of the
necessary calibre to
execute the Company’s
business strategy.
Benefits
In line with the
Company’s policy to
keep remuneration
simple and consistent.
Pension
To provide employees
with long term savings via
pension provisions in line
with the Company’s
strategy to keep
remuneration simple
and consistent.
Operation (including maximum
levels where applicable)
Salaries are normally reviewed annually, with changes typically effective
from 1 January.
Salaries are typically set after considering salary levels in companies of a
similar size and complexity as well as companies in the wider aviation and
travel & leisure sector, the responsibilities of each individual role,
progression within the role, individual performance, and an individual’s
experience. Our overall policy, having given due regard to the factors
noted, is normally to target salaries at a broadly market competitive level
in the context of the total package.
Salaries may be increased, and any increase will ordinarily be no higher
than those of the wider workforce (in percentage of salary terms).
However, increases beyond those granted to the wider workforce (in
percentage of salary terms) may be awarded in certain circumstances
such as to reflect performance, significant changes in market practice or
the size of the Company, to recognise changes in roles and responsibilities
or where a new Executive Director has been appointed to the Board at a
lower than typical market salary to allow for growth in the role.
Executive Directors are entitled to a combination of modest benefits
aligned to the market, such as life assurance and other insurance
arrangements as well as a range of voluntary benefits including the
purchase of additional holiday.
The Company provides Directors’ and Officers’ Liability Insurance and may
provide an indemnity to the fullest extent permitted by the Companies
Act (see Directors’ Report section).
Where required, a car allowance or the use of a driver for Company
business may be provided.
Executive Directors shall be reimbursed for all reasonable business
expenses and the Company may settle any tax incurred in relation to
these where appropriate.
Where an Executive Director is required to relocate to perform their role,
appropriate one-off or ongoing benefits may be provided (such as
housing support, schooling etc).
Executive Directors are also eligible to participate in any all-employee
share plans operated by the Company, in line with HMRC guidelines
currently prevailing (where relevant), on the same basis as for other
eligible employees.
The Committee may introduce other benefits if it is considered
appropriate to do so.
Defined contribution plan with the same monthly employer contributions
as those offered to eligible employees in the wider UK workforce (i.e. up
to 7% of base salary); or a cash alternative to the same value, which will
normally be less the equivalent value of employer National Insurance
contribution costs.
easyJet operates a pension salary sacrifice arrangement whereby all UK
employees, including Executive Directors, can exchange part of their
salary for Company-paid pension contributions. Where employees
exchange salary this reduces employer National Insurance contributions.
easyJet credits half of this NI reduction (currently 6.9% of the salary
exchanged) to the individual’s pension plan.
Framework used to assess
performance and provisions
for the recovery of sums paid
The Committee considers
individual salaries at the
appropriate Committee
meeting each year after
having due regard to the
factors noted in operating
the salary policy.
No recovery provisions apply
to base salary.
Not applicable.
No recovery provisions apply
to benefits.
Not applicable.
No recovery provisions apply
to employer pension
contributions.
www.easyJet.com
137
GOVERNANCE DI RE CTORS’ REMUNERATIO N R EPORT (CONTI NUE D)
Remuneration structure (continued)
Element, purpose
and link to strategy
Annual bonus
To incentivise and
recognise execution of
the business strategy
on an annual basis.
Rewards the
achievement of annual
financial and
operational goals.
Compulsory deferral of
a portion of the bonus
provides alignment
with shareholders.
Operation (including maximum
levels where applicable)
Maximum opportunity of 200% of salary for Chief
Executive and 175% of salary for other Executive
Directors.
One-third of the pre-tax bonus earned is normally
subject to compulsory deferral into shares (or
equivalent), typically for a period of three years, and is
normally subject to continued employment.
The remainder of the bonus is typically paid in cash.
Dividend equivalent payments may be made on the
deferred bonus at the time of vesting and may
assume the reinvestment of dividends.
All bonus payments are at the discretion of the
Committee, as set out following this table.
Restricted Share Plan
(RSP) award
To incentivise the
execution of the
business strategy
over the longer term.
Rewards sustained
increase in shareholder
value1.
Each year RSP awards may be granted. Awards
normally vest over a three-year period.
A holding period applies to RSP awards which requires
the Executive Directors to retain the after-tax value of
shares for 24 months from the vesting date –
including post cessation of employment.
The maximum opportunity contained within the plan
rules for RSP awards is 125% of salary (with awards up
to 150% of salary eligible to be made in exceptional
circumstances).
The normal maximum face value of annual awards will
be 125% of base salary for the Chief Executive and
100% of base salary for other Executive Directors.
Dividend equivalent awards may be made on RSP
awards that vest and may assume the reinvestment of
dividends.
Share ownership
To ensure alignment
between the interests
of Executive Directors
and shareholders.
Post-employment
share ownership
guideline
The Chief Executive and the Chief Financial Officer are
expected to build and maintain a holding equivalent to
250% and 200% of salary respectively over a period of
five years from appointment. Executive Directors are
expected to retain 50% of the post-tax shares vesting
under the Long Term Incentive Plans, the RSP and
100% of the post-tax deferred bonus shares until the
guideline is met.
Executive Directors are now required to hold up to
100% of their shareholding requirement for two years
after stepping down from the Board in respect of
shares from incentive awards.
The Committee retains discretion to waive this
guideline if it is not considered appropriate in the
specific circumstances.
Framework used to assess performance and provisions
for the recovery of sums paid
In line with last year, bonuses are normally based on
stretching financial and non-financial measures,
including personal or strategic performance
measures.
Performance measures are set and assessed by the
Committee at its discretion, with performance
normally measured over a one-year period.
Financial measures will normally represent the
majority of the bonus, with other non-financial
measures representing the balance.
Safety underpins all of the operational activities of
the Group and the bonus plan includes a provision
that enables the Committee to scale back the
bonus earned (including to zero) in the event that
there is a safety event which it considers warrants
the use of such discretion.
The annual bonus plan includes provisions which enable
the Committee (in respect of both the cash and the
deferred elements of bonuses) to recover or withhold
value in the event of certain defined circumstances.
The Committee may, at its discretion, adjust the
level of bonus payout if it considers that the payout
would not reflect the underlying performance of the
executive, the Group, the experience of
shareholders, other stakeholders or if such a level
would not be appropriate in the circumstances.
Awards will be subject to performance underpins
measured over the vesting periods. If the Company
does not meet one or more of the underpins the
Committee would consider whether it was
appropriate to scale back the level of payout under
the award to reflect this.
The Committee would retain discretion to determine
what level of scale back, if any, was appropriate.
The RSP includes provisions which enable the
Committee to recover or withhold value in the event
of certain defined circumstances.
The Committee retains discretion to review the
performance underpins, and to set the triggers for
each underpin.
The Committee may, at its discretion, adjust the
vesting level of an award if it considers that the
vesting level would not reflect the underlying
performance of the executive, the Group, the experience
of shareholders, other stakeholders or if such a level
would not be appropriate in the circumstances.
Not applicable.
Not applicable.
Outstanding awards under the LTIP will vest in line with the remuneration policy in force at the time of grant.
1. RSPs will be awarded subject to the approval of scheme rules at the AGM, otherwise we will retain the ability to issue awards based upon the existing LTIP.
138 easyJet plc Annual Report and Accounts 2021
Discretion retained by the
Committee in operating the
incentive plans
The Committee will operate the annual
bonus plan and RSP according to their
respective rules (or relevant documents)
and in accordance with the Listing Rules
where relevant. The Committee retains
discretion, consistent with market practice,
in a number of regards to the operation
and administration of these plans. In
relation to the annual bonus plan, the
Committee retains discretion over:
• the participants;
• the timing of grant of a payment;
• the determination of the bonus payment;
• dealing with a change of control;
• determination of the treatment of
leavers based on the rules of the plan
and the appropriate treatment chosen;
and
• the annual review of performance
measures and weighting, and targets for
the annual bonus plan from year to year.
In relation to the RSP and annual bonus
deferred in shares, the Committee retains
discretion on the following:
• the participants;
• the timing of grant of an award;
• the size of an award;
• the determination of vesting;
• the payment vehicle of the award/
payment;
• a change of control or restructuring of
the Group;
• determination of the treatment of
leavers based on the rules of the plan
and the appropriate treatment chosen;
• adjustments required in certain
circumstances (e.g. rights issues,
corporate restructuring events and
special dividends).
In relation to both the Group’s RSP and the
annual bonus plan, the Committee retains
the ability to adjust the targets (in the case
of the annual bonus) or underpins (in the
case of the RSP) and/or set different
measures if events occur which cause it to
determine that the conditions are no longer
appropriate (e.g. material acquisition and/or
divestment of a Group business), and the
amendment is required so that the
conditions achieve their original purpose
and are not materially less difficult to
satisfy.
Any use of the above discretions would be
explained in the Annual Report on
Remuneration and may be the subject of
consultation with the Company’s major
shareholders.
The use of discretion in relation to the
Group’s Save As You Earn, and Share
Incentive Plans will be as permitted under
HMRC rules and the Listing Rules.
Details of share awards granted to existing
Executive Directors are set out on
page 147. These remain eligible to vest
based on their original award terms.
Malus and clawback provisions are included
in all incentives: the annual bonus (up to
three years from date of award), and the
RSP (up to six years from the date of
award). The circumstances in which malus
and clawback could apply may include
some or all of the following as determined
by the Board:
• A material misstatement resulting in an
adjustment to the Company’s audited
consolidated accounts
• The determination of the number of
shares subject to an award or the
assessment of any performance
condition was in error or based on
inaccurate or misleading information
• The Board determining in its reasonable
opinion that any action or conduct of the
participant amounts to serious
misconduct, fraud, or gross misconduct
• That there has been a material failure of
risk management
• That there has been a safety incident
which has damaged the reputation of
the Company to a material extent
• That there has been serious reputational
damage
• That there has been a material corporate
failure or
• Any other circumstances which the
Board in its discretion considers to be
appropriate
Performance metrics and target
setting
The choice of the performance metrics
applicable to the annual bonus plan reflect
the Committee’s belief that any incentive
compensation should be appropriately
challenging and tied to the delivery of a
blend of key financial and non-financial
measures. These bonus measures are
intended to ensure that Executive Directors
are incentivised to deliver across a range of
objectives for which they are accountable.
Financial measures will normally be used for
the majority of the bonus and will be
selected in order to provide a clear
indication of how successful the Group has
been in managing operations effectively
overall. The remainder of the bonus may be
based on key operational or strategic
objectives, which are set annually.
Since safety is of central importance to the
business, the award of any bonus is subject
to an underpin that enables the Committee
to reduce the bonus earned (including to
zero) in the event that there is a safety
event that it considers warrants the use of
such discretion.
RSP awards are subject to performance
underpins. These are intended to represent
a minimum level of performance below
which vesting may not be appropriate.
The performance underpins will normally
be linked to key financial, operational or
governance minimum standards. Underpins
are set taking into account what would be
considered to be a minimum acceptable
level of performance.
The Committee has retained flexibility on
the specific measures which can be used
for the annual bonus plan and the
underpins for the RSP to ensure that they
will be fully aligned with the strategic
imperatives prevailing at the time they are
set. Performance targets are set taking into
account internal and external expectations
of performance to align with our
remuneration philosophy and principles.
No performance targets are set for Save
As You Earn awards since these are
purposefully designed to encourage
employees across the Group to purchase
shares in the Company. A measure of
Group performance based on financial and
operational targets set in the prior year is
used in determining awards under the
Share Incentive Plan.
Historical awards
The Committee reserves the right to make
any remuneration payments and/or
payments for loss of office (including
exercising any discretions available to it in
connection with such payments)
notwithstanding that they are not in line
with the policy set out above where the
terms of the payment were agreed (i)
before the policy set out above came into
effect, provided that the terms of the
payment were consistent with any
applicable shareholder-approved Directors’
remuneration policy in force at the time
they were agreed or where otherwise
approved by shareholders; or (ii) at a time
when the relevant individual was not a
Director of the Company (or other persons
to whom the policy set out above applies)
and, in the opinion of the Committee, the
payment was not in consideration for the
individual becoming a Director of the
Company or such other person. For these
purposes ‘payments’ include the
Committee satisfying awards of variable
remuneration and, in relation to an award
over shares, the terms of the payment are
‘agreed’ no later than the time the award is
granted. This policy applies equally to any
individual who is required to be treated as a
Director under the applicable regulations.
www.easyJet.com
139
GOVERNANCE DI RE CTORS’ REMUNERATIO N R EPORT (CONTI NUE D)
Differences in pay policy for
Executive Directors compared to
other easyJet employees
In line with the Group’s policy to keep
remuneration simple, aligned, and
performance-based, the benefit and
pension arrangements for the current
Executive Directors are typically on broadly
the same terms as those offered to eligible
UK employees in the wider workforce. In
addition, all employees have the
opportunity to participate in a number of
broad-based share plans.
However, the overall remuneration policy
for the Executive Directors is more heavily
weighted towards variable and share-based
pay than for other employees. This is to
ensure that a greater proportion of
executive pay is linked directly to the
creation of value for shareholders. This
approach is to create a clear link between
the value created for shareholders and
the remuneration received by the
Executive Directors.
Illustration of how much the
Executive Directors could earn
under the remuneration policy
The charts below show how much the
Chief Executive and Chief Financial Officer
could earn through easyJet’s remuneration
policy under different performance
scenarios in the 2022 financial year. The
following assumptions have been made:
Minimum (performance below threshold)
– fixed pay only, with no vesting under any
of easyJet’s incentive plans.
Mid (performance in line with expectations)
– fixed pay plus a bonus at the mid-point
of the range (giving 50% of the maximum
opportunity), plus 100% vesting of the
Restricted Share Plan.
Maximum (performance meets or exceeds
maximum) – fixed pay plus maximum
bonus, plus 100% vesting of the Restricted
Share Plan.
Fixed pay comprises:
Salaries – salary effective as at 1 January
2022.
Benefits – amount received in the 2022
financial year.
Pension – employer contributions or
cash-equivalent payments received in the
2022 financial year.
Matching Shares under the all-employee
Share Incentive Plan.
CHIEF EXECUTIVE (JOHAN LUNDGREN)1
Minimum
CHIEF FINANCIAL OFFICER (KENTON JARVIS)2
Minimum
100%
£800,000
Mid
100%
£566,000
Mid
32%
30%
38%
£2,465,000
37%
30%
34%
£1,541,000
Maximum
Maximum
25%
46%
29%
£3,205,000
28%
46%
26%
£1,996,000
Maximum + share price growth (50%)
Maximum + share price growth (50%)
22%
40%
25% 13%
£3,667,000
25%
40%
23% 12%
£2,256,000
Fixed pay
Annual bonus
RSP
Fixed pay
Annual bonus
RSP
Change in share price
Change in share price
1. Were easyJet’s share price to increase by 50%, Johan Lundgren’s total remuneration would increase to £3,667k under a ‘maximum’ scenario – driven by
the increased value of the RSP awards
2. Were easyJet’s share price to increase by 50%, Kenton Jarvis’ total remuneration would increase to £2,256k under a ‘maximum’ scenario – driven by the
increased value of the RSP awards
The scenarios shown above do not include any dividend assumptions. It should be noted that since the analysis above shows what could
be earned by the Executive Directors based on the remuneration policy described above (ignoring the potential impact of share price
growth), these numbers will differ to values included in the table on page 145 detailing the actual earnings by Executive Directors.
140 easyJet plc Annual Report and Accounts 2021
Executive Directors’ terms of
employment
The Group’s policy is for Executive
Directors to have service contracts which
may be terminated with no more than 12
months’ notice from either party.
The Executive Directors’ service contracts
are available for inspection by shareholders
at the Company’s registered office.
Approach to leavers
If notice is served by either party, the
Executive Director can continue to receive
basic salary, benefits and pension for the
duration of their notice period, during
which time the business may require the
individual to continue to fulfil their
current duties or may assign a period
of garden leave.
A payment in lieu of notice may be made,
and, in this event, the Committee’s normal
policy is to make the payment in up to 12
monthly instalments which may be reduced
if alternative employment is taken up
during this period.
For good leavers, bonus payments may be
made on a pro-rata basis, but only for the
period of time served from the start of the
financial year to the date of termination,
and not for any period in lieu of notice. Any
bonus paid would be subject to the normal
bonus targets, tested at the end of the
financial year.
In relation to a termination of employment,
the Committee may make any payment in
relation to statutory entitlements or to
settle or compromise claims in connection
with a termination of any existing or future
Executive Director as necessary. The
Committee also retains the discretion to
reimburse reasonable legal expenses
incurred in relation to a termination of
employment and to meet any
outplacement costs if deemed necessary.
The rules of the Company’s share plans set
out what happens to awards if a participant
ceases to be an employee or Director of
easyJet before the end of the vesting
period. Generally, any outstanding share
awards will lapse on such cessation, except
in certain circumstances.
If an Executive Director ceases to be an
employee or Director of easyJet as a result
of death, injury, retirement, the sale of the
business or company that employs the
individual, or any other reason at the
discretion of the Committee, then they will
be treated as a ‘good leaver’ under the
relevant plan’s rules. Under the deferred
bonus, the shares for a good leaver will
normally vest in full on the normal vesting
date (or on cessation of employment in the
case of death) and if the award is in the
form of an option, there is a 12 month
window in which the award can be
exercised. Awards structured as options
which have vested prior to cessation can
be exercised within 12 months of cessation
of office or employment.
Under the RSP, a good leaver’s unvested
awards will vest (either on the normal
vesting date or the relevant date of
cessation, if determined by the Committee)
subject to achievement of the performance
underpin, with a pro-rata reduction to
reflect the proportion of the vesting period
served. The holding period shall normally
continue to apply. The Committee has the
discretion to dis-apply time pro-rating if it
considers it appropriate to do so. A good
leaver may exercise their vested awards
structured as options for a period of 12
months following the individual’s cessation
of office or employment. Unvested
awards may be exercised within
12 months of vesting.
Under the LTIP (the plan under which
awards were granted up to and including
2020), a good leaver’s unvested awards will
vest (either on the normal vesting date or
the relevant date of cessation, as
determined by the Committee) subject to
achievement of any relevant performance
conditions, with a pro-rata reduction to
reflect the proportion of the vesting period
served. The holding period shall normally
continue to apply. The Committee has the
discretion to dis-apply time pro-rating if it
considers it appropriate to do so. A good
leaver may exercise their vested awards
structured as options for a period of 12
months following the individual’s cessation
of office or employment. Unvested
awards may be exercised within 12 months
of vesting.
In determining whether an Executive
Director should be treated as a good
leaver, and the extent to which their award
may vest, the Committee will take into
account the circumstances of an
individual’s departure.
In the event of a takeover or winding-up
of easyJet plc (which is not part of an
internal reorganisation of the easyJet
Group, in circumstances where equivalent
replacement awards are not granted) all
awards will vest taking into account the
achievement of any relevant performance
underpins (in the case of the RSP)/
performance conditions (in the case of the
LTIP) with a pro-rata reduction to reflect
the proportion of the vesting period served.
The Committee has discretion to dis-apply
time pro-rating if it considers it appropriate
to do so. In the event of a takeover, the
Committee may determine, with the
agreement of the acquiring company, that
awards will be exchanged for equivalent
awards in another company.
Policy on external appointments
Executive Directors are permitted to
accept appropriate outside non-executive
director appointments so long as the
overall commitment is compatible with
their duties as Executive Directors and is
not thought to interfere with the business
of the Group. Any fees received in respect
of these appointments are normally
retained directly by the relevant
Executive Director.
Approach to determining
remuneration on recruitment
Base salary levels will normally be set in
accordance with easyJet’s remuneration
policy as well as taking into account the
experience and calibre of the individual.
Benefits will normally be provided in
accordance with easyJet’s remuneration
policy taking into account those offered to
other employees. Where an Executive
Director is required to relocate from their
home location to take up their role, the
Committee may provide assistance with
relocation (via either one-off or ongoing
payments or benefits).
The maximum level of variable pay that
may be offered on an ongoing basis and
the structure of remuneration will be in
accordance with the approved policy
detailed above, i.e. at an aggregate
maximum of up to 325% of salary (200%
annual bonus and 125% under the RSP) and
350% in exceptional circumstances (200%
annual bonus and 150% under the RSP),
taking into account annual and long term
variable pay. This limit does not include the
value of any buy-out arrangements.
Different performance measures may be
set initially for the annual bonus, taking into
account the responsibilities of the
individual, and the point in the financial year
that they joined. RSP awards can be made
shortly following an appointment (assuming
the Company is not in a closed period).
The above policy applies to both an internal
promotion to the Board or an external hire.
Where an individual forfeits outstanding
variable pay opportunities or contractual
rights at a previous employer as a result of
appointment, the Committee may offer
compensatory payments or awards if
after careful consideration it is determined
that it is appropriate to offer a buy-out.
Any buy-out may be in such form as the
Committee considers appropriate, taking
into account relevant factors including the
form of awards, expected value and
vesting timeframe of forfeited
opportunities.
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141
GOVERNANCE DI RE CTORS’ REMUNERATIO N R EPORT (CONTI NUE D)
To the extent that it was not possible or
practical to provide the buy-out within the
terms of the Company’s existing incentive
plans, a bespoke arrangement may be
used (including granting an award under
the Listing Rule 9.4.2 which allows for the
granting of awards, to facilitate, in unusual
circumstances, the recruitment of an
Executive Director).
In the case of an internal promotion, any
outstanding variable pay awarded in
relation to the previous role will be paid
according to its terms of grant (adjusted as
relevant to take into account the Board
appointment).
On the appointment of a new Chairman or
Non-Executive Director, fees will be set
taking into account the experience and
calibre of the individual. Where specific
cash or share arrangements are delivered
to Non-Executive Directors, these will not
include share options or other
performance-related elements.
The Board evaluation and succession
planning processes in place are designed to
ensure there is the correct balance of skills,
experience, and knowledge on the Board.
The activities of the Nominations
Committee overseeing these matters are
disclosed in the Nominations Committee
report on pages 121 to 123.
Non-Executive Director fees
The Non-Executive Directors receive an annual fee (normally paid in monthly instalments). The fee for the Non-Executive Chairman is set
by the Remuneration Committee and the fees for the other Non-Executive Directors are approved by the Board, on the
recommendation of the Chairman and Chief Executive.
Element
Purpose and link to strategy
Operation (including maximum levels where applicable)
Fees
To attract and retain a high
calibre Chairman, Deputy
Chairman and Non-Executive
Directors by offering market-
competitive fee levels
The Chairman is paid an all-inclusive fee for all Board responsibilities.
The other Non-Executive Directors receive a basic Board fee, with supplementary
fees payable for additional responsibilities including Board or Committee
responsibilities.
The Chairman and Non-Executive Directors do not participate in any of the Group’s
incentive arrangements.
Fee levels are reviewed on a regular basis, and may be increased, taking into account
factors such as the time commitment of the role and market levels in companies of
comparable size and complexity.
Flexibility is retained to exceed current fee levels if it is necessary to do so in order to
appoint a new Chairman or Non-Executive Director of an appropriate calibre.
In exceptional circumstances, if there is a temporary yet material increase in the time
commitments for Non-Executive Directors, the Board may pay extra fees to
recognise the additional workload.
Necessary expenses incurred will be reimbursed so that the Chairman and Non-
Executive Directors are not worse off, on a net of tax basis, as a result of fulfilling
Company duties.
No other benefits or remuneration are provided to the Chairman or Non-Executive
Directors. Selected benefits may be introduced if considered appropriate.
Terms of appointment of the Non-Executive Directors
The terms of appointment of the Chairman and the other Non-Executive Directors are recorded in letters of appointment. The required
notice from the Company is three months. The Non-Executive Directors are not entitled to any compensation on loss of office.
The Non-Executive Directors’ letters of appointment are available for inspection by shareholders at the Company’s registered office.
UK Corporate Governance Code – Provision 40 disclosures
When developing the proposed remuneration policy and considering its implementation for 2022, the Committee was mindful of the UK
Corporate Governance Code and considers that the executive remuneration framework appropriately addresses the following factors:
• Clarity – The Committee is committed to providing open and transparent disclosures regarding our executive remuneration
arrangements.
• Simplicity – Remuneration arrangements for our Executives and our wider workforce are simple in nature and well understood by both
participants and shareholders. Our proposed RSP would further simplify incentive arrangements.
• Risk – The Committee considers that the incentive arrangements do not encourage inappropriate risk-taking. Malus and clawback
provisions apply to annual bonus and RSP awards, and the Committee has overarching discretion to adjust formulaic outcomes to
ensure that they are appropriate.
• Predictability and proportionality – The proposed RSP increases the predictability of outcomes in line with recovery strategy and
minimises the potential of unintended outcomes. Our policy illustrates opportunity levels for Executive Directors under various
scenarios for each component of pay.
• Alignment to culture – Any financial and strategic targets set by the Committee are designed to drive the right behaviours across the
business. The proposed RSP encourages our executives to focus on making the right decisions for the execution of our strategy and
the creation of long term shareholder value.
142 easyJet plc Annual Report and Accounts 2021
Annual report on remuneration
Role of the Remuneration Committee
The key role of the Committee is to make recommendations to the Board on executive remuneration packages and to ensure that
remuneration policy and practices of the Company reward fairly and responsibly, with a clear link to corporate and individual
performance. The Committee’s terms of reference can be found on the Company’s website at https://corporate.easyjet.com.
Membership, meetings, and attendance
• Moni Mannings (Chair from 8 October 2020)
• Charles Gurassa (until 23 December 2020)
• Moya Greene DBE (Chair until 8 October 2020 and member until 23 December 2020)
• Julie Southern
• David Robbie (from 17 November 2020)
There were three changes to the membership of the Committee during the year as set out above. The Company Secretary acts as
Secretary of the Committee. Other key invitees include the Chief Executive, the Group People Director, the Reward Director, the Chief
Financial Officer, and external advisers as relevant.
Member biographies setting out their skills and experience can be found on pages 98 to 101. The Committee met five times during the
year. Meeting attendance can be found in the table on page 112.
Key responsibilities
• To set the remuneration policy for all Executive Directors and the Company’s Chairman
• To set the remuneration packages for the AMB and monitor the principles and structure of remuneration for other senior management
• To oversee remuneration and workforce policies and practices, and take these into account when setting the policy for Director and
AMB remuneration
• To approve the design of, and determine targets for, all employee share schemes operated by the Group
• To oversee any major changes in employee benefit structures throughout the Company or Group
• To review and monitor the Group’s compliance with relevant gender pay reporting requirements
• To assess that all incentives implemented are consistent with company culture and purpose
Key activities during the year
• Appointed Deloitte as external advisers with effect from 21 January 2021, replacing the previous advisers Willis Towers Watson
• Assessed the level of performance in respect of the bonus for the 2021 financial year, and LTIP awards set in December 2018 and
vesting in December 2021, to determine appropriate pay-outs
• Monitored the developments in the internal and external environment and in relation to the impact of Covid-19
• Reviewed and approved the remuneration packages for the new AMB members
• Reviewed the total packages and service contracts of the AMB and senior management
• Considered the results and implications of the UK gender pay gap report and reviewed and commented on recommendations to
address the gap and challenges faced by the aviation sector
• Reviewed and approved no payment of the all-employee Performance Share Award in respect of the 2021 financial year and cessation
of selected other all-employee share scheme features
• Reviewed the provision of long term incentive awards for the Executive Directors and the consideration to move from LTIP awards to a
Restricted Share Plan (RSP)
On balance, having taken into account a number of internal and external measures as well as the pay ratio analysis, the Committee
believes the proposed remuneration decisions in this report appropriately reflect the needs of the business and long term interests of
shareholders. The Committee also believes the remuneration policy operated as intended in terms of reflecting Company performance
and the overall level of quantum delivered was considered appropriate given the business context.
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143
GOVERNANCE DI RE CTORS’ REMUNERATIO N R EPORT (CONTI NUE D)
Application of the remuneration policy for the 2022 financial year
Salary
The current and proposed salaries of the Executive Directors are:
Johan Lundgren
Kenton Jarvis1
1 January
2022 salary
1 January
2021 salary
Change vs
1 January 20212
£740,000
£520,000
£740,000
£520,000
0%
0%
1. Effective on joining 3 February 2021
2. For comparison, the typical rate of salary increases to be awarded to our wider UK workforce will also be 0%
Annual bonus in respect of performance in the 2022 financial year
The maximum bonus opportunity remains at 200% of base salary for the Chief Executive and at 175% for the Chief Financial Officer.
There will be no change to bonus maximum levels. For the year ended 30 September 2022 the annual bonus will be based on 30% on
EBITDAR performance, 50% on a balanced scorecard of financial and operational objectives including Free Cash Flow, Ancillary Yield,
Cost Programme Performance and CSAT and 20% based on individual performance. Individual performance includes measures linked to
our sustainability strategy, recognising the increasingly importance of this to the business, as well as measures linked to easyJet holiday’s
performance and employee engagement. The Committee has chosen to use a balanced scorecard approach to assessing performance
for 50% of the bonus this year to ensure that we are providing a balanced incentive to drive performance across a range of areas. The
Committee will consider performance against each measure and determine an appropriate total outcome for the scorecard at the end of
the year. At least 40% of the scorecard will be linked to financial measures ensuring that at least 50% of the overall bonus is linked to
financial measures. The safety of our customers and people underpins all of the operational activities of the Group and the bonus plan
includes a provision that enables the Committee to scale back (including to zero) the bonus awarded in the event that a safety event has
occurred, which it considers warrants the use of such discretion. One-third of the pre-tax bonus earned will be deferred into shares for a
period of three years and will be subject to continued employment.
Bonus payments may be withheld or recovered if, within a period of three years from the date of payment or at vesting in the case of
the deferred bonus, there is: a case of serious personal misconduct; a misstatement of accounts; an error in calculation of results; an
instance of corporate failure; or material damage to the Company’s reputation as a result of a safety event.
RSP awards in relation to the 2022 financial year
As outlined in the Chair’s statement, after careful consideration and consultation with our largest shareholders, the Remuneration
Committee has concluded that a Restricted Share Plan is the best approach for the Company going forward to support the execution of
our strategy and the creation of long term shareholder value.
Subject to shareholder approval of our revised Directors’ remuneration policy at the AGM in February 2022, the Committee intends to
grant RSP awards to Executive Directors.
The proposed award levels for the 2022 financial year are 125% of salary for the CEO and 100% of salary for the CFO.
Awards will vest 100% on the third anniversary of the award and will then be subject to a two-year holding period so that the total time
horizon is five years for the entire award.
Awards will be subject to the following performance underpins measured over the vesting periods. If any underpin is not met, the
Committee will consider whether it is appropriate to reduce the portion of the award vesting, based on its judgement of the context.
Theproposed underpins are:
1. That easyJet does not fall below its minimum liquidity target (such that a credit risk is triggered) through the vesting period.
2. Satisfactory governance performance including no ESG issues that result in material reputational damage to the Company
(asdetermined by the Board).
If the Company does not meet one or more of the underpins the Committee would consider whether it was appropriate to scale back
the level of payout under the award to reflect this.
The Committee will operate a further underpin such that if the Company’s performance taken as a whole materially underperforms what
might reasonably have been expected for the sector for reasons attributable to management action or inaction, the Committee will at its
discretion reduce the award quantum appropriately.
The Committee would also retain discretion to determine what level of scale back, if any, was appropriate. The Committee also may, at
its discretion, adjust the vesting level of an award if it considers that the vesting level would not reflect the underlying performance of the
executive, the Group, the experience of shareholders, other stakeholders or if such level would not be appropriate in the circumstances.
Non-Executive Director fees
The fees for the Chairman and Non-Executive Directors from 1 January 2022 will remain as:
Chairman
Basic fee for other Non-Executive Directors
Fees for SID role1
Chair of the Audit, Safety and Remuneration Committees1
Chair of the Finance Committee1
1. Supplementary fees.
£314,568
£62,914
£25,000
£15,000
£10,000
Fees payable to the Non-Executive Directors are reviewed annually. The basic fee will not increase from 1 January 2022, which aligns with
the wider UK workforce pay freeze.
144 easyJet plc Annual Report and Accounts 2021
Single total figure of remuneration for the year ended 30 September 2021
The table below sets out the amounts earned by the Directors (audited).
Fees
and
£’000
Salary Benefits7 Bonus
LTIP Pension8
Total
Total
Fixed
Total
Variable
Fees
and
Salary
Benefits
Bonus
LTIP
Pension
Total
Total
Fixed
Total
Variable
2021
2020
Executive
Johan
Lundgren
Kenton
Jarvis1
Andrew
Findlay2
Non-
Executive
John Barton
Stephen
Hester3
Dr Andreas
Bierwirth
Catherine
Bradley CBE
Moya
Greene DBE4
Charles
Gurassa4
Dr
Anastassia
Lauterbach5
Nicholas
Leeder
Moni
Mannings
Andy Martin
David
Robbie6
Julie
Southern
Total
740
342
386
315
5
78
73
19
22
16
63
78
–
52
103
2,292
8
–
–
–
–
–
–
–
–
–
–
–
–
–
–
8
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
46
794
794
21
363
363
22
408
408
–
–
–
–
–
–
–
–
–
–
–
315
315
5
78
73
19
22
16
63
78
–
52
5
78
73
19
22
16
63
78
–
52
–
–
–
–
–
–
–
–
–
–
–
–
–
–
698
14
–
513
297
–
74
45
81
84
59
59
10
63
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
103
103
89 2,389 2,389
78
–
– 2,061
–
14
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
43
755
755
–
–
–
32
545
545
–
–
–
–
–
–
–
–
–
–
–
297
297
–
74
45
81
84
59
59
10
63
–
–
74
45
81
84
59
59
10
63
–
–
75
78
78
2,150 2,150
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1. Appointed Executive Director on 3 February 2021
2. Stepped down as Executive Director on 3 February 2021, employed until 25 May 2021. Includes payment of £29,615 for accrued holiday.
3. Appointed to the Board on 1 September 2021 and Chair from 1 December 2021
4. Stepped down from the Board on 23 December 2020
5. Stepped down from the Board on 21 December 2020
6. Appointed to Board on 17 November 2020
7. Benefits relate to the cost to the Company of life assurance cover and the value of all employee shares received during the year under the Company’s
Share Incentive Plan, as well as reimbursements made to the Chief Executive for business-related travel expenses in respect of domestic car travel to the
value of £7,790
8. Johan Lundgren, Kenton Jarvis, and Andrew Findlay received a cash alternative to pension contributions equivalent to 6.15% of base salary
www.easyJet.com
145
GOVERNANCE DI RE CTORS’ REMUNERATIO N R EPORT (CONTI NUE D)
Payments for loss of office and payments to past directors (audited)
Andrew Findlay leaving arrangements
Andrew Findlay stepped down as a Director of easyJet plc and as Chief Financial Officer on 3 February 2021.
He received his salary and benefits (including pension contribution) on a monthly basis for the duration of his notice period through to 25
May 2021. He also received a payment on leaving of £29,615 for accrued holiday. All unvested LTIP and deferred bonus share awards
lapsed on the termination of his employment on 25 May 2021. His vested LTIP and deferred bonus share awards continued to be
exercisable in accordance with the relevant plan rules until his termination date, at which point any unexercised awards lapsed. He was
not eligible to receive a bonus for the 2021 financial year and was not granted any further LTIP or deferred bonus share awards.
