MAKING
LOW-COST
TRAVEL EASY
Annual Report and Accounts
2023
01
CONTENTS
WELCOME
to our Annual Report and
Accounts 2023
Go paperless
You can help us reduce our
impact on the environment
by signing up to receive your
Annual Report and other
shareholder communications
digitally rather than in print. For
more information on how to do
this, see page 198.
06
CEO review
Further reading
For more information, visit
our corporate website:
corporate.easyJet.com
08
Our purpose framework
39
Sustainability
STRATEGIC REPORT
At a glance
Chairman’s statement
Highlights
CEO review
Our purpose framework
Winning for our customers,
our shareholders and our
people
Our strategy in action
Our net zero roadmap
Business model
Market review
Key performance indicators
02
03
05
06
08
09
12
20
22
23
25
Financial review
People and culture
Sustainability
Task Force on Climate-
related Financial Disclosures
Sustainability Accounting
Standards Board (SASB)
Index
Risk management
Going concern and
viability statement
27
35
39
54
58
59
67
Non-financial and
sustainability information
statement and S172 statement
69
GOVERNANCE
Chairman’s statement
Governance highlights
Our activities in the year
Understanding the
business and culture
Ensuring effective
governance
72
73
74
78
81
Engaging with stakeholders 95
Committee reports
Directors’ remuneration
report
Other disclosures
Statement of Directors’
responsibilities
100
113
131
135
FINANCIALS
Independent auditors’
report to the members of
easyJet plc
Consolidated financial
statements
Notes to the financial
statements
Company financial
statements
Notes to the Company
financial statements
Five-year summary
136
142
147
189
191
194
Additional information
Glossary – Alternative
performance measures
Glossary
Shareholder information
195
197
198
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 02
AT A GLANCE
OUR PURPOSE
Making low-cost travel easy.
Read more on page 8
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 from these
airports – making great value
travel accessible for everyone.
We aim to provide simple,
convenient travel and holidays
at a competitive price with
outstanding customer service.
FLEET DETAILS
Aircraft in the fleet
at 30 September 2023
A319
A320
A320neo
A321neo
TOTAL
Total
Owned
Leased
95
172
54
15
336
29
103
47
4
183
66
69
7
11
153
KEY FACTS
Countries1
Core market positions
Customer satisfaction
35
73%
155
Airports
2
Routes1
1 OR 2
1,018
336
Number of aircraft
1) As served over the financial year ending 30 September 2023.
2) Number one low-cost carrier in the core markets of the UK,
France and Switzerland, where a carrier has >10% of market share.
ContentsStrategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023 03
CHAIRMAN’S STATEMENT
2023: A YEAR OF
ACHIEVEMENT
STEPHEN HESTER
Chairman
continued human progress and prosperity. There
will be plenty of setbacks and issues to tackle, but
I am confident that easyJet can prosper over the
years to come from serving well a growing
customer demand for travel, driven by our
uniquely powerful brand and customer positioning.
The aviation industry is tricky to navigate, but we
believe we are in a good position to be successful
for our customers, shareholders, people and
broader society.
Turning to the specifics of 2023 for easyJet:
STRATEGY
We have spent considerable time honing and
updating our strategy post-pandemic. We aspire
to a position as Europe’s most loved airline,
winning for our customers, our shareholders and
our people. As a champion of low-cost, customer-
friendly travel in Europe, with unrivalled network
and positioning, we see this as a demanding but
appropriate goal. Its pillars – building Europe’s best
network, transforming revenue, delivering ease
and reliability, and driving our low-cost model –
are at the heart of what we are doing.
PERFORMANCE
Revenue for the full year increased 42% to
£8,171 million. Group headline profit before tax of
£455 million was an improvement of £633 million
versus the prior year. easyJet holidays delivered
£122 million of profit before tax, which is a very
pleasing result in what is only the second full year
of operations.
Following the achievement of easyJet’s existing
financial targets, we have set new medium-term
targets. These include a Group headline profit
before tax of £7 to £10 per seat, high teen ROCE,
Holidays profit before tax of over £250 million, and
disciplined capacity growth of around 5% CAGR to
2028. We clearly understand that in a capital-
intense industry, with some inherent volatility,
being able to achieve attractive returns on capital
lies at the heart of delivery for our shareholders.
I am confident that easyJet can prosper
over the years to come from serving well
a growing customer demand for travel,
driven by our uniquely powerful brand
and customer positioning.
The 2023 financial year was one of considerable
accomplishment at easyJet. We made important
progress on our strategic framework, on the
operational resilience so necessary in a
constrained aviation environment, and on the
balance sheet strength to underpin future growth
and risk management. Of particular note was
strong financial delivery, including record profits in
the second half of the year, and the return to
dividends we propose.
However, no review of the year is possible without
a discussion of the external environment. The
world is full of challenges and difficult problems,
ranging from the appalling human tragedies
ongoing in Ukraine and more recently in the
Middle East conflict, to the economic costs of
tackling inflation and post-pandemic supply
bottlenecks, alongside the stresses of a long-
coming normalisation of interest rates. The airline
industry has substantial exposure to these
challenges, ranging from operational impacts on
a complex schedule, to jet fuel and exchange rate
price volatility, and most important of course, the
health of passenger demand.
Our thoughts and profound sympathies go out to
all those so cruelly affected by conflicts they did
not seek.
However, away from the conflicts, on a medium
and long-term view I remain positive, indeed
optimistic. The world is showing its resilience, the
ability to respond and tackle challenges and for
economies to adapt to very major changes.
Employment is strong, major recessions have
been avoided to date and the striking march of
technological development shows the way for
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 04
CHAIRMAN’S STATEMENT (CONTINUED)
BALANCE SHEET
Financial strength is an important attribute in this
industry, given its nature and asset intensity. As at
30 September 2023, easyJet had unrestricted
access to £4.7 billion of liquidity, in line with the
prior year, despite repaying £1.2 billion of gross
debt and the purchase of 10 aircraft during the
year. easyJet finished the year with a net cash
balance of £41 million.
OUR PEOPLE
I am hugely grateful to our employees,
management and my Board colleagues for
their continued dedication and commitment to
delivering easyJet’s purpose to all stakeholders. It is
not an exaggeration to note that the last few years
have brought unprecedented stress and difficulty
to managing an airline. Johan Lundgren, our CEO, is
leading a talented team, and doing it well.
This strength, reflected in the investment grade
credit ratings we hold, positions easyJet to be able
to prepare for the capex coming over the next few
years, as aircraft deliveries increase, but also
provides a base to deal with those challenges and
opportunities that the current macro-economic
environment may present.
DIVIDENDS
Given the financial performance in the 2023
financial year alongside easyJet’s strong liquidity
position, the Board is proposing an ordinary
dividend of 4.5 pence per share, amounting to
£34 million, at the upcoming Annual General
Meeting. This represents 10% of the headline proft
after tax. The expectation is that this will rise to
20% of headline profit after tax in FY24, payable in
early 2025. The Board is committed to maintaining
regular returns to shareholders, with the level
of future return to be assessed over the coming
years, taking into account market conditions,
capex requirements and progress towards
the Group’s new medium-term targets.
YOUR BOARD
I am pleased to report that your Board is
effective and is strongly focused on supporting
management through strategy development
and operational delivery. We were joined by Sue
Clark as Senior Independent Director in March,
completing the Board refresh of recent years.
STAKEHOLDERS
There has been a constant dialogue with our
stakeholder groups throughout the year, and on
behalf of the Board, I would like to take this
opportunity to thank them for their partnership.
At the front of our minds remain our customers
and shareholders. We take very seriously the task
of serving customers well and were not content
with the impact on them of external operating
conditions this past summer. In response, we took
measures to bolster our schedule’s resilience,
ensuring we delivered a more robust and reliable
service to our customers. There is more to do.
Our focus remains firmly on providing a quality
customer experience in all areas within our control.
It is gratifying to see positive financial results, but
there is still a way to go to produce the high
performance levels that easyJet is capable of. We
are determined to deliver and demonstrate that
easyJet can be a leading airline for our
shareholders, just as we are for our customers.
There has been some criticism of rising airfares
and the unbundled pricing models of airlines like
easyJet. This ignores the fact that some 30 million
of our customers opt for the cheapest no-frills fare
option. We are committed to the highest levels of
transparency on our full range of fare bundles –
the low-cost air travel we provide remains
exceptionally good value compared to other
transport and leisure activities. And if authorities
could more effectively support reform of air traffic
routings and air traffic control reliability, there
would be substantially greater customer benefits
to come.
SUSTAINABILITY
The airline industry as a whole has a particular
responsibility to respond effectively to the
climate-based challenges facing the world. It is
therefore important that easyJet continues to play
a positive role as a leader in mapping out the
transition towards our ultimate ambition of zero
carbon emission flying. This was set out through
our net zero roadmap, launched in September
2022. It is very pleasing that our carbon intensity
emissions for the 2023 financial year are below the
level we had set out in our net zero roadmap.
THE FUTURE
In December 2023, easyJet will hold a general
meeting for the proposed aircraft purchase of 157
aircraft and 100 purchase rights from Airbus.
I believe the proposed purchase is strongly in the
interests of easyJet’s shareholders as fleet renewal
reduces costs, reduces carbon intensity and is
expected to drive positive returns for the business,
forming a core part of the delivery of our strategic
objectives.
As we move forward, the Board and I will continue
to work collectively with the management team
and everyone at easyJet to progress towards the
delivery of our new medium-term targets.
Stephen Hester
Chairman
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents easyJet plc
Annual Report and Accounts 2023
05
HIGHLIGHTS
STRONG
DEMAND
UNDERPINS
GROWTH
This year saw strong financial
delivery including record profits
in the second half of the year,
and the return to dividends we
propose.
Stephen Hester
Chairman
FINANCIAL HIGHLIGHTS
NON-FINANCIAL HIGHLIGHTS
Profit/(loss) before tax
Headline profit/(loss) before tax
Load factor
£432m
2023
2022
Revenue
£8.2bn
2023
2022
Headline EBIT
£476m
2023
2022
£455m
89.3%
432
(208)
2023
2022
455
(178)
2023
2022
Net cash/(debt)
£41m
Seats flown
92.6m
8.2
5.8
2023
2022
41
(670)
2023
2022
Headline EBITDAR margin
OTP (On-time performance)
13.8%
66%
476
3
2023
2022
13.8
9.9
2023
2022
89.3
85.5
92.6
81.5
66
72
Alternative performance measures
We use various alternative performance measures
(APMs) which we believe provide useful additional
information for understanding the financial
performance and financial health of the Group.
See the glossary on pages 195 and 196 which
provides a comprehensive list of the APMs that we
use, an explanation of how they are calculated,
why we use them and a reconciliation to the
closest equivalent IFRS measure where relevant.
Read more on pages 27 to 34
CO2 emissions per passenger kilometre
67.2g
2023
2022
67.2
70.4
Strategic reportGovernanceFinancialsContents 06
CEO REVIEW
MAKING LOW-COST
TRAVEL EASY
JOHAN LUNDGREN
Chief Executive Officer
FINANCIAL PERFORMANCE
Total revenue saw a significant rise of 42%,
reaching £8,171 million, compared to £5,769 million
in 2022. This is primarily due to an increase in
capacity to 92.6 million seats from 81.5 million in
2022, coupled with strong ticket yield and a
continued increase in ancillary revenue generation
and the rapid growth of easyJet holidays.
Passenger Revenue Per Seat (RPS) saw a 21%
increase to £56.37, up from £46.80 in 2022. This
growth is driven by easyJet’s optimised network at
primary airports, as demand remained strong
through the year. Airline ancillary revenue per seat
also rose by 21% to £23.47, compared to £19.43 in
2022. This is a result of easyJet’s ongoing efforts
to increase conversion and revenue management,
generating additional revenue for the airline.
Group headline costs, excluding fuel, rose by 22%
to £5,683 million, up from £4,668 million in 2022.
This increase is attributed to higher capacity,
industry-wide inflation, rapid expansion of easyJet
holidays, and resilience measures implemented
ahead of summer 2023.
Headline Airline cost per seat, excluding fuel, saw
a marginal increase of 2% to £54.30 from £53.20
in 2022, aligning closely with the sector length
increase of 3%. This is despite inflation being seen
across the cost base, including within airport,
navigation and staffing expenses, and a
4 percentage point increase in load factor
observed during the year, which affects per
passenger charges within airports.
We have a clear strategy and plan
that we are working towards which will
deliver our target of making low-cost
travel easy, winning for our customers,
our shareholders and our people.
easyJet achieved a record performance during
summer 2023, despite high fuel costs and the
challenges arising from the external operational
environment, thanks to initiatives implemented
over the past year and a half. Supported by strong
consumer demand and easyJet’s leading brand
position, the Company’s success is driven by the
low-risk expansion at primary airports, significant
increases in ancillary revenue, market-beating
growth for easyJet holidays and a constant focus
on cost. This led to a pre-tax headline profit of
£455 million for the 2023 financial year, an
improvement of £633 million on the previous year.
We knew there were going to be external
challenges through the year from the external
operating environment, with continued French
pension reform strikes, ongoing air traffic control
flow rate restrictions and airspace congestion. In
order to prepare for this, we started our
recruitment earlier than ever before, insourced key
processes such as ID checks, and took proactive
action through the summer season to mitigate the
impact of disruption for our customers.
It is very pleasing to have delivered our existing
financial targets in the 2023 financial year:
mid-teen EBITDAR margin, easyJet holidays to
deliver greater than £100 million of profit before
tax and a low to mid-teen ROCE. Following this, we
have set out our new ambitious medium-term
targets, with the goal to deliver greater than £1
billion of headline profit before tax. We have a
clear strategy and plan that we are working
towards which will deliver our purpose of making
low-cost travel easy, winning for our customers,
our shareholders and our people.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 07
CEO REVIEW (CONTINUED)
easyJet holidays continues to be the fastest-
growing UK holiday company, expanding its
customer base by 77% year on year. This profitable
growth has been very pleasing to see and delivered
the Company’s existing medium-term financial
target with its £122 million of profit before tax.
This year’s Group headline profit before tax of £4.91
per seat is an encouraging first step towards our
medium-term target of £7 to £10 Group profit
before tax per seat.
OUTLOOK
The 2024 financial year has begun positively with
strong year-on-year profit growth in October and
revenue per seat on early bookings for Q2 to Q4
pleasingly ahead of last year. There’s also strong
growth in easyJet holidays’ bookings for all periods
on sale, continuing the upward trend. Consequently,
easyJet aims for continued progress towards our
medium-term profitability ambitions.
Early winter results for FY24 will see an impact
from the conflict in the Middle East, which started
on 7 October. In our planned winter schedule,
flights to Israel, Jordan (both temporarily paused)
and Egypt represented 4% of capacity and 10%
ASKs. Additionally there was a broader impact on
near term flight searches and bookings across the
industry, though this seems to be coming back
with a recent improvement in trading. Accordingly,
despite positive underlying strength, easyJet does
not currently expect its Q1 loss to improve year on
year. The present booking strength for summer
2024, coupled with supply constraints in Europe,
provide a positive outlook for the year as a whole.
MEDIUM-TERM TARGETS
easyJet has ambitious and credible medium-term
targets, that provide the building blocks to achieve
a Group profit before tax per seat of between £7
to £10. The levers to achieving this are reducing
winter losses, growing easyJet holidays to deliver
over £250 million of profit before tax and the cost
savings that our current Airbus order book will
deliver from fleet efficiency and upgauging. In
addition to the delivery of our strategy, these
targets are integral to achieving easyJet’s ambition
to deliver more than £1 billion profit before tax.
SUSTAINABILITY
There are many benefits of travel and tourism.
It connects people, countries and cultures and
supports the aspirations and livelihoods of millions
of people. If lost, it would have a devastating
global impact on economic prosperity and social
mobility. Clearly, we need to find a balance that
both lowers the impact of aviation and safeguards
these benefits. This is why we developed and
published an SBTi-aligned net zero roadmap, and
secured validation from SBTi for our interim target
of 35% greenhouse gas emissions intensity
reduction by 2035 (against a FY19 baseline).
We are collaborating in multiple cross-sector
partnerships and have invested multimillions of
pounds in the development of zero carbon
emission technology.
We are making significant breakthroughs. We
partnered with Rolls-Royce to set a world first by
successfully running a modern aero engine on green
hydrogen. A test on a key component in a Pearl 700
engine in September further proves hydrogen’s
suitability for aviation, and – in addition to continued
partnerships with Airbus, GKN Aerospace and
Cranfield Aerospace Solutions – easyJet has played
the lead role in establishing the Hydrogen in Aviation
alliance to help ensure the infrastructure and supply
exists, so we can capitalise on this opportunity when
it becomes available.
We’re also making substantial operational
efficiencies. A fifth of our fleet comprises the
highly efficient NEO aircraft and we’ve invested
heavily in state-of-the-art software to drive flight
efficiencies – all of which are contributing to
easyJet’s best-ever carbon intensity performance
in FY23.
Looking beyond our operations, we continue to
support the vital work of UNICEF and many
charitable and local community focused projects.
At the same time, easyJet holidays is working to
maximise the socio-economic benefits of tourism
to destination communities, while managing
environmental impacts.
Sustainability is at the heart of our strategy and
everyone at easyJet is dedicated to building a
sustainable and thriving aviation sector that will
serve and benefit countless generations to come.
OUR PEOPLE
easyJet continues to have a market leading
reputation as an employer of choice, as evidenced
through our Glassdoor rating of 4.2.
In a recruitment market that remains competitive,
we continue to improve how we attract and retain
diverse talent that reflects the communities we
serve. We have evolved our Employee Value
Proposition and launched a more compelling
careers website to deliver a much-improved
candidate experience and to convert more of the
interest generated by our recruitment advertising
into applications.
When people join easyJet, our proactive and
rewarding health and wellbeing strategy
empowers them to take small, easy steps to better
wellbeing every day. By giving colleagues the
tools, support and confidence they need to take
care of themselves and each other, they will have
the energy to enable us to perform at our best
and win together.
By building an inclusive culture and living our
behaviours, we create a place where everyone can
not only be themselves but also thrive, grow to
their full potential and be at their best.
Our crew in particular have worked tirelessly
throughout the year, providing the customer
service that our customers expect and love from
easyJet. There were many unexpected challenges
during the peak summer period from wildfires in
Greece to air traffic control disruption. I would like
to commend our crew for how they managed
these challenges and to thank all my colleagues
for their contribution in the year to our record
performance.
Johan Lundgren
Chief Executive Officer
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents easyJet plc
Annual Report and Accounts 2023
08
OUR PURPOSE FRAMEWORK
MAKING
LOW-COST
TRAVEL
EASY
We are passionate about
connecting people by making
travel easy, enjoyable and
affordable for customers,
whether for leisure or business.
Our purpose defines who
we are and guides our actions
and decision making.
Low-cost
A PURPOSE-LED BUSINESS
Travel
Easy
We are a low-cost, European,
point-to-point airline.
We believe in the power of travel
to bring people and places together.
Low-cost travel should be a
positive and hassle-free experience.
DELIVERING OUR STRATEGIC PRIORITIES
Building Europe’s
best network
Read more on pages 12 and 13
Transforming
revenue
Read more on pages 14 and 15
Delivering ease
and reliability
Read more on pages 16 and 17
Driving our
low-cost model
Read more on pages 18 and 19
TO ARRIVE AT OUR DESTINATION OF BEING EUROPE’S MOST LOVED AIRLINE, WINNING FOR
OUR CUSTOMERS
Read more on page 9
OUR SHAREHOLDERS
Read more on page 10
OUR PEOPLE
Read more on page 11
MADE POSSIBLE BY OUR PEOPLE LIVING OUR VALUES
Always with
safety at our
heart
Always
challenging
cost
Making a
positive
difference
Always warm
and welcoming
Living the
Orange Spirit
Read more on pages 35 to 38
Strategic reportGovernanceFinancialsContents 09
CUSTOMER PROPOSITION
WINNING FOR
OUR CUSTOMERS
To be Europe’s most loved airline, we win for
customers by offering an unbeatable network and
delivering value through a best-in-class customer
experience at competitive prices.
Continual improvement to the
customer experience focuses first
on people-driven service, along
with foundational investments
behind a longer-term approach
that leverages technology.
This includes investing in ‘brilliant
basics’ – with the aim of making
communication, boarding, bag
drop, the inflight experience and
disruption service recovery as
easy as possible. Our people are
key to improving customers’
experience and we are building
the Orange Spirit through
enhanced customer service
training and incentive
programmes for frontline staff.
Making our customers’ travel
experience even easier will
come through the application
of connected technology to
create an easier travel experience
across every stage of the journey
through further development of
the industry-leading easyJet app.
Customers respond positively to
our proposition, with 78% of seats
in FY23 booked by returning
passengers. We are seen as the
number one in providing value for
money in core markets – the UK,
France and Switzerland – and
94% of easyJet’s target audience
in the UK would consider flying
with easyJet this summer.1
Overall customer satisfaction in
FY23 remained level at 73%2,
despite higher volumes of
disruption compared to FY22.
Read more on pages 16 and 17
1) Brand consideration and value perceptions are from our new brand tracker with
Delineate launched in June 2023.
2) This figure denotes the percentage of customers who said they were completely, very or
quite satisfied with their experience in the easyJet internal On The Day survey conducted
by KPMG. In FY23, we changed our customer satisfaction measurement platform;
therefore, all previous scores have been normalised for comparison.
CASE STUDY
Delivering
ease and
reliability
In 2023, we introduced a
specialised customer chat
feature to provide
personalised support and
improve our operational
efficiency. Our goal was to
upgrade our virtual adviser
(chatbot) to autonomously
handle common inquiries and
seamlessly transfer to human
agents when necessary. Live
chat became our primary
contact channel at the end of
2023. This transition has led
to both improved customer
engagement and enhanced
operational efficiency. We
have begun deploying the
use of generative AI to create
further efficiencies and
engagement enhancements
in customer interactions and
have deployed a development
team to scale these solutions
based on early success.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents MEDIUM-TERM TARGETS
Group PBT per seat
£7–10
HIGH
TEEN %
ROCE1
Holidays PBT contribution
>£250M
C.5%
Capacity growth CAGR2
10
SHAREHOLDER PROPOSITION
WINNING FOR
OUR SHAREHOLDERS
Our strategic priorities — building Europe’s best
network, transforming revenue, delivering ease
and reliability, and driving our low-cost model —
will deliver shareholder value over the long term.
We have set ourselves ambitious
new medium-term targets which
provide us with the building
blocks to achieve our ambition
of making a profit before tax of
greater than £1 billion.
We will grow where it makes
sense and we have identified
the right opportunities to do so,
supported by our investment-
grade balance sheet – one of
the strongest in the industry.
A continued disciplined approach
will be taken to managing the
business through ensuring we
are utilising our assets to generate
the best returns from the capital
we employ.
Our decision to reinstate the
dividend demonstrates our
commitment to both growth
and shareholder returns.
Read more on pages 27 to 34
For more on our
work for investors visit
corporate.easyJet.com/
investors
1) ROCE is calculated by taking headline profit/(loss) before interest, foreign
exchange gain/(loss) and tax, applying tax at the prevailing UK corporation
tax rate at the end of the financial year, and dividing by the average capital
employed. Capital employed is shareholders equity, excluding the hedging
and cost of hedging reserves, plus net debt.
2) Capacity growth between 2023 and 2028.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 11
PEOPLE PROPOSITION
WINNING FOR
OUR PEOPLE
CASE STUDY
living the
orange
spirit
When I applied for the role 20 years ago, I knew
that my age and experience meant I had something
really valuable to offer. My favourite part of the job
has been meeting passengers from all over the
world and giving them the most enjoyable travel
experience possible. I’m proud to work at a
company that puts people first.
Our purpose is clear and our destination is well
understood, to be Europe’s most loved airline.
Winning for our people is a key leg of the journey.
We are setting our colleagues up
for success by giving them the
tools that make it easy to win. A
continued focus on developing
our colleagues, and retaining and
attracting the best talent, will
ensure capability within the
organisation is future-proofed.
We continue to build a high-
performance culture that allows
the Orange Spirit to thrive by
engaging and inspiring our people
to stride towards a common goal.
Read more on pages 35 to 38
Our people help us to win for our
customers and we aim to provide
an experience that sets us apart.
With 82% of our colleagues in
customer-facing roles, our people
are one of our key differentiators.
Our People strategy is focused on
four key elements: enhancing our
culture; future-proofing our
capability; continuously improving
our ways of working; and
optimising productivity though
world-class organisational
effectiveness.
We strive to ensure that our
people are proud of the
organisation they work for,
connected to our purpose, set up
for success and empowered to
make a difference. They aren’t
just employees, but brand
advocates who give our
customers a compelling reason
to choose to fly with us.
Pam Clark, our oldest
employee at the age of 73,
is flying high as easyJet cabin
crew. It was on an easyJet
flight to Madrid 20 years ago
that former hairdresser Pam
picked up a recruitment ad
and was inspired to make her
childhood dream come true.
With two decades of loyal
service with easyJet, Pam
has welcomed an estimated
800,000 passengers on
board 4,500 flights. Now
she is encouraging others
to follow in her footsteps
and consider an exciting
new career as cabin crew –
no matter their age.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents
12
OUR STRATEGY IN ACTION
BUILDING
EUROPE’S
BEST NETWORK
OVERVIEW
CASE STUDY
Lead and build scale in
our core markets
Maintain and build leadership
positions in slot-constrained
airports
Accelerate investment in
destination bases
Additional expansion
when opportunities arise
increased operations
in Lisbon
in flight frequencies and
destinations we can now offer
our customers has moved us
into the number two position
at this airport.
Lisbon is a highly slot-constrained
airport and last year we were
delighted that the European
Commission awarded 18 daily
slots at the airport to us, as they
were impressed with our plans to
use the slots and grow at the
airport. We began to operate
these slots at the start of this
financial year and the increase
ContentsStrategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023
13
OUR STRATEGY IN ACTION (CONTINUED)
BUILDING EUROPE’S BEST NETWORK
Our network of number one and two positions
at primary European airports is unique and
gives easyJet an advantage that another
airline would find hard to match.
UNRIVALLED NETWORK USING
SOUGHT-AFTER AIRPORTS
Our network strategy gives us a
competitive advantage. We are
building our strength at Europe’s
most popular airports with large
catchment areas, increasing
opportunities at the most
slot-constrained airports where
our returns are highest. More
flights and a wider range of
destinations in these airports
provide customers with the best
choice and value when compared
with our competitors.
For example, since 2019 we have
added capacity into Portugal
equivalent to 11 aircraft. This has
resulted in us moving into the
number two position in both
Lisbon and Porto where we were
previously the number three
carrier, building scale and breadth
of offering to our customers in
this market.
This is a great example of how we
can grow by taking advantage of
opportunities as they arise at
slot-constrained airports. The
table below also shows how since
2019 we have increased our focus
on constrained airports where we
achieve the highest returns.
LEAD AND BUILD SCALE IN
OUR CORE MARKETS
We have many opportunities to
grow in our core markets. Larger
aircraft will provide 6% growth in
capacity by 2028, as they enable
us to increase our overall share
of passengers in core slot-
constrained airports without
obtaining additional slots. We will
also expand our existing markets.
The regional market in the UK
has performed extremely well
and we will be adding aircraft to
Manchester, Birmingham, Bristol
and Liverpool to take advantage
of rising demand.
Capacity %1
Fully constrained
Constrained at peak times
Other
2023
42%
39%
19%
2019
37%
30%
33%
Delta
+5ppts
+9ppts
-14ppts
1) Capacity (by calendar year) originating from constrained airports – IATA level 2
or level 3 definition.
OUR NETWORK
Leadership position2
in 8 of Europe’s 30
largest airports
Leadership position2
in 13 fully constrained
airports
Bases
Destinations
2) Leadership position = number one or number two.
PROGRESS IN FY23
> Operated additional slots at
Porto and Lisbon which we
were awarded in 2022.
> Greek islands: easyJet
continued to be the largest
carrier there this summer.
> Rightsized our operations in
Berlin, where we now have
11 aircraft based and the
returns have improved to be in
line with our network average.
> Growth in UK regions with
capacity increases compared
to FY22 of: Edinburgh 30%,
Bristol 28%, Manchester 26%
and Liverpool 20%. These
capacity increases also
enabled an improved product
offering, with a total of 26 new
routes added into the UK
regions, including seven new
routes at Manchester and four
new routes at Glasgow,
broadening the choice for our
customers.
PROPOSED AIRCRAFT ORDER
easyJet recently announced that
it has entered into conditional
arrangements with Airbus to
secure the delivery of a further
157 aircraft (56 A320neo and 101
A321neo) between FY29-34 as
well as 100 purchase rights. This
provides easyJet with the ability
to complete its fleet
replacement programme of
A319 aircraft and replace
approximately half of the older
A320ceo aircraft, alongside
providing the foundation for
disciplined growth. This
proposed order secures scarce
order book positions, enabling
the ongoing renewal of the fleet
to continue. A younger, more
technologically advanced fleet
will deliver substantial fuel and
carbon efficiencies, helping to
deliver our net zero pathway and
drive improved profitability. The
new aircraft also have more
seats than the aircraft they are
replacing and, as noted, this
upgauging helps to increase
capacity without the need to
acquire additional slots, which
can further improve overall
profitability per seat.
This proposed order is a
significant step in assuring the
trajectory of the business and
ensuring that easyJet has
capacity available to implement
its strategy between 2029 and
the mid-2030s.
In view of the size of the order,
shareholder approval is required
in order for easyJet to proceed
and a separate circular has been
issued to shareholders
containing the full details of the
proposed transaction.
FY24 INITIATIVES
> Strengthening the UK regional
market with more aircraft
being added into Manchester,
Bristol and Liverpool.
> Creating new bases for FY24
at Birmingham and Alicante,
with three aircraft to be
located at each base.
> Adding aircraft into
Switzerland, providing
customers with additional
choice for skiing and other
winter sports.
> Increasing capacity over the
winter season (H1) with c.15%
capacity growth focused
across 10 key routes,
unlocking productivity gains
for pilots, cabin crew and
aircraft. Beach capacity will be
increased by around 20% as
we expect people to seek
winter sun, particularly in the
Canary Islands and Egypt. We
are also increasing capacity to
city destinations by 16% as
city breaks and business travel
continue to recover.
> Aircraft deliveries scheduled
for FY24 will continue the
process of upgauging, as the
new aircraft are larger and
have more seats than the
aircraft they are replacing.
> We expect capacity growth of
c.5% per annum on average
(CAGR) between 2023 and
2028.
RELEVANT RISK THEMES
> Safety, security and
operations
> Asset performance
> Macro-economic and
geopolitical
Read more on our principal risks on
pages 61 to 66
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 14
TRANSFORMING
REVENUE
OVERVIEW
Maximise the revenue
potential of our market
Transform our ancillary
revenue capability
Diversify our sources of
revenue, continuing to
focus on easyJet holidays
CASE STUDY
fastest growing holidays
business in the UK
easyJet holidays is going from
strength to strength, with a
77% year-on-year growth in
customers taking advantage of
a fantastic range of holidays at
consistently lower prices than our
competitors. Our share of the UK
market has doubled year on year,
reaching 5% in 2023 with
customers reporting exceptional
levels of satisfaction, with a
customer score of 83%.
This all amounts to £122 million
headline profit before tax
delivered for FY23.
Competitive pricing underpins
the growth – we keep the fixed
costs as a percentage of revenue
as low as possible, lower than our
major rivals. And this pays off for
customers, our prices are
cheaper 70% of the time.
The next phase of our growth
plan includes doubling our UK
market share to 10%, by
introducing new destinations
and products, and growing the
leisure and city break sector.
easyJet holidays year-on-
year customer growth
77%
ContentsStrategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023 15
OUR STRATEGY IN ACTION (CONTINUED)
TRANSFORMING REVENUE
Continuing to develop and build on our
exceptional revenue performance is a key
element of our strategy, ensuring we maximise
the revenue potential of the market.
This involves investing in our revenue
management capability, developing new
industry-leading ways of leveraging data,
and optimising ticket and ancillary revenue.
We are transforming our ability to develop new
ancillary revenue product for our customers
based on their specific needs and we will also
continue to diversify our sources of revenue
with an ongoing focus on easyJet holidays.
Example booking curves
r
o
t
c
a
f
d
a
o
L
100%
80%
60%
40%
20%
0%
Later
booking
profiles
(e.g. city
and domestic
routes)
-10
10
30
50
Earlier booking profiles
(e.g. leisure and beach routes)
150
170
190
210
90
130
70
Days before departure
110
Additional airline ancillary
revenue compared to 20191
£1bn
Ancillary revenue as a
proportion of airline revenue
29%
1) Calculated as increased ancillary
revenue per seat FY23 versus FY19,
multiplied by seats flown FY23.
PROGRESS IN 2023
Over the last four years we have
transformed our ancillary
proposition and this has provided
a step change in revenue
generation. We are giving
customers more choice and they
are responding well to further
unbundling, such as enabling
them to book a seat without
having to book a large cabin bag.
Our customers only have to pay
for ancillary products that they
want, rather than having
products that they don’t want
included in the price of the ticket.
Airline ancillary revenue in the
current financial year was
£2.2 billion, an increase of 37%
compared to the prior year, and
29% of the airline’s revenue now
comes from the sale of ancillary
products.
We believe there is scope for
further revenue generation from
the pricing algorithms we have
developed which we are
continuously evolving and which
are used to apply dynamic pricing
to both tickets and ancillary
products. The data science team
which develops and refines these
algorithms is embedded within our
revenue management team to
ensure we prioritise development
where it will enable us to maximise
our return.
The algorithms will balance how
rapidly flights are selling against
the benefit of flying full and price
seats to maximise revenue.
Different types of routes have
different booking curves: leisure
routes tend to get booked earlier,
while city routes sell much nearer
departure (see graphic above).
In addition, easyJet’s in-flight retail
brand and proposition, which
launched last year, is delivering
growth across all KPIs and is
allowing us to tailor our product
offering to our customers. This
has been a real success and we
have increased spend per seat by
17% to £2.12 and profit per seat by
42% to £0.60. We are planning to
deliver over £1 profit before tax
per seat over the medium term.
In addition to the development of
ancillary revenue, we are also
benefiting from the growth of
easyJet holidays. This year it has
performed strongly, contributing
incremental revenue of £776
million to the Group and
generating £122 million profit from
1.9 million passengers (including
agent commission passengers).
We believe there is
scope for further
revenue generation
from the pricing
algorithms we have
developed which we
are continuously
evolving.
FY24 INITIATIVES
> We are planning further growth
of easyJet holidays. Having
achieved our original target for
easyJet holidays, of profit before
tax in excess of £100 million, we
have now set ourselves a new
target for easyJet holidays to
achieve profit before tax of
£250 million in the medium
term. The next phase of our
growth plan includes doubling
our UK market share to 10% by
introducing new destinations
and products, and growing the
leisure and city break sector. We
will look to convert as many of
our airline passengers as
possible into easyJet holidays
customers, and one key
advantage of our holidays
business is that it has no
constraints on growth. easyJet
holidays recently launched into
Switzerland so there will be a
focus on growing this market in
2024, and expansion into other
markets in Continental Europe
will also be explored.
> We will focus on the
continued development of our
in-flight retail offering to make
it even more attractive to our
customers and to drive
towards delivery of our
medium-term target of £1
profit before tax per seat.
Enhancements being
assessed include the
introduction of closed-loop
wi-fi to facilitate an enhanced
in-flight retail experience by
enabling customers to browse
the product offering with
latest prices on their phone
and to order to their seat.
Similarly, we will also assess
the development of pre-order
capability for in-flight retail for
food, drink and Duty Free.
RELEVANT RISK THEMES
> Technology
> Macro-economic and
geopolitical
Read more on our principal risks on
pages 61 to 66
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents
16
OUR STRATEGY IN ACTION (CONTINUED)
DELIVERING
EASE AND
RELIABILITY
OVERVIEW
Provide an easy and reliable
customer experience
Protect and build on easyJet’s
strong brand
Grow and deepen relationships
with our customers
Establish sustainability
leadership
Use of our disruption
management tool
80%
of those disrupted used the
disruption management tool
CASE STUDY
self-
service
tool
We have further enhanced the
functionality of our disruption
management self-service tool
(SSDM) this year to make it even
easier for customers to make
changes when disruption does
occur. Customers are now able
to use the SSDM to select
alternative flights and to book
hotels if accommodation is
required, or to request either
vouchers or a refund. This year,
80% of customers made use of it.
ContentsStrategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023 17
OUR STRATEGY IN ACTION (CONTINUED)
DELIVERING EASE AND RELIABILITY
Giving customers an enjoyable, hassle-free experience
and reliable service that makes them want to fly with
us again will always be one of the key cornerstones of
our strategy. Ease and reliability is at the centre of our
purpose to make low-cost travel easy.
Airline customer
satisfaction score
73%
We aim to deliver a seamless
and digitally enabled customer
journey at every stage and we are
working continuously to enhance
the customer experience,
particularly at the airport.
Sustainability continues to be a
priority for easyJet and our
customers, and our net zero
roadmap demonstrates our
commitment to leading in this area.
easyJet has a loyal customer
base, with 78% of seats booked
by returning customers, as our
crew provide the warmest
onboard experience. The latest
brand tracker1 confirmed our
number one position in our core
markets when it comes to value,
which is all the more important at
a time when consumers’
disposable income continues to
be squeezed.
In preparation for the summer
2023 season, we recruited more
crew than ever before, onboarding
them ahead of summer to ensure
we were fully prepared.
Unfortunately, despite easyJet
being fully prepared for this
summer, we saw operational
challenges outside of our
control, in particular with air
traffic control (ATC), which was
the single biggest source of
delays this year across the
network and more specifically at
Gatwick. We continued to take
proactive action throughout the
summer to manage in this
challenging operating
environment. As a result, to
tackle this, we consolidated
flights in the middle of the day
at Gatwick to create ‘firebreaks’
in our schedule to minimise the
knock-on effects from delays
to aircraft in the morning.
Congested airspace from the
continued invasion of Ukraine,
French ATC strikes, the impact
of NATS staff shortages in the
control tower at Gatwick and
weather-related disruption all
drove operational challenges
in 2023.
PROGRESS IN FY23
> Self-service disruption
management tool
functionality enhanced during
the year, improving the
experience for our customers.
> Our in-house team processed
employment reference checks
more quickly and we recruited
more crew than ever before.
> We aspire to lead the way on
the sustainability agenda, and
we were very proud to win the
2023 UK Green Business
award for ‘Net Zero Strategy
of the Year’.
> Launched the Hydrogen in
Aviation alliance alongside
Rolls-Royce, Airbus, Ørsted,
GKN Aerospace and Bristol
Airport. We expect this alliance
to be critical in bringing
together major players across
the aviation and energy sectors
to accelerate the delivery of
zero carbon aviation.
FY24 INITIATIVES
> Recruitment of cabin crew
and pilots for the 2024
summer season to take place
early again. Recruitment is
already underway for the
1,100+ cabin crew and c.500
pilots that we need for the
2024 summer season. We
have already received over
13,000 applications for cabin
crew and have recruited over
35% of our target, with training
scheduled from November
2023 to January 2024. We
have also recruited over 50%
of the pilots we require.
> Encouraging Gatwick to build
more resilience by increasing
staffing levels in the control
tower. ATC was the single
biggest source of delays this
year and the Gatwick tower,
operated by NATS, particularly
struggled to cope with staff
shortages, leading to
restrictions on the aircraft
numbers which Gatwick could
handle over a sustained period.
We have been engaged in
dialogue with Gatwick Airport
since this issue started to have
a significant detrimental
impact, and have stressed the
importance of improving their
resilience to reduce disruption
and minimise the negative
impact on customers’ travel
plans. In the meantime, we
continue the ongoing work to
improve our customer
experience at Gatwick as with
all other airports.
> Supporting Rolls-Royce’s
research into hydrogen engine
development. Our
groundbreaking partnership
with Rolls-Royce aims to
pioneer the development of
hydrogen combustion engine
technology. In November
2022, we set a new aviation
milestone with the world’s first
run of a modern aero engine
using hydrogen, and in
September 2023, we
successfully tested a
combustor, a key engine
component. The ground
testing continues through
FY24, with a longer-term
ambition to carry out flight
tests. See page 48 for more
details of this and other
hydrogen aircraft partnerships
we are involved in.
RELEVANT RISK THEMES
> Safety, security and
operations
> Asset performance
> Our people
> Environmental sustainability
> Technology
Read more on our principal risks on
pages 61 to 66
INDUSTRY LEADING CUSTOMER PERCEPTION – #1LCC1
Delivering on value
Brand awareness
Delivering on network
Delivering on reliability
Making travel easy
UK
#1
#1LCC
#1LCC
#1LCC
#1LCC
FRANCE SWITZERLAND
#1
#1LCC
#1LCC
#1LCC
#1LCC
#1
#1LCC
#1LCC
#1LCC
#1LCC
1) Number one low-cost carrier in the core markets of the UK, France and
Switzerland, where a carrier has >10% market share.
Source: Delineate Brand Tracker (August 2023)
©2023 Rolls-Royce
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 18
OUR STRATEGY IN ACTION (CONTINUED)
DRIVING
OUR LOW-
COST MODEL
OVERVIEW
Drive our business with
sustainable efficiency
Invest in our fleet
Optimise our capital efficiency
Deliver strong productivity
CASE STUDY
Insourcing
line
maintenance
In recent years we have
insourced line maintenance at
several locations, enabling us to
have greater control over
maintenance, reducing costs
incurred and improving the
quality of the maintenance
fulfilled.
Our most recent development
was the opening of our Berlin
maintenance hangar in January
2023. This c.10,000 square-
metre facility had 107 full-time
engineers and other staff in
September 2023, and in the time
since it opened has dealt with
367 maintenance events, an
average of 41 per month. This is
expected to rise to c.60 per
month in 2024. We have seen an
average cost saving of 38% per
aircraft visit to date.
Cost saving per aircraft
visit to date
38%
ContentsStrategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023 19
OUR STRATEGY IN ACTION (CONTINUED)
DRIVING OUR LOW-COST MODEL
Disciplined implementation of our low-cost model
underpins all elements of the easyJet strategy:
> A highly efficient point-to-point network delivering
simplicity in operations and scale within airports.
> Providing disaggregated products and relevant
bundles of products, allowing customers to pay
for what they value.
> Ensuring we have a fleet with exceptional fuel
efficiency and low maintenance costs.
And most importantly, it means always challenging
cost, ensuring that where easyJet spends it delivers
tangible value to our customers. Alongside a focus
on productivity and investing in processes and
tools which deliver truly sustainable long-term
cost efficiency.
Our low-cost model
means always challenging
cost, ensuring easyJet
delivers tangible value
to our customers.
Upgauging the fleet will help us
to keep costs per seat down, as
the fixed costs involved with
flying an aircraft are spread over
a greater number of seats. Our
average gauge is expected to
increase from 179 at September
2023 to above 190 in FY28. This
will give us a cost-saving per
seat of greater than £3, which is
a benefit that no other European
airline has on this scale over the
next five years.
The capacity we are adding in the
FY24 winter season will help to
drive aircraft utilisation
improvements of 12% year on
year. Pilot productivity is expected
to go up by 9% and crew
productivity by 6% year on year.
The productivity and utilisation
benefits that we expect to see as
a result of this increased capacity
mean that we expect our cost per
seat excluding fuel over the
forthcoming winter season to
reduce year on year, and to be flat
across the FY24 year as a whole.
Expected average
gauge by FY28
190+
Delivery of new
A320neo family
aircraft in the year
10
PROGRESS IN FY23
> Fleet renewal continues
with the delivery of 10 new
A320neo family aircraft in
the year.
> Insourcing maintenance in
Berlin with the opening of a
new hangar.
> Functionality of our self-service
disruption management tool
enhanced during the year, with
the result that 80% of
disrupted passengers now use
the tool when disruption
occurs. This reduces the
volume of calls which our call
centre operatives need to
handle, meaning shorter wait
times for those customers who
do call and reduced costs
overall to manage disruption
when it occurs.
> Descent Profile Optimisation
is software which reduces the
amount of fuel used on
landing an aircraft by plotting
a more fuel-efficient descent.
It is estimated that this saves
at least 50kg of fuel per flight.
easyJet now has the largest
fleet in the world equipped
with this technology. See
page 44 for full details.
FY24 INITIATIVES
> Our overall ambition for the
forthcoming financial year is
to ensure that our cost per
seat (excluding fuel) is flat
year on year. We aim to
achieve this through our
continued focus on making
cost savings through
efficiencies and procurement
savings that do not jeopardise
the quality of our service
offering, combined with larger
initiatives such as those
described below.
> Delivery of 16 NEO aircraft
scheduled for FY24,
comprising 15 A320s and an
A321 NEO aircraft typically
deliver at least a 15% boost
in fuel efficiency and therefore
help to keep our overall fuel
costs down, as well as
producing significantly
lower carbon emissions
and being quieter.
> Assessing the opportunity
to insource more line
maintenance across the
network: in recent years
we have insourced line
maintenance at Gatwick,
Glasgow, Edinburgh, Bristol
and most recently Berlin with
great success, delivering lower
cost and a better quality
service. We are actively
assessing where we might
be able to deliver further
insourcing in FY24.
> Exploring the use of AI
technology to improve
efficiency and reduce costs:
we have already introduced
a generative AI solution to
manage customer queries,
which has led to a 50%
reduction in response
processing times and a 30%
reduction in the processing
cost of each email received.
Our teams are exploring other
ways in which we can utilise
data to drive efficiency across
the business.
RELEVANT RISK THEMES
> Asset performance
> Environmental sustainability
Read more on our principal risks on
pages 61 to 66
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 20
OUR NET ZERO ROADMAP
PIONEERING
FUTURE TRAVEL
We’re pioneering positive change for our
planet, communities and people. Getting
one step closer to net zero every day.
BY 2035
WE ARE COMMITTED TO
REDUCING OUR GHG EMISSIONS
INTENSITY BY
Our validated science-based target, a 35%
carbon emissions intensity improvement by
2035, is benchmarked against a 2019 baseline.
Since 2000, over a 20-year period, we have
already reduced our carbon emissions per
passenger per kilometre, by one third.
1,000
800
600
400
200
0
e
r
t
e
m
o
l
i
k
e
n
n
o
t
e
u
n
e
v
e
r
r
e
p
e
2
O
C
s
m
a
r
g
n
i
y
t
i
s
n
e
t
n
i
s
n
o
i
s
s
i
m
e
r
u
O
2023
Current position:
exceeding targets
67.2g
Achieved our lowest CO2 intensity ever,
67.2gCO2/Revenue Passenger Kilometre
20%
Fleet is now over 20%
NEO following the delivery
of our 69th aircraft
332
Successfully installed Descent
Profile Optimisation (DPO) on
332 aircraft, making easyJet
the largest worldwide operator
of DPO-enabled aircraft
easyJet entered in to a
sustainability-linked loan based
on our net zero roadmap. Read
more on page 99
35%
versus 2019
DRIVERS OF
2035 INTENSITY
REDUCTION
Sustainable Aviation Fuels (SAF)
Operational efficiencies
Airspace modernisation
Zero carbon emission aircraft
Fleet renewal with NEO aircraft
DRIVERS OF
2050 INTENSITY
REDUCTION
We will
address
residual
emissions
through
carbon
removals
2022
2023
2024
2025
2030
2035
2040
2045
2050
easyJet plc commits to reduce well-to-wake GHG emissions related to jet fuel from owned and leased operations by 35% per Revenue Tonne Kilometre (RTK) by FY35 from a FY19 base year. The target boundary includes
biogenic emissions and removals from bioenergy feedstocks. Based on SBTi Aviation Sectoral Decarbonisation Pathway for a well below 2°C scenario, read more on page 56.
BY 2050
WE AIM TO BE NET ZERO,
REDUCING OUR CARBON
EMISSIONS INTENSITY BY
78%
versus 2019
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents
21
OUR NET ZERO ROADMAP (CONTINUED)
Reduce
MINIMISE OUR ENERGY
REQUIREMENTS
HOW WE PLAN
TO ACHIEVE
NET ZERO
BY2050
Fleet renewal with NEO
Minimise fuel burn and
emissions through current
technology
Operational efficiencies
Fuel saving through initiatives
including single engine taxi
and engine washing
Airspace modernisation
10% reduction by 2035 through
Single European Sky and
modernisation of UK airspace
> 158 NEO aircraft to
be delivered by 2029
> SkyBreathe fuel
management tool
> Advocating for change
by decision makers
> Descent Profile Optimisation
Replace
CHANGE FROM FOSSIL
FUELS TO LOW-CARBON
AND ZERO CARBON SOURCES
Sustainable Aviation Fuel
Use at scale in line with
EU and UK mandates
> Long-term supply agreements
Zero carbon emission aircraft
Committed to being an early
adopter in transitioning
the fleet
with fuel suppliers
> Our partnerships include
Rolls-Royce, Airbus, Cranfield
Aerospace Solutions, GKN
Aerospace
Remove
ADDRESS RESIDUAL
EMISSIONS TO REACH
NET ZERO
Carbon removal
Residual emissions will be removed
to reach net zero by 2050
> Agreement signed with Airbus
and 1PointFive for Direct Air
Carbon Capture and Storage
credits
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 22
BUSINESS MODEL
Standard low-cost model
NETWORK AND SCHEDULE
> Point-to-point
routes.
> Frequency
of schedule.
easyJet differentiation
> Leadership positions in primary
and slot-constrained airports in
many of Europe’s largest
catchments with high customer
demand.
> These have proven to be
among the highest yielding in
the market and enable us to
tap into both business and
leisure demand.
> Our network is unrivalled
and difficult to replicate.
Standard low-cost model
easyJet differentiation
SCALE AND GROWTH
> Scale drives high
brand awareness
and facilitates
volume pricing deals
(e.g. airports, fleet).
> Spreads fixed
overheads over
larger volume
of seats.
> We have strengthened and will
continue to strengthen our
positions as the competitive
landscape evolves, bidding for
additional slots where it makes
economic sense.
CREATING VALUE THROUGH
NETWORK
AND SCHEDULE
CUSTOMER
SCALE
AND GROWTH
Making low-cost
travel easy
CAPITAL
EFFICIENCY
> We have an opportunity for
further growth by investing
in new, larger aircraft with
greater seat numbers
(known as upgauging).
PRODUCT PRICE
AND DISTRIBUTION
COST
EFFICIENCY
Standard low-cost model
easyJet differentiation
PRODUCT PRICE AND DISTRIBUTION
> Low fares
> Industry-leading revenue
predicated on
basic airport
and cabin product.
management capability, including
dynamic pricing of ancillaries.
> Continued evolution of the
> Unbundled fares
with additional
charges for
bags, seats
and catering.
Group’s product portfolio to
build on spend per customer
and deliver enhanced
sustainable returns.
> Limited indirect distribution
to capture additional value.
LOW-COST OPERATIONS
We deliver our purpose by leveraging the
low-cost airline business model with
network and service differentiation.
Standard low-cost model
CUSTOMER
> Standardised
products to
meet the needs
of individuals.
easyJet differentiation
> Leading customer app which
improves the overall experience
from booking to check-in to
reaching the aircraft, often without
the need for human interaction.
> Warm welcome and personal
service to get customers to their
destination on time.
> Disruption management
self-service tool makes it easier
for customers to be better
supported, informed and able to
make changes when disruption
does occur.
Standard low-cost model
easyJet differentiation
CAPITAL EFFICIENCY
> Single fleet type
with standard
specification.
> High density,
single-class cabin.
> Short turnarounds
and high aircraft
utilisation.
> Young fleet.
> Opportunity to increase the
average gauge of our aircraft
through our fleet renewal
programme, bringing in larger
aircraft.
> This presents us with a
considerable opportunity for
organic growth by increasing our
overall seat capacity.
> c.35% of the A319s will be replaced
over the next three years.
Standard low-cost model
easyJet differentiation
COST EFFICIENCY
> High productivity
and strong cost
culture.
> Long-term strategic partnerships
with key airports and ground-
handling operators.
> Focus on seasonal bases
which increases cost flexibility,
with 21 aircraft now operating
for eight months of the year from
these bases. New seasonal base
to open in Alicante in 2024.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 23
MARKET REVIEW
MARKET DYNAMICS
The key factors and trends which influence easyJet and
all operators within the European airline industry.
key
market
driver
impact
on our
industry
how we are
responding
Demand
The airline industry overall is a cyclical one,
with demand for flights driven primarily by
economic growth. Demand is also seasonal,
particularly in leisure travel. However, the
business model of low-cost carriers such as
easyJet tends to be more resilient to recession,
as there will be some customers who seek
greater value during periods of low economic
growth, attracted by our lower prices and our
network of primary airports.
Later in the year Gatwick Airport also imposed
flight reductions across all airlines as they
struggled with staffing levels in their air traffic
control tower. Passenger numbers in the
second half of our financial year were 7% higher
than in the second half of the previous financial
year. Overall, easyJet flew 82.8 million
passengers in this financial year, an increase of
19% on the previous year and 86% of the
pre-pandemic passenger numbers.
Demand in the first half of the year grew
strongly as the industry rebound from the
pandemic continued, with easyJet’s passenger
numbers being 41% higher than in the
equivalent six-month period in the previous
year. Over the second half of our financial year,
demand continued to be strong but external
factors – primarily air traffic control strikes in
Europe, notably France – caused disruption to
spike and eventually led to easyJet reducing
flight volumes at Gatwick from July, which
reduced passenger numbers compared to
what they would otherwise have been.
Forecasts from a range of institutions are that
economic growth will be weak across both the
UK and the EU in 2024, as a consequence of
geopolitical factors such as the ongoing wars in
Ukraine and the Middle East, high inflation and
interest rates. However, whilst consumers’
disposable income is under pressure, a recent
survey showed that 77% of UK consumers are
willing to protect their spend on holidays and
travel above most other items of discretionary
expenditure. Furthermore, we believe that
easyJet will be protected due to the emphasis
on value in such an environment.
> Most European airlines have seen
> The continued increases in the cost of living
customer numbers increase strongly this
year and they are now at similar levels to
those seen prior to the pandemic.
and the associated squeeze on household and
business incomes across European economies
are likely to increase the emphasis on value in
the short term, to the natural advantage of
low-cost carriers such as easyJet.
> We have moved a significant percentage
of our fleet to destination bases, which
allows us to reallocate capacity from one
source market to another rapidly in
response to demand fluctuations.
> We focus on constrained airports, where
demand is more resilient to these
macro-economic pressures.
> The combination of low fares, primary
airports and our city network is an attractive
offering for business travellers when cost
focus is paramount.
> Our strategic focus on ‘Building Europe’s
best network’ and ‘Transforming revenue’
addresses these market dynamics, including
how we manage the associated risks.
fuel
Fuel is one of the biggest costs airlines face
and one of the most volatile. Fuel represented
26% of easyJet’s headline cost base in the
current financial year. The ICE Brent crude oil
spot price has fluctuated between $72 and
$99 per barrel over our financial year. The
price was predominantly on a downward
trend for the first seven months through to
May 2023, coming off the spike which the
Russian invasion of Ukraine triggered in 2022.
Then a combination of stronger world
demand and reduced OPEC production levels
led to a general increase in the market price
of oil over the remainder of our financial year,
with the price at $95 per barrel at
30 September 2023, 8% higher than
12 months earlier. The price of jet fuel is
strongly correlated with the price of crude oil.
Brent price
140
120
100
80
60
40
20
0
2018
2019
2020
2021
2022
2023
> Many European airlines hedge their
fuel costs, reducing their exposure to
short-term volatility in the price of jet fuel.
> easyJet has continued its fuel hedging
programme throughout the year and is
76% hedged for H1 FY24.
> Further details on how we manage this risk
can be found under the Macro-economic
conditions risk on page 63.
> Aerospace companies are developing new
technologies and fuels which could in the
future help to decarbonise aviation. This
could have an impact on the price of jet
fuel as well as the alternative fuels as
demand patterns shift over time.
> easyJet is involved in a number of
initiatives to achieve our ambition to
be a leader in decarbonising aviation.
The main ones are hydrogen aircraft
partnerships and the use of Sustainable
Aviation Fuel. Full details can be found in
the ‘Pioneering future travel’ section on
pages 48 to 50.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 24
MARKET REVIEW (CONTINUED)
Environmental
and social
key
market
driver
impact
on our
industry
how we are
responding
Sustainability, in particular the carbon emissions from flights
and their 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. In 2022, a
nationwide study of 2,000 British holidaymakers, conducted
by easyJet, revealed that 76% think that companies need to
urgently set out how they will achieve net zero this century
and demonstrate how they are operating more sustainably.
78% say they will choose an airline based on their sustainability
credentials when travelling in the future and 70% would
commit to a zero carbon emission holiday if it was available
to them.
> Individual airlines, airports and industry groups have
set net zero targets for 2050.
> Aerospace companies are developing new technologies
and fuels 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.
> For 2023 we are ahead of our SBTi-aligned net zero
roadmap (see page 20 for full details).
> We recently announced that we are the first airline to
sign a contract with Airbus relating to Direct Air Carbon
Capture and Storage technology. We believe carbon
removal will play an important role in addressing our
residual emissions in the future, to help us achieve our
pathway to net zero.
> Our full Sustainability Strategy with further detail can be
found in the Sustainability section on pages 39 to 58.
Foreign
exchange
easyJet is exposed to foreign exchange rate movements,
mainly resulting from euro revenues and US dollar costs,
translated into our functional currency of sterling. Sterling
strengthened during the year against both the euro and
US dollar, as the political turmoil which impacted the UK in
autumn 2022 faded and investors’ confidence in the UK and
sterling returned. Sterling’s strength against both currencies
peaked in July 2023 and then it weakened over the late
summer as expectations of the Bank of England continuing to
raise interest rates began to fade. When sterling weakens this
has an adverse impact on US-denominated costs (mainly fuel,
leases and maintenance) and a favourable impact on euro
revenues when translated into sterling.
> Many European airlines hedge their foreign currency
requirements, particularly for the US dollar, which
reduces their exposure to short-term currency
fluctuations.
> easyJet has continued its US dollar hedging programme
throughout the year and is already 76% hedged on US
dollars for H1 FY24.
> Further details on how we manage this risk can be
found under the Macro-economic conditions risk on
page 63.
On-Time Performance,
airspace management and
supply chain pressures
European airspace remains a challenging and congested
environment. Eurocontrol continues to redesign the
airspace infrastructure with the aim of creating a more
efficient and sustainable network, but currently UK and EU
airspace consists of a complex network of flight paths that
have seen little development over the last 70 years.
In 2023, congested airspace from the continued conflict in
Ukraine, French air traffic control strikes, the impact of
NATS staff shortages in the control tower at Gatwick,
weather-related disruption and the NATS system failure in
August all drove operational challenges, particularly over
the second half of the year, resulting in a higher-than-
normal level of cancellations.
> Air traffic control delays cause a number of issues
from additional flying time and airport congestion
to inefficient flight planning.
> Antiquated flight paths cause additional fuel burn.
> The NATS system failure in August 2023 caused
many flight cancellations, resulting in the travel plans
of thousands of travellers across Europe being
disrupted and causing airlines to incur additional
welfare costs (hotels, food, etc.) on behalf of their
customers.
> We are encouraging Gatwick to build more resilience
into their operations, particularly staffing levels in the
control tower.
> Recruitment is already underway for cabin crew and
pilots for summer 2024, to ensure we are operationally
ready for next year’s peak trading period.
> We are advocating for change and modernisation of
airspace, alongside other airlines, by lobbying national
decision makers and maintaining a collaborative
relationship with Eurocontrol (see page 44 for further
details).
> Our strategic focus ‘Delivering ease and reliability’
addresses these market dynamics, including how we
manage the associated risks (read more on pages 16
and 17).
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents
25
KEY PERFORMANCE INDICATORS
headline profit/(loss)
before tax per seat (£)
Group
£4.91
AIRLINE
£3.59
headline ebitdar margin (%)
13.8%
headline EARNINGS/(LOSS)
per share (p)
45.4p
easyJet has seven key performance indicators
which we use to measure our overall progress.
Group
2023
2022
2021
2020
2019
Airline
2023
2022
2021
2020
2019
Group
2023
2022
2021
2020
2019
Group
2023
2022
2021
2020
2019
4.91
(2.19)
(40.29)
(15.16)
4.07
3.59
(2.65)
(39.87)
(14.68)
4.07
13.8
9.9
(37.8)
(9.0)
15.2
45.4
(19.6)
(166.9)
(149.7)1
88.7
Why it is important
Incremental improvements in profitability ensure
that we have a platform for long-term growth
while generating value for all stakeholders.
What we measure
Headline profit/(loss) before tax divided by the
number of seats flown. Prior to this year, our per
seat metrics were calculated for the airline only.
However, given the growth of easyJet holidays we
will now focus on headline profit/(loss) before tax
per seat for the Group as a whole as that metric
will correctly reflect the performance of the airline
and the holidays business combined. We will
therefore use the Group metric as our KPI going
forwards, particularly as it is one of our new
medium-term targets (see page 10 for details).
Why it is important
EBITDAR is a good proxy for cash generation.
EBITDAR margin is a metric the business uses to
make its operating decisions and is one measure
of the underlying performance of the business.
What we measure
Headline EBITDAR divided by total revenue.
How we performed
Headline profit before tax per seat for the Group
was £4.91 (2022: £2.19 loss). Airline revenue per
seat (RPS) increased by 19% at constant
currency, a consequence of increased loads and
strong yields. The increase in RPS was balanced
across passenger and ancillary revenue, and
included improved revenue from the revised
in-flight retail offer. This was tempered by cost
per seat (CPS) on fuel increasing 31% on a
constant currency basis predominantly due to
the increase in post-hedge fuel prices compared
to the prior financial year. CPS on airline headline
costs excluding fuel only rose by 1% at constant
currency, as strong cost management and
increased flying (which reduces fixed costs per
seat) offset the inflationary headwinds the
sector overall has been exposed to. Holidays
contributed £1.32 to the Group’s headline profit
before tax per seat, up from £0.46 in 2022, as a
consequence of its increased profitability driven
by its growth in customer numbers.
How we performed
Headline EBITDAR margin % increased from 9.9%
last year to 13.8% this year. This was a reflection
of the improved performance of the Group as
volumes and prices increased and customers’
confidence to travel returned.
Why it is important
Delivering sustainable shareholder value is a
fundamental part of our mindset as we manage
our business.
What we measure
Headline profit/(loss) after tax divided by the
weighted average number of shares in issue during
the year (adjusted for shares held in employee
benefits trusts).
How we performed
Headline earnings per share was 45.4 pence
(2022: 19.6 pence loss per share) as a result of
the improved performance of the Group this
year. Total earnings per share was 43.1 pence
(2022: 22.4 pence per share loss).
1) 2020 previously restated due to impact of 2021 rights issue.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 26
KEY PERFORMANCE INDICATORS (CONTINUED)
headline return/(Loss)
on capital employed (%)
12.6%
Group
2023
2022
2021
2020
2019
12.6
0.1
(25.2)
(19.2)
11.9
Capital employed definition changed to now exclude the
hedging and cost of hedging reserves. 2019–2022
recalculated as a result.
customer satisfaction (%)
73%
Airline
2023
2022
2021
2020
2019
73
731
75
75
74
1)
In 2023 we changed our customer satisfaction measurement
platfom and 2022 has been restated for comparison.
on-time performance (%)
66%
co2 emissions per
passenger kilometre (g)
67.2g
Airline
2023
2022
2021
2020
2019
airline
2023
2022
2021
2020
2019
66
72
87
84
75
67.23
70.36
81.08
70.77
70.41
Why it is important
As a low-cost business, we focus on efficiency to
provide outstanding customer service at the best
value, while also driving operational efficiencies
which will maximise our return on investment.
What we measure
Headline profit/(loss) before interest, foreign
exchange gain/(loss) and tax, applying tax at the
prevailing UK corporation tax rate at the end of the
financial year, and dividing by the average capital
employed. Capital employed we now define as
shareholders’ equity, excluding the hedging and
cost of hedging reserves, plus net debt.
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 for the
airline, measuring how satisfied the customer was
with their most recent flight.
Why it is important
Reliable operational performance is a key factor in
our customers’ perceptions of their experience with
us. Managing on-time performance (OTP) and
minimising disruption will positively impact on the
likelihood of our customers choosing to fly with us
on a repeat basis.
What we measure
Percentage of flights which arrive within 15 minutes
of the scheduled arrival time.
How we performed
Headline ROCE improved to 12.6% (2022: 0.1%)
driven by the higher headline profit before
interest, foreign exchange gain/(loss) and tax of
£476 million this year (2022: £3 million),
combined with the reduction in net debt. Total
ROCE for the year was 12.0% (2022: (0.7)%).
The total ROCE was adverse to the headline
ROCE due to non-headline items generating a
£23 million charge before tax in the income
statement.
How we performed
Overall customer satisfaction stayed constant at
73%. Customer satisfaction is closely related to
the level of disruption experienced, notably
on-the-day cancellations and delays. Generally,
when disruption increases, our customer
satisfaction score decreases. The operational
challenges experienced in the year, and
particularly over the busy summer trading period,
resulted in a high level of cancellations and delays
and therefore our customer satisfaction score was
lower than we would like it to be.