Other than the amounts disclosed above, no other remuneration payment was made to Andrew Findlay in the year.
No other payments for loss of office or any other payments have been made to any former Directors during the year.
Annual bonus outturn for performance in the 2021 financial year (audited)
In light of continued market uncertainty, the annual bonus targets were set separately for the first and second half of the 2021 financial
year to allow flexibility and agility. The measures selected for the bonus aligned with our key priorities for 2021 and were EBITDA (30%),
cost reduction programme (20%), free cash flow (20%), customer satisfaction (10%) and individual performance (20%).
A sliding scale of financial and operational bonus targets was set at the start of the 2021 financial year. 10% of each element is payable
for achieving the threshold target, increasing to 50% for on-target performance and 100% for achieving maximum performance.
Achievements between these points are calculated on a straight-line basis.
Measure
CEO & CFO
Threshold
On-target
Maximum
Threshold
On-target
Maximum
Actual
Payout
EBITDA £m
Cost reduction programme £m
Free cash flow £m
Customer satisfaction
Individual1
Total
30%
20%
20%
10%
20%
100%
H1 2021 Targets
H2 2021 Targets
H1
H2
(595)
194
(1,156)
75%
n/a
(541)
216
(1,051)
77%
50%
(487)
238
(946)
79%
100%
650
269
260
69%
n/a
722
299
289
71%
50%
794
329
318
73%
100%
(470)
250
(1,336)
80%
n/a
(91)
262
50
73%
n/a
0%
0%
0%
0%
0%
1. Given that the decision was made not to pay a bonus, individual performance for bonus purposes was not assessed.
Despite the Customer satisfaction target being met, due to the continuing restrictions on airline travel and the impact of this on our
overall performance no annual bonus in respect of 2021 will be paid.
LTIP (audited)
The 2018 LTIP awards vesting in respect of the performance years to 30 September 2021 were subject to a combination of performance
conditions based on three-year average headline ROCE and relative TSR compared to FTSE 51-150 companies measured over the prior
three financial years. The percentage which could be earned was determined using the following vesting schedule:
Below threshold
(0% vesting)
Threshold
(25% vesting)
On-target
(50% vesting)
Maximum
(100% vesting)
Actual
Vesting
(% of element)
ROCE awards (40% of total)
EPS awards (40% of total)
<11.0%
<383p
11.0%
383p
TSR awards (20% of total)
< Median
Median
13.0%
414p
n/a
15.0%
446p
Upper
quartile
Below threshold
Below threshold
< Median
0%
0%
0%
Three-year average headline EPS and ROCE performance along with TSR performance were below threshold due to the impact of
Covid-19 on the business. The Committee considered this outcome and determined that no payment was an appropriate outcome given
the current business context.
146 easyJet plc Annual Report and Accounts 2021
Executive Directors’ share awards outstanding at the financial year end (audited)
Details of share options and share awards outstanding at the financial year end are shown in the following tables:
JOHAN LUNDGREN
No. of shares/
options at
30 September
2020
Shares/
options
granted
in year
Rights
issue
adjustment1
Shares/
options
lapsed
in year
Shares/
options
exercised
in year
No. of shares/
options at
30 September
2021
Scheme
Date of grant
Market
price on
exercise
date
(£)
Exercise
price
(£)
A
A
A
A
B
B
C
D
134,350
167,003
129,461
–
26,871
5,282
282
1,571
–
–
–
214,369
–
–
–
–
– (134,350)
–
–
–
–
–
–
–
31,358
24,309
40,252
5,045
991
49
294
–
–
–
–
–
–
–
–
19 Dec 20174
–
19 Dec 20185
198,361
19 Dec 20196
153,770
254,621 29 Dec 20207
19 Dec 2018
19 Dec 2019
5 Apr 2019
14 Jun 2019
31,916
6,273
331
1,8653
–
–
–
–
–
–
–
6.751
KENTON JARVIS
No. of shares/
options at
30 September
2020
Shares/
options
granted
in year
Rights
issue
adjustment1
Shares/
options
lapsed
in year
Shares/
options
exercised
in year
–
–
134,541
1,653
25,262
310
–
–
–
–
Scheme
A
D
ANDREW FINDLAY2
No. of shares/
options at
30 September
2021
Date of grant
159,803 20 May 20218
20 Jul 2021
1,9633
Exercise
price
(£)
–
6.421
Date from which
exercisable
19 Dec 2020
19 Dec 2021
19 Dec 2022
29 Dec 2023
19 Dec 2021
19 Dec 2022
5 Apr 2022
1 Aug 2022
Expiry date
19 Dec 2027
19 Dec 2028
19 Dec 2029
29 Dec 2030
19 Dec 2028
19 Dec 2029
n/a
1 Feb 2023
Date from which
exercisable
Expiry date
–
–
–
–
–
–
–
–
Market
price on
exercise
date
(£)
–
–
29 Dec 2023
1 Sep 2024
29 Dec 2030
1 Mar 2025
No. of shares/
options at
30 September
2020
Shares/
options
granted
in year
Rights
issue
adjustment1
12,789
557
–
–
n/a
n/a
Shares/
options
lapsed
in year
–
(557)
Shares/
options
exercised
in year
(12,789)
–
Scheme
B
D
No. of shares/
options at
30 September
2021
–
–
Date of grant
19 Dec 20174
15 Jun 2017
Exercise
price
(£)
–
9.69
Market
price on
exercise
date
(£)
Date from which
exercisable
Expiry date
9.99
–
19 Dec 2020
1 Aug 2020
19 Dec 2027
1 Feb 2021
The closing share price of the Company’s ordinary shares at 30 September 2021 was £6.63 and the closing price range during the year
ended 30 September 2021 was £3.96 to £11.67.
Key:
A Long Term Incentive Plan – Performance Shares
B Deferred Share Bonus Plan
C Share Incentive Plan – Performance (Free) Shares
D Save As You Earn Awards (SAYE)
Note 1: Adjustments
Formulaic adjustments were made during the year as a result of the rights issue in September 2021
Note 2: Andrew Findlay
Stepped down from the Board on 3 February 2021
Note 3: Number of share awards granted
The number of shares is calculated according to the scheme rules of individual plans based on the middle-market closing share price on
the day prior to grant. As is usual market practice, the option price for SAYE awards is determined by the Committee in advance of the
award by reference to the share price following announcement of the half year results the day immediately preceding the date the
invitations are sent.
www.easyJet.com
147
GOVERNANCE DI RE CTORS’ REMUNERATIO N R EPORT (CONTI NUE D)
Note 4: LTIP awards made in December 2017
40% of vesting is based on three-year average Headline ROCE (including lease adjustment) performance for the three financial years
ending 30 September 2020; 40% of vesting is based on three-year total Headline EPS performance for the three financial years ending
30 September 2020; and 20% of vesting is based on relative TSR performance compared to companies ranked FTSE 51-150.
The face value of the award granted was £1,850,000 (250% of base salary) to Johan Lundgren. The below targets applied for these
awards and as none of the targets were met, the options have all lapsed within the year:
Vested in December 2020
ROCE awards (40% of total award)
EPS awards (40% of total award)
TSR awards (20% of total award)
Below threshold
(0% vesting)
Threshold (25%
vesting)
Target (50%
vesting)
Maximum (100%
vesting)
<9.0%
< 278p
< Median
9.0%
278p
Median
11.2%
310p
13.0%
335p
n/a Upper quartile
Note 5: LTIP awards made in December 2018
40% of vesting is based on three-year average Headline ROCE (including lease adjustment) performance for the three financial years
ending 30 September 2021; 40% of vesting is based on three-year total headline EPS performance for the three financial years ending
30 September 2021; and 20% of vesting is based on relative TSR performance compared to companies ranked FTSE 51-150. In addition,
the TSR awards will not vest unless there has been positive TSR over the performance period.
The face value of the award granted was £1,800,300 (250% of salary) to Johan Lundgren. The below targets applied for these awards
and as none of the targets were met, the options will now lapse:
Vesting in December 2021
ROCE awards (40% of total award)
EPS awards (40% of total award)
TSR awards (20% of total award)
Below threshold
(0% vesting)
Threshold
(25% vesting)
Target
(50% vesting)
Maximum
(100% vesting)
< 11.0%
< 383p
< Median
11.0%
383p
Median
13.0%
414p
15.0%
446p
n/a Upper quartile
Note 6: LTIP awards made in December 2019
40% of vesting is based on three-year average Headline ROCE (including lease adjustment) performance for the three financial years
ending 30 September 2022; 40% of vesting is based on three-year total headline EPS performance for the three financial years ending
30 September 2022; and 20% of vesting is based on relative TSR performance compared to companies ranked FTSE 51-150. In addition,
the TSR awards will not vest unless there has been positive TSR over the performance period.
The face value of the award granted was £1,850,000 (250% of salary) to Johan Lundgren. The following targets apply for this award:
Vesting in December 2022
ROCE awards (40% of total award)
EPS awards (40% of total award)
TSR awards (20% of total award)
Below threshold
(0% vesting)
Threshold
(25% vesting)
Target
(50% vesting)
Maximum
(100% vesting)
<9.5%
<288p
< Median
9.5%
288p
Median
11.5%
310p
13.5%
335p
n/a Upper quartile
148 easyJet plc Annual Report and Accounts 2021
Note 7: LTIP awards made in December 2020
The face value of the award granted to Johan Lundgren was £1,850,000 (250% of salary). The award is based 100% on TSR
performance compared to companies from the FTSE 51-151 and will vest on 29 December 2023. In addition, the TSR awards will not vest
unless there has been positive TSR over the performance period.
Note 8: LTIP awards made in May 2021
The face value of the award granted to Kenton Jarvis was £1,040,000 (200% of salary). The award is based 100% on TSR performance
compared to companies from the FTSE 51-151 and will vest on 29 December 2023. In addition, the TSR awards will not vest unless there
has been positive TSR over the performance period.
Shareholding guidelines in the 2021 financial year (audited)
In 2021 the shareholding guidelines increased with the Chief Executive and Chief Financial Officer expected to build up a shareholding of
250% and 200% of salary respectively (from 200% and 175%), over the first five years from appointment to the Board. The Committee
has discretion to extend the five-year timeframe in certain circumstances, for example where there have been limited payouts under the
incentive schemes. Until the guideline is met, Executive Directors are required to retain 50% of net vested shares from the LTIP and RSP
and 100% of net vested deferred bonus shares. Similarly, the Non-Executive Directors, including the Chairman of the Board, are required
to build up a shareholding of 100% of annual fees over a period of five years from appointment. All directors participated in the rights
issue that took place in September 2021 and details of their holdings are set out overleaf.
www.easyJet.com
149
GOVERNANCE DI RE CTORS’ REMUNERATIO N R EPORT (CONTI NUE D)
Directors’ current shareholdings and interests in shares (audited)
The following table provides details on current Directors’ interests in shares at 30 September 2021 (unless otherwise noted).
John Barton
Stephen Hester6
Johan Lundgren10
Kenton Jarvis5
Andrew Findlay7
Dr Andreas Bierwirth
Catherine Bradley CBE
Moya Greene DBE8
Charles Gurassa8
Dr Anastassia Lauterbach9
Nicholas Leeder
Moni Mannings
David Robbie
Julie Southern
Unconditionally
owned shares1
Shareholding
guidelines
achieved2
Deferred
bonus
74,680
73,000
66,382
–
71,017
8,715
2,489
14,439
108,439
–
3,847
4,351
16,596
7,451
100%
100%
34%
–
100%
100%
39%
100%
100%
–
57%
35%
100%
61%
–
–
38,189
–
–
–
–
–
–
–
–
–
–
–
LTIP3
–
–
606,752
159,803
–
–
–
–
–
–
–
–
–
–
SAYE
–
–
1,865
1,963
–
–
–
–
–
–
–
–
–
–
Interests in share
schemes
Total interest in
share schemes
–
–
647,137
161,808
–
–
–
–
–
–
–
–
–
–
SIP4
–
–
331
42
–
–
–
–
–
–
–
–
–
–
1. Includes SIP Partnership Shares, vested SIP Performance (Free) Shares, vested SIP Matching Shares, and any shares owned by connected persons
2. Based on unconditionally owned shares and post-tax value of share interests under the deferred bonus plan as per the Committee’s policy on
shareholding guidelines
3. LTIP shares are granted in the form of nil cost options subject to performance
4. Consists of unvested SIP Performance (Free) Shares and unvested SIP Matching Shares
5. Kenton Jarvis was appointed to the Board on 3 February 2021
6. Stephen Hester was appointed to the Board on 1 September 2021
7. As at 3 February 2021, the date Andrew Findlay stepped down from the Board
8. As at 23 December 2020, the date Moya Greene DBE and Charles Gurassa stepped down from the Board
9. As at 21 December 2020, the date Anastassia Lauterbach stepped down from the Board
10. Shareholding guideline increased from 200% to 250% during the year. Given the participation in the rights issue, and the limited incentive payouts over
the last four years, the Committee is currently satisfied with the progress being made towards meeting the shareholding guidelines.
Changes in share ownership levels throughout the year may be found on our corporate website https://corporate.easyjet.com.
Executive Directors are deemed to be interested in the unvested shares held by the easyJet Share Incentive Plan and the easyJet plc
Employee Benefit Trust. At 30 September 2021, ordinary shares held in the Trusts were as follows:
easyJet Share Incentive Plan Trust
easyJet plc Employee Benefit Trust
Total
Number of
ordinary shares
1,774,800
288,258
2,063,058
Changes since the year end: as at 29 November 2021, there were no changes to the easyJet plc Share Incentive Plan Trust balance and
the easyJet plc Employee Benefit Trust held 281,899 shares.
Dilution limits
easyJet complies with the Investment Association’s Principles of Remuneration with regard to dilution limits. These principles require that
commitments under all of the Company’s share incentive schemes must not exceed 10% of the issued share capital in any rolling 10-year
period. Share awards under all current incentive plans are within the Company’s maximum 10% dilution limit.
Employee share plan participation
A key component of easyJet’s reward philosophy is to provide share ownership opportunities throughout the Group by making annual
awards of performance-related shares to all eligible employees. In addition, easyJet operates a voluntary discounted share purchase
arrangement for all employees via a Save As You Earn scheme and a Buy As You Earn arrangement with matching shares in the UK
under the tax-approved Share Incentive Plan. A 20% discount was offered on Save As You Earn 2021, however, Matching Shares remain
suspended.
150 easyJet plc Annual Report and Accounts 2021
Details of Directors’ service contracts and letters of appointment
Details of the service contracts and letters of appointment in place as at 30 September 2021 for Directors are as follows:
John Barton
Stephen Hester
Johan Lundgren
Kenton Jarvis
Dr Andreas Bierwirth
Catherine Bradley CBE
Nicholas Leeder
Moni Mannings
David Robbie
Julie Southern
Date of
appointment
Date of current
service contract
Unexpired term at
30 September 2021
1 May 2013
1 September 2021
1 December 2017
3 February 2021
22 July 2014
1 January 2020
1 January 2019
6 August 2020
17 November 2020
1 August 2018
3 May 2016
20 August 2021
10 November 2017
15 September 2020
19 July 2017
9 December 2019
14 December 2018
5 August 2020
16 November 2020
7 June 2018
Letters of appointment for
the Non-Executive Directors
do not contain fixed term
periods; however, they are
appointed in the expectation
that they will serve for a
maximum of nine years,
subject to satisfactory
performance and re-election
at AGMs.
Review of past performance
The chart below sets out the TSR performance of the Company relative to the FTSE 250, FTSE 100, and a group of European airlines1
since 30 September 2011. The FTSE 100 and FTSE 250 were chosen as easyJet has been a member of both indices during the period.
This graph shows the value, by 30 September 2021, of £100 invested in easyJet on 30 September 2011, compared with the value of £100
invested in the FTSE 100 and FTSE 250 Indices or a comparator group of airlines on the same date.
The other points plotted are the values at intervening financial year ends. Overseas companies have been tracked in their local currency,
i.e. ignoring exchange rate movements since 30 September 2011.
700
600
500
400
300
200
100
0
30 Sep 2011
30 Sep 2012
30 Sep 2013
30 Sep 2014
30 Sep 2015
30 Sep 2016
30 Sep 2017
30 Sep 2018
30 Sep 2019
30 Sep 2020
30 Sep 2021
easyJet
FTSE 100 Index
FTSE 250 Index
Comparator Airlines
1. Lufthansa, Ryanair, Air France-KLM, and Wizz Air have all been included in the comparative European airlines group. Wizz Air has been
tracked from listing.
www.easyJet.com
151
GOVERNANCE DI RE CTORS’ REMUNERATIO N R EPORT (CONTI NUE D)
Chief Executive total remuneration table
The table below shows the total remuneration figure for the Chief Executive over the same 10-year period. The total remuneration figure
includes the annual bonus and LTIP awards which vested based on performance in those years.
The annual bonus and LTIP vesting percentages show the payout for each year as a percentage of the maximum.
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Single total figure of
remuneration (£’000)
Annual bonus (%)
LTIP vesting (%)
Johan
Lundgren
Carolyn
McCall
Johan
Lundgren
Carolyn
McCall
Johan
Lundgren
Carolyn
McCall
–
–
–
–
–
–
1,500
1,006
7551
794
3,694
7,777
9,2095
6,2414
1,4533
757
125
–
–
–
–
–
–
–
–
–
73%
16%
0%
0%
96%
87%
76%
66%
13%
0%
–
–
–
–
–
–
92%
100%
100%
100%
32%
0%
–
–
–
–
–
–
–
–
0%
0%
–
–
1. This amount is after the voluntary 20% reduction in base salary during April, May, and June 2020
2. Johan Lundgren was appointed to the Board on 1 December 2017 and Carolyn McCall stepped down from the Board on 30 November 2017
3. Includes 48,509 LTIP shares (inclusive of dividend equivalents) at the vesting date share price of £10.43, a decrease of 30% on the share price at grant of
£14.99
4. Includes 266,899 LTIP shares vesting for the period; share price is £17.15 (the actual share price at vesting), an increase of 133% on the share price at grant
of £7.37
5. Includes 445,575 LTIP shares vesting for the period; share price was £16.71 (the actual share price at vesting), an increase of 325% on the share price at
grant of £3.93
Change in Directors’ pay for the year in comparison to that for easyJet employees
The table below shows the year-on-year percentage change in salary, benefits and annual bonus earned between the year ended 30
September 2021 and the year ended 30 September 2020 for the Directors, compared to the average earnings of all other easyJet UK
employees.
Johan Lundgren1
Kenton Jarvis2
Andrew Findlay1,3
John Barton1,3
Stephen Hester4
Dr Andreas Bierwirth1
Catherine Bradley CBE1,9
Moya Greene DBE1,5
Charles Gurassa1,5
Dr Anastassia Lauterbach1,6
Nicholas Leeder1
Moni Mannings8
Andy Martin1
David Robbie7
Julie Southern1,10
Average pay based on easyJet’s UK employees11
Salary
6.0%
–
(24.8)%
6.1%
–
5.4%
62.2%
(76.5)%
(73.8)%
(72.9)%
6.8%
680.0%
–
–
32.1%
0%
2021
Benefits12
(43)%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0%
Annual bonus13
Salary
Benefits
Annual bonus
2020
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0%
(2.6)%
–
1.0%
(2.6)%
–
(2.6)%
–
19.1%
(16.8)%
28.3%
28.3%
–
(11.3)%
–
8.3%
2.0%
0%
–
0%
–
–
–
–
–
–
–
–
–
–
–
–
0%
(100)%
–
(100)%
–
–
–
–
–
–
–
–
–
–
–
–
(100)%
1. Voluntary 20% reduction between April to June 2020
2. Appointed Executive Director on 3 February 2021
3. Stepped down as Executive Director on 3 February 2021, employed until 25 May 2021 and voluntary 20% reduction of salary between April to June 2020
4. Appointed to the Board on 1 September 2021 and Chair from 1 December 2021
5. Stepped down from the Board on 23 December 2020
6. Stepped down from the Board on 21 December 2020
7. Appointed to the Board on 17 November 2020
8. Appointed to the Board on 6 August 2020
9. Appointed to the Board on 1 January 2020
10. Appointed SID on 5 August 2020
11. There are no employees in easyJet plc, therefore, the Committee decided to use the average for all UK employees as the appropriate comparator group
given, they comprise over 50% of total employees and therefore this is considered to be the most representative for comparison. There was no general
salary increase for UK employees in January 2021
12. Chief Executive benefits include reimbursements for business-related travel expenses in respect of domestic car travel which were lower in 2021 than
2020
13. UK employee benefits remained unchanged versus the prior year. The zero bonus outcome, both for the Chief Executive and for all employees, has
resulted from easyJet’s missing its profit threshold in 2021 as a result of Covid-19
152 easyJet plc Annual Report and Accounts 2021
Relative importance of spend on pay
The table below shows the total pay for all of easyJet’s employees compared to other key financial indicators.
Employee costs (£ million)
Ordinary dividend (£ million)
Average monthly number of employees
Revenue (£ million)
Headline (loss)/profit before tax (£ million)
Year ended
30 September 2021
Year ended
30 September 2020
623
–
12,389
1,458
(1,136)
862
–
14,566
3,009
(835)
Change %
(28)%
0%
(15)%
(52)%
(36)%
1. Additional information on the number of employees, total revenue and profit has been provided for context. The majority of easyJet’s employees
(around 90%) perform flight and ground operations, with the rest performing administrative and managerial roles.
Chief Executive pay ratio
The table below sets out the Chief Executive pay ratios as at 30 September 2021. The report will build up over time to show a rolling
10-year period. The ratios compare the single total figure of remuneration of the Chief Executive with the equivalent figures for the lower
quartile (P25), median (P50) and upper quartile (P75) employees.
We have used the ‘Option A’ methodology which uses actual earnings for the Chief Executive Officer and UK employees over the
financial year to provide the most accurate comparison. The total FTE remuneration paid during the year for each employee in each of
the groups was then calculated, on the same basis as the information set out in the ‘single figure’ table for the Chief Executive on
page 134.
In calculating the figures, the following considerations were made:
• The single total figure of remuneration of our UK colleagues was calculated as at 30 September 2021
• No bonus will be paid or LTIPs vest in relation to the 2021 year
• Earnings for those who are part time or joined during the year have been annualised on an FTE basis
• This data then identified those employees at the 25th, 50th (median) and 75th percentile points.
Year
2020
2021
2021
2021
25th percentile
75th percentile
Method
pay ratio
Median pay ratio
Option A
Option A
Total pay and benefits
Salary
30:1
27:1
£29,981
£20,300
23:1
21:1
£38,992
£24,360
pay ratio
12:1
10:1
£78,134
£71,002
Unlike the total remuneration for the majority of employees, total remuneration for the Chief Executive is mostly dependent on business
performance and share price movements over time. As a result, the ratios may fluctuate significantly from year to year.
The Committee has agreed that the ratio reflects easyJet’s wider policies on pay and reward in line with market, experience, and skills.
Statement of shareholders’ voting at AGM
The table below provides details of shareholder voting in respect of the Directors’ remuneration policy (approved in December 2020),
and the Annual Report on Remuneration (in December 2020).
Votes cast in favour
Votes cast against
Total votes cast in favour or against
Votes withheld
Policy
(December 2020 AGM)
Annual Report on Remuneration
(December 2020 AGM)
170,640,512
7,497,351
178,137,863
131,196,347
95.79%
4.21%
100%
–
177,627,469
498,511
178,125,980
131,206,724
99.72%
0.28%
100%
–
Advisers to the Remuneration Committee
Deloitte was appointed as the new independent adviser, with effect from 21 January 2021 following an independent review process.
Deloitte advises the Committee on developments in executive pay and on the operation of easyJet’s incentive plans. Other than to the
Committee, advice is also provided to easyJet in relation to, for example, senior management pay practices and the fees of the Non-
Executive Directors. Total fees (excluding VAT) paid to Deloitte and Willis Towers Watson, the previous advisers, in respect of services to
the Committee during the 2021 financial year were £72,950 and £31,200 respectively, based on time and materials. Deloitte is a founding
member of the Remuneration Consultants Group and a signatory to its Code of Conduct. Any advice received is governed by that code.
The Committee is satisfied that the Deloitte engagement team, which provide remuneration advice to the Committee, do not have
connections with easyJet plc or its Directors that may impair their independence. The Committee has reviewed the operating processes
in place at Deloitte and is satisfied that the advice it receives is independent and objective.
www.easyJet.com
153
GOVERNANCE DI RE CTORS’ REPORT
DIRECTORS’ REPORT
It is the current intention that at the
Company’s next AGM all continuing
Executive and Non-Executive Directors will
retire and offer themselves for
reappointment in compliance with the
2018 Code.
Directors’ conflicts of interest
Directors have a statutory duty to avoid
situations in which they have, or may have,
interests that conflict with those of easyJet,
unless that conflict is first authorised by the
Board. The Company has in place
procedures for managing conflicts of
interest. The Company’s Articles of
Association also contain provisions to allow
the Directors to authorise potential
conflicts of interest so that a Director is not
in breach of his or her duty under company
law. Should a Director become aware that
he or she has an interest, directly or
indirectly, in an existing or proposed
transaction with easyJet, he or she should
notify the Board in line with the Company’s
Articles of Association. Directors have a
continuing duty to update any changes to
their conflicts of interest.
Directors’ indemnities
Directors’ and officers’ insurance cover has
been established for all Directors to provide
appropriate cover for their reasonable
actions on behalf of the Company. A deed
was executed in 2007 indemnifying each
of the Directors of the Company and/or its
subsidiaries as a supplement to the
directors’ and officers’ insurance cover.
The indemnities, which constitute a
qualifying third-party indemnity provision as
defined by section 234 of the Companies
Act 2006, were in force during the 2021
financial year and remain in force for all
current and past Directors of the Company.
Employees
Employees with a disability
The Company’s approach to providing
support to disabled applicants and
employees is detailed in our Diversity and
Inclusion Strategy on page 56.
Communication and engagement
Details on how the Board and management
have communicated and engaged with
employees and the wider workforce while
taking into account their interests in
decision-making during the year can be
found in the Stakeholder engagement
section on pages 27 to 28 and
Sustainability section on pages 43 of the
Strategic Report and the Corporate
Governance Report on pages 107 to 109.
Participation in share schemes
A key component of easyJet’s reward
philosophy is to provide share ownership
opportunities throughout the Group by
making annual awards of performance-
related shares to all eligible employees
when certain criteria are met. In addition,
easyJet operates a voluntary discounted
share purchase arrangement for all
employees via a Save As You Earn scheme,
and a Buy As You Earn arrangement with
Matching Shares in the UK under the
tax-approved Share Incentive Plan. In
response to the Covid-19 pandemic
Matching Shares were suspended from
April 2020. Further details of the
Company’s share schemes are set out in
the Directors’ Remuneration Report on
page 150.
Stakeholders
Details on the methods the Board has used
to engage and build strong business
relationships with the Group’s suppliers,
customers and other key stakeholders are
given on pages 26 to 37 of the Strategic
Report and the Corporate Governance
Report on pages 106 to 109. The Section
172 Statement is available on page 36 of
the Strategic Report.
The Directors present their Annual Report
and Accounts together with the audited
consolidated financial statements for
the year ended 30 September 2021.
This Directors’ Report and the Strategic
Report, which includes the trends and
factors likely to affect the future
development, performance and position
of the business and a description of the
principal risks and uncertainties of the
Group (which can be found on pages 78 to
95 and are incorporated by reference),
collectively comprise the management
report as required under the Disclosure
Guidance and Transparency Rules (‘DTRs’).
Results and dividend
The loss for the financial year after taxation
amounts to £858 million (last year: loss of
£1,079 million).
As a result of the impact of the Covid-19
pandemic on the Group, and the losses
incurred, the Board is not recommending
the payment of a dividend in respect of
the year ended 30 September 2021.
The Board recognises the importance of
dividends to shareholders and will seek to
resume payments when the operating
environment and the financial performance
of the Group permits. The Board expects
to update shareholders as to when it
anticipates resuming paying dividends and
on its future dividend policy, assuming the
market environment and circumstances
permit, when it announces its full year
results for the financial year ending
30 September 2022.
Board
Board of Directors and their
interests
Details of the Directors who held office at
the end of the year and their biographical
details are set out on pages 98 to 101.
Changes to the Board during the year and
up to the date of this report are set out on
page 113. The Directors’ interest in the
ordinary shares and options of the
Company are disclosed within the Directors’
Remuneration Report on pages 130 to 153.
Appointment and retirement of
Directors
The Directors may from time to time
appoint one or more Directors. Any such
Director shall hold office only until the next
Annual General Meeting (AGM) and shall
then be subject to appointment by the
Company’s shareholders.
154 easyJet plc Annual Report and Accounts 2021
Shares
Share capital and rights attaching
to shares
The Company’s issued share capital as at
30 September 2021 comprised a single
class of ordinary shares. Further details of
the Company’s share capital during the
year are disclosed in note 20 to the
consolidated financial statements.
All of the issued ordinary shares are fully
paid and rank equally in all respects.
The rights and obligations attaching to the
Company’s ordinary shares are set out in its
Articles of Association. Holders of ordinary
shares are entitled, subject to any
applicable law and the Company’s Articles
of Association, to:
• have shareholder documents made
available to them, including notice of any
general meeting;
• attend, speak and exercise voting rights
at general meetings, either in person or
by proxy; and
• participate in any distribution of income
or capital.
Directors’ powers in relation to
issuing or buying back shares
Subject to applicable law and the
Company’s Articles of Association the
Directors may exercise all powers of the
Company, including the power to authorise
the issue and/or market purchase of the
Company’s shares (subject to an
appropriate authority being given to the
Directors by shareholders in a general
meeting and any conditions attaching to
such authority).
At the AGM held on 23 December 2020,
the Directors were given the following
authority:
• to allot shares up to a nominal amount
of £41,127,035, representing
approximately one-third of the
Company’s then issued share capital;
• to allot shares comprising equity
securities up to a further aggregate
nominal amount of £41,127,035 in
connection with an offer by way of a
rights issue, representing approximately
one-third of the Company’s then issued
share capital;
• to allot shares, without first offering
them to existing shareholders in
proportion to their holdings, up to a
maximum nominal value of £6,231,368
representing approximately 5% of the
Company’s then issued share capital; and
• to purchase in the market a maximum of
45,674,962 shares representing
approximately 10% of the Company’s
then share capital.
As part of a review of its capital structure,
the Board concluded that raising additional
equity would protect and strengthen
easyJet’s long term positioning in the
European aviation sector. As a result, the
Company launched a fully underwritten
rights issue on 9 September 2021 to raise
net proceeds of approximately £1.2 billion
using the authorities outlined above. This
comprised offering 31 New Shares to
qualifying shareholders for every 47 Existing
Shares held. The allotment of 301,260,394
New Shares (representing approximately
66% of the Company’s existing issued share
capital) was effective on 27 September
2021 and the Company’s issued share
capital was increased to 758,010,025
ordinary shares as of that date.
No other shares were allotted or bought
back under the above authorities during
the year and up to the date of this report.
The standard authorities expire on 31 March
2022 or at the conclusion of the 2022
AGM, whichever is earlier. The Directors will
seek to renew the authorities at the next
AGM as a matter of routine.
Voting rights and restrictions on
transfer of shares
None of the ordinary shares carry any
special rights with regard to control of the
Company. There are no restrictions on
transfers of shares other than:
• certain restrictions which may from time
to time be imposed by laws or
regulations such as those relating to
insider dealing;
• pursuant to the Company’s Share
Dealing Code, whereby the Directors and
designated employees require approval
to deal in the Company’s shares;
• where a person with an interest in the
Company’s shares has been served with
a disclosure notice and has failed to
provide the Company with information
concerning interests in those shares;
• where a proposed transferee of the
Company’s shares has failed to provide
to the Directors a declaration of
nationality (together with such evidence
as the Directors may require) as required
by the Company’s Articles of Association;
and
• the powers given to the Directors by the
Company’s Articles of Association to limit
the ownership of the Company’s shares
by non-UK nationals or, following a
decision of the Directors, by non-EU
nationals, and powers to enforce this
limitation, including the right to force a
sale of any affected shares.
There are no restrictions on exercising
voting rights save in situations where the
Company is legally entitled to impose such
a restriction (for example under the Articles
of Association where an Affected Share
Notice has been served, amounts remain
unpaid in the shares after request, or the
holder is otherwise in default of an
obligation to the Company). Those
shareholders who own shares whose voting
rights will be suspended at the AGM will
receive an Affected Share Notice by post
from Equiniti, our Registrars, on or around
14 January 2022 notifying them of the
suspension of voting rights in respect of
their Affected Shares. Shareholders in
receipt of an Affected Share Notice will not
be entitled to attend, speak or vote at the
AGM, in respect of those shares subject to
an Affected Share Notice. The Company is
not aware of any other arrangements
between shareholders that may result in
restrictions on the transfer of securities or
voting rights.
Variation of rights
Subject to the Companies Act 2006, rights
attached to any class of shares may be
varied with the consent in writing of the
holders of three-quarters in nominal value
of the issued shares of the class or with the
sanction of a special resolution passed at a
separate general meeting of such class.
Employee share schemes – rights
of control
The trustees of the easyJet UK Share
Incentive Plan, which is used to acquire and
hold shares in the Company for participants
in the UK Share Incentive Plan, does not
seek to exercise voting rights on shares
held other than on direction of the
underlying beneficiaries. The trustees take
no action in respect of ordinary shares for
which they have received no direction to
vote, or in respect of ordinary shares which
are unallocated.
The trustee of the easyJet plc Employee
Benefit Trust (‘the Trust’), which is used to
acquire and hold shares in the Company
for the benefit of employees, including in
connection with the easyJet Long Term
Incentive Plan, the International Share
Incentive Plan and Save As You Earn plans,
has the power to vote or not vote, at its
absolute discretion, in respect of any
shares in the Company held unallocated in
the Trust. However, in accordance with
good practice, the trustee adopts a policy
of not voting in respect of such shares.
Both the trustees of the easyJet UK Share
Incentive Plan and the easyJet plc Employee
Benefit Trust have a dividend waiver in
place in respect of shares which are the
beneficial property of each of the trusts.
www.easyJet.com
155
GOVERNANCE DI RE CTORS’ REPORT (CONTINUE D)
Additional information
Substantial interests
In accordance with DTR 5, as at 30 September 2021 the Company had been notified of the following disclosable interests in its issued
ordinary shares:
The Haji-Ioannou family concert party shareholding, consisting of easyGroup Holdings Limited
(holding vehicle for Sir Stelios Haji-Ioannou and Clelia Haji-Ioannou) and Polys Haji-Ioannou
(through his holding vehicle Polys Holdings Limited)
The Goldman Sachs Group, Inc
Number of
shares as
notified to the
Company
% of issued share
capital as at
30 September
2021
115,737,821
49,382,199
15.27%
6.51%
Between 30 September 2021 and 29 November 2021, the Company received a number of notifications under DTR 5 which are available
at https://corporate.easyjet.com/investors/directors-and-substantial-interests/substantial-interests. As at 29 November 2021, the
Company had been notified that the Goldman Sachs Group, Inc interest had changed to 11,637,661 shares representing 1.54% of voting
rights, Societe Generale had a notifiable interest of 40,071,333 shares representing 5.28% of voting rights, and Bank of America
Corporation had a notifiable interest of 50,448,298 shares, representing 6.66% of voting rights.