How we performed
Our OTP declined in the year to 66% (2022: 72%)
primarily as a consequence of the external
factors such as air traffic control delays which
caused disruption.
Why it is important
An important part of our strategy is to make a
meaningful difference for our planet and help to
tackle climate change. In the short term our
focus is on being as efficient as we can and
driving carbon efficiencies.
What we measure
How much carbon dioxide is produced for each
passenger, for each kilometre they fly with us.
How we performed
In 2023, our carbon emissions per passenger
kilometre were 67.23g, a significant reduction
from 70.36g in 2022 and our lowest emissions
figure ever. This is a reflection of the increased
load factor in the current year which drove a
decrease in emissions per passenger, combined
with the increased number of more efficient NEO
aircraft and a continued focus on flight efficiency
measures such as Descent Profile Optimisation.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 27
FINANCIAL REVIEW
OUR FINANCIAL
RESULTS
KENTON JARVIS
Chief Financial Officer
The year was characterised by
a strong trading environment,
culminating in a record summer
for the Group, supported by
an excellent contribution from
easyJet holidays.
Headline profit before tax of £455 million for
the year ended 30 September 2023 was an
improvement of £633 million on the loss of £178
million for the year ended 30 September 2022, with
total revenue of £8,171 million, £2,402 million ahead
of the prior year. The year was characterised by a
strong trading environment, culminating in a record
summer for the Group. This result was supported
by an excellent contribution from easyJet holidays,
which has started to demonstrate its potential for
the future.
easyJet flew 82.8 million passengers in the year
(2022: 69.7 million), up 19% on the previous year,
this being the first year with no travel restrictions
since 2019. Strong yields and airline revenue per
seat (RPS) recovery (15% and 21% increase
respectively over the prior year) were key drivers
of success in the year. Load factor for the year was
89.3% (2022: 85.5%), an improvement of 3.8
percentage points, and capacity was 14% ahead of
the prior year. easyJet holidays delivered package
holidays for 1.9 million customers (including agent
commission passengers, 2022: 1.1 million),
generating incremental revenue of £776 million
(2022: £368 million) and delivering £122 million of
headline profit before tax (2022: £38 million). The
year was also characterised by industry-wide cost
challenges coming off the back of persistently
high levels of inflation. Despite the resilience
measures that easyJet undertook, we also saw
significant disruption including the impact of ATC
failures and external industrial action in several of
our markets.
Trading in the first half of the financial year, with
the absence of the prior year pandemic-related
travel restrictions, saw capacity increase by 25%
to 37.9 million seats flown (H1 2022: 30.3 million)
and strong yields delivering a record first half RPS
result of £66.46 (H1 2022: £47.61). The total
number of passengers carried in H1 increased by
41% to 33.1 million (H1 2022: 23.4 million) with load
factors at 87.5%, a 10.2 percentage point increase
on the comparative period (H1 2022: 77.3%).
Disruption due to external industrial action has
been a feature throughout the year, starting in the
first half of the financial year with French ATC
strikes resulting in flight cancellations and an
impact on on-time performance. In March alone,
only five days were unaffected by strike action.
Second half trading saw a continuation of strong
yields and RPS results, and a Q4 load factor of
91.6%. July and August revenues of over £1 billion
in each month were a record, as was headline EBIT
in Q4, the strongest quarterly headline EBIT in
easyJet’s history. This was despite significant
disruption over the summer period, with ongoing
industrial action and significant ATC challenges
across Europe, in particular at Gatwick Airport.
easyJet took action to thin the flying schedule at
Gatwick over the peak trading period in order to
mitigate ATC issues and ensure flights flew to
schedule, protecting the customer experience by
limiting on-the-day cancellations.
Fuel prices remained high throughout the year
and experienced significant volatility, ranging from
c.$700 to $1,100 per metric tonne. The industry
faced significant inflationary cost pressures in
addition to the cost of the disruption in the year.
Notwithstanding, with a focus on cost
management, productivity, and increased capacity,
the airline cost per seat (CPS) excluding fuel for the
year of £54.30, was an increase of only 2% on the
prior year (2022: £53.20). With the increase in
average sector length factored in, airline headline
cost per available seat kilometre (CASK) excluding
fuel at 4.44 pence was marginally lower than the
prior year (2022: 4.45 pence).
The strong revenues and cost management
delivered a headline EBITDAR achievement for the
year of £1,130 million, £561 million greater than the
prior year (2022: £569 million), and a statutory
profit before tax for the year of £432 million, an
improvement from the loss of £208 million in the
previous year.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 28
FINANCIAL REVIEW (CONTINUED)
Where amounts are presented at constant currency these values are an alternative performance measure
(APM) and are not determined in accordance with International Financial Reporting Standards (IFRS), but
provide relevant and comparative reporting for readers of these financial statements. Definitions of
APMs and reconciliations to IFRS measures are set out in the Glossary on pages 195 and 196.
PERFORMANCE SUMMARY
£ million (reported) – Group
Total revenue
Headline costs excluding fuel, balance sheet FX and ownership costs1
Fuel
Headline EBITDAR
Depreciation, amortisation and dry leasing costs
Headline EBIT
Net finance charges
Foreign exchange gain/(loss)
Headline profit/(loss) before tax
Being:
Airline headline profit/(loss) before tax
Holidays headline profit before tax
Headline tax (charge)/credit
Headline profit/(loss) after tax
Non-headline items
Non-headline tax credit
Total profit/(loss) after tax
£ million (reported) – Group
Headline profit/(loss) before tax per seat
2023
8,171
(5,008)
(2,033)
1,130
(654)
476
(48)
27
455
333
122
(114)
341
(23)
6
324
2023
4.91
2022
5,769
(3,921)
(1,279)
569
(566)
3
(117)
(64)
(178)
(216)
38
31
(147)
(30)
8
(169)
2022
(2.19)
The total number of passengers carried in the financial year increased by 19% to 82.8 million (2022: 69.7
million), driven by a 14% increase in seats flown to 92.6 million seats (2022: 81.5 million seats) and a 3.8
percentage point increase in load factor to 89.3% (2022: 85.5%). This reflects the increased capacity
from a year with no travel restrictions, an expanded network offer, and the increased customer demand.
Capacity was impacted by disruption in the year, with specific measures such as pre-emptive thinning to
provide schedule resilience, and the capacity caps introduced at Gatwick in the fourth quarter as the
airport struggled with a shortage of staffing in the control tower operated by NATS.
£ per seat – Airline only2
Airline revenue
Headline costs excluding fuel, balance sheet FX and ownership costs1
Fuel
Headline EBITDAR
Depreciation, amortisation and dry leasing costs
Headline EBIT
Net finance charges
Foreign exchange gain/(loss)
Airline headline profit/(loss) before tax
Headline tax (charge)/credit
Airline headline profit/(loss) after tax
Non-headline items
Non-headline tax credit
Airline total profit/(loss) after tax
2023
79.84
(46.93)
(21.95)
10.96
(7.02)
3.94
(0.63)
0.28
3.59
(1.22)
2.37
(0.24)
0.06
2.19
2022
66.23
(44.09)
(15.68)
6.46
(6.89)
(0.43)
(1.45)
(0.77)
(2.65)
0.38
(2.27)
(0.36)
0.10
(2.53)
1) Ownership costs are defined as depreciation, amortisation and dry leasing costs, plus net finance charges.
2) These 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 RPS and CPS metrics as they are not directly correlated to the seats flown by the airline.
Our easyJet holidays business forms a separate operating segment to the airline, and easyJet holidays’ key metrics are
included under key statistics.
Total revenue increased by 42% to £8,171 million (2022: £5,769 million) and by 40% at constant currency.
Airline RPS increased by 21% to £79.84 (2022: £66.23) and increased by 19% at constant currency,
reflecting both increased load and strong ticket yield. The increase in airline RPS was balanced across
passenger and ancillary revenue, and included revenue from the revised in-flight retail offer. As noted
above, the airline performance was complemented by strong holidays performance with net revenue
(i.e. excluding flight revenue which is reported under airline revenue) of £776 million.
Total headline costs excluding fuel, balance sheet exchange movements and ownership costs increased by 28%
to £5,008 million (2022: £3,921 million) mainly as a result of the volume of flying and general industry cost
pressures. Costs were also impacted by the disruption seen throughout the year with increased costs to deliver
operational resilience and £211 million EU261 compensation and welfare costs incurred for airline passengers
(2022: £205 million). However, the airline CPS of £46.93, was only 6% higher than the prior year (2022: £44.09),
4% at constant currency, and accommodates an increase in average sector length of 3% versus FY22. The CPS
benefited from fixed operating costs spread across greater flying capacity in addition to easyJet’s continued
focus on operational cost reduction with a number of cost reduction projects delivered in the year. The projects
included the retrofitting of descent profile optimisation software across the fleet, reducing fuel burn, and the
launch of enhancements to our customer self-service disruption management tool, which has provided cost
and customer experience benefits with regards to the management of disruption within the year.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 29
FINANCIAL REVIEW (CONTINUED)
Total fuel costs increased by 59% to £2,033 million for the year (2022: £1,279 million), which on an airline
CPS basis represented a 40% increase to £21.95 (2022: £15.68), 31% at constant currency. The price of jet
fuel remains high due to the increase in global demand with the resumption of pre-pandemic levels of
flying and increased economic activity, along with the restricted supply from OPEC+ due to production
cuts. The CPS metric also reflects the increase in average sector length compared to the prior year, with
an increase of leisure routes in the destination mix.
Similar to the prior financial year, the movement in exchange rates in the year, and the translation of
foreign currency denominated revenue and costs including fuel, has had a notable impact on the
consolidated income statement. This has resulted in a net debit impact of £115 million (2022: £88 million)
across costs and revenue, and an income statement credit of £27 million (2022: £64 million charge) from
the translation of foreign currency denominated monetary assets and liabilities on the statement of
financial position. Ownership costs benefited from the movement in US dollar interest rates with a credit
of £30 million (2022: £71 million) from the discounted maintenance reserves provision, which uses
long-term US dollar interest rates to set the discount rate.
During the financial year, the drawn element of the UKEF facility and the February 2016 €500 million
Eurobond were repaid, considerably reducing easyJet’s gross debt. This benefited net interest costs in
the second half of the financial year, whilst there was also a positive impact from higher interest rates on
cash balances throughout the whole year, resulting in the net finance charge for the year of £48 million
being 59% lower than the prior year (2022: £117 million).
easyJet holidays continued to perform strongly, with a significant growth in customer numbers and its
low fixed-cost operating model. Overall, incremental revenue from easyJet holidays of £776 million was
more than double (111%) the previous year’s revenue contribution (2022: £368 million), with 1.9 million
customers (including agent commission passengers, 2022: 1.1 million) delivering £122 million of headline
profit before tax (2022: £38 million).
The headline profit before tax per seat for the Group was £4.91 (2022: £2.19 loss). The airline’s headline
profit before tax per seat improved from a loss of £2.65 in the prior year to a profit of £3.59 this year,
driven by the improvement in RPS as described earlier. This was tempered by the headline CPS
increasing by 11%, primarily due to the increase in fuel costs on a per seat basis increasing 31% at
constant currency. However, airline headline CPS excluding fuel only rose by 2% at constant currency, as
strong cost management and increased flying (which reduces fixed costs per seat) offset the inflationary
headwinds the sector overall has been exposed to. Holidays contributed £1.32 to the Group’s headline
profit before tax per seat, up from £0.46 in FY22, as a consequence of its increased profitability driven
by its growth in customer numbers.
A non-headline charge of £23 million (2022: £30 million) was recognised in the year consisting of a £19 million
correction on an historical foreign currency translation error of right of use asset depreciation, a £nil million
loss on the sale and leaseback of eight aircraft (2022: £21 million loss from ten aircraft), a £3 million loss
(2022: £10 million) on the final disposal of landing rights surrendered as a consequence of the reduction in
our operations at Berlin Airport, and a net £1 million of restructuring charges (2022: £nil million) reflecting the
change in estimation of the final settlement of restructuring programmes initiated in prior years.
Corporate tax has been recognised at an effective rate of 25.1% (2022: 18.7%), resulting in an overall
tax charge of £108 million (2022: £39 million credit). This splits into a tax credit of £6 million on the
non-headline losses and a tax charge of £114 million on headline items.
PROFIT/(LOSS) PER SHARE
Basic headline profit/(loss) per share
Basic total profit/(loss) per share
2023
Pence per
share
2022
Pence per
share
Change in
pence per
share
45.4
43.1
(19.6)
(22.4)
65.0
65.5
Basic headline profit per share increased by 65.0 pence and basic total profit per share increased by
65.5 pence over the loss per share in the prior financial year as a consequence of the profit generated
in the current financial year.
RETURN ON CAPITAL EMPLOYED (ROCE)
Reported £ million
Headline profit before interest, foreign exchange gain/(loss) and tax
UK corporation tax rate
Normalised headline operating profit after tax (NOPAT)
Average shareholders’ equity (excluding the hedging and cost of
hedging reserves)
Average net debt
Average capital employed
Headline return on capital employed
Total return on capital employed
2023
476
25%
357
2,517
315
2,832
12.6%
12.0%
20221
3
19%
2
2,421
790
3,211
0.1%
(0.7%)
1) The average capital employed and ROCE percentage has been restated to exclude the hedging and cost of hedging
reserves.
ROCE is calculated by taking headline profit before interest, foreign exchange gain/(loss) and tax,
applying tax at the prevailing UK corporation tax rate at the end of the financial year, and dividing by
average capital employed. Capital employed is defined as shareholders’ equity excluding hedging and
cost of hedging reserves plus net debt.
Headline ROCE for the year of 12.6% is significantly ahead of the prior year (2022: 0.1%). This reflects the
move into a strong headline profit position in the year combined with the reduction in net debt from the
profits generated and the positive working capital movement in the year driven by the increase in
unearned revenue. Total ROCE of 12.0% (2022: (0.7%)) is reduced by the non-headline charge in the year,
and is greater than prior year where the FY22 non-headline charge resulted in an operating loss.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 30
FINANCIAL REVIEW (CONTINUED)
Summary net cash/(debt) reconciliation
The below table presents cash flows on a net cash basis. This presentation is different to the
presentation of the statement of cash flows in the consolidated financial statements as it includes
non-cash movements on debt facilities.
Operating profit/(loss)
Net tax paid
Net working capital movement excluding unearned revenue
Unearned revenue movement
Depreciation and amortisation
Net capital expenditure
Net proceeds from sale and leaseback of aircraft
Increase in lease liability
Net funding activities
Purchase of own shares for employee share schemes
Other (including the effect of exchange rate movements)
Net decrease in net debt
Net debt at the beginning of the year
Net cash/(debt) at the end of the year
2023
£ million
2022
£ million
Change
£ million
453
(12)
(19)
458
673
(754)
76
(208)
–
(15)
59
711
(670)
41
(27)
(4)
101
197
564
(530)
87
(43)
53
(9)
(149)
240
(910)
(670)
480
(8)
(120)
261
109
(224)
(11)
(165)
(53)
(6)
208
471
240
711
Net cash as at 30 September 2023 was £41 million (30 September 2022: £670 million net debt) and
comprised cash, cash equivalents and money market deposits of £2,925 million (30 September 2022:
£3,640 million), borrowings of £1,895 million (30 September 2022: £3,197 million) and lease liabilities of
£989 million (30 September 2022: £1,113 million).
Net working capital outflow, excluding unearned revenue, of £19 million in the year (2022: £101 million
inflow) predominantly reflects the increased holding of Emissions Trading System (ETS) allowances for
the remaining FY23 flying liability and FY24 forward purchase of allowances.
The unearned revenue movement of £458 million (2022: £197 million) has increased as customer booking
behaviour has normalised in the year, and easyJet has increased available capacity and stimulated
improved levels of demand, including for the easyJet holidays offer. In addition, the inflow reflects the
improved ticket and ancillary yields achieved.
The increase in depreciation and amortisation to £673 million (2022: £564 million) predominantly reflects
the increase in leased aircraft maintenance costs, recognised through depreciation, with the rise in flying
volumes and greater numbers of leased aircraft. Additionally, the prior financial year benefited from a
significant movement in the discount rate on maintenance reserves (based predominantly on US dollar
short-term and long-term rates) which reduced the overall maintenance charge, whereas the change in
the rate this financial year has been less pronounced.
Net capital expenditure in the year of £754 million (2022: £530 million) reflects the investment in fleet
renewal and growth in the overall size of the fleet. The expenditure is across ten new aircraft (2022:
eight), pre-delivery payments for future aircraft, capital expenditure on long life parts, engines and
aircraft spares, and maintenance additions. The sale and leaseback of eight aircraft in the year resulted
in a net cash inflow of £76 million compared to the ten sale and leasebacks in FY22 which generated
proceeds of £87 million. Lease additions (including the eight sale and leaseback aircraft) and lease
extensions are the key drivers for the increase in the lease liability by £208 million (which excludes
exchange rate impact and lease payments).
In the prior year, the net funding activities of £53 million relate to final funding income from the rights
issue in FY21.
The £208 million movement in ‘Other’ predominantly reflects a movement in net interest, as interest
received in this financial year is significantly higher due to increased interest rates, and the foreign
exchange impact in the year.
EXCHANGE RATES
The proportion of revenue and headline costs denominated in currencies other than sterling is outlined
below alongside the exchange rates in the year:
Revenue
Headline costs1
Sterling
Euro
US dollar
Other (principally Swiss franc)
Average headline exchange rates3
Euro – revenue
Euro – costs
US dollar
Swiss franc
Closing exchange rates
Euro
US dollar
Swiss franc
2023
55%
35%
1%2
9%
2022
51%
38%
1%
10%
2023
32%
35%
27%
6%
2023
€1.15
€1.15
$1.24
20221
32%
37%
25%
6%
2022
€1.18
€1.18
$1.32
CHF 1.14
CHF 1.25
2023
€1.15
$1.22
2022
€1.14
$1.11
CHF 1.12
CHF 1.09
1) 2022 figures have been restated to exclude the impact of non-headline costs.
2) Our customers have the option of paying for flights in US dollars.
3) Exchange rates quoted are post-hedging applied to revenue and headline costs.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents revenue there was a £47 million credit (2022: £22 million) arising from the release of aged contract
liabilities within other payables, with £40 million recognised in passenger revenue and £7 million in
ancillary revenue.
Total airline RPS of £79.84 was 21% ahead of prior year (2022: £66.23), 19% at constant currency, and
total yield of £89.36 was 15% favourable (2022: £77.48), 14% at constant currency, with passenger yield
13% and ancillary yield 14% favourable at constant currency.
Airline ancillary revenue of £2,174 million was 37% ahead of the previous financial year (2022: £1,585
million), 35% at constant currency, as a result of both passenger numbers and improved yields. Refreshed
ancillary offers and pricing initiatives have contributed to the continued growth of this revenue stream as
an increasing proportion of our customers choose to buy our flexible product offering. Within ancillary
revenue the relaunch of the in-flight retail offer has delivered an additional £22 million of partner revenue
compared to the prior financial year with improved spend per seat alongside higher passenger numbers.
easyJet holidays’ incremental revenue increased by 111% to £776 million (2022: £368 million) and now
accounts for 9% of total revenue. The growth is attributable to improved yields and growth in customer
numbers to 1.9 million (including agent commission passengers, 2022: 1.1 million).
31
FINANCIAL REVIEW (CONTINUED)
Headline exchange rate impact
Favourable/(adverse)
Total revenue
Fuel
Headline costs excluding fuel
Headline total before tax1
Euro
£ million
Swiss franc
£ million
US dollar
£ million
Other
£ million
Total
£ million
66
(4)
(63)
(1)
46
–
(24)
22
1
(125)
(17)
(141)
1
–
4
5
114
(129)
(100)
(115)
1) Excludes the impact of balance sheet revaluations.
The Group’s Foreign Currency Risk Management Policy aims to reduce the impact of fluctuations in exchange
rates on future cash flows. Refer to note 26 in the financial statements for more details.
easyJet recognises a significant element of revenue, 35%, across its network in euros, and therefore a
weaker sterling versus euro on average, when compared to the prior year, has resulted in a stronger
sterling denominated revenue (and similarly with Swiss francs). However, this has been offset by
increased costs due to the stronger euro compared to the prior year. Additionally, easyJet’s cost base is
27% US dollar denominated, notably fuel and aircraft lease payments, and therefore the post-hedge US
dollar rate strengthening compared to the prior year has also increased headline costs. On a net position,
the movement in average exchange rates between the current and prior years has resulted in an adverse
foreign currency impact of £115 million on the consolidated income statement.
Conversely, in-year movements in closing exchange rates resulted in easyJet benefitting from the
translation of foreign currency denominated monetary assets and liabilities held on the statement of
financial position, primarily due to sterling strengthening against the US dollar over the course of the
year, resulting in a net gain of £27 million (2022: £64 million loss).
FINANCIAL PERFORMANCE
Revenue
£ million – Group
Passenger revenue
Ancillary revenue
Holidays incremental revenue1, 2
Total revenue
2023
5,221
2,174
776
8,171
2022
3,816
1,585
368
5,769
1) easyJet holidays numbers include elimination of intercompany airline transactions.
2) The presentation of Group revenue has been amended to split out easyJet holidays incremental revenue; refer to note 1a
in the financial statements.
The increase in revenue was a combined result of increased customer volumes, a focus on yield
optimisation resulting in strong ticket yield, and continued growth in our ancillary offer. The total number
of passengers carried increased by 19% to 82.8 million (2022: 69.7 million), arising from a combination of
a 14% increase in seats flown to 92.6 million seats (2022: 81.5 million seats) and a 3.8 percentage point
increase in load factor to 89.3% (2022: 85.5%). This reflects the increased capacity on offer with the
return to flying in the absence of pandemic-related travel restrictions. Similar to the prior year, within
Headline costs excluding fuel
Operating costs and income
Airports and ground handling
Crew
Navigation
Maintenance
Holidays direct operating costs
Selling and marketing
Other costs
Other income
Ownership costs
Aircraft dry leasing
Depreciation
Amortisation
Foreign exchange (gain)/loss
Total revenue increased by 42% to £8,171 million (2022: £5,769 million) and 40% at constant currency.
Net interest and other financing income and charges
2023
2022
Group
£ million
Airline
£ per seat
Group
£ million
Airline
£ per seat
1,800
941
422
341
582
232
695
19.44
10.16
4.56
3.69
n/a
2.04
7.09
1,443
767
339
301
273
173
635
17.70
9.40
4.16
3.69
n/a
1.88
7.38
(5)
5,008
(0.05)
46.93
(10)
(0.12)
3,921
44.09
–
625
29
48
702
(27)
675
–
6.75
0.27
0.63
7.65
(0.28)
7.37
2
539
25
117
683
64
747
0.04
6.60
0.25
1.45
8.34
0.77
9.11
Headline costs excluding fuel
5,683
54.30
4,668
53.20
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents
32
FINANCIAL REVIEW (CONTINUED)
Headline CPS excluding fuel for the airline
increased by 2% to £54.30 (2022: £53.20), and
by 2% at constant currency.
Included within the Group headline costs excluding
fuel of £5,683 million is £654 million (2022: £330
million) related to the Holidays business, the cost
increase primarily being activity related due to the
growth of the business.
Headline operating costs and income
Airports and ground handling operating costs
increased by 25% to £1,800 million (2022: £1,443
million), an increase of 10% to £19.44 (2022: £17.70)
on an airline CPS basis, 7% at constant currency.
The year has seen a significant overall increase in
airport rates, both contractual and regulatory,
reflecting that easyJet largely flies from slot-
constrained and regulated airports. In addition,
with airport and ground handling costs being
linked to volumes, operating costs associated with
improved load factors, as well as higher passenger
and security charges, drove a cost increase on a
per seat basis.
Crew costs increased by 23% to £941 million (2022:
£767 million), an increase of 8% to £10.16 (2022:
£9.40) on an airline CPS basis, 6% at constant
currency. This CPS increase reflects the current
highly inflationary CPI environment, increased
costs invested in resilience to mitigate disruption,
post-pandemic pay deals and an increase in sector
length. This has been offset by productivity gains
in the year and the benefit of allocating the fixed
element of crew costs over greater capacity.
Navigation costs increased by 24% to £422 million
(2022: £339 million), a rise of 10% to £4.56 (2022:
£4.16) on an airline CPS basis, 7% at constant
currency, as a result of the increases in both
Eurocontrol rates and an increase in the sector
length of our commercial flying compared to the
previous year.
Maintenance costs increased by 13% to £341 million
(2022: £301 million), but remained flat at £3.69
(2022: £3.69) on an airline CPS basis, and
decreased by 4% at constant currency. This reflects
that whilst flying hours have increased in the year,
there is a benefit from the fixed element of
maintenance costs being apportioned over the
increased capacity.
Group selling and marketing costs increased by 34%
to £232 million (2022: £173 million), which for the
airline resulted in an increase of 9% to £2.04 (2022:
£1.88) on a CPS basis, 6% at constant currency. The
increase is predominantly in selling costs which result
from increased credit card bookings on increased
sales, higher credit card fees, and an element of
increased airport commission.
Group other costs increased by 9% to £695 million
(2022: £635 million), which for the airline was a
reduction of 4% to £7.09 (2022: £7.38) on a CPS basis,
and 4% reduction at constant currency. Other costs
include the impact of the disruption experienced in
the year, with net £211 million disruption compensation
and welfare costs incurred (2022: £205 million) after a
£24 million release (2022: £3 million pre-pandemic
liability release) of a liability held for prior year
disruption costs where customer compensation
claims have not matched our initial estimations. In the
prior year, easyJet also incurred significant wet lease
costs; the absence of such costs this year has been
offset by increased employee costs and benefits, and
an investment in cybersecurity and merchandising
technology in the year.
Headline ownership costs
Depreciation costs increased by 16% to £625
million (2022: £539 million), a 2% increase to £6.75
(2022: £6.60) on a CPS basis, and 2% at constant
currency. The increase in depreciation costs
compared to prior year is due to the increased
maintenance provision for leased aircraft,
reflecting higher flying volumes and the change in
the discount rate arising from movements in US
dollar interest rates, as well as an increase in the
leasehold fleet. The cost on a CPS basis has
benefited from the increased maintenance cost
being allocated across an increased seat capacity.
Group net interest and other financing income and
charges decreased by 59% to £48 million (2022:
£117 million), which amounted to a 57% decrease
on an airline CPS basis to £0.63 (2022: £1.45)
reflecting the benefit from higher interest rates on
cash deposits in the year, and the reduction in
gross debt.
Foreign exchange gains in the year were £27
million (2022: £64 million loss), being the benefit of
the retranslation of foreign currency denominated
monetary assets and liabilities arising from
currency movements, with sterling being stronger against both the US dollar and euro at 30 September
2023 compared to 30 September 2022.
Fuel
Fuel
2023
2022
Group
£ million
2,033
Airline
£ per seat
21.95
Group
£ million
Airline
£ per seat
1,279
15.68
Fuel costs for the year increased by 59% to £2,033 million, compared to £1,279 million in 2022, a 40%
increase on a CPS basis to £21.95 (2022: £15.68), 31% on a constant currency basis. The increase in flying
volumes, resulting in a 17% increase in block hours in the year, 3% increase in average sector length
(1,224km from 1,193km) and increased load factor, has contributed (on an absolute basis), in addition to
the increase in post-hedge fuel prices over the year.
The Group uses jet fuel derivatives to hedge against increases in jet fuel prices to mitigate cash and
income statement volatility. In order to manage the risk exposure, jet fuel derivative contracts are used in
line with the Board-approved policy to hedge up to 18 months of forecast exposures.
During the financial year, the average market price payable for jet fuel reduced by 16% from $1,063 per
tonne in 2022 to $897 per tonne in 2023. The overall post-hedge fuel price in the year was $867 per
tonne (2022: $705), the 23% increase compared to FY22 being due to the fuel cost at the time the FY23
hedges were entered into. Approximately 80% of jet fuel was hedged in 2023. Additionally, the cost of
compliance with emission trading schemes increased with a greater level of flying and the higher cost of
allowances coupled with the previous year comparative including the carry forward of unused ETS
allowances from the years impacted by pandemic-related restrictions.
Group profit/(loss) after tax
£ million (reported) – Group
Headline profit/(loss) before tax
Headline tax (charge)/credit
Headline profit/(loss) after tax
Non-headline items before tax
Non-headline tax credit
Total profit/(loss) after tax
2023
455
(114)
341
(23)
6
324
2022
(178)
31
(147)
(30)
8
(169)
Non-headline items
A non-headline charge of £23 million (2022: £30 million) was recognised in the year. This consisted of a
£19 million correction on an historical foreign currency translation error of right of use asset depreciation,
£3 million loss on disposal for a further and final surrender of landing rights as a consequence of the
reduction in our operations at Berlin Airport (2022: £10 million loss) and net restructuring charges of
£1 million (2022: £nil million) resulting from the impact of additional costs arising from previously
announced restructuring programmes in Germany. The sale and leaseback of eight aircraft in the year
generated a £nil million loss (2022: £21 million loss from ten aircraft).
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 33
FINANCIAL REVIEW (CONTINUED)
Corporate tax
Corporate tax has been recognised at an effective rate of 25.1% (2022: 18.7%), resulting in an overall tax
charge of £108 million (2022: £39 million credit). This splits into a tax charge of £114 million on the
headline profit and a tax credit of £6 million on the non-headline items, the right of use asset
depreciation non-headline charge being tax deductible and therefore creating a tax credit.
Summary consolidated statement of financial position
Goodwill and other non-current intangible assets
Property, plant and equipment (excluding right of use assets)
Right of use assets
Derivative financial instruments
Equity investment
Other assets (excluding cash and money market deposits)
Unearned revenue
Trade and other payables
Other liabilities (excluding debt)
Capital employed
Cash and money market deposits2
Debt (excluding lease liabilities)
Lease liabilities
Net cash/(debt)
Net assets
2022
Re-presented1
£ million
Change
£ million
582
3,682
947
442
31
1,022
(1,043)
(1,759)
(701)
3,203
3,640
59
254
(19)
(289)
–
137
(458)
(5)
(136)
(457)
(715)
(3,197)
1,302
(1,113)
(670)
2,533
124
711
254
2023
£ million
641
3,936
928
153
31
1,159
(1,501)
(1,764)
(837)
2,746
2,925
(1,895)
(989)
41
2,787
1) The liability for compensation and reimbursements for airline customer delays and cancellations has been re-presented
from provisions for liabilities and charges to liabilities within other payables.
2) Excludes restricted cash.
Since 30 September 2022 net assets have increased by £254 million.
The net book value of goodwill and other non-current intangible assets has increased in the year by £59
million, reflecting significant investment in the year on software development and applications, with a
focus on digital safety and security, optimising commercial platforms and customer applications, and
implementing aircraft descent optimisation software.
The property, plant and equipment (excluding right of use assets) net book value has increased by £254
million, the impact of the sale and leaseback of eight aircraft and the depreciation charge for the year
being offset by the ten new owned aircraft brought into the fleet in the year.
At 30 September 2023, right of use assets amounted to £928 million (2022: £947 million) and lease
liabilities amounted to £989 million (2022: £1,113 million). Whilst there have been a number of new leases,
including aircraft sale and leaseback transactions, and lease extensions, the relatively static position of
lease assets and liabilities arises from a number of lease returns, and the fact that new leases are being
entered into for shorter lease periods as easyJet manages the exit of A319 aircraft from the fleet.
There has been a £289 million decrease in the net asset value of derivative financial instruments, with
a closing net asset balance of £153 million (2022: £442 million). The movement is due to a decrease in
currency assets, including cross-currency swaps, as a result of the stronger pound against the US dollar
and euro in comparison to the rates at 30 September 2022. This reduction was partially offset by a gain
in the asset value of jet fuel hedges compared to 30 September 2022 as a result of an increase in the jet
fuel forward curve.
Other assets have increased by £137 million, mainly driven by increased current intangible assets
reflecting the ETS allowances held as a result of increased flying and the increased cost of the
allowances.
Unearned revenue increased by £458 million, reflecting customer behaviour returning to a more forward
booking position, improved yields, and FY24 capacity availability.
Other liabilities have increased by £136 million as a result of increased provisions, in particular for
maintenance with the increase in flying over the year, but also because deferred tax is now in a liability
position with the return to profit in the year.
Debt has decreased by £1,302 million as a result of the repayment of the drawn element of the UKEF
facility, and repayment of a €500 million Eurobond in the year, with no additional debt entered into.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 34
FINANCIAL REVIEW (CONTINUED)
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 (thousands)
Block hours (thousands)
2023
92.6
82.8
89.3%
113,334
102,984
1,224
519
1,094
2022
81.5
69.7
85.5%
97,287
84,874
1,193
456
938
easyJet holidays passengers (thousands)1
1,893
1,072
Number of aircraft owned/leased at end of year
Average number of aircraft owned/leased during year
Average number of aircraft operated per day during year
Number of routes operated at end of year
Number of airports served at end of year
336
328
276
1,018
155
320
321
255
988
153
1) holidays’ passenger numbers excluding agency commission passengers are 1.6 million (FY22: 0.8 million).
Refer to the Glossary on page 197 for further detail.
Increase/
(decrease)
14%
19%
3.8ppt
16%
21%
3%
14%
17%
77%
5%
2%
8%
3%
1%
Financial measures
Total return on capital employed
Headline return on capital employed
Group total profit/(loss) before tax per seat (£)
2023
12.0%
12.6%
4.67
2022
Favourable/
(adverse)
(0.7%)
12.7ppt
0.1%
12.5ppt
(2.55)
283%
Group headline profit/(loss) before tax per seat (£)
4.91 (2.19)
324%
Airline total profit/(loss) before tax per seat (£)
Airline headline profit/(loss) before tax per seat (£)
Airline headline profit/(loss) before tax per ASK (pence)
easyJet holidays total profit before tax (£ millions)
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 headline cost per seat excluding fuel (£)
Airline headline cost per seat excluding fuel at constant currency (£)
Per ASK measures
Airline headline cost per ASK (pence)
Airline headline cost per ASK excluding fuel (pence)
Airline headline cost per ASK excluding fuel at constant currency (pence)
3.35
3.59
0.29
122
79.84
78.60
6.52
6.42
89.36
87.98
76.25
54.30
53.58
6.23
4.44
4.38
(3.01)
(2.65)
(0.22)
38
66.23
66.23
5.54
5.54
77.48
77.48
68.88
53.20
52.43
5.77
4.45
4.39
211%
235%
232%
221%
21%
19%
18%
16%
15%
14%
(11%)
(2%)
(2%)
(8%)
0%
0%
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 35
PEOPLE AND CULTURE
CREATING
A WINNING
CULTURE
By building an inclusive culture
and living our behaviours, we
create a place where everyone
can not only be themselves but
can thrive, grow to their full
potential and be at their best.
Jane Storm
Group People Director
Living our Promises
to create a winning
culture
We need our colleagues to be highly
engaged and connected if we are to
reach our destination of being
Europe’s most loved airline.
Through our biannual Your Voice Matters
engagement survey, we learn where to best
focus our time and energy to improve colleague
engagement, enhance and modernise our
colleague experience and how we can support
our people to deliver for our customers.
In a recruitment market that remains competitive,
we continue to improve how we attract and retain
diverse talent that reflects the communities we
serve. We have evolved our Employee Value
Proposition (EVP) and launched a more compelling
careers website to deliver a much-improved
candidate experience and to convert more of the
interest generated by our recruitment advertising
into applications.
When people join easyJet, our proactive and
rewarding health and wellbeing strategy
empowers them to take small, easy steps
to better wellbeing every day. By giving colleagues
the tools, support and confidence they need to
take care of themselves and each other, they will
have the energy to enable us to perform at our
best and win together.
And by building an inclusive culture and living
our behaviours, we create a place where everyone
can not only be themselves but also thrive, grow
to their full potential and be at their best. This
will make it easy for us to reach our destination
together.
Our Promise behaviour framework
This year we worked with our
people to create a behavioural
framework to support our promise
and deliver our strategy.
Be
safe
During the year, we ran focus groups with cabin
crew, pilots, engineers and colleagues from our
offices to pinpoint exactly what makes us great
today and share ideas on what we need to do
more of to help us reach our destination of being
Europe’s most loved airline.
We identified behaviours that will help guide
our daily decision making, strengthen our
culture and bring out the best in our teams.
Be
challenging
Bringing our promise behaviours to life across our
business every day, including embedding them
into our employee life cycle, enables us to achieve
our purpose and deliver our strategic priorities:
Be
bold
> Building Europe’s best network
> Transforming revenue
> Delivering ease and reliability
> Driving our low-cost model
Be
welcoming
Be
Orange
> We work together to keep
everyone safe
> We speak up, learn from
our mistakes and act
when needed
> We respect and care for
each other and our own
wellbeing
> We proactively look for
ways to be more efficient
> We think about the impact
of our cost-based decisions
on others
> We seek opportunities to
drive growth
> We’re ambitious, forward-
looking and make decisions
with confidence
> We’re curious and challenge
the way we do things to
improve and innovate
> We take accountability and
have a can-do attitude
> We are passionate about
our customers and help
each other to deliver for
them every day
> We’re fair, open and
approachable
> We go above and beyond
to make things easy
> We love to win and
celebrate success
> We listen, learn and
break down barriers
> We’re brave, determined
and restless to try
new things
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 36
PEOPLE AND CULTURE (CONTINUED)
underpinning
everything with an
inclusive culture
We are committed to building
an inclusive culture for all, where
colleagues can be their authentic
selves and feel a sense of belonging.
In 2023, we relaunched our Inclusion
and Diversity framework to keep us
focused on what is important for
creating the inclusive culture and
diverse and authentic workforce
that is key to our business success.
INCLUSION
INCLUSION FIRST
Engage
We have engaged with colleagues across the
business to ensure everyone understands the
part they play in creating an inclusive culture.
We embed important messaging into recurring
training for crew and put on a range of offsite
meetings and town hall events.
Educate
Throughout 2023, we have continued to work with
our partners at The Centre for Inclusive Leadership
(TCfIL) on creating an inclusive culture and
mindset. Together we have provided training
for the Airline Management Board and created
leadership communities across the easyJet
network. The partnership has enabled us to inspire
our leaders to think and engage differently and
create a culture that enables all colleagues
to belong and thrive.
Community
Our employee-led community known as the
Trailblazers network continues to support and
engage colleagues, putting on events and creating
educational tools that spread the word about the
value of the differences that make up our
colleague population.
This year we introduced ‘You matter moments’.
These are online information pages that inform all
colleagues about the events and observations that
make up our inclusion calendar, such as Holocaust
Memorial Day, Ramadan, LGBTQIA+ History month,
the Lunar New Year and International Women’s Day.
Our International Women’s Day event featured
women from the 2022 Women to Watch and Role
Models for Inclusion lists. Each participant spoke
about what embracing equity meant to them and
how everyone can play their part in making an
inclusive and equitable culture.
Other events included our continued engagement
in LGBTQIA+ Pride month, during which we took
part in six community Prides across the UK and
Europe. In August we recognised and celebrated
South Asian Heritage month, showcasing the rich
culture of the South Asian community within
easyJet and across Luton.
We continue to work with key partners to provide
insights and advice. Our current partnerships
include:
> Business Disability Forum (BDF)
> DIAL Global
> Diversity in Hospitality, Travel and Leisure
(WiHTL)
> Employers Network for Equality & Inclusion
(ENEI)
> Fantasy Wings
> Stonewall, the LGBTQIA+ charity
DIVERSITY
FLYING HIGH FOR PEOPLE
Attract
We continue to improve how we attract and retain
diverse talent that reflects the communities we
serve, with new ambitious targets to improve the
gender representation across our leadership
population and match our peers across the
industry and other FTSE companies.
As an organisation we are committed to the target
of 40% women on our plc Board, which we meet,
and the same percentage of the Airline Management
Board and its direct reports filled by women by 2025,
in line with the FTSE Women Leaders pledge. To
achieve this, we need female representation at all
levels of the organisation, to create a pipeline of
talent for the future.
Thrive
To ensure everyone can thrive and grow to their
full potential we invest in opportunities for our
under-represented communities. We introduced our
Accelerate Programme to support our ambitious
targets to improve female representation, which
has enabled 40 women to further develop and
support their career aspirations. Find out more
about this programme on page 37.
Retain
We continue to look at how we enhance and
modernise the experience of our colleagues
across easyJet, encompassing our communication
channels, policies and ways of working.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 37
PEOPLE AND CULTURE (CONTINUED)
wellbeing
WE AIM TO BE RENOWNED FOR OUR
CULTURE OF CARE AND SUPPORT
We have developed a proactive health and
wellbeing strategy and a programme of
activities to drive impact and cultural change.
We started the year with a discovery phase.
The goal was to fully understand the health and
wellbeing landscape of easyJet, establish our
baseline and create clear KPIs to start making
informed decisions. We ran focus groups, released
a dedicated health and wellbeing survey, held
one-to-ones with the Airline Management Board
(AMB) and drew on the Your Voice Matters survey,
our Employee Assistance Programme and
occupational health data.
We used this information to design the strategy.
We started by defining our wellbeing proposition,
creating a wellbeing brand and building a robust
strategy framework, mapping out the initial areas
of focus, both in the short and long term.
The results were ‘Wellbeing, the easier way’, which
is about making the journey to better wellbeing as
easy as possible. The strategy has three elements
as shown on the right. Healthy living is about
giving our people the tools and resources they
need to prioritise all aspects of wellbeing. Healthy
communities bring colleagues together with a
shared purpose to create a sense of belonging.
Lastly, Healthy working is about building wellbeing
into all we do; from our policies and guidelines to
the way we work and interact.
wellbeing, the easier way
Empowering and supporting our
people to take small easy steps to
better wellbeing every day, so we
have the energy to perform at our best
and win together — at work and in life.
OUR WELLBEING PILLARS
What health and wellbeing
means to us at easyJet:
Healthy living
Looking after our mental and physical
wellbeing enables us to live well and
approach each day with positive energy
and confidence.
Healthy communities
Community and human connection are
essential to wellbeing as they foster a
shared sense of purpose, belonging
and support among our people.
Healthy working
Championing a shared responsibility
and commitment to wellbeing in the
way we work creates a high-performing
easyJet, powered by an energised,
thriving workforce.
CASE STUDY
accelerating women
The Accelerate Flightpath: Women’s Development
Programme is the first of a series of progressive
programmes aimed at addressing the imbalance
of representation in our under-represented
communities. It is designed to develop women
at all levels, with the wider goal of increasing the
number of women at a senior level.
The Inclusion and Diversity team worked with
the Talent Development team to develop
the programme and partnered with EDIT
Development to support and embed it. EDIT
works with organisations globally to create diverse
and inclusive cultures, bringing the latest thinking
to individual and organisational development.
The Accelerate programme encourages women
at easyJet to look back at what has influenced
who they are and explore the present for areas
of growth and opportunity. It inspires them to
remove their ‘boundaries’ and discover the art
of the possible. EDIT and easyJet believe such
programmes create long-lasting communities who
can lift, support and challenge each other now
and in the future. To ensure that each participant
is successful, line managers are engaged from the
outset, so that they understand the fundamentals
of the programme and how they can play their
part in continually developing their direct report.
The Accelerate course has given me the
opportunity to think about my key strengths,
identify my development areas, particularly in
how I come across to others, and the direction
I want my career to go in. Specific insights for
me have been looking at how to build on my
network and evaluate my career success
factors. It has been inspirational to share our
insights with one another on the course and
learn from each other’s experiences. I look
forward to the upcoming sessions and
continuing my journey towards my
career aspirations.
Lisa Matheson
Finance Manager, Crew and Accelerate participant
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 38
PEOPLE AND CULTURE (CONTINUED)
resourcing
the best
PEOPLE RECRUITMENT 2023
Cabin crew
2,748
Pilots
446
Engineering
186
Management and
administration
582
EMPLOYER BRANDING
We evolved our EVP in January this year (see
image) to help us to continue to attract and retain
the best talent.
In addition, we have continued to evolve how we
advertise roles to ensure diversity remains a
priority, with targeted campaigns for cabin crew;
‘influencer’ recruitment marketing on TikTok as well
as working with our public relations team on a very
successful campaign showcasing older colleagues
who start careers with us over the age of 45.
Our new careers website launched in October
2023 at careers.easyJet.com. This provides
content and messaging aligned with the EVP, and
clearer information on why people should view
easyJet as an employer of choice.
Make it easyJet
Everything we do is guided by our promise
and our goal to Make it easyJet
Connect people
to what they love
> High performing
people
> Great travel perks
> Flexible working
> Opportunities
Share our
Orange Spirit
> Energised
> Positive
> Inclusive
> United by purpose
Develop in
Orange years
> Making us Europe’s
most loved airline
> Drive to net zero
> A career with
breadth and variety
> Push you and your
ambitions further
EXTERNAL RECOGNITION
Over the last few years, we have featured in the
list of Britain’s Most Admired Companies. In 2022,
we were seventh in the Transport sector
easyJet holidays was named in the Sunday Times
Best Places to Work 2023. This accolade comes
following easyJet holidays being awarded ‘Best
Travel Retailer 2022’ at the Travolution Awards and
receiving the 2023 ‘Sustainable Future Award’ at
the Travel Weekly Globe Travel Awards.
On 30 September 2023 easyJet’s Glassdoor score
was 4.2.
Listening to
our colleagues
gender pay gap 2022
(reported in March 2023)
To reach our destination of being Europe’s most
loved airline, we understand that highly engaged
and connected colleagues are essential to our
success. We have a comprehensive employee
listening approach which includes employee
consulting groups, works councils, people action
groups and more.
The key mechanism for employee listening is our
Your Voice Matters employee engagement survey,
for which we partner with Peakon, a globally
recognised employee listening platform. We have
an aggregated colleague engagement score1 of
7.2, with an aggregated participation rate of 64%.
1) The aggregated engagement score is derived from the
average responses to the four primary engagement
questions, as part of the four surveys conducted in FY23.
Median gender pay gap
Mean gender pay gap
45.7%
50.3%
The biggest single factor influencing our gender
pay gap is the gender representation within our
pilot community. This remains a well-known
industry-wide challenge that we continue to tackle,
working with our partners to inspire more young
people to consider a career in aviation, including
encouraging more women to become pilots.
Our gender pay gap submission for 2023 and
those for previous years are available on our
website at corporate.easyJet.com/sustainability/
gender-pay-reports
Creating capability
for the future
Female/Male
REPRESENTATION1
We continue to invest in building capability across our
organisation, building the skills we need for today and
tomorrow, and developing our leaders and managers.
plc Board
Airline
Management Board2
We celebrated a very successful Learning at Work
week where over 1,000 of our colleagues participated
in various learning interventions centred around the
theme of creating the future.
We offer a variety of personal and professional
development programmes, with our flagship talent
development programme being Velocity. This year
we saw the first cohort graduate and a second
cohort start. Velocity was designed by easyJet for
easyJet and includes many structured workshops,
mentoring, coaching, 360 feedback, behavioural
assessment and a business challenge think tank,
enabling us to build our future leaders.
4 (40%)
6 (60%)
3 (30%)
7 (70%)
Airline Management
Board direct reports3
Senior managers4
19 (30%)
43 (70%)
10 (19%)
42 (81%)
All employees
7,538 (45%) 9,159 (55%)
Female
Male
1) Figures per Human Capital Management system at
30 September 2023
2) The Airline Management Board is our ‘Executive Committee’
for the purposes of the FTSE Women Leaders Review.
3) Airline Management Board direct reports that are reported
as part of the FTSE Women Leaders Review.
4) Defined in accordance with the Companies Act 2006, and
includes those with responsibility for planning, directing or
controlling the activities of the Company as well as
Directors of our subsidiary undertakings.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents
39
SUSTAINABILITY
OUR APPROACH TO
SUSTAINABILITY
easyJet not only aims to do
business responsibly, we want
to be pioneers of change.
Johan Lundgren
Chief Executive Officer
Aviation contributes to climate
change so we’re working hard to
reduce the impact of our
operations.
That feeling of responsibility
extends to preserving the many
benefits of travel and tourism. It
connects people, countries and
cultures, and supports the
aspirations and livelihoods of
millions of people. If lost, it
would have a devastating global
impact on economic prosperity
and social mobility.
Clearly, we need to find a balance
that both lowers the impact of
aviation and safeguards these
benefits. This is why we
developed and published our
SBTi-aligned (and now award-
winning) net zero roadmap, are
collaborating in multiple cross-
sector partnerships and invested
multimillions of pounds in the
development of zero carbon
emission technology.
We’re also making significant
breakthroughs. Last year, we
partnered with Rolls-Royce to set
a world first by successfully
running a modern aero engine on
green hydrogen. A test on a key
component in a Pearl 700 engine
in September further proves
hydrogen’s suitability for aviation,
and – in addition to continued
partnerships with Airbus, GKN
Aerospace and Cranfield
Aerospace Solutions – easyJet
has played the lead role in
establishing the Hydrogen in
Aviation (HIA) alliance to help
ensure the infrastructure and
supply exists, so we can
capitalise on this opportunity
when it becomes available.
We’re also making substantial
operational efficiencies. A fifth of
our fleet comprises the highly
efficient NEO aircraft and we’ve
invested heavily in state-of-the-art
software and AI to drive flight
efficiencies – all of which are
contributing to easyJet’s best-ever
carbon intensity performance.
Looking beyond our operations,
we continue to support the vital
work of UNICEF and many
charitable and local community-
focused projects. At the same
time, easyJet holidays is working
to maximise the socio-economic
benefits of tourism to destination
communities, while managing
environmental impacts.
These are just a few examples,
but they demonstrate that
sustainability is at the heart of
our business strategy and a
recent Environmental, Social and
Governance (ESG) materiality
assessment shows how critical
it is not only to our financial
performance but to our
people too.
As ever, there is more work to be
done, but we are all dedicated
to building a sustainable and
thriving aviation sector that will
serve and benefit countless
generations to come.
Read more on pages 40 to 58
We’re conscious about the
impact of aviation and we’re
working hard to adapt our
operations to ensure we can
thrive within a low-carbon
economy, while safeguarding
the enormous benefits of
travel and tourism for
future generations.
EXTERNAL RECOGNITION
ESG ratings
2023 awards
easyJet was scored in
the top 10% of all
airlines ranked by
Sustainalytics
25.4
Score
Sustainalytics uses a 100-0
scoring scale, with a lower
score being better
September 2023
AA
Score
MSCI uses a CCC-AAA
scoring scale
July 2023
B
Score
Jun
2023
Net Zero Strategy of the Year
UK Green Business Awards
May
2023
Achievement in Sustainability
2023 — Airline
Business Travel News Awards
Jan
2023
Top Sustainable Airline at
Prague 2022
Prague Airport
Sustainable Future Award
Travel Weekly Globe Travel
Awards
Awarded to easyJet holidays
CDP uses an F-A scoring scale
December 2022
Included in
Nov
2022
Airline Sustainability Award
Scottish Passenger
Association Awards
Travolution Impact Award
Travolution Awards
for easyJet’s net zero pathway
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 40
SUSTAINABILITY (CONTINUED)
sustainability strategy
sustainability and esg governance
Pioneering positive change for our planet, communities and people
Getting one step closer to net zero every day
Strong governance and monitoring at Board level drive delivery
of our Sustainability Strategy
Reducing our
impact today for
a better tomorrow
We work tirelessly to minimise
the environmental impact
across our operations.
Pioneering
future travel
easyJet’s support in the
development of zero carbon
emission technologies will
shape the future of flying.
Driving positive
change in society
Positively impacting our people,
customers and communities
to maximise the social and
economic benefits of travel
and tourism.
> Focused on reducing the
> Signed up to Race to Zero.
> Making more sustainable
carbon intensity of our flying.
Read more on page 45
> Continuously addressing our
noise impact.
Read more on page 44
> Enhancing our environmental
performance through ISO
14001-aligned environmental
management system.
Read more on page 47
> Tackling waste and plastic
reduction within easyJet and
our supply chain.
Read more on page 47
Read more on page 20
> Driving change to deliver our
net zero transition roadmap.
Read more on page 20
> Collaboration and
partnerships to achieve zero
carbon emission aviation.
Read more on page 48
> Advocating for effective
carbon regulation and new
technology.
Read more on page 48
travel accessible to everyone
through easyJet holidays.
Read more on page 51
> Remaining an employer of
choice.
Read more on page 51
> Creating an inclusive
workplace.
Read more on page 51
> Supporting charitable causes
that are important to our
customers and employees.
Read more on page 53
United Nations Sustainable Development Goals relevant to our ambitions
Preparing for future reporting requirements
We are familiarising ourselves with International Sustainability Standards Board (ISSB) reporting
standards for when the UK adopts them, and with CSRD (EU Corporate Sustainability Reporting
Directive) in preparation for easyJet’s reporting under this legislation in future years.
PLC BOARD
Approves Sustainability Strategy and reviews implementation, guided by its committees below:
Nominations Committee
Diversity organisational targets,
employee engagement and culture, workforce
engagement, sustainability and ESG expertise
of the Board
Audit Committee
Accuracy and reliability of non-financial
reporting, ethics and compliance-related impact,
climate risk, supply chain integrity and
sustainable procurement
Safety & Operational
Readiness Committee
Review and monitoring of the implementation
of easyJet’s annual safety plan
Remuneration
Committee
ESG-linked remuneration and
gender pay gap
Finance Committee
Emissions Trading Schemes
AIRLINE MANAGEMENT BOARD
Regular updates and approval
There are AMB sponsors for (key) material ESG topics
SUSTAINABILITY STEERING COMMITTEE
Steers direction of Sustainability Strategy, including net zero roadmap and ESG disclosure
SUSTAINABILITY TEAM
Supported by specialist sustainability and ESG working groups
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 41
SUSTAINABILITY (CONTINUED)
MATERIALITY
Understanding the main social and environmental
issues that have an impact on our business will help
us meet our ambition to pioneer positive change
in our sector.
This year we have undertaken a
double materiality assessment
to identify the topics we need to
address right now and the issues
and opportunities of rising
importance. A double materiality
assessment looks outward at
the impact on people and the
planet, such as greenhouse gas
(GHG) emissions, the impact of
flights on destinations, and the
impact of easyJet on employee
wellbeing. It also looks inward, at
the impact on our business
success – such as the effect of
extreme weather events
exacerbated by climate change
on flight disruptions.
By engaging both internal and
external stakeholders, we gained
a deeper understanding of their
key ESG concerns. This will allow
us to make sure we are focusing
our efforts on what they care
most about. It will also help us
ensure our sustainability reporting
is aligned with our stakeholders’
concerns and help build brand
awareness. Importantly, it will help
us meet regulatory requirements,
particularly the EU Corporate
Sustainability Reporting Directive.
I admire easyJet’s decarbonisation
strategy and the decision to stop
offsetting to focus on reducing
emissions, by partnering
with Rolls-Royce on a hydrogen
engine. This can give them a
leadership role within the sector
for zero emissions flights. It’s a
way to gain prestige and authority
for public relations and attracting
customers, but also human
capital.
Supplier
Carbon reduction is a big
opportunity as it’s an area
where we are driving
commercial viability. It makes
us more appealing to
sustainability-minded
customers. This is the single
biggest opportunity for us as
we are trying to lead the way
for all the right reasons.
Head office management
the process
Our double materiality process had five stages:
STAGE 1
STAKEHOLDER MAPPING
We worked with sustainability experts Corporate
Citizenship to plan the project, identify stakeholders
and understand the key topics of the agenda.
STAGE 2
HORIZON SCAN AND ISSUE IDENTIFICATION
A review of the business, sustainability and regulatory
landscape gave us a list of 17 potentially relevant sustainability
topics that have an impact on our business, or where we have
an impact.
STAGE 3
STAKEHOLDER ENGAGEMENT
We gathered stakeholder perspectives through surveys,
interviews and focus groups. 841 stakeholders took part,
including academics, employees, customers, NGOs,
regulators, government departments and investors.
STAGE 4
ANALYSIS
Online surveys asked stakeholders to rate the importance of the topics
identified to business and society. Quantitative results from the surveys
were enriched with qualitative insights from interviews and focus
groups.
STAGE 5
VALIDATION
Topics were validated, reviewed and
confirmed by the Airline Management
Board.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 42
SUSTAINABILITY (CONTINUED)
OUTCOMES
All 17 topics ranked highly on
the matrix – illustrating the high
relevance to easyJet of all the
ESG topics selected for
evaluation and reflecting the
complex range of impacts of
travel and tourism on easyJet’s
stakeholders, up and down the
value chain. There was a strong
consensus on material issues
across all stakeholder groups,
particularly between internal
and external stakeholders.
EMERGING TOPICS
AND OPPORTUNITIES
The process highlighted a
number of issues that will grow
in importance over the next five
to 10 years, as well as some
opportunities:
Emerging topics
> Climate change
> Data privacy and security
> Macro-economic and
geopolitical risks
Opportunities
> Advocacy and collaboration in
technology innovation
> Sustainable travel and tourism
> Inclusion and Diversity
One of the most exciting
opportunities is around
recruitment and retention,
and creating a sense of purpose
by being a business at the
forefront of a transition in
a challenging industry.
Business partner
MATERIALITY MATRIX EXPLAINED
This matrix summarises the overall
result of easyJet’s 2023 double
materiality assessment. It takes
into account two criteria: internal
and external stakeholders’ views
on the financial impact of the
sustainability topic on the
business (horizontal axis) and the
impact of our business operation
on society and the environment
(vertical axis). We consulted a
range of stakeholders to gather
qualitative and quantitative data
about both perspectives. The
most critical topics are ‘Climate
change’ and ‘Customer safety
and security’ in the top right
corner, reflecting their ongoing
prominence in society and
business. Other governance-
related topics such as
‘Responsible governance’,
‘Business ethics’, and ‘Responsible
marketing practices’ were placed
in the middle of the matrix,
indicating the ongoing
importance of these business
fundamentals. Similarly, social
topics like ‘Workers in the supply
chain’, ‘Employee health, safety
and wellbeing’ and ‘Diversity,
equity and inclusion’ also remain
highly material. What has gained
prominence this year is ‘Customer
satisfaction and accessibility’,
‘Data privacy and cybersecurity’,
‘Talent attraction and retention’,
and ‘Sustainable travel and
tourism’, reflecting the increasing
stakeholder interests and
concerns in these areas in the
post-pandemic world.
MATERIALITY MATRIX (WEIGHTED)
1
2
4
5
6
15
11
13
9
16
3
7
8
10
12
14
17
t
c
a
p
m
i
l
a
t
n
e
m
n
o
r
i
v
n
e
d
n
a
l
a
t
e
i
c
o
S
Financial/business impact
1 Customer safety and security
2 Climate change
3 Data privacy and cybersecurity
4 Customer accessibility and satisfaction
Sustainable travel and tourism
Employee health, safety and wellbeing
(including labour rights)
5
6
7
10 Advocacy and collaboration on
technological innovation
11 Responsible marketing practices
12 Diversity, equity and inclusion
13 Workers in the supply chain
14 Macro-economic and geopolitical risks
15
Local air pollution and noise management
Talent attraction and retention
16 Waste and water management
8 Business ethics
9 Responsible governance
17 Contribution to local economics
and communities
All 17 topics were rated highly material to easyJet as plotted in the top right quadrant of the matrix
and is demonstrated in the smaller graph to scale.
You get much better results
with inclusive or diverse teams,
not just trying to fill a criterion
but seeing genuine difference.
Board member
NEXT STEPS
We will use the outcomes of the
process to support our strategic
aspiration to be leaders in
sustainability in our sector.
Many of the highlighted issues are
already part of our Group and
Sustainability strategic plans and
underlying governance structures.
The materiality assessment
outcomes reiterate the need to
double down on those areas and
highlight where we need to
strengthen our efforts.
We will use the findings to improve
stakeholder engagement and
communications, and align with
emerging mandatory reporting
standards. We are already using
insights from the assessment to
prepare for future regulatory
obligations such as the EU CSRD,
and to inform a comprehensive
supply chain due diligence exercise
to identify impacts, manage risks
and ensure compliance with
reporting requirements.
The insights will be integrated into
our Enterprise Risk Management to
enhance internal collaborations and
governance structures.
We aim to distinguish between
materiality topics that are to be
managed and those where we
intend to lead, being mindful of the
emerging topics and opportunities,
and using the outcomes of this
stakeholder engagement to refine
our Social Impact strategy.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents
43
SUSTAINABILITY (CONTINUED)
REDUCING OUR
IMPACT TODAY
FOR A BETTER
TOMORROW
We work tirelessly to minimise the
environmental impact across our
operations. Our focus is to reduce the
carbon intensity of our flying but we
are also addressing our noise impact,
enhancing our environmental
performance, tackling waste and
reducing the use of plastics
throughout the business.
We publish a range of ESG factsheets on
our website to be read alongside the
2023 Annual Report and Accounts. The
factsheets provide further data and
information on: human capital; safety,
quality, and governance; digital safety,
and environmental management. Go to:
corporate.easyJet.com/sustainability
Reducing Our Impact
in the Air
OVERVIEW
As an interim goal on our net zero pathway, we
have established a target of 35% greenhouse gas
(GHG) emissions intensity reduction by 2035
(against a FY19 baseline). This ambitious target,
validated by the Science Based Targets initiative
(SBTi), was a first for low-cost carriers worldwide.
In FY23, we have made significant progress
against this target, delivering a 5% reduction
versus FY19, a saving of over 500,000 tonnes of
CO2e (well-to-wake). This was driven primarily by
fleet renewal, with 10 NEO aircraft joining the fleet,
and strong performance of operational efficiencies
led by Descent Profile Optimisation (DPO) and
Continuous Descent Approach (CDA). We also
recorded our lowest ever CO2 intensity of
67.2gCO2/RPK.
WHAT WE ARE DOING TO REDUCE CARBON
Efficient aircraft
easyJet is proud to hold one of the largest fleets
of A320neo family aircraft in Europe. By the end
of FY29, we aim to take delivery of a further 158
brand new NEO (New Engine Option) A320 and
A321 aircraft, at a combined list price of $19 billion
– with 69 already part of the fleet. Equipped with
CFM International’s LEAD-1A engines, NEOs offer
at least a 15% boost in fuel efficiency and provide
a 50% noise reduction compared to the CEO-type
(Current Engine Option) they replace, and produce
significantly less NOx. This switch to more
fuel-efficient aircraft, as well as upgauging to
larger aircraft with more seats, has a significant
impact on reducing carbon emissions in the short
term due to both higher absolute fuel efficiency
and lower emissions per seat.
Complementing this upgrade, since 2013 our
A320ceo aircraft have been delivered with
‘Sharklet’ wingtips. Also fixed as standard on
NEO models, these reduce drag and fuel-burn
by up to 3% per hour flown. We’ve managed a
further boost in efficiency by having 93% of our
A320 fleet delivered with, or retrofitted, to the
increased density Spaceflex configuration. This
reconfiguration has freed up space in the rear
galley to create room for six additional seats per
plane. Regular passengers will notice the seats of
these aircraft have also had an upgrade –
converted to a slimline lightweight Recaro design
(standard on all NEO deliveries), which has further
reduced the weight and fuel burn of the aircraft.
For a full fleet profile, see page 2.
Operational improvements and efficiencies
We continue to operate our aircraft as efficiently
as possible and are always looking for further
efficiency improvements to reduce fuel burn and
therefore carbon emissions. Our initiatives cover
the whole flight profile from departure to arrival.
This is accompanied by a variety of partnerships
to improve flight efficiency including those with
Airbus, Collins Aerospace, NATS and Eurocontrol.
While we continue to be progressive and invest in
new technologies to improve efficiencies, safety
continues to be our first priority. All new measures
are therefore closely scrutinised and taken only
when safe and practical to do so, and within the
parameters of the operational environment. We
are harnessing the power of AI and big data
through initiatives such as the deployment of the
SkyBreathe fuel management tool. This solution
automatically collects and analyses data from the
easyJet fleet and combines them with data from
other sources such as weather conditions and air
traffic control to identify the most relevant
fuel-saving opportunities. This enables the
implementation of the most efficient operational
procedures on the ground and in the air.
OUR CARBON REDUCTION INITIATIVES
Reduced auxiliary
power unit usage
Reduced acceleration
altitude
Engine
washing
Cost index
optimisation
SkyBreathe fuel
management tool
Speed
adherence
Refined taxi
fuel calculations
Advanced weather
information
Optimised cruise and
descent winds
Delayed
engine start
Single
engine taxi
Aircraft performance
monitoring
Descent Profile
Optimisation
Continuous Descent
Approach
Reduced auxiliary
power unit usage
Reduced
flap landings
Single
engine taxi
Departure
En route
Arrival
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 44
SUSTAINABILITY (CONTINUED)
CASE STUDY
optimising
descent
We’ve made a multimillion-pound investment
in upgrading our planes’ software to minimise
fuel burn and emissions during descent to a
destination airport. easyJet uses two software
upgrades, DPO and CDA, which enable the
aircraft’s onboard computer to calculate and
operate a minimum fuel burn descent trajectory,
which also minimises emissions. easyJet now
has DPO/CDA installed on 332 aircraft and
has the largest DPO/CDA-enabled fleet in
the world.
OPTIMISED DESCENT THROUGH SOFTWARE UPGRADES
Longer cruise phase
at higher altitude
c.1% fuel saving
per flight
Reduced crew
workload
Reduced
noise
Final descent
point
Non-optimised flight trajectory
Flight trajectory with DPO only
Flight trajectory with both DPO and CDA
AIRSPACE MODERNISATION
Airspace modernisation has the potential for
significant carbon reductions in the short and
medium term and will be critical to addressing
non-CO2 global warming effects. It must be
addressed at a national and pan-European level and
is crucial for a more environmentally-optimised and
efficient air traffic management system.
NOISE
easyJet continues to work to reduce the noise
impact of our aircraft and flights, helped by the
acquisition of newer, quieter Airbus A320neo and
A321neo aircraft, powered by CFM LEAP-1A engines,
that meet ICAO Chapter 14 regulations. In total 48%
of our fleet are Chapter 14 certified with the
remaining 52% Chapter 4 certified.
easyJet is laying the foundations to be equipped
for optimised European airspace as the first airline
evaluation partner for Iris, the groundbreaking air
traffic management programme led by Inmarsat,
the global leader in satellite communications, the
European Space Agency and Airbus.
Iris enables new air traffic management
functionalities such as trajectory-based operations
which will enable controllers to manage a flight as
a single trajectory as opposed to a series of
discrete paths. This will help aircraft to avoid
holding patterns, calculate shortest available
routes and evaluate optimum altitudes. The
additional communications capacity provided by
SwiftBroadband-Safety (SB-S) powers a host of
powerful onboard digital applications, such as AI
flight profile optimisers and real-time weather
applications. easyJet has now received six out of 11
IRIS-equipped Airbus NEO aircraft with trials
expected to start in the first half of FY24.
We are working with stakeholders and public
authorities in the UK and across Europe to
advocate for the modernisation of airspace.
Projects include the Single European Sky, which
has a stated ambition to deliver 10% carbon
emissions savings from European aviation. easyJet
engages with key stakeholders in Brussels through
its membership of the A4E’s Airspace Working
Group. easyJet is a partner on the HERON project,
a three-year programme led by Airbus as part of
the SESAR Joint Undertaking which coordinates
and concentrates all EU research and
development activities in air traffic management
with innovative procedures that range from more
efficient aircraft operations to optimised
management of air traffic during flights.
Flight crew use specialist techniques to minimise
noise, adhering to noise abatement procedures
and flying continuous descent approaches.
We investigate any concerns raised relating to
noise. This helps us understand how we can
improve procedure design and flight planning to
reduce the impact of noise.
AIRPORTS
This year we extended our airports environmental
programme to include London Gatwick Airport,
London Luton Airport, Edinburgh Airport and
EuroAirport Basel Mulhouse Freiburg alongside
Bristol and SEA Milan airports. These partnerships
aim to test and define how airlines and airport
operators can work in a more carbon-efficient and
sustainable way. The collaborations explore the
use of Sustainable Aviation Fuels, improvements to
recycling and waste management, more
sustainable ground service equipment, flight
operations improvements, employee carbon-
saving initiatives, including travel to work, and
research partnerships on the infrastructure
associated with the transition to hydrogen.
INTERNAL CARBON PRICE
We set an internal carbon price, based on ETS
costs, for monitoring and evaluating compliance
obligations. Using the internal carbon price we can
track the obligation costs now and in the future.
The internal carbon price is input into easyJet’s
master financial models that drive the five-year
financial plan, 10-year funding model and budget.
These financial models forecast route profitability
and therefore influence both near and long-term
commercial decisions such as the routes that
easyJet operates and the frequency of service.
The internal carbon price also has a material
influence on the fleet plan, which defines the
number and type of aircraft in the easyJet fleet,
and on fleet-related capex as a result.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 45
SUSTAINABILITY (CONTINUED)
OUR CARBON PERFORMANCE IN 2023
TOTAL AND INTENSITY
Our total GHG emissions from the fuel used in our
flights was 7,515,806 metric tonnes CO2e in FY23
compared to 6,390,927 metric tonnes CO2e in
FY22. The FY23 figure is higher than FY22
reflecting the market recovery from the effects of
the pandemic. In FY23 we recorded our lowest
ever carbon intensity of 67.23gCO2/RPK as 10 more
Airbus NEO aircraft joined our fleet, taking our
fleet composition to 20% NEO, and made
significant progress in implementing operational
efficiency initiatives. This included the rollout of
DPO and CDA software across all 332 compatible
aircraft in our fleet. We have also reduced our
well-to-wake GHG emissions per revenue tonne
kilometre by 5% versus FY19, making a very strong
start towards our SBTi-validated interim target of
35% reduction in emissions intensity by 2035.
The increase in Scope 3 emissions has been driven
by an increase in capacity and customers at
easyJet and easyJet holidays, an increase in the
number of new aircraft delivered in the year, and
an improvement in the granularity, methodology
and data sources used by EcoAct to calculate
Scope 3 emissions (excluding Scope 3 Category 3).
THIRD-PARTY VERIFICATION
Our absolute emissions and intensity metrics are
verified by a third-party specialist auditor, Verifavia,
who are a leading verification body for aviation.
Verifavia used a reasonable assurance approach to
review easyJet’s 2023 financial year aircraft fuel
burn, Revenue Passenger Kilometres, Revenue
Tonne Kilometres and associated output CO2 and
CO2e key performance indicators. In FY23, the
verified emissions equated to 92% of easyJet’s
GHG emissions footprint and included Scope 1,
Scope 2 and Scope 3 Category 3 (upstream
emissions due to fuel usage). 99.97% of easyJet’s
Scope 1 and Scope 2 emissions are attributable to
use of aviation turbine fuel.
Verifavia’s detailed assurance statement is
available at corporate.easyJet.com/sustainability
Greenhouse gas and energy performance
Scope 1 – tonnes of CO2e
Scope 2 – tonnes of CO2e1
Total Scope 1 and 2 – tonnes of CO2e
Scope 3 – tonnes of CO2e3
Total carbon footprint – Scope 1, 2 and 3 tonnes of CO2e
Scope 1 energy use (kWh)
FY23
FY22
Global
emissions
UK-only
emissions2
Global emissions
(excluding UK)
Global
emissions
UK-only
emissions2
Global emissions
(excluding UK)
7,517,925
2,752,970
4,764,955
6,421,434
2,601,877
3,819,557
300
5
295
7,518,225
2,752,975
4,765,250
2,303,152
9,821,377
0
6,421,434
1,660,512
8,081,946
0
0
2,601,877
3,819,557
30,554,375,959 11,298,307,349 19,256,068,609
25,911,221,182
10,498,872,319
15,412,348,863
Scope 2 energy use (kWh)
6,084,730
4,065,111
2,019,619
3,246,789
3,246,789
0
Total energy use (kWh) Scope 1 and 2
30,560,460,688 11,302,372,460 19,258,088,228
25,914,467,971
10,502,119,108
15,412,348,863
Voluntary carbon credits retired, tonnes of CO2e
2,808,879
6,497,911
1) Year-on-year change in Scope 2 emissions was driven primarily by the opening of the new maintenance hangar in Berlin, Germany.
2) UK-only emissions cover emissions from flights operating under our UK Air Operating Certificate.
3) Scope 3 figures exclude the following GHG protocol categories as they are not applicable to easyJet: (9) Downstream transportation and distribution (13) Downstream leased assets
(14) Franchises. Categories (10) Processing of sold products and (11) Use of sold products are not deemed to be material for easyJet and are also excluded.
Scope 1 GHG emissions/revenue passenger kilometre due to aviation fuel
Carbon emissions/revenue passenger kilometre
FY23
easyJet plc
gCO2/RPK
67.23
easyJet plc
gCO2e/RPK
67.84
FY22
easyJet plc
gCO2/RPK
70.36
easyJet plc
gCO2e/RPK
71.07
Scope 1 CO2/RPK due to aviation fuel
CO2 emissions due to combustion of aviation turbine fuel per revenue passenger per kilometre travelled on revenue flights.
Scope 1 CO2e/RPK due to aviation fuel
GHG emissions CO2, N2O and CH4 due to combustion of aviation turbine fuel per revenue passenger per kilometre travelled on revenue flights.
Well-to-wake GHG emissions/revenue tonne kilometre due to aviation fuel (aligned with the SBTi target)
Well-to-wake GHG emissions/revenue tonne kilometre (aligned with the SBTi target)
FY23
easyJet plc
gCO2e/RTK
882
FY22
easyJet plc
gCO2e/RTK
909
Well-to-wake CO2e/RTK
GHG emissions including CO2, N2O and CH4 due to Scope 1 (combustion) and Scope 3 Category 3 (extraction, processing and distribution) of aviation turbine
fuel per tonne of revenue payload per kilometre travelled on revenue flights – as required by the SBTi.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents NON-CARBON DIOXIDE EFFECTS
easyJet recognises the impact of non-CO2 effects
caused by contrail cirrus and their contribution to
global warming. There is uncertainty around the
magnitude of the impact, particularly on individual
flights, which contrasts with the clear correlation
between CO2-induced warming and fossil fuel
burn. There is an urgent need for more funding,
data and research to quantify these effects and
develop ways of minimising aviation’s overall
impact on climate change. Airspace modernisation
will be critical to mitigating contrail cirrus warming
through optimised routings. In 2023, we have
conducted trials with NATS, Airbus and
Breakthrough Energy to assess predictive models
to evade high contrail risk regions. We have also
joined Project CICONIA, part of EU Single
European Sky ATM Research 3 (SESAR3).
NOx and other particulates also affect local air
quality. The levers of our net zero roadmap – fleet
renewal, operational efficiencies, airspace
modernisation, SAF and zero carbon emissions
aircraft – aim to address both CO2 and
non-CO2 effects.
CARBON OFFSETTING
In September 2022, we announced our transition
from investment in voluntary carbon offsetting to
supporting the new technologies that will facilitate
delivery of our net zero roadmap see pages 20
and 21, such as our hydrogen engine partnership
with Rolls-Royce and scaling Direct Air Carbon
Capture and Storage with Airbus and 1PointFive.
From 1 January 2023, we ceased to offset new
bookings, although we continued to honour our
carbon offset commitment to customers who
booked up to and including 31 December 2022. In
relation to carbon emitted during FY23, we retired
2,808,879 voluntary carbon credits, all certified to
either Gold Standard or VCS (Voluntary Carbon
Standard). These carbon credit certificates are
available at corporate.easyJet.com/sustainability
From January 2023, we made an optional carbon
compensation facility available to customers via
our partners South Pole.
46
SUSTAINABILITY (CONTINUED)
CARBON EMISSIONS METHODOLOGY
The measurement and reporting of our GHG
emissions are aligned to the EU, UK and Swiss
Emissions Trading Schemes (ETS), the GHG
Protocol, and the recommendations of the Task
Force on Climate-related Financial Disclosures
(TCFD) see pages 54 to 57. Our GHG emissions
metrics also meet the UK Government’s
Streamlined Energy and Carbon Reporting
requirements, 2019. easyJet measures and reports
GHG emissions footprint in tonnes CO2 and CO2e
(carbon dioxide equivalent, i.e. CO2, N2O and CH4).
easyJet uses the operational control approach, in
which we include emissions from activities where we
control the operation.
Scope 1, Scope 2 and Scope 3 Category 3
(extraction, processing and distribution of aviation
turbine fuel) emissions are calculated in-house by
easyJet’s Sustainability, Finance and Flight
Operations teams, are third-party verified, and
equate to 92% of our total GHG emissions footprint.
This year we have worked with EcoAct, a global
climate change and sustainability consultancy, on
our carbon mapping work. EcoAct has carried out
carbon mapping on all applicable Scope 3 emissions,
excluding Category 3 (equating to 8% of our total
GHG emissions footprint), and reviewed the
calculations carried out by easyJet’s in-house teams.
Our carbon intensity calculation method aligns to
industry norms, i.e. ETS requirements. We adopt
Great Circle Distance (GCD) with a fixed correction
factor for each sector, as endorsed by ETS and
ICAO. This approach enhances the accuracy of
distances flown. Each flight records completed
data, fuel, passengers and GCD, with regular
internal checks for data quality. Department for
Environment, Food and Rural Affairs (Defra) GHG
Conversion Factors from June 2023 were applied
for reporting.
For further details on our carbon emissions
methodology, see the ESG environment fact sheet
at corporate.easyJet.com/sustainability
KEY DEFINITIONS
Revenue passenger
A revenue passenger is a passenger for whose
transportation an air carrier receives commercial
remuneration, as defined by the Sustainability
Accounting Standards Board (SASB).
Revenue Passenger Kilometres (RPK) is defined
as the cumulative total kilometres travelled by
revenue passengers.
Revenue tonne
Tonne of revenue generating payload.
easyJet does not carry any cargo and therefore
the revenue tonnes are calculated assuming
100kg average for each passenger and luggage
as per SBTi guidance.
The GHG Protocol categorises emissions in
three scopes:
Scope 1
Direct emissions from owned and leased assets
(typically combustion of fossil fuels). Also
included are fugitive emissions from chillers
and air-conditioning equipment.
Scope 2
Indirect emissions from imported energy
(typically grid electricity) used in assets where
easyJet has direct operational control.
Scope 3
All other indirect emissions resulting from
upstream and downstream business activity
such as supply chain, business travel and
aircraft components.
A breakdown of our FY23 Scope 3 emissions
can be found in our ESG environment fact sheet
at corporate.easyJet.com/sustainability
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 47
SUSTAINABILITY (CONTINUED)
Reducing our Impact
on the Ground
OVERVIEW
As well as reducing our environmental impact in
the air, our commitment to reducing our impact
on the ground is managed through our IATA
certified Environmental Management System
(EMS), through which we systematically prioritise
and address environmental impact across the
breadth of our operations.
ENVIRONMENTAL MANAGEMENT SYSTEM
We maintained our Stage 2 registration under
the IATA Environmental Assessment Programme
(IEnvA), an EMS accreditation programme aligned
with internationally recognised environmental
management standard ISO 14001:2015. IEnvA was
specifically developed for the aviation sector to
independently assess the commitment of aviation
stakeholders to continuously improve their
environmental performance. IEnvA Stage 2
Standards represent the highest level of IEnvA
compliance and require an airline to demonstrate
ongoing environmental performance
improvement.
We were the first low-cost carrier operating in
Europe with an IEnvA Stage 2 certified EMS and
the first non-IATA member to participate in the
IEnvA certification process.
easyJet’s Environment Policy can be found at:
corporate.easyJet.com/sustainability
WASTE MANAGEMENT
We generate a variety of waste streams in our
operations and are committed to reducing waste
across all our activities. We always try to apply the
waste hierarchy (reduce, reuse, recycle and
recover) to minimise the impact of waste. A prime
example of this is where we cannot avoid
single-use-plastics, we work with our suppliers to
ensure that these plastics are diverted from landfill
or incineration. For example, 1.9 million plastic
seals, equivalent to six tonnes, have been diverted
from incineration since our supplier TydenBrooks
began a recycling trial at Gatwick in 2022. The
seals cannot be avoided or reduced due to Civil
Aviation Authority (CAA) requirements, so a supply
chain solution to recycle the plastic has been
sought. Our supplier processes the seals into
recycled plastic pellets, which are reused to make
components in the automotive industry.
Waste generated in easyJet operations
(excluding onboard waste)
In our offices we segregate recyclable waste
streams such as paper and cardboard, aluminium
cans, plastics and food waste. In FY23, in our Luton
campus, we achieved 100% landfill diversion. In
FY23, we generated 30% more waste than in FY22,
which is due to increased activity at all of our bases
and office locations post-pandemic.
Waste type
Total waste generated
Total general waste
Total hazardous waste
Total reused, recycled,
and recovered
Metric tonnes
FY23
Metric tonnes
FY22
354.01
245.73
108.28
272.78
191.91
80.87
288.34
–
Hazardous waste
Hazardous and non-hazardous waste is generated
in our Engineering & Maintenance operations. For
easyJet, the main types of hazardous wastes we
produce include:
> waste oils and fuels
> oil contaminated containers, rags, gloves and
cardboard
> electrical and electronic equipment waste (WEEE)
> batteries and accumulators
> fluorescent tubes.
We are committed to ensuring that all hazardous
waste is appropriately managed in accordance
with local requirements and any risks to human
health and the environment are minimised. We
have a procedure for waste segregation to ensure
hazardous waste is not allowed to contaminate
any other waste stream. We apply the waste
hierarchy to the way we manage hazardous waste,
giving priority to waste prevention (avoid creating
waste in the first place), and reusing and recycling
where possible. For example, cardboard is reused
for transporting engineering parts, and cleaning
cloths are made from recycled clothing materials.
Onboard waste
Airlines and passengers have a strong desire to reuse
and recycle. We communicate regularly with our cabin
crew community, emphasising the importance of
waste segregation. Training on waste segregation and
recycling is part of our cabin crew new entrant course.
The management of the disposal of our onboard
waste 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.
Under the International Catering Waste (ICW)
legislation, UK-EU waste interpretation labels all
onboard waste as ICW, leading to unnecessary
incineration or landfill. In 2023, we supported trade
associations’ (Airlines UK and IATA) campaigns for
smarter regulation of ICW in aviation.
In FY23, we simplified waste segregation procedures
on board to improve the quality and legal compliance
of recycling collected. We continue to discuss these
issues of waste with partners at our base airports to
drive improvements in waste segregation and increase
recycling rates and we now are able to recycle at 50%
of our bases (versus 31% at FY22 year end). Working
with SEA Milan Airports, we carried out an analysis
of onboard waste in FY23 which showed that
58.5% of waste materials generated per flight are
recyclable.
Onboard waste generated across the network
Metric
FY23
FY22
FY21
Waste per passenger
(kg/pax)1
Total onboard waste
(thousand tonnes)2
0.09
0.07
0.08
7.27
4.92
1.61
1) Average waste generated per passenger was calculated
based on the total cabin waste generated from aircraft
operations at Luton Airport and the number of arriving
passengers.
2) Total onboard cabin waste generated, including recycling,
general waste and international catering waste,
calculated using average waste per passenger and the
total number of easyJet passengers carried.
The total onboard waste produced has increased
year on year in line with passenger numbers. We
continue to make changes to our in-flight
food and drinks service to reduce the number
of single-use plastics and excess packaging used
in our flights. For example, this financial year we
conducted an analysis on Airbus A319 and Airbus
A320 and achieved 29% reduction in dry store
pack contents, while an Airbus A321 review
achieved 16% reduction.
In FY23, we trialled reusable cups and cutlery for
crew meals, which has a potential to save over
10 million single-use items per year. This will be
rolled out to all crew in the first quarter of FY24.
SUSTAINABLE PREMISES
easyJet has direct operational control over nine
sites – seven in the UK and one each in Germany
and France. The majority of our UK sites operate on
100% renewable energy and do not drive any
carbon emissions under the market-based
approach.
In FY23, we installed new energy-saving lighting in
our landside offices in Luton and changed the
heating system from LPG to electric. We also
installed an electric ventilation system.
ELECTRIC VEHICLES
At the planning stages of the Berlin hangar build
project we took the decision to install electric
charging points with a view to turning the fleet
of vehicles in Berlin fully electric.
We carried out a successful trial last year with a
fully electric small line maintenance van and we
are now aiming to turn the whole Berlin fleet
electric by the end of FY24. Vehicles will be
changed over as they become available from the
manufacturer. We are working with our supplier to
start the transition to electric in the UK.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 48
SUSTAINABILITY (CONTINUED)
PIONEERING
FUTURE TRAVEL
We want to be a leader in the
decarbonisation of aviation in Europe
– our ultimate aim is to achieve zero
carbon emission flying. We are
committed to meeting our target of
net zero by 2050, are supporting the
development of new technologies to
achieve this ambition, and are strong
advocates for effective carbon
regulation.
OVERVIEW
Partnerships are key to achieving our ambition to
be a leader in decarbonising aviation. The past
year has seen significant technology progress
across our partnerships, from the successful
hydrogen aero engine tests with Rolls-Royce, to
Airbus pushing boundaries to address the
operational requirements of hydrogen aircraft and
infrastructure. With our collaborations such as
Hydrogen in Aviation and Hydrogen South West
we are working to identify frameworks for
hydrogen policy, regulation, safety and the
infrastructure ecosystem required to scale use of
hydrogen in aviation. Meanwhile we are investing
to scale Sustainable Aviation Fuel and Carbon
Removal technology to address the emissions we
can’t reduce at source.
HYDROGEN – THE KEY TO SUSTAINABLE AIR TRAVEL
We recognise the impact our operations have on
climate change and that’s why we’re investing in
the development of new zero carbon emission
technologies that will not only reduce this impact
but also help protect the long-term future of our
industry and the huge socio-economic benefits it
provides to so many.
We believe hydrogen in particular is the future of
short-haul aviation and a significant component
that will help us reduce our carbon emissions
intensity by 78% by 2050, with residual emissions
addressed by carbon removal technology.
Hydrogen not only has no operational carbon
emissions, it also shows huge promise in reducing
non-CO2 effects. It is only a matter of time before
the demand for hydrogen spikes, particularly in
hard-to-abate sectors like aviation, logistics and
heavy industry. This is why we helped establish the
Hydrogen in Aviation alliance – to capitalise on
hydrogen’s potential and ensure accessibility to
this important energy source keeps pace with
technological development. It’s also why we
continue to work with key cross-industry players
including Airbus, Rolls-Royce, GKN Aerospace and
Cranfield Aerospace Solutions to accelerate the
transition to zero emissions aircraft.
Hydrogen aircraft partnerships
Our groundbreaking partnership with Rolls-Royce
aims to pioneer the development of hydrogen
combustion engine technology. Both companies
have set out to prove that hydrogen can safely
and efficiently deliver power for civil aero engines,
including those suitable for narrowbody aircraft.
easyJet has invested in Rolls-Royce’s ground
demonstrator programme which aims to reach a
full ground test on a Pearl engine (see case study,
right). easyJet is also a consortium member of two
funded research projects led by Rolls-Royce –
HEAVEN (funded by EU Clean Aviation) and
LH2GT (funded by the UK Aerospace Technology
Institute (ATI)). Our support as an operator has
helped unlock funding worth tens of millions of
pounds for these programmes. We have a core
team of subject matter experts across the
business who work collaboratively with Rolls-Royce
to provide inputs from the operators’ perspective
to drive design specifications and develop
economic models.
We have been collaborating with Airbus since 2019
on the ZEROe programme which aims to deliver a
hydrogen-powered commercial airliner for entry
into service in 2035. This comprehensive
partnership spans the development of the design
and operational requirements of the aircraft and
the wider aviation hydrogen ecosystem. Airbus is
currently maturing two hydrogen-based propulsion
technologies in parallel. Hydrogen combustion and
hydrogen fuel cell systems are being developed for
flight testing on the A380 multi-modal test aircraft
in the middle of this decade. The journey to
hydrogen powered flight is being boosted further
by the Blue Condor project, a modified glider that is
being used to test hydrogen combustion at altitude
with a particular focus on contrail formation.
easyJet has a collaborative partnership with GKN
Aerospace. We sit on the GKN H2GEAR External
Advisory Group, providing airline operational
insights to the programme, and a regular working
relationship with engineers to understand the
progress of technology development. The GKN
programme, H2GEAR, is developing a hydrogen fuel
cell propulsion system for a hypothetical 19, 48 and
96+ seat aircraft. The project is backed by a £54
million collaborative UK ATI/Industry investment to
accelerate aerospace decarbonisation.
CASE STUDY
hydrogen breakthrough
In November 2022, Rolls-Royce and easyJet set
a new aviation milestone with the world’s first
run of a modern aero engine on hydrogen,
conducted on a converted Rolls-Royce AE2100
engine. The engine was powered by green
hydrogen created by wind and tidal energy.
This is a major step towards proving hydrogen’s
use as a zero carbon aviation fuel and is a key
proof point in the decarbonisation strategies of
both Rolls-Royce and easyJet.
Progress is being made on components and
systems, with tests on a full annular combustor
of a Rolls-Royce Pearl 15 engine running on
100% hydrogen. This world-industry first proved
that hydrogen can be combusted at conditions
that represent maximum take-off thrust.
Learnings from the Pearl 700 tests and the
AE2100 tests will be combined for the next
stage – a full gas hydrogen ground test on a
Pearl engine, followed by a full ground test on
a Pearl engine using liquid hydrogen. easyJet
and Rolls-Royce have a shared ambition to
then take the technology to flight.
©2023 Rolls-Royce
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SUSTAINABILITY (CONTINUED)
A key technology advancement being developed
by GKN is a hyper-conducting electrical distribution
and drive system which will help unlock the route to
hydrogen fuel cell powered aviation through its
higher efficiency and lower mass power system.
easyJet also has a collaborative working
relationship with Cranfield Aerospace Solutions for
Project Fresson. Cranfield Aerospace Solutions is
currently developing a zero-emissions, hydrogen
fuel-powered aircraft. It is one of very few
aerospace SMEs globally to have both whole
aircraft design capability, and to hold a range of
regulatory approvals for the design and
manufacture of modifications to existing aircraft.
As part of the first phase of the project, the
company is converting a Britten Norman Islander
nine-seat aircraft to gaseous hydrogen propulsion
via a fuel cell and electric motor. The solution will
be emissions free and aims to be certified for
passenger flight by 2026. After the nine-seat
Islander, Cranfield has a multi-phase programme
that includes larger aircraft up to and including
75+ seat regional aircraft.
Hydrogen in Aviation alliance
easyJet is a founding member of the Hydrogen in
Aviation (HIA) alliance which brings together
leading companies in the UK to help deliver zero
carbon aviation. Alliance members include easyJet,
Airbus, Rolls-Royce, GKN Aerospace, Bristol Airport
and Ørsted.
The HIA plans to draw upon its considerable
expertise to propose a clear and deliverable
pathway to achieving hydrogen-powered flights in
the UK by scaling up the infrastructure and the
policy, regulatory and safety frameworks needed,
so that large-scale hydrogen aviation can become
a reality.
We hosted the launch of the HIA at a
parliamentary reception in the House of Commons
in September 2023, attended by the Secretary of
State for Transport, crossbench MPs, academics
and hydrogen experts, to promote the use of
hydrogen in aviation.
Hydrogen ecosystems
We are collaborating with partners to develop
hydrogen ecosystems – the infrastructure and
technology required to enable commercial zero
carbon emission flying at scale.
Copyright © 2023 Andrew Wiard
We are a founding board member of Hydrogen
South West (HSW) – a business-led infrastructure
ecosystem for the accelerated production,
transportation and use of hydrogen.
We are collaborating with HSW partners to
determine how Bristol Airport can become a
hydrogen hub. This project brings together a
network of hydrogen experts to assess local and
global hydrogen supply chains, forecast future
hydrogen powered aircraft traffic and explore how
a hydrogen supply at Bristol Airport could also
power other forms of transport, such as HGVs and
other heavy vehicles. By bringing together the
airport, easyJet, Airbus and hydrogen generator
EDF Hynamics, the project creates a unique
partnership to assess how hydrogen technology
can be best used under ‘real world’ conditions.
SUSTAINABLE AVIATION FUEL
We believe zero carbon emission (likely hydrogen-
powered) aircraft are the future of short-haul
aviation and key to helping us achieve net zero.
However, it’s clear that while this technology
develops and before it becomes widely available,
we will require a number of different solutions to
decarbonise the sector.
Sustainable Aviation Fuel (SAF) in particular will be
an important interim solution until our fleet can
fully transition to zero carbon emission aircraft
and is achieving a material reduction in emissions
compared to kerosene. easyJet is already using
SAF in France in line with the French national
mandate for SAF use on domestic routes.
One of the challenges the industry currently faces
is the limited availability and high cost of SAF
compared to conventional jet fuels. This is why we
are working closely with our fuel suppliers to ensure
we can fly on increasing amounts of SAF across our
network over the coming years – with Q8 Aviation
having agreed to supply us with SAF until 2027.
This will not only help us in our path to net zero, it
will ensure we meet the requirements of the SAF
mandates set by the UK and EU, as well as those
set by individual EU member countries such as
France. Both zero emission technology and SAF
Left: CEO Johan Lundgren meets Transport Secretary
Mark Harper at the launch of the Hydrogen in Aviation
alliance.
are in their infancy but investment into both will be
vital in securing availability and affordability in the
longer term. For instance, as short-haul airlines
adopt zero carbon emission technology, pressure
on SAF supply chains will ease. This will boost SAF
supply levels, enabling long-haul airlines to use
higher blends of SAF and helping to decarbonise
the whole industry in the process.
SAF will therefore play a significant role across
the industry for decades to come and is a
complementary factor to our longer-term
ambitions. It’s because of this that we believe
there should be strict sustainability standards set
for the sourcing of alternative fuels for use in
aviation. To this end, we have signed joint
statements that appeal to the EU to prevent
unsustainable feedstocks and food-grade
agricultural land being used to produce aviation
biofuels, as well as any use of palm oil that is not
responsibly sourced. We are also actively pursuing
new opportunities for alternative fuel sources to
diversify our pricing and supply risk.
CARBON REMOVALS
Direct Air Carbon Capture and Storage (DACCS)
is an essential element of our net zero roadmap,
necessary for addressing the residual carbon our
aircraft will emit through to 2050 and beyond. It is
a high-potential, nascent technology, which aims
to capture carbon dioxide directly from the
atmosphere and store it securely and durably in
geological formations. Carbon capture is also
critical for production of power-to-liquid (PtL) SAF.
In FY23, easyJet actively championed the scaling
of this emerging industrial sector by finalising a
contractual agreement with Airbus to supply us
with carbon removal credits from the 1PointFive
DACCS plant in Texas FY26 to FY29. Meanwhile,
we support the UN, UK and EU intent to include
these carbon removal credits as eligible under
CORSIA and ETS, once methodologies for
certification and trading mechanisms have been
established.
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SUSTAINABILITY (CONTINUED)
NET ZERO ECOSYSTEM
Delivering net zero requires a collaborative effort across the aviation industry and beyond. Our net zero roadmap is supported
by a comprehensive range of partnerships spanning the aviation and energy value chains. Through these we are engaging
in tangible actions to reduce our energy use and emissions today, and pioneering future travel with new technologies
and fuels, as we guide easyJet towards net zero carbon emissions by 2050.
Supporting the development of
zero carbon emissions aircraft
powered by hydrogen
Renewing and upgauging
our fleet with NEO aircraft
Developing the infrastructure
needed to support hydrogen
aircraft operations
Collaborating to drive
airspace modernisation
Long term SAF offtake
agreements with fuel suppliers
Supporting the development and
scaling up of Direct Air Carbon
Capture and Storage
H2
H2
DACCS
Sustainable
Aviation Fuel
Fuel and emissions savings
through a multitude of
operational initiatives
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 51
SUSTAINABILITY (CONTINUED)
DRIVING
POSITIVE
CHANGE IN
SOCIETY
We aim to have a positive impact
on our people, customers and
communities and to maximise the
social and economic benefits of
travel and tourism. We are focused
on making sustainable travel more
accessible, doing our best to be an
employer of choice by creating an
inclusive workplace, and supporting
charitable causes that are important
to our customers and employees.
OVERVIEW
This year easyJet holidays invested in partnerships
with the United Nations World Tourism
Organisation (UNWTO) and Global Sustainable
Tourism Council (GSTC) to drive practical tools and
training to empower young people, tourism
businesses and their hotel partners to improve the
social, environmental and economic impacts of
tourism. Across the Group, we deepened our
engagement with our customers, our people and
wider stakeholders – especially policymakers – to
drive sustainable change. A particular focus and
growth area is our ‘early careers initiatives’,
encouraging and supporting the next generation
to embark on careers in aviation, including working
with establishments close to our operations.
PIONEERING SUSTAINABLE TOURISM
In 2021, easyJet holidays launched its inaugural
sustainability strategy focusing on three key pillars:
create better holiday choices – which is about
making sustainable travel affordable and accessible
to everyone; keep our holidays special – which is
maximising the benefits and minimising the
negative impacts of travel and tourism; and
transform travel for everyone – which means
embedding sustainability into business decisions
and behaviours and driving meaningful change in
the industry. Through our collaboration with the
Travel Foundation, the University of Oxford, and as
a member of the GSTC where our Director of
Customer & Operations sits on the board, easyJet
holidays is focused on building its research,
partnerships and hotel certifications, and taking
action to make a positive impact on the people and
places that make its destinations so special.
United Nations World Tourism Organisation
easyJet holidays has joined forces with the
UNWTO and the University of Oxford to help
develop the first ESG framework for tourism
businesses.
Based on UNWTO’s UN Statistical Framework
on Measuring Sustainable Tourism, the framework
for tourism business project brings together
businesses to co-design a tool to measure how
tourism businesses impact, and depend on,
people, planet and prosperity.
To support the creation of this tool, the UNWTO
and the University of Oxford have carried out a
comprehensive mapping of current work and
interviewed pioneering businesses in the
accommodation sector, along with further
research and development.
Through the easyJet holidays Sustainable Tourism
Programme, easyJet holidays continued work
throughout 2023 to equip Oxford graduate
students with the transferable skills needed to
identify and deliver solutions to help develop
sustainable travel.
Global Sustainable Tourism Council
easyJet holidays has partnered with the GSTC
to accelerate sustainability transformation in the
industry by sponsoring training in sustainable
tourism for its hotel partners in some of our key
markets: Spain, Greece and Turkey.
This training programme reflects easyJet holidays’
commitment to supporting hotel partners to
achieve GSTC-recognised certification within the
next five years. Certified hotels become part of
our ‘eco-certified’ collection, making it easier for
customers to make sustainable choices.
The GSTC Sustainable Tourism course aims to
support hotels on their journey to meet their
sustainability targets offering an excellent
opportunity to gain in-depth knowledge about the
GSTC criteria and sustainable tourism practices.
After completing the training, participants can
take an optional official exam to receive the GSTC
Professional Certificate in Sustainable Tourism, also
sponsored by easyJet holidays.
ENGAGING OUR STAKEHOLDERS IN SUSTAINABILITY
Building close relationships with our people, with
our customers – current and future – and with our
suppliers and industry peers on sustainability
issues is critical to creating a more sustainable
future. In FY23, we ran net zero masterclasses
across Europe to communicate the launch of our
net zero roadmap and our sustainability strategy.
These events, held in Italy, the Netherlands and
Spain, engaged multiple stakeholders, including
political figures and members of the media.
Discussions centred around policies and
recommendations. Future masterclasses are
planned for France, the UK and Germany.
Engaging with our people
As re-confirmed in our double materiality
assessment (see pages 41 and 42), our people
(easyJet colleagues) are not only extremely
passionate about sustainability, they play an
important role in shaping our strategy, raising
awareness of key issues and driving behaviour
change across our business. This year we have run
several internal events showcasing our work with
Rolls-Royce and Airbus which have furthered
learning and collaboration among colleagues. We
have also created a network of 40+ champions in
the cabin crew/pilot community who exchange
views and ideas on sustainability. This initiative is
helping to drive engagement in environmental
improvements (particularly in areas such as waste
minimisation and segregation).
We also have an active sustainability workplace
forum on our intranet with over 700 members,
where colleagues share ideas and exchange views
on sustainable aviation issues and easyJet’s
strategy. Sustainability features on our main
intranet forum ’Inside’, with materials, interviews
and links to events where our senior managers are
speaking. Colleagues’ commitment to the agenda
is reflected in the 99.8% of cabin crew who
completed our newly launched sustainability
module, and the 79% of engineering colleagues
who completed sustainability training launched
in March 2023.
Engaging our customers
We regularly communicate with our airline and
holiday customers about sustainability and we
have a section of our website dedicated to our
sustainability activities: corporate.easyJet.com/
sustainability. This year we engaged with over 600
customers during our double materiality exercise,
helping us understand the most relevant
sustainability topics and the impact we have.
easyJet was pleased to be one of just three airlines
invited onto Google’s Travel Impact Model (TIM)
Advisory Committee facilitated by the International
Council on Clean Transportation (ICCT). TIM is a
public and freely accessible tool that conveys per
passenger CO2 emissions for upcoming flights, on
Google and other metasearch platforms. It is
important for us that customers are provided with
accurate, transparent and credible carbon
information.
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SUSTAINABILITY (CONTINUED)
Engaging the next generation
As an integral part of our strategy, the work we all
do towards reaching our destination of becoming
Europe’s most loved airline is made possible by our
people living out the different parts of our promise.
Our early careers initiatives centred around young
people are real examples of our commitment to
making a positive difference and making easyJet a
warm and welcoming place to start a career.
We have three main pillars to our focus
on early careers:
> Educate ourselves and others on the roles
and skills needed now and the future.
> Inspire the next generation on the
opportunities available to them especially
within travel and aviation.
> Grow our talent pipeline through a lens
of inclusion.
A few examples of our work:
School-age initiatives
> Local to our head office in Luton and our
biggest operational hub at London Gatwick, we
have partnered with local schools and councils
to provide eight Enterprise Careers Advisers that
work with the career leads of the school to
support the development of employability skills
and showcase the variety of careers available in
the travel and aviation sector.
> We offer work experience placements across
our business to the schools we partner with –
this year we provided around 30 placements.
> Through our visits programme, so far this year,
we have visited 15 schools, two colleges and
four university events, engaging with
approximately 1,700 young people aged 13–25.
> This summer we launched our first Summer
Flight School, allowing kids to get a taste of the
role of a pilot in a real Airbus A320 flight
simulator. Children and their parents were able
to go behind the scenes at our state-of-the-art
Gatwick training centre, and experience exciting
hands-on pilot and cabin crew training.
Apprenticeship and graduate opportunities
> We offer three specific pathways for graduates
via our Runway Graduate Programmes –
Engineering, Finance and Management – each
with an annual intake.
> We have an annual Engineering Apprenticeship
Programme and use apprenticeships throughout
the business in both office and operational roles.
Summer Flight School
Research reveals that 37% of children believe
piloting is a male-only job, 68% of girls believe both
genders can be pilots, but 28% of boys see cabin
crew as exclusively female. In fact, only 6% of
pilots globally are women, and while easyJet has
tripled the number of its female pilots since 2015,
there is still a long way to go. This year we have
launched a Summer Flight School to inspire
children aged 7–12 and to challenge gender
stereotypes in aviation careers. The initiative offers
hands-on experiences, including A320 simulator
control, in-flight service insights and conversations
with pilots and crew, blending education and
school holiday fun.
Fantasy Wings
easyJet has partnered with diversity-focused
youth organisation Fantasy Wings to enhance
opportunities for young people from minority
backgrounds and young women interested in
aviation careers. Through its career development
programme, we sponsor students in 50 UK
schools, providing practical skills, knowledge
training, mentorship and even flight training, which
enhance their prospects of getting into courses
such as engineering and flying. Selected students
receive a fully sponsored private pilot licence
course, covering training and examination fees.
Engaging with suppliers
We rely on around 3,000 suppliers to deliver
products and services, from customer facing
activities such as bookings and support to
back-office functions and we depend on the
assurance of these suppliers that they are meeting
our standards of sustainable procurement and
supply chain integrity.
In February 2023, we formed a working group of
managers from our Procurement, Sustainability,
Risk, Human Resources and Legal teams to review
improvements to existing controls and assurances.
We have a number of controls, pre-contractual
and contractual, to ensure our suppliers share our
commitment to human rights and sustainable
procurement, including on bribery, corruption,
sustainability, modern slavery and data protection.
CASE STUDY
Easier journeys
for customers
with disabilities
easyJet is committed to ensuring we deliver ease
and reliability to our customers with disabilities,
and the easyJet Assisted Travel Advisory Board
(EATAB) has recently been re-established and
reformed, post-pandemic, to oversee our
performance in this important area. The board
has a new structure and renewed commitment to
ensuring we make low-cost travel easy and deliver
ease and reliability to our customers with
disabilities or that need special assistance. It will
continue to be chaired by former UK Cabinet
Minister Lord David Blunkett.
The board advises us on the evolving needs of
passengers requiring special assistance – now
more than 750,000 people each year. It directly
contributes to ongoing improvements for
customers, such as the introduction of easyJet’s
onboard cabin aisle wheelchair. The board reviews,
challenges and improves our policies and
procedures in the area of accessibility.
In FY24, the board is planning to work with different
partners or charities and will be taking advice and
guidance from organisations that have expertise of
specific accessibility initiatives or challenges.
Through our Supplier Code of Conduct we hold
our suppliers to the same high standards that we
apply to ourselves.
In August 2023, we engaged Deloitte to identify
any possible improvements in our existing controls
for identified ESG risks regarding third parties and
provide an implementation roadmap.
Combating modern slavery
easyJet is committed to combating modern
slavery through its policies, due diligence process,
risk assessment and management; key
performance indicators; and employee training –
as highlighted in our Modern Slavery Statement,
available at corporate.easyJet.com/sustainability
easyJet has its own Human Rights and Modern
Slavery Policy and asks suppliers that go through
tenders a number of questions on modern slavery,
including an agreement to comply with easyJet’s
Supplier Code of Conduct. This code strictly
prohibits any form of slavery, exploitation, child
abuse, or human trafficking in supplier operations
and supply chain in relation to any person.
We have a well-established cross-functional Modern
Slavery Working Group, comprised of senior leaders
from relevant areas, which updates our modern
slavery risk and identifies, monitors and mitigates
any modern slavery breaches. easyJet also provides
specific mandatory training for its cabin crew and
its head office.
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SUSTAINABILITY (CONTINUED)
Engaging with industry peers
We continue to engage with our industry peers
across the UK and Europe on how to address
carbon emissions and stimulate the technological
innovation that will be needed for zero carbon
emission aviation. Our CEO 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. We also
participate in industry groups and forums that
contribute to public policy development in
sustainability. These include the Hydrogen in
Aviation alliance, Aerospace Technology Institute,
the Airspace Change Organisation Group, Airlines
for Europe, Airlines UK, the Aviation Council, the
Global Sustainable Tourism Council, Sustainable
Aviation, the World Economic Forum’s Target True
Zero coalition, and the EU-funded aviation
hydrogen projects – HEAVEN and LH2GT.
Aviation Industry Skills Board
As Aviation Industry Skills Board members, we
foster cross-industry collaboration to attract,
develop and retain aviation talent. We now chair
the AISB and advocate for apprenticeships’ role
in sector-wide talent strategies at the Aviation
Council. Our engagement extends to DfT-
commissioned research on pilot training costs,
and we chaired the trailblazer group for Level 3
Aviation Flight Operations Coordinator
Apprenticeship Standard development.
Engaging with policymakers
Our public policy positions promote effective
climate regulation and decarbonisation
technologies for aviation.
In 2022, we continued our engagements around the
EU’s Fit for 55 climate package and outlined how to
better uphold the ‘polluter pays’ principle
in environmental legislation for aviation. easyJet
advocated for greater coverage of the Fit for 55
proposals, by expanding climate measures to all
flights departing the European Economic Area (EEA),
to align all of aviation with net zero and protect the
sector’s licence to operate in the long run.
This year, we asked EU policymakers to expand
the scope of the EU’s Emissions Trading System to
all EEA departing flights, in line with our previous
joint statements with NGOs and other airlines. We
welcomed the conclusion of EU negotiations over
the EU’s Sustainable Aviation Fuel (SAF) mandate,
Refuel EU Aviation, and its non-discriminate
application within European aviation. We
continued to push for stringent sustainability
standards for SAF and coherent methodologies
around accounting for SAF in the ETS.
We advised the European Commission on how to
use EU ETS revenues dispensed through the EU
Innovation Fund to decarbonise aviation, including
through incentivising the adoption of hydrogen-
based propulsion. In the Netherlands, we
advocated for the modulation of the national
ticket tax so that it reflects emissions per
passenger and includes transfer passengers and
we succeeded in having this position considered
in a government report, increasing the probability
of modulation in future.
In both the EU and UK, we engaged with
authorities to best design eco-labelling
methodologies for aviation, ensuring they reflect
true emissions-per-passenger in an objective and
non-discriminatory way.
Our CEO is a member of the UK Government’s
Aviation Council which brings together industry
and government. The Aviation Council, set up
earlier this year, is chaired by Aviation Minister
Baroness Vere of Norbiton and has a strong focus
on airspace modernisation. Our Chief Operating
Officer is a member of the Airspace Change
Organising Group steering committee and is
helping to drive the required changes. In April, we
hosted the UK Aviation Minister at our Gatwick
simulator centre to visually demonstrate the
benefits of airspace modernisation. In September,
we launched Hydrogen in Aviation see page 49.
We continue to participate in the steering
committee of the EU’s Alliance for Zero-Emission
Aviation (AZEA) as well as its six working groups
and we are co-chair of the steering committee
support group. AZEA works to remove technical,
legislative and policy barriers to the adoption of
zero-emissions aircraft.
In the UK, we have engaged with the Department
for Transport and the Department for Energy
Security and Net Zero (DESNZ) over expanding
the UK ETS to all UK departing flights in line with
our EU positions. We supported the introduction
of the UK SAF mandate and recommended
the UK adopt similar incentives to support the
production and use of SAF, matching equivalent
systems in the EU.
Decarbonising aviation requires government
support to accelerate change. easyJet advocates
for public institutions to:
> Support the development of zero carbon
emission technology:
– Develop a regulatory framework which
incentivises aircraft manufacturers to produce
zero carbon emission aircraft and airlines to
adopt the technology.
– Create investment and financial incentives for
funding the development and scaling-up of
zero carbon emission technology.
– Recognise the role of green hydrogen in
aviation by incorporating the requirements of
aviation in UK and EU hydrogen strategies.
– Invest in renewable energy to support the
creation of green hydrogen for aviation.
– Incorporate hydrogen as a SAF equivalent in
EU and UK SAF mandates.
– Support the development of hydrogen supply
and infrastructure at airports.
> Ensure passenger taxes reflect emissions to
incentivise efficiency and the move towards
zero carbon emission aircraft.
> Expand effective carbon capping and pricing,
through the EU and UK ETS, to all EEA and UK
departures.
> Ringfence a portion of tax and ETS revenues to
decarbonise aviation.
> For the EU27 national governments to make
rapid improvements in national airspace
efficiency plus deliver on the Single European
Sky programme for airspace modernisation.
> For the UK government to deliver on its stated
ambitions for UK Airspace Modernisation.
> Recognition and incentivisation of the
contribution of carbon removal technology to
meet net zero targets. Carbon removal credits
should be equivalent to ETS allowances.
CASE STUDY
renewed
partnership
with unicef
This year, easyJet and UNICEF have entered a
new three-year charity partnership and
launched our new joint Sky’s the Limit
programme to address the safety, health and
welfare issues impacting children’s lives and
drive sustainable change across the world. We
launched our partnership with UNICEF in 2012
and so far easyJet customers and crew have
raised over £17 million in onboard donations,
helping UNICEF to protect millions of children
around the world from disease and keep them
safe during emergencies. This includes a
record-breaking £616,000 in a single month for
the Ukraine response in October 2022, and an
emergency collection launched in February
2023 in response to the devastating
earthquakes in Turkey and Syria, which raised
an incredible £400,000 in just three weeks for
children and their families affected by the
earthquakes.
©Unicef
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Our disclosures are consistent with the recommendations and recommended
disclosures of the Task Force on Climate-related Financial Disclosures (TCFD),
taking into consideration the TCFD all-sector guidance and the supplemental
guidance for non-financial groups for the transportation group.
GOVERNANCE
(a) The Board’s oversight of climate-related
risks and opportunities
Climate-related issues were discussed by the plc
Board through regular sustainability updates as well
as specific Board discussions to approve key
climate-related decisions including the proposed
Airbus fleet order, which included consideration of
the impact of the decision on CO2/RPK
performance, see page 99; for relevant Board
expertise, see page 83; for the frequency of
sustainability updates to the Board, which include
monitoring of progress against target, see pages 74
to 77. The Audit Committee has reviewed the
climate transition risks during the year as part of its
review of principal risks, as set out in its report on
page 104. Additionally, climate-related issues are
regularly discussed by the Airline Management
Board (AMB), the executive committee of the
functional leaders across the Group. The AMB is led
by the CEO, who is a member of the plc Board and
is ultimately responsible for climate-related issues.
The AMB’s members (which includes the CFO, who is
also on the plc Board) are collectively responsible for
assessing and managing climate-related risks and
opportunities, and use regular updates on
performance versus targets to drive the performance
of the Group against strategic KPIs. These updates are
conveyed to the Board through regular sustainability
updates as outlined on page 80. CEO, CFO and a
number of AMB members’ remuneration was aligned
with sustainability targets for FY23. This included
embedding the net zero ambition and best practice
environmental management across the business,
delivering against the CO2/RPK targets and driving
higher ESG scores. This is set out in the Directors’
Remuneration Report on page 113.
(b) Management’s role in assessing and
managing climate-related risks and
opportunities
easyJet has a Sustainability Steering Committee
which meets regularly. It comprises several AMB
members including the CFO, the Chief Operating
Officer (COO), the Chief Customer & Marketing
Officer, Group General Counsel, the CEO of
easyJet holidays, Group People Director and the
Group Markets Director (Chair), as well as the
Director of Sustainability and Director of Tax &
Fuel. This committee is responsible for steering our
Sustainability Strategy, driving key sustainability-
related decisions, such as on technology
partnerships and programmes that support our
net zero pathway, delivering against strategic KPIs,
and the consideration and disclosure of climate-
related risks opportunities. This committee is also
updated on the progress of the ISO14001-aligned
Environmental Management System, including the
work of the Fuel Conservation Working Group.
In FY23, we expanded our dedicated Sustainability
team, which works with management and teams
across the Group to develop and coordinate
implementation of the Sustainability Strategy. In
FY23, management accountabilities related to the
delivery of the net zero roadmap were agreed and
formalised in a RACI matrix.
Read more on page 20
STRATEGY
(a) The climate-related risks and opportunities
we have identified over the short, medium and
long term
Risks and opportunities are dynamically reviewed
and developed as part of the corporate risk
management framework, which ensures a unified
and collaborative risk management approach and
best practice across the Group. easyJet defines
the time horizons for climate risk as follows:
Short
0–1 year – aligned with budget
Medium
1–5 years – aligned with corporate strategy
and financial plan
Long
5–30 years – aligned with our commitment
to reach net zero by 2050
The key risks identified by the business using the
risk framework, and subsequently reviewed by the
plc Board, fall into seven broad themes – one of
which is the climate change transition risk, as
outlined in the risk section on page 66.
Since FY20, easyJet has engaged with Risilience
(formerly known as Cambridge Centre for Risk
Studies), an enterprise risk management specialist, to
assess our exposure to climate-related risks and
opportunities under four global average-temperature-
increase scenarios. Risilience created a digital twin of
the Group’s current portfolio and business activities,
assuming no climate actions are undertaken.
TCFD categorisation was then used to define
transition and physical risk definitions and scope,
and each risk was modelled independently. The
analysis covered physical and transition risks that
easyJet could be exposed to in the short, medium
and long term. The focus of the analysis was on the
five-year horizon to identify which risks easyJet
could be exposed to in the short and medium term,
aligned with easyJet’s budget and corporate
strategy timeframes. These risks were extrapolated
and assessed qualitatively to determine their
long-term impact.
The assessment was made using workshops and
interviews with key internal stakeholders regarding the
potential financial risks to our business operations
associated with physical and transition risks. Risilience
then undertook scenario modelling of each climate
risk against easyJet’s current commercial and physical
footprint. This included the potential financial impacts
of transition risks such as changing climate and
carbon-related taxes and regulatory changes on a
country level as well as physical risks.
easyJet has assessed the financial impact of
climate change transition risks and physical risks
against the organisation’s threshold for what
constitutes a risk of ‘major concern’ i.e. substantive
financial or strategic level of impact and ‘above risk
tolerance’. This metric is defined by the overall
Group materiality principle of 1% of total assets
equating to a threshold of £99 million.
This assessment has been reviewed and updated
in FY23 to reflect the evolving landscape.
Transition risks
easyJet has identified six transition risk areas:
> Compliance costs: Financial impact of
coordinated regulatory action to increase the
costs of emitting GHGs.
> Legal: Legislation and litigation to ensure that
companies take sufficient action on GHG
reduction.
> Technology: Transition to low-carbon emissions
technology and products drives increased total
operating costs, impairment of existing assets
and delivery risk.
> Consumer sentiment: Consumer preferences
shift at scale to lower emissions alternatives
resulting in demand suppression.
> Investor/market sentiment: Investors retreat
from carbon-intensive industries, resulting in
increasing challenges to attract/retain
investment and/or financing opportunities.
> Reputation: Impact of greenwashing claims and
climate activism towards organisations and
industries that are seen as being slow to
transition towards a low-carbon economy
adversely impacting reputation, brand and
ultimately demand.
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We have identified specific risks within these
transition risk areas. These include:
Compliance costs: carbon pricing
(short to medium term)
Future policy measures and regulation, to tackle
the impact of aviation on climate change such as
escalating costs of carbon emissions, introduction
of non-CO2 emissions taxes and the phasing out of
Emissions Trading System (ETS) free allowances
for the aviation sector, will add significant costs for
European airlines. easyJet has exposure to three
ETS schemes – UK, EU and Switzerland – which
included 79% of our flying carbon emissions in
FY23. While the impact of existing carbon pricing
mechanisms are modelled in easyJet’s financial
plans, the cost is subject to market volatility. Policy
change could result in a risk in the case of
escalating costs, or conversely an opportunity
where the actual costs are lower than expected.
Technology: Sustainable Aviation Fuel mandates
(medium to long term)
Sustainable Aviation Fuel (SAF) mandates in the
UK and EU will require fuel suppliers to provide
kerosene with a specified blend of SAF at airports
in that country or region. Airlines lifting fuel in
these countries will therefore be subject to higher
total fuel cost in FY22. easyJet signed a SAF
supply agreement with Q8, one of our key fuel
suppliers, creating a contractual obligation on Q8
to supply volumes of SAF that at least meet
minimum mandate requirements until FY27 in
order to secure certainty of supply.
We also have flexibility in our SAF agreement to
procure up to 10% more than mandated volumes
in order to manage the risk that other levers
contributing to our carbon intensity reduction
targets fall short.
As with carbon pricing mechanisms, the risk
and opportunity lies in SAF volatility.
Technology: New technology transition (long term)
Capex and operational costs associated with the
introduction of new technology such as next-
generation aircraft, alternative fuels and carbon
removals, and potential depreciation impacts on
older assets.
Physical risks
The Risilience analysis highlighted the acute and
chronic physical risks that could impact our business.
These relate to extreme weather events as well as
long-term environmental changes. The physical risks
were assessed according to the forecast changes in
environmental conditions in the different geographies
in which we operate and include the following:
> Operational disruption: Due to extreme weather
events in the short, medium and long term.
> Market disruption: Changing demand patterns
due to climate change in the long term.
Due to the nature of our business, easyJet could be
exposed to both on-the-ground impacts (such as
heavy rainfall and flooding affecting airport
infrastructure) and aerial impacts (such as more
severe storms, extreme wind or hailstorms). The
geographic spread of physical risk types varies
depending on the specific location – for instance,
coastal flooding was modelled as being more
pronounced in low-lying areas of North Western
Europe such as the Netherlands, whereas heatwave
risk was higher in inland regions of Spain, Portugal
and France. As an airline operator we have some
flexibility to adapt network and operations to
respond to changing geographic risk.
Risks summary
Risilience quantified easyJet’s climate change risks
using a five-year Enterprise Value at Risk (5yrEV@
Risk) metric for the period FY24–28, which shows
how the risks would impact discounted cash flows
over five years according to different scenarios,
aligned with the timeframe for easyJet’s budget,
corporate strategy and financial planning process.
The long-term risk levels have been determined
based on the quantified short to medium-term
risks and the long-term impact and likelihood, as
outlined in easyJet’s Corporate Risk Register.
The following table provides an indication of the
risk relative to present day, based on the Paris
Agreement scenario in the absence of actions
taken by easyJet to manage our climate change
transition. This scenario was selected as the
baseline as it is consistent with the SBTi aviation
sectoral decarbonisation pathway, which is aligned
to a well-below 2oC temperature scenario.
Short term
(0–1 year)
Medium term
(1–5 years)
Long term
(5–30 years)
Risk
Compliance costs
Legal
Technology
Consumer sentiment
Investor/market sentiment
Reputation
Physical
Low: <£99 million
Medium: £99–200 million
High: >£200 million
Medium and long-term risks have been assessed on 5yrEV@Risk and categorised as low: <£99 million,
medium £99–200 million, high >£200m due to £99 million being the Group materiality threshold.
Short-term risks are categorised as low as they are accounted for in easyJet’s financial plan. In FY23,
Risilience have upgraded their models to carry out calculations on a more granular level and with
updated macro assumptions that are based on published research and data. Technology and consumer
sentiment risks have changed from medium in FY22 to high in FY23 due to the change in definition and
upgrades to the model as opposed to a change in the underlying risk.
Opportunities summary
The key opportunities easyJet has identified are outlined below. The size of the bubble indicates the
relative impact at each time horizon.
Short term
(0–1 year)
Medium term
(1–5 years)
Long term
(5–30 years)
Opportunity
Fleet renewal: the use of more efficient Airbus
NEO aircraft, which reduce our fuel burn, carbon
emissions and related costs – easyJet has 158 A320neo
family aircraft on firm order valued at $18 billion at list
prices, and a proposed order for a further 157 firm orders
and 100 options
Optimising flight operations: initiatives to minimise fuel
burn, carbon emissions and related costs
Supporting development of zero carbon emission flight:
collaborations with industry partners, including Rolls-
Royce, Airbus, GKN and Cranfield Aerospace Solutions,
will be a key long-term driver of industry decarbonisation
Shifting consumer preferences: opportunity for easyJet
to build brand preference and loyalty as consumer
preferences shift towards organisations that are
committed to tackling climate change
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(b) The impact of climate-related risks and
opportunities on our businesses, strategy
and financial planning
Climate-related risks and opportunities are integrated
into the organisation’s strategic and financial plans
and have a material influence on major business
decisions. These include our fleet strategy centred
on fleet portfolio decisions and the purchase of
next-generation aircraft, an increased focus on
fuel-saving initiatives to refine our operation, entering
into partnerships with entities at the vanguard of
decarbonisation technologies and investigations into
transitioning from fossil fuels to electric power for
airport ground operations. This is further highlighted
amongst the nine principal risks which fall within the
seven principal risk themes, as outlined on page 66.
Costs associated with carbon, i.e. costs related to
SAF and to ETS, are incorporated into our five-year
financial plan and inform key longer-term decisions
such as fleet planning.
Transition plan – net zero roadmap
In FY22, we set an interim science-based target of
35% reduction in GHG emissions intensity by 2035
– we were the first low-cost carrier in Europe to have
our target validated by the Science Based Targets
initiative (SBTi). easyJet’s net zero roadmap provides
the framework with which to achieve these targets.
The pathway defines the levers with which we intend
to decarbonise our airline operations, along with
how, when and to what extent we need to use them,
materially affecting business decisions over the
short, medium and long term. In FY23, easyJet won
a number of awards for our net zero roadmap,
including the Best Net Zero Strategy of the Year at
the inaugural UK Green Business Awards in London.
The net zero roadmap is aligned to the SBTi
aviation sectoral decarbonisation pathway, which
is aligned to the Paris Agreement scenario (well
below 2°C). However, in the long term, easyJet’s
pathway drives emissions intensity reductions that
exceed the requirements of the SBTi pathway.
In the short to medium term, our focus will be on
maximising efficiency and using SAF in line with
mandated requirements. These initiatives will
continue into the long term. This will involve the
following:
they replace. We currently have a firm order for
158 NEO aircraft to be delivered up to FY29 and
a proposed order for a further 157 firm orders
and 100 options to be delivered by FY34.
> Airspace modernisation, which will lead to more
direct flight routings. easyJet is actively
contributing to these efforts via the IRIS
programme with Inmarsat, Airbus and the
European Space Agency, and on Project HERON
as part of the Single European Sky programme.
> A suite of operational efficiency initiatives that
minimise fuel burn, including Descent Profile
Optimisation (DPO), which has been installed
on 332 of our aircraft.
> Contractually committed SAF volumes with our
fuel supply partners to ensure security of supply
of SAF.
In the long term, zero carbon emission aircraft are the
cornerstone of our pathway. Based on today’s
science, our focus is on hydrogen-powered aircraft as
we believe it shows the most potential for a short-haul
airline like easyJet. Hydrogen has no carbon emissions,
provided it is green hydrogen produced with
renewable electricity, and has the potential to reduce
non-CO2 emissions from flying. Please refer to page
20 for more detail on the net zero roadmap.
easyJet is driving the development of hydrogen
aircraft through numerous investments and
partnerships:
> easyJet and Rolls-Royce partnership to pioneer
the development of hydrogen combustion
engine technology has already delivered the
world’s first run of a modern aero engine on
hydrogen, as well as two UK and EU funded
research programmes.
> easyJet continues to collaborate on Airbus’
ZEROe programme dedicated to developing
hydrogen-powered zero emissions aircraft.
> easyJet led the formation of the Hydrogen in
Aviation alliance, an alliance of major players
across aviation, to accelerate the delivery of
zero carbon emissions aviation.
> As a founding member of Hydrogen South
West, we are developing hydrogen ecosystems
to support the introduction of aircraft, in close
collaboration with Bristol Airport.
> Fleet renewal with Airbus NEO aircraft, which
are at least 15% more efficient than the aircraft
Carbon removal technology will also play a critical
role in our roadmap, both in supporting feedstock
as a component of power-to-liquid SAF and as a
mechanism to address residual emissions. In
October 2023, easyJet was the first airline in the
world to sign a contract for Direct Air Carbon
Capture and Storage (DACCS), via the Airbus
Carbon Capture Offer.
The net zero roadmap provides the framework
with which to mitigate against five of the six key
transition risks – compliance, legal, consumer
sentiment, investor/markets sentiment and
reputation. The key remaining risk is technology
– delivery of the roadmap is dependent on the
scaling-up of SAF production and the
development of nascent technologies such as zero
carbon emission aircraft, and there is a risk of a
potential increase in costs associated with
transition to these technologies and/or with
potential adjustment to net zero roadmap delivery
levers necessary.
Beyond carbon dioxide, non-CO2 effects such as
contrail cirrus and nitrous oxides (NOx) contribute
to aviation’s impact on global warming. easyJet
has joined Project CICONIA, part of the EU Single
European Sky programme, to explore operational
methods to minimise the formation of warming
contrails and contribute to the development of
mitigation strategies.
FY23 performance
In FY23, easyJet delivered strong progress against
our interim SBTi target with a 5% reduction in GHG
Overview of scenario analysis1
emissions intensity versus a FY19 baseline, and are
on track to meet our interim science-based target.
This was driven by fleet renewal, with a further 10
NEO aircraft joining the fleet, and the strong
performance of operational efficiency initiatives.
Our net zero transition plan is also aligned with the
SBTi Aviation Sectoral Decarbonisation Approach.
(c) The resilience of our strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower scenario.
easyJet’s net zero pathway is aligned to the SBTi
aviation sectoral decarbonisation pathway, which
is aligned to the Paris Agreement scenario (well
below 2°C). The sensitivity of the pathway and the
ability to meet our targets in the absence of
different levers has been assessed to ensure there
is no over-dependence on any single lever.
There is currently no formal aviation sectoral SBTi
pathway aligned to the Paris Ambition (1.5°C),
although SBTi has released an interim pathway
that is yet to go through consultation. easyJet
aims to reach net zero by 2050 by reducing
emissions intensity by 78% and addressing residual
emissions via carbon dioxide removal technology.
This is a significantly better reduction than the 57%
threshold defined for easyJet by the well below
2°C SBTi pathway. This gives easyJet headroom
and therefore resilience in respect of our climate
change risk and net zero strategy.
Scenario
Current policy
Stated policy
Paris Agreement2
Paris Ambition
Temperature alignment
3°C
2.5°C
Target global emissions reduction
Representative concentration pathway
-50%
by 2100
RCP 7.0
-75%
by 2100
RCP 4.5
Well below
2°C
Net zero
by 2050
1.5°C
Net zero
by 2050
RCP 2.6
RPC 2.6
1) easyJet works in partnership with Risilience to evaluate a range of climate change-related risks across a range of
scenarios, outlined further on page 68.
2) The Paris Agreement of well below 2°C was selected as the baseline scenario as it is aligned with the SBTi aviation
sectoral decarbonisation pathway. The analysis varied input assumptions across the transition risks in line with these
scenarios. As an example, the Paris Agreement scenario assumes a 56% increase in consumers adopting sustainable
alternative products by 2030, compared to 58% under the Paris Ambition and 42% under ‘stated policy’. 5yrEV@Risk
was assessed under these scenarios as described in the Risks summary on page 59. These scenarios incorporate
socio-economic projections from the Shared Socioeconomic Pathways (SSPs).
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RISK MANAGEMENT
(a) Our processes for identifying and assessing
climate-related risks and opportunities
easyJet works in partnership with Risilience to
evaluate a range of climate change-related risks
across a range of scenarios as described on page
55. The quantified risks are then assessed against
the organisation’s threshold for what constitutes a
risk of ‘major concern’, e.g. substantive financial or
strategic level of impact and ‘above risk tolerance’.
This metric is defined by the overall Group
materiality principle of 1% of total assets equating
to a threshold of £99 million.