Annual General Meeting
The Board currently intends to hold the
AGM on 10 February 2022 at 11.00am,
subject to the ongoing Covid-19 pandemic
and any UK Government guidance on social
distancing, non-essential travel or public
gatherings. The arrangements for the
Company’s 2022 AGM and details of the
resolutions to be proposed, together with
explanatory notes, will be set out in the Notice
of AGM to be published on the Company’s
website. Guidance on whether physical
attendance by shareholders will be possible
will be determined nearer the time of the AGM.
Articles of Association
The Company’s Articles of Association may
only be amended by a special resolution at
a general meeting of the shareholders. The
Company’s Articles of Association were last
amended at the AGM on 23 December
2020. A copy of the Articles is available on
the Company’s website: https://corporate.
easyjet.com/investors.
Branches
The Group, through various subsidiaries,
has established branches in France,
Germany, Italy, Netherlands, Portugal and
Spain, in which the business operates.
Financial instruments
Details of the Group’s use of financial
instruments, together with information on
our financial risk management objectives
and policies, hedging policies and our
exposure to financial risks, can be found
in Notes 24 to 26 of the consolidated
financial statements.
Going concern and
viability statement
The Company’s going concern and viability
statement are detailed on pages 74 to 77
of the Strategic Report.
Independent auditor and
disclosure of information to the
auditor
Each Director has taken all the steps that
they ought to have taken as a Director in
order to make themself aware of any
relevant audit information and to establish
that the Group’s auditor is aware of that
information. So far as each Director is
aware, there is no relevant audit
information of which the Group’s auditor is
unaware. A resolution to reappoint
PricewaterhouseCoopers LLP as auditor of
the Group will be put to shareholders at the
forthcoming AGM.
Political donations
and expenditure
easyJet works constructively with all levels
of government across its network,
regardless of political affiliation. easyJet
believes in the rights of individuals to
engage in the democratic process;
however, it is easyJet’s policy not to make
political donations. There were no political
donations made or political expenditure
incurred during the 2021 financial year.
Greenhouse gas emissions and
energy consumption
Details of the Company’s greenhouse gas
emissions (GHG), energy consumption,
energy efficiency action and Streamlined
Energy and Carbon Reporting (SECR)
disclosures can be found on pages 46
to 49 of the Strategic Report.
Significant agreements – change
of control
The Company licenses the easyJet brand
from easyGroup Limited. Further details are
set out in note 28 to the financial
statements.
The following significant agreements, which
were in force at 30 November 2021, take
effect, alter or terminate on a change of
control of the Company.
EMTN Programme and
Eurobond issue
On 7 January 2016, the Group established
a Euro Medium Term Note Programme
(the ‘EMTN Programme’) which provides
the Group with a standardised
documentation platform to allow for senior
unsecured debt issuance in the Eurobond
markets. The maximum potential issuance
under the EMTN Programme is £3 billion.
The EMTN Programme was subsequently
updated in March 2021 with the issue of
further Eurobonds.
Under the EMTN Programme, the following
notes (the ‘Notes’) have been issued by
the Company:
• February 2016: Eurobonds consisting of
€500 million guaranteed Notes paying
1.75% coupon and maturing in
February 2023;
• October 2016: Eurobonds consisting of
€500 million guaranteed Notes paying
1.125% coupon and maturing in
October 2023;
• June 2019: Eurobonds consisting of
€500 million guaranteed Notes paying
0.875% coupon and maturing in
June 2025; and
• March 2021: Eurobonds consisting of €1.2
billion guaranteed Notes paying 1.875%
interest and maturing in March 2028.
156 easyJet plc Annual Report and Accounts 2021
• Pursuant to the final terms attaching to
the Notes, the Company will be required
to make an offer to redeem or purchase
the notes at their principal amount plus
interest up to the date of redemption or
repurchase if there is a change of control
of the Company which results in a
downgrade of the credit rating of the
Notes to a non-investment grade rating
or withdrawal of the rating by both
Moody’s and Standard & Poor’s.
Revolving Credit Facility
The Group is party to a Revolving Credit
Facility (RCF) which contains change of
control provisions. The current RCF
amounts to a $400 million commitment,
supported by a consortium of five banks,
and has a termination date of September
2025 (unless extended).
Covid Corporate Financing Facility
On 6 April 2020 easyJet issued a £600
million Commercial Paper through the
Covid-19 Corporate Financing Facility
(CCFF). This is an unsecured, short-term
paper issued at a discount, of which £300
million was repaid in March 2021 and the
remaining £300 million was repaid in
November 2021.
UK Export Finance Facilities
Agreement
On 7 January 2021, easyJet entered into a
new five-year term loan facility of $1.87
billion underwritten by a syndicate of banks
and supported by a partial guarantee from
UK Export Finance under their Export
Development Guarantee Scheme.
Other agreements
The Company does not have agreements
with any Director or employee that would
provide compensation for loss of office or
employment resulting from a change of
control on takeover, except that provisions
of the Company’s share schemes and plans
may cause options and awards granted to
employees under such schemes and plans
to vest on a takeover.
The Annual Report and Accounts have
been drawn up and presented in
accordance with UK company law and the
liabilities of the Directors in connection with
the report shall be subject to the limitations
and restrictions provided by such law.
easyJet plc is incorporated as a public
limited company and is registered in
England under number 3959649. easyJet
plc’s registered office is Hangar 89, London
Luton Airport, Luton, Bedfordshire,
LU2 9PF.
The Strategic Report (comprising pages 2
to 95) and Directors’ Report (comprising
pages 96 to 129 and 154 to 157) were
approved by the Board and signed on its
behalf by the Company Secretary.
By order of the Board
Maaike de Bie
Company Secretary
London, 30 November 2021
Disclosures required under Listing Rule 9.8.4
The information to be included in the 2021 Annual Report and Accounts under LR 9.8.4, where applicable, can be located as set
out below.
Information
Details of long term incentive schemes
Shareholder waiver of future dividends
Other information that is relevant to this report, and which is incorporated by reference, can be located as follows:
Information
Membership of Board during 2021 financial year
Directors’ service contracts
Financial instruments and financial risk management
Greenhouse gas emissions, energy consumption and energy efficiency
Environmental, Social and Governance (ESG) matters
Corporate governance report
Future developments of the business of the Group
Employee equality, diversity and inclusion
Employee engagement
Stakeholder engagement
Section 172 Statement
Hedge accounting policies
Activities in relation to Research and Development
Post Balance Sheet Events
Page
201-202
155
Page
98-101
151
204-211
46-48
38-55, 58-61
96
8-23
56-57
28, 43, 63, 109
26-37
36
180-181
29, 45, 51-52, 79
212
www.easyJet.com
157
GOVERNANCE In accordance with section 418 of the
Companies Act 2006, each Director in
office at the date the Directors’ Report is
approved, confirms that:
• so far as the Director is aware, there is
no relevant audit information of which
the Company’s auditor is unaware; and
• he/she has taken all the steps that he/
she ought to have taken as a Director in
order to make himself/herself aware of
any relevant audit information and to
establish that the Company’s auditor is
aware of that information.
The Annual Report on pages 1 to 158 was
approved by the Board of Directors and
authorised for issue on 30 November 2021
and signed on its behalf by:
JOHAN LUNDGREN
Chief Executive
KENTON JARVIS
Chief Financial Officer
DI RE CTORS’ REPORT (CONTINUE D)
Directors’ responsibilities and
statements
The Directors are responsible for preparing
the Annual Report, the Directors’
Remuneration Report and the accounts in
accordance with applicable law and
regulations.
Company law requires the Directors to
prepare financial statements for each
financial year. Under that law the Directors
have prepared the group and the company
financial statements in accordance with
international accounting standards in
conformity with the requirements of the
Companies Act 2006. Additionally, the
Financial Conduct Authority’s Disclosure
Guidance and Transparency Rules require
the Directors to prepare the group financial
statements in accordance with international
financial reporting standards adopted
pursuant to Regulation (EC) No 1606/2002
as it applies in the European Union. Under
company law, Directors must not approve
the financial statements unless they are
satisfied that they give a true and fair view
of the state of affairs of the group and
company and of the profit or loss of the
group for that period.
In preparing these accounts, the Directors
are required to:
• select suitable accounting policies and
then apply them consistently;
• make judgements and accounting
estimates that are reasonable and
prudent;
• for the Group accounts, which have
been prepared in accordance with
international accounting standards, state
whether applicable International Financial
Reporting Standards (IFRS) adopted
pursuant to Regulation (EC) No
1606/2002 as it applies in the European
Union in conformity with the
requirements of the Companies Act
2006 have been followed, subject to any
material departures disclosed and
explained in the accounts;
• the company financial statements, which
have been prepared in accordance with
international accounting standards, state
whether conformity with the
requirements of the Companies Act
2006 have been followed, subject to any
material departures disclosed and
explained in the accounts;
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Group’s
and the Company’s transactions and
disclose with reasonable accuracy at any
time the financial position of the Group and
the Company. This enables them to ensure
that the accounts and the Directors’
remuneration report comply with the
Companies Act 2006 and, as regards the
Group accounts, Article 4 of the IAS
Regulation. They are also responsible for
safeguarding the assets of the Group and
the Company and hence for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for the
maintenance and integrity of, amongst
other things, the financial and corporate
governance information provided on the
easyJet website (https://corporate.easyjet.
com). Legislation in the United Kingdom
governing the preparation and
dissemination of accounts may differ
from legislation in other jurisdictions.
The Directors consider that the Annual
Report and Accounts, taken as a whole, are
fair, balanced and understandable and
provide the information necessary for
shareholders to assess the Group’s and the
Company’s position and performance,
business model and strategy.
Each of the Directors, whose names and
functions are listed on pages 98 to 101,
confirm that, to the best of their knowledge:
• the Group accounts, which have been
prepared in accordance with
international accounting standards and
International Financial Reporting
Standards (IFRS) adopted pursuant to
Regulation (EC) No 1606/2002 as it
applies in the European Union, and
Company accounts which have been
prepared in accordance with
international accounting standards in
conformity with the requirements of the
Companies Act 2006, both give a true
and fair view of the assets, liabilities,
financial position and profit of the Group
and Company;
• the Strategic Report, included in the
Annual Report, includes a fair review of
the development and performance of
the business and the position of the
Group, together with a description of the
principal risks and uncertainties that
it faces.
158 easyJet plc Annual Report and Accounts 2021
I N D E P E N D E N T A U D I T O R S ’ R E P O R T T O T H E M E M B E R S O F E A S Y J E T P L C
Report on the audit of the financial statements
Opinion
In our opinion, easyJet plc’s Group financial statements and Company financial statements (the ‘‘financial statements’’):
• give a true and fair view of the state of the Group’s and of the Company’s affairs as at 30 September 2021 and of the Group’s loss and
the Group’s and Company’s cash flows for the year then ended;
• have been properly prepared in accordance with International Accounting Standards in conformity with the requirements of the
Companies Act 2006; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Accounts 2021 (the ‘‘Annual Report’’), which comprise:
Consolidated and Company statements of financial position as at 30 September 2021; Consolidated income statement and Consolidated
statement of comprehensive income, the Consolidated and Company statements of changes in equity, and the Consolidated and
Company statements of cash flows for the year then ended; and the notes to the financial statements, which include a description of the
significant accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
Separate opinion in relation to international financial reporting standards adopted pursuant to Regulation
(EC) No 1606/2002 as it applies in the European Union
As explained in note 1 to the financial statements, the Group, in addition to applying international accounting standards in conformity with
the requirements of the Companies Act 2006, has also applied international financial reporting standards adopted pursuant to Regulation
(EC) No 1606/2002 as it applies in the European Union.
In our opinion, the Group financial statements have been properly prepared in accordance with international financial reporting standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (‘‘ISAs (UK)’’) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in note 3 to the Group financial statements and the Audit Committee Report, we have provided no non-audit
services to the Company in the period under audit.
www.easyJet.com
www.easyJet.com
159
159
FINANCIAL STATEMENTS
I N D E P E N D E N T A U D I T O R S ’ R E P O R T T O T H E M E M B E R S O F E A S Y J E T P L C ( C O N T I N U E D )
Our audit approach
Context
There were no significant changes to the Group’s operations during the year. However, travel restrictions remained in place for much
of the period due to Covid-19 and this continued to put significant pressure on the Group’s financial performance, financial position
and liquidity.
There are a number of changes to our key audit matters this year as explained later in the report. This year we have also specifically
set out our consideration of the impact of climate change on the audit which is further explained below.
Climate change risk is expected to have a significant impact on the aviation industry. As explained in the Sustainability Report, the Group
is clearly mindful of its impact on the environment and focussed on ways to reduce climate related impacts as they continue to work
towards their Net Zero pathway to 2050.
In planning and executing our audit we have considered the Group’s risk assessment process following their work with the Cambridge
Centre for Risk Studies (described in the Sustainability Report above). This, together with discussions with our own sustainability
specialists, provided us with a good understanding of the potential impact of climate change on the financial statements. We assessed
that the key financial statement line items and estimates which are more likely to be materially impacted by climate risks are those
associated with future cash flows, given the more notable impacts of climate change on the business are expected to arise in the
medium to long term. These include the impairment assessment of goodwill and landing rights, the assessment of impairment of
investments held by easyJet plc as a standalone Company and the recoverability of the Group’s deferred tax assets; our key audit
matters further explain how we have evaluated the impact of climate change. We have also specifically considered the impact of climate
change on likely aircraft ownership periods, residual value changes for less fuel-efficient aircraft, and the related impact on ongoing
depreciation charges.
Whilst the Group is targeting net zero carbon emissions by 2050, they are continuing to work on their pathway towards this. The Group
has started to quantify some of the impacts that may arise on this pathway; the future financial impacts are clearly uncertain given the
medium to long term time horizon. We have discussed with management and the Audit Committee that the estimated financial impacts
of climate change will need to be frequently reassessed and our expectation that climate change disclosures will continue to evolve as
greater understanding of the actual and potential impacts on the Group’s future operations are obtained.
Overview
Audit scope
• We performed full scope audit procedures over the Company and one individually significant component in the Group. Procedures
over material financial statements lines were performed in four further components.
• Separate audit procedures were performed in relation to consolidation adjustments.
• This provided coverage of 97% of external consolidated revenue and 98% of the consolidated loss before tax.
Key audit matters
• Going concern (Group and Company)
• Leased aircraft maintenance provision (Group)
• Assessment of impairment of goodwill and other intangible assets (Group)
• Estimates in assessing the carrying value of owned aircraft assets (Group)
• Recoverability of deferred tax assets (Group)
• Impact of the Covid-19 pandemic (Group and Company)
Materiality
• Overall Group materiality: £21,500,000 (2020: £21,500,000) based on 5% of headline loss before tax, capped at £21.5 million.
• Overall Company materiality: £19,350,000 (2020: £19,350,000) based on 1% of total assets, capped at 90% of Group materiality.
• Performance materiality: £16,125,000 (Group) and £14,500,000 (Company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In
particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates that
involved making assumptions and considering future events that are inherently uncertain.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Going concern, Estimates in assessing the carrying value of owned aircraft assets and Recoverability of deferred tax assets are new key
audit matters this year. Discontinuation of hedge accounting, Valuation of restructuring provisions and Risk of fraud arising from cyber-
attack, which were key audit matters last year, are no longer included because of the risks associated with these matters having either
significantly reduced in the current year or they relate specifically to events which arose in the prior year and have not reoccurred.
Otherwise, the key audit matters below are consistent with last year.
160 easyJet plc Annual Report and Accounts 2021
160 easyJet plc Annual Report and Accounts 2021
Key audit matter
Going concern (Group and Company)
In the 2020 Annual Report and Accounts the occurrence
of multiple downside potential risks, including cash
collateralisation of unearned revenue by card acquirers
and easyJet’s ability to obtain additional funding resulted
in the conclusion that there was a material uncertainty
that could cast significant doubt upon the Group’s ability
to continue as a going concern.
In forming its assessment for the 2021 Annual Report and
Accounts the Board has concluded that the financial
statements should be prepared on a going concern basis
with the removal of the material uncertainty disclosure. In
assisting the Directors reach their conclusion management
has modelled both a base case and a downside case
which it considers to be severe but plausible to assess
whether there is sufficient access to liquidity across the
going concern outlook period based on the financing
facilities currently in place.
We have focussed on this area given the continuing
uncertainty in respect of the short term recovery of the
airline industry and in light of the conclusions reached in
the previous year.
Refer to the Accounting policies, judgements and
estimates note (note 1) and the going concern
statement on page 75, for management’s disclosures
of the relevant judgements and estimates involved in
assessing going concern.
How our audit addressed the key audit matter
• We obtained management’s base case and severe but plausible downside
scenario models supporting the Board’s going concern assessment,
evaluated the process by which the assessment has been drawn up,
ensured that the calculations in the models were mathematically
accurate and that the overall methodology used was appropriate.
• We have evaluated the committed financing facilities currently available
to the Group and ensured that both models appropriately include all
contractual debt repayments and committed capital expenditure.
• We have reviewed the revised contracts which are now in place with
some card acquirers and assessed whether any minimum liquidity
requirements have appropriately been taken account of in management’s
assessment on both the base case and downside scenarios.
• We have evaluated management’s base case and ensured that the
forecasts being used were aligned with the Board approved plan. In
evaluating the inputs used in managements base case scenario we
challenged the key assumptions including:
• assessment of short-term recovery assumptions in the forecasts by
comparing them to third party economic and industry forecasts;
• the level of assumed cost reductions delivered during the current year
which have been assessed as sustainable through the going concern
outlook period; and
• removing the impacts of any uncommitted re-financing in our overall
evaluation.
• We have assessed whether the downside scenario applied is sufficiently
severe in order to appropriately stress test the base case model. This
considered both historical performance, current levels of forward bookings
as well as the current status of travel restrictions in place across Europe
and the vaccination roll out.
• We have also performed an alternative independent assessment
considering the levels of operational cash utilisation which has been
evidenced during the last year to evaluate the impact on overall liquidity
headroom should a repeat scenario arise.
• We have reviewed the adequacy of disclosures made in the 2021 Annual
Report and Accounts.
Based on the work performed, as summarised above, we concur with the
Board’s conclusion to adopt the going concern basis of preparation and that
the removal of the previously disclosed material uncertainty is appropriate.
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How our audit addressed the key audit matter
• We evaluated the maintenance provision model and tested the
calculations therein. This included assessing the process by which
the variable factors within the provision are estimated, evaluating
the reasonableness of the assumptions, testing the input data and
re-performing calculations. In particular, we challenged the key
assumptions using the Group’s internal data, such as maintenance
contract terms and pricing, business plans and forecasts. We also
performed sensitivity analysis in respect of the key drivers of the
model. We found no material exceptions from these assessments
and comparisons.
• Having ascertained the magnitude of movements in those key
assumptions, that either individually or collectively would be required
for the provision to be misstated, we considered the likelihood of such
movements arising and any impact on the overall level of aircraft
maintenance provisions recorded in the financial statements. Our
assessment as to likelihood and magnitude of misstatement did not
identify any material exceptions.
Based on the work performed, as summarised above, we have concluded
the Group’s valuation of maintenance provisions on leased aircraft is
materially appropriate.
Key audit matter
Leased aircraft maintenance provision (Group)
The Group operates aircraft which are held under lease
arrangements and for which it incurs liabilities for
maintenance costs during the term of the lease. These
arise from legal and contractual obligations relating to the
condition of the aircraft when they are returned to the
lessor. Maintenance provisions of £550 million
(2020: £597 million) for aircraft maintenance costs in
respect of leased aircraft were recorded in the financial
statements at 30 September 2021. At each statement of
financial position date, the calculation of the maintenance
provision includes a number of variable factors and
assumptions including primarily the expected cost of the
heavy maintenance check at the time it is expected to
occur.
We focused on this area because of the inherent level of
management judgement required in calculating the
amount of provision needed as a result of the complex
and subjective elements around these variable factors
and assumptions.
Refer to the Accounting policies, judgements and
estimates note (note 1 and note 18), for management’s
disclosures of the relevant judgements and estimates
involved in assessing this provision valuation. Refer to the
Audit Committee report on page 127 for a description of
its assessment of significant judgements.
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Key audit matter
Assessment of impairment of goodwill and other intangible assets (Group)
At 30 September 2021, the aggregate value of goodwill
and landing rights, which are both assessed to have
indefinite lives, amounted to £533 million (2020: £533
million). Under IAS 36 ‘Impairment of Assets’, goodwill
must be tested for impairment at least annually.
How our audit addressed the key audit matter
All goodwill, landing rights and aircraft and spares belong
to a single cash-generating unit (‘‘CGU’’), being easyJet’s
route network, and a single value in use (‘‘VIU’’) calculation
is performed in order to assess their recoverability.
We focused on the risk of impairment as the
impairment test involves a number of subjective
judgements and estimates by management, many of
which are forward-looking. These estimates include key
assumptions underpinning the strategic plan, fuel prices,
exchange rates, long-term economic growth rates and
discount rates.
Refer to the Accounting policies, judgements and
estimates note (note 1) and note 10, for management’s
disclosures of the relevant judgements and estimates
involved in assessing goodwill and landing rights for
impairment. Refer to the Audit Committee report on page
127 for a description of its assessment of significant
judgements.
• We obtained management’s annual impairment assessment and ensured
the calculations were mathematically accurate and that the methodology
used was in line with the requirements of IAS 36 ‘Impairment of Assets’.
• We evaluated the future cash flow forecasts of the CGU, and the process
by which the forecasts were drawn up. In doing this, we confirmed that
the forecasts used for the impairment assessment were consistent with
the latest Board-approved plans (excluding the impact of easyJet
Holidays which is a separate CGU to which no goodwill is assigned).
• We evaluated the inputs in the VIU calculation and challenged the key
assumptions including:
• assessment of short-term flying assumptions and long-term growth rates
in the forecasts by comparing them to third party economic and
industry forecasts;
• using our internal valuation experts to calculate an independent WACC
rate range, with reference to comparable businesses, to assess the
appropriateness of the WACC rate used in management’s assessment;
• assessment of the fuel price assumptions, to which the VIU model is most
sensitive, to ensure the rates used at 30 September 2021 were appropriate
and that sufficient disclosure of the underlying assumptions for dealing with
future potential fuel price volatility via pass through to customers have been
adequately disclosed in the financial statements; and
• working closely with internal sustainability specialists we evaluated the
extent to which the considerations of climate change, such as expanded or
more costly carbon trading schemes and the expected increased use of
sustainable aviation fuels, had been reflected in the underlying cash flows.
This included an assessment of the consistency of the assumptions used
with the impact assessments that had already been carried out by easyJet’s
sustainability team.
• We recalculated management’s own sensitivity analysis of key
assumptions used in the VIU assessment and also performed our own
independent sensitivity testing to include the application of reasonable
alternative individual and combined risk scenarios in order to assess for
any potential material impairment under such conditions. This included
the consideration of potential future costs which could arise as a result
of climate change, including from increased pricing or taxes from the
emission of carbon and the use of more expensive sustainable
aviation fuel.
• We reviewed the adequacy of disclosures made in the financial
statements and assessed compliance with IAS 36 including challenging
management to be transparent about the underlying risks which have
been assessed and embedded into its future cash flow assumptions.
Based on our work summarised above, we have concluded that goodwill
and other intangible assets balances are not impaired at 30 September 2021
and that appropriate assumption and sensitivity disclosures have been made
in the financial statements.
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How our audit addressed the key audit matter
Key audit matter
Estimates in assessing the carrying value of owned aircraft assets (Group)
At 30 September 2021, the aggregate value of owned
aircraft amounted to £3,497 million (2020: £4,246 million).
The recoverable amount of these assets is supported as
part of the VIU assessment described in the key audit
matter above. The carrying value of these assets and the
resulting depreciation charge recognised in the income
statement is dependent on the estimated useful
economic lives (‘‘UELs’’) and residual values used.
• We assessed whether managements estimated UEL estimates were in line
with the requirements of IAS 16 and current fleet planning assumptions.
• We evaluated the methodology being used by management to estimate
the residual value of these assets including their use of a third party
valuation expert in determining the residual value associated with the
specific assets capitalised at the purchase date. We also carried out
procedures and enquiries to validate the third party valuation expert
used by management was appropriately qualified.
Whilst these estimates are required to be assessed
annually more focus has been placed on them in the
light of the more volatile aircraft valuations being seen
in the market and identified changes to intended
holding periods.
Refer to the Accounting policies, judgements and
estimates note (note 1) and note 11, for management’s
disclosures of the relevant judgements and estimates
involved in assessing UELs and residual values. Refer to the
Audit Committee report on page 127 for a description of
its assessment of significant judgements.
• We challenged management to support the assumptions used in respect
of estimating the UEL and residual value of maintenance event
enhancements which are capitalised over the life of the aircraft.
• We have also specifically considered the impact of climate change on
likely aircraft ownership periods and residual value changes impacting
less fuel-efficient aircraft.
• We assessed that the date from which these changes in estimates
would be applied prospectively has been applied appropriately.
• We obtained management’s calculation for the resulting impact on the
depreciation charge from updating these estimates and ensured the
calculations were mathematically accurate and that the correct final
assumptions had been used to determine the overall depreciation
charge in the year.
• We have reviewed the adequacy of disclosures made in the financial
statements.
Based on our work summarised above, we have concluded that the
estimates used to determine the current carrying value of owned aircraft
assets and the related depreciation charge in the year were appropriate.
The date of the application of the prospective change was considered
appropriate and appropriate disclosures have been made in the financial
statements.
Recoverability of deferred tax assets (Group)
At 30 September 2021 significant deferred tax assets
(‘‘DTAs’’) of £425 million (Sep 20: £275 million) have been
recognised, primarily in respect of aggregated
UK tax losses.
• We obtained management’s calculation for assessing the recognition and
recoverability of deferred tax assets and assessed the methodology and
ability to offset and recognise certain DTAs against the unwind of existing
deferred tax liabilities, primarily in respect of UK fixed assets.
We have focussed on this area given the significant
judgement required in assessing whether full recognition
and recoverability of the asset is appropriate. When
considering the additional losses reported in the current
year alongside the existence of the significant losses
brought forward there is an increased time horizon
associated with the future recovery of the DTAs and as a
result an increased level of uncertainty. Combined with the
continuing uncertainty arising from Covid-19 and climate
change on future forecasts this acts to increase the
overall level of judgement in making this assessment.
Refer to the Accounting policies, judgements and
estimates note (note 1) and note 6, for management’s
disclosures of the relevant judgements and estimates
involved in assessing the recoverability of DTAs. Refer to
the Audit Committee report on page 127 for a description
of its assessment of significant judgements.
• We have assessed the future profit forecasts which have been used to
support the additional recognition and recovery of DTAs. This included
assessment of whether the pre-tax cashflows had been appropriately
adjusted for tax purposes to estimate the taxable profit/loss in each year.
We also assessed the risk adjustments which have been applied to these
future profits given the extended expected recovery time horizon to
evaluate whether the methodology applied was in line with the
requirements of IAS 12 and the associated guidance from the European
Securities and Markets Authority.
• We assessed the consistency of the forecasts used to justify the
recognition of DTAs to those used elsewhere in the business such as in
the assessment of goodwill and landing rights recoverability and the
Directors’ viability and going concern statements. Further assessment was
made of the forecasts for periods which extended beyond the period
which had already been assessed as part of our audit work in these
other areas to ensure the assumptions used appeared reasonable.
• In assessing the future forecasts across this extended time horizon, whilst
recognising the inherent uncertainty in assessing the impacts which may
arise, we challenged management as to whether allowance had been
made for the potential impact of climate change to reflect the current
risks which have been identified. Where appropriate, we also considered
this when assessing management’s sensitivity analysis and when
performing our own independent sensitivity testing.
• We reviewed the adequacy of disclosures made in the financial
statements in respect of this judgemental estimate including challenging
management to be transparent about the underlying risks which have
been assessed and embedded into its future cash flow assumptions.
Based on our work summarised above, we have concluded that the full
recognition of the DTAs at 30 September 2021 is appropriate and that
appropriate disclosure of the judgements applied has been included within
the financial statements.
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Key audit matter
Impact of the Covid-19 pandemic (Group and Company)
Throughout the year the Group and Company have
continued to operate and trade in an environment that
has seen significantly reduced levels of flying when
compared to historical levels. Management has considered
the impact of Covid-19 on the Group and Company
financial statements. Primarily these considerations related
to the possible impairment of intangible and tangible
assets, the recoverability of deferred tax assets, the
recognition of income from furlough and temporary
government unemployment support schemes, the
appropriate accounting for sale and leaseback
transactions and the Board’s going concern assessment.
There is a risk that the financial impact arising from
Covid-19 which has been recorded by management is
inappropriate or that we are unable to obtain sufficient
audit evidence to support our conclusions in respect of
this assessment. Our audit focused on those areas where
management identified potential financial impacts arising
as a result of the pandemic which, based on our
independent risk assessment, could give rise to a risk of
material misstatement.
Refer to Accounting Policies note (notes 1a and 1b), note
5, note 18 and note 27 as well as the Directors’ Report and
Strategic Report for management’s disclosures of the
relevant judgements, estimates and impacts related to
these items.
How our audit addressed the key audit matter
In advance of the year end and throughout the course of the audit we
continued to assess the risks arising from the ongoing Covid-19 pandemic.
We focussed on areas where significant additional audit effort might be
required as well as those areas which might be susceptible to a material
financial impact on the performance and position of the Group or Company
for the year ended 30 September 2021. Other than as already described in
the key audit matters above, we noted the following key material impacts on
the financial statements, arising from Covid-19:
• We verified furlough receipts have been received through inspection of
bank statements and correspondence. We also performed additional
enquires to confirm no issues have arisen regarding the eligibility of claims
or any evidence that is indicative of errors which could otherwise result in
potentially material refunds, fines and penalties.
• We assessed the movements and closing positions in respect of the
specific restructuring and customer welfare provisions established as a
result of the pandemic.
• We evaluated the accuracy of the hedge de-designation impacts
recognised in the income statement based on the use of appropriate
forecast cash flows and the assessment of whether the specific
transactions related to headline or non-headline items.
• We challenged management in respect of the fair valuation of the
consideration received and lease liabilities recognised in respect of aircraft
which were subject to sale and leaseback transactions and we
corroborated this assessment back to third party valuations and other
supporting evidence. We concluded that the accounting treatment for
these items was appropriate.
• We have sample tested the authenticity of credit vouchers issued to
customers, that primarily arose from the cancellation of flights across both
the current and prior year, agreeing the voucher amounts to evidence
that the initial cash received was from the same customer.
• We evaluated management’s impairment assessment of the investment
held by the Company in easyJet Airline Company Limited. We concluded
the investment was not impaired following assessment of the underlying
cash flows and VIU calculation which are predominantly the same as
those evaluated as described in the ‘Assessment of impairment of
goodwill and other intangible assets’ key audit matter.
• Despite undertaking some of our year end work remotely, we did not
encounter any significant difficulties in performing our audit testing or in
obtaining the required evidence to support our audit conclusions.
• We reviewed the disclosures in the financial statements in respect of the
continuing impact of Covid-19 and concluded that these are appropriate.
Based on the work performed, as summarised above, we have
concluded that the Group’s conclusions in respect of the impact of
Covid-19 are appropriate.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements
as a whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry in
which they operate.
The Group operates through the Company and its fourteen subsidiary undertakings of which eight were actively trading through the
year. The remaining subsidiaries are either holding companies, dormant or have been newly established during the year and not yet
started to actively trade. The accounting for these subsidiaries, each of which is considered to be a separate component in the way we
scope our audit, is primarily centralised in the UK.
We determined the most effective approach to scoping was to perform full scope audit procedures over the Company and one
individually significant component in the Group which is registered in the UK. Procedures over material financial statements lines were
performed in four further components. In some cases, financial statement line items are tested in aggregate to the Group materiality
level where items across more than one component are homogenous. All Group audit work has been performed by the UK Group
engagement team.
Additional audit procedures were performed in relation to consolidation adjustments by the UK Group engagement team. The testing
approach ensured that appropriate audit evidence was obtained over all financial statement line items in order to support our opinion on
the Group financial statements as a whole. Based on the detailed audit work performed across the Group, we have obtained coverage of
97% of external consolidated revenue and 98% of the loss before tax.
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Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,
together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit
procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually
and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality
How we determined it 5% of headline loss before tax, capped at £21.5 million
Financial statements – group
£21,500,000 (2020: £21,500,000).
Financial statements – company
£19,350,000 (2020: £19,350,000).
1% of total assets, capped at 90% of Group
materiality
Rationale for
benchmark applied
We consider that the income statement remains the principal
measure used by the shareholders in assessing the underlying
performance of the Group and therefore an approach to materiality
based on 5% of the headline loss before tax has been applied.
However, given the context of this year’s headline loss before tax, we
capped the level of overall materiality at £21.5 million. This is in line with
the level used in 2020 when the same cap was applied, in line with the
materiality level applied in 2019.
We believe that a total asset benchmark is
appropriate given that the Company does not
generate revenues of its own. The value is
capped at 90% of the Group overall
materiality.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The
materiality allocated to the two significant components was £19,350,000.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit
and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample
sizes. Our performance materiality was 75% of overall materiality, amounting to £16,125,000 for the Group financial statements and
£14,500,000 for the Company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range
was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £1,075,000 (Group
audit) (2020: £1,075,000) and £1,075,000 (Company audit) (2020: £1,075,000) as well as misstatements below those amounts that, in
our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group's and the Company’s ability to continue to adopt the going concern basis of
accounting included:
• Review of management’s base case and severe but plausible downside scenario, ensuring the directors have considered all appropriate
factors. This included consideration of the cash flows against current industry forecasts, the liquidity position of the Group, available
financing facilities, the timing of contractual debt repayments and committed capital expenditure and the relevant liquidity
requirements that exist as part of the contractual arrangements with current card acquirers.
• Consideration of the operational cash utilisation which has been evidenced during the last year to assess the potential impact on the
overall liquidity headroom should a repeat scenario arise.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group's and the Company’s ability to continue as a going concern for a period of at
least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group's and the
Company's ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate
to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
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Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report
thereon. The directors are responsible for the other information which includes reporting based on the Task Force on Climate-related
Financial Disclosures (TCFD) recommendations. Our opinion on the financial statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of
assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required
to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of
the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ Report, we also considered whether the disclosures required by the UK Companies
Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and
matters as described below.