In parallel, we leverage our internal and external
network to understand and critically evaluate
transition risks and opportunities related to
compliance, consumer sentiment, market
sentiment, technology, legal and reputation that
are relevant to the Group. Group Finance, Legal,
Investor Relations and Marketing teams support
the identification and qualitative and quantitative
assessment of specific risks and opportunities,
feeding into Risilience’s analysis, and into strategy
and financial planning for the Group.
Risilience conducted workshops in FY22 focused
on climate-related risks identified to have a
potentially substantial financial impact. The
workshops involved colleagues from across the
business and identified the key functional level
risks within each corporate level risk category.
For full details of the specific risks identified,
see Strategy section (a) on page 54.
The impact and likelihood inputs were then
calibrated in order to reach an aligned and
consistent view of each risk. These risks are
reviewed annually and updated if required.
(b) Our processes for managing climate-related
risks and opportunities
Following the outputs of internal stakeholders,
the Risilience study and external networks, risk
workshops were conducted to determine the
appropriate ownership and management of these
risks. This process confirmed climate change
transition is a principal risk, see page 66 of our Risk
section for further detail. Mitigations and controls
for these risks were developed by the named risk
owners including those outlined on page 66 and
are documented in the Climate Change Transition
Risk Register, overall ownership of which sits with
the CFO. Governance for these risks and
mitigations are regularly reviewed through
easyJet’s Sustainability Steering Committee.
Ownership of risks are outlined below.
Risk
Risk owner
Compliance costs
CFO
Legal
Group General Counsel
Technology
CFO
Consumer sentiment
Chief Customer &
Marketing Officer
Investor/market
sentiment
CFO
Reputation
Group Markets Director
(c) How our processes for identifying, assessing
and managing climate-related risks are
incorporated into the business overall risk
management
As described in the risk management section
(b) above, climate change transition risks are
incorporated into the corporate risk framework
and register. For more detail on the overall risk
management of the business, see the Risk section,
pages 59 to 66.
Mitigation options that are identified during the
above process have been incorporated into
easyJet’s net zero pathway, which is reviewed
on an annual basis and feeds into the corporate
strategy and financial planning process and
principal risks and uncertainties, see pages
61 to 66.
METRICS AND TARGETS
(a) The metrics we use to assess the climate-
related risks and opportunities in line with our
strategy and risk management process
easyJet assesses financial impact in the form of
5yEV@Risk. These figures are then assessed
against the materiality threshold, which is defined
by the Company as 1% of total assets, i.e. a
threshold of £99 million in FY23. Risks and
mitigation options identified through these metrics
have been incorporated into easyJet’s climate
change transition plan and continue to inform our
financial and strategic planning.
(b) Our disclosure of Scope 1, Scope 2 and
Scope 3 GHG and the related risks
easyJet has disclosed its full value chain emissions
in this Annual Report. Read our comprehensive
GHG and energy performance table, including
Scope 1, 2 and 3 emissions on page 45, where you
can find the breakdown by geography and the
methodology used. See page 45 for a link to the
detailed independent assurance statement.
(c) The targets we use to manage climate-related
risks and opportunities and performance against
targets
In FY22, easyJet joined the Race to Zero and in
doing so we committed to setting an interim
science-based target on GHG intensity for 2035 as
well as to reach net zero carbon emissions by
2050, aligning with the aviation sector criteria and
recommendations of the SBTi.
As our interim target, easyJet has committed to
reducing well-to-wake GHG emissions related to jet
fuel by 35% per Revenue Tonne Kilometre (RTK) by
FY35 from a FY19 base year1 2, which has been
approved by the SBTi.
easyJet’s net zero roadmap, outlined on page 20,
provides the framework with which we intend to
meet our targets in 2035 and beyond on our
journey to net zero in 2050.
For details of the CEO and CFO sustainability-
related targets, see the Remuneration Report on
page 115.
1) The target boundary includes biogenic emissions and
removals from bioenergy feedstocks.
2) Non-CO2e effects which may also contribute to aviation
induced warming are not included in this target. easyJet
commits to report publicly on its collaboration with
stakeholders to improve understanding of opportunities
to mitigate the non-CO2e impacts of aviation annually
over its target timeframe.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 58
SUSTAINABILITY ACCOUNTING STANDARDS BOARD (SASB) INDEX
SASB Standards identify the subset of ESG issues most relevant to financial performance and enterprise value for 77 industries. Below we report on the metrics for the Airlines standard.
TABLE 1. SUSTAINABILITY DISCLOSURE TOPICS AND ACCOUNTING METRICS
Topic
Accounting metric
Category
Unit of measure
Code
Disclosure
Greenhouse
gas emissions
Gross global Scope 1 emissions
Discussion of long-term and short-term strategy or plan to manage
Scope 1 emissions, emissions reduction targets, and an analysis of
performance against those targets
Quantitative
Metric tonnes (t) CO2e
n/a
TR-AL-110a.1
Disclosed on page 45 of Annual Report
TR-AL-110a.3
Covered in the Annual Report, (primarily pages 43
to 46)
(1) Total fuel consumed
(2) Percentage alternative
(3) Percentage sustainable
Quantitative
Gigajoules (GJ)
TR-AL-110a.3
103,880,085
Percentage (%)
0.020%
0.020%
Labour practices
Percentage of active workforce covered under collective bargaining
agreements
Quantitative
Percentage (%)
TR-AL-310a.1
85% – disclosed in ESG fact sheet
(1) Number of work stoppages and
Quantitative
Number, days
TR-AL-310a.2
Not disclosed
(2) Total days idle1
Competitive
behaviour
Total amount of monetary losses as a result of legal proceedings
associated with anticompetitive behaviour regulations2
Discussion and
analysis
n/a
Accident and
safety management
Description of implementation and outcomes of a safety
management system
Discussion and
analysis
n/a
TR-AL-540a.1
The Company has not incurred any monetary
losses as a result of legal proceedings associated
with anti-competitive behaviour regulations
TR-AL-540a.1 Disclosed in Safety, Quality & Governance ESG
fact sheet. Also discussed in Annual Report risk
section pages 59 to 66
Number of aviation accidents
Number of governmental enforcement actions
of aviation safety regulations
Quantitative
Number
Quantitative
Number
TR-AL-540a.2 Zero
TR-AL-540a.3 Zero
TABLE 2. ACTIVITY METRICS
Activity metric
Available Seat Kilometres (ASK)3
Passenger load factor4
Revenue Passenger Kilometres (RPK)5
Revenue Tonne Kilometres (RTK)6
Number of departures
Average age of fleet
Category
Quantitative
Quantitative
Quantitative
Quantitative
Quantitative
Quantitative
Unit of measure
Code
Disclosure
ASK
Rate
RPK
RPK
Number
Years
TR-AL-000.A
TR-AL-000.B
TR-AL-000.C
TR-AL-000.D
TR-AL-000.E
TR-AL-000.F
Disclosed on page 34 of Annual Report
Disclosed on page 34 of Annual Report
Disclosed on page 34 of Annual Report
Disclosed on page 45 of Annual Report
Disclosed on page 34 of Annual Report
9.9 years
1) Note to TR-AL-310a.2 – Disclosure shall include a description of the reason for each work stoppage, impact on operations and any corrective actions taken.
2) Note to TR-AL-520a.1 – The entity shall briefly describe the nature, context and any corrective actions taken as a result of the monetary losses.
3) Note to TR-AL-000.A – Available Seat Kilometres (ASK) is defined as the maximum potential cumulative kilometres travelled by passengers (i.e. kilometres travelled by occupied and unoccupied seats).
4) Note to TR-AL-000.B – Load factor is a measure of capacity utilisation and is calculated as passenger kilometres travelled, divided by ASK.
5) Note to TR-AL-000.C – Revenue Passenger Kilometres (RPK) is defined as the cumulative total kilometres travelled by revenue passengers. A revenue passenger is a passenger for whose transportation an air carrier receives commercial remuneration.
6) Note to TR-AL-000.D – Revenue Tonne Kilometres (RTK) is defined as one metric tonne of revenue traffic transported one kilometre. RTK is computed by multiplying the aircraft kilometres flown on each flight stage by the number of metric tonnes
of revenue traffic carried on that flight stage (e.g. passengers, baggage, freight and mail).
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 59
RISK MANAGEMENT
EFFECTIVE
RISK
MANAGEMENT
OUR CORPORATE RISK FRAMEWORK
The Board approves the strategy
for easyJet, including strategic
initiatives and objectives, and
ensures suitable oversight and
governance through several
management methods. This
includes 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, setting its risk appetite,
and maintaining the Group’s
systems of internal control and
risk management. The Audit
Committee and the Board are
accountable for reviewing and
assessing the risk management
processes. The Risk & Assurance
team, which reports jointly to the
Chair of the Audit Committee and
Chief Financial Officer (CFO),
ensures that robust processes are
in place for identifying and
assessing the Group’s emerging
and principal risks.
The Board, with the assistance
of the Audit Committee, 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.
The Risk & Assurance team is
responsible for creating,
implementing and delivering the
corporate risk framework and
reporting the principal and
emerging risks to the Board.
Each function across easyJet is
responsible for understanding
and managing its own risks and
considering the impact on all
stakeholders. To ensure that risks
are managed within the
framework, the Risk & Assurance
team maintains a programme of
risk monitoring with each
function and promotes cross-
functional management of risks.
We continue to develop our
corporate risk framework to
ensure that risks, including
emerging risks, are identified,
assessed, managed and
articulated. Emerging risks are
captured from a variety of
sources and are updated onto
our central Risk Radar. This is
shared in each AMB and Audit
Committee meeting attended.
The Risk & Assurance team
works with the functions to
ensure that risk information
remains relevant, control
deficiencies or gaps are identified
and improvement actions are
implemented. During FY23, the
Corporate Risk team has further
developed the corporate risk
framework. The principal risks
and risk themes have been
updated in line with the strategy,
the enhanced risk appetite
process was used to update risk
appetite for FY24, the risk radar
process is being further
developed and a Risk Platform
has been procured and is being
rolled out. All functional risks
have been scored on the same
basis using the same taxonomy.
The Corporate Risk, Compliance
and Internal Audit teams have
updated the assurance map to
identify key controls to manage
our principal risks and
understand the assurance over
these controls and have validated
a number of these controls.
Following a robust review of the
2022 principal risks, a refresh of
the principal risks took place
during the second half of the
year. We recategorised where
our sub risks were positioned
against the main principal risk.
RISK THEMES
Nine corporate risks fall into seven corporate risk themes, which have been updated
to ensure alignment to the corporate strategy as follows:
SAFETY, SECURITY
AND OPERATIONS
OUR PEOPLE
MACRO-ECONOMIC
AND GEOPOLITICAL
TECHNOLOGY
easyJet’s number one priority is the safety and security of its
customers, colleagues and contractors, demonstrated by our value
of ‘always with safety at our heart’. The delivery of a safe and
secure operation also supports easyJet’s strategy to ‘deliver ease
and reliability’ to meet the needs and expectations of our
customers. This is critical to ‘building Europe’s best network’.
Having the right people is a key part of our value to be ‘always
warm and welcoming’ and ‘living the Orange Spirit’. We aim to
create an inclusive, diverse and energised environment that
attracts the right people and inspires everyone to learn and grow.
Our values include to ‘always challenge costs’. The airline industry
can be sensitive to macro-economic and geopolitical conditions
which could affect our financial performance. Risks include supply/
demand imbalance, general economic trends, as well as the impact
of changes in fuel cost, foreign exchange rates and counterparty
performance.
easyJet’s strategy to ‘deliver ease and reliability’ includes
developing new technologies to enhance experiences and
operational performance. 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 data and information.
Digital safety is treated as seriously as physical safety under our
value ‘always with safety at our heart’.
LEGISLATIVE/REGULATORY
LANDSCAPE
Our value of ‘making a positive difference’ in a heavily regulated
industry includes keeping well informed and adapting (as required)
to any legislative or regulatory changes across the jurisdictions in
which we operate.
ENVIRONMENTAL
SUSTAINABILITY
ASSET
PERFORMANCE
The impacts of climate change transition risk on our business and
operations, regulation and taxation, and changing consumer,
colleague and shareholder expectations. easyJet’s environmental
sustainability commitment is to reduce our impact today, and to
pioneer a sustainable future for travel.
Supporting easyJet’s strategic priorities of ‘transforming our revenue
capability’ and ‘delivering ease and reliability’ we make the best use
of our fleet capabilities and our capacity/slots in the right airports at
the right prices, whilst working with our supply chain to enhance
value and deliver our priority of ‘driving our low-cost model’.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents Organisations across many different sectors were
competing for talent in the market, as a period of staff
reductions changed to a period of high recruitment.
Onboarding processes became more difficult. Our
regulators dictate the standards of background checks
that we must achieve for new starters, and the
pandemic coincided with the introduction of new
enhanced background checks. Our new starters had
more complex employment backgrounds as a result of
the pandemic, often with periods of employment which
we were unable to verify due to the closure of many
businesses. These external factors resulted in significant
processing time challenges, which meant that many of
our new starters were unable to work following the
completion of training. We looked to compress our
onboarding times to support new starter engagement,
but our third-party vetting partners struggled to keep
pace with the evolving and growing intake plan,
meaning that onboarding for many new starters took
significantly longer than planned.
We made significant changes to enhance the planning
and onboarding of new colleagues. We compressed the
timeline and started the recruitment process (and
hence onboarding) three months earlier to proactively
access the potential pool of candidates, support
engagement and deliver to plan. We brought our
outsourced vetting process in-house, which delivered
an improved candidate experience, a quicker
turnaround time and could meet the changing needs of
the business. We have also launched a pilot cadet
programme, ensuring we have resilience in place for our
future pilot needs through a partnership with CAE over
the next five years. This new partnership will see 200
cadets join easyJet on our multi-pilot licence
programme each year and will support 1,000 new pilots
into the industry. This is in addition to our direct-entry
pilot recruitment.
60
RISK MANAGEMENT (CONTINUED)
The following title changes were
made to the principal risks:
CASE STUDY
> Safety, security and
operations changed to
Significant operational
disruption
> Asset efficiency and
effectiveness changed to
Network and primary airport
> Legislative and regulatory
landscape changed to Breach
of regulatory requirements
> People changed to Talent
acquisition and retention
> Environment and sustainability
changed to Climate change
transition risk
> Technology and digital safety
changed to Significant safety
or security event
> Macro-economic and
geopolitical changed to
Macro-economic conditions
Two new risks have been
introduced:
> Non delivery of strategic
initiatives
> Significant digital safety event
Two risks have been removed:
> Pandemic
> Brand licence
There are a variety of potential
impacts for each risk and
subrisk, which are documented
in detailed risk registers. These
are consolidated into an overall
impact and likelihood score for
each subrisk and overall risk.
Ensuring we
have the
talent we
need
At easyJet, people are our greatest asset.
Without them we cannot deliver and
operate safe and timely flights or provide
the brilliant customer service we are known
for. We are speeding up our recruitment
procedures to make sure we encourage the
best talent to easyJet.
Our people is one of our risk themes, and talent
acquisition and retention a principal risk. Following the
pandemic, the airline industry suffered a reduction in
staffing levels, due to a number of redundancies and
staff leaving because of uncertainty in the industry.
This had an impact on our ability to operate at full
capacity during the final months of the pandemic.
As easyJet and the wider aviation industry began to
recover from the pandemic, there was a time lag in
recruiting, onboarding and training staff to meet the
pent-up demand for travel.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 61
RISK MANAGEMENT (CONTINUED)
OUR PRINCIPAL RISKS AT A GLANCE
Principal risk
Risk change
Risk owner
Risk themes
Our strategic priorities
1 Breach of regulatory requirements
2 Significant safety or security event
3 Significant digital security event
4 Macro-economic conditions
5 Network and primary airport risks
6 Non-delivery of strategic initiatives
7
Significant operational disruption
8 Talent acquisition and retention risks
9 Climate change transition risks
Read more on pages 62 to 66
RISK HEAT MAP
This heat map shows the
relative position of our
principal risks at a residual
risk level. We continue to
monitor risks and develop
action plans where
necessary to keep risks in
line with our risk appetite.
2
6
4
3
7
9
5
8
1
t
c
a
p
m
I
Likelihood
Group General Counsel
Chief Operating Officer
Chief Information Officer
Chief Financial Officer
Chief Commercial Officer
Chief Operating Officer
Group People Director
Chief Financial Officer
RISK THEMES
OUR STRATEGIC PRIORITIES
Safety, security and operations
Building Europe’s best network
Asset performance
Transforming our revenue capability
Legislative/regulatory landscape
Delivering ease and reliability
Our people
Driving our low-cost model
Environmental sustainability
Technology
Macro-economic and geopolitical
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 62
RISK MANAGEMENT (CONTINUED)
1 BREACH OF REGULATORY REQUIREMENTS
SUB RISKS
Changing legal and
regulatory landscape
Increasing requirement
for disclosure
Cross-jurisdictional legislation
Corporate Social
Responsibility Directive
RISK OWNER
Group General Counsel
CHANGE IN RISK
RISK THEME
Legislative/regulatory landscape
POTENTIAL IMPACTS
> 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
MITIGATIONS
> Policies, procedures and mandatory training
programmes:
– In-house legal experts and advisers to
identify and respond to changes in
legislation.
– External legal experts and advisers to
identify and respond to changes in
legislation.
– Influencing relevant future and existing
policy, including by working with relevant
industry bodies.
– Adapting existing processes for new
legislation/regulation.
> Advice from third-party experts to ensure
adherence to all disclosure requirements:
– External auditors provide regulatory updates
– Technical accounting team assesses any
impact on easyJet’s Group accounts from
changes in IFRS requirements.
– Subscription to third-party technical
accounting platform (currently
Viewpoint) to keep abreast of changing
reporting requirements.
> easyJet holidays recruitment policy to include
hire of lawyer/paralegal with expertise in each
new jurisdiction, for example Swiss and any
additional new markets:
– Existing in-house team receives regular
updates on cross-jurisdictional legislation.
– Most expansion destinations are within the EU.
– Panel law firms have multi-jurisdictional
reach.
2 SIGNIFICANT SAFETY OR SECURITY EVENT
No sub risks specified for this risk
RISK OWNER
Chief Operating Officer
CHANGE IN RISK
RISK THEME
Safety, security and operations
POTENTIAL IMPACTS
> Sustained adverse media coverage
> Reduction in future revenue
> Fines/regulatory sanctions
> Operational disruption
> Significant spike in costs
> Share price movement
MITIGATIONS
> Cross-functional safety action groups identify,
evaluate and control safety-related risks:
– easyJet Safety Board reviews safety,
security and compliance performance
across all Air Operator Certificates (AOC). It
is chaired by the CEO, attended by AOC
accountable managers and periodically by
AOC regulators.
– Local safety review boards, including at AOC
level, are open for the local regulator to
attend.
– Published Safety Policy promotes incident
reporting process and supports safety
culture.
– easyJet Safety Management System using
leading software systems to: report
incidents and events; identify and mitigate
hazards and threats; collect and analyse
safety data (identifying potential areas of
risk); capture learnings from easyJet and
industry events/incidents; and embed into
future risk mitigations.
– Timely, credible and reliable information
upon which to base operational decisions.
– Emergency response process and crisis
management exercises.
– Hull (all risks) and liabilities insurance
(including spares).
– Geopolitical developments across the easyJet
network, reviewed by security-cleared
specialists and reported back to the Board.
– Airport inspection regime to ensure the
security elements effectively managed at
all our airports.
– Continual review and development of safety
management processes.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 63
RISK MANAGEMENT (CONTINUED)
3 SIGNIFICANT DIGITAL SECURITY EVENT
SUB RISK
Data loss or compromise
RISK OWNER
Group General Counsel
MITIGATIONS
> 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 provides a
level of assurance over third parties,
proactively monitors threats and responds
to incident.
– Employee education and awareness
programme includes a network of
champions, online training and awareness
campaigns.
– External threat intelligence monitoring.
– Security logging and monitoring.
– Vulnerability scanning and penetration
testing.
– Credit card data is protected through PCI
DSS compliance as a Level 1 Merchant.
– Digital safety is discussed monthly at our
Airline Management Board (AMB), biannually
at Board and biannually at Audit Committee.
Additionally, as part of our governance
processes, the Digital Safety Board meets
regularly to discuss matters related to our
cybersecurity.
4 MACRO-ECONOMIC CONDITIONS
SUB RISK
Volatility in financial markets
RISK OWNER
Chief Financial Officer
CHANGE IN RISK
> Digital Safety Programme ensures compliance,
CHANGE IN RISK
RISK THEME
Safety, security and operations
POTENTIAL IMPACTS
> Sustained adverse media coverage
> Reduction in future revenue
> Fines/regulatory sanctions
> Operational disruption
> Significant spike in costs
> Share price movement
data controls and protection. Vulnerability
reduced by establishing documented
workflows, training programmes and
establishing employee guidelines.
RISK THEME
Macro-economic and geopolitical
POTENTIAL IMPACTS
> Share price movement
> Significant increase in costs
> Adverse impact to credit rating
MITIGATIONS
> The Finance Committee oversees the Treasury
Policy and funding activities.
> The Treasury Policy contains strategies for
managing market price risk, counterparty
credit risk and liquidity risk management.
The Board approves the Treasury Policy.
Compliance with the Treasury Policy is
reported on a monthly basis.
> easyJet manages a liquidity buffer to protect
against unforeseen circumstances. This
liquidity buffer is supported by cash and
undrawn facilities.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 64
RISK MANAGEMENT (CONTINUED)
5 NETWORK AND PRIMARY AIRPORT RISKS
SUB RISKS
Airport infrastructure capacity
Loss of slots
Failure to protect core markets
Increased competition
RISK OWNER
Chief Operating Officer
CHANGE IN RISK
RISK THEME
Asset performance
POTENTIAL IMPACTS
> Weakened customer proposition
> Customer welfare and safety incidents,
particularly relating to passengers with
restricted mobility
> Loss of market share
> Inefficient use of crew and aircraft
> Significant increase in costs
> Slot portfolio pressure in coordinated
airports
> Loss of crew engagement
> Shortage of ground handling staff (due to
shortage of available recruits in the UK)
could lead to delayed performance of the
schedule, leading to impact on crew hours
and slot compliance
> Shortage of airport staff (people with
reduced mobility and security) risks poor
passenger-handling experience
MITIGATIONS
> 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:
– Managing aircraft gauge to improve our
ability to grow.
– Engagement with Eurocontrol to understand
expected network constraints.
– Tactical flight planning to mitigate impact of
air traffic management constraints.
> Projecting cancellations for the rest of the
season so we can analyse risk and take
informed decisions when required in order to
reduce the risk of permanently losing slots as a
result of capacity reductions:
– Mitigating actions available, e.g. removal of
seats, wet lease and how pipeline for crew is
increased.
– Continuous contact with operations
department to proactively cancel flights
whilst trying to minimise slot impact to
future seasons with minimum number
possible at highly constrained airports.
Although some slot losses may occur.
– Slot-tracker dashboard created to give
teams managing the portfolio better
visibility of complex requirements. Work is
continuing to enhance the tool and
ultimately to allow us to share timely
updates with other departments so they can
be aware of risks due to planned or actual
changes.
> easyJet reviews its capacity allocation each
across all key markets through the Network
Development Forum (NDF) process and
quarterly AMB network and airports updates.
Focus is on any potential slot regulation
changes and is linked into both EU and UK
processes.
> easyJet has a clear strategy of differentiation
through network design. Mitigating competitor
impact is a key focus of this year’s NDF
process.
6 NON-DELIVERY OF STRATEGIC INITIATIVES
No sub risks specified for this risk
RISK OWNER
Chief Commercial Officer
CHANGE IN RISK
RISK THEME
Asset performance
Technology
Macro-economic and geopolitical
POTENTIAL IMPACTS
> Business benefits not realised
> Financial underperformance
> Inefficient use of resources
MITIGATIONS
> Complex, large-scale programmes have been
initiated and prioritised through the Enterprise
Project Management Office.
> The Enterprise Project Management Office is
in place to oversee 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, a Leadership 50 owner 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 AMB 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.
> Onboarding of Accenture as the systems
integrator to help orchestrate the largest and
most complex programmes.
> Fortnightly updates on projects to the AMB
with ownership residing with the Chief
Customer & Marketing Officer, with a
more agile approach to deliver faster.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 65
RISK MANAGEMENT (CONTINUED)
7 SIGNIFICANT OPERATIONAL DISRUPTION
SUB RISKS
Continuity of services
Flight and cabin crew resource
Single aircraft supplier
Protests
Industrial action
Failure of critical technology
RISK OWNER
Chief Operating Officer
CHANGE IN RISK
RISK THEME
Safety, security and operations
POTENTIAL IMPACTS
> Customer dissatisfaction
> EU261 compensation and welfare payable
to customers
> Inefficient use of crew/aircraft
> Negative impact on brand
> Share price movement
> Adverse media coverage
> Reduction in revenue
> Operational disruption
MITIGATIONS
> 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.
– 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.
– Significant focus on risk mitigation of, and
preparedness for, a destructive cyberattack.
– 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 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:
– Adoption of cloud and externally hosted
systems, in addition to easyJet’s two data
centres.
– 24/7 Incident Management Teams.
– Time-critical staff identified through Business
Impact Assessments and Business Continuity
Plans (BCPs), with regular testing.
– Procurement requires relevant third parties to
have own BCPs/Disaster Recovery plans.
– Close working relationships with key
stakeholders, including but not limited to
airport authorities and slot coordinators,
lobbying where appropriate.
> We have established appropriate crew numbers
for the schedule that has been planned to
operate in addition to improving levels of crew
resilience. Summer 2023 recruitment was
delivered successfully and the summer 2024
recruitment campaign is underway with the first
candidates joining before the end of the
calendar year. The crew establishment outlook
for the peak summer flying remains on track to
deliver peak crew volumes in all ranks. Cancelled
flights due to non-availability of crew decreased
significantly in summer 2023 compared to
summer 2022.
> Over 10,000 A320 family aircraft operating
worldwide, with proven track record for safety
and reliability:
– A320neo has a different engine type.
– Aircraft continuous improvement to address
learnings during operation and regulatory-
imposed airworthiness directives.
– Full visibility of Airbus delivery schedule for
new aircraft, with appropriate mitigation.
plans e.g. short-term wet-lease arrangements.
– Rigorous established aircraft maintenance
programme. Schedules approved by relevant
regulatory body.
– Fleet exit strategy options. Second-hand
market. Sale and leaseback.
> Union engagement with regular meetings
to engage discussions before any formal
escalations:
– Clear mandate processes and industrial
relations steering committee. We have a clear
industrial relations plan, mandating process
and governance in place to oversee all
negotiations and manage escalations. This
involves AMB leads and budget holders, so
that decisions can be made in a timely
manner.
> Continued improvements to IT environment,
e.g. new data platform further leveraging cloud
hosting and capabilities. Dedicated Digital
Safety team and Digital Safety Programme.
Documented workflows, training and
establishing employee guidelines:
– 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 to ensure
changes to critical IT systems are managed
in a controlled manner.
– Firm order book agreed with Airbus and CFM,
– Supplier Management process for critical IT
guarantees inventory up to FY29.
suppliers.
– Continuously replace older aircraft and avoid
a prolonged service life for aircraft in
easyJet’s fleet fluctuations.
– Pandemic Lessons Learned review identified
best practice and opportunities for
improvement.
> Business Continuity team/Integrated Control
Centre Planning for disruption:
– A Business Impact Analysis and Business
Continuity Plan is in place for all functions
across the business in order to manage initial
disruption and post-crisis loss of premises,
loss of people, loss of systems, loss of
supplier and our key business critical
resources.
– Critical technologies are either cloud-hosted,
hosted across two data centres or at third-
party provider locations with necessary
failover protocols in place.
– IT Major Incident Management team is in
place to respond rapidly to any unforeseen
critical technology incidents which is aligned
to the wider easyJet Incident and Crisis
Management framework.
– 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.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 66
RISK MANAGEMENT (CONTINUED)
8 TALENT ACQUISITION AND RETENTION RISKS
9 CLIMATE CHANGE AND TRANSITION RISKS
SUB RISKS
Health and wellbeing
Inclusion and diversity
RISK OWNER
Group People Director
CHANGE IN RISK
RISK THEME
Our people
POTENTIAL IMPACTS
> Sustained inability to deliver key strategic
initiatives
> Loss of corporate knowledge
> Potential operational disruption and
associated costs
MITIGATIONS
> Monthly reporting on attrition to highlight any
areas of concern to address in a timely way:
– Development of a strong Employee Value
Proposition to enable clear articulation of
the reasons to join and remain at easyJet.
– Develop cabin crew and pilot engagement
strategy and action plan.
– Implement a refreshed recognition strategy.
– Review of hybrid working arrangements to
deliver effective ways of working and an
enhanced employee experience.
– Creating a new careers website to enable an
improved experience and functionality for
potential candidates to support greater
attraction.
> Health and wellbeing digital transformation
journey underway with improved online
presence and support structures in place:
– Health and wellbeing strategy has been
developed and updated for all colleague
groups.
> Develop and agree a company-wide Diversity,
Equity and Inclusion strategic framework
– Implement agreed gender targets to
improve women representation across our
leadership population.
– Initial focus is on delivering a women’s
development programme to support the
gender targets.
MITIGATIONS
> Developed SBTi-aligned net zero roadmap
which provides the framework to manage
easyJet’s climate change transition risks. It is
also a means of communicating with all
stakeholders including consumers, investors
and government.
> Taking action to reduce short to medium-term
impact by securing firm orders for more fuel
efficient A320neo and A321neo aircraft.
Reducing emissions and associated costs
further through a host of operations initiatives.
> Supporting future technologies including
hydrogen aircraft development with our
partners such as Rolls-Royce and Airbus.
Investing in Direct Air Carbon Capture and
Storage (DACCS). Securing SAF supply
through long-term contractual commitments.
> Proactive advocacy with UK and EU authorities
to ensure that policies intended to reduce
industry climate impact are appropriate and
effective in collaboration with our partners and
trade bodies.
> Robust governance through the Sustainability
Steering Committee, AMB and plc Board as
well as specific forums such as the Fuel
Conservation Working Group and
Environmental Policy Forum. Increased costs
due to climate regulation are also included in
central financial planning processes.
SUB RISKS
Consumer sentiment
Cost of emissions
Emissions reductions
Financial markets sentiment
RISK OWNER
Chief Finance Officer
CHANGE IN RISK
RISK THEME
Environmental sustainability
POTENTIAL IMPACTS
> Increased operational costs driven by
regulation relating to the use of
sustainable aviation fuel, withdrawal of
free allowances under the ETS, fuel taxes,
taxation of non-carbon GHG emissions
and other air travel related charges
> Suppression of demand driven by
changes in consumer preferences
> Increased compliance and reporting
requirements
> Shareholder activism
> Adverse publicity and impact on our
reputation/brand
> Climate change-related regulatory and
legal challenge
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents
67
GOING CONCERN AND VIABILITY STATEMENT
ASSESSMENT OF PROSPECTS
The strategic report on pages 2 to 70 sets out the
activities of the Group and the factors likely to
impact its future development, performance and
position. The Finance Review on pages 27 to 34
sets out the financial position of the 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, the
updated medium-term targets set out in the
strategic plan (see page 10) 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, the current macro-economic and
market conditions and longer-term management
incentives. However, it is noted that the high-level
fleet plan used by easyJet is necessarily over a
longer period to enable future planning of aircraft
deliveries underpinning the plans for fleet
modernisation, future growth, cost efficiencies and
sustainability improvements. This longer-term
planning is evidenced this year by the latest
proposed aircraft purchase transaction which, if
approved by shareholders, will secure aircraft
deliveries for the period FY29–34.
The assessment of the prospects of the Group
includes the following factors:
> The strategic plan – which takes into
consideration growth expected by way of
creating value through the business model,
market conditions, future commitments, cash
flow, expected impact of key risks, funding
requirements and maturity of existing financing
facilities (see table above right).
As at September 2023
Eurobonds
Revolving credit facility
Undrawn UKEF backed facility
Maturity date
(drawn and undrawn)
Available funds
October 2023
June 2025
March 2028
September 20251
June 2028
€500m
€500m
€1,200m
$400m
$1,750m
1) Option to extend to September 2026 at lender’s 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 61 to 66.
STRESS TESTING
The corporate risk management framework
facilitates the identification, analysis and response
to plausible risks, 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 61 to 66) and the controls
and mitigations identified.
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 on the next page
show that there is sufficient liquidity under all
scenarios. In the first four scenarios one of the
assumptions is that the existing Eurobonds are
refinanced, whereas in the last scenario no
refinancing of existing Eurobonds is assumed.
GOING CONCERN STATEMENT
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 through to June 2025.
As at 30 September 2023, easyJet had a net cash
position of £41 million including cash and cash
equivalents of £2.9 billion, with unrestricted access
to £4.7 billion of liquidity, and has retained
ownership of 54% of the total fleet, all of which are
unencumbered.
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 management’s best estimation of
how the business plans to perform over the
period. 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
future estimated price of ETS allowances, the
phasing out of the free ETS allowances from 2024,
the expected price and quantity required of
Sustainable Aviation Fuel (SAF) usage and fleet
renewals.
The business is exposed to fluctuations in fuel
prices and foreign exchange rates. easyJet is
currently c.76% hedged for fuel in H1 of FY24 at
c.$867 per metric tonne, c.51% hedged for H2
FY24 at c.$823 and c.25% hedged for H1 FY25 at
c.$832.
In modelling the impact of severe but plausible
downside risks, the Directors have considered
demand suppression leading to a reduction in
ticket yield of 5% and a reduction in Holidays
contribution of 5%. The model also includes the
reoccurrence of additional disruption costs (at
FY22 levels), an additional $50 per metric tonne
on the fuel price, 1.5% additional operating cost
inflation and an adverse movement on the US
dollar rate. These impacts have been modelled
across the whole going concern period. In
addition, this downside model also includes a
grounding of 25% of the fleet for the duration of
the peak trading month of August, to cover the
range of severe but plausible risks that could result
in significant operational disruption. This downside
scenario resulted in a significant reduction in
liquidity but still maintained sufficient headroom
on external liquidity requirements.
The Directors also considered a separate downside
model that included the operational disruption
and adverse US dollar rate but, instead of the yield
reduction, modelled increased costs (additional
3% inflation assumed on operating costs) and an
additional $100 per metric tonne on the fuel price
compared to the base case. This scenario was not
as severe and as such still resulted in sufficient
headroom. It was not deemed plausible to
combine yield reduction and the higher cost and
fuel increases based on an analysis of historical
information across the airline industry.
After reviewing the current liquidity position,
committed funding facilities, the base case and
severe but plausible downside financial forecasts
incorporating the uncertainties described above,
the Directors have a reasonable expectation that
the Group has sufficient resources to continue in
operation for the foreseeable future. For these
reasons, the Directors continue to adopt the going
concern basis of accounting in preparing the
Group’s financial statements.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 68
GOING CONCERN AND VIABILITY STATEMENT (CONTINUED)
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 2026. 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
stress testing demonstrates that the current
funding with refinancing of the existing
Eurobonds would be sufficient to retain liquidity
in both the base and downside scenarios
(excluding the specific lack of funding
scenario).
2. In assessing viability, it is assumed that the
detailed risk management process as outlined
on pages 59 to 66 captures all plausible risks,
and that in the event that multiple risks occur,
all available actions to mitigate the impact to
the Group would be taken on a timely basis and
have the intended impact.
3. There is no prolonged grounding of a
substantial portion of the fleet greater than
included in the downside and alternative
downside scenarios. This includes a grounding
of 25% of the fleet for the duration of the peak
trading month of August, to cover the range of
severe but plausible risks that could result in
significant operational disruption.
The key risks that are most likely to have a
significant impact on easyJet’s viability have been
considered in the stress testing across multiple
scenarios and are shown on the right. The
assumptions applied to the models are based on
plausible but severe impacts of the risks, as
assessed by review of the current macro-
economic position and historical information
across the airline industry. The principal risks have
continued to be assessed for any changes in the
risk environment. The actions in place to mitigate
against these risks are included in the Risk section
on pages 61 to 66.
Scenario modelled
Description
Assumptions applied
Corporate risk covered
Demand suppression and
operational disruption
Increase in costs and
operational disruption
Downside scenario covering multiple
risks that may lead to a reduction in
demand, resulting in a prolonged yield
reduction over the period. In addition,
this scenario combines risks that also
would lead to operational disruption
and/or short-term grounding of the
fleet.
Scenario covers multiple risks that
would result in an increase in costs
across the period or a significant spike
in costs. In addition, this scenario
combines risks that also would lead to
operational disruption and/or short-
term grounding of the fleet.
Across the whole period:
> reduction in ticket yield of 5%
> reduction in Holidays contribution
of 5%
> additional disruption costs (based
on FY22 levels).
One-off:
> a grounding of 25% of the fleet for
the duration of the peak trading
month of August.
Across the whole period:
> additional $100 per metric tonne
on the fuel price
> increased costs (additional inflation
assumed on all costs)
> additional disruption costs (based
on FY22 levels)
> an adverse movement on the
Breach of regulatory requirements
Significant safety or security event
Significant digital security event
Network and primary airport risks
Significant operational disruption
Breach of regulatory requirements
Significant safety or security event
Significant operational disruption
Significant digital security event
Network and primary airport risks
US dollar rate.
Macro-economic conditions
Climate change
Failure to deliver on plans
Scenario covers climate-based risks
that would result in both a reduction
in demand and increased costs. This
includes SAF and ETS costs, capex and
maintenance costs due to technology
changes and additional costs for
regulatory and legal challenge.
Scenario covers the risks that would
result in easyJet being unable to deliver
on its plans for the period.
Lack of funding
Scenario covers the risk that would
result in no further funding being
available to easyJet during the period.
One-off:
> a grounding of 25% of the fleet for
the duration of the peak trading
month of August.
Across the whole period:
> reduction in demand – reduced
yields or capacity
> increased fuel costs (SAF and ETS)
> increased maintenance costs
> new taxes.
Across the whole period:
> reduced initiatives income
> increased costs
> reduction in ticket yield of 5%
> reduction in Holidays contribution
of 5%.
Across the whole period:
> uncommitted funding excluded.
Climate change transition risks
Non-delivery of strategic initiatives
Talent acquisition and retention risks
Macro-economic conditions
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 69
NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT
The table below and the information
incorporated by reference comprises
our Non-Financial and Sustainability
Information Statement required by s414CA
and 414CB of the Companies Act 2006.
Read more on our business model on page 22
Many of the policies listed
below can be found on our
corporate website:
corporate.easyJet.com
SECTION 172 STATEMENT
Our stakeholders are a fundamental part of our operations. We have set out on pages 95 to 98 details of
who our key stakeholders are, how we have engaged with them and the associated outcomes. Further
details are contained in the summary of the Board’s activity in the year on pages 74 to 77. Details of how
the Board has had regard to the matters set out in section 172(1)(a) to (f) can be found throughout the
Strategic and Governance reports.
Our approach
Our policies
Due diligence, outcome and key performance indicators
Related principal risks
1 ENVIRONMENTAL
MATTERS
We are passionate about making a
meaningful difference for our planet,
communities and people. Sustainability
is important to us and we work
tirelessly to minimise our
environmental impact across our
operations and are taking action to
pioneer a sustainable future for travel.
Read more in the Sustainability section
on pages 39 to 53
2 PEOPLE
Our people are our greatest asset and
we want to continue to attract, retain
and develop top talent by focusing on
creating an inclusive and energising
environment that inspires everyone to
learn and grow, enabling the Orange
Spirit to thrive.
Read more in the People and Culture
section on pages 35 to 38
> Environment Policy – our policy focuses on
minimising the environmental impact across
the organisation.
> Net zero roadmap – our roadmap to net zero
carbon emissions by 2050 focuses on zero
carbon emission technology.
> The Sustainability Steering Committee is responsible for monitoring
the outcome of our Sustainability Strategy, driving key sustainability-
related decisions, delivering against strategic KPIs and the
consideration and disclosure of climate-related risks and
opportunities.
> Further details on sustainability and our roadmap to net zero can be
> Sustainability Strategy – easyJet’s
Sustainability Strategy has evolved to reflect
our ambition to pioneer positive change for
our planet, communities and people.
> Environment Management System (EMS)
– allows us to manage and continually improve
our environmental performance in a structured
and systematic way.
> Supplier Code of Conduct – we require our
suppliers to comply with environmental
standards.
found on pages 20 and 21, and pages 39 to 53.
> Streamlined Energy and Carbon Reporting can be found on page 45.
> Climate-related financial disclosures can be found on pages 54 to 57.
> easyJet has received IATA IEnvA Stage 2 certification, making us the
first low-cost carrier worldwide with a fully IATA IEnvA certified EMS.
> Equal opportunity and inclusion –
encourages our employees to make the best
use of their skills and experience, and ensure
we treat staff, potential staff and the public
fairly.
> Inclusion and Diversity Framework – keeps
us focused on what is important for creating
an inclusive and diverse culture and an
authentic workforce.
> Wellbeing Strategy – drives impact and
cultural change through a programme of
activities.
> Code of Business Ethics – promotes a culture
that encourages open lines of communication
and free access to information.
> ‘Speak Up, Speak Out’ whistleblowing
process – enables easyJet employees and
suppliers to be able to raise concerns about
any safety, ethical or legal issues.
> Engagement with colleagues across the Company to ensure everyone
understands the part they play in creating an inclusive culture.
> Training for our Airline Management Board (AMB) with The Centre for
Inclusive Leadership to enable them to think and engage differently and
create a culture where everyone can thrive. More information on page 36.
> Created a behavioural framework to support our values through
engagement from various groups across the business including crew
and pilots. More information on page 35.
> Rolled out a Wellbeing Strategy to look after the heath and wellbeing of our
people which will be embedded and implemented in different communities
over time. More information on page 37.
> We continue to measure how our employees feel about the inclusive
environment that we are striving to create, through our regular employee
listening activities. More information on page 38.
> Ethical and compliance policies are monitored by the Business
Integrity Committee and People team. The Audit Committee reviews
the Business Integrity Committee’s activities quarterly.
> Stakeholder engagement (employees) on page 96.
> Whistleblowing on pages 79, 104 and 107.
> The impacts of climate change
on our business and operations,
regulation/taxation, and
changing consumer and
colleague expectations are
recognised as one of our
principal risks. More information
can be found on page 66.
> Our strategy and risk
management on climate-related
risks and opportunities can
be found in the Task Force on
Climate-related Financial
Disclosures section on pages
54 to 57.
> Talent acquisition and retention is
recognised as a principal risk and
we seek to control and mitigate
that risk in order to reduce its
impact. Further information is set
out on page 66.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 70
NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT (CONTINUED)
Our approach
Our policies
Due diligence, outcome and key performance indicators
Related principal risks
3 SOCIAL
MATTERS
easyJet is committed to doing the
right thing for our customers, our
people, our partners, the communities
in which we operate and the
environment.
4 HUMAN
RIGHTS
We are committed to human rights,
both in our business and our supply
chain. This includes observance of the
principles set out by the International
Labour Organization Declaration on
Fundamental Principles and Rights at
Work.
5 ANTI-CORRUPTION
AND ANTI-BRIBERY
At easyJet we conduct all of our
business in an honest and ethical
manner. We take a zero-tolerance
approach to bribery and corruption and
are committed to acting professionally,
fairly and with integrity in all business
dealings and relationships wherever
easyJet operates. We encourage our
employees and suppliers to raise
concerns on ethical issues via the ‘Speak
Up, Speak Out’ whistleblowing process.
> easyJet has a pan-European partnership with
> Our cabin crew make onboard appeals for customers to make
> Social impact matters are not
UNICEF to support its work.
> We have an Inclusion and Diversity
Framework and a Wellbeing Strategy.
donations in support of UNICEF’s work to protect children around
the world from disease and keep them safe during emergencies.
More information can be found on page 53.
> Freedom to change – allows our customers to
> Created a development programme for women, with the wider goal
change flights to a different date or route,
fee-free, up to two hours before departure.
of increasing the number of women in leadership roles. More
information can be found on page 37.
> Travel restriction protection – allows
customers impacted by a travel ban or
mandatory hotel quarantine to change their
flights fee-free, request a voucher or a refund.
> Human Rights and Modern Slavery Policy
– supports recognised human rights principles.
> Supplier Code of Conduct – easyJet’s
suppliers have an important role in delivering
our ambition, and we strive to ensure that our
suppliers have aligned views on corporate
responsibility and compliance.
> Both induction training and annual refresher training at Group level
ensures the workforce is continually mindful of human rights and
modern slavery.
> easyJet seeks to identify and prevent adverse human rights impacts
directly linked to its business relationships, through obtaining
appropriate contractual commitments and undertaking appropriate
due diligence on suppliers (including enhanced due diligence on high
risk suppliers).
> Cross-functional modern slavery working group updates the Modern
Slavery Risk Register, ensures legal compliance, complies and
maintains up-to-date policies and procedures, identifies and
mitigates modern slavery breaches. More information can be found
on page 52.
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 95 to 99.
> We continue to use the Global
Slavery Index to support our
analysis of geographic risks and
assess whether the country/
area has a high prevalence of
modern slavery or other labour
rights violations.
> Anti-Bribery and Anti-Corruption Policy
> All existing and new employees receive mandatory ethics training
> A breach of regulatory
– sets out the responsibilities of easyJet, and
of those working for and on behalf of easyJet,
to observe and uphold easyJet’s prohibition on
bribery and corruption.
> Gifts and Hospitality Policy – sets out the
rules on receiving and giving gifts and
hospitality.
> Code of Ethics – ethical and compliance
policies, covering topics that include bribery
and corruption, gift-giving and fraud.
annually and upon joining the business.
> Risks associated with bribery and corruption are regularly reviewed
by the Audit Committee.
> Ethical and compliance policies are monitored by the Business
Integrity Committee and People team. The Business Integrity
Committee’s activities are reviewed by the Audit Committee on a
quarterly basis.
requirements is recognised as a
principal risk. More details can
be found on page 62.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 71
CONTENTS
GOVERNANCE
74
Activities in the year
89
Biographies
95
Engaging with
stakeholders
73
Governance highlights
83
Board at a glance
Chairman’s statement
Governance highlights
Our activities in the year
Understanding the
business and culture
> Our purpose
> Our culture
> Our performance
72
73
74
78
78
80
Ensuring effective
governance
> Governance framework
> Board at a glance
> Role of the Board
> Performance review
> Board of Directors’
biographies
> Airline Management
Board biographies
Engaging with
stakeholders
> Understanding
stakeholder perspectives
> Stakeholders in decision
making
81
83
84
87
89
92
95
99
Committee reports
> Nominations Committee
100
Report
> Audit Committee
Report
> Finance Committee
Report
> Safety & Operational
Readiness Committee
Report
> Directors’
Remuneration Report
Other disclosures
103
109
111
113
131
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 72
CHAIRMAN’S STATEMENT
ENSURING EFFECTIVE
GOVERNANCE
The Board is mindful that the aviation industry is
complex, demanding, and there are many factors
outside of our control, as we have seen this year
with air traffic control failures and European
industrial relations challenges. We therefore
understand the need to focus on those areas that
are within our control, whilst building a robust
resilience against those things we cannot control.
The Board has spent considerable time engaging
with the business to this end. We have also spent
time engaging with our key stakeholders and
taken steps to ensure the Board itself continues to
be appropriately effective.
We set out some of the key highlights on the next
page and I hope that the remainder of the report,
which provides more detail on our activities during
the year, gives you an insight into the breadth of
our work and our efforts to ensure easyJet serves
customers well, whilst delivering attractive
shareholder value.
I remain convinced that with its commitment to
high standards of corporate governance and a
proven strategy, easyJet can be a winner in the
evolving European airline industry and I am
committed to working with the Board,
management and wider employees to deliver
on this for all our stakeholders.
Stephen Hester
Chairman
I am pleased to present our corporate
governance report, setting out the
Board’s activities during the year along
with details of our governance
arrangements.
It has been a year of considerable achievement for
easyJet, completing our return to attractive
profitability post pandemic and setting the
Company up for further success in coming years.
The Board has particularly focused on ensuring
progress is being made against our strategic
priorities whilst maintaining an appropriate
engagement in near-term operational and
commercial challenges that are an enduring
feature of the airline industry.
easyJet has set an aspiration of being ‘Europe’s
most loved airline – winning for our customers,
shareholders and people’ (read more about our
purpose and strategy on page 8). This requires
continuing progress against each of the key
priorities – building Europe’s best network,
transforming revenue, delivering ease and
reliability and driving our low-cost model. I am
pleased with the financial performance in 2023,
meeting the existing medium-term targets and
allowing the reinstatement of dividend payments.
It is also positive that as part of our longer-term
strategy we have been able to announce a
conditional agreement with Airbus for an
additional 157 aircraft order covering FY29 to
FY34 and a further 100 purchase rights, which
shareholders will be asked to approve by the end
of 2023. This not only supports our cost efficiency
goals from fuel savings and upgauging, but also
enables our longer-term growth aspirations and,
crucially, will play a key part in delivering our net
zero roadmap.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 73
HIGHLIGHTS
GOVERNANCE
HIGHLIGHTS
UNDERSTANDING THE BUSINESS AND CULTURE
> The Board visited our base in Milan in June
2023, meeting the management team and
local airport and tourism stakeholders, and
visiting our world-leading pilot and crew
training facility to see the easyJet culture in
action. We also held our September 2023
meetings at Gatwick, meeting the local
management team along with airport and
air traffic control stakeholders.
> We have undertaken strategic deep dives into
specific countries (Spain, Portugal, Italy and
the UK) and the easyJet holidays business.
> The Board had a chance to experience the
daily operational complexity when it visited
the Integrated Control Centre in May 2023,
which manages all on-the-day crewing and
network movements.
> Our activities also extended to understanding
values and culture, with the Employee
Representative Directors (ERD) regularly meeting
with employees to understand their experiences
and feedback, and reviewing our people
strategy, whistleblowing and employee surveys
to check our culture and values are aligned.
Read more on pages 78 to 79
STRATEGY AND PERFORMANCE
> We review our trading, operational and financial
ENSURING EFFECTIVE GOVERNANCE
> The Board keeps its composition and the
performance at each Board meeting and receive
regular updates outside of meetings. As set out in
the CEO’s review the operational environment was
particularly challenging this year. The Board
therefore received weekly updates from the Chief
Operating Officer during the summer and at each
meeting discussed actions being taken to remedy
the issues where possible, for example creating
firebreaks in the middle of the Gatwick schedule
to minimise the knock-on effects from ATC delays.
> The Board also remained focused on
maintaining financial strength, repaying a €500
million Eurobond in February 2023 and
refinancing the $1.77 billion UKEF facility in June
2023, where an additional $950 million of gross
debt was repaid. The new $1.75 billion facility
includes a sustainability performance metric
linking this to milestones in our net zero
roadmap. We have also repaid a €500 million
Eurobond which matured in October 2023.
> We discussed our customer strategy and
initiatives planned to improve ease and reliability
and the customer experience. Many of these
rely on technology to be delivered, and the
Board discussed the technology roadmap twice
in the year.
Read more on page 80
balance of skills, diversity and experience under
regular review. We were pleased to welcome
Sue Clark as Senior Independent Director (SID)
in March 2023 and more details of her induction
are set out on page 85. Sue succeeded Julie
Southern, who along with Andreas Bierwirth,
stepped down from the Board in February 2023.
> To ensure our governance framework remains
relevant and effective, the Safety Committee
was renamed the Safety & Operational
Readiness Committee and its terms of reference
updated during the year, to better reflect the
scope of its activities. We also reviewed the
composition of the Board’s committees, the
matters reserved for Board decision and our
delegated authority framework.
> We undertook an internal Board Performance
Review and reviewed Directors’ external
appointments to ensure they have sufficient
time to devote to their role, as well as
approving additional external appointments
during the year.
Read more on pages 81 to 94
ENGAGING WITH STAKEHOLDERS
> As well as the ERD meetings, the Board hosted
a breakfast with senior leaders in order to get to
know the management layer below the Airline
Management Board (AMB).
> Having set a new aviation milestone with the
world’s first run of a modern aero engine on
hydrogen with our partner Rolls-Royce, the
Board invited the Rolls-Royce team to present to
them in March 2023 in order to understand their
plans around hydrogen and net zero technology.
> When visiting Milan, the Board met
representatives from the City of Milan tourist
board and SEA Milan, the owner of Malpensa
and Linate Airports.
> In addition to engagement at the AGM, the
Chairman, CEO and CFO have regularly updated
the Board on the opinions of investors and
these are also communicated to the Board
via presentations from the Director of Investor
Relations and engagement with the brokers
and other advisers.
Read more on pages 95 to 99
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance OCTOBER 2022
NOVEMBER
DECEMBER
Business updates
> CEO, CFO, trading and operations
> Investor relations
Strategy
> FY24–28 strategy
> Revenue management deep dive
> Fleet requirements from 2029 onwards
Stakeholders
> Investor engagement around trading
update
> Consideration of stakeholders and
long-term strategic priorities in strategy
and fleet discussion
Business updates
> CEO, CFO, trading and operations
> Investor relations
> Safety
Strategy
> Approval of FY23 budget
> Technology, data and change update, and
status review of key programmes
Governance
> Approval of Annual Report and Accounts
including principal and emerging risks
> Board Performance Review outcomes
> ERD terms of reference and engagement
with Cabin Services team and Portfolio
team
Stakeholders
> Investor engagement around full-year
results and Annual Report and Accounts,
and with regulators and governments
> Engagement by ERD with employee
groups
Business updates
> CEO, CFO, trading and operations
Strategy
> FY24–28: review market and competitive
environment
> Sustainability update including net zero
roadmap
Governance
> Review of Board Forward agenda
> Update on SID recruitment
> Appointment of Company Secretary
> Consideration of AGM matters
Stakeholders
> Assessment of resolutions to be put to
the AGM in the interests of the Company
and investors
> Remuneration Committee consultation
with investors and voting bodies on
remuneration arrangements
> Consideration of stakeholders and
long-term strategic priorities in strategy
discussion and sustainability update
> Board dinner with AMB
74
HIGHLIGHTS
ACTIVITIES IN
THE YEAR
The Board meets regularly and held
10 meetings during the year. Each
Board meeting follows a carefully
tailored agenda agreed in advance
by the Chairman, Chief Executive
and Company Secretary.
On the following pages we set
out some, but not all, of the main
activities of the Board during the
year, to provide an insight into the
items that have been discussed
and approved, along with the
related stakeholder considerations.
More on our engagement with
stakeholders is set out on pages
95 to 99.
Q1
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 75
HIGHLIGHTS
JANUARY 2023
FEBRUARY
MARCH
APRIL
Business updates
> CEO, CFO, trading and operations
> Investor relations
> Regulatory and government affairs
> Safety
Strategy
> Country deep dive: Spain and Portugal
> Sustainability
Governance
> Approval of Safety & Operational
Readiness Committee terms of reference
and changes to Committee composition
Stakeholders
> Investor engagement around AGM
> Consideration of regulators and
government and investors stakeholder
groups
> Consideration of stakeholders and
long-term strategic priorities in Spain
and Portugal
Business updates
> CEO, CFO, trading and operations
Strategy
> Rolls-Royce update on hydrogen
technology
> FY24–28: long-term network strategy
and delivering ease and reliability
Governance
> Consideration and approval of tax
strategy and Modern Slavery Statement
Stakeholders
> Board and senior leadership breakfast
> Board and CEO dinner
> Consideration of multiple stakeholders
in reviewing tax strategy
> Consideration of employees and supply
chain relating to preventing modern
slavery
Activity
> Approval of trading update for six months
ending 31 March 2023
Stakeholders
> Investor engagement around trading
update and post-AGM matters
©2023 Rolls-Royce
Q3
Business updates
> CEO, CFO, trading and operations
> Approval of Q1 trading update
Governance
> Appointment of Senior Independent
Director
Stakeholders
> Investor engagement around first quarter
trading update and AGM
Q2
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance BASE VISIT
milan, italy
In June 2023, Board members spent two days
visiting our base at Malpensa Airport in Milan, Italy,
to understand the scale of the easyJet operation in
the country and review our strategy in Milan and
the Italian market. easyJet is the second biggest
airline in Italy. Malpensa became an easyJet base in
2006 and is the largest easyJet base in continental
Europe, with a dedicated terminal. Milan is also
home to our world-leading pilot and crew training
facility, operated in partnership with CAE for the
benefit of our European crew and training around
5,000 employees a year.
The itinerary was designed to allow the Board
to see as much of the operation in the allotted
time and gain a deeper understanding of our
European operations. The visit included:
> A deep dive with the local management team
into the Italy country strategy, performance and
stakeholder considerations.
> Visiting the CAE training centre and having a
tour of the pilot and crew training facilities led
by easyJet’s Director of Training Operations.
> Participating in a session in the pilot training
A320 simulators, experiencing the market-
leading technology first hand.
> A tour of Malpensa and Linate Airports and
meeting with the operators of both airports,
Società Esercizi Aeroportuali (SEA), to
understand future strategy and how we can
partner to improve the customer experience.
> A presentation from Diego Babuder, an easyJet
pilot based in Milan who is undertaking a PhD on
Sustainable Aviation, on his PhD research into
new technologies such as hydrogen and
sustainable aviation fuels, and the impact of
each technology on airport operations and
infrastructure.
The visit enabled the Board to directly engage
with our employees, seeing the easyJet culture in
action, and allowed them to spend more time
together as a group, in line with the Board
Performance Review outcomes from the
prior year.
JUNE
Business updates
> CEO, CFO, trading and operations updates
Strategy
> Country deep dive: Italy
> Update on fleet requirements
> Sustainability
Stakeholders
> Investor conference attended by CFO
> Discussions with City of Milan tourist
board and SEA Milan, the owner of
Malpensa and Linate Airports, around
economic environment in Italy and
future plans
> Consideration of stakeholders and
long-term strategic priorities in Italy
> Consideration of multiple stakeholder
groups when developing fleet plans
76
HIGHLIGHTS
MAY
Business updates
> CEO, CFO, trading and operations
> Investor relations
> Digital Safety Programme (including
cybersecurity)
> Approval of half-year results
Strategy
> FY24–28: transforming revenue
capability, driving our low-cost model
> Technology, data and change update
and status review of key programmes
> Approval of a new undrawn five-year
sustainability-linked term loan facility
of $1.75 billion
Governance
> Review of principal risks at half year
> Annual review of delegated authorities
and matters reserved for the Board
Stakeholders
> Investor engagement around half-year
results
> Consideration of long-term strategy
and purpose
> Review of financial position and debt
facilities and consideration of investor
and other stakeholders entering into
new term loan facility with sustainability
metrics attached
Q3(CONTINUED)
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 77
HIGHLIGHTS
JULY
SEPTEMBER
BASE VISIT
London, gatwick
Business updates
> CEO, CFO, trading and operations
> Approval of Q3 trading update
> Safety
Strategy
> easyJet holidays deep dive
> Fleet requirements from 2029 onwards
Governance
> Approval of revised Inside Information
Policy and Share Dealing Code
> ERD update
Stakeholders
> Investor engagement around trading
update
Business updates
> CEO, CFO, trading and operations
> Safety
> Sustainability
> Investor relations
Strategy
> Review of FY24 budget
> Country deep dive: UK
> Fleet requirements from 2029 onwards
> Customer brand and marketing update
Governance
> Board Performance Review
Stakeholders
> Investor conference in London attended
> Operations and Customer Seminar with
by CEO
investors
> Consideration of long-term strategy for
easyJet holidays
> Consideration of multiple stakeholder
groups when developing fleet plans
> Consideration of stakeholders and
long-term strategic priorities in the UK
> Engagement with Gatwick Airport
Limited on operations at London
Gatwick Airport, and NATS regarding
air traffic control
In September 2023, the Board held two days of
meetings at easyJet’s largest base, London
Gatwick. The Board met with local management
teams and key suppliers. This included
representatives from Gatwick Airport Limited
(GAL), the operators of the airport and a key
supplier, and NATS, the air traffic control
providers, to discuss the staff shortages and
poor performance over the summer, including
the outage in August. The Board pressed both
GAL and NATS to make major improvements in
their performance as their performance during
summer 2023 had negatively impacted easyJet
customers.
The Board also visited the operations centre at
the airport and had a tour of the North Terminal
operations, which gave them an opportunity to
meet easyJet and DHL ground handling staff
who manage operations on the front line, and
understand end-to-end procedures of an airport
terminal including takeoff, landing, navigation
and communication facilities.
Q4
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 78
UNDERSTANDING THE BUSINESS AND CULTURE
OUR BUSINESS
AND CULTURE
An understanding of, and connection
with, easyJet’s business and culture is
fundamental for our Non-Executive
Directors to enable them to maximise
their contribution to Board discussions
and monitor performance.
OUR PURPOSE
easyJet’s purpose is ‘Making low-cost travel easy’.
We are passionate about connecting people by
making travel easy, enjoyable and affordable for
customers, whether for leisure or business. Our
purpose defines who we are and guides the Board
actions and decision making. Our strategic
priorities are aligned with our ambition to be
Europe’s most loved airline, winning for our
shareholders, customers and our people. 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 22.
To ensure our strategic priorities are embedded
in Board discussion, the papers presented to the
Board clearly draw out the purpose, connection
and alignment to the strategic priority to aid the
Board’s decision making.
OUR CULTURE
easyJet has a unique culture, which is open,
positive and collaborative, and is embodied as
the ‘Orange Spirit’. The Board 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. Examples during the year include
reviewing the outcomes of the Your Voice Matters
survey to identify hotspots within the business;
reviewing the people strategy and promises to
ensure the right levels of engagement and
behaviours were being achieved; embedding a
compliance role in the Risk & Assurance team to
map current policies and owners to ensure they
are effective and regularly reviewed; and reviewing
the ‘Speak Up, Speak Out’ cases and trends.
Our culture is underpinned by the values and
behaviours we call ‘Our Promises’.
How the Board monitored culture in 2023
As well as aiming to lead by example, the Board
uses a number of methods to understand, monitor
and assess the Company’s culture:
Employee engagement
> Reviewing the results of the employee survey –
Your Voice Matters – enables the Board to
understand the employee experience and make
an assessment of the Company’s culture in
practice. This also enables the Board to
understand the working practices within the
organisation and how it aligns with the purpose
and strategic priorities of the Group. More detail
on this year’s Your Voice Matters survey can be
found on page 38.
> Employees were encouraged to get involved in
defining the behaviours that underpin our
promises during the year, via online polls and
focus groups. Insight from these discussions
along with feedback from the Your Voice
Matters survey helped in the development of a
behavioural framework. This framework will be
embedded into key stages of employee
experience, including how we attract, recruit,
onboard, reward and recognise our people. The
Board received an update on the behavioural
framework and will continue to monitor the
trends in the behaviour of the workforce.
Further detail on the behaviour framework can
be found on page 35.
> The ERDs meet various employee groups
regularly to understand their experiences, their
concerns, priority issues and a view of the
employee engagement across the organisation.
The ERDs provide an update to the full Board
following these meetings on the discussion and
key themes raised during the meeting. Further
detail is set out on page 82.
> The Board hosted a breakfast with members
of senior management to get to know the
management layer below the AMB. This
provided an opportunity for the Board to
engage directly and build an understanding
of their roles.
> Induction meetings also provide an opportunity
for the Directors to ask questions about the
culture in one-to-one sessions with senior
management.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 79
UNDERSTANDING THE BUSINESS AND CULTURE (CONTINUED)
Policies and procedures
> With the assistance of its Committees, the
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
& Operational Readiness Committee regularly
reviews safety strategy and performance to
ensure appropriate mitigations are in place and
any trends identified, which are then reported
to the Board. This enables the Board to
understand the effectiveness of easyJet safety
strategies and behaviours.
Read more on pages 111 and 112
Board oversees the effectiveness of a number
of Company policies in relation to Modern
Slavery, Digital Safety (including cybersecurity),
and Inclusion and Diversity. This enables the
Board to understand the practice and
behaviours across the Group and how these
align with our purpose and promises and actions
taken in these areas to make easyJet a better
place to work.
Read more on pages 69 and 70
Internal audit
> The Audit Committee reviews the internal audits
undertaken during the year and focuses on
audits that received limited assurance. This
helps them understand the processes, issues
and corrective action being taken.
Read more on page 107
Base visits
> These visits help the Board see easyJet’s culture
in action. The Board also toured the Integrated
Control Centre in Luton during the year, which
manages all on-the-day crewing and network
movements. This enabled the Board to
understand the complexity of the daily
operation and understand where new
technology, such as AI, could play a role in
future.
Read more on pages 76 and 77
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, which
considers incidents and their outcomes, on an
anonymous basis, in line with the 2018 UK
Corporate Governance Code (Corporate
Governance Code).
Read more on pages 107
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance How the Committees monitored
performance in 2023
> The Nominations Committee monitored the
Company’s progress against diversity targets
and succession plans, and reviewed the Board’s
performance through the annual Board
Performance Review.
> The Audit Committee monitored progress on
the continual programme of improvement to
easyJet’s financial control framework and the
corporate risk plan through regular updates at
meetings and feedback from the external
auditors.