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors’
Report for the year ended 30 September 2021 is consistent with the financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the audit, we
did not identify any material misstatements in the Strategic report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the
Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the
corporate governance statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review. Our additional responsibilities with respect to the corporate governance statement as other information are
described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance
statement, included within the of the Annual Report and Accounts is materially consistent with the financial statements and our
knowledge obtained during the audit, and we have nothing material to add or draw attention to in relation to:
• The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an
explanation of how these are being managed or mitigated;
• The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of
accounting in preparing them, and their identification of any material uncertainties to the Group’s and Company’s ability to continue to
do so over a period of at least twelve months from the date of approval of the financial statements;
• The directors’ explanation as to their assessment of the Group's and Company’s prospects, the period this assessment covers and why
the period is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue in operation and
meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any
necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the Group was substantially less in scope than an audit and
only consisted of making inquiries and considering the directors’ process supporting their statement; checking that the statement is in
alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is consistent with
the financial statements and our knowledge and understanding of the Group and Company and their environment obtained in the course
of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides
the information necessary for the members to assess the Group’s and Company's position, performance, business model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
• The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the Company’s compliance
with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review
by the auditors.
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Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Directors’ responsibilities and statements in the Directors’ Report, the directors are responsible for the
preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair
view. The directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and regulations
related to other environmental regulations, adherence to data protection requirements in the jurisdictions in which easyJet operates and
holds data, UK and overseas tax legislation not being adhered to and non-compliance with employment regulations in the UK and other
jurisdictions in which the Group operates, and we considered the extent to which non-compliance might have a material effect on the
financial statements. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements
(including the risk of override of controls), and determined that the principal risks were related to inappropriate journal entries, either in
the underlying books and records or as part of the consolidation process, and management bias in accounting estimates. Audit
procedures performed by the engagement team included:
• Discussions with management, internal audit and the Group’s legal team, including consideration of known or suspected instances of
non-compliance with laws and regulations and fraud
• Challenging assumptions and judgements made by management in it’s significant accounting estimates that involved making
assumptions and considering future events that are inherently uncertain. We focused on the valuation of the maintenance provision,
the estimates used in assessing the carrying value of owned aircraft, the assessment of impairment of intangible assets and the
recoverability of deferred tax assets (see related key audit matters above). We also specifically assessed the provisions held in respect
of restructuring, actual and potential litigation matters, provisions held for customer compensation and for the Company the
assessment of impairment of investments
• Consideration of recent correspondence with the Group’s legal advisors to ensure that it aligned with the conclusions drawn on
obligations recognised and contingent liabilities disclosed in respect of uncertain legal matters
• Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations or those posted by
unexpected users
• Testing all material consolidation adjustments to ensure these were appropriate in nature and magnitude
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also,
the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud
may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We
will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to
enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3
of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for
any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
168 easyJet plc Annual Report and Accounts 2021
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easyJet plc Annual Report and Accounts 2021
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from
branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the
accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the members on 22 February 2006 to audit the financial
statements for the year ended 30 September 2006 and subsequent financial periods. The period of total uninterrupted engagement is
16 years, covering the years ended 30 September 2006 to 30 September 2021.
Owen Mackney (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Watford
1 December 2021
www.easyJet.com
www.easyJet.com
169
169
FINANCIAL STATEMENTS
Consolidated income statement
Year ended 30 September 2021
Total
£ million
1,000
458
1,458
Non-headline
£ million
–
–
–
Headline
£ million
1,000
458
1,458
Notes
8
Passenger revenue
Ancillary revenue
Total revenue
Fuel
Airports, ground handling and other
operating costs
Crew
Navigation
Maintenance
Selling and marketing
Other costs
Other income
EBITDAR
Aircraft dry leasing
Impairment
Depreciation
Amortisation of intangible assets
Operating (loss)/profit
Interest receivable and other financing income
Interest payable and other financing charges
Net finance charges
(Loss)/profit before tax
Tax credit/(charge)
(Loss)/profit for the year
Loss per share, pence
Basic
Diluted
11
10
2
3
6
7
7
Headline
£ million
2,303
706
3,009
(721)
(938)
(629)
(206)
(278)
(107)
(426)
23
(273)
(1)
–
(485)
(18)
(777)
12
(70)
(58)
Non-headline
£ million
Year ended 30 September 2020
Total
£ million
2,303
706
3,009
–
–
–
–
–
–
–
–
–
(130 )*
45 *
(85 )
–
(37 )
–
–
(122 )
105
(421 )
(721)
(938)
(629)
(206)
(278)
(107)
(556)
68
(358)
(1)
(37)
(485)
(18)
(899)
117
(491)
(316 )
(374)
(371)
(446)
(495)
(102)
(222)
(60)
(319)
6
(551)
(5)
–
(456)
(24)
(1,036)
50
(150)
(100)
–
–
–
–
–
–
47
79
126
–
–
–
–
126
33
(59)
(26)
(371)
(446)
(495)
(102)
(222)
(60)
(272)
85
(425)
(5)
–
(456)
(24)
(910)
83
(209)
(126)
(1,136)
100
(1,036)
(835)
(438 )
(1,273)
236
(58)
178
110
84
194
(900)
42
(858)
(725)
(354 )
(1,079)
(159.0)
(159.0)
(222.9)
(222.9)
* Sale and leaseback gains and losses recognised in the prior year have been re-presented, see note 5.
170 easyJet plc Annual Report and Accounts 2021
170
easyJet plc Annual Report and Accounts 2021
Consolidated statement of comprehensive income
Loss for the year
Other comprehensive income/(loss)
Items that may be reclassified to the income statement:
Cash flow hedges
Fair value gains/(losses) in the year
(Gains)/losses transferred to income statement
Hedge discontinuation losses transferred to income statement
Related tax (charge)/credit
Cost of hedging
Related tax credit
Items that will not be reclassified to the income statement:
Remeasurement gain of post-employment benefit obligations
Related deferred tax credit
Fair value loss on equity investment
Total comprehensive loss for the year
Year ended
30 September
2021
£ million
(858)
Year ended
30 September
2020
£ million
(1,079)
Notes
6
19
6
477
(17)
25
(93)
(3)
1
5
(4)
(3)
388
(470)
(628)
39
284
55
(8)
1
3
–
(15)
(269)
(1,348)
Fair valuation gains in the year primarily due to increases in the market price of jet fuel, along with movements in foreign exchange rates
used when valuing derivatives held in the hedging reserve.
For capital expenditure cash flow hedges, the accumulated gains and losses recognised in other comprehensive income will be
transferred to the initial carrying amount of the asset acquired, within property, plant and equipment.
Losses/(gains) on cash flow hedges reclassified from other comprehensive income in income statement captions are as follows:
Revenue
Fuel
Maintenance
Eurobonds
Other costs
2021
£ million
(8)
41
–
(49)
(1)
(17)
2020
£ million
(16)
43
(6)
21
(3)
39
www.easyJet.com
www.easyJet.com
171
171
FINANCIAL STATEMENTS
Consolidated statement of financial position
As at 30
September
2021
£ million
As at 30
September
2020
£ million
Notes
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Derivative financial instruments
Equity investment
Restricted cash
Other non-current assets
Deferred tax assets
Current assets
Trade and other receivables
Intangible assets
Derivative financial instruments
Current tax assets
Restricted cash
Money market deposits
Cash and cash equivalents
Current liabilities
Trade and other payables
Unearned revenue
Borrowings
Lease liabilities
Derivative financial instruments
Current tax payable
Provisions for liabilities and charges
Net current assets/(liabilities)
Non-current liabilities
Borrowings
Unearned revenue
Lease liabilities
Derivative financial instruments
Non-current deferred income
Post-employment benefit obligation
Provisions for liabilities and charges
Deferred tax
Net assets
Shareholders' equity
Share capital
Share premium
Hedging reserve
Cost of hedging reserve
Translation reserve
Retained earnings
Total equity
10
10
11
24
24
14
12
6
13
10
24
14
14
14
15
15
16
17
24
18
16
17
24
19
18
20
365
217
4,735
86
30
1
135
39
5,608
291
140
185
–
13
–
3,536
4,165
(1,128)
(844)
(300)
(189)
(31)
(2)
(183)
(2,677)
365
232
5,053
89
33
5
133
–
5,910
193
12
21
7
14
32
2,284
2,563
(1,242)
(614)
(987)
(224)
(352)
–
(407)
(3,826)
1,488
(1,263)
(3,067)
(2)
(890)
(37)
(4)
(37)
(420)
–
(4,457)
(1,744)
–
(486)
(85)
(5)
(45)
(332)
(51)
(2,748)
2,639
1,899
207
2,166
156
(1)
–
111
2,639
125
1,051
(236)
1
(2)
960
1,899
The financial statements on pages 170 to 212 were approved by the Board of Directors and authorised for issue on 30 November 2021
and signed on behalf of the Board.
JOHAN LUNDGREN
Director
KENTON JARVIS
Director
172 easyJet plc Annual Report and Accounts 2021
172
easyJet plc Annual Report and Accounts 2021
Consolidated statement of changes in equity
At 1 October 2020
Loss for the period
Other comprehensive income/(loss)
Total comprehensive income/(loss)
Net proceeds from rights issue (note
20)
Share incentive schemes
Value of employee services
Related tax (note 6)
Purchase of own shares
Currency translation differences
At 30 September 2021
At 1 October 2019
Loss for the period
Other comprehensive loss
Total comprehensive loss
Transfer to property plant and
equipment
Dividends paid (note 9)
Net proceeds from shares issued
Share incentive schemes
Value of employee services
Related tax (note 6)
Purchase of own shares
Currency translation differences
At 30 September 2020
Share
Capital
£ million
125
–
–
–
Share
premium
£ million
1,051
–
–
–
Hedging
reserve
£ million
(236)
–
392
392
Cost of
hedging
reserve
£ million
1
–
(2)
(2)
Translation
reserve
£ million
(2)
–
–
–
Retained
earnings
£ million
960
(858)
(2)
(860)
82
–
–
–
207
Share
Capital
£ million
108
–
–
–
–
–
17
–
–
–
–
125
1,115
–
–
–
2,166
Share
premium
£ million
659
–
–
–
–
–
392
–
–
–
–
1,051
–
–
–
–
156
Hedging
reserve
£ million
(4)
–
(250)
(250)
18
–
–
–
–
–
–
(236)
–
–
–
–
(1)
–
–
–
2
–
–
15
2
(6)
–
111
Cost of
hedging
reserve
£ million
8
–
(7)
(7)
Translation
reserve
£ million
(1)
–
–
–
Retained
earnings
£ million
2,215
(1,079)
(12)
(1,091)
–
–
–
–
–
–
–
1
–
–
–
–
–
–
(1)
(2)
–
(174)
–
18
(1)
(7)
–
960
Total
£ million
1,899
(858)
388
(470)
1,197
15
2
(6)
2
2,639
Total
£ million
2,985
(1,079)
(269)
(1,348)
18
(174)
409
18
(1)
(7)
(1)
1,899
On 9 September 2021 the Company invited its shareholders to subscribe to a rights issue of 301,260,394 ordinary shares at an
issue price of 410 pence per share on the basis of 31 shares for every 47 fully paid ordinary shares held, with such shares issued on
28 September 2021.
The rights issue resulted in £1,235 million of gross proceeds. Shares totalling 280.2 million were taken up by existing shareholders (93%)
with the remaining rump of 21.0 million shares being underwritten. As at 30 September 2021, there were £91 million of proceeds
outstanding, which have been subsequently received. Costs of £38 million were incurred on the rights issue.
In June 2020, easyJet successfully raised net proceeds of £409 million through an equity placing of new shares.
The hedging reserve comprises the effective portion of the cumulative net change in fair value of cash flow hedging instruments relating
to highly probable transactions that are forecast to occur after the year end. Included within the hedging reserve are amounts totalling a
£13 million gain related to derivative hedge trades that were mutually early terminated with counterparty banks in the year ended
30 September 2020 (2020: £46 million gain), as these trades had an effective hedge relationship at the point of termination, the fixed
fair value is held in the hedging reserve and recycled to the income statement in line with when the original hedge item also impacts the
income statement. See section ‘Foreign currency risk management in note 25 for further details.
At 30 September 2021 amounts in the hedging reserve comprised of £nil related to cross-currency basis (2020: £4 million gain) and a
£1 million loss related to the time value of options (2020: £3 million loss).
www.easyJet.com
www.easyJet.com
173
173
FINANCIAL STATEMENTS
Consolidated statement of cash flows
Cash flows from operating activities
Cash used from operations
Ordinary dividends paid
Interest and other financing charges paid
Interest and other financing income received
Net tax received
Net cash used in operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of non-current intangible assets
Net decrease in money market deposits
Net proceeds from sale and leasebacks
Net cash generated by investing activities
Cash flows from financing activities
Net proceeds from issue of ordinary shares
Purchase of own shares for employee share schemes
Proceeds from debt financing
Repayment of bank loans and other borrowings
Repayment of capital element of leases
Decrease/(increase) in restricted cash
Net cash generated from financing activities
Effect of exchange rate changes
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Notes
22
9
11
10
23
23
23
23
14
Year ended
30 September
2021
£ million
Year ended
30 September
2020
£ million
(755)
-
(282)
1
1
(1,035)
(140)
(9)
32
836
719
1,144
(6)
1,804
(1,045)
(261)
5
1,641
(542)
(174)
(71)
12
13
(762)
(659)
(36)
259
702
266
409
(7)
1,399
–
(230)
(15)
1,556
(73)
(61)
1,252
2,284
999
1,285
Cash and cash equivalents at end of year
14
3,536
2,284
174 easyJet plc Annual Report and Accounts 2021
174
easyJet plc Annual Report and Accounts 2021
NOTES TO THE ACCOUNTS
1. Accounting policies, judgements and estimates
Statement of compliance
easyJet plc (the ‘Company’) and its subsidiaries (‘easyJet’ or the ‘Group’ as applicable) is a low-cost airline carrier operating principally in
Europe. The Company is a public limited company (company number 03959649) whose shares are listed on the London Stock Exchange
under the ticker symbol EZJ and is incorporated and domiciled in the United Kingdom. The address of its registered office is Hangar 89,
London Luton Airport, Luton, Bedfordshire, LU2 9PF.
These financial statements have been prepared in accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006, and in accordance with International Financial Reporting Standards (IFRS) adopted pursuant
to Regulation (EC) No 1606/2002 as it applies in the European Union. The financial statements have also been prepared in accordance
with IFRS Interpretations Committee (IFRS IC) interpretations issued and effective at the time of preparing these financial statements.
Basis of preparation
The financial statements are prepared based on the historical cost convention except for certain financial assets and liabilities, including
derivative financial instruments, financial guarantees, equity investments and certain contingent liabilities and commitments, which are
measured at fair value.
easyJet’s business activities, together with factors likely to affect its future development and performance, are described in the Strategic
report on pages 2 to 95. Principal risks and uncertainties are described on pages 78 to 95. Note 25 to the financial statements sets out
the Group’s objectives, policies and procedures for managing its capital and gives details of the risks related to financial instruments held
by the Group.
The financial statements have been prepared on a going concern basis. In adopting the going concern basis for preparing these financial
statements, the Directors have considered easyJet’s business activities, together with factors likely to affect its future development and
performance, as well as easyJet’s principal risks and uncertainties and liquidity position.
After taking into account the net proceeds of the rights issue, the new revolving credit facility and the other sources of funding
described above, easyJet has unrestricted access to £4.4 billion of liquidity and has retained ownership of 59% of the total fleet with 44%
being unencumbered. This presents an improved liquidity position of £2.1 billion since 30 September 2020 year end.
In modelling the impact of severe but plausible downside risks, the Directors have considered travel restrictions including government
lockdowns and international travel bans, leading to a prolonged recovery period, reduction in revenue yield, lower load factors, cash
collaterisation of unearned revenue by card acquirers, and a reduction to anticipated forward bookings.
After reviewing the current liquidity position, financial forecasts, stress testing of potential risks and considering the uncertainties
described above and the committed funding facilities, the Directors believe it appropriate to continue to adopt the going concern basis
of accounting in preparing the Group financial statements without the inclusion of material uncertainty which has been removed since
the interim financial statements as at 31 March 2021 and the full year financial statements as at 30 September 2020.
The use of critical accounting estimates and management judgement is required in applying the accounting policies. Areas involving a
higher degree of judgement or complexity, or where assumptions and estimates are significant to the financial statements, are
highlighted on pages 183 to 185.
Climate change
In preparing the financial statements, the Directors have considered the impact of climate change, particularly in the context of the
climate change risks identified in the Sustainability section of the Strategic Report and the Group’s stated target of net zero carbon
emissions by 2050.
These considerations did not have a material impact on the financial reporting judgements and estimates in the current year. This reflects
the conclusion that climate change is not expected to have a significant impact on the Group’s short-term cash flows including those
considered in the going concern and viability assessments.
However, in preparing the financial statements, the directors have considered the medium and longer term cash flow impacts of climate
change on a number of key estimates within the financial statements, including:
• the estimates of future cash flows used in impairment assessments of the carrying value of non-current assets;
• the estimates of future profitability used in our assessment of the recoverability of deferred tax assets in the UK; and
• the revision of the useful economic lives and related residual values for our less fuel-efficient aircraft.
1a. Significant accounting policies
The significant accounting policies applied are summarised below. Unless otherwise stated they have been applied consistently to both
years presented. The explanations of these policies focus on areas where judgement is applied or which are particularly significant in the
financial statements.
Basis of consolidation
The consolidated financial statements incorporate those of easyJet plc and its subsidiaries for the years ended 30 September 2020 and
2021. A full list of subsidiaries can be found in the Notes to the Company financial statements on page 217.
A subsidiary is an entity controlled by easyJet plc. Control is achieved when easyJet is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power, directly or indirectly, over the investee.
Intragroup balances, transactions and any unrealised gains and losses arising from intragroup transactions are eliminated in preparing the
consolidated financial statements.
175
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www.easyJet.com
175
FINANCIAL STATEMENTS
N O T E S T O T H E A C C O U N T S ( C O N T I N U E D )
1. Accounting policies, judgements and estimates continued
1a. Significant accounting policies continued
Foreign currencies
The primary economic environment in which a subsidiary operates determines its functional currency. The consolidated financial
statements of easyJet are presented in Sterling, rounded to the nearest £ million, which is the Company’s functional currency and the
Group’s presentation currency. Certain subsidiaries have operations that are primarily influenced by a currency other than Sterling.
Exchange differences arising on the translation of these foreign operations are taken to shareholders’ equity until all or part of the
interest is sold, when the relevant portion of the accumulated exchange gains or losses is recognised in the income statement. Profits
and losses of foreign operations are translated into Sterling at average rates of exchange during the year, since this approximates the
rates on the dates of the transactions.
Transactions arising in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies are translated into functional currency using the rate of exchange ruling at the end of a
reporting period and (except where the asset or liability is designated as a cash flow hedge) the gains or losses on translation are
included in the income statement within Interest receivable and other financing income and Interest payable and other financing charges.
Non-monetary assets and liabilities denominated in foreign currencies are translated into Sterling at foreign exchange rates ruling at the
dates the transactions were effected.
Goodwill and other intangible assets
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business
combination over easyJet’s interest in the net fair value of the identifiable assets acquired and the liabilities assumed. Goodwill is stated at
cost less any accumulated impairment losses. It has an indefinite expected useful life and is tested for impairment at least annually or
where there is any indication of impairment.
Landing rights are stated at cost less any accumulated impairment losses. They are considered to have an indefinite useful life as they will
remain available for use for the foreseeable future provided minimum utilisation requirements are observed, and are tested for
impairment at least annually or where there is any indication of impairment.
Licence agreements to use cloud software are capitalised if easyJet has both a contractual right to the software and the ability to run
the software independently of the host vendor. If this is not deemed the case the costs are expensed and treated as a service
agreement.
When assessing for impairment or reassessing useful economic lives, easyJet consider significant future changes including in relation to
market, technological, economic and legal developments. The potential future impacts of climate change have been incorporated by
including the estimated financial impact within cash flow projections of the increased cost of carbon-offsetting, the future estimated
price of ETS permits and the expected price and quantity required of Sustainable Aviation Fuel usage.
Other intangible assets are stated at cost less accumulated amortisation, which is calculated to write off their cost, less estimated
residual value, on a straight-line basis over their expected useful lives. Expected useful lives and residual values are reviewed annually.
Computer software
Property, plant and equipment
Expected useful life
3-7 years
Property, plant and equipment is stated at cost less accumulated depreciation. Depreciation is calculated to write off the cost, less
estimated residual value, of assets on a straight-line basis over their expected useful lives. Expected useful lives and residual values are
reviewed annually.
Aircraft*
Aircraft spares
Aircraft – prepaid maintenance
Leasehold improvements**
Freehold land
Fixtures, fittings and equipment**
Computer hardware**
Expected useful life
18-23 years
14 years
7-10 years
5-10 years or the length of lease if shorter
Not depreciated
3 years or length of lease of property where equipment is used if shorter
3-5 years
* Aircraft held as right of use assets are depreciated over the lease term see leases section. Additional capitalised maintenance associated with leased aircraft is
depreciated based on usage over its expected period of utilisation.
** ’Other’ assets within note 11.
176 easyJet plc Annual Report and Accounts 2021
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easyJet plc Annual Report and Accounts 2021
Residual values are reviewed annually against prevailing market rates at the end of the reporting period for equivalently aged assets and
depreciation rates are adjusted accordingly on a prospective basis. The carrying value is reviewed for impairment at least annually or
where there is any indication of impairment within the cash generating unit of which the asset is part. For aircraft, easyJet is dependent
on Airbus as its sole supplier. This gives rise to an increased valuation risk which crystallises when aircraft exit the fleet, where easyJet is
reliant on the future demand for second-hand aircraft. Future developments, such as the impact of climate change on the technological,
market, economic or legal environment, are considered when assessing residual values, useful economic lives and impairment. In the year,
the expected useful economic life estimate for CEO aircraft was revised from 23 years to 18 years in line with expected usage. This was
applied prospectively from 1 July 2021 and had an immaterial impact.
An element of the cost of a new aircraft is attributed on acquisition to prepaid maintenance and is depreciated over a period ranging
from seven to ten years from the date of manufacture. Subsequent costs incurred which lend enhancement to future periods, such as
long-term scheduled maintenance and major overhaul of aircraft and engines, are capitalised and depreciated over the length of the
period benefitting from these enhancements. All other maintenance costs for owned aircraft are charged to the income statement as
incurred.
Pre-delivery and option payments made in respect of aircraft are recorded in property, plant and equipment at cost. These amounts are
not depreciated. Interest attributed to pre-delivery and option payments made in respect of aircraft and other qualifying assets under
construction are capitalised and added to the cost of the asset concerned.
Gains and losses on disposals (other than aircraft-related sale and leaseback transactions) are determined by comparing the net
proceeds with the carrying amount and are recognised in the income statement.
Freehold land is recorded at cost and not depreciated as it is considered to have an indefinite useful life.
Leases
When a contractual arrangement contains a lease easyJet recognises a lease liability and a corresponding right of use asset at the
commencement of the lease.
At the commencement date the lease liability is measured at the present value of the future lease payments, discounted using the
Group’s incremental borrowing rate where the interest rate in the lease is not readily determined. Subsequently, the lease liability is
adjusted by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease
payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications.
The lease term is determined from the commencement date of the lease and the duration of the non-cancellable term. If easyJet has an
extension option, which it considers it reasonably certain to exercise, then the lease term will be considered to extend beyond that non-
cancellable period. If easyJet has a termination option, which it considers it reasonably certain to exercise, then the lease term will be
considered to be until the point the termination option will take effect.
At the commencement date the right of use asset is measured at an amount equal to the lease liability plus any lease payments made
before the commencement date and any initial direct costs, less any lease incentive payments. An estimate of costs to be incurred in
restoring an asset, in accordance with the terms of the lease, is also included in the right of use asset at initial recognition. Subsequently,
the right of use asset is measured in accordance with the accounting policy for property, plant and equipment. Adjustment is also made
to the right of use asset to reflect any remeasurement of the corresponding lease liability. The right of use assets are also subject to
impairment testing under IAS 36.
Short-term leases less than 12 months in length and low-value leases are not recognised as lease liabilities and right of use assets, but are
recognised as an expense on a straight line basis over the lease term. Payments for the interest element of recognised lease liabilities are
included in Interest and other financing charges paid within cash flows from operating activities. Payments for the principal element of
recognised lease liabilities are presented within cash flows from financing activities.
easyJet periodically enters into sale and leaseback transactions whereby it sells either new or mid-life aircraft or engines to a third party
and immediately leases them back. For each transaction, where the sale proceeds and lease payments are judged to be at fair value, any
gain or loss arising on disposal is recognised in the income statement, to the extent that it relates to the rights that have been
transferred. Gains and losses that relate to the rights that have been retained are included in the carrying amount of the right of use
asset recognised at commencement of the lease. Where sale proceeds and lease payments are not at fair value, any below market
terms are recognised as a prepayment of lease payments, and above market terms are recognised as additional financing provided by
the lessor. Gains on sale and leaseback transactions are recognised in other income, with losses on sale and leaseback transactions
recognised in other costs. This has been retrospectively applied to the comparative financial year. See note 5 for further details.
Other non-current assets
Payments for aircraft and engine maintenance, as stipulated in the respective lease agreements, have historically been made to some
lessors as security for the performance of future heavy maintenance works. These payments are recorded within current and non-
current assets (as applicable) as receivables from the lessors until the respective maintenance event occurs and the reimbursement with
the lessor is finalised. Any payment that is not expected to be reimbursed by the lessor is recognised immediately within operating
expenses in the statement of comprehensive income. Amounts due to easyJet from lessors for maintenance related to use before
easyJet acquired the aircraft are also recognised in this category.
Financial guarantees
If a claim on a financial guarantee given to a third party becomes probable, the obligation is recognised at fair value. For subsequent
measurement, the carrying amount is the higher of initial measurement and best estimate of the expenditure required to settle the
obligation at the reporting date.
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1. Accounting policies, judgements and estimates continued
1a. Significant accounting policies continued
Tax
Tax expense in the income statement consists of current and deferred tax. Tax is recognised in the income statement except when it
relates to items credited or charged directly to other comprehensive income or shareholders’ equity, in which case it is recognised in
other comprehensive income or shareholders’ equity. The charge for current tax is based on the results for the year as adjusted for
income that is exempt and expenses that are not deductible, using tax rates that are applicable to the taxable income.
Deferred tax is provided in full on temporary differences relating to the carrying amount of assets and liabilities, where it is probable that
the recovery or settlement will result in an obligation to pay more, or a right to pay less, tax in the future, with the following exceptions:
• where the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither taxable income nor accounting profit; and
• deferred tax arising on investments in subsidiaries is not recognised where easyJet is able to control the reversal of the temporary difference
and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply in the periods in which recovery of assets and settlement of
liabilities are expected to take place, based on tax rates or laws enacted or substantively enacted at the date of the statement of
financial position.
Deferred tax assets represent amounts recoverable in future periods in respect of deductible temporary differences, losses and tax
credits carried forwards. Deferred tax assets are recognised to the extent that these are estimated to be fully recoverable against the
unwind of taxable temporary differences and future taxable income.
Deferred tax liabilities represent the amount of income taxes payable in future periods in respect of taxable temporary differences.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and it is the intention to settle these on a net basis.
Provisions
Provisions are recognised when a present legal or constructive obligation arises as a result of a past event, it is probable that the Group
will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. Amounts provided for
represent the best estimate of the consideration required to settle the present obligation at the statement of financial position date,
taking into account all related risks and uncertainties.
Restructuring
As a result of the Covid-19 pandemic, easyJet implemented a major co-ordinated restructuring programme to reduce the number of
bases, and the number of employees. Provisions have been made based on the expected outcome of consultations with staff, including
pilots and crew. Where specific individuals at risk have not been identified, estimations have been based on information available such as
average payroll data, employee age and length of service.
Customer claims
Provisions for customer claims comprise amounts payable to customers who make claims in respect of flight delays and cancellations,
and refunds of air passenger duty or similar charges. Provisions are measured based on known eligible events, passengers impacted and
historical claim rates.
Maintenance
easyJet incurs liabilities for maintenance costs in respect of aircraft leased during the term of the lease. These arise from legal and
constructive contractual obligations relating to the condition of the aircraft when it is returned to the lessor. On recognition of a right of
use asset under IFRS 16 a provision is made in full for maintenance not dependent on use of the aircraft, plus maintenance relating to
previous use, based on hours or cycles flown, to provide for the cost of these obligations. Contractual obligations which are dependent
on the ongoing use of the aircraft are provided over the term of the lease based on the estimated future costs, discounted to present
value. These are capitalised to the right of use asset rather than recognised in maintenance in the income statement. These assets are
depreciated immediately as the obligation has arisen as a result of flying hours already undertaken.
Other
Other provisions include amounts in respect of potential liabilities for employee related matters and litigation which arises in the normal
course of business.
Employee benefits
easyJet contributes to defined contribution pension schemes for the benefit of employees (see below for the Swiss scheme treatment).
The assets of the schemes are held separately from those of easyJet in independently administered funds. easyJet's contributions are
charged to the income statement in the year in which they are incurred. easyJet has no further payment obligations once the
contributions have been paid for defined contribution schemes.
The expected cost of compensated annual leave and other employee benefits is recognised at the time that the related employees'
services are provided.
Switzerland pension scheme
easyJet contributes to an independently administered post-employment fund for employees in Switzerland. The final benefit is
contribution-based with certain minimum guarantees required by Swiss law. Due to these minimum guarantees, the Swiss pension plan
meets IAS 19 Employee Benefits requirements to be treated as a defined benefit plan for the purposes of these consolidated financial
statements.
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The easyJet portion of the current service costs and the net interest cost are charged to the consolidated income statement in the year
in which they relate. Actuarial gains and losses are recognised in the consolidated statement of comprehensive income and in the
consolidated statement of financial position reflects the net surplus or deficit at the statement of financial position date.
The actuarial assumptions used to calculate the defined benefit obligation are based on the requirements set out in IAS 19. They are set
by management, based on advice from independent actuaries. The defined benefit obligation is calculated using the projected unit credit
method. Costs of managing the plan assets are deducted as incurred in determining the return on plan assets and the present value of
projected future general administration expenses that are a direct consequence of past service are included as part of the retirement
benefit obligation.
Share capital and dividend distribution
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
Where any Group company or employee benefit trust purchases the Company’s equity shares, the consideration paid and any directly
attributable incremental costs are deducted from retained earnings until the shares are cancelled or reissued. Proceeds from re-issue are
shown as a credit to retained earnings.
easyJet settles share awards under the Long Term Incentive Plan, the Save As You Earn scheme, Restricted Share Plan and Share
Incentive Plans by purchasing its own shares on the market through employee benefit trusts. The cost of such purchases is deducted
from retained earnings in the period that the transaction occurs.
Dividend distributions to the Company’s shareholders are recognised as a liability in the period in which the dividends are approved by the
Company’s shareholders.
Share-based payments
easyJet has a number of equity-settled share incentive schemes. The fair value of share options granted under the Save As You Earn
scheme is measured at the date of grant using the Binomial Lattice option pricing model. The fair value of grants under the Long Term
Incentive Plan is measured at the date of grant using the Black-Scholes model for awards based on ROCE performance targets, and the
Stochastic model (also known as the Monte Carlo model) for awards based on TSR performance targets. The fair value of all other
awards is the share price at the date of grant.
The fair value of the estimated number of options and awards that are expected to vest is expensed to the income statement on a
straight-line basis over the period that employees’ services are rendered, with a corresponding increase in shareholders’ equity. Where
non-market performance criteria (such as ROCE) attached to the share options and awards are not met, any cumulative expense
previously recognised is reversed. For awards with market-related performance criteria (such as TSR), an expense is recognised
irrespective of whether the market condition is satisfied.
The social security obligations payable in connection with the grant of the share options are an integral part of the grant itself and the
charge is treated as a cash-settled transaction.
Financial instruments
Financial instruments are recognised when easyJet becomes a party to the contractual provisions of the relevant instrument and
derecognised when it ceases to be a party to such provisions. Financial assets are also derecognised (written-off) when the Group has
no reasonable expectation of recovering the financial asset.
With the exception of trade receivables that do not contain a significant financing component, financial instruments are initially measured
at fair value plus or minus (in the case of a financial asset or financial liability not at fair value through profit or loss) directly attributable
transaction costs. Trade receivables that do not contain a significant financing component are initially measured at the transaction price.
Where market values are not available, the fair value of financial instruments is calculated by discounting expected cash flows at
prevailing interest rates and by applying period end exchange rates.
The equity investment in The Airline Group Limited is measured at fair value. Movements in fair value are assessed at each reporting
period and recorded in other comprehensive income. The fair value is measured using a combination of income and market valuation
techniques in line with IFRS 13 requirements. See note 24 for further details.
Non-derivative financial assets
Non-derivative financial assets are classified and measured according to easyJet's business model for managing a specified group of
financial assets, and the nature of the contractual cash flows arising from that group of financial assets.
Financial assets measured at amortised cost
Subsequent to initial recognition, this classification of financial asset is measured at amortised cost using the effective interest rate
method.
Financial assets are measured at amortised cost when both of the following criteria are met:
• The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amounts outstanding.
Financial assets measured at amortised cost include refundable lease deposits and other refundable lease contributions, restricted cash,
trade and other receivables, money market deposits and cash and cash equivalents (excluding money market funds).
Restricted cash comprises cash deposits which have restrictions governing their use and is classified as a current or non-current asset
based on the estimated remaining length of the restriction.
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1. Accounting policies, judgements and estimates continued
1a. Significant accounting policies continued
Cash and cash equivalents comprise cash held in bank accounts with no access restrictions and bank term deposits and tri-party repos
repayable on demand or maturing within three months of inception.
Money market deposits comprise term deposits and tri-party repos maturing greater than three months from inception.
Financial assets measured at fair value through other comprehensive income
On initial recognition, equity investments, excluding interests in associates, are irrevocably designated as measured at fair value through
other comprehensive income. Subsequently they are measured at fair value with changes recognised in other comprehensive income
with no recycling of these gains and losses.
Financial assets measured at fair value through profit or loss
Financial assets are measured at fair value through profit or loss when they do not meet the criteria to be measured at amortised cost or
at fair value through other comprehensive income.
Subsequent to initial recognition, this classification of financial asset is measured at fair value through profit or loss.
Financial assets measured at fair value through profit or loss solely comprise money market funds at 30 September 2021.
Impairment of financial assets measured at amortised cost
At each reporting date easyJet recognises a loss allowance for expected credit losses on financial assets measured at amortised cost.
In establishing the appropriate amount of loss allowance to be recognised, easyJet applies either the general approach or the simplified
approach, depending on the nature of the underlying group of financial assets.
General approach --- impairment assessment
The general approach is applied to the impairment assessment of refundable lease deposits and other refundable lease contributions,
restricted cash, money market deposits and cash and cash equivalents.
Under the general approach easyJet recognises a loss allowance for a financial asset at an amount equal to the 12-month expected
credit losses, unless the credit risk on the financial asset has increased significantly since initial recognition, in which case a loss allowance
is recognised at an amount equal to the lifetime expected credit losses.
Simplified approach --- impairment assessment
The simplified approach is applied to the impairment assessment of trade and other receivables.
Under the simplified approach easyJet always recognises a loss allowance for a financial asset at an amount equal to the lifetime
expected credit losses.
Non-derivative financial liabilities
Non-derivative financial liabilities are initially recorded at fair value less directly attributable transaction costs, and subsequently at
amortised cost, and include trade and other payables and borrowings. Interest expense on borrowings is recognised using the effective
interest method.
Borrowings are classified as current liabilities unless there is an unconditional right to defer settlement of the liability for at least 12 months
after the reporting period date.
Financial liabilities measured at amortised cost
Subsequent to initial recognition, this classification of financial asset is measured at fair value through profit or loss.
Financial liabilities measured at amortised cost include trade and other payables, lease liabilities and borrowings.
Derivative financial instruments and hedging activities
Derivative financial instruments are measured at fair value through profit or loss with the exception of derivative financial instruments that
are designated as a hedging instrument in a cash flow for hedge relationship.
easyJet uses foreign currency forward contracts to hedge foreign currency risks on transactions denominated in US dollars, Euros or
Swiss francs. These transactions primarily affect revenue, fuel, fixed costs, and the carrying value of owned aircraft. easyJet also uses
cross-currency interest rate swaps to hedge currency and interest rate risk on certain borrowings, and jet fuel forward swap and option
contracts to hedge fuel price risks. Hedge accounting is applied to those derivative financial instruments that are designated as cash flow
hedges or fair value hedges.
Fair value hedges
Changes in the fair values of derivatives that are designated and qualify as fair value hedges are recorded in the income statement,
together with any changes in the fair values of the hedged assets or liabilities that are attributable to the hedged risk. Any differences
between the hedge item and hedge instrument fair valuation is recorded as hedge ineffectiveness as a non-headline item within the
income statement.
Fair value changes in the derivative instrument attributable to currency basis are not designated as part of the hedged instrument. Such
fair value changes are recognised through other comprehensive income as a cost of hedging and are recycled to profit or loss on a
rational basis, according to the nature of the underlying hedged item.
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Cash flow hedges
Gains and losses arising from changes in the fair value of foreign exchange forwards, jet fuel forward swaps, jet fuel options and cross-
currency interest rate swap contracts designated as cash flow hedges are recognised in other comprehensive income and deferred in
the hedging reserve to the extent that the hedges are determined to be effective.
All foreign exchange contracts in a cash flow hedge relationship are designated on a forward basis with the full fair value as the hedge
instrument. Jet fuel option contracts in a cash flow hedge relationship are designated using the intrinsic value of the derivative as the
hedge instrument only. The time value element of the full fair value for these derivatives is recognised through other comprehensive
income as a cost of hedging and recycled to profit or loss at the same time as the hedge item also impacts profit and loss.
Fair value changes in foreign currency derivative instruments attributable to currency basis are not designated as part of the hedged
instrument. Such fair value changes are recognised through other comprehensive income as a cost of hedging and are recycled to profit
or loss on a rational basis, according to the nature of the underlying hedged item. All other changes in fair value are recognised
immediately in the income statement.
When the hedged forecast transaction relates to an item of property, plant and equipment, the relevant accumulated gains and losses
are transferred from the hedging reserve and included in the initial carrying amount of that purchased asset. Otherwise they are
recognised in the income statement in the same period in which the hedged transaction affects the income statement and against the
same line item.
In the event that a hedged forecast transaction is no longer expected to occur, any related gains and losses are immediately transferred
from the hedging reserve and recognised in the income statement. Derivative instruments that have been derecognised from hedge
relationships are classified as fair value through profit or loss thereafter with subsequent fair valuation movements impacting the income
statement.
Hedge accounting is discontinued when a hedging instrument is derecognised (e.g. through expiry, disposal or termination of a
derivative), or no longer qualifies for hedge accounting. Where the hedged item continues to be expected to occur, the related gains and
losses remain deferred in the hedging reserve until the transaction takes place.
Hedge relationship
The Group determines that the criteria for each hedge accounting relationship are met when:
• All relationships demonstrate a strong economic correlation;
• The effects of credit do not dominate the change in value of the associated hedged risk; and
• All Group hedge relationships have a hedge ratio of one to one, aligning to the Group’s risk management strategy.
UK and EU ETS permits
Free allocations received from the government under the EU ETS scheme are recognised at fair value on the date received with a
corresponding liability recognised. Purchased carbon credits are recognised at the purchase price. Both purchased and free credits are
not subsequently revalued as they are held for own use. Carbon assets are derecognised when they are used to settle the ETS liabilities
subsequent to the end of each calendar year. These assets are presented as current intangible assets and are reviewed for impairment
annually or when there is an indication of impairment within the airline cash generating unit.
Revenue recognition
easyJet categorises total revenue earned on the face of the income statement between passenger and ancillary revenue. Passenger
revenue arises from the sale of flight seats and administration fees and is measured as the price paid by the customer. Passenger
revenue is recognised when the performance obligation has been completed. This is when the flight takes place. Amounts paid by ‘no-
show’ customers are recognised as passenger revenue when the booked service is provided, as such customers are not generally entitled
to change flights or seek refunds once a flight has departed.
Ancillary revenue includes revenue from the provision of checked baggage, allocated seating and change fees, package holidays revenue
(excluding flights which are recognised as passenger revenue) and revenue arising from commissions earned from services sold on
behalf of partners and inflight sales. It is measured as the price paid by the customer for the service booked. Ancillary revenue is
recognised when the performance obligation is complete, which is generally when the related flight takes place, with the following
exceptions:
• cancellation fees which are recognised when the cancellation requested by the customer is processed; and
• in the case of commission earned from travel insurance, revenue is recognised at the time of booking as easyJet acts solely as appointed
representative of the insurance company.
Package holiday revenue is recognised evenly over the duration of the holiday. Package holiday revenue is measured as the price paid by
the customer for the service booked.
Airline flights and package holiday deposits are paid for at the point of booking. Package holiday balances due from customers are offset
against the customer deferred revenue until paid in full, due 28 days before departure. Unearned revenue from flights not yet flown is
held in the statement of financial position until it is realised in the income statement when the performance obligation is complete and
until then represents a contract liability. Unearned revenue also includes non-flight elements of package holidays for which the customer
has paid but has not yet taken place, and is held in the statement of financial position until it is realised in the income statement when
the performance obligation is complete. Vouchers issued by easyJet in lieu of refunds are held in the statement of financial position in
other payables as a contract liability until they are redeemed against a new booking, at which point they are recognised as unearned
revenue, or when the performance obligation is complete, at which point they will be recognised as revenue.
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1. Accounting policies, judgements and estimates continued
1a. Significant accounting policies continued
If easyJet cancels a flight or holiday, unless a customer immediately re-books on an alternative flight or holiday, at the point of the
cancellation the amount paid for the flight is derecognised from unearned revenue and a contract liability is recognised within trade and
other payables to refund the customer or provide a voucher or flight transfer if requested. easyJet make an estimate of the proportion
of this liability which will never be claimed by customers and recognises this as income.
Some of the compensation payments made to customers (in respect of flight delays) are offset against revenues recognised up to the
amount of the flight, with the excess compensation being recorded within expenses.
Revenue from easyJet plus cards is recognised evenly over time in line with when the performance obligations are expected to arise.
Revenue from easyJet plus cards for the current financial year totalled £14 million (2020: £22 million).
Segmental reporting
easyJet has two operating segments, being its Airline business, which operates easyJet’s route network, and the Holidays business, which
sells holiday packages. The Chief Operating Decision Maker has been assessed as the easyJet plc Board, which receives regular reporting
on the Airline and Holidays results in order to make resource allocation decisions. Presentation of separate segmental reporting is
included in note 8.
Geographic revenue is allocated on the following bases:
• revenue earned from customers is allocated according to the location of the first departure airport on each booking; and
• commission revenue earned from partners is allocated according to the domicile of each partner.
Passenger revenue recognised within the Airline segment includes intra-segment sales of flights to the Holidays segment. Passenger
revenue is recognised in the Airline segment when the flight takes place.
Carbon offsetting and Verified Emission Reductions
easyJet operates a voluntary policy to compensate for every tonne of carbon and carbon equivalents (collectively ‘carbon’) emitted from
fuel used for all its flights, by investing in projects which will mean there is one tonne less in the atmosphere - whether by reducing
carbon by physically removing it from the air or by avoiding the release of additional carbon.
easyJet purchases Verified Emission Reductions (VERs) arising from Gold Standard or Verified Carbon Standard (VCS) accredited
projects to offset the carbon emitted from flights. The cost of purchasing VERs is recognised in the income statement when the flight
occurs with a corresponding carbon offsetting liability. This is measured using the purchase price of VERs on a First In First Out basis
where they have already been purchased, then a weighted average of expected future purchases where sufficient future VER purchase
commitments are already in place. If there are insufficient future commitments, a market value would be used. At present there is excess
VER commitments when compared to the current liability. VERs are recorded as an asset at historic cost when delivery into the easyJet
registry account has taken place and not subsequently revalued. At regular intervals the VERs are retired to settle the obligation, at which
point the VER asset and carbon offsetting liability are derecognised.
Voluntary change in accounting policy
Foreign exchange gains and losses arising from the revaluation of monetary assets and liabilities have historically been classified as non-
headline items. During the year it was concluded that these gains and losses would be more appropriately classified as headline items, as
they are considered to be reflective of the trading performance of the business.
Due to the immaterial value in the prior year, no reclassification has been made in the comparative year.
The initial charges for discontinuation of hedge accounting applied to derivative financial instruments entered before the Covid-19
pandemic are still recognised as non-headline items, however any on-going fair value movements from these derivative financial
instruments will now be classified as headline items due to easyJet's ability to manage those positions.
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received. Loans provided and/or
guaranteed by governments that represent market rates of interest are recorded at the amount of the proceeds received and
recognised within borrowings. All existing loans are considered to be at market value. Grants that compensate the Group for expenses
incurred are recognised in the income statement in the relevant financial statement line on a systematic basis in the periods in which the
expenses are recognised to present the net expense to the Group.
Alternative performance measures (APMs)
Within the financial statements on pages 170 to 212, a number of APMs have been disclosed which the Directors consider key to
assessing underlying performance. Refer to the glossary for a list of APMs disclosed in the financial statements, including definitions and
reconciliations to IFRS measures.
New and revised standards and interpretations
A number of amended standards became applicable during the current reporting period. The Group did not have to change its
accounting policies or make retrospective adjustments as a result of adopting these standards. The amendments that became applicable
for annual reporting periods commencing on or after 1 January 2020, and did not have a material impact were:
• IAS 1 Presentation of Financial Statements & IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors – Definition of material;
• IFRS 3 Business Combinations – Definition of business;
• IFRS 16 Leases – Amendments in relation to Covid-19 related rent concessions; and
• Revised conceptual framework for financial reporting.
There are no standards that are issued but not yet effective that would be expected to have a material impact on the Group in the
current or future reporting periods and on foreseeable future transactions.
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1b.Critical accounting judgements and estimates
The preparation of the financial statements in conformity with generally accepted accounting principles requires the use of estimates
and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported
amounts of income and expenses during the reporting period. Although these amounts are based on management’s best estimates,
events or actions may mean that actual results ultimately differ from those estimates, and these differences may be material. The
estimates and the underlying assumptions are reviewed regularly.
1b.(i) Critical accounting judgements
The following are the critical judgements, apart from those involving estimations (which are dealt with separately below), that the
Directors have made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts
recognised and presented in the financial statements.
Classification of income or expenses between headline and non-headline items (note 5)
The Group seeks to present a measure of underlying performance which is not impacted by material non-recurring items or items which
are not considered to be reflective of the trading performance of the business. This measure of profit is described as ‘headline’ and is
used by the Directors to measure and monitor performance. The excluded items are referred to as ‘non-headline’ items.
Non-headline items may include impairments, amounts relating to acquisitions and disposals, expenditure on major restructuring
programmes, litigation and insurance settlements, the income or expense resulting from the initial recognition of sale and lease back
transactions, fair value adjustments on financial instruments and other particularly significant or unusual non-recurring items. Items
relating to the normal trading performance of the business will always be included within the headline performance.
Judgement is required in determining the classification of items between headline and non-headline. In line with Financial Reporting
Council (FRC) guidance, easyJet has not attempted to identify additional non-headline items as a direct or indirect result of Covid-19,
other than those items which clearly meet our existing definition of non-headline, such as hedge discontinuation, restructuring and asset
impairment. See ‘Voluntary change in accounting policy’ note above for changes in classifications in the year.
Consolidation of easyJet Switzerland
Judgement has been applied in consolidating easyJet Switzerland S.A. as a subsidiary on the basis that the Company exercises a
dominant influence over the undertaking. A non-controlling interest has not been reflected in the consolidated financial statements on
the basis that holders of the remaining 51% of the shares have no entitlement to any dividends from that holding and the Company has
an option to acquire those shares for a pre-determined minimal consideration.
Vouchers issued
Due to the amount of cancelled flights, easyJet continues to offer customers the option to accept vouchers in lieu of cash refunds. The
liability for vouchers is classified as other payables until the voucher is redeemed against a future booking when it is reclassified to
unearned revenue. Breakage may occur if customers do not redeem their voucher prior to expiry and would be recognised in revenue.
The liability has been recorded in full as no vouchers have yet expired, and due to the significant level of flight cancellations as a result of
the pandemic impact there is not sufficient historical data available to reliably estimate the amount of vouchers that will not be used prior
to expiry. To date no vouchers have expired as the vouchers have had the expiry dates extended to ensure customers have the
maximum opportunity to utilise their vouchers. Applying breakage at 10% would result in a c. £20 million reduction to the liability.
Sale and leaseback transactions
Judgement is required when determining if sale and leaseback proceeds and lease rentals are at fair value. The sale and leaseback
transactions completed in the year have been assessed with reference to external valuations specific to the easyJet fleet and deemed to
be at fair value. The accounting treatment would have been different if the transactions had not been at fair value (see leases
accounting policy).
Contingent liability recognition
On 19 May 2020, easyJet announced that it had been the target of a cyber-attack from a highly sophisticated source. The email
addresses and travel details of approximately 9 million customers were accessed and for a very small subset of customers (2,208), credit
card details were accessed.
The cyber-attack continues to be under investigation by the Information Commissioner's Office (ICO). As the cyber-attack took place
before the United Kingdom left the European Union, the Group expects the ICO to be investigating on behalf of all EU data protection
authorities as lead supervisory authority under the GDPR. Any penalty or enforcement action will need to be reviewed and approved by
the other EU data protection authorities under the GDPR's cooperation process. In addition, in May 2020, a class action claim was filed in
the UK High Court by a law firm representing a class of affected customers and claims have also been commenced or threatened in
certain other courts and jurisdictions.
Judgement has been applied in assessing the merit, likely outcome and potential impact on the Group of the continued investigation by
the ICO, group action and other claims. These are still subject to a number of significant uncertainties and therefore the Group is unable
to assess the likely outcome or quantum of the claims as at the date of these financial statements.
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1. Accounting policies, judgements and estimates continued
1b.(ii) Critical accounting estimates
The following critical accounting estimates involve a higher degree of judgement or complexity, or are areas where assumptions are
significant to the financial statements. The critical accounting estimates concerned are the major sources of estimation uncertainty that
have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next year.
Aircraft maintenance provisions - £550 million (2020: £597 million) (note 18)
The most critical estimate required for the provision is considered to be the expected costs of the heavy maintenance checks at the time
they are expected to occur. Other estimates also impacting the provision include the future utilisation of the aircraft, the condition of the
aircraft, the lifespan of life-limited parts and the rate used to discount the provision.
easyJet incurs liabilities for maintenance costs in respect of aircraft leased during the term of the lease. These arise from legal and
constructive contractual obligations relating to the condition of the aircraft when it is returned to the lessor. To discharge these
obligations, easyJet will also normally need to carry out one heavy maintenance check on each of the engines and the airframe during
the lease term.
The bases of all estimates are reviewed at least annually, and when information becomes available that is capable of causing a material
change to an estimate, such as renegotiation of end of lease return conditions, increased or decreased aircraft utilisation, or changes in
the cost of heavy maintenance services. Given the much increased uncertainty in forecasting future maintenance requirements, and the
associated judgemental nature of the assumptions applied in determining the maintenance provision, management believe that a
reasonable combination of changes to these estimates could result in a material movement to the carrying value of the provision. A 5%
movement in the estimated cost of final maintenance events would result in a £24 million movement to the provision.
Goodwill and landing rights - £533 million (2020: £533 million) (note 10)
The recoverable amount of goodwill and landing rights has been determined based on value in use calculations for the whole airline route
network cash generating unit. The value in use is determined by discounting future cash flows to their present value. When applying this
method, easyJet relies on a number of key estimates including the ability to meet its strategic plans, future fuel prices, the ability to pass
on cost price increases to the customer, exchange rates, long-term economic growth rates for the principal countries in which it
operates, and its pre-tax weighted average cost of capital. Strategic plans incorporate estimations of the future impact of climate
change on easyJet, this includes the future financial impact within cash flow projections of the increased cost of carbon-offsetting, the
future estimated price of ETS permits and the expected price and quantity required of Sustainable Aviation Fuel usage.
Fuel price and exchange rates continue to be volatile in nature but the assumptions used assume the ability to pass these on to the
customer (see Note 10 for plausible scenarios). In addition, assumptions over the recovery of customer demand levels could have a
significant effect on the impairment assessment performed. Due to the uncertainty created by the Covid-19 pandemic, there remains a
risk that further waves of the pandemic could affect our markets, leading to further travel restrictions being imposed. These uncertainties
could have an effect on future impairment or useful economic life assessments performed.
Defined benefit pension assumptions --- £152 million gross obligation (2020: £153 million gross obligation) (note 19)
The Swiss pension scheme meets the requirements under IAS 19 to be recognised as a defined benefit pension scheme and the net
pension obligation is recognised in the statement of financial position. The measurement of scheme assets and obligations are calculated
by an independent actuary in line with IAS 19. The financial and demographic assumptions used in the calculation are determined by
management following consultation with the independent actuary with consideration of external market movements and inputs. The
calculation is most sensitive to movements in the discount rate applied to the future obligation and a sensitivity analysis is included in
note 19.
Derivative financial instruments --- £203 million net asset (2020: £327 million net liability) (note 24)
easyJet is exposed to financial risks including fluctuations in exchange rates, jet fuel prices and interest rates. Financial risk management
aims to limit these market risks with selected derivative hedging instruments being used for this purpose. The Group holds a number of
derivatives and financial instruments including foreign currency forward contracts, jet fuel forward and option contracts and cross-
currency interest rate swap contracts. easyJet’s policy is not to speculatively trade derivatives but to use the instruments to hedge
anticipated exposure. Given the inherently complex nature of this area, the Finance Committee (a committee of the Board) oversees the
Group’s treasury and funding policies and activities.
Provisions for customer claims --- £21 million (2020: £39 million) (note 18)
easyJet incurs liabilities for amounts payable to customers who make claims in respect of flight delays and cancellations, and refunds of
air passenger duty or similar charges, for which claims could be made up to 6 years after the event. Estimates include passenger claim
rates, the value of claims made and the period of time over which claims will be made. The bases of all estimates are reviewed at least
annually and also when information becomes available that is capable of causing a material change to the estimate. A 5% movement in
the estimated customer claim rate would result in a £1 million movement to the provision.
Hedge discontinuation and ineffectiveness – £26 million charge (2020: £311 million charge) (note 25)
As a result of the reduced flying programme throughout the year, the Group’s near-term exposures for jet fuel and foreign currency were
reduced, causing a proportion of derivatives previously hedge accounted for to be discontinued from a hedge relationship. A net charge
of £26 million has been recognised as a non-headline item in the income statement primarily due to the discontinuation in the year of
hedge accounting for impacted derivatives. In assessing whether future exposures are still expected to occur, easyJet made estimates as
at 30 September 2021 regarding its jet fuel consumption requirements and expected future foreign currency cash flows. These estimates
used assumptions based on the expected recovery of customer demand and subsequent flying schedule as at that date. See note 25 for
details of the split between headline and non-headline for hedge discontinuation.
184 easyJet plc Annual Report and Accounts 2021
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Aircraft carrying values --- £3,559 million (2020: 4,333 million) --- (note 11)
Aircraft asset recoverable amounts have been tested for impairment based on value in use at the airline route network cash generating
unit level as described in the goodwill section above. Strategic plans incorporate estimations of the future impact of climate change on
easyJet, this includes the future financial impact within cash flow projections of the increased cost of carbon-offsetting, the future
estimated price of ETS permits and the expected price and quantity required of Sustainable Aviation Fuel usage. The recoverable
amounts exceed the carrying values as at 30 September 2021.
Aircraft are depreciated over their useful economic life to their residual values in line with the property, plant and equipment accounting
policy. A review has been performed during the current financial year and the useful economic life and residual value amounts for aircraft
and capitalised maintenance have been revised in line with the latest information available. This included the expected useful economic
life estimate for CEO aircraft revised from 23 years to 18 years in line with expected usage and the residual value for aircraft revised
based on reports obtained from independent aircraft valuation experts. The revised estimates led to a net accelerated depreciation of
the fleet on a prospective basis from 1 July 2021. The changes increased the depreciation charge by c.£13 million in the financial year
2021. This increase is expected to annualise at £47 million in financial year 2022. The change in depreciation charge is non-cash.
However, in light of the global pandemic, the longer-term impact on the airline industry is currently uncertain and the market for
aircraft transactions has also slowed. Should future demand fall significantly below current expectations there could be a risk that the
recoverable amount for some aircraft assets falls below their current carrying value or that residual values are subject to significant
deterioration.
Recoverability of deferred tax assets - £425 million (2020: £275 million) (note 6)
The deferred tax asset balances include £425 million (2020: £275 million) arising on full recognition of the UK trading tax losses
accumulated at the statement of financial position date. The Group has concluded that these deferred tax assets will be fully recoverable
against the unwind of taxable temporary differences and future taxable income based on the long term strategic plans of the Group.
Where applicable the financial projections used in assessing future taxable income are consistent with those used elsewhere across the
business for example in the assessment of the carrying value of goodwill. These assessments include the expected impact of climate
change on easyJet and the future financial impact within cash flow projections of the increased cost of carbon-offsetting, the future
estimated price of ETS permits and the expected price and quantity required of Sustainable Aviation Fuel usage.
The tax losses for which a deferred tax asset has been recognised are expected to be utilised within the next eight years, based on
probable forecast future taxable income. Probable forecast future taxable income includes an incremental and increasing risk weighting
to represent higher levels of uncertainty in future periods.
The loss utilisation has been stress tested by assessing probable future taxable income for the next five years, based on the same risk
weightings to those applied above, but assuming no profit growth from the end of a five year forecast period. The resultant reduction in
forecast taxable profit calculated on this basis would extend the tax loss utilisation period by two years.
The tax losses can be carried forward indefinitely and have no expiry date.
1c. New and revised standards and interpretations not applied
In September 2019 the IASB issued the first accounting amendment to IFRS 9 and IFRS 7 related to the upcoming IBOR reform and to
address the impact that the current uncertainty could have when applying specific hedge accounting requirements on applicable hedge
relationships. In particular, the amendment provides temporary relief to allow hedge accounting to continue during the transition period
before IBOR based hedge items or instruments are amended as a result of the reform being completed.
The Group early adopted this amendment in the financial year ending September 2020, applying it retrospectively to accounting
relationships that existed before the start of the current reporting period. The impacts of IBOR reform on the Group is assessed as being
limited, with this amendment only applicable to one hedge relationship as at 30 September 2021.
Specifically the amendment impacts the fair value hedge relationship on one of the Group’s Eurobonds, where a cross-currency interest
rate swap (with a Sterling notional of £379 million, maturity of February 2023 and a fair value of £53 million in an asset position) is used
to swap the fixed interest coupon of the Euro denominated debt into a floating interest rate, reset quarterly using future expected
GBP LIBOR. In assessing hedge effectiveness on a prospective basis for this relationship, the Group has continued to assume that the
GBP-LIBOR related interest cash flows on the swap are not altered by IBOR reform and the hedge continues to be highly effective.
Furthermore, hedge accounting did not need to be discontinued during the period of IBOR-related uncertainty as the Group has taken
the relief available in Phase 1 to separately identify the risk component at the initial hedge designation and not on an ongoing basis.
In August 2020, IASB also issued Phase 2 amendments which are effective from 1 January 2021. This looked to address issues around
the updating of hedge designations and documentation following the adoption of alternative benchmark rates. The Group is not
adopting these amendments currently due to continued uncertainty over IBOR transition. Therefore, no amendments have been made to
the hedged item and/or hedging instruments in the 2021 financial year.
In October 2020 the International Swaps and Derivatives Association (ISDA) released its IBOR fallback protocol to aid the IBOR transition.
In June 2021 the Group signed up to this protocol as part of its approach to the transition.
During the year a LIBOR transition working group was formed to consider wider impacts on the business of changes. Key areas that this
group reviewed included existing supplier contracts, debt financing, leases, inter-company loan agreements and discount rates. No
material impacts were identified as part of this review.
There are no other standards that are issued but not yet effective that would be expected to have a material impact on the Group in the
current or future reporting periods and on foreseeable future transactions.
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FINANCIAL STATEMENTS
N O T E S T O T H E A C C O U N T S ( C O N T I N U E D )
2. Net finance charges
Interest receivable and other financing income
Interest income
Hedge discontinuation (1)
Net exchange gains on monetary assets and liabilities (2)
Interest payable and other financing charges
Hedge discontinuation (1)
Interest payable on bank and other borrowings
Interest payable on lease liabilities
Other interest payable
Net exchange losses on monetary assets and liabilities
Net finance charges
2021
£ million
2020
£ million
1
(74)
(10)
(83)
92
75
42
–
–
209
126
(11)
(106)
–
(117)
411
36
24
15
5
491
374
1. See Note 25 for details of the split between headline and non-headline for hedge discontinuation.
2. Included within net exchange gains on monetary assets and liabilities is a £15 million loss (2020: £13 million loss) relating to the fair value loss on USD foreign
exchange derivatives designated as fair value through profit and loss.
3 Loss before tax
The following have been included in arriving at loss before tax:
Depreciation of property, plant and equipment
Owned assets
Right of use assets
Loss on disposal of intangibles
Loss on disposal of property, plant and equipment
Gain on sale and leaseback
2021
£ million
2020
£ million
234
222
–
30
(65)
256
229
19
11
(38)
The sale of EU ETS assets in the prior year resulted in a remeasurement of the EU ETS liability which reduced 2020 fuel costs by £33
million.
Auditors’ remuneration
During the year easyJet incurred fees payable for the audit of the Group and individual financial statements from easyJet’s auditors
and their associates (including foreign partners) totalling £1.1 million (2020: £0.8 million). In addition, easyJet incurred audit-related
non-audit services fees of £0.2 million (2020: audit-related fees of £0.1 million) from its auditors. This includes the fee of £0.1 million
(2020: £0.1 million) in respect of the half year review performed. During the year other assurance related non-audit services fees of
£1.2 million were also incurred in relation to work associated with the rights issue in September 2021. The rights issue assurance work,
where PwC acted as the Reporting Accountant, was one-off in nature and only commenced following approval from the FRC as the
work resulted in the 70% fee cap being exceeded.
4 Employees
The average monthly number of people employed by easyJet was:
Flight and ground operations
Sales, marketing and administration
Employee costs for easyJet were:
Wages and salaries
Social security costs
Pension costs
Share-based payments
2021
Number
11,480
909
12,389
2021
£ million
472
69
67
15
623
2020
Number
13,581
985
14,566
2020
£ million
690
77
77
18
862
Included in the pension costs is £7 million (2020: £6 million) related to pension schemes treated as a defined benefit scheme under IAS 19.
Included in employee costs for 2021 is a benefit of £61 million from the release of restructuring provisions within non-headline
(2020: £123 million restructuring costs). Refer to note 5 for further details.
The amounts received under government 'Furlough' schemes offset the employee costs in the Income statement. Refer to note 27 for
further details.
186 easyJet plc Annual Report and Accounts 2021
186
easyJet plc Annual Report and Accounts 2021
Key management compensation was:
Short-term employee benefits
Share-based payments
2021
£ million
6
2
8
2020
£ million
6
–
6
The Directors of easyJet plc and the other members of the Airline Management Board are easyJet's key management as they have
collective authority and responsibility for planning, directing and controlling the business.
Emoluments paid or payable to the Directors of easyJet plc were:
Remuneration
Details of Directors' remuneration are disclosed in the Directors' remuneration report on pages 130 to 153.
5. Non-headline items
An analysis of the amounts presented as non-headline is given below:
Sale and leaseback gain
Restructuring (release)/charge
Impairment
Recognised in operating loss
Fair value adjustment and hedge discontinuation
Statement of financial position foreign exchange charge
Total non-headline (credit)/charge before tax
Tax charge/(credit) on non-headline items
Total non-headline (credit)/charge after tax
Sale and leaseback gain
2021
£ million
3
3
2020
£ million
2
2
Year ended
30 September
2021
£ million
(65)
(61)
–
(126)
26
–
(100)
58
(42)
Year ended
30 September
2020
£ million
(38)
123
37
122
311
5
438
(84)
354
During the year, easyJet completed the sale and leaseback of 7 A319 (2020: 17), 24 A320 (2020: 9) and 4 A321 (2020: 7)
and 2 engines (2020: nil). The Income Statement impact of the 35 aircraft and 2 engine sale and leasebacks was a £79 million gain
(2020: £45 million gain) recognised in Other income offset by a £14 million loss (2020: £7 million loss) recognised in Other costs.
The prior year net gain of £38 million has been reclassified on the face of the Income statement to present £45 million of gains within
Other income and £7 million of losses within Other costs. There is no net impact on EBITDAR or the loss before tax.
Restructuring
As a result of the ongoing restructuring programme and continuing negotiations with unions, restructuring provisions have been
remeasured throughout the year. As a result of this, a credit of £61 million (2020: £123 million of costs) has been recognised as non-
headline within Other costs where the initial expense was recognised. As at 30 September 2021 there were unpaid amounts of £18 million
(2020: £101 million) for those consultations which have not been finalised and settled.
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FINANCIAL STATEMENTS
N O T E S T O T H E A C C O U N T S ( C O N T I N U E D )
5. Non-headline items continued
Impairment
In 2020 due to lower forecasted customer demand, the Group reassessed the fleet capacity and utilisation requirements leading to
34 leased aircraft being permanently removed from commercial service. These assets were not utilised again before being returned to
the lessor at the end of their existing lease term and therefore did not generate any further economic benefit. As a result, an impairment
charge of £37 million was recognised in 2020 for these aircraft and was categorised as non-headline in the income statement, along with
an equivalent reduction within right of use assets.
Fair value adjustment and hedge discontinuation
This relates to hedge accounting ineffectiveness for items currently held in fair value and cash flow hedge relationships, and the
cumulative fair value of derivatives at the time of being discontinued from a previous hedge accounting relationship.
In accordance with IFRS 9, hedge effectiveness testing is performed on a regular, periodic basis. For cash flow hedges this includes an
assessment of highly probable future cash exposures with the amount compared to the notional of derivatives held in a hedge
relationship. In the 2021 financial year, due to the reduced commercial flying, easyJet was in an over-hedged position from both a jet fuel
and FX perspective. As the forecast exposures were no longer expected to occur, these previously hedged amounts no longer qualify for
hedge accounting. In the 2021 financial year, cumulative fair value movement of a £25 million loss (2020: £311 million loss) related to
these discontinued derivatives held in Other Comprehensive Income was immediately recorded in the income statement. Subsequent
fair value movement of a £30 million gain on these discontinued derivatives was recognised as a headline item.
Additionally, fair value adjustments of £1 million (2020: £nil) were recorded during the period related to hedge ineffectiveness on hedges
of foreign currency denominated borrowings that continue to be effective hedge relationships. This hedge ineffectiveness arises as the
value of hedged items are adjusted for changes in fair value attributable to the hedged risks, which are not perfectly offset by the fair
value change on the hedging instruments due to factors such as in counterparty credit risk, cash flow timing or amount changes.
Statement of financial position foreign exchange charge
This relates to foreign exchange gains or losses arising from the re-translation of monetary assets and liabilities held in the statement of
financial position, which have been reclassified as headline items in the current year (see Voluntary change in policy section of note 1).
A £9 million gain was recognised as a headline item (2020: £5 million charge recognised as non-headline).
6. Tax credit
Tax on loss on ordinary activities
Current tax
Adjustments in respect of UK tax for prior years
Foreign tax
Total current tax charge
Deferred tax
Temporary differences relating to property, plant and equipment
Other temporary differences
Adjustments in respect of prior years
Remeasurement of opening balances due to change in tax rates
Total deferred tax credit
Total tax credit
Effective tax rate
2021
£ million
2020
£ million
5
4
9
(36)
(189)
7
31
(187)
(178)
(1)
6
5
41
(275)
(1)
36
(199)
(194)
17.2%
15.3%
188 easyJet plc Annual Report and Accounts 2021
188
easyJet plc Annual Report and Accounts 2021
Reconciliation of the total tax credit
The tax for the year is lower than (2020: lower than) the standard rate of corporation tax in the UK as set out below:
Loss before tax
Tax credit at 19.0% (2020: 19.0%)
Expenses not deductible for tax purposes
Share-based payments
Adjustments in respect of prior years - current tax
Adjustments in respect of prior years - deferred tax
Difference in applicable rates for current and deferred tax
Attributable to rates other than standard UK rate
Change in substantively enacted tax rate
Movement in provisions
IFRS 16 restricted gain
Total tax credit
2021
£ million
(1,036)
(197)
2
2
5
7
(54)
2
31
(1)
25
(178)
2020
£ million
(1,273)
(242)
1
(1)
(1)
(1)
–
1
36
(1)
14
(194)
Current tax payable at 30 September 2021 amounted to £2 million (2020: £7 million receivable). This is related to tax payable in other
European jurisdictions.
During the year ended 30 September 2021, net cash tax received amounted to £1 million (2020: £13 million).
The Finance Act 2016 included legislation to reduce the main rate of UK corporation tax from 20% to 19% from 1 April 2017 and to 17%
from 1 April 2020. The rate reduction to 17% was subsequently reversed by the Finance Act 2020, such that the main rate of UK
corporation tax from 1 April 2021 remains at 19%. The Finance Act 2021 confirmed an increase of UK corporation tax rate from 19% to
25% with effect from 1 April 2023 and this was substantively enacted by the statement of financial position date and therefore included
in these financial statements. Temporary differences have been remeasured using the enacted tax rates that are expected to apply
when the liability is settled or the asset realised.
Tax on items recognised directly in other comprehensive income/(loss) or shareholders' equity:
Charge/(credit) to other comprehensive income/(loss)
Deferred tax on change in fair value of cash flow hedges
Deferred tax on post-employment benefit
Deferred tax
The net deferred tax (asset)/liability in the statement of financial position is as follows:
2021
£ million
2020
£ million
(93)
(4)
56
–
At 1 October 2020
Charged/(credited) to income
statement
Charged to other comprehensive loss
At 30 September 2021
Accelerated
capital
allowances
£ million
386
Short-term
timing
differences
£ million
(7)
Fair value
(gains)/ losses
£ million
(43)
Share-based
payments
£ million
(2)
Post-
employment
benefit
obligation
£ million
(8)
Trading loss
£ million
(275)
Total
£ million
51
(13)
–
373
(19)
–
(26)
1
93
51
(1)
–
(3)
(5)
4
(9)
(150)
–
(425)
(187)
97
(39)
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and it is the intention to settle these on a net basis.