> The Finance Committee monitored the
performance of easyJet’s fuel and capex
hedging policies, liquidity management and
balance sheet policies.
> The Remuneration Committee reviewed
progress on the gender pay gap, how effective
the Remuneration Policy was in incentivising
management to deliver the Company’s strategic
objectives, and how performance and outcomes
benchmarked against others.
> The Safety & Operational Readiness Committee
monitored safety and operational performance
metrics through incident and risk trackers, deep
dive sessions on key risks and operational areas,
and regular reports from the Director of Safety,
Security & Compliance and the Chief Operating
Officer.
More information on the role of the Committees
and their work through the year can be found on
pages 100 to 130.
80
UNDERSTANDING THE BUSINESS AND CULTURE (CONTINUED)
OUR PERFORMANCE
easyJet’s strategy is set out on pages 12 to 19,
and part of the Board’s role is overseeing
management’s execution of the strategy. The
Board’s forward agenda is designed to ensure that
the Board considers a balance of business
updates, strategic and governance matters, while
maintaining an appropriate focus on monitoring
management’s delivery of the strategy and
progress against longer-term objectives, which
can be seen in the summary of activities in the
year on pages 74 to 77.
How the Board monitored performance in 2023
The Board received updates on trading,
operational and financial performance at each
Board meeting and challenged management
on trends, actions and progress against the
strategic initiatives:
Trading
> The Board reviewed the trading performance at
each meeting via an update from the Chief
Commercial Officer, reviewing demand trends,
pricing, load factors, the impact of marketing
campaigns and other commercial initiatives. This
included a deep dive on revenue management.
Operations
> The Board received updates from the Chief
Operating Officer at each meeting, and during
peak summer received weekly updates setting
out the operational performance metrics and
actions being taken where relevant to respond
to the operational challenges.
Finance
> The Chief Financial Officer updated
the Board at each meeting on the financial
performance of the Company. This included
reviewing costs, revenue, net debt and cash
balances. The Board approved the repayment
of £1.2 billion of debt in the year, and entering into
the new sustainability-linked term loan facility.
Budget
> The Board reviewed the previous year’s
performance versus budget and competitor
performance; monitored FY23 financial
performance against budget throughout the
year; and reviewed the draft budget for FY24.
Strategy
> The Board regularly reviewed easyJet’s
operational and financial performance against
the Company’s strategy and KPIs; reviewed
country and business area deep dives; and
received regular strategic updates in a number
of key areas, including those listed below.
Customer
> The Board received presentations from the
Chief Customer and Marketing Director on
customer satisfaction, the customer strategy
and initiatives planned to improve ease and
reliability and the customer experience.
Technology
> The Chief Data & Information Officer updated
the Board on the Technology, Data and Change
Programme and status of the various
workstreams, and the Board challenged the
team to accelerate progress wherever possible.
Sustainability
> There were several updates during the year on
progress towards easyJet’s net zero roadmap and
delivery of the sustainability strategy. The Board
also received a presentation from Rolls-Royce on
their plans for net zero technology, and reviewed
easyJet’s performance in ESG ratings and
upcoming disclosure requirements.
People
> The CEO updates the Board on people matters
regularly, including updates on the outcome of
the Your Voice Matters survey.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 81
ENSURING EFFECTIVE GOVERNANCE
GOVERNANCE FRAMEWORK
SHAREHOLDERS
CHAIRMAN
The Chairman leads the Board and is responsible for ensuring it operates effectively through productive debate and challenge.
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. It enables sustainable
long-term growth while maintaining a balanced approach to risk within a framework of effective controls and taking into account the interests of a diverse range of stakeholders. The Board is also
responsible for our sustainability strategy and environmental (climate change), social and governance matters, as well as cybersecurity (digital safety).
A full schedule of matters reserved for its decision can be found on our website at: corporate.easyJet.com.
Biographies
Read more on pages 89 to 91
Strategic priorities
Read more on pages 12 to 19
Stakeholder engagement
Read more on pages 95 to 99
Board activity in the year
Read more on pages 74 to 77
THE BOARD
BOARD COMMITTEES
The terms of reference of each Committee are documented and agreed by the Board. The Committees’ terms of reference are available on our website at: corporate.easyJet.com.
The key responsibilities of each Committee are set out below.
Nominations Committee
To evaluate the balance of skills,
knowledge, experience and diversity on
the Board, and keep the composition,
structure and size of the Board and its
Committees under regular review.
Audit Committee
To monitor the integrity of the Group’s
financial and narrative reporting, and
the adequacy and effectiveness of the
systems for risk management and
internal control.
To provide succession planning for
senior executives and the Board, leading
the process for all Board appointments.
To monitor the effectiveness and
independence of the internal and
external auditors.
Finance Committee
To review and monitor the Group’s
treasury policies, treasury operations
and funding activities, along with the
associated risks and provide approvals
in relation to fuel, currency and interest
rate hedging, letters of credit and
guarantees.
Safety & Operational
Readiness Committee
To oversee easyJet’s safety strategy to
address existing and emerging safety
risks, identify and monitor any new,
emerging or changing safety risks, ensure
an appropriate governance framework is
in place and receive reports on
operational performance indicators.
To oversee the Board elements of the
Inclusion and Diversity Policy and
monitor Group-wide initiatives.
Remuneration Committee
To set remuneration for all Executive
Directors, the Chairman and the Airline
Management Board (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.
Read more on pages 100 to 102
Read more on pages 103 to 108
Read more on pages 109 and 110
Read more on pages 111 and 112
Read more on pages 113 to 130
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
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.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 82
ENSURING EFFECTIVE GOVERNANCE (CONTINUED)
EXECUTIVE DIRECTORS
INDEPENDENT NON-EXECUTIVE DIRECTORS
COMPANY SECRETARY
THE BOARD
Chief Executive
Chairman
Senior Independent Director
> Responsible for recommending the Group’s
strategy to the Board and for delivering the
strategy once approved.
> Together with the Chief Financial Officer,
monitors the Group’s operating and financial
results and directs the day-to-day business
of the Group.
> Responsible for recruitment, leadership and
development of the Group’s executive
management team below Board level.
> Keeps the Chairman and the Board appraised
> Responsible for leadership of the Board and
ensuring effectiveness in all aspects of its role.
> Responsible for setting the Board’s agenda
and ensuring adequate time is available for
discussion of all agenda items, including
strategic issues.
> 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.
> Acts as a sounding board for the Chairman and
as an intermediary for the other Directors when
necessary.
> Responsible for addressing shareholders’
concerns that have not been resolved through
the normal channels of communication with the
Chairman, Chief Executive or Chief Financial
Officer.
> Responsible for evaluating the performance
of the Chairman in consultation with the other
Non-Executive Directors.
of important and strategic issues facing
the Group.
> Ensures effective engagement between the
Board, its shareholders and key stakeholders.
Chief Financial Officer
Non-Executive Directors
Employee Representative Directors
> Supports the Chief Executive in developing
> Provide an external perspective, sound
and implementing strategy.
> Provides financial leadership to the Group
and alignment between the Group’s business
and financial strategy, including developing
the Group’s annual budget prior to the formal
agreement of the Board.
judgement and objectivity to the Board’s
deliberations and decision making.
> Use their diverse range of skills and expertise
to support and constructively challenge the
Executive Directors and monitor and scrutinise
the Group’s performance against agreed goals
and objectives.
> 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.
> Review the integrity of financial reporting and
that financial controls and systems of risk
management are robust.
> Provide the mechanism for the Board to engage
with the workforce in line with the Corporate
Governance Code.
> Responsible for meeting 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, along
with other informal engagement.
> Provide regular updates to the Board to
ensure employee voice is clearly reflected
in the boardroom.
> Supports and works closely with the
Chairman, the Chief Executive and the Chairs
of the Board Committees in setting agendas
for meetings of the Board and its
Committees.
> 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.
> Supports the Chairman in designing and
delivering Directors’ induction programmes
and the Board and Committee performance
evaluations.
> Provides advice and support to the Board and
individual Directors on corporate governance
matters and Board procedures and is
responsible for administering the Share
Dealing Code and the Annual General
Meeting.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 83
ENSURING EFFECTIVE GOVERNANCE (CONTINUED)
BOARD AT A GLANCE
The Board continues to meet
best practice guidelines for
independence and ethnic
diversity and keeps the balance
of skills, knowledge and
experience on the Board under
regular review. Biographies are
set out on pages 89 to 91.
Stephen Hester
Johan Lundgren
Kenton Jarvis
Sue Clark1 ,4
Catherine Bradley CBE
Ryanne van der Eijk
Harald Eisenächer
Moni Mannings
David Robbie3
Dr Detlef Trefzger3 ,4
Dr Andreas Bierwirth2
Julie Southern2
Board composition as at 30 September 2023
Gender
Ethnicity
Nationality
Tenure
Independence
Male
Female
6
4
White
Asian
9
1
Dutch
German
Swedish
UK/French
UK
0–3 years
3–6 years
1
2
1
1
5
6
4
Chairman
Executive Directors
Non-Executive Directors
1
2
7
Skills and experience
Meeting attendance
Airline/Travel
Finance
Strategy
Safety/
Sustainability
Commercial/
Consumer
Digital/
Marketing
Ex CEO/CFO
Board
10/10
10/10
10/10
5/5
10/10
10/10
10/10
10/10
10/10
10/10
5/5
5/5
Audit
Finance
Nominations
Remuneration
Safety &
Operational
Readiness
–
–
–
1/2
4/4
–
–
–
4/4
3/4
–
2/2
–
–
–
–
4/4
–
4/4
–
4/4
–
1/1
–
3/3
–
–
2/2
3/3
–
–
3/3
2/2
2/2
–
1/1
–
–
–
–
–
–
4/4
4/4
4/4
–
–
2/2
–
–
–
1/2
–
4/4
–
–
–
4/4
1/1
1/1
Sue Clark was appointed to the Board on 1 March 2023.
1)
2) Dr Andreas Bierwirth and Julie Southern stepped down from the Board on 9 February 2023.
3) David Robbie and Dr Detlef Trefzger joined the Nominations Committee on 9 February 2023.
4) Absences were due to unavoidable prior commitments. Directors who are unable to attend
meetings continue to receive the papers in advance of the meeting and have the opportunity
to discuss with the relevant Chair or the Company Secretary. Feedback is provided on the
decisions taken at the meeting.
ContentsFinancialsGovernanceStrategic reporteasyJet plc Annual Report and Accounts 2023 84
ENSURING EFFECTIVE GOVERNANCE (CONTINUED)
ROLE OF THE BOARD
Our governance framework is set out on page 81.
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. Our robust governance
framework is also instrumental in ensuring our
strategy is delivered successfully.
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
considers 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 information
on how we have engaged with our stakeholders
and the outcomes of that engagement, can be
found on pages 95 to 99.
The activities of the Board during the year can
be found on pages 74 to 77.
Each Board meeting follows a carefully tailored
agenda agreed in advance by the Chairman, Chief
Executive Officer and Company Secretary. The
Company Secretary provides support to the
Chairman in planning the Board’s forward agenda
to ensure appropriate matters are brought to the
Board’s attention throughout the year. The agenda
items correspond to the strategic priorities and
take into consideration the impact of stakeholders.
The Board has a formal schedule of matters
reserved for its decision and is assisted in its work
by its Committees. Each Committee Chair reports
to the Board on matters discussed at Committee
meetings and highlights any significant issue that
requires Board attention.
The Nominations Committee, on behalf of the
Board, reviews the composition of the Board at
least annually, identifying any areas of skills,
experience and knowledge that can be
strengthened further. Due consideration is given to
all aspects of diversity, including gender, ethnicity,
age, sexual orientation, disability and education,
professional and socio-economic backgrounds and
personal strengths.
A number of changes to Board occurred during
the year:
> Sue Clark was appointed as Senior Independent
Director with effect from 1 March 2023.
> Dr Andreas Bierwirth stepped down from the
Board on 9 February 2023 after serving nearly
nine years on the Board, as per corporate
governance best practice.
> Julie Southern also stepped down from the
Board on 9 February 2023, following her
appointment as Chair Designate of RWS
Holdings plc.
Maaike de Bie stepped down as Group General
Counsel and Company Secretary during the year
and the Board approved the appointment of Ben
Matthews as Group Company Secretary with
effect from 1 January 2023.
Following the above changes, and to ensure the
Committees continue to have an appropriate
combination of skills, experience and knowledge,
the Board approved changes to the Committee
memberships on the recommendation of the
Nominations Committee:
> David Robbie succeeded Julie Southern as
Chair of the Audit Committee.
> Dr Detlef Trefzger succeeded Dr Andreas
Bierwirth as Chair of the Safety & Operational
Readiness Committee.
> David Robbie and Dr Detlef Trefzger became
members of the Nominations Committee.
> Sue Clark became a member of the Audit,
Nominations and Safety & Operational
Readiness Committees.
The matters reserved for the Board and the
terms of reference of the Board Committees
are available on our corporate website at
corporate.easyJet.com.
INDIVIDUAL ROLES
Further information on each of the Board
members’ roles and that of the Company
Secretary is set out on page 82. Biographies are
set out on pages 89 to 91. 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
corporate.easyJet.com.
APPOINTMENTS TO THE BOARD
The Nominations Committee leads the process for
appointments to the Board and ensures plans are
in place for the orderly succession to both Board
and senior management. The activities of the
Nominations Committee are set out in its report
on pages 100 to 102.
The Board ensures that appointments are made
on merit against objective criteria to ensure
Non-Executive Directors 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
implementation of the Group’s strategy.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 85
ENSURING EFFECTIVE GOVERNANCE (CONTINUED)
INDUCTION
Following appointment, all Directors receive a
tailored induction programme designed through
discussion with the Chairman and Company
Secretary. Further detail is set out under Director
Inductions.
INDEPENDENCE
The Board consists of 10 Directors – the Chairman,
two Executive Directors and seven independent
Non-Executive Directors. Over half our Board
(excluding the Chairman) are independent
Non-Executive Directors and the composition of all
Board Committees complies with the Corporate
Governance Code. Additionally, the Chairman was
considered independent on appointment.
The independence of the Non-Executive
Directors is considered by the Board and reviewed
on an annual basis. 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.
As part of the Board Performance 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.
Director inductions
Ryanne van der Eijk, Harald Eisenächer and
Dr Detlef Trefzger, who joined the Board last
year, continued to follow their induction
programme into this year, as set out in the
2022 Annual Report.
Sue Clark joined the Board as Senior
Independent Director on 1 March 2023. Her
induction programme covered a range of key
areas of the business, and included meetings
with key colleagues across the business,
examples of which are listed to the right. Sue
was also given a detailed Board induction
pack containing Company and Board
information to assist with building an
understanding of the business, how it runs
and operates, the key markets and teams,
and to provide an understanding of the
Group’s main relationships and risks. The pack
also included information on the Board’s
composition and governance framework,
and the responsibilities of a Director.
Topics
Purpose, business model, strategic priorities,
insights into various functions of the business,
five-year plan and fleet overview
Session with
Chief Executive Officer
Members of the AMB
Strategy Director
Sustainability strategy and net zero roadmap
Director of Sustainability
Financial performance
Treasury policies, liquidity management,
revenue management, trading performance,
budget, cost efficiency programme and
financial controls
Chief Financial Officer
Director of Treasury
Finance Director: FP&A
Chair of the Finance Committee
Procurement and supply chain management
Director of Procurement
Risk and assurance including risk management
framework and audit briefing
Operational performance including summer
2023 readiness
Health and safety including briefing on AOC
structures, safety management and regulatory
framework
Director of Risk & Assurance
External auditors (PWC)
Chair of the Audit Committee
Chief Operations Officer
Director of Safety, Security & Compliance
Engineering and maintenance overview
Director of Engineering & Maintenance
Cabin services overview
Corporate governance and Market Abuse
Regulations
Shareholder relationships,
analyst views
Director of Cabin Services
Company Secretary
Director of Investor Relations
Company’s Brokers
Government relationships and lobbying positions
Director of Government Affairs
Our people, wellness and inclusion strategy,
industrial relations, succession planning,
reward and remuneration
Group People Director
Head of Reward
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 86
ENSURING EFFECTIVE GOVERNANCE (CONTINUED)
ATTENDANCE
Details of the Directors’ attendance at the Board
and Committee meetings held during the year can
be found on page 83.
The core activities of the Board and its
Committees are covered in scheduled meetings
held during the year. Additional ad hoc meetings
may be held to consider and decide matters
outside of the scheduled meetings when required.
Non-Executive Directors are encouraged to
communicate directly with each other and senior
management between Board meetings. In
addition to the regular Board meetings, and to
provide opportunities for the Board to engage
with senior management to discuss key elements
of the business, a number of Board dinners and
lunches were held, as well as a breakfast with
management detailed further on page 73.
Directors are encouraged and invited to attend all
Board and Committee meetings, but in certain
circumstances meetings are called at short notice
or, due to prior business commitments and time
differences, Directors may not always be able to
attend. During the year, Sue Clark and Dr Detlef
Trefzger both had to miss Committee meetings
due to unavoidable clashes with commitments
from prior to their appointment.
Even if a Director is unable to attend a meeting,
they continue to receive the papers 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.
The Chairman holds regular meetings with the
Non-Executive Directors without the Executive
Directors present. There is a standing agenda item
at the end of each Board meeting for the
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 page 101.
TIME COMMITMENT AND EXTERNAL APPOINTMENTS
The expected time commitment of the Chairman
and Non-Executive Directors is agreed and set out
in writing in the Letter of Appointment, available on
our corporate website at corporate.easyJet.com.
For the Chairman, this is a minimum of one day per
week, and for Non-Executive Directors a minimum
of three days per month.
The Directors often spend time in excess of this
minimum requirement, for example the Chairman
meets with the Chief Executive Officer and other
members of the AMB regularly and undertakes
regular base visits across Europe.
As part of the Board Performance Review, 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
on page 83, the attendance remained high and
demonstrates the Directors’ ability to devote
sufficient time to their role.
Executive Directors and the AMB are permitted to
take up non-executive positions on the board of
one other listed company as long as this is not
deemed to interfere with the business of the
Group.
In line with the Corporate Governance Code,
Directors are required to seek Board approval prior
to taking on any additional external appointments
and the following were approved during the year
in line with this requirement:
> Ryanne van der Eijk’s appointment as a member
of the Supervisory Board of Krasnapolsky Hotels
& Restaurants NV, a private company.
> Dr Detlef Trefzger’s appointment as a Non-
Executive Director of SATS Ltd (a company
listed in Singapore) and PSA International, a
private company.
Prior to these appointments, the Board considered
the time required, including whether the role
would impact the Director’s ability to devote
sufficient time to their current role, and concluded
that the appointments would not interfere with
their roles with the Company.
The Board is mindful of differing policies and
guidelines amongst individual shareholders and
proxy advisers on the number of appointments
the Directors should hold. However when
reviewing the contribution of individual Directors,
the Board reviews their attendance, their
availability to attend ad hoc meetings and their
contribution outside of meetings. Following this
review, the Board is comfortable that all Directors
continue to devote sufficient time to discharge
their duties.
ELECTION AND RE-ELECTION
All Board appointments are subject to continued
satisfactory performance following the Board’s
annual performance review. The Company’s Articles
of Association require the Directors to submit
themselves for election or re-election by
shareholders at every AGM. All Executive and
Non-Executive Directors will stand for election or
re-election at the Company’s next AGM.
TRAINING AND DEVELOPMENT
Directors’ training and development needs are of
key importance in order to discharge their duties
effectively. 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.
On joining the Board, all newly appointed Directors
receive a full, formal and tailored induction, further
details of which can be found on page 85.
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, they should
notify the Board in line with the Company’s
Articles of Association. If a conflict does arise, the
Director is excluded from discussions. Directors
have a continuing duty to update any changes to
their conflicts of interest.
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
supporting and reference material at least one
week in advance of the meeting to allow for
sufficient time for detailed review and
consideration prior to the meetings.
The Company Secretary acts as the Secretary of
the Board and its Committees and attends all
meetings. The Company Secretary 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.
The Company Secretary meets with the Non-
Executive Directors individually to discuss any
additional support they may require in order to
perform their duties.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 87
ENSURING EFFECTIVE GOVERNANCE (CONTINUED)
COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
easyJet follows the principles of the 2018 UK
Corporate Governance Code (Corporate
Governance Code) which sets out the standards
of good practice in relation to how a company
should be directed and governed. The full text of
the Corporate Governance Code is available at
frc.org.uk.
The Board is pleased to confirm that the Company
has applied the Principles of the Corporate
Governance Code and complied with all the
Provisions throughout the year. Our compliance
with key areas of the Corporate Governance Code
is summarised in this section together with cross
references, where applicable, to the relevant
sections of this report where more information can
be found (together with the Directors’
Remuneration Report on pages 113 to 130 and the
Other Disclosures’ section on pages 131 to 134).
As required by the Corporate Governance Code,
the Board confirm that they consider that the
Annual Report, taken as a whole, is fair, balanced
and understandable and provides the information
necessary for the shareholders to assess the
Company’s position and performance, business
model, and strategy. Further detail on how this
conclusion was reached can be found in the Audit
Committee Report on page 106.
BOARD PERFORMANCE REVIEW
In line with the Corporate Governance Code, the
Board undertakes a rigorous annual review of the
performance of the Board, its Committees, the
Chair and individual Directors. The review aims to
identify the Board’s strengths and any
opportunities for improvement, as well as
highlighting any training and development needs.
The Board follows a formal three-year cycle for
an externally facilitated annual review. The 2021
Board evaluation was externally facilitated
by Manchester Square Partners, and therefore
the 2022 and 2023 performance reviews were
planned to be facilitated internally by the
Nominations Committee and, in relation to the
Chairman’s performance, the Senior Independent
Director.
2022 BOARD PERFORMANCE REVIEW
The 2022 performance review was facilitated internally by the Nominations Committee and, in relation to
the Chairman’s performance, the Senior Independent Director. The process and outcomes
of this review were set out fully in last year’s Annual Report, with an update provided below:
AREA
ACTION AND OUTCOME
Continued focus on succession
planning throughout the
business.
The Nominations Committee and Board continued to
review the talent pipeline and succession planning for
AMB as well as Board composition. During the year, the
Nominations Committee led the process for the
appointment of the Senior Independent Director and
reviewed plans for succession planning more generally.
Refinement of the Board forward
agenda, with deep dives on
customer experience, people
and culture.
The Board forward agenda was refreshed during the
year to improve the cadence of Board meetings as well
as to ensure items related to strategic priorities have
sufficient time on the agenda.
The Board forward agenda also emphasised ensuring
items related to stakeholders were included on the
agenda to reflect the upcoming priorities. For example,
customer updates, regulatory and government affairs
updates, Employee Representative Director updates
and investor relations updates.
Reviewing the remit and
membership of the Board’s
Committees.
Following the changes in composition of the Board, the
Committee membership was refreshed to ensure each
of the Committees had a relevant skill and expertise.
Allowing sufficient time together,
formally and informally, to
continue to build relationships
with newer members of the
Board and management.
The remit of the Safety Committee was also amended
to better reflect its scope of activities. Further details
are set out in the Safety & Operational Readiness
Committee Report on page 111.
The Board has had the opportunity to meet in person
both formally and informally at Board meetings as well
during visits held in Milan and Gatwick. The Chair
periodically meets with the Non-Executive Directors
(NEDs) individually and after each Board meeting NED
only sessions are held for the Board to discuss matters
without the executives being present. Four Board
dinners were held during the year.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 88
ENSURING EFFECTIVE GOVERNANCE (CONTINUED)
2023 BOARD PERFORMANCE REVIEW
The 2023 performance review was conducted
internally. The review extended to all aspects of
Board and Committee performance and the
process undertaken is explained below.
The evaluation of the Chairman was led by the
Senior Independent Director, who gathered
performance feedback through separate meetings
with each of the Non-Executive Directors, with
supplementary views from the Executive Directors.
PREPARATION
Questionnaires for the Board and its Committees were developed by the Company Secretary
in consultation with the Chairman and Senior Independent Director.
The questionnaires covered the following thematic areas:
AREA
FINDINGS AND ACTIONS
The performance review concluded that the Board continued to operate effectively, with the Board‘s
deliberations, number and length of meetings, information presented by management, and the
composition of the Board all rated positively. The changes made to the board forward agenda had been
received positively, and the informal and formal time spent with getting to know the business was also
viewed as an improvement.
The findings of the Chairman evaluation confirmed that Stephen Hester continued to be a successful
Chairman, with his chairmanship of Board meetings being effective, and he continued to devote
sufficient time to the role.
The key focus areas identified from the review are set out below.
Board
composition,
skills and diversity
Board
effectiveness
Link between
the Board and
business
Strategic
oversight
Continue to evolve the governance structure
to meet the evolving requirements of ESG
metrics and disclosures.
Culture
oversight
Information
flow
Individual
performance
Committee
strengths and
weaknesses
COMPLETION OF ONLINE QUESTIONNAIRES
Online questionnaires were distributed to each of the individual Board members for completion.
The questionnaires sought feedback on the areas set out above, covering both the Board
and its Committees.
COLLATION OF RESPONSES AND INDIVIDUAL DISCUSSIONS
Individual responses to the questionnaires were collated by the Company Secretary,
who prepared anonymised summaries. These anonymised summaries were discussed with the
Chairman and Senior Independent Director. The Company Secretary then summarised the main
areas of feedback, before preparing a summary of suggested actions that could be implemented
over the forthcoming year.
BOARD DISCUSSION
The findings of the performance review and proposed actions were discussed at the September
Board meeting. The feedback on the Chairman was discussed by the Non-Executive Directors
without the Chairman being present.
The Board agreed a number of actions in response to the review that would be implemented
and monitored over the forthcoming year.
Talent reviews and succession planning for
senior management to continue to be
subject to regular review.
Focus areas for the Board in the coming year
to include people and culture, customers,
investors.
Continue the interaction with management
and all employees to continue to build
understanding of the business and culture.
OUTCOME AND ACTIONS
A schedule of sustainability updates was
agreed as part of the Board forward
agenda. The Company Secretary was
reviewing the role and responsibilities for
the Committees and this review would
cover where ESG issues were considered.
The Board agreed that this would continue
to be a regular item of discussion and
incorporated into the forward agenda.
Further updates and discussions took place
at the November 2023 Nominations
Committee meeting, with papers available
to the full Board, and further updates have
been scheduled.
Sufficient time for discussion on each
stakeholder group would be built into the
forward agenda, with updates from
relevant AMB member and further
stakeholder engagement opportunities
identified where appropriate.
The Board agreed that a set of meetings
should be held at an easyJet holidays
destination, and other meetings should be
held elsewhere in the easyJet network to
provide opportunities to build relationships
amongst board members and continue
enhancing their knowledge and
understanding of the business.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 89
ENSURING EFFECTIVE GOVERNANCE (CONTINUED)
BOARD OF
DIRECTORS’
BIOGRAPHIES
STEPHEN HESTER
Chairman
Nationality: British
Appointed: September 2021 (Chairman from
December 2021)
Contribution to the Board
> Stephen is a strategic and successful leader with
more than 35 years of wide-ranging business
experience, including significant experience leading
major international businesses in regulated industries.
> He brings a strong track record of value creation
and listed company experience to the Board.
> As well as ensuring the Board operates
effectively, chairing Board meetings and
meetings of the Nominations Committee, he
regularly engages with management, employees
and investors to ensure their views are
represented in the Board’s deliberations.
Career and experience
Stephen served as a Chief Executive of RSA
Insurance Group plc from February 2014 to May
2021, and prior to this 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 and Senior Independent Director of
Centrica plc. Stephen holds a BA (Hons) in Politics,
Philosophy and Economics from Oxford University.
Current external appointments
Lead Independent Director of Kyndryl Holdings,
Inc. and Chairman of Nordea Bank Abp.
Board Committees key
Committee Chair
Audit Committee
Finance Committee
Nominations Committee
Remuneration Committee
Safety & Operational Readiness Committee
A
F
N
R
S
N
JOHAN LUNDGREN
Chief Executive
Nationality: Swedish
Appointed: December 2017
Contribution to the Board
> Experienced leader who is strategic yet
operationally focused, having designed and
implemented a number of easyJet’s key
strategic initiatives since his appointment,
including the relaunch of easyJet holidays, our
Sustainability Strategy and our pathway to net
zero emissions, which demonstrates his desire
to lead the decarbonisation of aviation.
> Proven experience in European travel with more
than 30 years’ experience in the travel industry.
KENTON JARVIS
Chief Financial Officer
Nationality: British
Appointed: February 2021
Contribution to the Board
> Brings extensive experience of the travel and
aviation sector to the Board having held senior
group and divisional finance roles at TUI and
Airtours Holidays.
Career and experience
Prior to joining easyJet, Johan was the Group
Deputy Chief Executive Officer and Chief
Executive Officer of Mainstream Tourism at TUI
AG. He 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.
Career 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
Senior Advisor, Blackstone (private equity group).
Current external appointments
None
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 90
ENSURING EFFECTIVE GOVERNANCE (CONTINUED)
BOARD OF DIRECTORS’ BIOGRAPHIES (CONTINUED)
SUE CLARK
Senior Independent Director
A N S
CATHERINE BRADLEY CBE
Non-Executive Director
F A N
RYANNE VAN DER EIJK
Non-Executive Director
S
HARALD EISENÄCHER
Non-Executive Director
F R
Nationality: British
Appointed: March 2023
Nationality: French and British
Appointed: January 2020
Nationality: Dutch
Nationality: German
Appointed: September 2022
Appointed: September 2022
Contribution to the Board
> Significant strategic and commercial experience
Contribution to the Board
> Extensive financial expertise gained across
having served various executive and non-
executive roles which is valuable to easyJet in
driving long-term shareholder value.
> Liaises with Non-Executive Directors outside of
Board meetings and leads the performance
review of the Chairman.
Career and experience
Sue served as a member of the Executive
Management team at SABMiller plc from 2003,
serving as Director of Corporate Affairs until 2012
and then Managing Director, Europe until the
business was acquired in 2016. Prior to SABMiller,
she served as Director of Corporate Affairs for
Railtrack plc and Scottish Power plc.
Current external appointments
Senior Independent Director of Imperial Brands
PLC and an independent Non-Executive Director
of Mondi plc and Britvic plc.
senior finance roles in investment banking and
M&A over 33 years, along with an in-depth
understanding of corporate governance and
regulatory matters.
> Her experience in financial and capital markets makes
her ideally suited as Finance Committee Chair.
> Experienced in stakeholder engagement as
evidenced in her role as the Employee
Representative Director.
Career and experience
Catherine began her career with Merrill Lynch in the
US and finished the executive phase of her career as
Head of Advisory Global Markets with Societe
Generale in Asia. Catherine then served as a
Non-Executive Director of the UK Financial Conduct
Authority and Chair of its Audit Committee from
2014 to July 2020, and of WS Atkins plc from 2015
until its delisting in 2017. Catherine was also a
member of the Supervisory Board and Chair of the
Finance and Audit Committee of Peugeot S.A. from
2016 to 2021. Catherine graduated from HEC Paris
with a major in Finance and International Economics.
Current external appointments
Non-Executive Director of Johnson Electric
Holdings Limited and Chair of their Nomination and
Governance Committee, a Non-Executive Director
of abrdn plc and Chair of their Audit Committee,
and Senior Independent Director of Kingfisher plc.
Contribution to the Board
> In-depth airline and customer services
experience, along with a valuable European
perspective to Board deliberations.
> Experienced in stakeholder engagement as
evidenced in her role as the Employee
Representative Director.
Contribution to the Board
> Brings extensive travel and aviation sector
commercial experience as well as a deep
knowledge of digital and data driven businesses,
combined with a European outlook.
Career and experience
Ryanne has extensive airline operations and
customer service experience, having more than 20
years’ experience with KLM, her last role being the
Chief Experience Officer. Her previous senior
executive appointments also include Chief
Operating Officer for Dubai Airports and Chief
Experience Officer for Ras Al Khaimah Economic
Zone in the UAE. She also served as Chief
Operating Officer of Mentaal Beter, an
organisation focused on mental healthcare in the
Netherlands.
Current external appointments
Chair of Advisory Board, Child Protection Research
Centre, UAE, and Member of the Supervisory
Board of Krasnapolsky Hotel and Restaurants N.V.
Career and experience
Harald brings significant experience of the travel
and aviation industry, having held senior executive
positions with Lufthansa and Sabre Travel
Network. He most recently served as Chief
Commercial Officer for Infare A/S, the leading
provider of competitor air travel data based in
Denmark, and later served as a member of the
Supervisory Board (2021 to 2023). He has
previously held senior positions with Deutsche
Telekom, eBay and Hoechst and served as a
Non-Executive Director of Groz-Beckert SE (2007
to 2021) and Ifolor AG (2013 to 2019).
Current external appointments
Member of the Advisory Board of Solytic GmbH.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 91
ENSURING EFFECTIVE GOVERNANCE (CONTINUED)
BOARD OF DIRECTORS’ BIOGRAPHIES (CONTINUED)
MONI MANNINGS
Non-Executive Director
Nationality: British
Appointed: August 2020
R N
DAVID ROBBIE
Non-Executive Director
A F N R
DR DETLEF TREFZGER
Non-Executive Director
S A N
BEN MATTHEWS
Company Secretary
Contribution to the Board
> Experienced non-executive who brings
extensive legal and corporate finance
experience to the Board.
> Deep knowledge of executive remuneration as
an experienced Remuneration Committee Chair
means she is well placed as Chair of the
Remuneration Committee.
> Experienced in stakeholder engagement as
evidenced in her role as the Employee
Representative Director.
Career and experience
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. Until 2017, Moni was Chief
Operating Officer of Aistemos Limited. Moni has also
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. Moni has 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), Breedon Group plc (2019 to 2021)
and Investec Bank plc (2016 to 2023), and Deputy
Chair of the charity Barnardo’s (2017 to 2022).
Current external appointments
Independent Non-Executive Director of Hargreaves
Lansdown plc, Non-Executive Director and Chair of
the Remuneration Committee of Cazoo Group Ltd,
and Member of the Takeover Panel.
Nationality: British
Nationality: German
Appointed: November 2020
Appointed: September 2022
Contribution to the Board
> Brings strong financial, risk management and
corporate finance experience to the Board and
Audit Committee as Chair.
> His international and strategic outlook,
combined with over 20 years serving as a
Director on FTSE Boards, provides a valuable
perspective in Board and Committee
discussions.
Contribution to the Board
> Brings recent and in-depth experience of global
logistics and commercial strategy, along with a
European outlook.
> Broad experience of technology enabled and
data supported business transformation.
Career and experience
David 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.
Career and experience
Detlef brings more than 30 years’ experience
leading global transport and logistics companies.
Detlef served as Chief Executive of Kuehne +
Nagel International AG, from 2013 to 2022. During
his tenure, he led the company through an
important period of growth, transformation and
consolidation, doubling revenue and quadrupling
profit to become the largest third-party transport
and logistics provider in the world. Prior to Kuehne
+ Nagel, he spent 15 years with DB Schenker in
various senior executive positions, including EVP of
Global Contract Logistics & Supply Chain
Management, having started his career at Siemens
AG and Roland Berger.
Current external appointments
Senior Independent Director and Chair of the
Audit Committee at DS Smith plc.
Current external appointments
Non-Executive Director of Accelleron Industries
AG, SATS Ltd and PSA International.
Career and experience
Ben joined easyJet in July 2019 as Deputy
Company Secretary and became Group Company
Secretary on 1 January 2023. He is a Fellow of the
Chartered Governance Institute and has over 20
years’ experience working for leading UK listed
brands including ITV, Burberry and Sky.
Changes to the Board during the year
and up to 28 November 2023
> Julie Southern and Dr Andreas Bierwirth
stepped down on 9 February 2023.
> Sue Clark was appointed with effect
from 1 March 2023.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 92
ENSURING EFFECTIVE GOVERNANCE (CONTINUED)
AIRLINE
MANAGEMENT
BOARD
BIOGRAPHIES
JOHAN LUNDGREN
Chief Executive
KENTON JARVIS
Chief Financial Officer
ROBERT BIRGE
Chief Customer & Marketing Officer
See Board of Directors profile.
See Board of Directors profile.
Read more on page 89
Read more on page 89
Nationality: American
Areas of expertise: Customer and marketing
Career and experience
Robert joined the AMB in August 2022. Robert is
a highly experienced consumer marketing and
general management leader with a track record
of driving growth, building brands and leading
winning teams across ecommerce, travel, online
apparel, wireless and consumer goods for both
large companies and start-ups. Before joining
easyJet, Robert was Chief Growth Officer at ASOS
in a role that encompassed marketing, end-to-end
customer experience, data insight and media
publishing, increasing revenue growth from 13% in
2019 to 21% in 2021. Previously Robert spent six
years as CMO at KAYAK, establishing it as a leader
in the travel industry, leading to public listing. He
was also part of the original start-up team that
created US online travel agency Orbitz.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 93
ENSURING EFFECTIVE GOVERNANCE (CONTINUED)
AIRLINE MANAGEMENT BOARD BIOGRAPHIES (CONTINUED)
STUART BIRRELL
Chief Data & Information Officer
SOPHIE DEKKERS
Chief Commercial Officer
THOMAS HAAGENSEN
Group Markets Director
Nationality: British
Nationality: British
Nationality: Danish
Areas of expertise: Data and information
technology
Career and experience
Stuart joined the AMB in November 2020. Before
joining easyJet, Stuart spent five years as Director
and Chief Information Officer at Heathrow Airport
Ltd. 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.
Areas of expertise: Aviation and strategy
Career and experience
Sophie joined the AMB in December 2020. She
had previously been easyJet’s Customer Director.
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, 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, and she has 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 Coordination Limited from 2017 to 2021
and sat on their Remuneration and Nomination
Committees. Sophie is easyJet’s AMB lead on
diversity, equity and inclusion, a qualified MindGym
coach, business mentor, and was a founding
member of easyJet’s Women’s Network.
Areas of expertise: Commercial and operations
management
Career and experience
Thomas became a member of the AMB in May
2018. 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 has significantly grown 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
part of its Brexit migration plan, and managed the
transition of 100 aircraft to easyJet Europe.
REBECCA MILLS
Group General Counsel
Nationality: British
Areas of expertise: Legal
Career and experience
Rebecca joined the AMB in January 2023 on her
appointment as Group General Counsel. Rebecca
has over 20 years’ experience as a lawyer, having
started her career at Herbert Smith Freehills,
where she specialised in IP, technology and media
law and disputes. She joined easyJet in 2010 as a
senior commercial lawyer and has progressed her
career through a variety of roles, before taking on
responsibility for the management of the legal and
claims teams in 2018. From 2019 to 2023, she led
these teams in the role of Deputy General Counsel
and was at the heart of easyJet’s response to, and
emergence from, the pandemic. Rebecca has also
been the Legal Director of easyJet holidays since it
was established in 2019. Rebecca’s sharp
commercial skills, combined with her deep
understanding of the airline and holidays
businesses, give her a unique and powerful
perspective.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 94
ENSURING EFFECTIVE GOVERNANCE (CONTINUED)
AIRLINE MANAGEMENT BOARD BIOGRAPHIES (CONTINUED)
Changes to the Airline Management Board
during the year and up to 28 November
2023
> Rebecca Mills was appointed Group General
Counsel on 1 January 2023, replacing
Maaike de Bie.
> Jane Storm was appointed Group People
Director on 1 March 2023, replacing Ella
Bennett.
DAVID MORGAN
Chief Operating Officer
JANE STORM
Group People Director
GARRY WILSON
CEO, easyJet holidays
Nationality: British
Nationality: British
Nationality: British
Areas of expertise: Flight operations
Areas of expertise: People and culture
Career and experience
David joined the AMB in July 2022, having joined
easyJet in September 2016 as the airline’s Chief
Pilot, and in December 2017 took up the position
of Director of Flight Operations, taking
responsibility for the safe and efficient operation
of the airline’s flights across Europe. David
previously served as interim COO in 2019, when
he oversaw operations across the airline and
delivered significant improvements in operational
performance. David and his operations team focus
on safe, efficient and sustainable operations in an
increasingly complex and challenging environment.
Prior to joining the airline, David was Chief Flight
Operations Officer at Wizz Air. His long career in
aviation has taken him around the world including
Australia and the Middle East.
Career and experience
Jane joined the AMB in March 2023. Jane is a
highly experienced strategic HR Director with a
track record of driving positive and inclusive
cultural change, alongside accelerating leadership
and operational capability. She has specialist HR,
operational and change leadership experience
across travel, digital, media, retail, logistics and
financial services. Before joining easyJet, Jane was
the Chief People Officer at Saga Plc. She was
previously a Senior HR Director at Tesco plc, with
19 years’ experience driving people strategies
across UK, European and Asian markets, as well as
strategically leading organisation design, talent
and learning at a Group level.
Areas of expertise: Travel, business transformation
and global markets
Career and experience
Garry joined the AMB in 2018 and has over 25 years
experience in the travel sector. He has successfully
developed significant business growth strategies
across several international markets and has built
and led large global teams throughout his career.
Garry has worked extensively with overseas
governments and emerging economies to create
sustainable tourism policies, whilst promoting major
economic growth and positive social change. He is
an AMB sponsor for diversity, equity and inclusion,
and health and well-being. He has held Board
positions in the Travel Foundation and Travelife and
was appointed to the board of ABTA in 2021.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 95
ENGAGING WITH STAKEHOLDERS
UNDERSTANDING
STAKEHOLDER
PERSPECTIVES
OUR CUSTOMERS
A key part of our strategy is a focus on the
customer, both to win our customers’ loyalty
and to achieve our purpose of making
low-cost travel easy.
Customers have increased choice, and their
expectations are rising. Ensuring we meet their
evolving needs will position us as the brand of
choice when flying within Europe.
Our understanding of who our current and
potential customers are, how they perceive
easyJet and what products they need, enables
us to prioritise our efforts towards delivering a
positive customer experience and loyalty.
Read more on page 9
As set out in the Corporate Governance Code, the
Board recognises the importance of identifying its
key stakeholders and understanding their
perspectives. They 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, and included some examples of
stakeholders being considered in strategic
decisions. Further details are contained in the
summary of the Board’s activity in the year on
pages 74 to 77.
As set out on pages 51 to 53, there was extensive
engagement around our sustainability activities in
the year with our people, customers, policymakers,
suppliers and industry peers. We have not
repeated these below but incorporate by
reference.
KEY FOCUS
> Safety
> Product choice and value
> Ease of making and managing bookings
> Ease of travelling and minimising disruption
> Sustainability
HOW WE ENGAGE AND INFORMATION FLOWS
> Customer communications, including emails,
our app, call centres, our self-service disruption
management tool, our corporate website, our
dedicated sustainability website and on social
media.
> easyJet Customer Community, who share
experiences and help test messaging, policies,
products and propositions via polls, discussions,
forums, video diaries and surveys.
> Regular customer surveys to find out about
customers’ travel experiences.
> Crew feedback sessions via management
and online forums.
> Customer sentiment and satisfaction (CSAT) is
regularly discussed by the Airline Management
Board (AMB) and the Board.
> We measure our performance through our
customer satisfaction KPI (see page 17) which
is reported to the Board monthly.
CONSIDERATIONS AND OUTCOMES
The Board reviewed easyJet’s customer strategy
and priority to deliver ease and reliability during
the year. From discussing feedback received
from customers, the Board requested that
further work be undertaken on customer
communications during times of disruption.
The Board visit to the Integrated Control
Centre helped members to understand
on-the-day factors and how this impacts
the customer experience, including identifying
opportunities to deploy AI and other technologies
to improve operational efficiencies.
The Board received operational updates
from David Morgan, Chief Operating Officer at
each Board meeting on winter 2022 and summer
2023 operational readiness, challenges around
disruption and initiatives undertaken to minimise
disruption. In addition, they also received regular
weekly updates on trends and metrics on
operational performance, customer satisfaction,
flying schedule, and crew training. This allowed
the Board to have an oversight of easyJet’s
operational performance.
Customer satisfaction was regularly discussed by
the Board including through updates received as
part of CEO reports.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 96
ENGAGING WITH STAKEHOLDERS (CONTINUED)
OUR PEOPLE
Our people are a critical part of our business
and we want to create an inclusive culture
where people can be their best, feel that they
truly belong and live the ‘Orange Spirit’.
Engaging effectively with them is key to doing
this successfully. More information our people
and our approach to Inclusion and Diversity
can be found on page 36.
Read more on page 11
OUR SUPPLIERS
easyJet’s suppliers have an important role in
delivering our ambition, and we strive to
ensure that they have aligned views on
corporate responsibility and compliance.
We partner with key suppliers to deliver many of
our 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.
KEY FOCUS
> Health, safety and working conditions
> Wellbeing and mental health
> Training and career development
> Inclusion and Diversity
> Reward and benefits
HOW WE ENGAGE AND INFORMATION FLOWS
> Employee Representative Directors’ meetings.
> Base visits and informal interaction with crew.
> Updates from the CEO and Group People
Director on people strategy and other matters.
> Hosting events such as breakfasts with senior
leaders in order to get to know the
management layer below the AMB.
> Your Voice Matters employee surveys are
discussed by the AMB and Board.
> Engagement with employee representative
groups, pilot and cabin crew unions.
> Regular internal communications.
> Participation in the Group’s performance
through employee share schemes.
> Monitoring of themes and trends arising from
the ‘Speak Up, Speak Out’ (SUSO) mechanism.
CONSIDERATIONS AND OUTCOMES
The Board received regular updates from our
Employee Representative Directors to ensure
employee voice was reflected when taking strategic
decisions, including during the fleet discussions
during the year. This included feedback from
meetings with the Portfolio Change team, the
Operations Leadership team, pilot representatives
and Cabin Services team.
The Board and its Committees have considered
this feedback during its deliberations in the year,
including when reviewing SUSO whistleblowing
cases, wellbeing and matters such as the gender
pay gap during the year.
The Your Voice Matters survey was discussed by
the Board to understand employee behaviours
and expectations.
KEY FOCUS
> Compliance with regulations
> Health and safety
> Treatment of suppliers
> Sustainability
> Payment practices
HOW WE ENGAGE AND INFORMATION FLOWS
> Meetings between AMB members and senior
executives of major suppliers on a regular basis
to understand the strategy and health of their
businesses.
> The Board looks to engage with key suppliers
CONSIDERATIONS AND OUTCOMES
We have a number of key suppliers, including
aircraft and engine suppliers, ground handling and
logistics, critical technology suppliers, fuel
providers, engineering and maintenance providers,
aircraft lessors and hoteliers for easyJet holidays.
whenever appropriate.
> Discussion at Audit Committee and Board
with central procurement function on supplier
management.
The Board has engaged with the organisations
operating key airports during the year, such as
Milan and Gatwick (see pages 76 and 77).
We continue to engage with our suppliers to
improve resilience and performance.
During the year the Board considered the
longer-term fleet plan and following a robust
procurement process, entered into an agreement
with Airbus for the purchase of new aircraft.
Further details are set out on page 99.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 97
ENGAGING WITH STAKEHOLDERS (CONTINUED)
OUR SHAREHOLDERS AND INVESTORS
Shareholders and investors are the main
providers of capital with which to invest and
grow the Group’s business. Understanding the
views of our shareholders, and acting fairly
between them, remains a key priority.
Taking account of their views on the
Company’s operational and financial
performance and its strategic direction
is also an important part of ensuring we
deliver strong shareholder value.
KEY FOCUS
> Operational and financial performance
> Creation of long-term sustainable
shareholder value, including addressing
environmental, social and governance
matters
> Share price and dividend returns
CONSIDERATIONS AND OUTCOMES
Engagement took place in advance of the AGM
on the resolutions being proposed, including by
the Chair of the Remuneration Committee.
Engagement also took place following the AGM,
to understand where investor policies differed
from the Company’s approach and where any
steps could be taken to address these gaps, for
example around share capital authorities. These
views will be considered when finalising the
business for the next AGM.
HOW WE ENGAGE AND INFORMATION FLOWS
> The Board actively seeks engagement with
investors and major institutional shareholders
and shareholder representative bodies.
> The CEO and CFO, together with members of
the AMB, engage with shareholders on financial
and business performance and strategic
priorities regularly, particularly around results
announcements, and the Chairman and
Company Secretary engage with shareholders
as required to understand their views on
corporate governance and strategy.
> The Chairman, CEO and CFO update the Board
regularly and the views of shareholders.
> The Committee Chairs also make themselves
available for engagement with major
shareholders.
> There is also engagement with the brokers
and other advisers.
ENGAGEMENT DURING THE YEAR
The Investor Relations team and Company
Secretary proactively engage with
investors throughout the year through an
annual programme of activity summarised
below, alongside communication with
market analysts and the Company’s
brokers, and attending regular investor
conferences with the CEO or CFO.
> Trading update for the year ended
30 September 2022
> Full-year results
> Road shows with UK, European and
US investors with management
> easyJet holidays seminar
> First quarter trading update and
discussion with investors and
advisory bodies ahead of AGM
> Annual General Meeting
Q1
Q3
> Trading update for six months ended
31 March 2023
> Half-year results
> Road shows with UK, European and
US investors with management
Q2
Q4
> Operations and customer seminar
> Third quarter trading update
Annual General Meeting
Shareholders are encouraged to participate
in the AGM either in person or remotely and
communicate directly with the Board.
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 2023 AGM was held
on 9 February 2023, and shareholders had the
opportunity to ask questions in advance of the
meeting or during the meeting, in person and
electronically.
Notice of 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
corporate.easyJet.com.
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98
ENGAGING WITH STAKEHOLDERS (CONTINUED)
OUR COMMUNITIES
We want to make a positive impact and we
value our relationships with the communities
where our employees and customers live and
operations are based, as they are important to
the effective operation of our business.
KEY FOCUS
> Local employment and social mobility
> Sustainability, including carbon and other
aircraft emissions; aircraft noise; energy
usage; recycling and waste
> Charitable activity
REGULATORS AND GOVERNMENTS
Regulators and governments take decisions
which directly impact our operations. easyJet
engages with them to understand their
strategic drivers and the impact of any
regulatory changes on the Company and
customers, and to ensure that policymakers
understand our business and the social and
economic benefits it delivers.
KEY FOCUS
> Compliance with regulations
> Health and safety
> Treatment of suppliers
> Sustainability
> Payment practices
HOW WE ENGAGE AND INFORMATION FLOWS
> Country managers lead the community
engagement in their markets, and base
managers also engage directly with their local
airport communities.
> Partnerships 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.
> Employee volunteering with local charities
and organisations.
> This year we undertook a double materiality
assessment, where we gathered 841
stakeholder perspectives through surveys,
interviews and focus groups.
CONSIDERATIONS AND OUTCOMES
We offer support for employees to volunteer in
their local communities, such as flexible working
and time off.
This summer, to help support the emergency
response following the natural disasters in
Morocco and Libya, we launched an emergency
collection on board to support UNICEF’s
Children’s Emergency Fund.
As set out in the stakeholder example on page
99, the Proposed Aircraft Purchase will allow
easyJet to bring newer, more fuel efficient and
quieter aircraft into its fleet, benefiting
communities.
HOW WE ENGAGE AND INFORMATION FLOWS
> AMB members and other senior management
engage with members of government and
regulatory bodies.
> Country managers and directors engage with
governments in all markets where we have
bases, at both a national and regional level.
> Discussions with operations and safety
regulators such as Austro Control (Austria), the
Civil Aviation Authority (UK), the Federal Office
of Civil Aviation (Switzerland) and EASA, among
others.
> Discussions with air traffic control operators
such as NATS.
> Participation in trade associations such as A4E
and Airlines UK, and tourism bodies, such as
ABTA and the GSTC.
> We also participate in industry groups that
contribute to public policy development on
sustainability issues, such as the Aerospace
Technology Institute, the Aviation Council,
Airlines UK, the Jet Zero Council (UK
Government), the Science Based Targets
initiative and Sustainable Aviation (UK).
CONSIDERATIONS AND OUTCOMES
Meetings with various governments resulted
in confirmation of our commitment to various
markets in our network and discussed some
of the key challenges and opportunities.
Discussed the EU’s ‘Fit for 55’ climate legislation
package and how to stimulate the technological
innovation that will be needed for zero emission
aviation, including through the EU’s Alliance for
Zero-Emission Aviation.
Shared our net zero roadmap with minsters in the
UK and Europe, and how governments can
support decarbonisation of the sector.
Our COO attended the Transport Select
Committee on travel disruption and the NATS IT
issue to provide an overview of the issues faced
by the industry as well as provided
recommendations aligned with our regulatory
priorities.
Submitted a response to the UK Budget
highlighting the need for greater support on
hydrogen, air passenger duty reforms.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 99
ENGAGING WITH STAKEHOLDERS (CONTINUED)
STAKEHOLDERS IN DECISION MAKING
sustainability-
linked term loan
Decision
Refinancing the existing term loan facility and
linking to sustainability metrics.
Background
In January 2021, the Company entered into a
five-year $1.87 billion loan facility with 10 banks
and supported by 80% guarantee from UK
Export Finance (the UKEF Facility). Management
determined that the Company should look to
refinance this facility in order to reduce gross
debt and interest rate costs. Given easyJet was
the first low-cost carrier in Europe to have CO2
intensity targets validated by the SBTi,
management decided to consider the inclusion
of sustainability metrics into the term of the new
facility into the new UKEF Facility.
Stakeholders
Community, Investors, Suppliers
Strategic priorities
Driving our low-cost model
Delivering ease and reliability
Links to strategy and purpose
Sustainability is a key element of easyJet strategy.
We are focused on reducing the carbon intensity of
our flying and as a result in September 2022, we
launched our SBTi-aligned net zero roadmap.
Stakeholder and s172 considerations
The Board considered that the term loan facility
was likely to promote the success of the
Company in the long term, as by repaying the
amount outstanding on the previous facility and
reducing the interest rates on the new facility,
this would reduce financing costs. This would be
beneficial to shareholders by increasing financial
efficiency.
easyJet worked with 11 key banking relationships
on this financing and took account of the
Company’s impact on communities and the
environment by incentivising easyJet to deliver
on its net zero roadmap through the inclusion of
the sustainability metrics.
Outcome
The Company signed a new undrawn five-year
sustainability-linked term loan of $1.75 billion
underwritten by a syndicate of banks and
supported by a partial guarantee from UKEF
under their Export Development Guarantee
scheme. The terms of the loan are linked to a
reduction in carbon emission intensity in line with
the Company’s SBTi-validated target, with a
margin adjustment mechanism (upward or
downward) conditional to the achievement of
specific milestones.
Proposed
Aircraft purchase
Stakeholder and s172 considerations
The Board considered that the Proposed Aircraft
Purchase was likely to promote the success of
the Company in the long term, as it would
provide security in the Company’s aircraft supply
and therefore help easyJet sustain its route
network, maintain desirable airport slots and
continue to grow. The Proposed Aircraft
Purchase would also improve the Company’s
impact on communities and the environment, as
the new aircraft would continue the
modernisation of the easyJet fleet, delivering
fuel efficiencies, and carbon emissions and noise
footprint reductions. Not only would the fuel
efficiencies and carbon emission reductions
benefit the environment, it would also provide
economic advantages, which would benefit
easyJet’s customers and investors.
Outcome
As the Proposed Aircraft Purchase would
constitute a Class 1 transaction it will require
shareholder approval at a general meeting to be
held by the end of 2023. Ahead of the general
meeting, the Company will consult major
shareholders to discuss the transaction, and all
shareholders will be able to submit questions in
advance of, and during, the general meeting.
Decision
Aircraft purchase and conversion – purchase of
157 Airbus aircraft (56 A320neo and 101 A321neo)
between FY29 and FY34, purchase rights for a
further 100, and conversion of 35 A320neo
aircraft currently on order to A321neo aircraft, for
delivery between FY26 and FY28 (the Proposed
Aircraft Purchase).
Background
easyJet already had 69 A320neo aircraft within
its fleet and an existing order book with Airbus
to FY29 for a further 158. The Proposed Aircraft
Purchase provides easyJet with the ability to
address its fleet requirements beyond FY28,
including the completion of the fleet
replacement programme of A319 aircraft and
replace approximately half of the A320ceo
aircraft, alongside providing the foundation for
disciplined growth.
Stakeholders
Community, Customers, Investors
Strategic priority:
Building Europe’s best network
Links to strategy and purpose
The Proposed Aircraft Purchase would allow
easyJet to invest in its network and deliver the
growth ambitions set out in the strategic
priorities, and provide a cost-competitive fleet,
which is a key component of easyJet’s low-cost
business model. It was also aligned with easyJet’s
sustainability strategy as the adoption of new
and more efficient aircraft is a core component
of the path to net zero emissions.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 100
COMMITTEE REPORTS
Members
Stephen Hester (Chair)
Catherine Bradley CBE
Sue Clark
from 1 March 2023
Moni Mannings
David Robbie
from 9 February 2023
Julie Southern
until 9 February 2023
Dr Detlef Trefzger
from 9 February 2023
NOMINATIONS
COMMITTEE
REPORT
The Committee consists of the Chair of the
Board and the Independent Non-Executive
Directors listed above right. All members of the
Committee are Independent Non-Executive
Directors. Member biographies can be found
on pages 89 to 91.
The Chair 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 three times in the year and
meeting attendance can be found on page 83.
The Committee’s terms of reference can
be found on the Company’s website at
corporate.easyJet.com
I am pleased to present an overview of the
Nominations Committee’s activities during the
year. The main purpose of the Committee is to
ensure plans are in place for orderly succession
of Board and senior management positions while
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.
During the year, the Committee led the process
to identify a new Senior Independent Director and
reviewed the Company’s talent and succession
plans for the Board and senior management,
along with our talent development and retention
strategies.
Inclusion and Diversity continue to be a key priority
for the Board. The Committee was updated on the
developments made in this area, including updates
to the Company’s structure and framework on
Inclusion and Diversity, as well as measurable goals
on gender representation across the organisation.
The Committee undertook a performance review of
the Board and its Committees as part of the 2023
Board Performance Review, details of which are set
out on in the governance report on page 88.
Further details of the Committee’s activities during
the year are set out in this report.
Stephen Hester
Chair of the Nominations Committee
KEY ACTIVITIES DURING THE YEAR
Senior Independent Director appointment
The Committee is responsible for the orderly
succession of both the Board and senior
management positions and oversees the
development of a diverse pipeline for succession.
It is also responsible for maintaining a formal,
rigorous and transparent procedure for Board
appointments based on merit and objective
criteria. As part of this responsibility, the
Committee identifies and nominates candidates
for approval by the Board. The Committee also
considers the succession plans for the Board as
well as senior management below Board level.
Following the announcement in August 2022 that
Julie Southern would not be seeking re-election at
the AGM in February 2023 due to her appointment
as Chair Designate of RWS Holdings plc, the
Committee led the process to identify Julie’s
successor as Senior Independent Director. The
Committee reviewed the current composition of
the Board and the skills and experience it sought
in the new Senior Independent Director. The
Committee engaged search consultants Russell
Reynolds Associates (RR) to help define the role
profile and identify suitable candidates. RR are
signatories to the Enhanced Code of Conduct for
Executive Search Firms. They 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.
A range of candidates were considered for the
role, keeping in mind the skill and experience
required on the Board, as well as the need to
maintain gender diversity on the Board. Three
candidates were shortlisted for the role and
following an interview process involving the Chair,
Nominations Committee members, the Company
Secretary and Group People Director, Sue Clark
was identified as the recommended candidate for
Board approval.
The recruitment process is set out on the following
page, and Sue Clark’s biography can be found on
page 90. Details of her induction programme can
be found on page 85.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 101
COMMITTEE REPORTS (CONTINUED)
NOMINATIONS COMMITTEE REPORT (CONTINUED)
SENIOR INDEPENDENT DIRECTOR
APPOINTMENT PROCESS
> Independent search consultants RR
engaged to develop a role profile and
identify suitable candidates for a longlist.
> RR compiled a longlist of candidates for
review.
> The Committee discussed the longlist and
considered the balance of skills, knowledge,
independence, diversity and experience of
the Board, together with an assessment of
the time commitment expected, and
created a shortlist.
> Interviews were held between three
shortlisted candidates and the Committee
Chair, Committee members, the Company
Secretary and Group People Director.
> Following completion of the interviews, the
Committee discussed the shortlisted
candidates and recommended that Sue
Clark be appointed as Senior Independent
Director given her experience in executive
and non-executive roles in large
international organisations.
> The appointment was recommended to,
and approved by, the Board.
There was a short period without a Senior
Independent Director between 9 February 2023
and 1 March 2023. During this period, there were
no Board meetings or any matters requiring the
attention or input of the Senior Independent
Director.
Committee membership
Following the changes to the Board during the
year, the Committee reviewed the membership of
the Committees to ensure they continued to have
an appropriate combination of skills, experience
and knowledge. As a result, the Committee
recommended a number of changes to the
membership of Board Committees to the Board,
which were approved:
> David Robbie succeeded Julie Southern as Chair
of the Audit Committee in February 2023.
> Dr Detlef Trefzger succeeded Dr Andreas
Bierwirth as Chair of the Safety & Operational
Readiness Committee in February 2023.
> David Robbie and Dr Detlef Trefzger became
members of the Nominations Committee in
February 2023.
> Sue Clark became a member of the Audit,
Nominations and Safety & Operational
Readiness Committees on joining the Board
in March 2023.
Talent and succession planning
The Board continues to review plans for the
orderly succession of 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 recognises that building a
broader talent pipeline for executive succession,
the AMB and the Executive Leadership Team (ELT)
is a key priority to lead the growth of easyJet’s
business. During the year, the Committee reviewed
the Group’s senior management talent pipeline,
their development and succession plans, as well as
progress against the talent and development
framework.
As part of the succession planning process, the
Committee has visibility of written succession
plans, including details of emergency successors
and those identified as short and medium-term
successors, and reviews the development
programme for these individuals to understand
their strengths and skill gaps.
During the year, the Board engaged with AMB
and ELT members through formal presentations
at Board meetings, informal breakfasts and
dinners. This provided the Board and Committee
an opportunity to get to know individuals identified
in the succession plans.
Election and re-election of Directors
In line with the provisions of the Code and the
Company’s Articles, each Director is required
to seek election or re-election annually at the
Company’s AGM. The individual contribution,
effectiveness and time commitment of each of
the Non-Executive Directors is reviewed annually
as part of the Board Performance Review.
The Committee is mindful of differing policies and
guidelines amongst shareholders and proxy
advisers on the number of appointments the
Directors should hold. However when reviewing the
contribution of individual Directors, the Board
reviews their attendance, their availability to attend
ad hoc meetings and their contribution outside of
meetings. Following this review, 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, remains appropriate.
The Board is therefore recommending the election
or re-election of all 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 127.
Inclusion and diversity
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 Inclusion and Diversity Policy.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 102
COMMITTEE REPORTS (CONTINUED)
NOMINATIONS COMMITTEE REPORT (CONTINUED)
INCLUSION AND DIVERSITY
Our people are critical to our success, and as set out on
pages 35 to 38 we want to create an inclusive culture where our
people can feel they belong and be at their best. This
extends to the Board and its Committees and is
managed through the Board Diversity Policy.
Policy principles
Implementation and progress
Outcome
Appropriately review all
aspects of diversity in
relation to Board and
Committee composition.
See page 84
Review diversity of the
Board on an annual basis as
part of the Board
Performance Review.
See page 88
See page 84
New appointments to
the Board will be made on
merit, in the context of the
requirements of the Board
at that time.
See pages 85 and 101
The 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.
The Board and Committee meet FCA
diversity targets, with 40% female, one
member from an ethnic minority, and
the role of Senior Independent Director
held by a woman.
This has been reviewed during the
year, including as part of the Senior
Independent Director appointment
process and Board Performance
Review.
All appointments to the Board are
made on merit reviewing the balance
of skills and experience needed on the
Board. The Committee considered
these aspects before recommending
the appointment of Sue Clark as the
Senior Independent Director during
the year.
The Committee emphasises
identification of suitable candidates
based on the role profile required on the
Board following discussion with the
Board members as well as considering
diversity, social and ethnic background.
These requirements are briefed to the
external consultants for them to be able
to develop a role profile that suits our
purposes. During the year, RR developed
a role profile for appointment of Senior
Independent Director based on which
suitable candidates were identified by
the Committee.
During the year, the Committee reviewed the
Company’s wider strategic approach on inclusion
and diversity as well as measurable goals on
gender representation across the Company.
The Company has met the FTSE Women Leaders
target of having 40% women on Boards (2023:
40%) and is targeting having 40% women in the
Airline Management Board (Executive Committee)
and their direct reports by 2025 (2023: 30%).
As at 30 September 2023, the Company has also
met the following FCA Diversity Targets (as
required by Listing Rule 9.8.6):
> at least 40% of the Board being women
(2023: 40%)
> at least one of the senior Board positions being
held by a woman (2023: Senior Independent
Director)
> at least one member of the Board being from
an ethnic minority background (2023: one).
The Company will set a target for ethnic minority
representation in senior management (AMB and
their direct reports) as required by the Parker
Review and disclose this in the next Annual Report.
The data required by Listing Rule 9.8.6 for the
Board of Directors and executive management as
at 30 September 2023, is set out on page 132.
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.
Board Performance Review
During the year, the Committee undertook an
internal performance review of the Board, its
Committees, the Chairman and individual
Directors. Further details can be found on
page 88.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance Members
David Robbie (Chair)
Catherine Bradley CBE
Sue Clark
from 1 March 2023
Julie Southern
until 9 February 2023
Dr Detlef Trefzger
103
COMMITTEE REPORTS (CONTINUED)
AUDIT
COMMITTEE
REPORT
The Committee consists of the Independent
Non-Executive Directors listed above right. All
members of the Committee are Independent
Non-Executive Directors as required by the
Code. Member biographies can be found on
pages 89 to 91.
The Board has confirmed that David Robbie
has recent and relevant financial experience
and is satisfied that all Committee members
have a depth of financial and commercial
experience including the travel sector in which
the Company operates.
The Committee met four times during the year,
with members of senior management required
to attend as and when appropriate. The
Committee also met with the external auditors
separately when appropriate. Meeting
attendance can be found on page 83.
In addition, the Committee Chair holds
regular private sessions with the Chief
Financial Officer (CFO), senior members
of the Finance team, the Director of
Risk & 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
corporate.easyJet.com
As the new Chair of the Audit Committee, I am
pleased to present the Committee report for the
year ended 30 September 2023.
The Committee continued to play a key role in
assisting the Board in its oversight responsibility
and monitoring the integrity of the financial
information for the benefit of our shareholders.
This has included challenging management on the
significant accounting judgements made in our
financial reporting, as well as reviewing the analysis
behind our going concern and viability statements,
and considering the processes that underpin the
production of the Annual Report and Accounts.
The Committee continued to oversee the
programme of financial control improvements,
receiving regular updates on the progress of key
initiatives such as a more automated maintenance
model for leased aircraft, a new treasury
management system and the planned
implementation of a new revenue accounting
system. As part of the control improvement
initiatives, the finance team reviewed the
translation of foreign currency balances
throughout the financial statements. This identified
two errors with the existing methodologies which
have now been corrected in these financial
statements and processes amended accordingly
to prevent the issue recurring in the future.
The Committee also focused on the further
development of the corporate risk management
framework to ensure principal and emerging risks
were appropriately assessed, and mitigations
identified and appropriately reported. The
Committee assisted the Board in undertaking a
robust assessment of the Group’s principal and
emerging risks.
The Committee received regular updates at each
meeting from the Risk & Assurance team, covering
the risk management framework and risk
management process, internal audit, whistleblowing,
business integrity and fraud matters.
This year, we also received an update on easyJet’s
supplier relationship management and the work by
the Procurement team to enhance our activities in
this area.
Before each meeting, I met with the CFO, the
Director of Reporting and Financial Control, the
Director of Risk & Assurance and the External
Audit team, to ensure the key issues were being
addressed at each meeting. After each Committee
meeting, I provided an update to the Board on the
key topics discussed during our meetings. The
Committee meets with the external auditors after
Committee meetings without management
present when appropriate.
Looking forward, we will be conducting an audit
tender process in the coming year as set out later
in this report. The Committee will also continue to
review the financial reporting of the Group and its
accounting policies, with any major accounting
issues of a subjective nature discussed by the
Committee. We will continue to develop our work
on the effectiveness of the risk management
process and are also mindful of the changing
regulatory landscape. This includes the proposals
around the government’s audit and governance
reforms and the role of the Committee in
reviewing narrative reporting, and we will ensure
compliance with any new requirements.
David Robbie
Chair of the Audit Committee
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 104
COMMITTEE REPORTS (CONTINUED)
AUDIT COMMITTEE REPORT (CONTINUED)
KEY ACTIVITIES DURING THE YEAR
The roles and responsibilities of the Committee are
set out in full in its terms of reference. The main
areas of Committee activity during the financial
year are set out below with further detail on the
following pages.
Financial and narrative reporting
> Reviewing the integrity of the 2022 full-year and
2023 half-year financial statements and formal
announcements relating to the financial
performance and governance of the Group.
> Reviewing and challenging the material areas
in which significant judgements were applied,
based on reports from both the Group’s
management and the external auditors in the
preparation of the 2022 full-year and 2023
half-year financial statements. Further
information is provided in the significant
judgements section on page 105.
> Reviewing the development of the assurance
map against all the principal risks to provide
greater transparency to the Board and
Committee on the strength of assurance across
different areas of the organisation as well as
process for the development of corporate risk
strategy for FY23 and FY24.
> Receiving an update on the results of the control
self-assessment undertaken on the
implementation of financial controls and
understanding of the policies and processes
underpinning them.
> Reviewing the translation of foreign currency
balances, correcting the financial statements
following the identification of two errors with the
existing methodology, and updating the
processes to ensure the errors do not recur in
the future.
> Reviewing the Group’s Delegated Authority
Policy.
> Reviewing the information, underlying
> Reviewing principal and emerging digital safety
assumptions and stress-test analysis presented
in support of the viability statement and going
concern status.
risks and receiving regular updates on the
progress of the Group’s Digital Safety
Programme.
> Undertaking a fair, balanced and
understandable assessment of the Annual
Report and Accounts for the 2022 financial year
and the 2023 half-year statement.
> Reviewing the consistency and appropriateness
of the financial control and reporting
environment.
> Reviewed the plans and process for the
preparation of the Annual Report and Accounts
for 2023, including timelines and reviewing the
approach to ESEF tagging.
Internal control and risk management
> Considering the progress made on the financial
control framework given a number of system
implementations were underway to strengthen
the control framework.
> Confirming the adequacy and effectiveness of
the Group’s risk management systems and
internal control processes, through evaluating:
risk and assurance plans; Internal Audit reports;
risk assessments; and control themes.
> Overseeing the Group’s risk framework,
including the corporate risk framework and a
robust review of the Company’s principal and
emerging risks and uncertainties, including
climate change risk.
> Reviewing the activities of the Procurement
function and efforts relating to supplier
relationship management.
> Reviewing the Group’s insurance programme.
Compliance, whistleblowing and fraud
> Reviewing the Business Integrity measures
including the ‘Speak Up, Speak Out’
whistleblowing process and investigations.
> Receiving updates on work undertaken by
management on the anti-bribery and anti-
corruption framework to assess controls in place
including development of targeted training.
> Receiving updates on fraud investigations to
understand the process undertaken to identify
fraud risks and improvement actions as well as
reviewing the FY23 action plan on fraud
reporting requirements.
> Monitoring the process undertaken by the
Business Integrity team around compliance
activity undertaken within the business and
creation of a policy framework to standardise
policies across the business.
Internal Audit effectiveness and
review of activities
> Receiving an update on the work undertaken
by Internal Audit, including audit resources,
progress with the FY23 Internal Audit Plan,
significant findings and audit actions.
> Assessing the effectiveness and independence
of the Internal Audit function including
consideration of key Internal Audit reports,
implementation of Internal Audit
recommendations and Internal Audit’s
compliance with prevailing professional
standards.
> Approving the Internal Audit Charter, Annual
Plan, Budget and Annual Report of Internal
Audit and Business Integrity activities.
Relationship with the external auditors
> Reviewing the external audit approach
undertaken by PricewaterhouseCoopers LLP
(PwC) as the external auditors, significant risks,
areas of audit focus, scope and materiality
for FY23.
> Reviewing the effectiveness and quality of the
external audit process.
> Assessing the performance and continued
objectivity and independence of the external
auditors.
> Agreeing the external audit engagement
and audit fee.
FINANCIAL AND NARRATIVE REPORTING
Significant judgements
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 through
reviewing and challenging accounting papers
prepared by management. The Committee also
reviewed the reports by the external auditors on
the half-year and full-year results, which
highlighted any issues arising from the work
undertaken on the audit.
The significant issues considered in relation to the
financial statements are detailed on the following
page.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 105
COMMITTEE REPORTS (CONTINUED)
AUDIT COMMITTEE REPORT (CONTINUED)
SIGNIFICANT JUDGEMENTS AND ESTIMATES
In general, the Committee assesses key
judgements by receiving a report on the
topic prepared by management which
details the decision-making process
which management has been through
in making that judgement and any
assumptions used. The Committee is
then able to challenge management on
critical aspects of the judgement and
discuss the matter with the external
auditors in arriving at their own
assessment of the position.
Going concern
The Committee reviewed and challenged
management’s assessment of base case and
downside forecast cash flows, including
sensitivity to macro-economic uncertainties such
as a sustained downturn in demand and higher
interest rates and fuel prices, combined with
significant operational disruption. Having
considered and challenged these downside
scenarios and reviewed the associated going
concern disclosures in the financial statements,
the Committee was comfortable with
recommending to the Board that it adopt the
going-concern basis of preparation for these
financial statements.
Carrying value of assets
The Committee considered whether the carrying
value of goodwill, landing rights and aircraft
assets held by easyJet should be impaired or
otherwise adjusted. 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, the
calculated WACC rate and the overall macro-
economic assumptions. The Committee
addressed these matters by challenging
management on 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.
In relation to the disposal of landing rights at
Berlin Airport, the Committee reviewed
management’s paper to ensure consistency with
the calculations and disclosure made in the 2022
Annual Report and Accounts.
Translation of foreign currency
Management conducted a detailed assessment
this year of the existing process for the translation
of foreign currency balances throughout the
financial statements. The initial focus was on the
translation of the local currency balance sheets of
the Group’s non-UK subsidiaries into sterling for
the purposes of producing the Group’s
consolidated statement of financial position. Its
conclusion was that there was a flaw in the
existing methodology which dated back to the
introduction of the existing general ledger system
in 2007; foreign exchange gains and losses which
should have been posted to the translation
reserve on consolidation were instead being
posted directly to the Group income statement.
Analysis showed that the impact was not material
in recent years, however the effect over time was
such that there needed to be an adjustment of
£78 million between retained earnings and the
translation reserve. The Committee reviewed
management’s paper and calculations and along
with the Group’s auditors considered the proposal
to reflect the adjustment as a current-year
transfer between reserves. The nature of the error
was considered to not constitute a material error
on a qualitative basis and therefore the
Committee concluded that this was the correct
course of action with appropriate disclosure.
A detailed review also highlighted a second issue,
this time regarding the translation into sterling of
US dollar denominated leased aircraft right of use
assets and the associated depreciation, which
arose in certain circumstances when lease
modifications occurred in 2021. The Committee
considered management’s proposal to disclose
the required £19 million adjustment under
non-headline items and were comfortable that
this was an appropriate remedy, with suitable
disclosure.
Aircraft maintenance provisions
Throughout the year, the Committee received
updates on progress with implementing a new,
more automated, model for calculating the
maintenance provision for easyJet’s leased
aircraft. This model will be more robust and easier
to update than the suite of spreadsheets it
replaces and represents a significant improvement
in the control environment around this material
balance. Management performed a parallel
calculation over an extended period during the
year to prove that the new model was calculating
the provision correctly, and the Committee was
happy to approve using the model for the
year-end provision calculation.
The Committee then reviewed the maintenance
provision at the year end as a number of
judgements are used in the calculation of the
provision, primarily pricing, utilisation of aircraft
and the timing of maintenance checks. The
Committee addressed these matters using
reports received from management which
detailed the basis of assumptions used and
challenged those assumptions to test their
validity. The Committee concluded that the
year-end maintenance provision was appropriately
calculated and disclosed.
Other key judgemental accruals, provisions
and contingent liabilities
The Committee reviewed and challenged the
level and calculations of key accruals and
provisions which are judgemental in nature and
the appropriate disclosures, including customer
claims in respect of flight delays and
cancellations, legal liabilities and restructuring
provisions. The Committee also considered the
appropriateness of the recognition of contingent
liabilities as at the year end.
Deferred tax asset
The Committee has considered the recoverability
of the deferred tax asset based on the expected
future taxable income of the Group and is
comfortable with the position taken.
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COMMITTEE REPORTS (CONTINUED)
AUDIT COMMITTEE REPORT (CONTINUED)
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 Director of Reporting
and Financial Control, and the CFO, 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 & 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.
Senior members of the Finance team including the
CFO, the Director of Reporting and Financial
Control, and the Group Chief Accountant meet
with the Committee to present key events and
discuss areas of judgement or in-depth
presentations on significant areas.
The Finance team has 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 Committee.
The Committee reviewed the Group’s Going
Concern and Viability Statements and considered
the thorough assessment reports prepared by
management in support of these statements. The
Viability Statement section on page 68 provides
details of the base case and downside scenarios
applied in assessing the appropriateness of this
statement and the Committee provided robust
challenge of the assumptions applied by
management as part of this assessment.
The Committee continues to conclude that the
time period of three years used to assess the
Viability Statement remains appropriate. Based on
these assessments, the Committee confirmed that
the application of the going concern basis for the
preparation of the financial statements continued
to be appropriate and recommended the approval
of the Viability Statement.
The Committee also reviewed the approach and
controls around the enhanced ESEF requirements
for the Annual Report and Accounts for 2023.
Fair, balanced and understandable
The Committee conducted an assessment and
recommended to the Board that, taken as a
whole, the 2023 Annual Report and Accounts
(which the Board subsequently approved) is fair,
balanced and understandable, and provides 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 critically
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.
> Ensuring key messages are clearly summarised
and reflect the Group’s performance as a whole,
as well as provide stakeholders with clear,
concise and transparent disclosures.
> 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 the opportunity
to review and comment on iterations of the draft
copy of the Annual Report and Accounts.
In carrying out the above assessment, 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.
RISK MANAGEMENT AND INTERNAL CONTROL
The Board as a whole, including the Committee
members, considers the nature and extent of
easyJet’s risk appetite that is acceptable in order
to achieve the Group’s strategic objectives and for
ensuring that an appropriate culture has been
embedded throughout the organisation. The
Committee has reviewed the work undertaken by
management on the assessment of the Group’s
emerging and principal risks, including their impact
on the prospects of the Group.
During the year, the Committee reviewed the
development of the corporate risk management
framework and risk appetite, including the process
for identifying, evaluating and managing the
Company’s principal risks. The programme, led by
the Risk & Assurance function, focused on
understanding current and emerging risks and
how these are managed in line with the risk
appetite, developing a risk and assurance map,
and implementing a consistent risk scoring
mechanism and risk taxonomy to cover all risks.
In order to assess the robustness of easyJet’s risk
appetite, the Risk & Assurance function conducted
a workshop to validate future risk appetite. The
Board received the output of the risk appetite
exercise for consideration and agreement.
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 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.
There were no significant financial control
deficiencies identified by the Committee during
the year.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 107
COMMITTEE REPORTS (CONTINUED)
AUDIT COMMITTEE REPORT (CONTINUED)
To ensure the robustness of our financial controls, a
financial control improvement programme was
launched in the previous financial year.
Management has completed the documentation of
key financial processes and is now working to
implement control improvements which were
identified through this exercise. Management has
also worked with BDO to implement a system
which will facilitate the ongoing monitoring of the
operation of key financial controls, through a
combination of self-certification (or attestation) by
control operators and independent testing of the
operation of controls by appropriate compliance
teams. The system was implemented just before
the year end with the intention that all control
operators will be self-certifying on the system by
early 2024. The Committee will undertake regular
reviews of the effective operation of these key
financial controls in the forthcoming financial year.
In the meantime, the updates provided to the
Committee during the year confirmed that no
significant control gaps had been identified and
there were no known breakdowns of critical
controls in the current financial year.
As a result of this annual review of the
effectiveness of the risk management and internal
control systems, which the Committee undertakes
on behalf of the Board, it is considered that the
Board has fulfilled its obligations under the Code.
Further details on the Group’s principal risks and
uncertainties and their impact on the prospects of
the Group are set out on pages 61 to 66.
Compliance, whistleblowing and fraud
To strengthen the Compliance and Assurance
function in FY23, management had embedded a
compliance and assurance framework. This
included the development of a Group-wide policy
management framework for management and
assurance of policies across the organisation. It
also covered the development of a supplier
relationship management framework to identify
how our suppliers comply with our policies initially
and on an ongoing basis. The Committee received
regular updates on the progress made against the
compliance and assurance framework.
The Group is committed to the highest standards
of quality, honesty, openness and accountability.
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 Group and all operating companies
have whistleblowing policies in place and the
Board and Committee receive regular reports on
this subject, which is communicated internally as
the ‘Speak Up, Speak Out’ (SUSO) mechanism. The
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 trends being regularly reported to the Board.
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. All employees are able to
report concerns in their local language. 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 Committee and the Board, along with a
comprehensive full-year report.
As a result, the positive increase in SUSO cases
continued in FY23, with a total of 233 cases
received, compared to 105 cases in FY22. All
reports were followed up, triaged to relevant areas
of the business and investigated where
appropriate. The Committee was pleased to see
both the increased use of the whistleblowing
channels and appropriate action taken for
underlying themes.
To ensure mitigation against fraud risks,
management has conducted deep dives into the
Group’s Anti-Bribery and Corruption Framework
and has plans to launch a wider fraud investigation
framework across the Company in early FY24.
The Committee received updates on the progress
made on the framework as well as issues identified
as a result of deep dives followed by mitigating
actions. In addition, the Committee agreed that
anti-fraud procedures would be reviewed in FY24
to make enhancements where possible to
minimise the risk of fraud offences to ensure
compliance with forthcoming enhancement to
anti-fraud legislation.
Internal Audit
The Committee is responsible for overseeing the
work of the Internal Audit function, which provides
independent and objective assurance to
management, the Committee and the Board on
the effectiveness of the Group’s risk management
and internal controls. The purpose, scope and
authority of Internal Audit is defined within its
charter which is approved annually by the
Committee. To safeguard independence, the
Director of Risk & Assurance has a dual reporting
line into the Chair of the Audit Committee and
CFO, and can meet privately with the Committee
without management. External providers can
be engaged where specific skills are required.
The Internal Audit function will undergo an
independent External Quality Assessment in
early FY24.
The Committee reviews and approves the scope of
the Internal Audit annual plan and resourcing levels.
Increased focus on financial processes and controls
was included in FY23 and future audit plans. The
Committee reviews continuous improvement in
audit methodology. Members have access to
detailed Internal Audit reports. It assesses the
quality of Internal Audit reports and considers
management’s actions to address findings.
At each Committee meeting, an update is received
on progress against the Internal Audit annual plan
and the status of the closure of recommended
actions.
The Committee received detailed updates on
audits with limited assurance and recommended
action plans and management responses. The
Committee also considers stakeholder feedback
on the quality of Internal Audit’s work.
External audit
PwC, as the external auditors, is engaged to
conduct a statutory audit and express an opinion
on the Group’s financial statements.
During the year, PwC presented the strategy and
scope of the audit undertaken as well the areas of
focus providing an opportunity for the Committee
to monitor progress and raise questions. PwC
shared insights and feedback with management
and refined the planned audit approach for the
financial year ended 30 September 2023.
Following the retirement of Owen Mackney, he was
succeeded as external audit partner by Matthew
Mullins, Senior Statutory Auditor with the
responsibility for signing the audit opinion on
behalf of PwC. The external audit plan and the
£1.87 million fee proposal for the financial year
(2022: £1.1 million) was prepared by PwC and
presented to the Committee for consideration and
approval.
External auditors effectiveness
The Audit Committee is focused on ensuring the
external auditors deliver a high-quality audit and
plays an essential role in overseeing the Group’s
relationship with the external auditors to ensure
their independence, the quality of the external
audit process and provide challenge where
necessary. The Committee has regular
engagement with the external auditors, including
meetings without any member of management
being present, as well as ahead of each
Committee meeting. It also assesses the
effectiveness, independence, objectivity and
quality of the external auditors by reviewing,
among other things:
> The audit approach, key areas of focus, scope
and level of fees for the audit.
> All key external auditors plans and reports; in
particular those summarising audit work
performed to address significant risks and
critical judgements identified, and detailed audit
testing thereon.
> Quality, knowledge and expertise of the Audit
Engagement team, the nature of their interaction
with management and Audit Committee
members, and the culture they display.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 108
COMMITTEE REPORTS (CONTINUED)
AUDIT COMMITTEE REPORT (CONTINUED)
> Key accounting and audit judgements and how
the external auditors have challenged
management in reaching a conclusion.
> Reviewing the findings from the audit (or
management letter) and other communications
with the Committee, to assess whether it is
based on a good understanding of the
Company’s business.
> Reviewing and discussing FRC audit quality
inspection reports.
The Committee was satisfied that the agreed audit
plan had been met and that the external audit
process had provided appropriate focus to those
areas identified as the key risk areas to be
considered by the 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, including the CFO and Director of
Risk & Assurance, the Committee concurred that
the external audit had been effective and was of
a high standard.
External auditors’ independence and objectivity
The Committee also assesses the independence
and objectivity of the external auditor through the
assurances provided by the external auditors on
the independence, challenges to management on
significant accounting judgements and
professional scepticism. In addition, oversight of
the non-audit services policy and level of fees
paid, as well as employment of former PwC
employees, are also considered in determining the
independence of the external auditors.
To preserve objectivity and independence, the
external auditors do 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 on permitted services.
The policy also covers the approach around hiring
former external audit employees in order to
avoid any conflict of interest and to protect
external auditor independence. This policy is
available to view on the Company’s website at
corporate.easyJet.com.
The policy sets out the categories of non-audit
services and related approvals required, and those
non-audit services which the auditors are
prohibited from undertaking. Certain audit-related
non-audit services are deemed pre-approved by
the Committee but only up to a value of
£100,000, such as reporting on regulatory returns.
Other non-audit services require Audit Committee
approval as set out in the policy.
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
17-year term, now on the 18th year. 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
retender at 10 years.
An additional protection is provided by way of
a non-audit services fee cap. The Audit Committee
(or the Company) may not approve an
engagement of the external auditors if annual
non-audit services fees would exceed 70% of
the average audit fees (not including fees for
audit-related services or for services required
by regulation) charged in the previous three
financial years.
During the 2015 financial year, the Committee
led a tender process for external audit services,
following which the Committee agreed to
recommend that the Board reappoint PwC as,
on balance, it performed best against the
Committee’s pre-agreed selection and assessment
criteria. PwC cannot continue as Group auditors,
therefore, beyond the financial year ending
30 September 2025.
During the year, PwC undertook non-audit services
for the Company with a total value of £0.5 million,
as set out in note 3 to the financial statements.
These fees were within the limit of the non-audit
services fee cap mentioned above and included
audit-related non-audit service fees of £0.2 million
and other assurance related non-audit services
fees of £0.3 million, primarily related to a working
capital review to support the Class 1 transaction
arising from the agreement with Airbus.
The Committee’s intention is to run an audit
tendering process in 2024 to enable new
auditors to be selected, with at least one mid-tier
challenger audit firm included in the tender. This
timing will also enable an appropriate ‘cooling-in’
period to occur or for existing services to be
tendered to a new supplier if necessary, in good
time before the new Group auditors start to
shadow PwC in 2025 ahead of taking over as
Group auditors from 1 October 2025.
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.
The external auditors set out their audit process in
their Independent Auditors’ Report, which can be
found on pages 136 to 141.
Audit Committees and the External Audit:
Minimum Standard
In May 2023, the FRC published the Audit
Committees and the External Audit: Minimum
Standard, which took effect immediately for FTSE
350 companies on a comply or explain basis.
This Audit Committee Report describes how the
Audit Committee has complied with each of the
provisions of the Minimum Standard during the
year (in particular the ‘External Audit’ section of
this report).
An explanation of Group’s accounting policies is
provided on pages 147 to 157.
External audit tendering timeline
2006
PwC appointed
2015
2020
2024
2025
Fully competitive
tender; PwC
reappointed for the
financial year ending
30 September 2016
Mandatory
appointment of
new external audit
lead partner after
five years
Competitive tender
to take place
PwC cannot
continue beyond
financial year end
30 September 2025
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance Members
Catherine Bradley CBE (Chair)
David Robbie
Harald Eisenächer
Dr Andreas Bierwirth
until 9 February 2023
109
COMMITTEE REPORTS (CONTINUED)
FINANCE
COMMITTEE
REPORT
The Committee consists of the Independent
Non-Executive Directors listed above right. All
members of the Committee are Independent
Non-Executive Directors. Member biographies
setting out their skills and experience can be
found on pages 89 to 91.
The Company Secretary acts as Secretary to
the Committee and members of the executive
management are invited to attend meetings.
The Committee met four times during the year and
meeting attendance can be found on page 83.
I am pleased to present the Finance Committee
Report for the year ended 30 September 2023.
This report provides an outline of the key activities
of the Committee during the year in overseeing
the Group’s treasury operations and funding
activities.
The Committee provides oversight by reviewing
and monitoring the Group’s liquidity and hedging
approach, treasury activities and associated risks
in this area. The Committee is also responsible for
reviewing and recommending to the Board any
financing arrangements that may be appropriate
for the Company to enter into, including aircraft
financing. In doing so, it assists the Board in the
effective discharge of its duties in relation to
balance sheet considerations, financing options
and treasury arrangements.
During the year, the Committee focused on
ensuring the Company’s approach to hedging and
treasury strategies remained appropriate. This
included a review of our balance sheet principles.
The Committee also reviewed the liquidity
management strategy and the counterparts that
easyJet invests with.
The Committee also oversaw the refinancing of
the UK Export Finance Facility. The Company took
the opportunity to repay the drawn element of
$950 million on the old facility, significantly
reducing the Company’s ongoing interest charge.
The new $1.75 billion facility remains undrawn,
providing the Company with significant levels of
liquidity and extends the maturity of the facility to
2028. It was also decided to link this facility to
sustainability targets. This is the first time the
Company has linked debt to sustainability targets,
showing its commitment to the net zero pathway.
After each Committee meeting, I presented an
update to the Board on the key issues discussed
during our meetings.
Catherine Bradley CBE
Chair of the Finance Committee
The Committee’s terms of reference can
be found on the Company’s website at
corporate.easyJet.com
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 110
COMMITTEE REPORTS (CONTINUED)
FINANCE COMMITTEE REPORT (CONTINUED)
KEY ACTIVITIES DURING THE YEAR
Liquidity
The Committee continued to monitor the
Company’s liquidity during the year, including
where cash balances were held. easyJet has a
clear liquidity policy of holding liquidity of at least
Unearned Revenue plus £500 million that protects
customers’ money and creates a buffer for shock
events. The Committee received regular updates
on liquidity to ensure that the Company had
liquidity in excess of its liquidity policy and was
able to protect itself against uncertainty.
Hedging
easyJet provides cash flow and P&L certainty
by hedging its largest financial exposures. The
Committee monitored the hedging activity on an
ongoing basis through review of Jet fuel, USD and
Euro policies and ensured the hedging policies
were benchmarked appropriately.
To ensure reduced volatility in hedging policies,
the Committee reviewed the current Capex
Hedging Policy against competitors and approved
amendments to the policy. The Committee stayed
close to changes in ETS schemes over the course
of the year, recommending changes to the Carbon
Hedging Policy where appropriate. In addition, the
Committee also reviewed the procedures on
easyJet holidays hedging to ensure the hedging
levels remained appropriate as the business grows.
Debt
The Committee reviewed and recommended to the
Board a new undrawn five-year sustainability-linked
term loan facility of $1.75 billion underwritten by a
syndicate of banks and supported by a partial
guarantee from UK Export Finance under their Export
Development Guarantee scheme. The new five-year
sustainability-linked facility is currently undrawn and
extends easyJet’s debt maturity profile. The facility
also reduces the Group net financing costs. A
sustainability key performance indicator linked to a
reduction in carbon emission intensity in line with
easyJet’s SBTi-validated target is embedded within
the facility, with a margin adjustment mechanism
(upward or downward) conditional to the
achievement of specific milestones.
easyJet capitalised on its strong liquidity to fully
repay the existing UKEF drawn balance of $950
million, which had incurred interest at a floating
rate. The original facility was then cancelled,
resulting in no aircraft being encumbered within
the Group.
In September 2023, the Committee reviewed, for
instance, the process surrounding the sale and
leaseback of 11 A319 aircraft, recommending to the
Board that easyJet proceed with management’s
proposal of exiting those assets through this
method.
Other matters
In addition, the Committee also received analysis
on easyJet’s balance sheet, including what key
principles and policies the Company adopts. The
analysis also explained how these are operated
in practice and their importance to easyJet. This
allowed the Committee to review those principles
and provide feedback on the application of the
principles.
In addition to the repayment of the drawn UKEF
balance, the Company repaid one of its €500
million Eurobonds in February 2023. Both of these
activities reduced the gross debt position in the
year. An additional bond repayment of €500 million
took place in October 2023 after the year end.
Aircraft finance
The Committee received analysis on the different
ways easyJet can source additional aircraft into
the fleet. The analysis showed the best financial
outcome from a P&L and cash perspective in the
short term and over the lifetime of the aircraft,
based on current market dynamics. This enabled
the Committee to provide further insight into the
various options available to the Company when
purchasing and leasing aircraft.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance Members
Dr Detlef Trefzger (Chair)
Sue Clark
from 1 March 2023
Ryanne van der Eijk
Dr Andreas Bierwirth
until 9 February 2023
Julie Southern
until 9 February 2023
111
COMMITTEE REPORTS (CONTINUED)
SAFETY &
OPERATIONAL
READINESS
COMMITTEE
REPORT
All members of the Committee are Independent
Non-Executive Directors, as listed above right.
Member biographies can be found on pages 89
to 91.
The Company Secretary acts as the Secretary
of the Committee and attends all the meetings.
The Committee met four times during the year and
meeting attendance can be found on page 83.
The Director of Safety, Security & Compliance
and Chief Operating Officer have attended all
meetings during the year. Other members of
the executive management team are invited to
attend all or part of the meeting as appropriate
or necessary including Chief Executive Officer,
Head of Safety, Director of Flight Operations
and Director of Engineering and Maintenance.
The Committee’s terms of reference can
be found on the Company’s website at
corporate.easyJet.com
During the year, the Committee focused on the
Group’s performance on safety issues through
safety dashboards and trends, and reviews of
existing and emerging risks to understand how
the risk landscape was changing going forward.
The Committee also received updates on winter
2022 and summer 2023 operational readiness
across all areas of the operations (internal and
external), key issues and action plans.
Execution and operations is with the easyJet
Safety Board, which reports to the AMB, to ensure
safety risks and issues are identified and prioritised
and action plans are executed to mitigate existing
and emerging risks.
After each meeting, the Board is updated on the
key issues discussed during the Committee
meetings and with the Committee’s assessment of
the status of safety and operational readiness
management within the airline.
Dr Detlef Trefzger
Chair of the Safety & Operational
Readiness Committee
As the new Chair of the Safety & Operational
Readiness Committee, I am pleased to present
the Committee report for the year ended
30 September 2023.
The ability to deliver a safe and secure operation
is easyJet’s top priority. With this in mind, I oversaw
a review of the Committee’s terms of reference
during the year to better reflect the scope of its
activities. Following this review, the Committee’s
terms of reference were updated and the role of
the Committee confirmed as:
> Strategy: to approve the annual safety plan
which sets out the Group’s strategy to address
existing and emerging safety risks, and to
monitor the Group’s progress on implementing
the safety plan.
> Performance: to identify and monitor both
existing and any new, emerging or changing
safety risks, and related mitigations, receive
updates on the performance of the Group on
safety issues, to identify existing and emerging
safety risks and discuss related mitigations.
> Governance: to ensure that an appropriate
governance framework and safety resources
are in place.
> Operational readiness: to receive regular
reports from the Chief Operating Officer on the
main operational performance indicators; and
discuss any new or emerging risks relating to the
safe and effective delivery of operations.
As a result, the Committee name was changed to
Safety & Operational Readiness Committee to
reflect this refreshed purpose.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 112
COMMITTEE REPORTS (CONTINUED)
SAFETY & OPERATIONAL READINESS COMMITTEE REPORT (CONTINUED)
KEY ACTIVITIES DURING THE YEAR
Whilst monitoring the areas described above, a
number of deep dives were undertaken across a
wide range of topics and these included the
following:
Summer 2022 performance
SP SS
The Committee received an update on the safety
performance and issues observed from the
summer 2022 operations. The update covered the
operational disruption experienced by the aviation
industry as a whole, and the increased regulator
oversight in a number of areas as a result.
It also covered the safety performance issues
experienced during this period, and the initiatives
undertaken to manage or mitigate the effects,
including a summer safety campaign by the
Ground Operations team and a security audit
programme by the Security team with a focus on
the areas of the network that present a higher
security risk.
Category C airports
SP SG
Category C airports are airports that require
additional considerations, experience and/or
qualifications from the flight crew due to the
elevated risks and hazards presented there. The
Committee did a deep dive into this category of
airports, the considerations for operating out of
these airports, and what controls were in place to
mitigate or eliminate the potential hazards faced.
The Committee also did a deep dive into the
summer 2022 operational performance at Calvi
Airport in Corsica, which is a category C airport.
Winter readiness 2022
OR SS
The Committee reviewed the seasonal readiness
for winter 2022 to ensure tasks across all
departments were on schedule, and that cross-
departmental communications were in place to
improve on issues faced in previous years,
including ICC access to Ground Operations
snow plans and Flight and Cabin Operations
collaborating on winter communications for crew.
Fatigue Risk Management (FRM)
SP SG
The Committee continued to review FRM processes
and techniques and roster stability challenges
following the summer disruption and strikes.
Services to Passengers with
Reduced Mobility (PRM)
SP SG
The Committee received an update on the
processes and procedures in plan for PRM
services, the responsibility for which sits across
multiple departments at different levels. The
Committee reviewed the current performance
levels, challenges and mitigations in place.
Cabin air quality
SP SG
Cabin air quality is the term used to cover the
issues of managing cabin and cockpit air. The
Committee received a technical update on the
main causes and the management processes in
place to support the crew in the event of a smell
event on board an aircraft.
LOOKING FORWARD
The Committee will monitor compliance with
regulations and standards, and improvement of
easyJet’s safety, security and environmental
performance as well as 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.
SS Safety strategy
OR Operational readiness
Operational readiness is key to delivering a
safe, efficient and reliable operation for
easyJet’s winter and summer schedule.
The governance review of the Committee’s
role highlighted the importance of the
Committee receiving updates on operational
readiness on a regular basis to ensure
resources, infrastructure and processes were
in place to deliver an efficient operation.
As a result, the Committee received detailed
reports from the Chief Operating Officer on
seasonal planning, recruitment and training,
fleet, ground handling, engineering and
maintenance as well as specific base and air
traffic control issues and mitigations given
limited air space following the war in Ukraine
and ATC strikes.
Our Safety, Security and Compliance Plan
supports our promise of ‘safety at our heart’
for our people, our customers, suppliers and
those affected by our activities, in terms of
operational safety, health and safety,
occupational health, compliance and
environmental protection. The Committee
monitored the progress made against the
FY22–FY27 Plan and reviewed the safety
performance against the plan as well as
keeping track of the longer-term deliverables.
SP Safety performance
The Committee oversaw the safety issues
and performance against the risk framework
through safety dashboards and trends. This
allows the Committee to understand
easyJet’s safety performance in each area of
the business as well as highlight current and
emerging threats and risks at easyJet and
the aviation industry as a whole and actions
taken to mitigate them.
SG Safety governance
To ensure that easyJet’s Safety, Security and
Compliance team was adequately resourced
and had the appropriate information to
perform its functions effectively and in
accordance with the relevant professional
standards, the Committee received regular
reports from the Director of Safety, Security
& Compliance. These reports provided
assurance to the Committee on the Safety,
Security and Compliance programme.
The Director of Safety, Security &
Compliance reports regularly to the AMB, the
Committee and the Board. He has the right
of direct access to the Committee Chair and
to the Chair of the Board, which reinforces
the independence of safety oversight.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance Member
Moni Mannings (Chair)
Julie Southern
(until 9 February 2023)
David Robbie
Harald Eisenächer
113
DIRECTORS’ REMUNERATION REPORT
REMUNERATION
COMMITTEE
REPORT
ANNUAL STATEMENT BY THE CHAIR OF THE
REMUNERATION COMMITTEE
There was one change 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
89 to 91. The Committee met four times during
the year. Meeting attendance can be found on
page 83.
The Committee’s terms of reference can
be found on the Company’s website at
corporate.easyJet.com
THE FY23 FINANCIAL YEAR
It has been a very successful year for easyJet,
achieving record performance during summer 2023,
despite the challenges arising from the external
operational environment and high fuel costs. This led
to a pre-tax headline profit of £455 million for the
2023 financial year, an improvement of £633 million
versus the 2022 financial year:
> load factor of 89.3%
> 92.6 million seats flown
> easyJet holidays delivered a profit of £122 million
> announcement of a new base at Birmingham
Airport with three new aircraft and 100 new jobs
for pilots and cabin crew
> headline ROCE of 12.6%.
WORKFORCE PAY AND ENGAGEMENT
In my role as one of the Board’s Employee
Representative Directors, I met with employees
during the year, which provides an opportunity for
me to understand the employee voice and bring
that back to Committee deliberations.
Whilst the Committee closely reviews the approach
for executive reward, the Committee also considers
the wider remuneration arrangements within easyJet
to ensure that these are aligned with the approach
for executive rewards and the broader reward
philosophy. This year, the Committee undertook a
thorough deep dive into the reward arrangements
across all our colleague groups, including pilots,
cabin crew, M&A and engineering. This has given the
Committee a wider perspective to inform decisions
around pay for Executive Directors and Airline
Management Board (AMB) members when
compared to our lower-paid colleagues. The
Committee also takes a close interest in the position
on gender pay at easyJet and how any issues are
being addressed, through regular reporting.
We continue to undertake regular dialogue with
colleague consultative groups to gather their
feedback on remuneration and benefits at easyJet,
including the remuneration approaches for
executives and other colleague groups. As in
previous years, regular meetings are held with the
Reward Director and the Group People Director
to discuss developments in reward over the year,
whilst structured meetings have also been held
with members of the AMB.
We are also aware of the continuing challenges
for individuals with cost-of-living pressures
and easyJet has provided financial wellbeing
advice and guidance to support colleagues,
together with access to benefits providing
discounts on goods and services.
ENGAGEMENT WITH SHAREHOLDERS
As Chair of the Committee, I remain committed
to regular engagement with our shareholders to
answer any questions and respond to feedback. We
were pleased that the Remuneration Report passed
at the 2023 AGM with a vote of 81% in favour,
however we are also mindful that some shareholders
voted against the resolution. The Committee is
aware that some shareholders were either
uncomfortable with the level of incentive payout in
the year, or do not support the use of an Restricted
Share Plan over an LTIP.
The Committee believes that the performance
achieved in the FY22 year against the financial
measures was strong in a highly unpredictable
environment, whilst the downwards discretion
applied to the bonus outcome reflected the overall
experience of our shareholders during the year in
the context of macroeconomic impacts on our
share price. Furthermore, the Committee is
satisfied that the current model of an annual
bonus and the Restricted Share Plan (RSP)
continues to support the business and long-term
strategic decision making. We will continue to
engage with shareholders on decisions made in
the year but are not proposing any further
changes at this time.
INCENTIVE OUTCOMES IN THE YEAR
Annual bonus
The FY23 annual bonus was based 30% on
EBITDAR performance, 50% on a balanced
scorecard of key performance targets including
Group free cash flow, cost programme
performance, on-time performance and customer
satisfaction (CSAT), and 20% on individual
performance including measures linked to
sustainability, strategy, operational resilience,
diversity and employee engagement. These
measures were selected to align with our key
priorities for the year. As was the case last year,
the Committee chose to use a balanced scorecard
approach to assess performance for 50% of the
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 114
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
bonus to ensure that the bonus provided a
balanced incentive to drive performance across a
range of key strategic areas and to provide
flexibility to determine that payouts were fair,
taking into account the underlying performance
and stakeholder experience.
Our financial performance was strong despite the
pressures of inflation, fuel costs and external
operational challenges. This resulted in an outcome
of 65% out of a maximum score of 80% across the
EBITDAR and scorecard measures whilst delivery of
personal objectives and an assessment of individual
performance in the year resulted in a payout at
100% of maximum.
The Committee felt the performance of the
Executive Directors had been particularly strong in
the year with excellent progress made towards a
number of key financial and strategic objectives;
revenue per seat (RPS) remained strong compared
to our peers; we achieved listing for the first time
on the FTSE4Good Series index; and we improved
our employee engagement metrics whilst
achieving targets against a number of operational
factors such as cost, on time performance and
cash flow (further detail on page 122).
Overall, FY23 was a very successful year for easyJet
with record performance during summer 2023 and a
large increase in profit compared to the previous year,
despite the challenges arising from the external
operational environment and high fuel costs.
Additionally, given the financial performance in FY23
alongside easyJet’s strong liquidity position, the Board
intends to pay a dividend of 10% of FY23’s headline
profit after tax, payable in early 2024.
Taking this all into account, it was felt the overall
outcome was appropriate in the context of
performance in the year and no discretion was applied.
Therefore, the final bonuses agreed were £1,326,000
for Johan Lundgren (85% of maximum), and £818,125
for Kenton Jarvis (85% of maximum), of which
one-third will be awarded in deferred shares. The
Committee was also pleased that this strong
performance also enabled the majority of colleagues
to receive payment of a bonus for FY23.
Long Term Incentive Plan
Awards granted in 2020 were due to vest based
on performance over the three financial years to
30 September 2023. The award was based 100%
on Total Shareholder Return (TSR) performance
compared to FTSE 51–150 companies. TSR
performance over the period was below median
and therefore below the threshold target so this
award will lapse.
Restricted Share Plan
In FY23, we made awards under the Restricted
Share Plan (RSP) that was approved by
shareholders at the 2022 AGM. The face value of
the award granted to Johan Lundgren was 125% of
salary and for Kenton Jarvis 100% of salary. The
awards are subject to the same underpins as in
previous years, being that easyJet does not fall
below its minimum liquidity target, there being
satisfactory governance performance, including
no ESG issues that gave rise to reputational
damage and a broader provision to allow the
Committee to reduce the award quantum
appropriately for material underperformance (full
detail on page 119).
Subject to the underpins being met, the awards
will vest in December 2025.
Implementation of remuneration for FY24
The Committee is satisfied that the current
approach to Directors’ remuneration continues to
support the business and long-term strategic
decision making. Therefore, we are not proposing
any changes for the year ahead and the operation
of the annual bonus and RSP will continue broadly
unchanged from last year with the maximum
opportunities remaining the same.
During the year, the Committee also undertook a
broader review of performance measures in the
annual bonus. With easyJet returning to full-year
profitability, and the focus for the business to
move towards +£1 billion in sustainable profit
before tax (PBT) delivery, it was felt to be an
appropriate time to reassess the bonus scheme to
ensure the framework is fit for purpose.
Following this review, it is proposed that the profit
metric will revert back to PBT from EBITDAR in
FY24. Using PBT allows for optimum alignment
between shareholders and employee remuneration
whilst also aligning with mid-term targets and
underpinning our long-term strategy. The move to
PBT will also be rolled out to other employee
groups ensuring consistency across the business.
We are also proposing to replace Cash Flow with
ROCE as part of the balanced scorecard. This will
allow for increased alignment with our medium
term targets.
Further details of the performance measures can
be found on page 118.
Salaries for our Executive Directors have been
considered against the pay awards made for our
employees in 2023 and into 2024 and it is
proposed that an increase of 4% will apply for both
Executive Directors from 1 January 2024. These
increases are below the average increase for the
wider workforce in this year, which is more than
5.2%, and the Committee felt it to be appropriate
in the context of the ongoing strong performance
of our Executive Directors and the financial
outcomes in the year.
On behalf of the Committee I would like to thank
shareholders for their continued support during
2023 and ahead of the next AGM.
Moni Mannings
Chair of the Remuneration Committee
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 115
REMUNERATION AT A GLANCE
reward principles
SIMPLE AND
COST-EFFECTIVE
application in remuneration framework
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 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.
FIXED PAY
Salary
CEO
£780k
CFO
£550k
Benefits
> Life assurance
> Other insurances
> Travel expenses
Pension
Amount of salary
6.15%
Implementation for FY24: 4% salary increase for FY24, which is below the average increase of more
than 5.2% for the wider workforce in the year, but no changes to remainder of their package.
ANNUAL BONUS
JOHAN LUNDGREN
CEO
KENTON JARVIS
CFO
Maximum
opportunity
Paid in
cash
200%
175%
Awarded in
shares held
for three years
2/3
1/3
FY23 outcomes — 85% of maximum
Measure
Threshold (10%)
Target (50%)
Max (100%)
Actual
% of max
EBITDAR (30%)
£890 million
£989 million £1,088 million £1,099 million
100%
Balanced scorecard (50%)
Cost programme
£100 million
£110 million
£120 million
£131 million
Free cash flow
£419 million
£480 million
£541 million
£569 million
Customer satisfaction
72.9%
74.9%
On-time performance
-1
Industry av.
76.9%
1
73.1%
0.3
Balanced
scorecard
outcome: 70%
Individual performance
(20%)
n/a
On target
Max Fully achieved
100%
Implementation for FY24: Weightings for FY24 will remain the same but EBITDAR will be replaced
with PBT and Free Cash flow with ROCE in the balanced scorecard.
LONG TERM INCENTIVES
2020 LTIP award
100% relative TSR
(v FTSE 51–150)
0% vesting
December 2022 RSP award
CEO:
125% of salary
Three-year performance period to
September 2025
CFO:
100% of salary
Two-year holding period to December 2027
Liquidity and governance underpin
Implementation for FY24: No changes to the operation of the RSP.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 116
REMUNERATION AT A GLANCE (CONTINUED)
2024 TOTAL SINGLE FIGURE (£’000)
JOHAN LUNDGREN (CHIEF EXECUTIVE)
Minimum
100%
Mid
KENTON JARVIS (CHIEF FINANCIAL OFFICER)
Minimum
£911,089
100%
Mid
£615,178
33%
30%
37%
£2,736,289
36%
30%
34%
£1,687,678
Maximum
26%
45%
29%
£3,547,489
28%
46%
26%
£2,188,178
Maximum
Maximum with 50% share price increase
Maximum with 50% share price increase
22%
40%
38%
£4,054,489
25%
40%
35%
£2,474,178
Fixed
Annual bonus
Restricted Share Plan (RSP)
ILLUSTRATION OF REMUNERATION POLICY TIMELINES
FY24
FY25
FY26
FY27
FY28
FY29
ANNUAL
BONUS
Cash award
Deferred share award
RESTRICTED
SHARE PLAN
Performance period
Holding/deferral period
Subject to malus and/or clawback
The diagram sets out detail on the period of time that Executive Directors are required to retain shares form the
annual bonus and RSP. It also shows for how long malus and/or clawback could be applied to incentives.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance UK CORPORATE GOVERNANCE CODE –
PROVISION 40 DISCLOSURES
When developing the proposed Remuneration Policy and
considering its implementation, 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. The introduction of the RSP
has further simplified 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 RSP
increases the predictability of outcomes in line
with our growth 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 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.
117
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
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 the Remuneration Policy and practices of the
Company reward fairly and responsibly, with a clear link to
corporate and individual performance.
KEY ACTIVITIES DURING THE YEAR
> Assessed the level of performance in respect
of the bonus for the 2023 financial year, and
LTIP awards set in December 2020 and vesting
in December 2023, to determine appropriate
payouts.
> Undertook a review of the reward frameworks
in easyJet across M&A, pilots, cabin crew and
engineering.
> Reviewed and approved the remuneration
packages for the new AMB members.
> Reviewed the total packages and service
contracts of the AMB and senior
management.
> Reviewed the outcome of the AGM and
agreed appropriate actions following
engagement with shareholders.
> 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.
REMUNERATION COMMITTEE KEY
RESPONSIBILITIES
> To set the Remuneration Policy for all
Executive Directors and the Company’s Chair.
> 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 ensure that they remain
reasonable and appropriate in comparison with
the wider workforce and external market.
> Reviewed and approved the award of the
all-colleague Performance Share Award in
respect of the 2023 financial year.
> Provided oversight on the broader
remuneration framework for the wider
workforce across easyJet and in particular the
response to retaining key colleagues and the
cost of living crisis.
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.
> To approve the design of, and determine
targets for, all colleague share schemes
operated by the Group.
> To oversee any major changes in colleague
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.
Strategic reportGovernanceFinancialseasyJet plc Annual Report and Accounts 2023Contents 118
DIRECTORS’ REMUNERATION POLICY
During 2021, the Committee undertook a detailed review of our Directors’ Remuneration Policy to ensure that the remuneration arrangements in place best support the long-term strategy of the business
and continue to motivate the Executive Directors, the AMB and the broader management population. It was concluded that replacing the LTIP with a Restricted Share Plan was the best approach going forward.
The Board believes that the Remuneration Policy will not only support long-term strategic decision-making and help retain and motivate management to drive the performance of the business but will also support
the longer term performance of the business including delivering sustainable shareholder value.
The revised policy was approved by shareholders at the AGM on 10 February 2022.
The table below summarises the approved Remuneration Policy, which can be found in full in the 2021 Annual Report on the Company website: corporate.easyJet.com/investors/reports-and-presentations
Summary of policy
Implementation for FY24
Salary
Increases normally up to the average workforce level (though may be increased at
higher rates in certain circumstances).
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.
The Committee has reviewed the salary for the Executive Directors with effect from
1 January 2024 and agreed to increase the CEO salary to £811,200 (4% increase) and the
CFO salary to £572,000 (4% increase).
These increases are below the average increase for the wider workforce during 2023 and
into 2024, which is more than 5.2%.
Benefits
Pension
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.
No change.
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.
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). This is in line with
pension contributions provided for the wider workforce.
No change.
Annual bonus
Maximum opportunity is 200% of base salary (Chief Executive) and 175% of base salary
(Chief Financial Officer).
Maximum will remain at 200% of base salary for the Chief Executive and at 175% of base
salary for the Chief Financial Officer.
One-third of bonus is deferred into shares for three years, pursuant to the deferred share
bonus plan.
Malus and clawback provisions apply.
The Committee may, at its discretion, adjust the level of bonus payout if it considers
that the formulaic outcome was not aligned with performance in the year. 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 bonus for the 2024 financial year will be based 30% on PBT performance, 50%
on a balanced score card of Group performance targets including from ROCE, cost control
programme, customer feedback and operational performance and 20% on individual
performance including measures linked to sustainability, strategy, balance sheet strength
and employee engagement.
The actual performance targets set for FY24 remain commercially sensitive and will be
disclosed as appropriate in next year’s Directors Remuneration Report.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 119
DIRECTORS’ REMUNERATION POLICY (CONTINUED)
Summary of policy
Implementation for FY24
Restricted Share Plan
Normal maximum awards of 125% of salary (Chief Executive) and 100% of salary
(Chief Financial Officer). Up to 150% of salary in exceptional circumstances.
The normal maximum award will be 125% of salary for the Chief Executive and 100% of
salary for the Chief Financial Officer.
Three-year performance period plus two-year post-vesting holding period.
The underpins for 2024 awards are unchanged and will be:
Awards will be subject to performance underpins measured over the performance period.
Malus and clawback provisions apply.
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.
> That easyJet does not fall below its minimum liquidity target through the performance period.
> Satisfactory governance performance including no Environmental, Social and Governance
(ESG) issues that result in material reputational damage to the Company (as determined
by the Board).
If the Company does not meet one or more of the underpins the Committee will consider
whether it is 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.
Share ownership
guidelines
Post-cessation share
ownership guidelines
250% of salary (Chief Executive) and 200% of salary (Chief Financial Officer).
No change.
Required to retain 50% of post-tax shares vesting under the RSP and 100% of
post-tax deferred bonus shares until guideline is met.
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.
No change.
Non-Executive fees
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 fees for the Chairman and Non-Executive Directors from 1 January 2024 will be
increased by 4% (with the exception of the SID fee which remains at its current level).
Fees from 1 January 2024 are summarised below:
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.
Chairman
Basic fee for other Non-Executive Directors
Fees for SID role
Chair of the Audit, Safety & Operational Readiness and
Remuneration Committees
Chair of the Finance Committee
January
2024
January
2023
£343,508
£330,296
£68,702
£25,000
£16,380
£10,920
£66,060
£25,000
£15,750
£10,500
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 120
DIRECTORS’ REMUNERATION POLICY (CONTINUED)
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 2024 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 RSP.
Maximum (performance meets or exceeds maximum) – fixed pay plus maximum bonus, plus 100%
vesting of the RSP.
Maximum plus 50% increase in share price (performance meets or exceeds maximum) – fixed pay plus
maximum bonus, 100% vesting of the RSP and easyJet’s share price increases by 50%.
Fixed pay comprises:
Salaries – salary effective as at 1 January 2024.
Benefits – amount received in the 2023 financial year.
Pension – employer contributions or cash-equivalent payments receivable in the 2024 financial year.
Other – Matching Shares under the all-employee Share Incentive Plan (SIP), if applicable.
Chief Executive (Johan Lundgren)
Chief Financial Officer (Kenton Jarvis)
Minimum
£911,089
Mid
Minimum
£911,089
£615,178
Mid
£615,178
£911,089
£811,200
£1,014,000
£2,736,289
£615,178
£500,500
£572,000
£1,687,678
Maximum
Maximum
£911,089
£1,622,400
£1,014,000
£3,547,489
£615,178
£1,001,000
£572,000
£2,188,178
Maximum with 50% share price increase
Maximum with 50% share price increase
£911,089
£1,622,400
£1,521,000
£4,054,489
£615,178
£1,001,000
£858,000
£2,474,178
Fixed
Annual bonus
RSP
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, these numbers will differ to values included in the table on page 121 detailing the
actual earnings by Executive Directors.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 121
DIRECTORS’ REMUNERATION REPORT
SINGLE TOTAL FIGURE OF REMUNERATION FOR THE YEAR ENDED 30 SEPTEMBER 2023
The table below sets out the amounts earned by the Directors (audited).
£’000
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2022
2023
2022
2023
2022
2023
2022
Fees and salary
Benefits1
Bonus2
LTIP7
Pension3
Other6
Total
Total fixed
Total variable
Executive Directors:
Johan Lundgren
Kenton Jarvis
Non-Executive Directors:
Stephen Hester
Dr Andreas Bierwirth5
Catherine Bradley CBE
Sue Clark4
Ryanne van der Eijk
Harald Eisenächer
Moni Mannings
David Robbie
Julie Southern5
Dr Detlef Trefzger
770
542
326
28
76
53
65
65
81
75
38
75
740
520
273
78
73
–
5
5
78
63
103
5
50
8
–
–
–
–
–
–
–
–
–
–
47
8
1,326
818
1,201
738
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0
0
–
–
–
–
–
–
–
–
–
–
0
0
–
–
–
–
–
–
–
–
–
–
48
34
46
32
–
300
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,194
1,402
326
28
76
53
65
65
81
75
38
75
2,034
1,598
273
78
73
–
5
5
78
63
103
5
868
584
326
28
76
53
65
65
81
75
38
75
833
860
1,326
818
1,201
738
273
78
73
–
5
5
78
63
103
5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1) Benefits relate to the cost to the Company of life assurance and other insurance of £27,641, together with reimbursements for business-related travel expenses in respect of domestic car travel to the value of £22,713 made to the Chief Executive and
the cost to the Company of life assurance and other insurance of £7,616 for the Chief Financial Officer.
2) One-third of the annual bonus is deferred in shares for a period of three years. There are no performance conditions attached to the deferred elements. The award is subject to continued employment.
3) Johan Lundgren and Kenton Jarvis received a cash alternative to pension contributions equivalent to 6.15% of base salary. No Director who served during the year accrued any other pension benefits.
4) Sue Clark joined the Board on 1 March 2023.
5) Dr Andreas Bierwirth and Julie Southern stepped down from the Board on 9 February 2023.
6) Payment of £300,000 for cash buy-out awards, disclosed in the FY21 Annual Report, paid to Kenton Jarvis in December 2021.
7) Represents the value of the 2019 and 2020 LTIP awards that both lapsed in 2022 and 2023 (as disclosed in the FY22 Remuneration Report and later in this report). Last year the table included the value of RSP awards granted in the year, which for
Johan Lundgren was £925,000 and for Kenton Jarvis £520,000. In line with regulations and typical market practice this has been updated so that the RSP awards will only be included in the single total figure when the performance underpins have
been assessed.
PAYMENTS FOR LOSS OF OFFICE AND PAYMENTS TO PAST DIRECTORS (AUDITED)
There were no payments for loss of office or payments to past directors.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 122
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
ANNUAL BONUS OUTTURN FOR PERFORMANCE IN THE 2023 FINANCIAL YEAR (AUDITED)
The measures selected for the FY23 annual bonus aligned with our key priorities for the year and were:
30% on EBITDAR performance; 50% on a balanced score card of Group performance targets including
free cash flow, cost control, customer feedback and operational performance; and 20% on individual
performance including measures linked to sustainability, strategy 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. At least 40% of the scorecard was linked to financial measures ensuring that at least 50%
of the overall bonus is linked to financial measures.
The Committee reviewed performance against these measures including the balanced scorecard and it
was determined that the bonus would pay out at 85% of maximum. The Committee also had the
discretion to determine the appropriate level of award at the end of the financial year based on
performance achieved. The Committee felt the performance of the Executive Directors had been
particularly strong in the year with excellent progress made towards a number of key financial and
strategic objectives.
Measure
EBITDAR (at constant
currency) £ million
Balanced scorecard
Cost programme
performance £ million
Free cash flow £ million1
Customer satisfaction
On time performance
Individual
Total
FY23 Targets
Weighting
CEO and
CFO
Threshold
(10%
minimum
award)
On target
(50% award)
Maximum
(100% award)
Outcome
Payout
30%
50%
20%
100%
890
989
1,088
1,099
100%
100
419
110
480
120
541
72.9%
74.9%
76.9%
-1
Industry
average
+1
131
569
73.1%
0.3
n/a
50%
100% Fully achieved
70%
100%
85%
1) Free cash flow targets were adjusted to reflect aircraft purchases during the year which were not included in the original
target to ensure performance is assessed on a comparable basis.
Overall, FY23 was a very successful year for easyJet with record performance during summer 2023 and a large
increase in profit compared to the previous year, despite the challenges arising from the external operational
environment and high fuel costs.
It was in this context that it was felt the overall outcome was appropriate in the context of performance in the
year and no discretion was applied.
The Committee considered the individual performance of the Executive Directors against their the individual
objectives as well as their broader contribution to the business during the year and determine that is portion of
the bonus should payout in full (see below).
As a result of this assessment and the Group performance achieved, the final bonuses agreed were £1,326,000
for Johan Lundgren (85% of maximum), and £818,125 for Kenton Jarvis (85% of maximum) of which one-third will
be awarded in shares deferred for three years.
PERSONAL OBJECTIVES (20% WEIGHTING) (AUDITED)
This component focuses on personal performance against the priorities set by the Board for the
Executive Directors in 2023. The Remuneration Committee considers their performance holistically in
relation to the development and driving of strategy, financial performance, sustainability, customer and
people initiatives (both what was delivered and how). The assessment for each Executive Director was as
shown in the following tables:
Johan Lundgren (CEO)
The Committee assessed performance against the objective focus areas set out below and determined
that the personal objectives element had been met in full. Details of performance against these
objective focus areas is provided below.
Focus Area
Outcomes and Evidence
Strategy – Setting,
communicating, and leading the
company strategy to deliver
long-term value.
> Successful rollout of refreshed strategy across business.
> Strong Revenue Per Seat outcomes with highest ever summer
performance .
> Customer communications strategy agreed and progressing in
implementation.
> Clear progress in key IT strategic programmes.
ESG – Taking an industry lead
on sustainability through
delivering on our net zero
ambition whilst developing
capability, inclusion, diversity,
and talent to underpin the
strategy delivery.
> Improved ESG performance evidenced through ratings scores and
external assessment.
> Continued successful delivery against net zero roadmap.
> Championed successful rollout of Centre of Inclusive Leadership
programmes to AMB, L50 and L350 with strategy for future DEI
activity agreed with the Board.
> Leading a focus on gender diversity to achieve and improve upon
Operational resilience – To
ensure that the operation is well
planned, properly resourced,
robust and resilient to meet
customer expectations.
People and employee
engagement – To lead a
continued improvement in
employee engagement scores
through the anticipation and
implementation of agreed
actions and initiatives.
targets set.
> Pilot and cabin crew establishment targets all achieved for S23
operations.
> Third party ground handling establishment targets achieved.
> All training completed according to plan, with no training delays.
> Additional resilience added with crew slipping, firebreaks, standby
crew optimization .
> Consistent outcomes achieved in Your Voice Matters employee
engagement survey and improved participation.
> Strong M&A engagement score in upper quartile of benchmark.
> Strategic engagement plans in place for pilots and cabin crew with
cross divisional working group established.
> Promises and behaviours launched with management teams.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 123
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Kenton Jarvis (CFO)
The Committee assessed performance against the objective focus areas set out below and determined
that the personal objectives element had been met in full. Details of performance against these
objective focus areas is provided below.
Focus Area
Outcomes and Evidence
ESG – Taking an industry lead
on sustainability through
delivering on our net zero
ambition whilst developing
capability, inclusion, diversity,
and talent to underpin the
strategy delivery.
Governance – Continue to
deliver on control improvement
plan in Group Financial Control
(GFC).
> Improved ESG performance evidenced through ratings scores and
external assessment.
> Continued successful delivery against net zero roadmap.
> DPO accelerated, no wet leases, accelerated NEO deliveries led to
FY23 CO2 RPK better than net zero roadmap.
> Strong improvements in control environment achieved.
> COSO framework advanced.
> Implemented software to allow monitoring of reconciliations .
LONG TERM INCENTIVE PLAN (AUDITED)
Given the continued external uncertainty when awards were made in 2020, it was decided that the
previous approach for the LTIP of setting a mix of three-year financial targets 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 when the 2020 LTIP award was granted that it would be based 100% on TSR
performance compared to FTSE 51–150 companies measured over the three financial years prior to
vesting (with a minimum positive TSR underpin).
The percentage which could be earned was determined using the following vesting schedule:
Below
threshold
(0% vesting)
Threshold
(25% vesting)
On target
(50% vesting)
TSR awards (100% of total)
< Median
Median
n/a
Maximum
(100%
vesting)
Upper
quartile
Actual
Below
median
Vesting
(% of
element)
0%
Strategy – Leading the
company strategy to deliver
long-term value.
> Cost savings program delivered above budget.
> Fleet plan prepared with shortfalls managed.
> Enhanced profitability analysis used for all country deep dives.
TSR performance was below threshold over the performance period. The Committee considered this
outcome and determined that no payment was an appropriate outcome, so no discretion was applied.
Funding/balance sheet
– Generate and maintain strong
liquidity above policy thresholds
for lowest P&L cost.
People and employee
engagement – To lead a
continued improvement in
employee engagement scores
through the anticipation and
implementation of agreed
actions and initiatives.
Gender diversity – To support
the delivery of the gender
diversity targets.
> Year-end liquidity in place exceeding internal policy.
> New UKEF facility renegotiated delivering in excess of target
savings, whilst protecting liquidity.
> Repayment of Feb-16 €500 million Eurobond in the year, as well
as the repayment of the Oct-16 €500 million Eurobond after the
year end.
> Balance sheet principles paper presented at Finance Committee,
culminating in capital allocation framework presented at year-end
trading statement.
> Credit card acquirer agreements renegotiated improving
commercial terms and conditions.
> Improved engagement scores achieved in Finance through delivery
of engagement initiatives.
> Retention improved to target level.
> Support provided to achieved corporate gender targets.
> Actions taken to support a stronger recruitment pipeline of female
candidates.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 124
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
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
Scheme
No. of shares/options
at 1 October 20221
Shares/options
granted in year
Shares/options
lapsed in year
Shares/options
exercised in year
No. of shares/options
at 30 September
20231
Date of grant
Exercise price
(£)
Market price on
exercise date
(£)
A
A
B
B
C
C
C
D
Kenton Jarvis
153,770
254,621
129,334
–
–
–
–
241,136
36,775
6,273
–
1,865
–
–
104,331
(153,770)
–
–
–
–
–
–
–
1,865
–
–
–
–
–
–
–
–
–
19 Dec 20192
254,621
29 Dec 20203
129,334
16 Feb 20225
241,136
12 Dec 20226
36,775
19 Dec 2018
6,273
19 Dec 20197
104,331
12 Dec 20228
–
–
–
–
–
–
–
–
14 Jun 20199
6.75
–
–
–
–
–
–
–
–
Date from which
exercisable
Expiry date
19 Dec 2022
19 Dec 2029
29 Dec 2023
29 Dec 2030
19 Dec 2024
16 Feb 2032
12 Dec 2025
12 Dec 2032
19 Dec 2021
19 Dec 2028
19 Dec 2022
19 Dec 2029
12 Dec 2025
12 Dec 2032
1 Aug 2022
1 Feb 2023
Scheme
No. of shares/options
at 1 October 20221
Shares/options
granted in year
Shares/options
lapsed in year
Shares/options
exercised in year
No. of shares/options
at 30 September
20231
Date of grant
Exercise price
(£)
Market price on
exercise date
(£)
Date from which
exercisable
Expiry date
A
B
B
C
D
D
Key:
159,803
72,706
–
–
1,963
1.353
–
–
135,557
64,149
–
–
–
–
–
–
–
–
–
–
–
–
–
–
159,803
20 May 20214
72,706
16 Feb 20225
135,557
12 Dec 20226
64,149
12 Dec 20228
1,963
1,353
20 Jul 20219
19 Jul 20229
–
–
–
–
6.42
3.99
–
–
–
–
–
–
29 Dec 2023
20 May 2031
19 Dec 2024
16 Feb 2032
12 Dec 2025
12 Dec 2032
12 Dec 2025
12 Dec 2032
1 Sep 2024
1 Mar 2025
1 Sep 2025
1 Mar 2026
A
LTIP
C Deferred Share Bonus Plan (DSBP)
B RSP
D Save As You Earn Awards (SAYE)
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 125
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
The closing share price of the Company’s ordinary shares at 30 September 2023 was £4.27 and the
closing price range during the year ended 30 September 2023 was £2.85 to £5.28.