At 1 October 2019
Charged/(credited) to income
statement
Charged/(credited) to other
comprehensive income
At 30 September 2020
Accelerated
capital
allowances
£ million
308
Short-term
timing
differences
£ million
(1)
Fair value
(gains)/losses
£ million
14
Share-based
payments
£ million
(8)
Post-
employment
benefit
obligation
£ million
(8)
Trading loss
£ million
–
Total
£ million
305
78
–
386
(6)
–
(7)
–
(57)
(43)
5
1
(2)
–
–
(8)
(275)
–
(275)
(198)
(56)
51
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FINANCIAL STATEMENTS
N O T E S T O T H E A C C O U N T S ( C O N T I N U E D )
7. Loss per share
Basic loss per share has been calculated by dividing the total loss for the year by the weighted average number of shares in issue during
the year after adjusting for shares held in employee benefit trusts.
On 9 September 2021 the Company invited its shareholders to subscribe to a rights issue of 301,260,394 ordinary shares at an issue price
of 410 pence per share on the basis of 31 shares for every 47 fully paid ordinary shares held, with such shares issued on 28 September
2021. As a result of this rights issue in September 2021, the comparative loss per share has been restated having applied the relevant
bonus factor to the calculator of the weighted average number of shares.
The rights issue resulted in £1,235 million of gross proceeds. Shares totalling 280.2 million were taken up by existing shareholders (93%)
with the remaining rump of 21.0 million shares being underwritten. As at 30 September 2021, there were £91 million of proceeds
outstanding, which have been subsequently received.
To calculate diluted loss per share, the weighted average number of ordinary shares in issue has been adjusted to assume conversion of
all dilutive potential shares. Share options granted to employees where the exercise price is less than the average market price of the
Company’s ordinary shares during the year are considered to be antidilutive potential shares. Where share options are exercisable based
on performance criteria and those performance criteria have been met during the year, these options are included in the calculation of
dilutive potential shares. The calculation of diluted earnings per share does not assume conversion, exercise, or other issue of potential
ordinary shares that would have an antidilutive effect on earnings per share.
Headline basic and diluted loss per share are also presented, based on headline loss for the year. For details on share capital and the
rights issue in the year, please refer to note 20.
Loss per share is based on:
Headline loss for the year
Total loss for the year
Weighted average number of ordinary shares used to calculate basic loss per share
Weighted average number of ordinary shares used to calculate diluted loss per share
Loss per share
Basic
Diluted
Headline loss per share
Basic
Diluted
2021
£ million
(900)
(858)
2021
million
539
539
2021
million
(159.0)
(159.0)
2021
million
pence
(166.9)
(166.9)
2020
£ million
(725)
(1,079)
2020
Restated
million
484
484
2020
Restated
million
(222.9)
(222.9)
2020
Restated
million
pence
(149.7)
(149.7)
190 easyJet plc Annual Report and Accounts 2021
190 easyJet plc Annual Report and Accounts 2021
8. Segmental and geographical revenue reporting
Segmental Analysis:
Revenue
Operating costs excl fuel
Fuel
Ownership costs
Headline loss before tax
Non-headline items
Total loss before tax
Revenue
Operating costs excl fuel
Fuel
Ownership costs
Headline loss before tax
Non-headline items
Total loss before tax
Year ended 30 September 2021
Holidays
£ million
41
(50)
–
(3)
(12)
–
(12)
Intergroup
Transactions
£ million
(7)
7
–
–
–
–
–
Group
£ million
1,458
(1,638)
(371)
(585)
(1,136)
100
(1,036)
Year ended 30 September 2020
Holidays
£ million
18
(45)
–
–
(27)
3
(24)
Intergroup
Transactions
£ million
(4)
4
–
–
–
–
–
Group
£ million
3,009
(2,561)
(721)
(562)
(835)
(438)
(1,273)
Airline
£ million
1,424
(1,595)
(371)
(582)
(1,124)
100
(1,024)
Airline
£ million
2,995
(2,520)
(721)
(562)
(808)
(441)
(1,249)
The intergroup transaction column represents intercompany revenues from Airline to holidays which are recorded at arm’s length and are
eliminated on consolidation. Individual cost lines are not reported separately as these are not key metrics reported to the Chief Operating
Decision Maker (CODM). Assets and liabilities are not allocated to individual segments and are not separately reported to or reviewed by
the CODM, and therefore these have not been disclosed. Interest income and expenditure are not allocated to segments as this activity
is driven by the central treasury function which manages the cash position of the Group.
Geographical revenue:
United Kingdom
Southern Europe
Northern Europe
Other
2021
£ million
413
619
411
15
1,458
2020
£ million
1,154
1,065
740
50
3,009
Geographical revenue is allocated according to the location of the first departure airport on each booking.
Southern Europe comprises countries lying wholly or mainly south of the border between Italy and Switzerland, plus France.
easyJet holidays revenue is generated wholly from the United Kingdom.
easyJet’s non-current assets comprise its fleet of 183 (2020: 215) owned and 125 (2020: 127) leased aircraft, giving a total fleet of 308 at
30 September 2021 (2020: 342). In addition to this easyJet was storing 12 aircraft under power by the hour agreements (2020: nil).
27 aircraft (2020: 29) are registered in Switzerland, 119 (2020: 125) are registered in Austria and the remaining 174 (2020: 188) are
registered in the United Kingdom.
9. Dividends
No dividend was paid in the year ending 30 September 2021. An ordinary dividend of 43.9 pence per share, or £174 million, in respect of
the year ended 30 September 2019 was paid in the year ended 30 September 2020.
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FINANCIAL STATEMENTS
N O T E S T O T H E A C C O U N T S ( C O N T I N U E D )
10. Goodwill and other intangible assets
Cost
At 1 October 2020
Additions
Disposals
At 30 September 2021
Amortisation
At 1 October 2020
Charge for the year
Disposals
At 30 September 2021
Net book value
At 30 September 2021
At 1 October 2020
Cost
At 1 October 2019
Additions
Transfer from property, plant and equipment
Disposals
At 30 September 2020
Amortisation
At 1 October 2019
Charge for the year
Disposals
At 30 September 2020
Net book value
At 30 September 2020
At 1 October 2019
Other intangible assets
Landing
rights
£ million
Computer
software
£ million
Total
£ million
Goodwill
£ million
365
–
–
365
–
–
–
–
365
365
168
–
–
168
–
–
–
–
168
168
96
9
(5)
100
32
24
(5)
51
49
64
264
9
(5)
268
32
24
(5)
51
217
232
Other intangible assets
Landing
rights
£ million
Computer
software
£ million
Total
£ million
Goodwill
£ million
365
–
–
–
365
–
–
–
–
365
365
132
36
–
–
168
–
–
–
–
168
132
100
–
37
(41)
96
36
18
(22)
32
64
64
232
36
37
(41)
264
36
18
(22)
32
232
196
Included within computer software, were are internally generated intangibles of £8 million (2020: £7 million).
192 easyJet plc Annual Report and Accounts 2021
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The recoverable amount of goodwill and other assets with indefinite expected useful lives has been determined based on value in use
calculations for the airline route network cash generating unit, which holds these assets.
Pre-tax cash flow projections have been derived from the strategic plan presented to the Board for the period up to 2026, using the
following key assumptions:
Pre-tax discount rate (derived from weighted average cost of capital)
Fuel price (US dollars per metric tonne)
Long-term economic growth rate
Exchange rates:
US dollar
Euro
Swiss franc
2021
11.3%
696
2.0%
1.35
1.16
1.26
2020
8.5%
450
2.0%
1.29
1.10
1.19
The discount rate has been calculated based on the capital asset pricing model using external inputs where relevant and the current debt
structure of the Group. The change in discount rate year on year reflects the change in gearing of the group and the change in tax rate.
Both fuel price and exchange rates are volatile in nature. Exchange rates and fuel price are based on spot rates as at 30 September
2021. The increase year on year (see in the table above) reflects the change in underlying fuel prices, however in preparing its
assessment management have assumed that fuel uplifts from a 2019 baseline can be recovered, with any increase in costs being passed
on to customers. Operating margins are sensitive to significant changes in the timing and ability of increases to be passed through to the
customer.
Cash flow projections beyond the forecast period have been extrapolated using an estimated average of long-term economic growth
rates for the principal countries in which easyJet operates. The future impact of climate change on the business has been incorporated
into strategic plans, including the estimated financial impact within the base case cash flow projections of the increased cost of carbon-
offsetting, the future estimated price of ETS permits and the expected price and quantity required of Sustainable Aviation Fuel usage.
The headroom during the year has decreased primarily due to the increase in the pre-tax discount rate.
Stress testing has been performed on key inputs to the value in use calculation, including the assumptions listed above and the strategic
plan used as the base for the calculation. The impairment model is sensitive to a sustained significant adverse movement in foreign
currency exchange rates and forecast operating profits to the extent that no other compensating action is taken. It has been assumed
that any significant future fuel price increase would be recovered through revenue pass through. Individual scenarios that have been
deemed reasonably probable do not give rise to an impairment. These scenarios include +/-5% on Euro and USD rates, +100 bps increase
in weighted average cost of capital (WACC) and a reduced long term growth rate of 1%.
Current intangible assets
Carbon offsetting VER
EU and UK ETS permits
30 September
2021
£ million
15
125
140
30 September
2020
£ million
6
6
12
www.easyJet.com
www.easyJet.com
193
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FINANCIAL STATEMENTS
N O T E S T O T H E A C C O U N T S ( C O N T I N U E D )
11. Property, plant and equipment
Cost
At 1 October 2020
Additions
Transfers
Aircraft sold and leased back
Disposals
At 30 September 2021
Accumulated depreciation and impairment
At 1 October 2020
Charge for the year
Transfers
Aircraft sold and leased back
Disposals
At 30 September 2021
Net book value
At 30 September 2021
At 1 October 2020
Cost
At 1 October 2019
Additions
Transfers
Aircraft sold and leased back
Disposals
At 30 September 2020
Accumulated depreciation and impairment
At 1 October 2019
Charge for the year
Transfers
Impairment
Aircraft sold and leased back
Disposals
At 30 September 2020
Net book value
At 30 September 2020
At 1 October 2019
Owned assets
Right of use assets held under
leasing arrangements
Aircraft and
spares
£ million
Land and
Buildings
£ million
Other
£ million
Aircraft and
spares
£ million
Other
£ million
Total
£ million
5,520
112
64
(795)
(99)
4,802
1,187
227
23
(120)
(74)
1,243
3,559
4,333
44
–
–
–
–
44
–
–
–
–
–
–
44
44
44
28
–
(15)
(2)
55
12
7
–
–
–
19
36
32
1,692
148
(64)
559
–
2,335
1,062
216
(23)
–
–
1,255
1,080
630
37
8
–
–
–
45
23
6
–
–
–
29
16
14
7,337
296
–
(251)
(101)
7,281
2,284
456
–
(120)
(74)
2,546
4,735
5,053
Owned assets
Right of use assets held under
leasing arrangements
Aircraft and
spares
£ million
Land and
Buildings
£ million
Other
£ million
Aircraft and
spares
£ million
Other
£ million
Total
£ million
5,720
559
107
(851)
(15)
5,520
1,147
251
15
–
(220)
(6)
1,187
4,333
4,573
34
–
10
–
–
44
–
–
–
–
–
–
–
44
34
76
100
(113)
–
(19)
44
18
5
–
–
–
(11)
12
32
58
1,298
64
(41)
371
–
1,692
818
222
(15)
37
–
–
1,062
630
480
34
3
–
–
–
37
16
7
–
–
–
–
23
14
18
7,162
726
(37)
(480)
(34)
7,337
1,999
485
–
37
(220)
(17)
2,284
5,053
5,163
The net book value of aircraft includes £132 million (2020: £281 million) relating to advance and option payments for future deliveries.
This amount is not depreciated.
As at 30 September 2021, easyJet was contractually committed to the acquisition of 101 (2020: 101) Airbus 320 family aircraft, with a
total estimated list price* of US$ 12.31 billion (2020: US$ 12.16 billion) before escalations and discounts for delivery in financial years 2022
(8 aircraft), 2023 (7 aircraft) and 2024 (18 aircraft).
The ‘Other’ categories comprise of leasehold improvements, computer hardware, leasehold property and fixtures, fittings and equipment
and work in progress in respect of tangible and intangible projects.
Assets of £934 million are pledged as security for the drawn portion of the UKEF backed facility (2020: £1,066 million pledged as security
for the Revolving Credit Facility and term loans).
* Airbus no longer publishes list prices. The estimated list price is based on the last available list price published in January 2018 and escalated by Airbus’ standard
escalation from January 2018 to January 2021 of 7.3% (or 2.38% CAGR).
194 easyJet plc Annual Report and Accounts 2021
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12. Other non-current assets
Lessor maintenance contributions
Deferred consideration and deposits held by aircraft lessors
2021
£ million
75
60
135
2020
£ million
92
41
133
Lessor maintenance contribution assets arise to compensate easyJet for the delivery of a mid-life aircraft, where a lessor has agreed to
make a contribution to easyJet’s maintenance costs to reflect the cycles already flown by the aircraft at the point it is delivered to
easyJet. Depending on the contract terms, payment will be made either at the maintenance event date or at the lease return date.
This has not been considered for impairment as the leased aircraft held by easyJet exceeds the value of the contribution due.
13. Trade and other receivables
Trade receivables
Less provision for loss allowance
Prepayments
Accrued income
Recoverable supplemental rent (pledged as collateral)
Other receivables
2021
£ million
45
(1)
44
2020
£ million
22
(4)
18
93
5
-
149
291
84
1
10
80
193
Within the provision for loss allowance, £4 million (2020: £4 million) has been charged to the income statement, with £1 million
(2020: £1 million) being utilised in the 2021 financial year.
Within other receivables, an amount of £91 million is due from the rights issue funding (2020: £nil).
Information about the impairment of trade receivables and the Group’s exposure to credit risk can be found in note 25..
14. Cash and money market deposits
Cash and cash equivalents (original maturity less than three months)
Money market deposits (original maturity more than three months)
Current restricted cash
Non-current restricted cash
Carrying value is not significantly different from fair value.
Restricted cash comprises:
Amount held in escrow accounts for legal cases
ATOL Licence non-pooled account
Cash held as bank guarantee collateral
2021
£ million
3,536
–
13
1
3,550
2020
£ million
2,284
32
14
5
2,335
2021
£ million
4
9
1
14
2020
£ million
5
14
–
19
www.easyJet.com
www.easyJet.com
195
195
FINANCIAL STATEMENTS
N O T E S T O T H E A C C O U N T S ( C O N T I N U E D )
15. Trade and other payables
Trade payables
Accruals
Taxes and social security
Other payables
Combined
Opening contract liabilities
Revenue deferred during the year
Revenue recognised during the year
Additional contract liability during the year
Reduction in contract liability during the year
Foreign exchange impact during the year
Closing contract liabilities
2021
£ million
217
556
25
330
1,128
Unearned
£ million
1,094
2,430
(2,910)
–
–
–
614
2020
£ million
323
379
33
507
1,242
2020
Other
£ million
8
–
–
1,271
(898)
16
397
Unearned
£ million
614
1,639
(1,409)
–
–
–
844
2021
Other
£ million
397
–
–
361
(475)
(6)
277
Other contract liabilities consist of amounts transferred from unearned revenue to other payables due to the cancellation of flights. This
liability includes customer vouchers outstanding and amounts where customers have not yet requested a refund, voucher or flight transfer.
16. Borrowings
At 30 September 2021
Eurobonds
Commercial Paper (Covid Corporate Financing Facility)
Commercial Paper (UK Export Finance)
At 30 September 2020
Eurobonds
Drawn down amounts on Revolving Credit Facility
Commercial Paper (Covid Corporate Financing Facility)
Bank loans
Current
£ million
Non-current
£ million
Total
£ million
–
300
–
300
2,303
–
764
3,067
2,303
300
764
3,367
Current
£ million
Non-current
£ million
Total
£ million
–
387
600
–
987
1,356
–
–
388
1,744
1,356
387
600
388
2,731
Amounts above are shown net of issue costs or discounted amounts which are amortised at the effective interest rate over the life of
the debt instruments.
On 7 January 2016, the UK Listing Authority approved a prospectus relating to the establishment of a £3,000 million Euro Medium Term
Note Programme of easyJet plc. Under this programme, on 9 February 2016 easyJet plc issued notes amounting to €500 million for a
seven-year term with a fixed annual coupon rate of 1.750%. On 18 October 2016 easyJet plc issued additional notes amounting to
€500 million for a seven-year term with a fixed annual coupon rate of 1.125%. On 11 June 2019 easyJet plc issued additional notes
amounting to €500 million for a six-year term with a fixed annual coupon rate of 0.875%.
The three €500 million Eurobonds issued on 9 February 2016, 18 October 2016 and 11 June 2019 are discussed within note 25.
On 10 February 2015 easyJet signed a $500 million Revolving Credit Facility which was due to mature in February 2022. On 9 April 2020
easyJet fully drew down this $500 million Revolving Credit Facility, secured against aircraft assets. This was repaid in January 2021.
On 6 April 2020 easyJet issued a £600 million Commercial Paper through the Covid Corporate Financing Facility (CCFF). This is an
unsecured, short-term paper issued at a discount, of which £300 million was repaid in March 2021 and the remaining £300 million was
repaid in November 2021. On 16 April 2020 easyJet secured two term loans with separate counterparty banks for £200 million and
$245 million respectively. Both loans were secured against aircraft assets and were due to mature in February 2022, but have since been
repaid as set out below.
In January 2021 easyJet entered into a new five-year term loan facility of $1.87 billion underwritten by a syndicate of banks and supported
by a partial guarantee from UK Export Finance under their Export Development Guarantee scheme. easyJet drew down $1.05 billion from
the UKEF backed facility in January, utilising these funds to repay and cancel the fully drawn $500 million Revolving Credit Facility and
repaying term loans of $245 million and £200 million.
easyJet issued a €1.2 billion seven year bond with an annual coupon of 1.875% in March 2021, under its Euro Medium Term Note (EMTN)
Programme. The bond was issued out of easyJet FinCo B.V registered in the Netherlands and was guaranteed by easyJet Airline
Company Limited (EACL) and easyJet plc.
On 9 September 2021 easyJet signed a $400 million Revolving Credit Facility with a minimum four-year term, which was undrawn as at
30 September 2021.
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17. Leases
easyJet holds aircraft under leasing arrangements that are recognised as right of use assets and lease liabilities, with remaining lease
terms ranging up to 10 years. easyJet is contractually obliged to carry out maintenance on these aircraft, and the cost of this is provided
based on the number of flying hours and cycles operated. Further details are given in note 1.
Information in respect of right of use assets, including the carrying amount, additions and depreciation, are set out in note 11 to these
financial statements. Information in respect of the carrying value and interest arising on lease liabilities is set out in note 24 and note 2
respectively. A maturity analysis of lease liabilities is set out below.
easyJet also enters into short-term leases and low-value leases which are not recognised as right of use assets and lease liabilities.
The expense recognised in the period in relation to these leases is disclosed below.
Amounts recognised in the statement of cash flows
Capital payments
Interest payments
Lease liabilities
Maturity analysis - contractual undiscounted cash flows
Less than one year
One to five years
More than five years
Lease liabilities included in the statement of financial position
Current
Non-current
Total
Amounts recognised in income statement
Interest on lease liabilities
Expenses relating to low-value leases
Expenses relating to short-term wet leases
Year ending
30 September
2021
£ million
(261)
(41)
Year ending
30 September
2020
£ million
(230)
(20)
30 September
2021
£ million
30 September
2020
£ million
(251)
(730)
(316)
(1,297)
(238)
(382)
(160)
(780)
30 September
2021
£ million
(189)
(890)
(1,079)
30 September
2020
£ million
(224)
(486)
(710)
Year ending
30 September
2021
£ million
42
5
(14)
33
Year ending
30 September
2020
£ million
24
6
17
47
The £14 million credit recognised as Expenses relating to short term wet leases relates to the release of an accrual recognised in financial
year 2020 which was no longer required.
18. Provisions for liabilities and charges
At 1 October 2020
Exchange adjustments
Credited to income statement
Charged income statement
Related to aircraft sold and leased back
Unwinding of discount
Utilised
At 30 September 2021
Maintenance
provisions
£ million
597
(23)
(20)
71
132
(20)
(187)
Provisions for
customer
claims
£ million
39
-
(14)
4
-
-
(8)
Restructuring
£ million
101
(3)
(65)
–
–
–
(15)
Other
provisions
£ million
2
–
–
12
–
–
–
Total
provisions
£ million
739
(26)
(99)
87
132
(20)
(210)
550
21
18
14
603
www.easyJet.com
www.easyJet.com
197
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FINANCIAL STATEMENTS
N O T E S T O T H E A C C O U N T S ( C O N T I N U E D )
18. Provisions for liabilities and charges continued
Maintenance provisions comprise of maintenance costs arisen from legal and constructive obligations relating to the condition of the
aircraft when returned to the lessor. Provisions for customer claims comprise amounts payable to customers who make claims in respect
of flight delays and cancellations, and refunds of air passenger duty or similar charges. Restructuring and other provisions include
amounts in respect of potential liabilities for employee-related matters and litigation which arose in the normal course of business.
Current
Non-current
2021
£ million
183
420
603
2020
£ million
407
332
739
The split of the current/non-current maintenance provision is based on the current expected maintenance event timings. If actual aircraft
usage varies from expectation the timing of the utilisation of the maintenance provision could result in a material change in the
classification between current and non-current.
Maintenance provisions are expected to be utilised within 12 years. Provisions for customer claims, restructuring, and other provisions
could be fully utilised within one year from 30 September 2021 and therefore are classified as current.
19. Pensions
Due to the minimum guarantees in place under Swiss law, the Swiss pension plan meets IAS 19 requirements to be treated as a defined
benefit plan under IAS 19 despite the scheme having many attributes akin to a defined contribution scheme. The Swiss Federal Council
requires that a guaranteed minimum interest rate must be achieved (currently 1%), plus a guaranteed minimum conversion rate to be
applied to accumulated pension on retirement (currently 6.8%). These guarantees mean that the scheme is accounted for as a defined
benefit scheme under IAS 19. The scheme remains open to new employees.
The easyJet portion of the current service costs and the net interest cost are charged to the consolidated income statement in the year
in which they relate. Net interest is determined by multiplying the net defined benefit liability by the discount rate at the start of the
annual reporting period, adjusted for any contributions and benefit payments in the period. Actuarial gains and losses are recognised in
the consolidated statement of comprehensive income and the consolidated balance reflects the net surplus or deficit at the statement
of financial position date.
The defined benefit obligation is calculated using the projected unit credit method. This reflects service rendered by employees to the
dates of valuation and incorporates actuarial assumptions including discount rates used in determining the present value of benefits,
projected rates of remuneration growth and mortality rates. The present value of the defined benefit obligation is determined by
discounting the estimated future cash outflows using yields of high-quality corporate bonds. Management base the discount rate on the
bond yield on the Swiss bond market over 15 to 20 years, reflecting the currency in which the benefits will be paid, and maturity terms
approximating to the terms of the related pension obligation.
The key financial assumptions used to calculate the Swiss scheme liabilities under IAS 19 as at 30 September were:
Discount rate
Salary increase
Demographic assumptions
Demographic assumptions
2021
0.35%
1.00%
BVG 2020 GT
2020
0.15%
1.00%
BVG 2015 GT
The demographic assumptions including mortality assumptions used for the liability calculation are based on the most recent BVG 2020
tables (2020: BVG 2015 tables). These tables are based on the experience during the period 2015 to 2019 on 15 of the largest
autonomous Swiss pension plans and are considered to be the best estimate available to management.
Sensitivities
The scheme asset values are sensitive to market conditions. The scheme liabilities are sensitive to actuarial assumptions used to
determine the scheme obligations. Significant changes in these assumptions could potentially have a material impact in the consolidated
statement of financial position. The main assumptions are the discount rate, the rate of salary increase and the life expectancy rate. The
following table provides an estimate of the potential impact on the pension scheme of changing these assumptions::
Increase / (decrease) in
defined benefit obligation
2020
(7.3%)
8.5%
1.1%
(1.0%)
0.6%
(0.7%)
2021
(6.6%)
+7.6%
+1.0%
(0.9%)
0.5%
(0.6%)
+0.5%
-0.5%
+0.5%
-0.5%
+ 1 year
- 1 year
Discount rate
Salary increase
Life expectancy
198 easyJet plc Annual Report and Accounts 2021
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easyJet has an affiliation contract with Swiss Life Collective BVG Foundation. The assets of all affiliated companies are pooled which
diversifies the associated risk and the scheme assets represent the share in this Foundation. The Collective controls the asset
management, is exposed to the risk and guarantees the savings capitals under the contract in place. The Board of Trustees with the
elected employees’ and employers’ representatives decide the investment strategy. The current agreement is fully insured by Swiss Life,
which means that all underfunding, investment and longevity risks are transferred from easyJet to Swiss Life over the term of the policy
i.e. over the term of the policy when members retire, all payments are the liability of the pension scheme.
The amounts recognised in the consolidated income statement are as follows:
Current service costs defined benefit
Interest cost on net defined benefit obligation
Interest income on defined benefit asset
Past service costs
Plan curtailment gain*
Net defined benefit cost recognised in the income statement
* The curtailment was recognised as a result of restructuring and was presented as a non-headline item in the income statement.
Amounts recognised in other comprehensive income/(loss):
Actuarial gain
Return on plan assets
Recognised in the statement of other comprehensive income
Movement in net deficit in the year:
Net deficit of the plan at 1 October
Net defined benefit cost recognised in the income statement
Net defined benefit gain recognised in other comprehensive income/(loss)
Company contributions
Foreign exchange
Statement of financial position net deficit as at 30 September
2021
£ million
8
–
–
(1)
–
7
2021
£ million
(3)
(2)
(5)
2021
£ million
45
7
(5)
(7)
(3)
37
2020
£ million
9
1
(1)
–
(3)
6
2020
£ million
(2)
(1)
(3)
2020
£ million
47
6
(3)
(7)
2
45
The prepayment represents cash paid over to Swiss Life in advance and not yet utilised in the pension scheme; this amount is consistent
year on year.
Expected employer cash contribution from the Company in the 2022 financial year is expected to be CHF 8 million (2020: CHF 8 million).
Changes in the present value of the defined benefit obligation are as follows:
Present value of obligation at 1 October
Current service cost
Member contributions
Interest costs on defined benefit obligation
Contributions paid by plan participants
Benefit payments from scheme assets
Past service cost
Plan curtailment
Plan settlement
Actuarial gain arising from financial adjustments
Actuarial gain arising from experience adjustments
Foreign exchange
Present value of obligation at 30 September
2021
£ million
153
8
4
–
4
(4)
(1)
–
–
–
(3)
(9)
152
2020
£ million
147
9
4
1
2
(5)
–
(3)
(5)
(2)
–
5
153
www.easyJet.com
www.easyJet.com
199
199
FINANCIAL STATEMENTS
N O T E S T O T H E A C C O U N T S ( C O N T I N U E D )
19. Pensions continued
Changes in the fair value of the scheme assets are as follows:
Fair value of the scheme asset as at 1 October
Interest income on the defined benefit plan assets
Contributions paid by Company
Contributions paid by employees
Contributions paid by plan participants
Benefits paid from plan assets
Return on plan assets
Plan settlement
Foreign exchange
Fair value of the pension assets as at 30 September
Number of active participants
Average age of active insured members in years
Average time remaining before active employees reach final age in years
Average active life expectancy in years
Average years of service in years
2021
£ million
108
–
7
4
4
(4)
2
–
(6)
115
2021
£ million
987
40
9
53
9
2020
£ million
100
1
7
4
2
(5)
1
(5)
3
108
2020
£ million
1,043
39
10
54
8
The weighted average duration of the defined benefit obligation of the Swiss pension scheme is 15 years (2020: 16 years).
The assets held do not have a quoted market price as are within the affiliation contract with Swiss Life Collective BVG Foundation.
Maturity profile of defined benefit obligation
Expected benefit payments during fiscal year ending 30 September:
1 year
2 years
3 years
4 years
5 years
6 up to 10 years
20. Share capital
Authorised
At 30 September
Ordinary shares of 27 2/7 pence each *
Allotted, called up and fully paid
At 30 September
2021
£ million
8
11
11
11
13
53
2020
£ million
7
8
9
7
9
38
2021
million
Number
2020
£ million
Nominal value
2020
£ million
2021
million
–
758
458
457
–
207
125
125
* At the AGM held on 23 December 2020, the shareholders of the Company approved the amendments to the Articles of Association which included removal of
Authorised Share Capital to bring the share capital authorities in line with the market practice and to provide flexibility to allot more shares.
200 easyJet plc Annual Report and Accounts 2021
200 easyJet plc Annual Report and Accounts 2021
On 9 September 2021 the Company invited its shareholders to subscribe to a rights issue of 301,260,394 ordinary shares at an
issue price of 410 pence per share on the basis of 31 shares for every 47 fully paid ordinary shares held, with such shares issued on
28 September 2021.
The rights issue resulted in £1,235 million of gross proceeds. Shares totalling 280.2 million were taken up by existing shareholders (93%)
with the remaining rump of 21.0m shares being underwritten. As at 30 September 2021, there were £91 million of proceeds outstanding,
which have been subsequently received.
In June 2020, easyJet successfully raised net proceeds of £409 million through an equity placing of new shares.
easyJet’s employee benefit trusts hold the following shares. The cost of these has been deducted from retained earnings:
Number of shares (million)
Cost (£ million)
Market value at year end (£ million)
2021
2
18
11
2020
2
27
11
21. Share incentive schemes
easyJet operates the following share incentive schemes, all of which are equity settled. The change in the number of awards outstanding
and weighted average exercise prices during the year, and the number exercisable at each year end were as follows:
Grant date
Long Term Incentive Plan
19 December 2016
19 December 2017
19 December 2018
19 December 2019
29 December 2020
Restricted Stock Unit
29 December 2020 - 2 year
29 December 2020 - 3 year
Restricted Share Plan
19 December 2016
Save As You Earn scheme
1 July 2017
1 July 2018
1 July 2019
1 August 2020
1 August 2021
Share Incentive Plans
Long Term Incentive Plan
1 October
2020
million
Granted
million
Rights issue
million
Forfeited
million
Exercised
million
30 September
2021
million
0.1
0.5
1.1
0.8
–
–
–
0.1
0.7
0.2
2.2
4.9
–
4.8
15.4
–
–
–
–
0.5
0.3
0.8
–
–
–
–
–
2.9
–
4.5
–
–
0.2
0.1
0.1
–
0.1
–
–
–
0.3
0.8
0.5
0.6
2.7
(0.1)
(0.5)
(0.3)
(0.3)
–
–
–
–
(0.7)
(0.1)
(0.6)
(0.4)
–
(0.4)
(3.4)
–
–
(0.1)
–
–
–
–
–
–
–
–
–
–
(0.6)
(0.7)
–
–
0.9
0.6
0.6
0.3
0.9
0.1
–
0.1
1.9
5.3
3.4
4.4
18.5
The plan is open, by invitation, to Executive Directors and senior management, and provides for annual awards of Performance Shares
worth up to 250% of salary each year. The vesting of these shares is dependent on return on capital employed (ROCE), earnings per
share (EPS) and/or total shareholder return (TSR) targets compared to FTSE-ranked companies at the start of the performance period.
All awards have a three-year vesting period. 2021 awards are assessed on performance conditions measured over the three financial
years ended 30 September 2023.
Restricted Stock Unit
The plan is given to Executive Directors, and both senior and middle management, which provides for annual awards of Performance
Shares worth up to 75% of salary each year. All awards have a two or three year vesting period of which the vesting conditions are
continued employment.
Save As You Earn scheme
The scheme is open to all employees on the UK payroll. Participants may elect to save up to £500 per month under a three-year savings
contract. An option is granted by the Company to buy shares at a discount of 20% from market price at the time of the grant. At the
end of the savings period, the option becomes exercisable for a period of six months. Employees who are not paid through the UK
payroll may participate in the scheme under similar terms and conditions, albeit without the same tax benefits.
www.easyJet.com
201
www.easyJet.com 201
FINANCIAL STATEMENTS
N O T E S T O T H E A C C O U N T S ( C O N T I N U E D )
21. Share incentive schemes continued
Share Incentive Plan
The plan is open to all employees on the UK payroll. Participants may invest up to £1,800 of their pre-tax salary each year to purchase
Partnership Shares in easyJet. For each Partnership Share acquired, easyJet purchases a matching share up to a maximum value of
£1,500 per annum. Employees must remain with easyJet for three years from the date of purchase of each Partnership Share in order to
qualify for the Matching Share, and for five years for the shares to be transferred to them tax free. The employee is entitled to dividends
on shares purchased, and to vote at shareholder meetings. With effect from 1 April 2020, easyJet ceased contributing a Matching Share
to the scheme as a result of the cash constraints on the business.
Subject to Company performance, easyJet also issues free shares to UK employees under an approved share incentive plan of up to
£3,000 per annum in value. There is a similar unapproved free shares scheme for international employees.
The fair value of grants under the Save As You Earn scheme are calculated by applying the Binomial Lattice option pricing model. The
fair value of grants under the TSR based Long Term Incentive Plan is estimated under the Stochastic model (also known as the Monte
Carlo model). The fair value of grants under all other schemes is the share price on the date of grant. The following assumptions are
used:
easyJet undertook a Rights Issue in the year which had a dilutive effect on the share price. To compensate for the dilution in value, the
number of options in each scheme was increased. At the date of modification, the Rights Issue was non beneficial to individuals as the
option number increased by the same factor the share price decreased and therefore there are no incremental changes to the fair
values.
Exercise
Price
£
Expected
volatility
%
Option
Life
years
Risk-free
interest rate
%
Grant date
Long Term Incentive Plan
19 December 2016 - ROCE
19 December 2016 - TSR
19 December 2017 - ROCE
19 December 2017 - EPS
19 December 2017 - TSR
19 December 2018 - EPS
19 December 2018 - TSR
19 December 2019 - EPS
19 December 2019 - TSR
29 December 2020 - TSR
Restricted Stock Unit
29 December 2020 - RSU
Restricted Share Plan
29 December 2016
Save As You Earn scheme
1 July 2017
1 July 2018
1 July 2019
1 August 2020
1 August 2021
Share
Price
£
10.43
10.43
13.77
13.77
13.77
10.78
10.78
14.29
14.29
8.63
8.60
10.43
12.11
17.43
10.03
6.65
9.53
–
–
–
–
–
–
–
–
–
–
–
–
9.7
13.9
8.0
6.7
7.6
–
35%
–
–
34%
–
47%
–
53%
61%
–
–
31%
30%
33%
49%
59%
Fair
Value
£
10.43
5.21
13.77
13.77
6.89
10.78
5.39
14.29
7.15
4.32
8.60
–
3.0
–
–
3.0
–
3.0
–
3.0
3.0
–
–
1%
–
–
1%
–
1%
–
1%
–
–
–
–
10.43
3.5
3.5
3.5
3.5
3.5
–
1%
1%
–
1%
2.84
4.41
2.70
1.95
3.96
Share price for LTIPs is the closing share price from the last working day prior to the date of grant.
Exercise price for the Save As You Earn scheme is set at a 20% (2020: 0%) discount from the share price at grant date.