Note 1: 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.
Note 2: Long Term Incentive Plan awards made in December 2019
The targets were not met at the end of the three-year performance period and as a result the award did
not vest.
Note 3: Long Term Incentive Plan awards made in December 2020
The targets were not met at the end of the three-year performance period and as a result the award
will not vest.
Note 4: Long Term Incentive Plan award made in May 2021
The targets were not met at the end of the three-year performance period and as a result the award
will not vest.
Note 5: Restricted Share Plan awards made in February 2022
The RSP awards made in February 2022 relate to the performance period from 1 October 2021 to
30 September 2024 and, subject to the underpins being met, the awards will vest on 19 December 2024.
Awards were made in line with the approval of the new Directors Remuneration Policy and Restricted
Share Plan rules at the AGM in February 2022 and are treated as having been granted on the normal
grant date of 19 December 2021 for the purposes of Provision 36 of the Corporate Governance Code.
The face value of the award granted to Johan Lundgren was £925,000 (125% of salary) and for Kenton
Jarvis £520,000 (100% of salary). This was based on the middle-market closing share price on the day
prior to grant, being £7.15. The award were granted as nil cost options and are subject to the following
underpins: that easyJet does not fall below its minimum liquidity target through the three-year
performance period; and that there is satisfactory governance performance including no ESG issues that
result in material reputational damage to the Company (as determined by the Board). 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.
Note 6: Restricted Share Plan awards made in December 2022
The face value of the award granted to Johan Lundgren was £925,000 (125% of salary) and for Kenton
Jarvis £520,000 (100% of salary). This was based on the middle-market closing share price on the day
prior to grant, being £3.84. The awards were granted as nil cost options and are subject to the following
underpins: that easyJet does not fall below its minimum liquidity target through the three-year
performance period; and that there is satisfactory governance performance including no ESG issues that
result in material reputational damage to the Company (as determined by the Board).
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.
Subject to the underpins being met, the awards will vest on 12 December 2025.
Note 7: Deferred Share Bonus Plan award made in December 2019
The face value of the award granted to Johan Lundgren was £75,481 and relates to the deferral into
shares of one-third of the bonus paid in 2019. This was based on the middle-market closing share price
on the day prior to grant, being £14.29. The award was granted as nil-cost options and is not subject to
performance conditions, but is subject to continued employment.
Note 8: Deferred Share Bonus Plan awards made in December 2022
The face value of the award granted to Johan Lundgren was £400,217 and for Kenton Jarvis £246,079
and relates to the deferral into shares of one-third of the bonus paid in 2022.This was based on the
middle-market closing share price on the day prior to grant, being £3.84. They were granted as nil-cost
options and are not subject to performance conditions, but are subject to continued employment.
Note 9: Save As You Earn awards
Executive Directors are eligible to participate in the SAYE on the same terms as all other UK-based
colleagues of the Company. Options are granted under the SAYE, which, in the UK, is an HMRC tax-
advantaged plan. Participants contract to save up to the equivalent of £350 per month over a period of
three years. Under the applicable plan rules the maximum permitted monthly saving, across all SAYE
plans is £500.
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.
In common with most plans of this type, there are no performance conditions applicable to options
granted under the SAYE.
Johan Lundgren’s 2019 SAYE option lapsed during the year without being exercised.
SHAREHOLDING GUIDELINES IN THE 2023 FINANCIAL YEAR (AUDITED)
The Chief Executive and Chief Financial Officer are expected to build up a shareholding of 250% and 200%
of salary respectively over the first five years from appointment to the Board. The Committee noted the
level of shareholding for Johan Lundgren in the context of his time as CEO and that he is currently below
his shareholding requirement. Given the level of vesting outcomes over a challenging period since his
appointment, the Committee is satisfied that Johan is continuing to build his shareholding to an
appropriate level in the circumstances. The Committee also notes that the Executive Directors are required
to retain a minimum of 50% of net vested shares from the LTIP and RSP and 100% of net vested deferred
bonus shares until the guidelines are met. This will be kept under review on an ongoing basis.
The Non-Executive Directors, including the Chair of the Board, are required to build up a shareholding
of 100% of annual fees over a period of five years from appointment. Details of their holdings are set
out below.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 126
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
DIRECTORS’ CURRENT SHAREHOLDINGS (AUDITED)
The following table provides details on current Directors’ interests in shares at 30 September 2023 (unless otherwise noted).
Stephen Hester
Johan Lundgren
Kenton Jarvis
Catherine Bradley CBE
Sue Clark7
Ryanne van der Eijk
Harald Eisenächer
Moni Mannings
David Robbie
Dr Detlef Trefzger
Unconditionally
owned shares1
Shareholding
guidelines achieved2
Deferred bonus3
120,000
66,713
15,819
6,000
17,281
15,670
14,500
6,990
16,596
20,000
100%
37%
21%
38%
84%
100%
90%
48%
100%
100%
–
147,3798
64.149
–
–
–
–
–
–
–
LTIP4
–
254,621
159,803
RSP4
–
370,470
208,263
–
–
–
–
–
–
–
–
–
–
–
–
–
–
SAYE5
–
–
3,316
–
–
–
–
–
–
–
Interests in share
schemes
SIP6
Total in share
schemes
–
–
–
–
–
–
–
–
–
–
–
773,015
435,531
–
–
–
–
–
–
–
Includes SIP Partnership Shares, vested SIP Performance (Free) Shares, vested SIP Matching Shares, and any shares owned by connected persons.
1)
2) Based on the shareholding guidelines and including unconditionally owned shares and for the Executive Directors, the post tax value of vested but unexercised share interests under the DSBP. The extent to which the guidelines have
been achieved is calculated based on the price at purchase or vesting; therefore, the values will be different for each director base on their purchase history.
3) DSBP shares are granted in the form of nil cost options and are not subject to performance conditions.
4) LTIP/RSP shares are granted in the form of nil cost options subject to performance. As per the disclosure on p. 126, outstanding LTIP awards are due to lapse.
5) SAYE are granted as options.
6) Consists of unvested SIP Performance (Free) Shares and unvested SIP Matching Shares. Last award made in 2019.
7) Joined Board on 1 March 2023.
8) The number of shares for Johan Lundgren includes 36,755 vested but not exercised options, awarded under the DSBP in December 2018 and 6,273 vested but not exercised options, awarded under the DSBP in December 2019.
Between the 30 September 2023 and the date of this report, the only change to the above holdings is the purchase of 73 partnership shares under the Buy As You Earn (SIP) scheme for Kenton Jarvis. There have
been no other changes.
Executive Directors are deemed to be interested in the unvested shares held by the easyJet Share Incentive Plan Trust and the easyJet plc Employee Benefit Trust.
At 30 September 2023, the unvested ordinary shares held in the Trusts were as follows:
easyJet Share Incentive Plan Trust
easyJet plc Employee Benefit Trust
Total
Changes since the year end: as at 28 November 2023, there was no change to the easyJet Share Incentive Plan Trust balance and the easyJet plc Employee Benefit Trust held 4,914,159 shares.
Number of
ordinary shares
0
4,915,387
4,915,387
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 127
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
DILUTION LIMITS
easyJet complies with the Investment Association’s Principles of Remuneration with regard to dilution
limits.
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, when
necessary financial targets are achieved. 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 SIP. A 20% discount was offered on
Save As You Earn 2023; however, Matching Shares remain suspended.
300
250
200
150
100
50
0
DETAILS OF DIRECTORS’ SERVICE CONTRACTS AND LETTERS OF APPOINTMENT
Details of the service contracts and letters of appointment in place as at 30 September 2023 for
Directors are as follows:
Sep 13
Sep 14
Sep 15
Sep 16
Sep 17
Sep 18
Sep 19
Sep 20
Sep 21
Sep 22
Sep 23
easyJet
FTSE 100 index
FTSE 250 index
Comparator airlines
Date of appointment
Date of current service
contract
Unexpired term at 30 September 2023
Stephen Hester
Johan Lundgren
Kenton Jarvis
1 September 2021
20 August 2021
1 December 2017
10 November 2017
3 February 2021
15 September 2020
Catherine Bradley CBE
1 January 2020
9 December 2019
Sue Clark
1 March 2023
4 January 2023
Ryanne van der Eijk
1 September 2022
22 August 2022
Harald Eisenächer
1 September 2022
22 August 2022
Moni Mannings
David Robbie
6 August 2020
5 August 2020
17 November 2020
16 November 2020
Dr Detlef Trefzger
1 September 2022
22 August 2022
Executive Directors are subject
to a 12-month notice period.
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.
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.
CHIEF EXECUTIVE TOTAL REMUNERATION TABLE
The table below shows the total remuneration figure earned 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.
Single total
figure of
remuneration
(£’000)
Johan
Lundgren
Carolyn
McCall
Annual bonus
(%)
Johan
Lundgren
2014
2015
2016
2017
20182
2019
2020
2021
2022
2023
–
–
–
–
1,500 1,006
7551
794 2,0346 2,194
9,2095
6,2414
1,4533
757
125
–
–
–
–
–
–
–
–
–
73%
16%
0%
0%
81%
85%
REVIEW OF PAST PERFORMANCE
The chart sets out the TSR performance of the Company relative to the FTSE 250, FTSE 100,
and a group of European airlines1 since 30 September 2013. The FTSE 100 and FTSE 250 were chosen
as easyJet has been a member of both indices during the period.
LTIP
vesting (%)
This graph shows the value, by 30 September 2023, of £100 invested in easyJet on 30 September 2013,
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 2013.
Carolyn
McCall
Johan
Lundgren
Carolyn
McCall
76%
66%
13%
0%
–
–
–
–
100% 100%
32%
0%
–
–
–
–
–
–
–
–
–
–
0%
0%
0%6
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.
6) Last year the LTIP value for FY22 included the value of RSP awards granted in the year, which for Johan Lundgren was
£925,000. In line with regulations and typical market practice this has been updated so that the RSP awards will only be
included in the single total figure when the performance underpins have been assessed.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 128
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
CHANGE IN DIRECTORS’ PAY FOR THE YEAR
The table below shows the year-on-year percentage change in pay for the Directors, compared to the average earnings of all other easyJet UK colleagues.
%
Executive Directors
Johan Lundgren
Kenton Jarvis1
Non-executive Directors
Stephen Hester2
Catherine Bradley3
Sue Clark4
Ryanne van der Eijk5
Harald Eisenächer5
Moni Mannings6
David Robbie7
Dr Detlef Trefzger5
Colleagues
2023
2022
2021
2020
Salary
Benefits9 Annual bonus
Salary
Benefits Annual bonus
Salary
Benefits Annual bonus
Salary
Benefits Annual bonus
4.1%
4.2%
6.4%
0%
10.4%
10.8%
0%
487.5%
52.0%
n/a
n/a
n/a
19.4%
4.1%
n/a
1200%
1200%
3.8%
19.0%
1400%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
n/a
–
n/a
n/a
n/a
–
21.2%
n/a
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6.0%
n/a
n/a
62.2%
–
–
–
680%
n/a
–
0%
-43%
n/a
n/a
n/a
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
-2.6%
0%
-100%
–
–
n/a
–
–
–
n/a
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0%
n/a
2.0%
0%
-100%
Average pay based on easyJet’s UK colleagues8
7.0%
0%
0%
1.9%
0%
n/a
n/a refers to a nil value in the previous year, meaning that the year-on-year change cannot be calculated.
1) Appointed Executive Director on 3 February 2021.
2) Appointed to the Board on 1 September 2021 and Chair from 1 December 2021.
3) Appointed to the Board on 1 January 2020.
4) Appointed to the Board on 1 March 2023.
5) Appointed to the Board on 1 September 2022.
6) Appointed to the Board on 6 August 2020.
7) Appointed to the Board on 17 November 2020.
8) There are no colleagues in easyJet plc; therefore, the Committee decided to use the average for all UK colleagues as the appropriate comparator group given they comprise over 50% of total colleagues and therefore this is considered to be the
most representative for comparison. There was an average change in pay of 7% in FY23 for UK colleagues.
9) Benefits relate to the cost to the Company of life assurance and other insurance, as well as reimbursements made to the Chief Executive for business-related travel expenses in respect of domestic car travel.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 129
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
RELATIVE IMPORTANCE OF SPEND ON PAY
The table below Illustrates the relative importance of the spend on pay showing the total pay for all
easyJet’s colleagues compared to the distributions to shareholders in the year and the percentage
change in the year ended 30 September 2023. No dividends were paid in the past financial year and
other reported key financial indicators are included for further points of reference including information
on the number of colleagues in the year, the reported total revenue and the reported profit. For further
information the majority of easyJet’s colleagues (around 90%) perform flight and ground operations,
with the rest performing administrative and managerial roles.
Colleague costs (£ million)
Ordinary dividend (£ million)
Average monthly number of colleagues
Revenue (£ billion)
Headline (loss)/profit before tax (£ million)
Year ended
30 September
2023
Year ended
30 September
2022
1,130
0
15,937
8.2
455
948
0
13,951
5.8
(178)
Change %
19%
–
14%
41%
356%
CHIEF EXECUTIVE PAY RATIO
The table below sets out the Chief Executive pay ratio as at 30 September 2023. 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) colleagues.
We have used the ‘Option A’ methodology which uses actual earnings for the Chief Executive and UK
colleagues over the financial year to provide the most accurate comparison. The total FTE remuneration
paid during the year for each colleague 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 121.
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 2023.
> Annual bonus will be paid in relation to the year ended 30 September 2023.
> For participating employees in the LTIP/RSP, the value of awards that vest in relation to the year ended
30 September 2023 have been included.
> 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
20221
2023
2023
2023
Method
Option A
Option A
Option A
Option A
25th
percentile
pay ratio
Median pay
ratio
75th
percentile
pay ratio
30:1
27:1
75:1
74:1
23:1
21:1
56:1
57:1
12:1
10:1
24:1
27:1
Total pay and benefits
£29,640
£38,340
£82,719
Salary
£16,235
£20,958
£65,707
1)
In line with regulations and typical market practice the total figure for the CEO shows the value of the LTIP on vesting
(which lapsed this year and last). Last year the calculation included the value of the RSP awards granted in the year,
however, the value of the RSP will be shown within the CEO’s total single figure after the peformance underpins have
been assessed The FY22 calcuation has been updated accordingly and therefore changed the overall ratios.
Unlike the total remuneration for the majority of colleagues, 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. For example, no bonus was paid in 2020 or 2021 but was
paid in 2022 and will be paid in 2023. This is a significant portion of the Chief Executive’s total
remuneration in 2022 and 2023 and this is reflected in the pay ratio. The Committee has agreed that the
ratio reflects easyJet’s wider policies on pay and reward in line with market, experience and skills.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 130
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
STATEMENT OF SHAREHOLDERS’ VOTING AT AGM
The table below provides details of shareholder voting in respect of the Directors’ Remuneration Policy
(approved in February 2022), and the Annual report on remuneration (in February 2023).
Votes cast in favour
Votes cast against
Policy
(February 2022 AGM)
Annual report on
remuneration
(February 2023 AGM)
186,561,503
73.38% 197,315,595
80.59%
67,687,412
26.62% 47,513,517
19.41%
100%
–
Total votes cast in favour or against
254,248,915
100% 244,829,112
Votes withheld
19,999,292
– 12,053,532
We were pleased that the Remuneration Report passed at the 2023 AGM with a vote of 81% in favour;
however, we are also mindful that some shareholders voted against the resolution. The Committee is
aware that some shareholders were either uncomfortable with the level of incentive payout in the year,
or do not support the use of an RSP over an LTIP.
The Committee believes that the performance achieved in FY22 against the financial measures was
strong in a highly unpredictable environment, and that the downwards discretion applied to the bonus
outcome at the time resulted in a fair outcome taking into account the experience of customers and our
shareholders. The Committee remains satisfied that the current bonus and RSP structure supports the
business and long-term strategic decision making.
We also note that some shareholders voted against the resolution for the Remuneration Policy in 2022
with not all supportive of the proposed RSP structure. The Remuneration Committee undertook a
thorough review of remuneration arrangements prior to the AGM, including consulting with major
shareholders and employee representatives, and concluded that replacing the LTIP with a Restricted
Share Plan was the best approach going forward. The Board believes that the updated Remuneration
Policy will not only support long term strategic decision-making and help retain and motivate
management to drive the performance of the business but will also support the longer term
performance of the business including delivering sustainable shareholder value.
ADVISERS TO THE REMUNERATION COMMITTEE
The Remuneration Committee is advised by Deloitte which was appointed by the Committee in 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 in respect of services to the
Committee during the 2023 financial year were £70,500, 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. Deloitte LLP also provided strategic and technology
consulting and wider risk advisory and assurance services to the Company during the year.
The Committee is satisfied that the Deloitte engagement team, which provides remuneration advice
to the Committee, does not have connections with easyJet plc or its Directors that may impair its
independence. The Committee has reviewed the operating processes in place at Deloitte and is satisfied
that the advice it receives is independent and objective.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 131
OTHER DISCLOSURES
The Directors present their Annual Report and
Accounts together with the audited consolidated
financial statements for the year ended
30 September 2023. 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 61 to
66 and are incorporated by reference), collectively
comprise the management report as required
under the Disclosure Guidance and Transparency
Rules (DTRs).
RESULTS AND DIVIDEND
The profit for the financial year after taxation
amounts to £324 million (last year: loss of
£169 million).
The Board are recommending a dividend
of 4.5 pence per ordinary share, amounting to
£34 million and representing approximately 10%
of headline profit after tax.
The dividend is subject to shareholder approval
at the Company’s Annual General Meeting (AGM)
to be held on 8 February 2024 and will be
payable on 22 March 2024 to those shareholders
on the register at the close of business on
23 February 2024.
The Board is committed to maintaining regular
returns to shareholders, with the level of future
returns to be assessed over the coming years,
taking into account market conditions, capex
requirements and progress towards the Group’s
new medium-term targets.
BOARD
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 89 to 91. Changes to the Board
during the year and up to the date of this report
are set out on page 84. The Directors’ interest in
the ordinary shares and options of the Company
are disclosed within the Directors’ Remuneration
Report on pages 113 to 130.
Directors’ appointment and retirement
The Directors may from time to time appoint one
or more Directors. Any such Director shall hold
office only until the next AGM and shall then be
subject to appointment by the Company’s
shareholders.
It is the current intention that at the Company’s
next AGM all Executive and Non-Executive
Directors will retire and offer themselves for
election or re-election. Further information is set
out in the Governance section on page 86.
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 2023 financial year and remain
in force for all current and past Directors of the
Company.
DIVERSITY
The Board values diversity and recognises that
having an appropriate mix of skills and experience
is critical to ensure the future success of our
business.
The Company has met the FTSE Women Leaders
target of having 40% women on Boards (2023:
40%), and is targeting having 40% women in the
Airline Management Board (Executive Committee)
and their direct reports by 2025 (2023: 30%).
The Company has also met the following FCA
Diversity Targets (as required by Listing Rule 9.8.6):
> at least 40% of the Board being women
(2023: 40%)
> at least one of the senior Board positions being
a woman (2023: Senior Independent Director)
> at least one member of the Board being from
an ethnic minority background (2023: one).
Further information on the Board and Committee
Diversity Policy and developing a diverse pipeline
is set out in the Nominations Committee Report
on pages 100 to 102, and on the wider Company’s
approach to Inclusion and Diversity can be found
on pages 36 and 37.
The data required by Listing Rule 9.8.6 for the
Board of Directors and executive management as
at 30 September 2023 is set out on the following
page. The data is based on the existing
information held by the Company’s HR team and
individual confirmations made as part of the
Company’s year-end sign off processes.
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 132
OTHER DISCLOSURES (CONTINUED)
Number of
Board members
Percentage of
the Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number
in executive
management*
Percentage
in executive
management*
Men
Women
Not specified/prefer not to say
6
4
–
60%
40%
–
3
1
–
8
3
–
73%
27%
–
Ethnicity
White British or other White
(including minority-white groups)
Mixed/Multiple Ethnic Groups
Asian/Asian British
Black/African/Caribbean/
Black British
Other ethnic group,
including Arab
Not specified/prefer not to say
Number
of Board
members
Percentage of
the Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number
in executive
management*
Percentage
in executive
management*
9
–
1
–
–
–
90%
–
10%
–
–
–
4
–
–
–
–
–
11
–
–
–
–
–
100%
–
–
–
–
–
* For the purposes of the FCA disclosures, ‘executive management’ is required to refer to the AMB (the most senior
executive body below the Board) and the Company Secretary, as set out under Listing Rule 9.8.6R(10). However, the
Company Secretary is not a member of the AMB, therefore as set out earlier in this report, the AMB (Executive
Committee) (and their direct reports) currently comprises 30% female and 70% male colleagues. Further details of our
female and male representation are set out on page 38.
EMPLOYEES
Employees with a disability
As part of our commitment to inclusion and
diversity, we treat every applicant in our
recruitment process fairly, including those
requiring workplace adjustments. We also continue
to support employees who require workplace
adjustments to achieve their full potential,
including through training and development
needs. However, for our two largest communities,
pilots and cabin crew, we are bound by regulatory
requirements for ability with which all applicants
and employees must comply, for operational
safety reasons.
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 95 to 99.
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 in the UK under the tax-
approved Share Incentive Plan. Further details of
the Company’s share schemes are disclosed within
the Directors’ Remuneration Report on pages 113
to 130.
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 95 to 99.
Further information on how the Board considered
stakeholders in its decision making can be found
in the Corporate Governance Report on page 72
to 99. The section 172 statement is available on
page 69.
SHARES
Share capital and rights attaching to shares
The Company’s issued share capital as at
30 September 2023 comprised a single class of
ordinary shares. Further details of the Company’s
share capital during the year are disclosed in note
21 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,
unless they are subject to disenfranchisement;
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 9 February 2023, the Directors
were given the following authority:
> to allot shares up to a nominal amount of
£68,253,388 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
£68,253,388 in connection with an offer by way
of a rights issue, representing approximately
one-third of the Company’s then issued share
capital;
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 133
OTHER DISCLOSURES (CONTINUED)
> to allot shares, without first offering them to
existing shareholders in proportion to their
holdings, up to a maximum nominal value of
£20,682,844, representing approximately 10% 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
£20,682,844, representing approximately 10% of
the Company’s then issued share capital only in
connection with the financing (or refinancing, if
the authority is to be used within 12 months
after the original transaction) of an acquisition
or specified capital investment; and
> to purchase in the market a maximum of
75,801,002 shares representing approximately
10% of the Company’s then share capital.
No shares were allotted or bought back under the
above authorities during the year and up to the
date of this report.
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 implement
disenfranchisement and 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 in January 2024 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.
ADDITIONAL INFORMATION
Substantial interests
As at 30 September 2023, the Company had been
notified of the following disclosable interests in its
issued ordinary shares in accordance with DTR 5:
The Company was not notified of any changes
between 30 September 2023 and 28 November
2023.
Annual General Meeting
The Board currently intends to hold the AGM
on 8 February 2024. The arrangements for
the Company’s 2024 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.
Articles of Association
The Company’s Articles of Association may only
be amended by a special resolution at a general
meeting of the shareholders, and were last
amended at the AGM on 23 December 2020. A
copy of the Articles is available on the Company’s
website: corporate.easyJet.com.
Branches
The Group, through various subsidiaries, has
established branches in France, Germany, Italy, the
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 25 and 26 of the consolidated
financial statements.
Number of
shares as
notified to the
Company
% of issued
share capital
as at
30 September
2023
Going concern and viability statement
The Company’s going concern and viability
statements are detailed on pages 67 and 68
of the strategic report.
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)
Societe Generale
115,737,821
33,384,779
15.27%
4.40%
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 134
OTHER DISCLOSURES (CONTINUED)
Independent auditors
A resolution to reappoint PricewaterhouseCoopers
LLP as auditors 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 2023
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 page 45 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 29 to the financial statements.
The following significant agreements, which were
in force at 28 November 2023, 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 £4 billion.
Under the EMTN Programme, the following notes
(the Notes) have been issued by the Company
and easyJet Finco B.V.:
> February 2016: Eurobonds consisting of €500
million guaranteed Notes paying 1.75% coupon.
This was repaid on its maturity date in February
2023;
> October 2016: Eurobonds consisting of €500
million guaranteed Notes paying 1.125% coupon.
This was repaid on its maturity date 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.
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
On 9 September 2021, easyJet entered into a
revolving credit facility (the RCF). The RCF
amounts to a $400 million commitment,
supported by a syndicate of banks, and has a
termination date of September 2025 (unless
extended). If there is a change of control of the
Company, the lenders are not required to lend
easyJet any money under the RCF. Lenders may
also request that any amounts that have been
borrowed (together with accrued interest and all
other amounts accrued or outstanding under the
RCF) become immediately due and payable.
UK Export Finance Facilities Agreement
On 16 June 2023, easyJet entered into a five-year
sustainability-linked term loan facility of $1.75 billion
underwritten by a syndicate of banks and
supported by a partial guarantee from UK Export
Finance under their Export Development
Guarantee scheme (the EDG Facility). If there is a
change of control of the Company, the lenders are
not required to lend easyJet any money under the
EDG Facility. Lenders may also request that any
amounts that have been borrowed (together with
accrued interest and all other amounts accrued or
outstanding under the EDG Facility) become
immediately due and payable. The EDG Facility is
undrawn and replaced easyJet’s previous export
development guarantee facility of $1.87 billion
entered into in January 2021.
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.
Disclosures required under Listing Rule 9.8.4
The information to be included in the 2023 Annual
Report and Accounts under LR 9.8.4, where
applicable, can be located as set out below.
Information
Shareholder waiver of future
dividends
Page
134
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
70) and Directors’ Report (comprising pages
72 to 112 and 131 to 134) were approved by the
Board and signed on its behalf by the
Company Secretary.
Other information that is relevant to this report,
and which is incorporated by reference, can be
located as follows:
Information
Directors’ service contracts
Environmental, Social and
Governance (ESG) matters
Corporate governance report
Page
127
20–21
and 39–58
71–130
Activities in relation to research
and development
18-19, 43–53
Events after statement of financial
position date
188
By order of the Board
Ben Matthews
Company Secretary
Luton
28 November 2023
easyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancialsGovernance 135
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS
The Directors are responsible for preparing the
Annual Report and Accounts 2023 and the
financial statements in accordance with applicable
law and regulation.
Company law requires the Directors to prepare
financial statements for each financial year. Under
that law the Directors have prepared the Group
financial statements in accordance with UK-
adopted international accounting standards and
the Company financial statements in accordance
with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting
Standards, comprising FRS 101 ‘Reduced Disclosure
Framework’, and applicable law).
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 the financial statements, the directors
are required to:
> select suitable accounting policies and then
apply them consistently;
> state whether applicable UK-adopted
international accounting standards have been
followed for the Group financial statements and
United Kingdom Accounting Standards,
comprising FRS 101 have been followed for the
Company financial statements, subject to any
material departures disclosed and explained in
the financial statements;
> make judgements and accounting estimates
that are reasonable and prudent; and
> prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the Group and Company will
continue in business.
The directors are responsible for safeguarding the
assets of the Group and Company and hence for
taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are also responsible for keeping
adequate accounting records that are sufficient
to show and explain the Group’s and Company’s
transactions and disclose with reasonable
accuracy at any time the financial position of the
Group and Company and enable them to ensure
that the financial statements and the Directors’
Remuneration Report comply with the Companies
Act 2006.
The directors are responsible for the maintenance
and integrity of the Company’s website. Legislation
in the United Kingdom governing the preparation
and dissemination of financial statements may
differ from legislation in other jurisdictions.
DIRECTORS’ CONFIRMATIONS
Each of the Directors, whose names and functions
are listed on pages 89 to 91, confirm that, to the
best of their knowledge:
> the Group financial statements, which have
been prepared in accordance with UK-adopted
international accounting standards, give a true
and fair view of the assets, liabilities, financial
position and profit of the Group;
> the Company financial statements, which have
been prepared in accordance with United
Kingdom Accounting Standards, comprising
FRS 101, give a true and fair view of the assets,
liabilities and financial position of the Company;
and
> 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 and Company,
together with a description of the principal risks
and uncertainties that it faces.
In the case of each Director in office at the date
the Directors’ Report is approved:
> so far as the Director is aware, there is no
relevant audit information of which the Group’s
and Company’s auditors are unaware; and
> they have taken all the steps that they ought
to have taken as a Director in order to make
themselves aware of any relevant audit
information and to establish that the Group’s
and Company’s auditors are aware of that
information.
This responsibility statement was approved by the
Board of Directors on 28 November 2023 and
signed on its behalf by:
Johan Lundgren
Chief Executive
Kenton Jarvis
Chief Financial Officer
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Independent auditors’ report to the members of easyJet Plc
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 2023 and of the group’s profit and the group’s cash
flows for the year then ended;
> the group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards
as applied in accordance with the provisions of the Companies Act
2006;
> the company financial statements have been properly prepared in
accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, including FRS 101
“Reduced Disclosure Framework”, and applicable law); and
> the financial statements 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 2023 (the “Annual Report”), which comprise:
Consolidated and Company statements of financial position as at
30 September 2023; Consolidated income statement and
Consolidated statement of comprehensive income, Consolidated and
company statements of changes in equity, and the Consolidated
statement of cashflows 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.
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 financial statements and
the Audit Committee Report, we have provided no non-audit
services to the company or its controlled undertakings in the period
under audit.
OUR AUDIT APPROACH
Context
There were no significant changes to the Group’s operations during
the year. Following the easing of the previous travel restrictions,
more normalised levels of trading and passenger volumes have
returned in the current year. easyJet holidays also grew significantly
during the year, with its second full summer of largely unrestricted
trading, and contributed over 25% of the total Group profit in the
current year. There are a number of changes to our key audit matters
this year as explained later in the report.
Overview
Audit scope
> We performed full scope audit procedures over the Company and
two individually significant components in the Group. Procedures
over material financial statement lines were performed in relation
to four further components.
> Separate audit procedures were performed in relation to
consolidation adjustments and balances which arise or eliminate
on consolidation of the Group financial statements, including
goodwill and postemployment benefit obligations.
> This provided coverage of over 95% of both external consolidated
revenue and consolidated profit before tax.
Key audit matters
> Assessment of impairment of easyJet plc’s investment in, and
recoverability of intercompany receivables due from, easyJet
Airline Company Limited (parent)
> Valuation of the leased aircraft maintenance provision (group)
Materiality
> Overall group materiality: £30,000,000 (2022: £21,500,000)
based on an average of 5% of headline profit/loss before tax over
the last 5 years on an absolute basis.
> Overall company materiality: £46,000,000 (2022: £19,350,000)
based on 1% of total assets, capped at 90% of Group materiality
for the purposes of the Group audit.
> Performance materiality: £22,500,000 (2022: £16,125,000) (group)
and £34,500,000 (2022: £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.
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.
Assessment of impairment of goodwill and other intangible assets
(group) and Recoverability of deferred tax assets (group), which were
key audit matters last year, are no longer included because of the
improvements in current and forecast trading performance which
have led to increased levels of headroom being observed in the
goodwill and other intangibles impairment assessment, and a
reduction to the risk that deferred tax assets may not be
recoverable. Otherwise, the key audit matters below are consistent
with last year.
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Key audit matter
How our audit addressed the key audit matter
Key audit matter
How our audit addressed the key audit matter
Assessment of impairment of easyJet plc’s investment in, and recoverability of intercompany
receivables due from, easyJet Airline Company Limited (parent)
Valuation of the leased aircraft maintenance provision (group)
At 30 September 2023, easyJet plc holds
an investment of £1.0bn (2022: £1.0bn) and
intercompany receivables of £3.6bn (2022:
£3.4bn), with easyJet Airline Company
Limited (EACL), resulting in a total
investment (total investment) balance of
£4.6bn (2022: £4.4nbn). The directors have
considered the cash flow projections for
the Airline cash-generating unit (“CGU”),
which are considered to be the relevant
cash flows for the purposes of assessing
impairment of the total investment in EACL.
We focused on the risk of impairment as
the impairment test involves estimates to
be made by management, many of which
are forward-looking. These estimates
include key assumptions underpinning the
strategic plan, fuel prices including
exchange rates (including the ability of cost
increases to be passed through to the
customer), contracted increases in fleet
size, revenue per seat short and long-term
economic growth rates and the impacts of
climate change on future cash flows. In
addition we noted a potentially heightened
risk in the current year due to the market
capitalisation falling below the current
aggregate carrying value of these assets.
Refer to the Accounting policies,
judgements and estimates note (note 1),
Note 10 to the consolidated financial
statements and Notes a), c) and f) to the
Company financial statements, for
management’s disclosures of the relevant
judgements and estimates involved in
assessing the total investment balance for
impairment.
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 concluded that using the Airline CGU cash flows is appropriate for
the purposes of performing the assessment of impairment of the total
investment held in EACL.
> 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
appropriately consistent with the latest available Board plans (excluding
the impact of easyJet holidays which is a separate CGU).
> We evaluated the inputs in the Value In Use (VIU) calculation and
challenged the key assumptions including assessment of short and
medium-term flying assumptions by comparing them to 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 ensure the rates used
at 30 September 2023 were appropriate and that sufficient
disclosure of the underlying assumptions for dealing with future
potential fuel and Emissions Trading Scheme credit price volatility via
pass through to customers have been adequately disclosed in the
financial statements; and
> we evaluated the extent to which the considerations of climate
change, such as costs associated with emissions trading schemes
and the expected increased use of sustainable aviation fuels, had
been reflected in the underlying cash flows and management’s
sensitivities. This included an assessment of the consistency of the
assumptions used with the latest impact assessments that have
been carried out by easyJet’s sustainability team, including the
continuing fleet transition.
> We assessed the implied enterprise value based on current market
capitalisation and compared this to the underlying asset carrying
values. We have also understood management’s explanation for the
difference between the current implied enterprise value and the cash
flows derived on a VIU basis.
> We reviewed the adequacy of disclosures made in the financial
statements and assessed compliance with disclosure requirements,
including challenging management to be transparent about the
underlying risk scenarios which have been assessed and embedded into
its future cash flow assumptions.
Based on our work summarised above, we have concluded that the
investment in and amounts due from, easyJet Airline Company Limited are
not impaired at 30 September 2023 and that appropriate assumption and
sensitivity disclosures have been made in the financial statements.
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.
Significantly material maintenance
provisions for aircraft maintenance costs in
respect of leased aircraft were recorded in
the financial statements at 30 September
2023. 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 and the time it is
expected to occur.
We focused on this area because of the
inherent level of management estimation
required in calculating the amount of
provision needed as a result of the
subjective estimation of uncontracted
variable costs and related inflationary
increases which may arise as part of the
overall cost estimate.
Refer to the Accounting policies,
judgements and estimates note (note 1)
and Note 19, for management’s disclosures
of the relevant judgements and estimates
involved in assessing this provision
valuation.
> We evaluated the maintenance provision model and tested the
calculations therein.
> We evaluated the judgements made by management to calculate
certain elements of the provision based on the expectation of incurring
penalties rather than performing maintenance restoration work before
the lease end date. We also performed testing to agree these penalty
rates back to the contractual agreements.
> We assessed the process by which the variable elements within the
provision are estimated, evaluating the reasonableness of the assumptions,
testing the input data and re-performing calculations. Our testing has
focussed on those elements of the cost assumptions which are most
exposed to estimation uncertainty, being the non-fixed elements of the
current estimate of event costs and the future inflation/escalation of these
costs to the date at which the event is expected to arise.
> We challenged the key assumptions using both the Group’s internal
data, such as maintenance contract terms and pricing, historical
experience, business plans and forecasts as well as external data points
such as external contracts, and price indices. We also performed
sensitivity analysis in respect of the key cost and inflationary
assumptions identified above, which are the elements most exposed to
estimation uncertainty. We found no material exceptions from these
assessments and comparisons.
> We have assessed the methodology by which the gross provision has
been discounted back to present value and considered it to be
appropriate.
> Having ascertained the magnitude of movements in those key
assumptions that 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.
> We reviewed the adequacy of disclosures made in the financial
statements and challenged management to be clear on what the
critical sources of estimation uncertainty are with respect to this
balance and to ensure that the sensitivity disclosures provided are
relevant to those specific areas.
Based on the work performed, as summarised above, we have concluded
the Group’s valuation of maintenance provisions on leased aircraft and
disclosure of the related critical estimates is materially appropriate.
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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 or
currently dormant. 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 two
individually significant components in the Group which are registered
in the UK. Procedures over material financial statements lines were
performed in respect of four further components. In some cases,
financial statement line items are tested in aggregate to the Group
materiality where they arise on consolidation. 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.
The impact of climate risk on our audit
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 their impact on the environment and in
September 2022 set out their roadmap to net zero carbon emissions
by 2050, including an interim target to have reduced well-to wake
GHG emissions by 35% by 2035, aligned with the Science-Based
Targets initiative and how they aim to deliver on these targets.
In planning and executing our audit we have considered the Group’s
risk assessment process and the steps the business expects to take
to deliver on its GHG emissions target. This, together with
discussions with management and our own sustainability specialists
and reading the Group’s most recent sustainability reporting,
including their latest Carbon Disclosure Project submission, 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 key audit matter
in respect of the assessment of impairment of easyJet plc’s
investment in, and recoverability of intercompany receivables due
from, easyJet Airline Company Limited, as well as the assessment of
impairment of goodwill and other intangible assets and the
recoverability of the Group’s deferred tax assets. We have
considered the estimated costs used by management in relation to
carbon credits required to be purchased under Emission trading
schemes and the minimum levels of SAF usage required under
currently implemented mandates. We have also specifically
considered how easyJet’s net zero targets impact on likely aircraft
ownership periods, residual value changes for less fuel-efficient
aircraft, and the related impact on ongoing depreciation charges in
respect of aircraft assets held at 30 September 2023. In addition we
also considered the consistency of the disclosures in relation to
climate change (including the disclosures in the Task Force on
Climate-related Financial Disclosures (TCFD) section) within the
Annual Report and Accounts with the financial statements and our
knowledge obtained from our audit.
Whilst the Group has started to quantify some of the impacts that
may arise on its pathway towards its net zero targets, the future
financial impacts are clearly uncertain given the medium to long
term time horizon and the technological advancements that will be
necessary, including further updates to sustainable aviation fuel
mandates and the development of zero emissions aircraft. We have
discussed with management and the Audit Committee that the
estimated financial impacts of climate change, which are expected
to be significant, 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 is obtained.
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
Rationale for benchmark
applied
Financial statements – group
Financial statements – company
£30,000,000 (2022: £21,500,000).
£46,000,000 (2022: £19,350,000).
Based on an average of 5% of headline profit/loss
before tax over the last 5 years on an absolute
basis
Based on 1% of total assets, capped at 90% of
Group materiality for the purposes of the Group
audit
We believe that a total asset benchmark is
appropriate given that the Company does not
generate revenues of its own.
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 profit/loss before tax
has been applied. However, given the continued
recovery in the current year and volatility in trading
caused by the impact of Covid, we have used an
average of the headline profit/loss before tax over
the last 5 years on an absolute basis.
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For each component in the scope of our group audit, we allocated a
materiality that is less than our overall group materiality. The range of
materiality allocated across components was between £5,214,442
and £27,000,000. Certain components were audited to a local
statutory audit materiality that was also less than our overall group
materiality.
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.
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% (2022: 75%) of
overall materiality, amounting to £22,500,000 (2022: £16,125,000)
for the group financial statements and £34,500,000 (2022:
£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 £1,500,000 (group
audit) (2022: £1,075,000) and £1,500,000 (company audit) (2022:
£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
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.
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 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.
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. 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 2023 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 Governance and
Strategic Report sections of the Annual Report 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.
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Our review of the directors’ statement regarding the longer-term
viability of the group and company 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.
RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS AND THE AUDIT
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities
in respect of the financial statements, 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 regulatory compliance to ensure Air Operator’s Certificates
(held in the UK, Switzerland and Austria) and travel provider licences
remain valid and fully operational, the majority of voting rights being
held by EU persons, Task Force on Climate-Related Financial
Disclosures, Streamlined Energy and Carbon Reporting (SECR)
requirements, consumer protection legislation, adherence to data
protection requirements in the jurisdictions in which easyJet operates
and holds data, regulatory compliance requirements 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 also considered those laws and regulations
that have a direct impact on the financial statements such as
compliance with the requirements of emissions trading schemes and
customer claims regulation, The Listing Rules, UK and overseas tax
legislation, The UK Corporate Governance Code 2018 and Companies
Act 2006. 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 in the underlying books
and records 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, and for the Company the assessment of impairment of
the investment in and intercompany receivables due from easyJet
Airline Company Limited (see related key audit matters above). We
also specifically assessed the provisions held in respect of actual
and potential litigation matters, provisions held for customer
compensation, breakage on contract liabilities held with
customers, the assessment of impairment of intangible assets, and
the recoverability of deferred tax assets
> 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 certain journal
entries posted with unusual account combinations
> Designing audit procedures to incorporate unpredictability around
the nature, timing or extent of our testing
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.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 141
Independent auditors’ report to the members of easyJet Plc (CONTINUED)
OTHER MATTER
In due course, as required by the Financial Conduct Authority
Disclosure Guidance and Transparency Rule 4.1.14R, these financial
statements will form part of the ESEF-prepared annual financial
report filed on the National Storage Mechanism of the Financial
Conduct Authority in accordance with the ESEF Regulatory Technical
Standard (‘ESEF RTS’). This auditors’ report provides no assurance
over whether the annual financial report will be prepared using the
single electronic format specified in the ESEF RTS.
Matthew Mullins (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Watford
28 November 2023
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.
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 18 years, covering the years ended 30 September
2006 to 30 September 2023.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 142
CONSOLIDATED INCOME STATEMENT
Passenger revenue
Ancillary revenue1
Airline ancillary revenue
Holidays incremental revenue
Total ancillary revenue
Total revenue
Fuel
Airports and ground handling1
Crew
Navigation
Maintenance
Holidays direct operating costs (excluding flights)1
Selling and marketing
Other costs
Other income
EBITDAR
Aircraft dry leasing
Depreciation
Amortisation of intangible assets
Operating profit/(loss)
Interest receivable and other financing income
Interest payable and other financing charges
Foreign exchange gain/(loss)
Net finance charges
Profit/(loss) before tax
Tax (charge)/credit
Profit/(loss) for the year
Earnings/(loss) per share, pence
Basic
Diluted
Year ended 30 September
2023
Non-headline
(note 5)
£ million
–
–
–
–
–
–
–
–
–
–
–
–
(10)
6
(4)
–
(19)
–
(23)
–
–
–
–
(23)
6
(17)
Headline
£ million
5,221
2,174
776
2,950
8,171
(2,033)
(1,800)
(941)
(422)
(341)
(582)
(232)
(695)
5
1,130
–
(625)
(29)
476
132
(180)
27
(21)
455
(114)
341
Total
£ million
5,221
2,174
776
2,950
8,171
(2,033)
(1,800)
(941)
(422)
(341)
(582)
(232)
(705)
11
1,126
–
(644)
(29)
453
132
(180)
27
(21)
432
(108)
324
43.1
42.7
Notes
8
11
10
2
3
6
7
7
2022
Non-headline
(note 5)
£ million
–
–
–
–
–
–
–
–
–
–
–
–
(30)
–
(30)
–
–
–
(30)
–
–
–
–
(30)
8
(22)
Headline
£ million
3,816
1,585
368
1,953
5,769
(1,279)
(1,443)
(767)
(339)
(301)
(273)
(173)
(635)
10
569
(2)
(539)
(25)
3
26
(143)
(64)
(181)
(178)
31
(147)
Total
£ million
3,816
1,585
368
1,953
5,769
(1,279)
(1,443)
(767)
(339)
(301)
(273)
(173)
(665)
10
539
(2)
(539)
(25)
(27)
26
(143)
(64)
(181)
(208)
39
(169)
(22.4)
(22.4)
1) Revenue and expenditure of easyJet holidays recognised in the prior year has been re-presented, see note 1a for details.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 143
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Profit/(loss) for the year
Other comprehensive (loss)/income
Items that may be reclassified to the income statement:
Cash flow hedges
Fair value (losses)/gains in the year
Gains transferred to income statement
Hedge ineffectiveness/discontinuation loss/(gain) transferred to income statement
Related deferred tax credit/(charge)
Cost of hedging
Related deferred tax credit/(charge)
Items that will not be reclassified to the income statement:
Remeasurement (loss)/gain of post-employment benefit obligations
Related deferred tax charge
Fair value gains on equity investment
Total comprehensive income/(loss) for the year
Year ended
30 September
2023
£ million
Year ended
30 September
2022
£ million
Notes
324
(169)
6
6
20
6
(19)
(51)
1
12
(9)
2
(8)
(1)
–
(73)
251
774
(730)
(5)
(11)
8
(2)
41
(10)
1
66
(103)
Fair valuation losses in the year are primarily due to movements in the foreign exchange rates partially offset by gains on fuel hedges.
(Gains)/losses on cash flow hedges reclassified from other comprehensive income to the income statement by income statement caption are as follows:
Revenue
Fuel
Maintenance
Eurobonds (within foreign exchange gain/(loss))
Other financing income
2023
£ million
2022
£ million
6
(86)
(5)
21
13
(51)
(9)
(663)
(7)
(30)
(21)
(730)
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials
144
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at
30 September
2023
£ million
Notes
As at
30 September
2022
re-presented
£ million
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
Restricted cash
Money market deposits
Cash and cash equivalents
Current liabilities
Trade and other payables1
Unearned revenue
Borrowings
Lease liabilities
Derivative financial instruments
Current tax payable
Provisions for liabilities and charges1
Net current (liabilities)/assets
10
10
11
25
25
14
12
6
13
10
25
14
14
14
15
16
17
18
25
6
19
343
676
186
–
–
2,925
4,130
(1,764)
(1,498)
(433)
(217)
(54)
(3)
(175)
(4,144)
(14)
365
276
4,864
35
31
2
138
–
Non-current liabilities
365
217
Borrowings
Unearned revenue
4,629
Lease liabilities
127
Derivative financial instruments
31
3
91
62
Non-current deferred income
Post-employment benefit obligation
Provisions for liabilities and charges
Deferred tax liabilities
5,711
5,525
Net assets
Shareholders’ equity
Share capital
Share premium
Hedging reserve
Cost of hedging reserve
367
495
423
4
126
3,514
Translation reserve
4,929
Retained earnings/(accumulated losses)
Total equity
2,787
2,533
1) The liability for compensation and reimbursements for airline customer delays and cancellations has been re-presented
from provisions for liabilities and charges to liabilities within other payables. Refer to note 1a for further detail.
The financial statements on pages 142 to 188 were approved by the Board of Directors and authorised
for issue on 28 November 2023 and signed on behalf of the Board.
Johan Lundgren
Director
Kenton Jarvis
Director
(1,759)
(1,042)
(437)
(247)
(86)
(5)
(102)
(3,678)
1,251
As at
30 September
2023
£ million
Notes
As at
30 September
2022
re-presented
£ million
17
16
18
25
20
19
6
21
(1,462)
(3)
(772)
(14)
(4)
(7)
(626)
(22)
(2,910)
2,787
207
2,166
113
(2)
72
231
(2,760)
(1)
(866)
(22)
(4)
(1)
(589)
–
(4,243)
2,533
207
2,166
170
5
(6)
(9)
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials
145
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
At 1 October 2022
Profit for the year
Other comprehensive loss
Total comprehensive income/(loss)
Share incentive schemes
Employee share schemes –
value of employee services (note 22)
Purchase of own shares
Currency translation transfer1
At 30 September 2023
At 1 October 2021
Loss for the year
Other comprehensive income
Total comprehensive (loss)/income
Transfers to property, plant and equipment
Share incentive schemes
Employee share schemes –
value of employee services (note 22)
Purchase of own shares
Currency translation differences
At 30 September 2022
Share
capital
£ million
207
Share
premium
£ million
2,166
–
–
–
–
–
–
–
–
–
–
–
–
207
2,166
Share
capital
£ million
207
Share
premium
£ million
2,166
–
–
–
–
–
–
–
–
–
–
–
–
–
–
207
2,166
Hedging
reserve
£ million
Cost of hedging
reserve
£ million
Translation
reserve
£ million
Retained
earnings/
(accumulated
losses)
£ million
170
–
(57)
(57)
–
–
–
113
5
–
(7)
(7)
–
–
–
(2)
(6)
–
–
–
–
–
78
72
(9)
324
(9)
315
18
(15)
(78)
231
Hedging
reserve
£ million
Cost of hedging
reserve
£ million
Translation
reserve
£ million
Retained
earnings/
(accumulated
losses)
£ million
156
–
28
28
(14)
–
–
–
170
(1)
–
6
6
–
–
–
–
5
–
–
–
–
–
–
–
(6)
(6)
111
(169)
32
(137)
–
26
(9)
–
(9)
Total
equity
£ million
2,533
324
(73)
251
18
(15)
–
2,787
Total
equity
£ million
2,639
(169)
66
(103)
(14)
26
(9)
(6)
2,533
1) The translation reserves transfer relates to a correction of a historical error in the retranslation of monetary assets and liabilities in overseas subsidiaries on consolidation. The cumulative
amount of exchange differences on these balances were previously presented within retained earnings/(accumulated losses) in the consolidated statement of changes in equity and the
consolidated statement of financial position. However, these exchange differences should have been presented as part of the translation reserve. This has resulted in a £78 million transfer
between retained earnings/(accumulated losses) and the translation reserve to more accurately present the cumulative foreign exchange gains recognised on consolidation. The nature of
the error is considered to not constitute a material error on a qualitative basis and therefore the impact has been adjusted in the current year. There is no change in brought forward or
carried forward total equity from this change and no restatement of the consolidated statement of financial position or consolidated statement of changes in equity has been made.
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments relating to highly probable
transactions that are forecast to occur after the year end.
At 30 September 2023, amounts in the cost of hedging reserve comprised of a £3 million gain related to cross-currency basis (2022: £7 million gain) and a
£5 million loss related to the time value of options (2022: £2 million loss).
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials
146
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flows from operating activities
Cash generated from operations
Interest and other financing charges paid
Interest and other financing income received
Settlement of derivatives
Net tax paid
Net cash generated from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of non-current other intangible assets
Net decrease/(increase) in money market deposits
Net proceeds from sale and leaseback of aircraft
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of ordinary share capital
Share issue transaction costs
Purchase of own shares for employee share schemes
Repayment of bank loans and other borrowings
Repayment of capital element of leases
Decrease in restricted cash
Net cash used in financing activities
Effect of exchange rate changes
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Year ended
30 September
2023
£ million
Year ended
30 September
2022
£ million
Notes
23
2
2
6
11
10
24
24
24
14
14
1,509
(162)
125
91
(12)
1,551
(677)
(77)
126
76
(552)
–
–
(15)
(1,192)
(218)
5
(1,420)
(168)
(589)
3,514
2,925
892
(130)
11
7
(4)
776
(501)
(29)
(126)
87
(569)
91
(38)
(9)
(377)
(206)
7
(532)
303
(22)
3,536
3,514
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 147
NOTES TO THE FINANCIAL STATEMENTS
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), incorporated and domiciled in the United Kingdom, whose shares are listed on the London
Stock Exchange under the ticker symbol EZJ. The address of its registered office is Hangar 89, London
Luton Airport, Luton, Bedfordshire, LU2 9PF, England.
The consolidated financial statements of easyJet plc have been prepared in accordance with UK-
adopted International Accounting Standards and with the requirements of the Companies Act 2006
as applicable to companies reporting under those standards.
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 70. Principal risks and uncertainties are
described on pages 61 to 66. Note 26 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 through to June 2025.
The Directors also considered a separate downside model that included the operational disruption and
adverse US dollar rate but, instead of the yield reduction, modelled increased costs (additional 3%
inflation assumed on operating costs) and an additional $100 per metric tonne on the fuel price
compared to the base case. This scenario was not as severe and as such still resulted in sufficient
headroom. It was not deemed plausible to combine yield reduction and the higher cost and fuel
increases based on an analysis of historical information across the airline industry.
After reviewing the current liquidity position, committed funding facilities, the base case and severe but
plausible downside financial forecasts incorporating the uncertainties described above, the Directors
have a reasonable expectation that the Group has sufficient resources to continue in operation for the
foreseeable future. For these reasons, the Directors continue to adopt the going concern basis of
accounting in preparing the Group’s financial statements.
The use of critical accounting estimates and management judgement is required in applying relevant
accounting policies to the Group’s consolidated financial statements. Areas involving a higher degree of
judgement, or where assumptions and estimates are significant to the financial statements and carry
estimation risk, are highlighted on pages 156 and 157.
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, the Group’s stated target of net zero carbon emissions by 2050, and our commitment
to reducing our carbon emissions intensity by 35% by 2035. These targets and risks have been
considered in relation to the financial reporting judgements and estimates in the current year and these
have not materially impacted the conclusions reached including;
> the estimates of future cash flows used in impairment assessments of the carrying value of
non-current assets;
As at 30 September 2023, easyJet had a net cash position of £41 million including cash and cash
equivalents of £2.9 billion, with unrestricted access to £4.7 billion of liquidity, and has retained ownership
of 54% of the total fleet, all of which are unencumbered.
> the estimates of future profitability used in our assessment of the recoverability of deferred tax
assets in the UK; and
> the useful economic lives (UELs) and related residual values for our less fuel-efficient aircraft.
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
management’s best estimation of how the business plans to perform over the period. 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 future estimated price of Emissions
Trading System (ETS) allowances, the phasing out of the free ETS allowances from 2024, and the
expected price and quantity required of Sustainable Aviation Fuel (SAF) usage and fleet renewals.
The business is exposed to fluctuations in fuel prices and foreign exchange rates. easyJet is currently
c.76% hedged for fuel in H1 of FY24 at c.$867 per metric tonne, c.51% hedged for H2 FY24
at c.$823 and c.25% hedged for H1 FY25 at c.$832.
In modelling the impact of severe but plausible downside risks, the Directors have considered demand
suppression leading to a reduction in ticket yield of 5% and a reduction in Holidays contribution of 5%.
The model also includes the reoccurrence of additional disruption costs (at FY22 levels), an additional
$50 per metric tonne on the fuel price, 1.5% additional operating cost inflation and an adverse
movement on the US dollar rate. These impacts have been modelled across the whole going concern
period. In addition, this downside model also includes a grounding of 25% of the fleet for the duration of
the peak trading month of August, to cover the range of severe but plausible risks that could result in
significant operational disruption. This downside scenario resulted in a significant reduction in liquidity
but still maintained sufficient headroom on external liquidity requirements.
Known climate-related impacts are incorporated into the Group’s short term and medium term cashflows
including the fleet planning, the purchase of next-generation aircraft, fuel-saving initiatives and costs
associated with carbon, i.e., updated mandates for the phase out of ETS allowances by 2026 and the
expected price and quantity required of SAF usage.
Climate change is not expected to have any significant impact on demand or further impact on the
Group’s short term cash flows considered in the going concern and viability assessments. Additional
identified climate based risks and the impact of these in the absence of actions taken by easyJet to
manage the transition are considered in the stress testing for impairment and viability. In particular the
impact of a reduction in demand due to investor/market sentiment and increased costs due to changes
in technology, regulatory and legal requirements have been considered.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 148
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1A. SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied in the preparation of the consolidated financial statements
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 2022 and 2023. A full list of subsidiaries can be found in the Notes to the
Company financial statements on page 191.
A subsidiary is an entity controlled by easyJet plc. Control is achieved when easyJet is exposed to, 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.
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.
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 the
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. Non-monetary assets and liabilities denominated in foreign currencies are
translated into the functional currency at foreign exchange rates ruling at the dates the transactions
were effected.
Airports, ground handling, holidays
accommodation, and other
operating costs
Holidays direct operating costs
(excluding flights)
Total
(1,716)
–
(1,716)
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 the translation
reserve within shareholders’ equity until all or part of the interest is disposed of, 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 monthly rates of exchange during the
year, as this approximates the rates on the dates of the transactions.
Change in presentation
Presentation of easyJet holidays
The presentation of the consolidated income statement has been amended in order to provide more
relevant information to the users of the financial statements, reflecting the increasing significance of the
Holidays operating segment. Holidays revenues have historically been presented within ‘Ancillary
revenue’, whilst associated costs have been presented within the ‘Airports, ground handling, holidays
accommodation, and other operating costs’ line. Ancillary revenue has now been split into ancillary
revenue attributable to airline passengers and Holidays incremental revenue, which is the revenue from
holidays’ customers net of flight revenue; the passenger revenue and airline ancillary revenue attributable
to holidays’ customers being included in the passenger revenue and airlines ancillary revenue lines
respectively. Additionally, a new cost line ‘Holidays direct operating costs’ is shown which includes costs
specific to the Holidays business such as accommodation costs and airport transfers.
The prior year has been presented on a consistent basis, which has resulted in the re-presentation of the
consolidated income statement as below.
Year ended 30 September 2022
(Previously reported)
(Re-presented)
Revenue
Passenger revenue
Airline ancillary
Holidays incremental revenue
Ancillary revenue
Total revenue
Expenditure
Headline
£ million
3,816
–
–
1,953
5,769
Airports and ground handling
–
Non-
headline
(note 5)
£ million
Total
£ million
Headline
£ million
Non-
headline
(note 5)
£ million
–
–
–
–
–
–
–
–
–
3,816
–
–
1,953
5,769
3,816
1,585
368
1,953
5,769
–
(1,443)
(1,716)
–
–
(1,716)
(273)
(1,716)
–
–
–
–
–
–
–
–
–
Total
£ million
3,816
1,585
368
1,953
5,769
(1,443)
–
(273)
(1,716)
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 149
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1A. SIGNIFICANT ACCOUNTING POLICIES (continued)
Presentation of the liability for compensation for airline customer delays and cancellations
In previous reporting periods easyJet has classified the liability for compensation and reimbursements
for airline customers arising from flight delays and cancellations as a provision. In response to a ruling by
the International Financial Reporting Interpretations Committee (IFRIC) that compensation for delays
gives rise to variable consideration, this liability has been re-presented from provisions for liabilities and
charges to liabilities within trade and other payables. This impacts both the statement of financial
position and the accompanying notes to the financial statements. The prior year statement of financial
position has been re-presented as described below, the impact on accompanying notes is described in
those notes. Specifically, for note 19, as a result of this re-presentation, the provision for holidays’
customer compensation for quality issues, personal injury and illness, and the provision for refunds of air
passenger duty and similar charges have been re-presented as ‘Other provisions’.
Current liabilities
Trade and other payables
Provisions for liabilities and charges
Remaining other current liabilities
As at 30 September 2022
Previously
reported
£ million
Re-presented
£ million
(1,685)
(176)
(1,817)
(3,678)
(1,759)
(102)
(1,817)
(3,678)
The value of the liability for the year ending 30 September 2021 was not material and therefore the 1
October 2021 opening balance in the relevant comparative notes has not been re-presented.
Impairment of non-financial assets
easyJet has identified two separate cash-generating units (CGUs) which are two separate groups of
assets generating largely independent cash flows, these being easyJet’s airline route network and its
Holidays business.
All goodwill, landing rights, current intangible assets, associated working capital balances, aircraft and
aircraft spares belong to the Airline CGU which is tested annually for impairment or when there is an
indication of impairment. A single value in use (VIU) calculation is performed in order to assess the
recoverability of the assets.
The Holidays CGU includes other intangible assets, which are subject to amortisation and working capital
associated to the Holidays segment. The CGU is tested for impairment annually or when there is an
indication of impairment.
A further description of the calculation of the VIU and current year outcome and sensitivities for the
Airline CGU is given in note 10.
Goodwill and other intangible assets
Goodwill arising on acquisition has been 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 as part of the
Airline CGU on an annual basis or when there is an 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 remain available for use for the foreseeable future provided minimum
utilisation requirements are observed. Landing rights form part of the Airline CGU and are therefore
tested for impairment at least annually or when there is an indication of impairment. Landing rights with
a carrying value that have no further VIU and have been surrendered for nil value are de-recognised and
a loss on disposal recognised in the income statement at the point of surrender.
When assessing for impairment or reassessing UELs, easyJet considers potential 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 future estimated price of ETS allowances, and the expected price and
quantity required of SAF usage. Additional risks associated with climate change have also been stress
tested, including sensitivities of SAF usage and ETS costs, additional legal and technology costs,
reduced demand and increased cost of maintenance and replacement aircraft.
Computer software is stated at cost and is amortised from the point at which the asset is ready for use
on a straight-line basis over the asset’s UEL. UELs are reviewed annually.
Computer software
Expected useful life
3–7 years
Annual licence agreements to use Cloud software are expensed and treated as a service agreement.
Perpetual licences 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, but are otherwise expensed.
Customisation and configuration costs related to the implementation of Cloud-based applications are
expensed unless the activity creates an asset that is separate and identifiable from the software.
EU ETS, CH ETS and UK ETS carbon allowances
easyJet participates in the EU ETS, CH (Swiss) ETS and UK ETS schemes. Participants are required to
purchase and surrender ETS carbon allowances to cover their annual carbon emissions from flying.
The surrender process takes place ahead of the compliance deadline of 30 April each year in respect
of the preceding calendar year. A proportion of allowances are issued for free and are recognised at fair
value, being the market value on the date they are received, with a corresponding liability recognised
simultaneously. Purchased allowances are recognised at the purchase price. Both free and purchased
carbon allowances are held as current intangible assets and are not subsequently revalued as they are
held for own use.
As part of the annual surrender process free allowances will be surrendered first with purchased
allowances then surrendered on a first in, first out (FIFO) basis. The income statement expense (included
in fuel costs), recognised throughout the year as the liability is incurred through flying, is based on a
weighted average cost of the free and purchased allowances estimated to be surrendered (on the FIFO
basis described above) as part of the annual surrender process. A corresponding liability of the same
value is also recognised. As such, for any financial year, three months of the related expense will be
known having already been surrendered, with nine months of the expense subject to a degree of
estimation. Where insufficient allowances are held in easyJet’s registry at the financial year end, when
compared with the expected calendar year surrender, the remainder of the income statement expense
is estimated using the market price of allowances as at the financial year end date. Both the related
asset and liability are extinguished only at the point when the allowances are surrendered.
These current intangible assets form part of the Airline CGU and are reviewed for impairment annually
or when there is an indication of impairment within the Airline CGU.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 150
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1A. SIGNIFICANT ACCOUNTING POLICIES (continued)
Carbon offsetting and Verified Emission Reductions
Up until 31 December 2022, easyJet operated a voluntary policy to offset every tonne of carbon and
carbon equivalents emitted from fuel used for all its flights. This was done through purchasing Verified
Emission Reduction (VERs) certificates arising from Gold Standard or Verified Carbon Standard (VCS)
accredited projects. The Voluntary Offsetting Policy was retired in September 2022 but VER assets
remain on the consolidated statement of financial position to offset the estimated emissions from flights
booked up to and including 31 December 2022 and with a departure date after 30 September 2023.
The value of these assets is immaterial, and they will be retired in financial year 2024. No contractual
commitments remain for the purchase of VERs.
easyJet continues to hold on the consolidated statement of financial position a number of VERs that
were purchased under contractual obligations and are surplus to the certificates required to meet the
remaining obligation for flights booked up to 31 December 2022. These certificates are being actively
marketed for sale, but are held on the consolidated statement of financial position at purchase price.
The value is not material. When sold, any excess of sale value over the purchase price value held on the
consolidated statement of financial position will be recognised in other income.
Additionally, easyJet has an obligation under French law to offset CO2 emissions incurred for French
domestic flights. No carbon certificates have yet been purchased for the obligation; the liability for the
certificates required to be purchased is not material and is recognised on the consolidated statement of
financial position under trade and other payables.
Property, plant and equipment
Property, plant and equipment (PPE) 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 UELs. UELs and residual values are reviewed annually.
Aircraft1
Aircraft spares
Expected useful life
18–23 years2, 3
18 years
Aircraft – prepaid maintenance
7–10 years
Leasehold improvements
5–10 years or the length of lease if shorter
Freehold land
Not depreciated
Fixtures, fittings and equipment4 3 years or length of lease of property where equipment is used if shorter
Computer hardware4
3–5 years
1) Aircraft held as right of use assets are depreciated over the lease term; see leases section. Contractual capital
maintenance associated with leased aircraft is charged as depreciation to the income statement as the usage that
defines the maintenance event occurs.
2) easyJet operate a fleet of Airbus ceo and neo aircraft. The newer neo aircraft have a UEL of 23 years. Aligning to the
longer-term plan for ceo aircraft, and the ambition to replace these over time with the more fuel efficient neo aircraft
as part of easyJet’s net zero commitment, ceo aircraft have a shorter UEL of 18 years.