Expected volatility is based on historical volatility over a period comparable to the expected life of each type of option.
Levels of early exercises and forfeitures are estimated using historical averages unless this is deemed unreasonable, in which case
judgement is used.
The weighted average fair value of Matching Shares granted under the Share Incentive Plan during the year was £nil (2020: £12.51).
For grants under the Save As You Earn scheme, the dividend yield assumption is calculated based on the actual yield at the date of
grant. For the options granted in 2021, the dividend yield assumption was 3% (2020: 2.5%, 2019: 4.5%, 2018: 3.2%, 2017: 4.2%).
The total share-based payment expense recognised for the year was £16 million (2020: £18 million). The share-based payment liability as
at 30 September 2021 was £45 million (2020: £42 million).
202 easyJet plc Annual Report and Accounts 2021
202 easyJet plc Annual Report and Accounts 2021
22. Reconciliation of operating loss to cash used in operations
Operating loss
Adjustments for non-cash items:
Depreciation
Loss on disposal of property, plant and equipment and intangibles
Gain on sale and leaseback
Amortisation of intangible assets
Share-based payments
Impairment
Changes in working capital and other items of an operating nature:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in current intangible assets
(Decrease)/increase in trade and other payables
Increase/(decrease) in unearned revenue
Post-employment benefit contributions
(Decrease)/increase in provisions
Decrease in other non-current assets
Increase/(decrease) in derivative financial instruments
Decrease in non-current deferred income
2021
£ million
(910)
2020
£ million
(899)
456
30
(65)
24
16
–
(8)
(74)
(187)
232
(7)
(294)
24
9
(1)
485
30
(38)
18
17
37
101
46
173
(455)
–
150
9
(215)
(1)
Cash used in operations
(755)
(542)
23. Reconciliation of net cash flow to movement in net debt
Cash and cash equivalents
Money market deposits
Eurobond
Drawn down amounts on Revolving Credit Facility
Commercial Paper (Covid Corporate Financing Facility)
Bank loans
Lease liabilities
Net debt
1 October
2020
£ million
2,284
32
Fair value and
foreign
exchange
£ million
(73)
–
New debt
raised in the
year
£ million
–
–
Other loan
issue costs
£ million
–
–
Net
cash flow
£ million
1,325
(32)
30 September
2021
£ million
3,536
–
2,316
(73)
–
–
1,293
3,536
(1,356)
(387)
(600)
(388)
(710)
(3,441)
(1,125)
24
–
–
76
63
163
90
(971)
–
–
(833)
(693)
(2,497)
(2,497)
–
–
23
–
23
23
–
387
300
358
261
1,306
(2,303)
–
(300)
(764)
(1,079)
(4,446)
2,599
(910)
www.easyJet.com
203
www.easyJet.com 203
FINANCIAL STATEMENTS
N O T E S T O T H E A C C O U N T S ( C O N T I N U E D )
24. Financial instruments
The fair values of financial assets and liabilities, together with the carrying value at each reporting date, are as follows:
At 30 September 2021
Other non-current assets
Trade and other
receivables
Trade and other payables
Derivative financial
instruments
Restricted cash
Cash and cash
equivalents
Eurobonds (2)
Other Borrowings (2)
Lease liabilities
Equity investments (3)
At 30 September 2020
Other non-current assets
Trade and other
receivables
Trade and other payables
Derivative financial
instruments
Restricted cash
Money market deposits
Cash and cash
equivalents
Eurobonds (2)
Other Borrowings (2)
Lease liabilities
Equity investments (3)
Amortised cost
Financial
assets
£ million
Financial
liabilities
£ million
Fair value
hedge
£ million
Held at fair value
Other
financial
instruments
£ million
Cash flow
hedge
£ million
135
178
–
–
14
1,932
–
–
–
–
–
–
(826)
–
–
–
(2,303)
(1,064)
(1,079)
–
–
–
–
53
–
–
–
–
–
–
–
–
–
153
–
–
–
–
–
–
–
–
–
(3)
–
1,604
–
–
–
30
Other (1)
£ million
Carrying
Value
£ million
Fair
Value
£ million
–
135
135
113
(302)
–
–
–
–
–
–
–
291
(1,128)
203
14
3,536
(2,303)
(1,064)
(1,079)
30
291
(1,128)
203
14
3,536
(2,380)
(1,064)
N/A
30
Amortised cost
Financial
liabilities
£ million
Financial
assets
£ million
Fair value
hedge
£ million
Held at fair value
Other financial
instruments
£ million
Cash flow
hedge
£ million
Other (1)
£ million
Carrying
Value
£ million
Fair
Value
£ million
133
53
–
–
19
32
1,467
–
–
–
–
–
–
(837)
–
–
–
–
(1,356)
(1,375)
(710)
–
–
–
–
82
–
–
–
–
–
–
–
–
–
–
(310)
–
–
–
–
–
–
–
–
–
–
(99)
–
–
817
–
–
–
33
–
133
133
140
(405)
–
–
–
–
–
–
–
–
193
(1,242)
(327)
19
32
2,284
(1,356)
(1,375)
(710)
33
193
(1,242)
(327)
19
32
2,284
(1,173)
(1,375)
N/A
33
Information presented for the current year ended 30 September 2021 and comparative year ended 30 September 2020, is presented in
accordance with IFRS 9.
1. Amounts disclosed in the 'Other' column are items that do not meet the definition of a financial instrument. They are disclosed to facilitate reconciliation of the
carrying values of financial instruments to line items presented in the statement of financial position.
2. For further information see Capital, financing and interest risk management section in note 25.
3. The equity investment of £30 million (2020: £33 million) represents a 13.2% shareholding in a non
listed entity, The Airline Group Limited. Valuation movements are
designated as being fair valued through other comprehensive income due to the nature of the investment being held for strategic purposes. No dividend was
received during the year (2020: £2 million).
‐
Fair value calculation methodology
Where available the fair values of financial instruments have been determined by reference to observable market prices where the
instruments are traded. Where market prices are not available, the fair value has been estimated by discounting expected future cash
flows at prevailing interest rates and by applying year end exchange rates (excluding The Airline Group Limited equity investment).
The fair values of the four Eurobonds are classified as level 1 of the IFRS 13 ‘Fair Value Measurement’ fair value hierarchy (valuations taken
as the closing market trade price for each respective Eurobond as on 30 September 2021). Apart from the equity investment, the
remaining financial instruments for which fair value is disclosed in the table above, and derivative financial instruments, are classified as
level 2.
The fair values of derivatives are calculated using observable market forward curves (e.g. forward foreign exchange rates, forward
interest rates or forward jet fuel prices) and discounted to present value using risk free rates. The impacts of counterparty credit, cross-
currency basis and market volatility are also included where appropriate as part of the fair valuation.
204 easyJet plc Annual Report and Accounts 2021
204 easyJet plc Annual Report and Accounts 2021
The equity investment is classified as level 3 due to the use of forecast dividends which are discounted to present value. Though there
are other level 2 inputs to the valuation, the discounted cash flow is a significant input which is not based on observable market data.
The fair value is assessed at each reporting date based on the discounted cash flows and two other valuations calculated using a market
approach and level 2 inputs. The fair value of £30 million was determined on this basis by an external valuation firm as at 30 September
2021 (2020: £33 million), representing a reduction of £3 million from the prior year which was recognised in other comprehensive income.
If the level 3 forecast cash flows were 10% higher or lower the fair value would not increase/decrease by a significant amount.
The fair value measurement hierarchy levels have been defined as follows:
• Level 1, fair value of financial instruments based on quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2, fair value of financial instruments in an active market (for example, over the counter derivatives) which are determined using valuation
techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates.
• Level 3, fair value of financial instruments that are not based on observable market data (i.e. unobservable inputs).
Fair value of derivative financial instruments
At 30 September 2021
Designated as cash flow hedges
US dollar
Euro
Swiss franc
Jet fuel
Cross-currency interest rate swaps
Designated as fair value hedges
Cross-currency interest rate swaps
Designated as fair value through profit or loss
US dollar
Euro
At 30 September 2020
Designated as cash flow hedges
US dollar
Euro
Swiss franc
South African rand
Jet fuel
Cross-currency interest rate swaps
Designated as fair value hedges
Cross-currency interest rate swaps
Designated as fair value through profit or loss
US dollar
Euro
Swiss francs
Jet
Quantity
million
Non-current
assets
£ million
Current
assets
£ million
Current
liabilities
£ million
Non-current
liabilities
£ million
Total
£ million
804
442
56
1
888
379
762
79
1
–
–
25
–
53
7
–
86
7
3
1
172
–
(10)
(12)
–
–
–
(1)
–
–
–
(33)
(3)
(9)
1
197
(33)
–
–
–
53
2
–
185
(8)
(1)
(31)
(3)
–
(37)
(2)
(1)
203
Quantity
million
Non-current
assets
£ million
Current
assets
£ million
Current
liabilities
£ million
Non-current
liabilities
£ million
Total
£ million
376
668
188
26
2
888
379
600
432
197
1
1
1
–
–
1
3
82
1
–
–
–
89
2
5
–
–
–
–
–
1
11
–
2
21
(2)
(6)
(4)
–
(228)
–
(2)
(7)
(2)
–
(71)
–
(1)
(7)
(6)
–
(298)
3
–
–
82
(8)
(3)
(4)
(97)
(352)
(3)
–
–
–
(85)
(9)
8
(4)
(95)
(327)
For foreign currency forward contracts, quantity represents the absolute gross nominal value of currency contracts held, disclosed in the
contract foreign currency. The cross-currency interest rate swap contracts are presented at the Sterling notional amount. For jet fuel
derivative contracts quantity represents absolute contracted metric tonnes.
The majority of foreign exchange and jet fuel transactions designated as a cash flow hedge are expected to occur on various dates
within the next 18 months. Accumulated gains and losses resulting from these transactions are deferred in the hedging reserve. They will
be recognised in the income statement in the periods that the hedged transactions impact the income statement. Where the gain or
loss is included in the initial amount recognised following the purchase of an aircraft, recognition in the income statement is over a period
of up to 23 years in the form of depreciation of the purchased asset.
www.easyJet.com
205
www.easyJet.com 205
FINANCIAL STATEMENTS
N O T E S T O T H E A C C O U N T S ( C O N T I N U E D )
24. Financial instruments continued
Amounts related to USD and EUR foreign exchange derivatives held at fair value through profit and loss (e.g. not held in a hedge
accounting relationship) form part of the Group’s statement of financial position retranslation risk management strategy.
Fair valuation movements on these derivatives are recognised in the income statement and offset foreign exchange movements on the
corresponding notional amount of the statement of financial position monetary liabilities held in USD and EUR. These trades are all
expected to occur on various dates within the next 36 months. Interest rate swap contracts are designated and qualify as either fair
value or cash flow hedges to minimise volatility in the income statement.
As at 30 September 2021 there were no active US dollar, Euro, Swiss franc or Jet derivatives discontinued from a hedge accounting
relationship.
The Group maintains cross-currency interest rate swap contracts on a proportion of fixed rate debt issuance as part of the approach to
currency and interest rate risk management. The cross-currency interest rate swap contracts are designated and qualify as either fair
value or cash flow hedges to minimise volatility in the income statement.
The following derivative financial instruments are subject to offsetting, enforceable master netting agreements:
At 30 September 2021
Derivative financial instruments
Assets
Liabilities
At 30 September 2020
Derivative financial instruments
Assets
Liabilities
Gross
Amount
£ million
Amount
not set off
£ million
Net
amount
£ million
271
(68)
203
(52)
52
–
219
(16)
203
Gross
Amount
£ million
Amount
not set off
£ million
Net
amount
£ million
110
(437)
(327)
(71)
71
–
39
(366)
(327)
All financial assets and liabilities are presented gross on the face of the statement of financial position as the conditions for netting
specified in IAS 32 'Financial Instruments: Presentation' are not met.
25. Financial risk and capital management
easyJet is exposed to financial risks including fluctuations in exchange rates, jet fuel prices and interest rates. Financial risk management
aims to limit these market risks with selected derivative hedging instruments being used for this purpose. easyJet's policy is not to
speculatively trade derivatives but use the instruments to hedge anticipated exposure and gain cash flow certainty. easyJet reduces its
exposure to market risk by using derivatives as any gains and losses arising are offset by the outcome of the underlying exposure being
hedged.
The Board is responsible for setting financial risk and capital management policies and objectives which are implemented by the treasury
function on a day to day basis. The policy outlines the approach to risk management and also states the instruments and time periods
which the treasury function is authorised to use in managing financial risks. The policy is regularly reviewed to ensure best practice.
easyJet’s normal rolling foreign exchange and commodity hedging policies have been reduced in order to mitigate the potential for
further over hedging. Throughout the year easyJet has continued to hedge a proportion of its future lease liability payments using USD
foreign exchange derivatives.
Capital employed comprises shareholders' equity, borrowings (including amounts related to IFRS 16 lease liability), cash and money
market deposits (excluding restricted cash).
Consequently, the capital employed at the end of the current and prior year and the return earned during those years were as follows:
Shareholders' equity
Borrowings
Lease liabilities
Cash and money market deposits (excluding
restricted cash)
Capital employed
Reported operating (loss)/profit
Tax rate
Adjusted operating profit after tax
Return on capital employed
Headline
£ million
2,639
3,367
1,079
Non-headline
£ million
–
–
–
(3,536
)
3,549
(1,036 )
(839 )
(25.5 )%
–
–
126
102
2021
Total
£ million
2,639
3,367
1,079
(3,536
)
3,549
Headline
£ million
1,899
2,731
710
Non-headline
£ million
–
–
–
2020
Total
£ million
1,899
2,731
710
(2,316
)
3,024
–
–
(2,316
)
3,024
(910 )
19 %
(737 )
(22.4 )%
(775 )
(124)
(628 )
(19.9 )%
(100)
(899 )
19 %
(728 )
(23.0 )%
Return on capital employed is calculated by dividing the adjusted operating (loss)/profit after tax by the average of the opening and
closing capital employed.
206 easyJet plc Annual Report and Accounts 2021
206 easyJet plc Annual Report and Accounts 2021
Liquidity risk management
The objective of easyJet's liquidity risk management is to ensure sufficient cash is available to meet future liabilities as they fall due and
ensure access to cost effective funding in various markets.
easyJet’s policy has consistently been to hold significant liquidity to mitigate the impact of potential business disruption events. easyJet
has undertaken swift and decisive action to raise c.£7 billion in liquidity since the beginning of the pandemic, from a diversified range of
funding sources including debt and equity.
Liquidity raised in the year includes:
• sale and leaseback transactions were conducted on 35 aircraft and 2 engines generating gross proceeds of £876 million.
• on 8 January 2021 easyJet entered into a new five-year term loan facility of $1.87 billion underwritten by a syndicate of banks and supported by
a partial guarantee from UK Export Finance under their Export Development Guarantee scheme. On 21 January 2021 easyJet drew down $1.05
billion from this facility, utilising funds to repay and cancel the $500 million Revolving Credit Facility and repay term loans of $245 million and
£200 million
• on 3 March 2021 easyJet FinCo B.V. issued a €1,200 million bond under the £3,000 million Euro Medium Term Note Programme guaranteed
by easyJet Airline Company Limited and easyJet plc. The Eurobond pays an annual fixed coupon of 1.875%.
• on 9 September 2021 easyJet announced a fully underwritten rights issue to raise £1,235 million. This was accompanied by a new committed
$400 million Revolving Credit Facility, which was undrawn at year end.
The Group continues to monitor liquidity to ensure it maintains adequate levels of cash. easyJet continues to have access to various
funding markets and a large fleet of unencumbered aircraft assets as sources of additional liquidity.
Throughout the year easyJet had a target minimum liquidity requirement to cover the higher of unearned revenue and £2.6 million per
100 seats in the fleet. In assessing this liquidity metric any undrawn credit facilities need to be taken into consideration. Total cash
(excluding restricted cash) and money market deposits at 30 September 2021 was £3,536 million (2020: £2,316 million) with total liquidity
at £4,442 million. Surplus funds are invested in high quality short-term liquid instruments, mainly money market funds, bank deposits and
tri-party repos. During the 2022 financial year, a new liquidity policy will be introduced to maintain minimum liquidity of at least unearned
revenue plus £500 million. easyJet would have been in compliance with this policy throughout the 2021 financial year.
The maturity profile of financial liabilities and derivatives based on undiscounted cash flows and contractual maturities is as follows:
At 30 September 2021
Borrowings principal and interest
Trade and other payables
Lease liabilities
FX & jet derivative contracts - receipts
FX & jet derivative contracts - payments
Cross-currency swap contracts - receipts
Cross-currency swap contracts - payments
At 30 September 2020
Borrowings principal and interest
Trade and other payables
Lease liabilities
FX & jet derivative contracts - receipts
FX & jet derivative contracts - payments
Cross-currency swap contracts - receipts
Cross-currency swap contracts - payments
Within 1 year
£ million
358
1,128
251
(1,354)
1,230
(16)
30
Within 1 year
£ million
1,018
837
278
(1,482)
1,871
(17)
33
1-2 years
£ million
488
-
239
(313)
291
(446)
405
1-2 years
£ million
418
–
174
(493)
657
(17)
33
2-5 years
£ million
1,762
-
491
(159)
155
(872)
914
Over 5 years
£ million
1,070
-
317
-
-
-
-
2-5 years
£ million
1,384
–
332
(89)
93
(1,392)
1,396
Over 5 years
£ million
–
–
160
–
–
–
–
The maturity profile has been calculated based on spot rates for the US dollar, Euro, Swiss franc and jet fuel at close of business on 30
September each year.
Credit risk management
easyJet is exposed to credit risk arising from cash and money market deposits, derivative financial instruments and trade and other
receivables. Credit risk management aims to reduce the risk of default by setting limits on credit exposure to counterparties based on
their respective credit ratings. Credit ratings also determine the maximum period of investment when placing funds on deposit. The
maximum exposure to credit risk at the reporting date is equal to the carrying value of its financial assets, excluding tri-party repos, which
are securitised by high quality, investment grade financial assets.
Counterparties for cash investments and derivatives contracts are required to have a long-term credit rating of A- or better at contract
inception from either Moody’s, Standard & Poor’s or Fitch (except where there is a specific regulatory, contractual requirement or a bank
guarantee from an A- rated entity). Exposures to these counterparties are regularly reviewed and, if the long-term credit rating falls
below A- management will make a decision on remedial action to be taken.
www.easyJet.com
207
www.easyJet.com 207
FINANCIAL STATEMENTS
N O T E S T O T H E A C C O U N T S ( C O N T I N U E D )
25. Financial risk and capital management continued
The credit ratings of counterparties that easyJet holds financial assets with are as follows:
At 30 September 2021
Financial assets
Trade receivables
Other non-current assets
Derivative financial instruments
Restricted cash
Cash and cash equivalents
Total
At 30 September 2020
Financial assets
Trade receivables
Other non-current assets
Derivative financial instruments
Restricted cash
Money market deposits
Cash and cash equivalents
Total
A- and
above
£ million
Below A-
£ million
Unrated/
Other
£ million
£ million
–
–
219
14
3,534
3,767
–
–
–
–
2
2
291
135
-
-
-
426
291
135
219
14
3,536
4,195
A- and
above
£ million
Below A-
£ million
Unrated/
Other
£ million
£ million
–
–
39
19
32
2,281
2,371
–
–
–
–
–
3
3
53
133
–
–
–
–
186
53
133
39
19
32
2,284
2,560
At the end of each reporting date easyJet recognises a loss allowance for expected credit losses on financial assets measured at
amortised cost. In establishing the appropriate amount of loss allowance to be recognised, easyJet applies either the general approach or
the simplified approach, depending on the nature of the underlying group of financial assets.
The general approach is applied to the impairment assessment of refundable lease deposits and other refundable lease contributions,
restricted cash, money market deposits, and cash and cash equivalents (excluding money market funds held at fair value through profit
or loss). Under the general approach easyJet recognises a loss allowance for a financial asset at an amount equal to the 12-month
expected credit losses, unless the credit risk on the financial asset has increased significantly since initial recognition, in which case a loss
allowance is recognised at an amount equal to the lifetime expected credit losses. At 30 September 2021 this was considered immaterial.
This is due to easyJet’s strict policy of investing only with counterparties who hold a high, investment grade credit standing (except in
specific circumstances) as detailed in the tables above.
The simplified approach is applied to the impairment assessment of trade and other receivables. Under the simplified approach easyJet
always recognises a loss allowance for a financial asset at an amount equal to the lifetime expected credit losses using the historic loss
methodology to calculate an impairment provision.
At 30 September 2021 trade receivables had a total loss allowance of £1 million (2020: £4 million). The exposure to individual customer’s
credit risk is reduced as no individual customer accounts for a substantial amount of the total revenue and most payments for flight
tickets are collected in advance of the service being provided.
Foreign currency risk management
The majority of easyJet's exposure to currency arises from fluctuations in the USD, EUR and CHF exchange rates which can significantly
impact easyJet's financial results and cash flows. The aim of the foreign currency risk management is to reduce the impact of these
exchange rate fluctuations.
Significant currency exposures in the income statement are managed through the use of currency forward contracts entered into cash
flow hedge relationships, in line with the Board approved policy. Throughout the year the policy stated that easyJet hedged between
65% - 85% of the next 12 months’ forecast surplus operating cash flows on a rolling basis, and 45% - 65% of the following 12 months’
forecast surplus operating cash flows on a rolling basis (excluding those related to easyJet holidays).
Following the launch of easyJet holidays the Group separately manages foreign exchange risk related to forecast cash out flows on
package holiday costs.
The foreign exchange hedging programmes for operational activities have continued at reduced levels due to uncertainty in exposures.
Significant currency exposures relating to the acquisition cost or sale proceeds of aircraft are also managed through the use of FX
forward contracts where up to 90% of the next 18 months’ forecast requirement may be hedged.
Significant currency exposures relating to foreign currency denominated Eurobond issuances are managed through the use of cross-currency
interest rate swap contracts where deemed appropriate. These hedges are designated as either fair value hedges or cash flow hedges.
easyJet has substantial borrowings and other monetary liabilities denominated in USD and EUR, which are largely offset by holding USD
and EUR cash and money market deposits. FX forward contracts are also used to manage foreign exchange translation risk. These are
classified as fair value through profit or loss (e.g. not designated in a hedge relationship). During the year easyJet decided to use EUR
lease liabilities to hedge a proportion of its EUR Revenue receipts in a cash flow hedge relationship. Revaluations of these EUR liabilities
are held in reserves and released on a straight-line basis over the term of the lease agreement through profit or loss.
208 easyJet plc Annual Report and Accounts 2021
208 easyJet plc Annual Report and Accounts 2021
Management may take action to hedge other currency exposures as deemed appropriate.
The gross notional of transactions in a hedge relationship that occurred during the financial year to manage the foreign currency risk and
the resulting gains and losses were as follows:
USD
EUR
CHF
Notional
380
200
61
2021
Gain/(loss)
(4)
7
1
Capital financing and interest rate risk management
The objective of capital management is to ensure that easyJet is able to continue as a going concern whilst delivering shareholder
expectations of a strong capital base as well as returning benefits for other stakeholders.
On the 30 September 2021, easyJet held long-term corporate credit ratings from both Standard & Poor's (BBB-) and Moody's (Baa3).
easyJet plc established a £3,000 million Euro Medium Term Note Programme on 7 January 2016. Subsequently easyJet plc has issued
three bonds under this programme and easyJet FinCo B.V. has issued one bond. All four bonds under this scheme are guaranteed by
easyJet Airline Company Limited, easyJet plc and easyJet FinCo B.V.
In February 2016, easyJet plc issued a €500 million bond under the £3,000 million Euro Medium Term Note Programme guaranteed by
easyJet Airline Company Limited. The Eurobond pays an annual fixed coupon of 1.750%. At the same time the Group entered into three
cross-currency interest rate swaps to convert the entire €500 million fixed rate Eurobond to a Sterling floating rate exposure. All three
swaps pay floating interest (three-month LIBOR plus a margin) quarterly, receive fixed interest annually, and have maturities matching the
Eurobond. The Group designated all three cross-currency interest rate swaps as a fair value hedge of the interest rate and currency risks
on the €500 million Eurobond. The swaps are measured at fair value through profit or loss with any gains or losses being taken
immediately to the income statement (except where related to timing differences related to cross-currency basis amortisation). The
carrying value of the Eurobond is adjusted for changes in fair value attributable to the risks being hedged. This net carrying value differs
to the swap’s fair value depending on movements in the Group's credit risk and cross-currency basis. The carrying value of the fixed rate
Eurobond net of the cross-currency interest rate swap at 30 September 2021 was £380 million. This value does not include capitalised
set-up costs incurred in the issuing of the bond.
The lifetime fair value adjustment to the bond hedge item in the statement of financial position was £(53) million. During the year, fair
value adjustments totalled £28 million which was offset by materially equal and opposite movements on the hedging instruments.
Movements related to the hedging of foreign exchange in the year were £25 million gain with the remaining fair value movements
relating to the hedging of interest risk.
In October 2016 easyJet plc issued a €500 million bond under the £3,000 million Euro Medium Term Note Programme guaranteed by
easyJet Airline Company Limited. The Eurobond pays an annual fixed coupon of 1.125%. Shortly after the issuance of the €500 million
bond the Group entered into three cross-currency interest rate swaps to convert the entire €500 million fixed rate Eurobond to a
Sterling fixed rate exposure. The cross-currency interest rate swaps were executed on 8 November 2016 with settlement and notional
exchange occurring on 14 November 2016. All three swaps pay fixed interest semi-annually, receive fixed interest annually, and have
maturities matching the Eurobond. The Group designated all three cross-currency interest rate swaps as a cash flow hedge of the
currency risk on the €500 million Eurobond. The cross-currency interest rate swaps are measured at fair value with the effective portion
taken through the statement of comprehensive income. The element of the fair value generated by the change in the spot rate is
recycled to the income statement from the statement of comprehensive income to offset the revaluation of the Eurobond. The carrying
value of the fixed rate Eurobond net of the cross-currency interest rate swap at 30 September 2021 was £447 million. This value does
not include capitalised set-up costs incurred in the issuing of the bond.
In June 2019 easyJet plc issued a €500 million bond under the £3,000 million Euro Medium Term Note Programme guaranteed by
easyJet Airline Company Limited. The Eurobond pays an annual fixed coupon of 0.875%. At the same time the Group entered into three
cross-currency interest rate swaps to convert the entire €500 million fixed rate Eurobond to a Sterling fixed rate exposure. All three
swaps pay fixed interest semi-annually, receive fixed interest annually, and have maturities matching the Eurobond. The Group
designated all three cross-currency interest rate swaps as a cash flow hedge of the currency risk on the €500 million Eurobond. The
cross-currency interest rate swaps are measured at fair value with the effective portion taken through the statement of comprehensive
income. The element of the fair value generated by the change in the spot rate is recycled to the income statement from the statement
of comprehensive income to offset the revaluation of the Eurobond. The carrying value of the fixed rate Eurobond net of the cross-
currency interest rate swap at 30 September 2021 was £446 million. This value does not include capitalised set-up costs incurred in the
issuing of the bond.
The weighted average GBP interest rate hedged for the three bonds was 2.30% with a weighted average GBP/EUR foreign exchange
hedge rate of 1.19.
In March 2021 easyJet FinCo B.V. issued a €1,200 million bond under the £3,000 million Euro Medium Term Note Programme
guaranteed by easyJet Airline Company Limited and easyJet plc. The Eurobond pays an annual fixed coupon of 1.875%. As at year end
this was not hedged.
Interest rate cash flow risk arises on floating rate borrowings and cash investments.
www.easyJet.com
209
www.easyJet.com 209
FINANCIAL STATEMENTS
N O T E S T O T H E A C C O U N T S ( C O N T I N U E D )
25. Financial risk and capital management continued
Interest rate risk management policy aims to provide certainty in a proportion of financing while retaining the opportunity to benefit from
interest rate reductions. Borrowings are issued at either fixed or floating interest rates repricing every three to six months. A significant
proportion of the US dollar debt liabilities are matched with US dollar cash assets by value. Operating leases are a mix of fixed and
floating rates. Of the 137 aircraft operating leases in place at 30 September 2021 (2020: 124), 95% were based on fixed interest rates and
5% were based on floating interest rates (2020: 90% fixed, 10% floating).
Commodity price risk management
The Group is exposed to commodity risk in the form of jet fuel requirements and Carbon Emissions Trading System schemes (EU-ETS,
CH-ETS & UK-ETS) price risk.
The objective of the fuel price risk management policy is to provide protection against sudden and significant increases in jet fuel prices,
thus mitigating volatility in the income statement in the short term. Throughout the year the policy stated that easyJet hedged between
65% and 85% of estimated exposures up to 12 months in advance, and hedged between 45% and 65% of estimated exposures from 13
up to 24 months in advance. Jet fuel derivatives are entered into a cash flow hedge relationship against the future forecasted jet fuel
usage. Treasury strategies and actions will be driven by the need to meet treasury, financial and corporate objectives.
The fuel hedging programme has continued throughout the year at reduced levels due to uncertainty in exposures.
The volume of effective hedge transactions that occurred during the financial year to manage the jet commodity price risk was 0.6
million metric tonnes. This resulted in a £39 million loss (2020: £77 million) (£37 million in relation to release from the Cashflow Hedge
Reserve, and £2 million in relation to release from Cost of Hedging) in the fuel line within the Income Statement.
The Group has a regulatory requirement to comply with EU-ETS, CH-ETS & UK-ETS on an annual basis to the relevant environmental
agencies. easyJet is required to purchase carbon allowances on the open market to fulfil this requirement and is exposed to price
movements that can introduce cash flow volatility. To mitigate this exposure easyJet will purchase its requirement on a spot or forward
basis in line with Board approved policy to hedge up to 95% of anticipated exposure up to 24 months out. easyJet holds allowances for
100% of all ETS obligations for calendar year 2021.
Contracts maturing in the year were not classified as financial instruments as they fell within the own use provision under IFRS 9.
Market risk sensitivity analysis
Financial assets and liabilities affected by market risk include borrowings, deposits, trade and other receivables, trade and other payables
and derivative financial instruments. The following analysis illustrates the sensitivity of changes in relevant foreign exchange rates, interest
rates and fuel prices. It should be noted that the analysis reflects the impact on profit or loss after tax for the year and other
comprehensive income on financial instruments in a cash flow hedge relationship held at the reporting date. The sensitivities are
calculated based on all other variables remaining constant. The analysis is considered representative of easyJet's exposure over the next
12 month period.
The sensitivity analysis is based on easyJet's financial assets and liabilities and financial instruments held as at 30 September 2021.
The currency exchange rate analysis assumes a +/-10% change in both US dollar and Euro exchange rates.
The interest rate analysis assumes a 1% increase in interest rates over the next 12 months.
The fuel price analysis assumes a 10% increase in fuel price over the next 12 months.
At 30 September 2021
Income statement impact: gain/(loss)
Impact on other comprehensive income: increase /
(decrease)
At 30 September 2020
Income statement impact: gain/(loss)
Impact on other comprehensive income:
increase/(decrease)
1. GBP weakened
2. GBP strengthened
US dollar
+10%(1)
£ million
(43)
US dollar -
10%(2)
£ million
35
Euro
+10%(1)
£ million
42
Currency rates
Euro
-10%(2)
£ million
(34)
Interest rates
1% increase
£ million
28
Fuel price 10%
Increase
£ million
–
75
(61)
5
(4)
–
57
US dollar
+10%(1)
£ million
£ million
(13)
US dollar -
10%(2)
£ million
£ million
10
Euro
+10%(1)
£ million
£ million
11
Currency rates
Euro
-10%(2)
£ million
Interest rates
1% increase
£ million
Fuel price 10%
Increase
£ million
£ million
(9)
£ million
18
£ million
8
(1)
1
(48)
39
–
46
The Market risk sensitivity analysis has been calculated on spot rates for the US dollar, EUR and jet fuel at close of business on 30
September each year.
210 easyJet plc Annual Report and Accounts 2021
210 easyJet plc Annual Report and Accounts 2021
Impact on the financial statements during the period ended 30 September 2021
Details of major hedging arrangements at the reporting date are set out below broken down by the notional maturity of hedge
instruments and average rates.
Hedge instrument (notional in millions)
Jet fuel hedged notional
Average hedge rate
USD foreign exchange hedged notional
Average hedge rate
EUR foreign exchange hedged notional
Average hedge rate
CHF foreign exchange hedged notional
Average hedge rate
Within
one year
1
498
463
1.34
470
1.12
55
1.21
Greater than
one year
1
481
63
1.34
–
–
–
–
Notional expressed in the GBP contractual leg for currencies and metric tonnes for jet fuel
Hedge discontinuation and ineffectiveness
Hedge effectiveness testing on all relationships is performed at each reporting date. Whilst the critical terms matching of the Group’s
hedge relationships means that any ineffectiveness should be minimal it can be driven by factors such as material changes in credit risk,
price fixing basis (in the case of jet fuel) or changes in the timings of the hedged cash flows.
Due to the reduced flying programme easyJet became over-hedged on both jet fuel and FX exposures. Where the forecasted future
exposure was no longer expected to occur, the hedge relationship was discontinued and all gains or losses related to the hedge
instrument transferred immediately to the income statement within non-headline. These amounts totalled a net £25 million loss in the
year.
Any subsequent fair value movements on these discontinued trades was recognised in headline. These amounts totalled a net
£30 million gain in the year. In addition, following the discontinuation of hedge accounting easyJet entered into derivatives to close out a
proportion of over-hedged positions. These derivatives were traded in an ‘equal and opposite’ direction to the discontinued trades to
economically close out these positions and totalled a net loss of £23 million. These have been included within the total headline fair
adjustment value resulting in a net £7 million gain.
All hedge relationships where the underlying exposure is still anticipated to occur continue to exhibit a strong economic hedge
relationship as the changes in fair value of hypothetical hedged items is materially offset by the changes in the fair value of hedging
instruments.
Additionally, fair value adjustments of £1 million (2020: £nil) were recorded during the period related to hedge ineffectiveness on hedges
of foreign currency denominated borrowings that continue to be effective hedge relationships.
26. Contingent liabilities and commitments
easyJet is involved in a number of disputes and litigation which arose in the normal course of business. The likely outcome of these
disputes and litigation cannot be predicted, and in complex cases reliable estimates of any potential obligation may not be possible.
On 19 May 2020, easyJet announced that it had been the target of a cyber-attack from a highly sophisticated source. The email
addresses and travel details of approximately 9 million customers were accessed and for a very small subset of customers (2,208),
credit card details were accessed.
The cyber-attack continues to be under investigation by the Information Commissioner's Office (ICO). As the cyber-attack took place
before the United Kingdom left the European Union, the Group expects the ICO to be investigating on behalf of all EU data protection
authorities as lead supervisory authority under the GDPR. Any penalty or enforcement action will need to be reviewed and approved by
the other EU data protection authorities under the GDPR's cooperation process. In addition, in May 2020, a class action claim was filed in
the UK High Court by a law firm representing a class of affected customers and claims have also been commenced or threatened in
certain other courts and jurisdictions.
The merit, likely outcome and potential impact on the Group of the continued investigation by the ICO, group action and other claims are
still subject to a number of significant uncertainties and therefore the Group is unable to assess the likely outcome or quantum of the
claims as at the date of these financial statements.
At 30 September 2021 easyJet had outstanding letters of credit and performance bonds totalling £72 million (2020: £120 million), of
which £43 million (2020: £89 million) expires within one year. The fair value of these instruments at each year end was negligible.
No amount is recognised in the statement of financial position in respect of any of these financial instruments as it is not probable that
there will be an outflow of resources.
As part of the commitment to voluntary carbon offsetting, easyJet currently has contractual commitments to purchase Verified Emission
Reductions worth £11 million (2020: £29 million) in total until December 2022.
www.easyJet.com
www.easyJet.com
211
211
FINANCIAL STATEMENTS
N O T E S T O T H E A C C O U N T S ( C O N T I N U E D )
27. Government grants and assistance
During the years ended 30 September 2020 and 2021, easyJet Airline Company Limited utilised of the Coronavirus Job Retention
Scheme implemented by the UK government, where those employees designated as being 'furloughed workers' are eligible to have
80 per cent of their wage costs paid up to a maximum amount of £2,500 per month. In the same period, easyJet Group (companies)
utilised similar schemes provided by governments in Portugal, Germany, Netherlands, France, Italy and Switzerland. The total amount of
such relief received by the Group amounted to £134 million (2020: £116 million) and is offset within employee costs in the income statement.
There are no unfulfilled conditions or contingencies relating to these schemes.
On 6 April 2020, easyJet issued a commercial paper through the Covid Corporate Finance Facility (CCFF) implemented by the UK
government. Under the CCFF, easyJet received £600 million, with interest incurred at the prevailing market rate. The facility is classified
within borrowings in the statement of financial position. On 5 March 2021 easyJet repaid £300 million of the CCFF liability, with the
remaining £300 million was repaid in November 2021.
On 8 January 2021 easyJet signed a five-year term loan facility of $1.87 billion, underwritten by a syndicate of banks and supported by a
partial guarantee from UK Export Finance under their Export Development Guarantee Scheme. The Export Development Guarantee
scheme for commercial loans is available to qualifying UK companies, does not carry preferential rates or require state aid approval, and
contains some restrictive covenants including dividend payments, however these are compatible with easyJet's existing dividend policy.
28. Related party transactions
The Company licenses the easyJet brand from easyGroup Limited (‘easyGroup’), a wholly owned subsidiary of easyGroup Holdings
Limited, an entity in which easyJet’s founder, Sir Stelios Haji-Ioannou, holds a beneficial controlling interest. The Haji-Ioannou family
concert party shareholding (being easyGroup Holdings Limited and Polys Holding Limited) holds, in total, approximately 15.27% of the
issued share capital of easyJet plc as at 30 September 2021.
Key management personnel who were existing shareholders were part of the rights issue that took place during the year, the issue price
was 410 pence per share on the basis of 31 shares for every 47 fully paid ordinary shares held.
Under the Amended Brand Licence signed in October 2010 and approved by the shareholders of easyJet plc in December 2010, an
annual royalty of 0.25% of total revenue is payable by easyJet to easyGroup. The full term of agreement is 50 years.
easyJet and easyGroup established a fund to meet the annual costs of protecting the ‘easy’ (and related marks) and the ‘easyJet’ brands.
easyJet contributes up to £1 million per annum to this fund and easyGroup contributes £100,000 per annum. If easyJet contributes more
than £1 million per annum, easyGroup will match its contribution in the ratio of 1:10 up to a limit of £5 million contributed by easyJet and
£500,000 contributed by easyGroup.
Three side letters have been entered into: (i) a letter dated 29 September 2016 in which easyGroup consented to easyJet acquiring a
portion of the equity share capital in Founders Factory Limited; (ii) a letter dated 26 June 2017 in which the easyJet’s permitted usage of
the brand was slightly extended; and (iii) a letter dated 2 February 2018 in which easyGroup agreed that certain affiliates of easyJet have
the right to use the brand.
The amounts included in the income statement, within other costs, for these items were as follows:
Annual royalty
Brand protection (legal fees paid through easyGroup to third parties)
2021
£ million
4
1
5
2020|
£ million
8
1
9
At 30 September 2021, £0.1 million (2020: £0.1 million) of the above aggregate amount was included in trade and other payables.
At 30 September 2021 £5.3 million (2020: £8.5 million) is due from related parties and is included within trade and other receivables.
29. Events after the statement of financial position date
On 18 November 2021, the remaining £300 million Commercial paper issued through the Covid Corporate Financing Facility (CCFF) was
repaid.
On 29 November 2021, a firm commitment was agreed with Airbus in respect of an additional 19 aircraft with deliveries between financial
years 2025 and 2028. This results in 118 firm Airbus A320 NEO family aircraft outstanding orders on this date. The 19 firm deliveries
consist of:
• Seven aircraft which easyJet had the option not to take up. This option not to take up has been relinquished and the aircraft are now
confirmed as firm deliveries between financial years 2025 and 2026;
• Seven purchase option aircraft in respect of which easyJet has exercised its option to purchase. This results in firm deliveries for these aircraft
between financial years 2025 and 2026; and
• Five purchase right aircraft that have been converted into aircraft with firm delivery dates in financial year 2027, which results in easyJet’s
purchase right aircraft reducing from 58 to 53.
212 easyJet plc Annual Report and Accounts 2021
212
easyJet plc Annual Report and Accounts 2021
COMPANY STATEMENT OF FINANCIAL POSITION
Non-current assets
Investments in subsidiary undertakings
Deferred tax asset
Current assets
Other receivables
Amounts due from subsidiary undertakings
Derivative financial instruments with subsidiary undertakings
Current liabilities
Amounts due to subsidiary undertakings
Borrowings
Other payables
Net current assets
Non-current liabilities
Borrowings
Derivative financial instruments with subsidiary undertakings
Net assets
Shareholders' equity
Share capital
Share premium
Hedging reserve
Retained earnings
Total equity
Notes
c
e
e
As at 30
September
2021
£ million
As at 30
September
2020
£ million
999
2
1,001
91
3,594
53
3,738
(9)
(300)
(37)
(346)
983
4
987
4
2,709
85
2,798
(2)
(600)
(12)
(614)
3,392
2,184
(1,285)
(33)
(1,318)
3,075
207
2,166
(5)
707
3,075
(1,356)
–
(1,356)
1,815
125
1,051
(15)
654
1,815
The financial statements on pages 213 to 218 were approved by the Board of Directors and authorised for issue on 30 November 2021
and signed on behalf of the Board.
In accordance with Section 408 of the Companies Act 2006, the Company is exempt from the requirement to present its own income
statement and statement of comprehensive income. The Company’s profit for the year was £37 million (2020: £35 million). Included in
this amount are dividends received of £30 million (2020: £30 million), which are recognised when the right to receive payment is
established.
JOHAN LUNDGREN
Director
KENTON JARVIS
Director
213
easyJet plc Annual Report and Accounts 2021
www.easyJet.com
213
FINANCIAL STATEMENTS
Company statement of changes in equity
At 1 October 2020
Profit for the year
Other comprehensive income
Total comprehensive income
Share incentive schemes
Net proceeds from rights issue
Movement in reserves for employee share schemes
At 30 September 2021
At 1 October 2019
Profit for the year
Other comprehensive loss
Total comprehensive income
Dividends paid
Share incentive schemes
Proceeds from shares issued
Movement in reserves for employee share schemes
At 30 September 2020
Share
Capital
£ million
125
–
–
–
Share
premium
£ million
1,051
–
–
–
82
–
207
1,115
–
2,166
Share
Capital
£ million
108
–
–
–
–
17
–
125
Share
premium
£ million
659
–
–
–
–
392
–
1,051
Hedging
reserve
£ million
(19)
–
10
10
–
–
(9)
Hedging
reserve
£ million
(15)
–
(4)
(4)
–
–
–
(19)
Cost of
hedging
£ million
4
–
–
–
Retained
earnings
£ million
654
37
–
37
–
–
4
–
16
707
Cost of
hedging
£ million
8
–
(4)
(4)
–
Retained
earnings
£ million
776
35
–
35
(174)
–
–
4
–
17
654
Total
£ million
1,815
37
10
47
1,197
16
3,075
Total
£ million
1,536
35
(8)
27
(174)
409
17
1,815
On 9 September 2021 the Company invited its shareholders to subscribe to a rights issue of 301,260,394 ordinary shares at an
issue price of 410 pence per share on the basis of 31 shares for every 47 fully paid ordinary shares held, with such shares issued on
28 September 2021.
The rights issue resulted in £1,235 million of gross proceeds. Shares totalling 280.2 million were taken up by existing shareholders (93%)
with the remaining rump of 21.0 million shares being underwritten. As at 30 September 2021, there were £91 million of proceeds
outstanding, which have been subsequently received. Costs of £38 million were incurred on the rights issue.
No ordinary dividend in respect of the year ended 30 September 2021 is to be proposed.
An ordinary dividend of 43.9 pence per share, or £174 million, in respect of the year ended 30 September 2019 was paid in the year
ended 30 September 2020.
The disclosures required in respect of share capital are shown in note 20 to the consolidated financial statements.
214 easyJet plc Annual Report and Accounts 2021
www.easyJet.com
214
Company statement of cash flows
Cash flows from operating activities
Cash generated from/(used in) operations (excluding dividends)
Interest received
Interest paid
Dividends received
Dividends paid
Tax credit/(charge)
Net cash generated from/(used in) operating activities
Cash flows from investing activities
Capital contribution to subsidiaries
Loans to subsidiaries
Cash used in investing activities
Cash flows from financing activities
Net proceeds from issue of ordinary share capital
Proceeds from drawdown of bank loans and other borrowings
Repayment of bank loans and other borrowings
Net cash generated from financing activities
Effect of exchange rate
Cash and cash equivalents at beginning and end of year
Note
f
Year ended
30 September
2021
£ million
Year ended
30 September
2020
£ million
57
41
(35)
30
–
4
97
–
(879)
(879)
1,144
–
(371)
773
9
–
(20)
39
(36)
30
(174)
(5)
(166)
(20)
(855)
(875)
409
600
–
1,009
32
–
215
easyJet plc Annual Report and Accounts 2021
www.easyJet.com
215
FINANCIAL STATEMENTS
Notes to the company accounts
a) Significant accounting policies
These financial statements have been prepared in accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006.
The Company's principal activity is that of a holding company for a group of companies engaged in providing low-cost European flights
and holidays.
The significant accounting policies applied in the preparation of these Company financial statements are the same as those set out in
note 1 to the consolidated financial statements with the addition of the following.
The financial statements have been prepared on a going concern basis; details of going concern are provided on pages 74 to 77.
Investments
Investments in subsidiaries are stated at cost, less any provision for impairment. Where subsidiary undertakings incur charges for share-
based payments in respect of share options and awards granted by the Company, a capital contribution in the same amount is
recognised as an investment in subsidiary undertakings with a corresponding credit to shareholders’ equity.
Estimates are required for assessing whether the Company’s investment carrying values are impaired. This requires estimation of the
investment ‘value in use’, which requires an assessment of the future cash flows which are expected to arise from the investments held in
addition to applying other suitable assumptions. These assumptions primarily align to those disclosed in note 10 to the consolidated
financial statements. This represents a critical accounting estimate for the Company.
Receivables
Receivables are recognised initially at fair value, and subsequently at amortised cost using the effective interest rate method, less any
expected credit losses.
b) Income statement and statement of total comprehensive income
In accordance with Section 408 of the Companies Act 2006, the Company is exempt from the requirement to present its own income
statement and statement of comprehensive income. The Company’s profit for the year was £37 million (2020: £35 million). Included in
this amount are dividends received of £30 million (2020: £30 million), which are recognised when the right to receive payment is
established.
The Company has eight employees at 30 September 2021 (2020: eight). These employees are the Non-Executive Directors of easyJet
plc; their remuneration is paid by easyJet Airline Company Limited. The Executive Directors of easyJet plc are employed and paid by
easyJet Airline Company Limited. Details of Directors' remuneration are disclosed in note 4 to the consolidated financial statements and
in the Directors' Remuneration Report on pages 130 to 153.
c) Investments in subsidiary undertakings
Investments in subsidiary undertakings were as follows:
At 1 October
Capital contributions to subsidiaries
At 30 September
2021
£ million
983
16
999
2020
£ million
945
38
983
During the year £16 million (2020: £18 million) capital contributions of share awards (as explained in note a above) was provided to Group
companies. No other cash contributions were made during the year (2020: £20 million).
216 easyJet plc Annual Report and Accounts 2021
www.easyJet.com
216
A full list of Group companies is detailed below.
easyJet Airline Company Limited (2)
easyJet Switzerland S.A. (3)
easyJet Sterling Limited (1) (4)
easyJet Leasing Limited (1) (4)
easyJet UK Limited (2)
easyJet Europe Airline GmbH (6)
easyJet FinCo B.V. (5)
easyJet MT Limited (8)
easyJet HQ Holdings Limited (2) (7)
easyJet HQ Limited (2) (7)
easyJet HQ Development Limited (2) (7)
easyJet Holidays Holdings Limited (2)
easyJet Holidays Limited (2)
easyJet Holidays Transport Limited (2)
Country of incorporation
Principal activity
England and Wales
Switzerland
Cayman Islands
Cayman Islands
England and Wales
Austria
Netherlands
Malta
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
Airline operator
Airline operator
Aircraft trading and leasing
Aircraft trading and leasing
Airline operator
Airline operator
Financing company
Insurance
Holding company
Development of building projects
Development of building projects
Holding company
Tour operator
Air transport
Percentage of
ordinary shares
held
100
49*
100
100
100
100
100
100
100
100
100
100
100
100
1. Although these companies are Cayman Islands incorporated they have always been, and continue to be, UK tax resident.
2. Hangar 89, London Luton Airport, Luton, Bedfordshire, LU2 9PF
3. 5 Route de l’Aeroport, Meyrin, CH-1215 Geneve 15, Switzerland
4. Governor’s Square, West Bay Road, Lime Tree Bay Road, UNIT # 2-105 , PO Box 1982, Grand Cayman KY1-1104, Cayman Islands
5. Westerdoksdijk 423, 1013BX Amsterdam, Netherlands
6. Wagramer Stasse 19, 11.Stock IZD Tower, 1220 Wien, Austria.
7. These UK entities are all 100% owned by the Group and are dormant subsidiary entities. They are exempt from the requirement to prepare individual financial
statements by virtue of s394A of the Companies Act 200, exempt from audit by virtue of s479A of the Companies Act 200 and exempt from filing with the
registrar by virtue of s448A of the Companies Act 2006.
8. Newly incorporated in the 2021 financial year
* The Company has a 49% interest in easyJet Switzerland S.A. with an option to acquire the remaining 51%. The option is automatically extended for a further year on
a rolling basis, unless the option is terminated by written agreement prior to the automatic renewal date. easyJet Switzerland S.A. is a subsidiary on the basis that the
Company exercises a dominant influence over the undertaking. A non-controlling interest has not been reflected in the consolidated financial statements on the
basis that holders of the remaining 51% of the shares have no entitlement to any dividends from that holding and the Company has an option to acquire those
shares for a predetermined minimal consideration. The Company has 100% of voting rights for all other subsidiaries.
d) Financial instruments
In February 2016, easyJet plc issued a €500 million bond under the £3,000 million Euro Medium Term Note Programme guaranteed by
easyJet Airline Company Limited. The Eurobond pays an annual fixed coupon of 1.750%. At the same time the Group entered into three
cross-currency interest rate swaps to convert the entire €500 million fixed rate Eurobond to a floating rate Sterling exposure.
In October 2016 easyJet plc issued a €500 million bond under the £3,000 million Euro Medium Term Note Programme guaranteed by
easyJet Airline Company Limited. The Eurobond pays an annual fixed coupon of 1.125%. At the same time the Group entered into three
cross-currency interest rate swaps to convert the entire €500 million fixed rate Eurobond to a Sterling fixed rate exposure.
In June 2019 easyJet plc issued a €500 million a bond under the £3,000 million Euro Medium Term Note Programme guaranteed by
easyJet Airline Company Limited. The Eurobond pays an annual fixed coupon of 0.875%. At the same time the Group entered into three
cross-currency interest rate swaps to convert the entire €500 million fixed rate Eurobond to a fixed rate Sterling exposure.
On 6 April 2020 easyJet issued a £600 million Commercial Paper through the Covid Corporate Financing Facility (CCFF). This is an
unsecured, short term paper issued at a discount, of which £300 million was repaid in March 2021 and the remaining £300 million was
repaid in November 2021.
For further details please refer to note 24 of the consolidated financial statements.
e) Borrowings
At 30 September 2021
Eurobond
Commercial Paper (Covid Corporate Financing Facility)
At 30 September 2020
Eurobond
Commercial Paper (Covid Corporate Financing Facility)
Current
£ million
–
300
300
Non-current
£ million
1,285
–
1,285
Current
£ million
–
600
600
Non-current
£ million
1,356
–
1,356
Total
£ million
1,285
300
1,585
Total
£ million
1,356
600
1,956
www.easyJet.com
www.easyJet.com
217
217
FINANCIAL STATEMENTS
N O T E S T O T H E A C C O U N T S ( C O N T I N U E D )
f) Reconciliation of profit for the year to cash generated from operations
Profit for the year
Adjustments for:
Net finance and other similar income
Unrealised foreign exchange differences
Tax credit
Dividends received
Operating cash flows before movement in working capital
Changes in working capital:
Increase in trade and other debtors
Increase in trade and other payables
Increase in amounts due from subsidiary undertakings
Increase in amounts due to subsidiary undertakings
Increase/(decrease) in derivative financial instruments
2021
£ million
37
2020
£ million
35
(6)
–
(2)
(30)
(1)
(33)
25
(16)
7
75
57
(4)
(1)
–
(30)
–
–
12
(4)
–
(28)
(20)
g) Guarantees and contingent liabilities
The Company has given a formal undertaking to the Civil Aviation Authority to guarantee the payment and discharge of all liabilities of
easyJet Airline Company Limited, a subsidiary of the Company. The guarantee is required for that company to maintain its operating
licence under Regulation 3 of the Licensing of Air Carriers Regulations 1992.
The Company has issued a guarantee in favour of easyJet Airline Company Limited, a subsidiary undertaking, in relation to the processing
of credit card transactions, and also in respect of hedging transactions carried out according to treasury policy.
The Company has guaranteed the contractual obligations of easyJet Airline Company Limited and easyJet Leasing Limited, both
subsidiary undertakings, in respect of its contractual obligations to Airbus SAS in respect of the supply of Airbus 320 family aircraft.
On 8 January 2021 the Company guaranteed the contractual obligations of easyJet Airline Company Limited, a subsidiary undertaking, in
respect of a $1.87 billion term loan facility, from which easyJet Airline Company Limited drew down $1.05 billion on the 22 January 2021.
This facility is due to expire in January 2026.
On 3 March 2021 the Company guaranteed the contractual obligations of easyJet FinCo B.V, a subsidiary undertaking, in respect of a
€1.2 billion bond issuance under the Euro Medium Term Note (EMTN) Programme. The bond has a coupon of 1.875% and matures in
March 2028.
The Company has guaranteed the contractual obligations of easyJet Airline Company Limited, a subsidiary undertaking, in respect of a
$400 million Revolving Credit Facility. The Revolving Credit Facility was agreed on 9 September 2021, for a minimum of four and a
maximum of six years.
The Company has guaranteed the repayment of borrowings that financed the acquisition of aircraft by subsidiary undertakings. The
Company has also guaranteed the payment obligations for the lease of aircraft by subsidiary undertakings.
The Company has guaranteed certain letters of credit issued on behalf of subsidiary undertakings.
easyJet plc has given a formal undertaking to the Civil Aviation Authority to guarantee the payment and discharge of all liabilities of
easyJet Holidays Limited. The guarantee is required for easyJet Holidays Limited, easyJet Airline Company Limited and easyJet Holidays
Transport Limited to maintain its ATOL’s under The Civil Aviation (Air Travel Organisers’ Licensing) Regulations 2012. easyJet plc has also
issued guarantees in favour of easyJet Holidays Limited and easyJet Airline Company Limited relating to processing of credit card
transactions; and brand licence agreement with easyGroup Limited.
No amount is recognised in the Company statement of financial position in respect to any of these guarantees as it is not probable that
there will be an outflow of resources.
h) Related party transactions
Transactions with subsidiary undertakings, which principally relate to the provision of funding within the Group, are carried out on an
arm's length basis. Outstanding balances are placed on intercompany accounts with no specified credit period, are unsecured, and bear
market rates of interest.
For full details of transactions and arrangements with easyJet’s largest shareholder, see note 28 of the consolidated financial statements.
i) Events after the balance sheet date
On 18 November 2021, the remaining £300 million Commercial paper issued through the Covid Corporate Financing Facility (CCFF) was
repaid.
218 easyJet plc Annual Report and Accounts 2021
218
easyJet plc Annual Report and Accounts 2021
Five-year summary
Income statement
Revenue
Total EBITDAR
Headline EBITDAR
Total operating (loss)/profit
Headline operating (loss)/profit
Total (loss)/profit before tax
Headline (loss)/profit before tax
Total (loss)/profit after tax
Headline (loss)/profit after tax
Basic total (loss)/earnings per share - pence
Basic headline (loss)/earnings per share - pence
Diluted total (loss)/earnings per share - pence
Diluted headline (loss)/earnings per share - pence
Ordinary dividend per share - pence
Statement of financial position
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
Net (debt)/cash
Operating activities
Investing activities
Financing activities (excluding movements in
borrowings and money market deposits)
Loan issue costs
Fair value and foreign exchange gains/(losses)
Net (decrease)/increase in net (debt)/cash
Key performance indicators
Headline return on capital employed
Net (debt)/cash
Airline total (loss)/profit before tax per seat (£)
Airline headline (loss)/profit before tax per seat (£)
Airline revenue per seat (£)
Airline total cost per seat (£)
Airline headline cost per seat (£)
Airline total cost per seat excluding fuel (£)
Airline headline cost per seat excluding fuel (£)
Seats flown (millions)
2021
(as reported)
£ million
2020
(as reported)
£ million
2019
(restated)
£ million
2018
(as reported)
£ million
2017
(restated)
£ million
1,458
(425)
(551)
(910)
(1,036)
(1,036)
(1,136)
(858)
(900)
(159.0)
(166.9)
(159.0)
(166.9)
–
5,608
4,165
(2,677)
(4,457)
2,639
(1,035)
719
(1)
23
(64)
(390)
(25.5)%
(910)
(36.33)
(39.87)
50.54
(86.87)
(90.41)
(73.72)
(77.25)
28.2
3,009
(358)
(273)
(899)
(777)
(1,273)
(835)
(1,079)
(725)
(222.9)
(149.7)
(222.9)
(149.7)
–
5,910
2,563
(3,826)
(2,748)
1,899
(776)
23
(22)
–
(66)
(841)
(19.9)%
(1,125)
(22.66)
(14.68)
54.35
(77.01)
(69.03)
(63.92)
(55.94)
55.1
6,385
970
970
466
466
430
427
349
349
88.6
88.7
87.8
87.8
43.9
5,898
839
961
463
595
445
578
358
466
90.9
118.3
90.2
117.4
58.6
6,044
2,119
(2,668)
(2,510)
2,985
4,994
1,999
(2,060)
(1,700)
(3,233)
761
(863)
(9)
6
(86)
(191)
11.4%
(326)
4.1
4.07
60.81
56.71
56.74
43.23
43.26
105.0
961
(906)
(21)
(1)
6
39
14.6%
396
4.68
6.07
61.94
57.26
55.87
44.82
43.43
95.2
5,047
709
733
404
428
385
408
305
325
77.4
82.5
76.8
81.9
40.9
4,237
1,734
(1,670)
(1,499)
2,802
663
(515)
(10)
6
–
144
11.9%
357
4.45
4.71
58.23
53.78
53.52
41.53
41.27
86.7
1. See note 1 to the 2019 financial statements for details of the change in accounting policy.
2. See note 1 to the 2017 financial statements for details of the change in accounting policy.
www.easyJet.com
www.easyJet.com
219
219
FINANCIAL STATEMENTS
Glossary – Alternative performance measures (APMs)
Non-headline items
Headline loss before tax
Material non-recurring items or items which are not considered to be reflective of the trading performance of the
business (See note 1a)
A measure of underlying performance which is not impacted by material non-recurring items or items which are not
considered to be reflective of the trading performance of the business.
Statutory loss before tax
Total non-headline (credit)/charge before tax (see note 5)
Headline loss before tax
Year ended
30 September
2021
(1,036)
(100)
Year ended
30 September
2020
(1,273)
438
(1,136)
(835)
EBITDAR
Headline EBITDAR
Earnings before interest, taxes, depreciation, amortisation and aircraft rental.
Earnings before non-headline items, interest, taxes, depreciation, amortisation and aircraft rental.
Statutory operating loss
Add back:
Aircraft dry leasing
Depreciation
Amortisation of intangible assets
EBITDAR
Non-headline (credit)/charge within operating profit (see note 5)
Headline EBITDAR
Year ended
30 September
2021
£ million
(910)
Year ended
30 September
2020
£ million
(899)
5
456
24
(425)
(126)
(551)
1
485
18
(395)
122
(273)
Net debt
Total cash less borrowings and lease liabilities. (Cash includes money market deposits but excludes restricted cash).
Borrowings
Lease Liabilities
Cash and money market deposits (excluding restricted cash)
Net debt
2021
Total
£ million
3,367
1,079
(3,536)
910
2020
Total
£ million
2,731
710
(2,316)
1,125
Return on Capital
employed (ROCE)
Headline return on capital
employed (ROCE)
Operating profit, less tax at the prevailing UK corporation tax rate at the end of the financial year, divided by
average capital employed (shareholder equity less net cash/debt).
Operating profit less non-headline items, less tax at the prevailing UK corporation tax rate at the end of the financial
year, divided by average capital employed (shareholder equity less net cash/debt).
220 easyJet plc Annual Report and Accounts 2021
220 easyJet plc Annual Report and Accounts 2021
Shareholders' equity
Net debt
Capital employed
Reported operating (loss)/profit
Tax rate
Adjusted operating profit after tax
Return on capital employed
Reported operating (loss)/profit
Non-headline (credit)/charge within operating profit (see note 5)
Headline Reported operating (loss)/profit
Tax rate
Adjusted headline operating profit after tax
Headline return on capital employed
2021
Total
£ million
2,639
910
3,549
(910)
19%
(737)
(22.4)%
(910)
(126)
(1,036)
19%
(839)
(25.5)%
2020
Total
£ million
1,899
1,125
3,024
(899)
19%
(728)
(23.0)%
(899)
122
(777)
19%
(629)
(19.9)%
Basic headline
(loss)/earnings per
share – pence
Diluted headline
(loss)/earnings per
share - pence
Total headline loss for the year divided by the weighted average number of shares in issue during the year
after adjusting for shares held in employee benefit trusts.
Diluted headline (loss)/earnings per share, the weighted average number of ordinary shares in issue is
adjusted to assume conversion of all dilutive potential shares.
Total loss for the year
Total non-headline (credit)/charge before tax (see note 5)
Tax impact of non-headline items
Headline Loss
Weighted average number of ordinary shares used to calculate basic loss per share
Weighted average number of ordinary shares used to calculate diluted loss per share
Headline loss per share
Basic
Diluted
2021
£ million
(858)
(100)
58
(900)
2021
£ million
539
539
2021
pence
(166.9)
(166.9)
2020
Restated
£ million
(1,079)
438
(84)
(725)
2020
£ million
484
484
2020
pence
(149.7)
(149.7)
Constant currency
measures
These performance measures are calculated by comparing 2021 financial year performance translated at the 2020
financial year effective exchange rate, excluding foreign exchange gains and losses in statement of financial position
revaluations.
www.easyJet.com
www.easyJet.com
221
221
FINANCIAL STATEMENTS
Glossary
Aircraft dry /
wet leasing
Aircraft owned/leased at
end of year
ATC
Available seat kilometres
(ASK)
Average adjusted
capital employed
Block hours
Capital employed
Cash collateralisation
CCFF
Cost per ASK
Cost per seat
Cost per seat, excluding
fuel
CRM
CSAT
CSAT
Gearing
Load factor
Normalised operating
profit after tax
OEM
Operated aircraft
utilisation
Other costs
Other income
Dry leasing arrangements relate solely to the provision of an aircraft. Wet leasing arrangements relate to the
provision of aircraft, crew, maintenance and insurance.
Number of aircraft owned or on lease arrangements of over one month’s duration at the end of the period.
Air Traffic Control
Seats flown multiplied by the number of kilometres flown.
The average of opening and closing capital employed.
Hours of service for aircraft, measured from the time that the aircraft leaves the terminal at the departure airport to
the time that it arrives at the terminal at the destination airport.
Shareholders’ equity less net cash/debt.
The process of pledging cash to serve as a lender’s protection against a borrower’s default.
Covid Corporate Financing Facility
Revenue less profit before tax, divided by available seat kilometres.
Revenue less profit before tax, divided by seats flown.
Revenue, less profit before tax, plus fuel costs, divided by seats flown.
Customer Relationship Management
Customer Satisfaction
A weighted average of responses of surveys sent to customers who experienced either an on-time, delayed,
severely delayed or cancelled flight.
Net cash/debt divided by the sum of shareholders’ equity and adjusted net cash/debt.
Number of passengers as a percentage of number of seats flown. The load factor is not weighted for the effect of
varying sector lengths.
Reported operating profit, less tax at the prevailing UK corporation tax rate at the end of the financial year.
Original Equipment Manufacturer
Average number of block hours per day per aircraft operated.
Administrative and operational costs not reported elsewhere, including some employee costs, compensation paid to
passengers and the profit or loss on the disposal of property plant and equipment.
Includes insurance receipts, compensation, dividends received and gains on sale and leaseback transactions.
Number of earned seats flown. Earned seats comprises seats sold to passengers (including no-shows), seats
provided for promotional purposes and seats provided to staff for business travel.
Revolving Credit Facility
The sum of passenger revenue and ancillary revenue.
Passengers
Profit before tax per seat Profit before tax divided by seats flown.
RCF
Revenue
Revenue passenger
kilometres (RPK)
Revenue per ASK
Revenue per seat
SAF
Seats flown
Sector
UKEF
VCS
Number of passengers multiplied by the number of kilometres those passengers were flown.
Revenue divided by available seat kilometres.
Revenue divided by seats flown.
Sustainable Aviation Fuel
Seats available for passengers.
A one-way revenue flight
UK Export Finance
Verified Carbon Standard
222 easyJet plc Annual Report and Accounts 2021
222 easyJet plc Annual Report and Accounts 2021
Shareholder Information
MANAGING YOUR SHARES
AND SHAREHOLDER
COMMUNICATIONS
The Company’s share register is maintained
by our registrar, Equiniti. Shareholders with
queries relating to their shareholding should
contact Equiniti directly using one of the
methods listed below:
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
ANNUAL GENERAL MEETING
The Board currently intends to hold the
AGM on 10 February 2022 at 11.00am,
subject to the ongoing Covid-19 pandemic
and any UK Government guidance on
social distancing, non-essential travel or
public gatherings. The arrangements for
the Company’s 2022 AGM and details of
the resolutions to be proposed, together
with explanatory notes, will be set out in
the Notice of AGM to be published on the
Company’s website. Guidance on whether
physical attendance by shareholders will be
possible will be determined nearer the time
of the AGM.
DIVIDENDS
Should the Company pay any dividends,
they can be paid quickly and securely
directly into your bank account instead of
being dispatched to you by cheque. You
may also choose to have your dividends
reinvested in further shares of the
Company through our Dividend
Reinvestment Plan (DRIP) (terms and
conditions apply). To arrange either of
these options, simply call Equiniti on the
number provided. Alternatively, you can
manage your dividend payment choices
by registering with Shareview at
www.shareview.co.uk.
SHARE GIFT
Shareholders who only have a small
number of shares whose valuation makes it
uneconomic to sell them may wish to
consider donating them to charity through
ShareGift, the independent charity share
donation scheme (registered charity no.
1052686). Further information may be
obtained from ShareGift on 020 7930 3737
or at sharegift.org
SHAREHOLDER FRAUD
Fraud is on the increase and many
shareholders are targeted every year.
If you have any reason to believe that you
may have been the target of a fraud, or
attempted fraud in relation to your
shareholding, please contact
Equiniti immediately.
Telephone: 0371 384 2577*
Telephone (outside UK): +44 121 415 7047
Online: help.shareview.co.uk
Website: www.equiniti.com
* Lines are open Monday to Friday 8.30am to
5.30pm, excluding bank holidays
Shareholders can manage their holdings
online or elect to receive shareholder
documentation/communication
in electronic form by registering
at www.shareview.co.uk. Some of
the benefits of having a Shareview
portfolio are:
• track share price and recent
performance;
• view and manage all of your
shareholdings in one place;
• buy and sell shares instantly online with
the share dealing service;
• find comprehensive shareholder
information and forms;
• update your records following a change
of address;
• have dividends paid into your
bank account; and
• vote in advance of Company
general meetings.
Shareholders who have elected to receive
electronic communication but require a
paper copy of any of the Company’s
shareholder documentation, or wish to
change their instructions, should contact
Equiniti directly using one of the methods
listed above.
INDEPENDENT AUDITOR
PricewaterhouseCoopers LLP
1 Embankment Place
London
WC2N 6RH
COMPANY’S REGISTERED
OFFICE
Hangar 89
London Luton Airport
Luton
Bedfordshire
LU2 9PF
Telephone: 01582 525019
Registered in England & Wales under
number 03959649
CORPORATE WEBSITE
You can access the corporate website
at https://corporate.easyjet.com.
The corporate website provides useful
information including annual reports,
results announcements and share price
data, as well as background information
about the Company and current issues.
Shareholders are encouraged to sign up
to receive email notification of results
and press announcements as they
are released by registering at
https://corporate.easyjet.com/investors
SHARE PRICE INFORMATION
Details of our share price data and
other share price tools are available at
https://corporate.easyjet.com/investors
www.easyJet.com
223
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Thank you
We’d like to thank everyone who
has helped to produce this report:
Antonia Antoniou, Jane Ashton, Justin Baker, Tasneem Baiyat, Sruti Bajoria, Michael
Barker, Meena Bhatia-Ahir, Maxwell Bruce, Gail Butler, Phil Chastell, Lou Darley, Claire
Dickinson, Jonathan Diec, Alex Field, James Fisher, Matt Garner, Kenton Jarvis, Matt
Landsman, Alex Larkin, Ryan Mynard, Paul Robbins, Zarina Sabir, Ryan Simmons, Chris
Sominka, Ben Souter, Ben Matthews, Julie Morris, Adam Mould, Anthony Pallant, Liz
Perry, Ryan Purvis, Megan Quiddington, Mark Ramsden, Raminder Shergill, Adrian
Talbot, Kieran Talwar, Tim Taylor, Lisa Tsavalos, Jessica Vaughan, Lucy Walker,
James Whittingham, Holly Younger and all of our employees across the network.
Hangar 89
London Luton Airport
Luton
Bedfordshire
LU2 9PF
www.easyJet.com