3) Aircraft are depreciated once in the location and condition necessary to be capable of operating in the manner
intended by management.
4) Other assets within note 11.
Residual values are reviewed annually, at the end of the reporting period, against prevailing market rates
for assets of an equivalent age, and the depreciation applied is adjusted accordingly on a prospective
basis. The carrying value of PPE assets is part of the Airline CGU and is therefore reviewed for
impairment at least annually or when there is any indication of impairment within the CGU. 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 and specifically Airbus aircraft. Future developments, such as the impact of climate change on
the market, technological, economic or legal environment, are considered when assessing residual values
and UELs.
An element of the cost of a new aircraft is attributed on acquisition to prepaid maintenance, reflecting
the ‘full-life’ maintenance status of key components of the aircraft at the point of transition of ownership.
This cost is depreciated over a period of between seven to ten years from the date of manufacture, in
accordance with the maintenance schedule for the aircraft. Subsequent costs incurred which lend
enhancement to future periods, such as long-term scheduled maintenance and major overhaul of
aircraft and engines, are capitalised at the time of the event and depreciated over the length of the
period benefiting from these enhancements. All other maintenance costs for owned aircraft are charged
to the income statement as incurred.
Pre-delivery payments made in respect of aircraft are recorded in PPE at cost. These amounts are not
depreciated. A proportion of easyJet’s financing costs have been attributed to pre-delivery payments,
made in respect of aircraft and other qualifying assets under construction. These are capitalised and
added to the cost of the asset concerned. Pre-delivery payments are depreciated from the point at
which the aircraft to which they relate is received and ready for commercial use.
Gains and losses on disposals (other than aircraft-related sale and leaseback transactions) are
determined by comparing the net proceeds with the carrying amount of the asset 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. Lease payments include fixed payments and variable payments which are
dependent on an index or rate. Where an index or rate is used this is initially measured using the index or
rate at commencement. 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 is reasonably certain to
exercise, then the lease term will be considered to extend beyond that non-cancellable period to the end
of the extension period available. Where easyJet has previously assessed that there is no intention to
exercise an extension option but subsequently opts to exercise the option, then a modification would be
carried out. If easyJet has a termination option, which it considers it is reasonably certain to exercise,
then the lease term will be accounted for until the point when the termination option will take effect.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 151
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1A. SIGNIFICANT ACCOUNTING POLICIES (continued)
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 before return to the
lessor, in accordance with the terms of the lease, is also included in the right of use asset at initial
recognition. Subsequently, for leased aircraft, the right of use asset attracts maintenance work in
accordance with the contractual obligations of the lease, and a provision for the maintenance work is
built up as the aircraft is flown, with the offset being against the right of use asset. The maintenance
asset created is immediately fully depreciated as the liability is incurred as the aircraft is flown.
Adjustment is also made to the right of use asset to reflect any remeasurement of the corresponding
lease liability. The right of use assets form part of the Airline CGU and are therefore subject to review
for impairment annually or when there is an indication of impairment within the Airline CGU.
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.
In the consolidated statement of cash flows, 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. Where the transaction is judged
to reflect the aircraft’s 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. If sale proceeds received were determined to not be at the
aircraft’s fair value, any below market terms would be recognised as a prepayment of lease payments,
and above market terms 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. Proceeds received for the sale of the fair value of the asset are recognised in
the statement of cash flows within investing activities as it relates to property, plant and equipment.
Other non-current assets
Other non-current assets include both general lease deposits, as stipulated in lease agreements, as well
as mid-life aircraft delivery assets for maintenance obligations incurred on mid-life aircraft before easyJet
acquired the aircraft. The payments and receivables are recorded within current and non-current assets
as applicable, pending reimbursement or receipt in accordance with contract specific terms.
Management assess the recoverability of these assets on an annual basis through consideration of the
credit position of the debtors and other relevant inputs. Under the general approach to assess
impairment of financial assets, easyJet recognises a loss allowance equal to the 12 month expected
credit losses.
Financial guarantees
Financial guarantees are initially measured at fair value and subsequently at the higher of the initial fair
value or the amount of the loss allowance determined by an expected credit loss calculation.
A loss allowance is calculated where easyJet is jointly and severally liable for financial guarantee
contracts. This is calculated based on the probability-weighted estimate of cash shortfalls to reimburse
the holder for a credit loss that it incurs and based on the agreements which may exist between any
co-guarantors.
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 considered recoverable in future periods in respect of deductible
temporary differences, losses and tax credits carried forward. 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
Provisions for restructuring arise principally in relation to network optimisation and head office reviews.
Provisions for restructuring programmes are made when easyJet has a demonstrable commitment to a
restructuring programme, for example through an announcement made to the impacted employees.
Restructuring provisions are measured based on the expected outcome of consultations with impacted
employees. Where specific individuals at risk have not been identified, estimations are based on
information available such as average payroll data, employee age and length of service.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 152
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1A. SIGNIFICANT ACCOUNTING POLICIES (continued)
Maintenance
easyJet incurs liabilities for maintenance and restoration costs in respect of leased aircraft 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 or when heavy maintenance events are
expected to occur during the period of the lease. Contractual maintenance obligations arising from the
ongoing use of the aircraft are provided for over the term of the lease based on the estimated future
costs of the maintenance events, or forecast penalty charges, discounted to present value. The provision
is built as the aircraft are flown, and recognised against the right of use asset, where it is immediately
fully depreciated as the flying hours that determine the provision have taken place. The restoration cost
obligation is described in the lease section.
Other
Other provisions include amounts in respect of onerous contracts, compensation for quality issues and
personal injury and illness for Holidays’ customers, the provision for refunds of air passenger duty and
similar charges, and potential liabilities for employee related matters and litigation which arise in the
normal course of business. Onerous contracts are recognised at the first indication that a loss is
anticipated, and the provision based on the expected economic outflow arising from the contracts.
Employee benefits
easyJet contributes to defined contribution pension schemes for the benefit of employees. 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.
See below for the treatment of the defined benefit Swiss pension scheme.
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 benefit is contribution-based with certain minimum guarantees required by Swiss law
to the mandatory part of the benefit. 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.
The easyJet portion of the current service cost 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 the consolidated statement of financial position
reflects the net surplus or deficit at the reporting 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 an independent
actuary. The defined benefit obligation is calculated using the projected unit credit method. The 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, Share Incentive Plans and Deferred Annual Bonus by purchasing its own shares on
the market through employee benefit trusts. The cost of such purchases are deducted from retained
earnings in the period that the transaction occurs.
Final 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. Interim dividends are recognised
when paid.
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 Return on Capital Employed (ROCE)
performance targets, and the Stochastic model (also known as the Monte Carlo model) for awards
based on Total Shareholder Return (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
sustainability targets) 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. A deferred tax balance is
recognised based on the intrinsic value of the outstanding options.
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 the income statement) 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.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 153
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1A. SIGNIFICANT ACCOUNTING POLICIES (continued)
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 dividend income model in accordance with IFRS 13 requirements. See note 25 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. Movements in
restricted cash are shown within financing activities in the consolidated statement of cash flows as the
movements arise from cash held relating to guarantees.
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 bank 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 the income statement
Financial assets are measured at fair value through the income statement 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 assets is measured at fair value through
the income statement.
Financial assets measured at fair value through the income statement compromised of money market
funds as at 30 September 2022; no such assets were held on 30 September 2023.
Impairment of financial assets
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 calculated using expected future default probabilities, 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 recognises a loss allowance for a financial asset at an amount
equal to the lifetime expected credit losses using a historical loss probability method.
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 at cost, this classification of financial liability is measured at amortised cost.
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 the income statement with the
exception of derivative financial instruments that are designated as a hedging instrument in a cash flow
hedge relationship.
easyJet uses foreign currency forward exchange contracts to hedge foreign currency risks on
transactions denominated in US dollars, euros and Swiss francs. These transactions primarily affect
revenue, fuel, lease costs, holiday accommodation costs, pre-delivery payments, and the initial 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. easyJet has a small number of euro-denominated lease contracts which result in a committed
schedule of euro lease rental payments; these are matched against forecasted euro revenue cash flows
to provide a cash flow hedge against the sterling/euro exchange rate. Hedge accounting is applied to
those financial instruments that are designated as cash flow hedges or fair value hedges.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 154
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1A. SIGNIFICANT ACCOUNTING POLICIES (continued)
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 difference between the hedge item and hedge
instrument fair valuation is recorded as hedge ineffectiveness within the income statement.
Hedge relationship
The Group determines that the criteria for each hedge accounting relationship are met where:
> 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.
Fair value changes in the derivative instrument attributable to the currency basis are not designated as
part of the hedged instrument. Such fair value changes are recognised through other comprehensive
income as cost of hedging and are recycled to the income statement on maturity or in the event of
hedge discontinuation, according to the nature of the underlying hedged item.
easyJet’s fair value hedges matured in February 2023 and there were therefore no fair value hedges
accounted for at year end.
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 the income statement at the same time as the hedge item also
impacts the income statement.
Fair value changes in a foreign currency derivative instrument attributable to the 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 the income statement on maturity
or in the event of hedge discontinuation, according to the nature of the underlying hedged item.
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 the income statement thereafter with subsequent fair valuation movements being recognised
in 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.
Revenue recognition
easyJet categorises total revenue earned on the face of the income statement between passenger and
ancillary revenue, with ancillary revenue further categorised into airline ancillary revenue and holidays
incremental revenue.
Passenger revenue
Passenger revenue arises from the sale of flight seats and is recognised when the performance
obligation has been completed, which is when the flight takes place. Revenue recognised is the price
paid by the customer for the flight excluding air passenger tax; this includes amounts paid by ‘no-show’
customers, as such customers are not generally entitled to change flights or seek refunds once a flight
has departed.
Compensation payments made to customers (in respect of flight delays and cancellations) are offset
against revenues recognised up to the amount of the flight, with the excess compensation being
recorded within expenses. The liability for compensation payments not yet paid is measured based on
known eligible events, passengers impacted, and the best estimate of claim rates which is in part
informed by historical claim rates.
Airline flights are paid for at the point of booking. 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 flight takes place.
If easyJet cancels a flight, unless a customer immediately rebooks on an alternative flight, 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. Vouchers issued by easyJet in lieu of refunds are held on the statement of
financial position in other payables as a contract liability (see note 16) until they are redeemed against a
new booking, at which point they are recognised as unearned revenue. Once vouchers expire or are
deemed to have a remote probability of being redeemed for a future booking they will be recognised as
revenue. For vouchers issued to customers in countries where regulations stipulate unused vouchers
should be refunded to the customer before the expiry of the statutory period, the required refunds have
been made.
Where customers do not request either a voucher, refund or flight transfer the liability continues to be
recognised in other payables, and breakage is applied when the likelihood of the customer exercising
their remaining rights to be repaid these amounts is considered remote.
Airline ancillary revenue
Sale of checked baggage, allocated seating, change fees and other
Revenue is measured as the price paid by the customer for the service booked and is recognised at a
point in time, which is when the flight takes place. Unearned revenue includes the amount paid for these
services and is treated in line with unearned revenue for the sale of flight seats.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 155
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1A. SIGNIFICANT ACCOUNTING POLICIES (continued)
Partner revenue and in-flight sales
Revenue is measured at the value of the commission earned as easyJet is deemed to be the agent and
does not control the related services or goods. The key consideration to reach this conclusion is that the
partner is deemed to be responsible for inventory risk and fulfilment of the goods and services. The
revenue is recognised at a point in time which is when the service takes place. The exception is
commission earned from travel insurance, where revenue is recognised at the time of booking as
easyJet acts solely as the appointed representative of the insurance company.
Cancellation fees
Revenue is measured at the amount paid for the cancellation and is recognised evenly at a point in time,
when the cancellation requested by the customer is processed.
easyJet plus
Revenue is measured at the amount paid for the annual membership and is recognised evenly over the
membership period.
Holidays incremental revenue
Package holidays revenue (excluding flights which are recognised as passenger revenue) is measured as
the price paid by the customer for the service booked. It is referred to as Holidays incremental revenue
in the income statement. The performance obligation is satisfied over time with the revenue recognised
evenly across the length of the holiday. This includes amounts paid by ‘no-show’ customers.
Package holiday deposits are paid for at the point of booking. Unearned revenue from the non-flight
elements of package holidays for which the customer has paid but the service has not yet taken place,
is held in the statement of financial position until it is realised in the income statement when the
performance obligation is complete. Package holiday balances due from customers are offset against
unearned revenue until paid in full, due 28 days before departure.
If easyJet cancels a holiday, and the customer does not elect to rebook or receive a voucher, the price of
the holiday (including flights) is refunded to the customer. If the customer elects to receive a voucher,
the voucher is held on the statement of financial position in other payables as a contract liability (see
note 16) until they are redeemed against a new booking, at which point they are recognised as unearned
revenue. Vouchers that expire or are deemed to have a remote probability of being redeemed for a
future booking will be recognised as revenue.
Operational costs and income
Costs and income are presented in the income statement based on the nature of the cost/income as
this is most relevant to enable users of the financial statements to understand easyJet’s financial
performance. Costs are expensed as incurred either at the point the goods or service is transferred,
or over time to reflect when the benefits are received (for example holidays accommodation costs
recognised over the period the holiday is taken). Separate financial statement line items are shown for
material income and expenses; the other costs and other income lines include items not reported in the
separate material line items. Other income includes insurance receipts, supplier compensation payments,
rental income and gains on sale of intangible assets. Other costs are expensed as incurred and include
disruption costs, IT costs, cost of third-party providers, employee costs for sales, marketing and
administration teams, wet lease costs and insurance. Gains/losses on sale and leaseback transactions
are recognised as non-headline in other income/other costs as applicable.
Finance charge/income
Interest payable/receivable and other financing charges/income includes interest expense/income on
bank and borrowings which is recognised using the effective interest method, interest on lease liabilities
which is recognised using the interest rate implicit in the lease, and fair value movements of derivative
financial instruments that are not designated hedging instruments in a cash flow hedge arrangement.
Net exchange gains/losses on statement of financial position monetary assets and liabilities are
presented as a separate financial statement line item.
Within the statement of cash flows, interest paid on bank borrowings and leases is included within net
cash generated from/used in operating activities as allowable by IAS 7, and this includes the settlement
of the derivatives used to hedge borrowings. In addition, the settlement of derivatives relating to cash
flows for ineffective and fair value derivatives through the income statement are also shown within
operating activities as they relate to transactions that primarily affect revenue, fuel and lease costs. The
amount recognised in settlement of derivatives includes cash flows arising from the maturity of cross-
currency interest rate swaps in the period. The settlement of operational hedged derivatives that have
already been recycled through the income statement are included in the operating result.
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 (CODM)
has been assessed as being 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 basis:
> 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.
Revenue by country of origin has been provided where revenues from external customers attributed to
an individual foreign country are material.
Passenger revenue recognised within the Airline segment includes intra-segment sales of flights to the
Holidays segment. Sales of seats are made between Airline and Holidays on a commercial basis whereas
the pricing of hold bags is based on historical average pricing to direct airline customers. Passenger
revenue is recognised in the Airline segment when the flight takes place.
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)
A number of APMs are disclosed within the financial statements on pages 142 to 188. In the Directors’
opinion, these APMs provide additional understanding to users of the financial statements in their
assessment of underlying performance. Refer to the glossary for a list of APMs disclosed in the financial
statements, including definitions and reconciliations to IFRS measures.
Included in the income statement is the sub-total EBITDAR which is a measure of earnings before
interest, taxes, depreciation, amortisation and aircraft rental.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 156
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1A. SIGNIFICANT ACCOUNTING POLICIES (continued)
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 2022, and did not have a material impact were:
Consolidation of easyJet Switzerland S.A.
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 the 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.
> Amendments to IFRS 3 – Business Combinations – Reference to the conceptual framework
> Amendments to IAS 16 – Property, plant and equipment – Proceeds before intended use
> Amendments to IAS 37 – Provisions, contingent liabilities and contingent assets – Onerous contracts:
Cost of fulfilling a contract
> Annual improvements to IFRS 1, IFRS 9, IAS 41 and illustrative examples accompanying IFRS 16 Leases
There are no standards that are issued but not yet effective that would be expected to have a material
impact on the entity in the current or future reporting periods and on foreseeable future transactions.
1B. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the financial statements in conformity with generally accepted accounting principles
requires management to make judgements as to the application of accounting standards to the
recognition and presentation of material transactions, assets and liabilities within the Group, and 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. Estimations are based on management’s best evaluation of a range of assumptions, however,
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 estimation (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)
Non-headline items are those where, in management’s opinion, their separate reporting provides an
additional understanding to users of the financial statements of easyJet’s underlying trading
performance, and which are significant by virtue of their size and/or nature. In considering the
categorisation of an item as non-headline, management’s judgement includes, but is not limited to,
a consideration of:
> whether the item is outside of the principal activities of the easyJet Group (being to provide point-to-
point airline services and package holidays);
> the specific circumstances which have led to the item arising, including, if extinguishing an item from
the statement of financial position, whether that item was first generated via headline or non-headline
activity. The rebuttable presumption being that when subsequently extinguishing an item from the
statement of financial position, any impact on the income statement should be reflected in the same
way as that which was used in the initial creation of the item;
> if the item is irregular in nature; and,
> whether the item is unusual by virtue of its size.
Non-headline items may include impairments, amounts relating to corporate acquisitions and disposals,
expenditure on major restructuring programmes and the gain or loss resulting from the initial recognition
of sale and leaseback transactions.
1B. (II) CRITICAL ACCOUNTING ESTIMATES
The following critical accounting estimates include judgements or complexity and 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.
Owned aircraft carrying values – £3,846 million (2022: £3,598 million) (note 11)
The key estimates used in arriving at aircraft carrying values are the UELs and residual values of the
owned aircraft.
Aircraft are depreciated over their UEL to their residual values in line with the Property, Plant and
Equipment Accounting Policy. The UEL is based on easyJet’s long-term fleet plan and intended utilisation
of the current fleet, which include long-term assumptions of market conditions and customer demands,
which by their nature are inherently uncertain.
Residual value estimates for aircraft are based on independent aircraft valuations. The valuations are based
on an assessment of the current and future state of the global marketplace for specific aircraft assets. Should
the marketplace for an asset class deteriorate unpredictably, there could be a risk that the recoverable
amount for some aircraft assets would fall below their current carrying value or that residual values are
subject to downward adjustment. If the market expectation of residual value of the easyJet aircraft varied by
+/- 10% this would result in an approximate +/- £7 million impact on annual depreciation rates.
Owned and leased aircraft asset recoverable amounts are included in the Airline CGU and are therefore
subject to review for impairment annually or when there is an indication of impairment within the Airline
CGU. Further details of the impairment testing applied are included in note 10.
Aircraft maintenance provisions – £753 million (2022: £636 million) (note 19)
easyJet incurs liabilities for maintenance costs arising during the lease term of leased aircraft. These
costs 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, it is usual for easyJet to carry out at
least one heavy maintenance check on each of the engines and the airframe of the aircraft during the
lease term. A material provision representing the estimated cost of this obligation is built up over the
course of the lease. The estimates and assumptions used in the calculation of the provision are reviewed
at least annually, and when information becomes available that is capable of causing a material change
to an estimate, such as the renegotiation of end of lease return conditions, increased or decreased
aircraft utilisation, or changes in the cost of heavy maintenance services and the expected uplift in
future prices.
A significant portion of the future maintenance costs and cost increases are under contract and provide
certainty to the provision. Where cost increases are not under contract, an estimation of the likely future
increases are made in the calculation of the provision. Given the significant value of the provision, the
provision is sensitive to changes in the future increase of uncontracted costs. An additional 4% cost
uplift on uncontracted costs over the future years used in the provision would result in a £28 million
increase in the provision. Additionally, with many maintenance costs incurred in US dollars, the provision
remains sensitive to changes in the GBP/USD exchange rate. A significant +/- 10 cent change in the GBP/
USD exchange rate would impact the provision by -£48 million/+£56 million respectively.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 157
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1B. (II) CRITICAL ACCOUNTING ESTIMATES (continued)
The rates used to discount the provision to arrive at a present value are based on observable market
rates as an estimate of the relevant risk free rate.
The provision can also be materially influenced by the maintenance status of aircraft when they enter
the easyJet fleet. To give flexibility to the fleet plan easyJet may lease ‘mid-life’ aircraft. When mid-life
aircraft enter the fleet, a ‘catch-up’ maintenance provision is created to reflect the maintenance
obligation for the flying cycles undertaken before the aircraft entered the easyJet fleet. The trigger for
such increases to the provision is the lease contract and as such any future mid-life lease events are not
reflected in the current provision. It is of note that where contractually agreed a mid-life delivery asset is
also created when the mid-life leased aircraft enter the fleet, creating a separate related asset on the
statement of financial position.
Goodwill and landing rights – £520 million (2022: £523 million) (note 10)
It is management’s judgment that there are two separate CGUs which generate largely independent
cash flows, these being easyJet’s Airline route network and its Holidays business. The recoverable
amount of goodwill and landing rights has been determined based on value in use calculations for the
airline route network CGU as they are wholly attributable to it. 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 and 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 include assessments of the future impact of climate
change on easyJet to the extent these can be estimated. This includes, for example, the future
estimated price of ETS allowances, the phasing out of the free ETS allowances from 2024, the expected
price and quantity required of SAF usage and currently estimated fleet renewals. The impact of longer-
term climate change risks that are not part of the strategic plans has been considered as part of the
stress testing and plausible scenarios modelled.
Fuel prices and exchange rates continue to be volatile in nature and the ability to pass these changes on
to the customer is a critical judgement that requires estimation. In addition, assumptions over customer
demand levels could have a significant effect on the impairment assessment performed. Any future
events that would lead to extended travel restrictions or fleet grounding may impact future impairment
or useful economic life assessments. The stress testing considered as part of the overall impairment
assessment takes into account different assumptions for these key estimates, see note 10 for details.
Recoverability of deferred tax assets – £442 million (2022: £443 million) (note 6)
The deferred tax asset balances include £442 million (2022: £443 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 going concern. These assessments include the
expected impact of climate change on easyJet, and the future financial impact within cash flow
projections, including the future estimated price of ETS allowances, the phasing out of the free ETS
allowances from 2024, the expected price and quantity required of SAF usage and fleet renewals.
The tax losses for which a deferred tax asset has been recognised are expected to be utilised within the
next six years, assessed by considering probable forecast future taxable income. The probable forecast
future taxable income includes the impact of the expected unwind of taxable temporary differences as
well as the effect of Full Expensing Relief for qualifying capital expenditure. Probable forecast future
taxable income includes an incremental and increasing risk weighting to represent higher levels of
uncertainty in future periods.
The period over which the loss is utilised has been stress tested by assessing probable future taxable
income for the next three years, based on the same risk weightings to those applied above, but
assuming no profit growth from the end of a three year forecast period. The resultant reduction in
forecast taxable profit calculated on this basis would extend the tax loss utilisation period by one year.
The tax losses can be carried forward indefinitely and have no expiry date.
In the 22 November 2023 Autumn Statement it was announced that full expensing relief, introduced in
the Finance (No.2) Act 2023, for qualifying expenditure incurred from 1 April 2023 to 31 March 2026 will
be made permanent. It is not substantively enacted at the statement of financial position date but the
Group is assessing the impact it may have on the recoverability of deferred tax assets for subsequent
financial years.
Defined benefit pension assumptions – £152 million gross obligation (2022: £140 million gross
obligation) (note 20)
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 on the consolidated 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,
which has been subject to significant volatility. A sensitivity analysis is included in note 20.
Liability for compensation payments – £62 million (2022: £74 million) (note 15)
easyJet incurs liabilities for amounts payable to customers who make claims in respect of flight delays
and cancellations, for which claims could be made up to six years after the event, and for reimbursement
of reasonable expenses incurred as a result of flight delays and cancellations. The key estimation in the
liability is the passenger claim rate for compensation payments. The estimation carries a level of
uncertainty as it is based on customer behaviour. The basis of the estimates included in the liability are
reviewed at least annually and when information becomes available that may result in a material change
to the estimate. Should the claim rate for compensation paid to customers increase by 2% across the six-
year liability period, it would result in an addition to the year end provision of £15 million.
Vouchers issued – £58 million (2022: £111 million) (note 16)
It is currently easyJet policy in the event of flight cancellations to offer customers the option to accept
vouchers in lieu of cash refunds. The liability for these vouchers is classified under other payables until
the voucher is redeemed against a future booking, when it is reclassified to unearned revenue.
For airline flight vouchers, where the likelihood of the contractual right being exercised is considered to
be remote, immaterial breakage has been applied. This has been estimated based on the utilisation rates
experienced to date, and these liabilities have been taken to the consolidated income statement as
revenue. The breakage was applied in the first half of the financial year ahead of a significant voucher
expiry deadline later in the financial year. That deadline was subsequently extended into the next
financial year to allow customers the maximum opportunity to utilise their vouchers. Utilisation patterns
since this extension do not suggest that the breakage recognition should be reversed.
For vouchers issued to customers in countries where regulations stipulate unused vouchers should be
refunded to the customer before the expiry of the statutory period, the required refunds have been made.
Applying breakage to the balance of the remaining airline flight vouchers at 30 September 2023 at a rate
of 10% would result in a reduction in the liability of c.£5 million.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 158
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
2. NET FINANCE CHARGES
Interest receivable and other financing income
Interest income
Hedge discontinuation and ineffectiveness1
Interest payable and other financing charges
Hedge discontinuation and ineffectiveness1
Interest payable on bank and other borrowings
Interest payable on lease liabilities
Other interest payable
Net exchange (gain)/loss on monetary assets and liabilities2
Net finance charges
2023
£ million
2022
£ million
3. PROFIT/(LOSS) BEFORE TAX
The following have been included in arriving at profit/(loss) before tax:
Depreciation of property, plant and equipment
Owned assets
Right of use assets
Loss on disposal of intangible assets
Loss on disposal of property, plant and equipment
(Reversal of impairment)/impairment of trade receivables
Sale and leaseback loss
2023
£ million
2022
£ million
271
373
3
10
(3)
–
264
275
10
7
7
21
Auditor’s remuneration
During the year, the Company obtained the following services from the Company’s auditor:
(132)
–
(132)
1
132
46
1
180
(27)
21
(21)
(5)
(26)
–
98
43
2
143
64
181
2023
£ million
2022
£ million
0.1
1.4
1.5
0.1
1.0
1.1
In addition, easyJet incurred audit-related non-audit services fees of £0.2 million (2022: £0.4 million) from its
auditor. This includes the fee of £0.1 million (2022: £0.1 million) in respect of the half-year review performed.
During the year, other assurance related non-audit services fees totalling £0.3 million (2022: £0.3 million)
were also incurred, primarily in relation to our Airbus Proposed Purchase (2022: primarily in relation to
working capital procedures associated with a Class 1 transaction).
The final fees for the audit of the Company’s subsidiaries and their associates (including foreign partners)
for financial year ended 30 September 2022 were £1.1 million.
1) See note 26 for details.
2) Included within net exchange (gain)/loss on monetary assets and liabilities is an £84 million loss (2022: £127 million gain)
relating to the fair value gain on US dollar foreign exchange derivatives designated as fair value through profit or loss.
Company audit fee
Fees for audit of the Company’s subsidiaries and their associates
(including foreign partners)
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials
159
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
4. EMPLOYEES
The average monthly number of people employed by easyJet was:
Emoluments paid or payable to the Directors of easyJet plc were:
Flight and ground operations
Sales, marketing and administration
Employee costs for easyJet were:
Wages and salaries
Social security costs
Pension costs
Share-based payments
2023
Number
14,598
1,339
15,937
2022
Number
12,906
1,045
13,951
2023
£ million
2022
£ million
888
129
97
18
1,132
745
100
77
26
948
Included in the pension costs is £6 million (2022: £7 million) related to pension schemes treated as a
defined benefit scheme under IAS 19.
Included in employee costs is a net debit of £2 million (2022: £nil million) from redundancy and
restructuring costs. The costs are the result of small-scale employee redundancy programmes in the
year in addition to further non-headline costs arising from the previously announced restructuring
programmes in Germany (see note 5 for further detail).
The amounts received under government furlough schemes are offset against employee costs in the
income statement. Refer to note 28 for further details.
Key management compensation was as follows:
Short-term employee benefits
Share-based payments
2023
£ million
14
2
16
2022
Restated1
£ million
11
3
14
1) Key management compensation has been restated to include bonus payments, the short-term employee benefits
previously disclosed was £7 million.
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.
Remuneration
2023
£ million
2022
£ million
5
5
3
3
Details of Directors’ remuneration are disclosed in the Directors’ remuneration report on pages 113 to 130.
5. NON-HEADLINE ITEMS
An analysis of the amounts presented as non-headline is given below:
Sale and leaseback loss
Restructuring charge
Loss on disposal of landing rights
Fair value adjustment and hedge discontinuation credit
Correction of prior year error
Total non-headline charge before tax
Tax credit on non-headline items
Total non-headline charge after tax
Year ended
30 September
2023
£ million
Year ended
30 September
2022
£ million
–
1
3
–
19
23
(6)
17
21
–
10
(1)
–
30
(8)
22
Sale and leaseback loss
During the year, easyJet completed the sale and leaseback of eight A319 aircraft (2022: ten). There was a
£nil million impact in the income statement (£6 million loss recognised in other costs offset by £6 million
gain recognised in other income) for the sale and leaseback of the eight aircraft during the year (2022:
£21 million loss recognised in other costs).
Restructuring
As a result of the downsizing of operations at Berlin Brandenburg Airport, announced in the previous
financial year, in the current year easyJet returned an additional number of landing right ‘slots’ held at the
airport relating to our summer 2023 flying schedule. As noted last year, the slots in Berlin were acquired
as part of the acquisition of Air Berlin’s operations in 2017. An allocation of the purchase price to the
surrendered slots has been estimated and, as no consideration was received in return for giving back the
slots, recognised as a loss on disposal of an intangible asset. This resulted in a non-headline restructuring
charge of £3 million (2022: £10 million). Additionally, net restructuring charges of £1 million (2022: £nil
million) representing additional costs arising from previously announced restructuring programmes in
Germany, have been incurred in the period. As at 30 September 2023, there were unpaid amounts of
£6 million (2022: £15 million) representing remaining redundancy cases which have not been finalised
and settled at the end of the financial year.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 160
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
5. NON-HEADLINE ITEMS (continued)
Hedge discontinuation
Hedge discontinuation relates to the cumulative fair value of financial derivatives at the time of being
discontinued from a previous hedge accounting relationship. No hedges were discontinued in the year
ended 30 September 2023.
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 value of derivatives held in a hedge relationship. In the year ending
30 September 2022, this resulted in a £1 million net credit related to these discontinued derivatives held
in other comprehensive income being immediately recorded in the income statement.
Correction of prior year error
In performing a review of foreign currency translation, an immaterial error was identified in a third-party
system relating to aircraft lease modifications which occurred in FY21 and the depreciation of the
corresponding right of use assets. The required correction to the statement of financial position at
30 September 2023 of £19 million has been posted to depreciation on those right of use assets. This has
been disclosed as a non-headline item as it is an irregular, immaterial error orginating in an earlier
financial year.
Tax on non-headline items
After the necessary tax adjustments, which principally relate to the sale and leaseback transactions in
both the current and comparative periods, there is a non-headline tax credit of £6 million (2022: £8
million) for the year.
Reconciliation of the total tax charge/(credit)
The tax for the year is higher than (2022: lower than) the standard rate of corporation tax in the UK as
set out below:
Profit/(loss)before tax
Tax charge/(credit) at 22.0% (2022: 19.0%)
Income not chargeable for tax purposes:
Expenses not deductible for tax purposes
Share-based payments
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
Total tax charge/(credit)
2023
£ million
432
95
2022
£ million
(208)
(40)
8
(3)
(3)
12
(1)
–
–
108
5
2
2
(12)
1
4
(1)
(39)
6. TAX (CHARGE)/CREDIT
Tax on profit/(loss) on ordinary activities
Current tax
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 charge/(credit)
Total tax charge/(credit)
Effective tax rate
Current tax payable at 30 September 2023 amounted to £3 million (2022: £5 million payable) which is
solely related to tax payable in other European jurisdictions.
2023
£ million
2022
£ million
During the year ended 30 September 2023, net cash tax paid amounted to £12 million (2022: £4 million
net cash tax paid).
11
11
76
24
(3)
–
97
108
25.1%
7
7
(50)
(2)
2
4
(46)
(39)
18.7%
The Finance Act 2021 confirmed an increase of the UK corporation tax rate from 19% to 25% with effect
from 1 April 2023 and as such, the blended statutory current tax rate for the year ended 30 September
2023 is 22%. Temporary differences have been measured using the enacted tax rates that are expected
to apply when the liability is settled or the asset is realised, which is 25%.
On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK, introducing a global
minimum effective tax rate of 15%. The legislation implements a domestic top-up tax and a multinational
top-up tax, effective for accounting periods starting on or after 31 December 2023. This will therefore
apply to the Group for the year ended 30 September 2025 onwards. The Group has applied the
exception allowed by an amendment to IAS 12 to recognising and disclosing information about deferred
tax assets and liabilities related to top-up income taxes.
Tax on items recognised directly in other comprehensive (loss)/income or shareholders’ equity:
Credit/(charge) to other comprehensive (loss)/income
Deferred tax on change in fair value of cash flow hedges
Deferred tax on post-employment benefit
2023
£ million
2022
£ million
14
(1)
(13)
(10)
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 161
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
6. TAX (CHARGE)/CREDIT (continued)
Deferred tax
The net deferred tax (asset)/liability in the statement of financial position is as follows:
At 1 October 2022
Charged/(credited) to income statement
Charged to other comprehensive loss
At 30 September 2023
Deferred tax liabilities expected to be settled:
Within 12 months
After more than 12 months
At 30 September 2023
Accelerated
capital
allowances
£ million
Short-term
timing
differences
£ million
Fair value
(gains)/losses
£ million
Share-based
payments
£ million
341
73
–
414
(26)
27
–
1
68
–
(14)
54
(1)
(3)
–
(4)
Post-
employment
benefit
obligation
£ million
(1)
(1)
1
(1)
Trading loss
£ million
Total
£ million
(443)
1
–
(442)
(62)
97
(13)
22
£ million
–
22
22
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 2021
Charged/(credited) to income statement
Charged to other comprehensive income
At 30 September 2022
Accelerated
capital
allowances
£ million
Short-term
timing
differences
£ million
Fair value
(gains)/losses
£ million
Share-based
payments
£ million
373
(32)
–
341
(26)
–
–
(26)
51
4
13
68
(3)
2
–
(1)
Post-
employment
benefit
obligation
£ million
(9)
(2)
10
(1)
Trading loss
£ million
Total
£ million
(425)
(18)
–
(443)
(39)
(46)
23
(62)
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 162
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
7. EARNINGS/(LOSS) PER SHARE
Basic earnings/(loss) per share has been calculated by dividing the total profit/(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.
To calculate diluted earnings/(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 dilutive 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 loss 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 earnings/(loss) per share are also presented, based on headline profit/(loss)
for the year.
Earnings/(loss) per share is based on:
Headline profit/(loss) for the year
Total profit/(loss) for the year
Weighted average number of ordinary shares used to calculate basic
earnings/(loss) per share
Weighted average number of ordinary shares used to calculate diluted
earnings/(loss) per share
Earnings/(loss) per share
Basic
Diluted
Headline earnings/(loss) per share
Basic
Diluted
2023
£ million
341
324
2023
million
751
758
2023
pence
43.1
42.7
2023
pence
45.4
45.0
2022
£ million
(147)
(169)
2022
million
753
753
2022
pence
(22.4)
(22.4)
2022
pence
(19.6)
(19.6)
8. SEGMENTAL AND GEOGRAPHICAL REVENUE REPORTING
Segmental analysis:
Passenger revenue
Ancillary revenue
Total revenue
Airline operating costs including fuel
Holidays direct operating costs
Selling and marketing
Other costs and other income
Amortisation, depreciation and dry leasing
Net interest (payable)/receivable and other
financing income/(charges)
Foreign exchange gain
Headline profit before tax
Non-headline items
Total profit before tax
Year ended 30 September 2023
Holidays
£ million
–
1,047
1,047
–
(842)
(43)
(47)
(5)
11
1
122
–
122
Intergroup
transactions
£ million
–
(271)
(271)
–
260
–
11
–
–
–
–
–
–
Airline
£ million
5,221
2,174
7,395
(5,537)
–
(189)
(654)
(649)
(59)
26
333
(23)
310
Group
£ million
5,221
2,950
8,171
(5,537)
(582)
(232)
(690)
(654)
(48)
27
455
(23)
432
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 163
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
8. SEGMENTAL AND GEOGRAPHICAL REVENUE REPORTING (continued)
Geographical revenue:
Year ended 30 September 2022 (re-presented)
Passenger revenue
Ancillary revenue
Total revenue
Airline operating costs including fuel
Holidays direct operating costs*
Selling and marketing*
Other costs and other income
Amortisation, depreciation and dry leasing*
Net interest (payable)/receivable and other
financing income/(charges)*
Foreign exchange loss
Headline (loss)/profit before tax
Non-headline items
Total (loss)/profit before tax
Airline
£ million
3,816
1,585
5,401
(4,129)
–
(153)
(593)
(562)
(117)
(63)
(216)
(30)
(246)
Holidays
£ million
Intergroup
transactions
£ million
–
495
495
–
(400)
(20)
(32)
(4)
–
(1)
38
–
38
–
(127)
(127)
–
127
–
–
–
–
–
–
–
–
Group
£ million
3,816
1,953
5,769
(4,129)
(273)
(173)
(625)
(566)
(117)
(64)
(178)
(30)
(208)
The presentation of this note has been expanded in the current year to provide further information to
the users of the financial statements; additional financial statement line items are marked in the above
table with an *. Note that airline operating costs including fuel comprises operating costs that relate
solely to the airline segment, and similarly holidays direct operating costs are costs specific to the
Holidays segment. All other costs are incurred by both the Airline and Holidays segments.
The prior year has been re-presented in order to show the information on a consistent basis. This revised
presentation reflects the increased granularity of the Holidays segment available to the CODM and
plc Board.
As described in note 1, airline revenue is recognised at a point in time (when the flight takes place).
The Holidays revenue detailed in this note includes both flight revenue, recognised at the time the flight
takes place, and remaining ancillary revenue which is recognised over time, aligned to the duration of
the holiday. The holidays flight revenue is included in this note within ancillary revenue (with the
associated intergroup transaction) aligned to the presentation of revenue to the CODM and plc Board.
The intergroup transactions column represents revenue and cost transactions between Airline and
Holidays for the flight element of holiday packages. These intercompany transactions are eliminated
on consolidation.
Assets and liabilities are not allocated to individual segments and are not separately reported to, or
reviewed by, the CODM, and therefore have not been disclosed.
United Kingdom
France
Switzerland
Northern Europe (excluding Switzerland)
Southern Europe (excluding France)
Other
2023
£ million
4,345
852
791
610
1,434
139
8,171
2022
(re-presented)
£ million
2,845
674
626
537
995
92
5,769
easyJet has assessed the materiality of geographical revenues and has disclosed revenues by country
of origin where such revenues are in excess of 10% of total revenue. For the year ended 30 September
2023, this included separate presentation of France and Switzerland which were previously included in
Southern Europe and Northern Europe respectively. The prior year has therefore been re-presented in
order to show the information on a consistent basis.
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.
easyJet holidays’ revenue is generated wholly from the United Kingdom.
easyJet’s non-current assets principally comprise its fleet of 183 (2022: 181) owned and 153 (2022: 139)
leased aircraft, giving a total fleet of 336 at 30 September 2023 (2022: 320). easyJet stored nil aircraft
under power by the hour agreements (2022: 3). 27 aircraft (2022: 27) are registered in Switzerland, 128
(2022: 132) are registered in Austria, nil (2022: 4) are registered in the Cayman Islands, and the remaining
181 (2022: 160) are registered in the United Kingdom.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 164
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
9. DIVIDENDS
No dividend was paid in the year ending 30 September 2023 or 30 September 2022.
An ordinary dividend in respect of the year ended 30 September 2023 of 4.5 pence per share, or
£34 million, based on 10% headline profit after tax, is to be proposed at the forthcoming Annual General
Meeting. These financial statements do not reflect this proposed dividend.
Cost
10. GOODWILL AND OTHER INTANGIBLE ASSETS
Cost
At 1 October 2022
Additions
Disposals
At 30 September 2023
Accumulated amortisation
At 1 October 2022
Charge for the year
Disposals
At 30 September 2023
Net book value
At 30 September 2023
At 1 October 2022
Other intangible assets
Goodwill
£ million
Landing
rights
£ million
Computer
software
£ million
At 1 October 2021
Additions
Disposals
Total
£ million
At 30 September 2022
Accumulated amortisation
At 1 October 2021
Charge for the year
At 30 September 2022
Net book value
At 30 September 2022
At 1 October 2021
365
–
–
365
–
–
–
–
365
365
158
–
(3)
155
–
–
–
–
155
158
135
91
(11)
215
76
29
(11)
94
121
59
293
91
(14)
370
76
29
(11)
94
276
217
Other intangible assets
Goodwill
£ million
Landing
rights
£ million
Computer
software
£ million
Total
£ million
365
–
–
365
–
–
–
365
365
168
–
(10)
158
–
–
–
158
168
100
35
–
135
51
25
76
59
49
268
35
(10)
293
51
25
76
217
217
Included within computer software, are internally generated intangible assets of £49 million (2022: £39
million, restated from £25 million due to a change in categorisation), and work in progress of £62 million
(2022: £25 million).
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 165
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
10. GOODWILL AND OTHER INTANGIBLE ASSETS (continued)
Value in use calculation
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 CGU, which holds these assets.
Pre-tax cash flow projections have been derived from the strategic plan approved by the plc Board for
the period up to 2028, using the following key assumptions:
Pre-tax discount rate (derived from weighted average cost of capital,
WACC)
Fuel price (US dollars per metric tonne, MT)
Long-term economic growth rate
Exchange rates:
US dollar
Euro
2023
2022
11.4%
751
2.0%
1.27
1.16
12.2%
1,010
2.0%
1.11
1.14
The annual impairment review has previously been carried out as at 30 September. In the current year,
the review was performed based on 30 June 2023 inputs in order to align with internal planning
timelines; 30 June will continue to be the date used going forward, in accordance with IAS 36.
The discount rate has been calculated based on the capital asset pricing model using external inputs where
relevant and the current cost of debt to the Group. The methodology is unchanged from the prior year. The
decrease in the discount rate has been driven primarily by a decrease in the cost of debt since the prior year
end. Both fuel price and exchange rates are volatile in nature. The fuel price has decreased significantly from
$1,010 /MT at 30 September 2022 to $751/MT as at 30 June 2023, reflecting the change in the underlying fuel
prices. Exchange rates and fuel price are based on spot rates as at 30 June 2023.
Cash flow projections for the period up to 2028 incorporate the long-term prospects of the Group,
taking into account growth expected by way of creating value through the business model. 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 future estimated price of ETS
allowances, the phasing out of the free ETS allowances from 2024, the expected price and quantity
required of SAF usage, and fleet renewals.
The headroom of the value in use calculation over the carrying value of the relevant assets has increased
compared to 30 September 2022. This is primarily due to the strengthening of sterling against the US
dollar and the associated impact on costs including fuel, as well as the decrease in the 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 and significant adverse movement in foreign currency exchange rates
(other than movements that are included in the fuel pass-through assumption) 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, in particular in relation to the current macro-
economic environment, do not give rise to an impairment. These scenarios include +/-10% on euro and
US dollar rates, +100 bps increase in WACC, reduced capacity of 5%, increased operating costs
(excluding fuel) of 3%, a fuel price increase of $100 per metric tonne and a flat growth rate.
Additional risks associated with climate change have also been stress tested, including sensitivities of
SAF usage and ETS costs, additional legal and technology costs, reduced demand and increased cost
of maintenance and replacement aircraft. These scenarios, both individually and in reasonably probable
combinations, do not give rise to an impairment.
Current intangible assets
Carbon offsetting VER
EU ETS, CH ETS and UK ETS carbon allowances
2023
£ million
7
669
676
2022
£ million
14
481
495
ETS allowances are required to offset the carbon emitted by flights. The scheme is settled on an annual
basis. The allowances required for annual settlement are held as current intangible assets, with the
associated liability included within accruals in trade and other payables (note 15).
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 166
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
11. PROPERTY, PLANT AND EQUIPMENT
Cost
1 October 2022
Additions
Aircraft sold and leased back
Disposals1
At 30 September 2023
Accumulated depreciation
At 1 October 2022
Charge for the year
Aircraft sold and leased back
Disposals1
At 30 September 2023
Net book value
At 30 September 2023
At 1 October 2022
Owned assets
Right of use assets
Aircraft and
spares
£ million
Land and
buildings
£ million
Other
£ million
Aircraft and
spares
£ million
Other
£ million
Total
£ million
4,988
604
(165)
(31)
5,396
1,390
263
(86)
(17)
1,550
3,846
3,598
44
–
–
–
44
–
–
–
–
–
44
44
68
14
–
(4)
78
28
8
–
(4)
32
46
40
2,416
292
44
(100)
2,652
1,479
368
–
(100)
1,747
905
937
45
18
–
(15)
48
35
5
–
(15)
25
23
10
7,561
928
(121)
(150)
8,218
2,932
644
(86)
(136)
3,354
4,864
4,629
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 167
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
11. PROPERTY, PLANT AND EQUIPMENT (continued)
Cost
At 1 October 2021
Additions2
Aircraft sold and leased back
Disposals
At 30 September 2022
Accumulated depreciation
At 1 October 2021
Charge for the year
Aircraft sold and leased back
Disposals
At 30 September 2022
Net book value
At 30 September 2022
At 1 October 2021
Owned assets
Right of use assets
Aircraft and
spares
£ million
Land and
buildings
£ million
Other
£ million
Aircraft and
spares
£ million
Other
£ million
Total
£ million
4,802
414
(216)
(12)
4,988
1,243
255
(102)
(6)
1,390
3,598
3,559
44
–
–
–
44
–
–
–
–
–
44
44
55
14
–
(1)
68
19
9
–
–
28
40
36
2,335
120
25
(64)
2,416
1,255
269
–
(45)
1,479
937
1,080
45
–
–
–
45
29
6
–
–
35
10
16
7,281
548
(191)
(77)
7,561
2,546
539
(102)
(51)
2,932
4,629
4,735
The net book value of aircraft includes £569 million (2022: £414 million) relating to advance payments for future deliveries and life limited parts not yet in use.
This amount is not depreciated.
The net book value of aircraft spares is £112 million (2022: £81 million).
The ‘Other’ categories are principally comprised of leasehold improvements, computer hardware, leasehold property, fixtures, fittings and equipment, and work
in progress in respect of property, plant and equipment projects. The work in progress as at 30 September 2023 was £14 million (2022: £20 million).
As at 30 September 2023, easyJet was contractually committed to the acquisition of two CFM LEAP engines (2022: four), and 158 (2022: 168) Airbus 320
family aircraft, with a total estimated list price3 of $18.1 billion (2022: $19.2 billion) before escalations and discounts, for delivery in financial years 2024 (16
aircraft), 2025 (19 aircraft) and 2026 to 2029 (123 aircraft).
At the year end date easyJet had a commitment for six aircraft lease contracts, where the aircraft had not been delivered, with a combined value of £67
million. Subsequent to 30 September 2023 two aircraft have been delivered reducing the commitment to £45 million.
1) Right of use asset disposals includes the transactions to remove the fully depreciated assets from the statement of financial position when the leased assets are returned. The gross
value of the cost and associated accumulated depreciation was £100 million.
2) £(14) million Other asset values previously recorded as transfers have been reclassified as additions.
3) As Airbus no longer publishes list prices, the last available list price published in January 2018 has been used for the estimated list price, and the prior year comparator has been restated
to be on the same basis.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 168
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
12. OTHER NON-CURRENT ASSETS
Mid-life aircraft delivery assets
Deposits held by aircraft lessors
2023
£ million
2022
£ million
115
23
138
64
27
91
Mid-life aircraft delivery assets arise from maintenance obligations incurred on mid-life leased aircraft
before easyJet acquired the aircraft. They occur 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, plus or minus any maintenance utilised by easyJet that will not be paid for via a maintenance
shop visit. Depending on the contract terms, payment will be made either at the maintenance event date
or at the lease return date, the timing of which determines the current and non-current split of the asset.
The recoverability of this asset has been assessed by management, and the asset is considered to be
fully recoverable.
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
2023
£ million
2,925
–
–
2
2022
£ million
3,514
126
4
3
2,927
3,647
Interest rates on money market deposits and restricted cash are repriced based on the prevailing market
rates of interest.
Restricted cash comprises:
13. TRADE AND OTHER RECEIVABLES
Trade receivables
Less provision for loss allowance
Prepayments1
Accrued income1
Other receivables
2023
£ million
2022
(re-presented)
£ million
Amount held in escrow accounts for legal cases
Cash held as bank guarantee collateral
115
(5)
110
44
110
79
343
85
(8)
77
64
79
147
367
15. TRADE AND OTHER PAYABLES
Trade payables
Accruals
Taxes and social security
Other payables1
1)
In the current year certain items have been reclassified from prepayments to accrued income to better represent the
nature of these assets. Prior year comparatives have been re-presented on the same basis. Prepayments and accrued
income were previously reported as £124 million and £19 million respectively.
Within the provision for loss allowance, £3 million has been credited to the income statement (2022: £7
million charged), with £nil million (2022: £nil million) being utilised in the year ended 30 September 2023.
Information about the impairment of trade receivables and the Group’s exposure to credit risk can be
found in note 26.
Other receivables comprises current mid-life aircraft delivery assets, prepaid maintenance costs, VAT and
trade deposits.
2023
£ million
2022
£ million
–
2
2
4
3
7
2023
£ million
402
1,096
52
214
1,764
2022
(re-presented)
£ million
431
983
38
307
1,759
1) The liability for compensation and reimbursements for airline customer delays and cancellations has been re-presented
from provisions for liabilities and charges to liabilities within other payables. Refer to note 1a for further detail.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 169
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
16. LIABILITIES RELATING TO CONTRACTS WITH CUSTOMERS
17. BORROWINGS
2023
2022 (re-presented)1
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
FX impact during the year
Closing contract liabilities
Unearned
revenue
£ million
1,043
9,233
(8,775)
–
–
–
1,501
Other
£ million
158
–
(47)
147
(177)
(2)
79
Unearned
revenue
£ million
846
6,476
(6,279)
–
–
–
1,043
Other
£ million
At 30 September 2023
Eurobonds
277
–
(25)
161
(258)
3
158
At 30 September 2022
Eurobonds
Term loan (UK Export Finance backed facility)
Current
£ million
Non-current
£ million
Total
£ million
433
433
1,462
1,462
Current
£ million
Non-current
£ million
437
–
437
1,919
841
2,760
1,895
1,895
Total
£ million
2,356
841
3,197
1) The prior year movements within unearned revenue have been re-presented in order to show the information on a
consistent basis. The change represents elimination on consolidation of intergroup revenue transactions of £137 million
between Airline and Holidays for the flight element of holiday packages.
Revenue deferred and recognised during the year is inclusive of airline passenger duty (APD) and other
charges, but net of intercompany eliminations.
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.
The February 2016 Eurobond with a carrying value of £437 million was repaid in February 2023. In
addition, the Term loan (UK Export Finance backed facility) with a carrying value of £841 million was
repaid in June 2023 and the facility was cancelled. At the same time easyJet entered into a new
undrawn facility for $1.75 billion. The October 2016 Eurobond with a carrying value of £433 million has
been repaid in October 2023. See note 26 for further information on borrowings.
2023
Unearned
revenue
£ million
Other
£ million
2022
Unearned
revenue
£ million
Other
£ million
Revenue recognised that was included in
the contract liability balance at the
beginning of the year
1,006
47
773
25
Other customer contract liabilities consist of amounts transferred from unearned revenue to other
payables due to the cancellation of flights and is made up of customer vouchers outstanding and
amounts where customers have not yet requested a refund, voucher or flight transfer. The movements in
‘additional contract liability’ and ‘reduction in contract liability’ arise as flights are cancelled, as vouchers
are awarded or exercised, and as customers advise on the exercise of their options following flight
cancellations. The breakage applied to the contract liability in the year is included in revenue recognised
during the year.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 170
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
18. 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 seven 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, days and
cycles operated and the estimated cost of the maintenance events. Further details are given in note 1.
19. PROVISIONS FOR LIABILITIES AND CHARGES
At 1 October 2022 (re-presented)1
Information in respect of right of use assets, including the carrying amount, additions and depreciation,
is set out in note 11. Information in respect of the carrying value and interest arising on lease liabilities is
set out in note 25 and note 2 respectively. A maturity analysis of lease liabilities is set out below.
Exchange adjustments
Release of provisions
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
Year ending
30 September
2023
£ million
Year ending
30 September
2022
£ million
(218)
(46)
(206)
(43)
30 September
2023
£ million
30 September
2022
£ million
(254)
(690)
(139)
(1,083)
(297)
(723)
(258)
(1,278)
30 September
2023
£ million
30 September
2022
£ million
(217)
(772)
(989)
(247)
(866)
(1,113)
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 year in relation to these leases is disclosed below.
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
2023
£ million
Year ending
30 September
2022
£ million
46
8
15
69
43
4
53
100
Maintenance
provisions
£ million
Restructuring
£ million
Other provisions
£ million
Total provisions
£ million
636
(44)
–
257
(30)
(66)
753
15
–
(5)
6
–
(10)
6
40
–
(6)
17
–
(9)
42
691
(44)
(11)
280
(30)
(85)
801
Maintenance
provisions
£ million
Restructuring
£ million
Other provisions
£ million
Total provisions
£ million
550
93
–
141
6
(71)
(83)
636
18
–
(10)
10
–
–
(3)
15
16
–
(1)
31
–
–
(6)
40
584
93
(11)
182
6
(71)
(92)
691
Additional provisions recognised
Updated discount rates net of unwind
of discount
Utilised
At 30 September 2023
Year ended 30 September 2022 (re-presented)1
At 1 October 2021
Exchange adjustments
Release of provisions
Additional provisions recognised
Related to aircraft sold and leased back
Updated discount rates net of unwind
of discount
Utilised
At 30 September 2022
1) The liability for compensation and reimbursements for airline customer delays and cancellations has been re-presented
from provisions for liabilities and charges to liabilities within other payables. Refer to note 1a for further detail.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 171
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
19. PROVISIONS FOR LIABILITIES AND CHARGES (continued)
The maintenance provisions provide for maintenance costs arising from legal and constructive
obligations relating to the condition of the aircraft when returned to the lessor. 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.
The easyJet portion of the current service costs and the net interest cost are charged to the
consolidated income statement in the year to 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.
Current
Non-current
2023
£ million
175
626
801
20221
£ million
102
589
691
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 in the Swiss bond market over 10 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.
1) The liability for compensation and reimbursements for airline customer delays and cancellations has been re-presented
from provisions for liabilities and charges to liabilities within other payables. Refer to note 1a for further detail.
The key financial assumptions used to calculate the Swiss scheme liabilities under IAS 19 as at
30 September were:
The split of the current/non-current maintenance provision is based on the 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 nine years.
Within other provisions are provisions for litigation matters. The split of these provisions between
current/non-current is based on the dates of expected court judgements. Provisions for restructuring
could be fully utilised within one year from 30 September 2023 and therefore are classified as current.
20. PENSIONS
Total pension costs of £97 million (2022: £77 million) recognised in employee costs (note 4), comprise
£91 million (2022: £70 million) related to defined contribution plans and £6 million (2022: £7 million)
related to defined benefit plans in Switzerland, including administration expenses of £nil million (2022:
£nil million).
The contributions payable to the relevant plans by the Group are at the rates specified in the rules of the
plans. The assets of the plans are held separately from those of the Group in funds under the control of
the trustees. Where there are employees who leave the plans before vesting fully in the contributions,
the ancillary contributions payable may be reduced by the amount of forfeited contributions.
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%) to the mandatory part of the benefits.
Swiss plans do not meet the definition of a Defined Contribution (DC) under IFRS as the obligation of the
employer does not stop at paying the pre-defined regular contributions due to these guarantees. Further
contributions might be required by the employer and the employee if the plan becomes underfunded
under local Swiss GAAP. This means Swiss plans are accounted for as Defined Benefit plans. The scheme
remains open to new employees.
Discount rate
Interest rate in savings
Salary increase
Mortality assumptions
2023
1.90%
1.90%
1.50%
2022
2.25%
2.25%
1.00%
70% BVG
2020 GT
70% BVG
2020 GT
Demographic assumptions
The demographic assumptions, including mortality assumptions used for the liability calculation, are
based on the most recent BVG 2020 tables (2022: BVG 2020 tables). These tables are based on the
experience during the period 2015 to 2019 of 14 of the largest autonomous Swiss pension plans, and
management consider these to be the best estimate available.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 172
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
20. PENSIONS (continued)
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 on 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. The sensitivity analysis was performed by recalculating the defined benefit obligation with
the following parameters (all other parameters were not modified):
Amounts recognised in other comprehensive (loss)/income:
Loss/(gain) from change in financial assumptions
Experience loss/(gain)
Return on plan assets
Recognised in the statement of other comprehensive (loss)/income
Increase/(decrease) in
defined benefit obligation
Movement in net deficit in the year:
2023
£ million
2022
£ million
5
3
–
8
(24)
(16)
(1)
(41)
2023
£ million
2022
£ million
1
6
8
(8)
–
7
37
7
(41)
(8)
6
1
Net deficit of the plan at 1 October
Net defined benefit cost recognised in the income statement
Net defined benefit loss/(gain) recognised in other comprehensive income
Company contributions
Foreign exchange
Statement of financial position net deficit as at 30 September
A £3 million (2022: £3 million) prepayment representing cash paid over to Swiss Life in advance and not
yet utilised in the pension scheme is offset against the net deficit.
Expected employer cash contribution from the Group in the 2024 financial year is expected to be CHF 9
million (2023: CHF 9 million).
Discount rate
Salary increase
Life expectancy
+0.5%
-0.5%
+0.5%
-0.5%
+1 year
-1 year
2023
(5.6%)
6.3%
0.9%
(0.9%)
0.6%
(0.6%)
2022
(5.4%)
6.1%
1.0%
(0.9%)
0.5%
(0.5%)
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 which is valid until 31 December 2027. The Board of
Trustees with the elected employees and employer’s representatives decide the investment strategy.
The current agreement is known as ‘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.
After the expiry date the benefits are no longer insured and all payments are the liability of the pension
scheme, unless the provider renegotiates the terms of the contract.
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 amendment)
Net defined benefit cost recognised in the income statement
2023
£ million
2022
£ million
6
3
(3)
–
6
8
1
(1)
(1)
7
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 173
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
20. PENSIONS (continued)
Changes in the present value of the defined benefit obligation are as follows:
Present value of obligation at 1 October
Current service cost
Contributions paid by employees
Interest costs on defined benefit obligation
Contributions paid by plan participants
Benefit payments from scheme assets
Past service cost
Actuarial loss/(gain) arising from changes in financial assumptions
Actuarial loss/(gain) arising from experience adjustments
Foreign exchange (gain)/loss
Present value of obligation at 30 September
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
Benefit payments from scheme assets
Return on plan assets
Foreign exchange (loss)/gain
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
2023
£ million
140
2022
£ million
152
The assets held do not have a quoted market price as they are within the affiliation contract with Swiss Life
Collective BVG Foundation. All assets are within the one class which takes the form of an insurance contract.
The weighted average duration of the defined benefit obligation of the Swiss pension scheme is 13 years
(2022: 12 years).
Maturity profile of defined benefit obligation
Expected benefit payments during fiscal year ending 30 September:
6
5
3
2
(9)
–
5
3
(3)
152
8
5
1
3
(6)
(1)
(24)
(16)
18
140
1 year
2 years
3 years
4 years
5 years
6 up to 10 years
21. SHARE CAPITAL
2023
£ million
2022
£ million
10
13
16
15
13
70
10
12
12
15
15
65
2023
£ million
139
2022
£ million
Allotted, called up and fully paid
115
At 30 September
Number
Nominal value
2023
million
2022
million
2023
£ million
2022
£ million
Ordinary shares of par 27 2/7 pence each
758
758
207
207
easyJet’s employee benefit trusts hold the following shares. The cost of these shares has been deducted
from retained earnings:
Number of shares (million)
Cost (£ million)
Market value at year end (£ million)
2023
5
21
21
2022
3
24
9
3
8
5
2
(9)
–
(3)
145
2023
1,031
41
9
52
10
1
8
5
3
(6)
1
12
139
2022
1,004
40
9
52
10
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 174
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
22. SHARE INCENTIVE SCHEMES
easyJet operates the following share incentive schemes, all of which are equity settled. The change in
the number of awards outstanding, weighted average exercise prices during the year, and the number
exercisable at each year end were as follows:
1 October
2022
million
Granted
million
Forfeited/
cancellations
million
Exercised
million
30 September
2023
million
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 the market price on the day immediately preceding the date on which invitations
are sent; however the 2022 scheme was granted at a discount of 10% from the market price, and the
2020 scheme did not have a discount. 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.
Grant date
Long Term Incentive Plan
Restricted Stock Unit
Restricted Share Plan
Save As You Earn scheme
Share Incentive Plans
Deferred Annual Bonus Plan
Grant date
Long Term Incentive Plan
Restricted Stock Unit
Restricted Share Plan
Save As You Earn scheme
Share Incentive Plans
1.1
2.7
0.5
16.3
3.3
–
23.9
–
2.7
0.4
6.3
–
0.3
9.7
(0.8)
(0.3)
(0.1)
(3.5)
(0.1)
–
(4.8)
–
(0.1)
–
–
(0.2)
–
(0.3)
0.3
5.0
0.8
19.1
3.0
0.3
28.5
Restricted Share Plan
The plan is open, by invitation, to Executive Directors, the Airline Management Board and senior and
some middle management, and provides for annual awards of Performance Shares worth from 20% to
125% of salary, depending on role. All awards have either a two or three-year vesting period. For the
Executive Directors a three-year performance period plus two-year post-vesting holding period will apply.
The awards are subject to the following underpins: that easyJet does not fall below its minimum liquidity
target (such that a credit risk is triggered) through the vesting period and that there is satisfactory
governance performance including no ESG issues that result in material reputational damage to the
Company (as determined by the Board). The vesting of these shares is also dependent on continued
employment and assessment against performance underpins, as outlined in the Directors Remuneration
Report, measured over the vesting period.
1 October
2021
million
Granted
million
Forfeited/
cancellations
million
Exercised
million
30 September
2022
million
2.0
1.4
–
10.9
4.3
18.6
–
1.3
0.6
12.3
–
14.2
(0.9)
–
(0.1)
(6.9)
(0.1)
(8.0)
–
–
–
–
(0.9)
(0.9)
1.1
2.7
0.5
16.3
3.3
23.9
Deferred Annual Bonus Plan
This plan represents the compulsory deferral of one-third of the annual bonus in shares for the Executive
Directors and one-fifth of the annual bonus for the Airline Management Board. All awards have a
three-year vesting period of which the vesting conditions are continued employment.
Weighted average exercise prices are as follows:
Save As You Earn scheme1
4.54
1 October 2022
£
Granted
£
4.07
Forfeited
£
5.45
Exercised
£
–
30 September
2023
£
4.22
Long Term Incentive Plan
The plan was 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 TSR targets compared to FTSE-ranked companies at the start of the performance period.
All awards have a three-year vesting period. Awards made in December 2020 are assessed on
performance conditions measured over the three financial years ended 30 September 2023.
Restricted Stock Unit
The plan was awarded to the Airline Management Board, senior managers and some middle
management, and provided 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.
1) The exercise prices used to calculate the weighted average price are post rights issue, so will differ to those stated in fair
values tables as fair values will not change.
The exercise price of all awards except those disclosed in the above table is £nil.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 175
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
22. SHARE INCENTIVE SCHEMES (continued)
The number of awards exercisable at each year end and their weighted average exercise price is as follows:
Long Term Incentive Plan
Restricted Stock Unit
Restricted Share Plan
Save As You Earn scheme
Deferred Annual Bonus Plan
Price £
Number million
2023
2022
–
–
–
5.62
–
–
–
–
6.76
–
2023
–
0.2
–
1.3
–
1.5
2022
0.1
–
–
1.1
–
1.2
The weighted average remaining contractual life for each class of share award at 30 September 2023
is as follows:
Long Term Incentive Plan
Restricted Stock Unit
Restricted Share Plan
Save As You Earn scheme
Deferred Annual Bonus Plan
Years
2023
7.3
8.5
8.9
2.5
9.2
2022
7.4
8.7
9.4
2.9
–
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. 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 paused contributing a Matching Share to the scheme as a result of the financial constraints of
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.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 176
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
22. SHARE INCENTIVE SCHEMES (continued)
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:
Grant date
Restricted Stock Unit
12 December 2022
Restricted Share Plan
12 December 2022
21 June 2023
Save As You Earn scheme
19 July 2023
Deferred Annual Bonus Plan
12 December 2022
Share
price
£
3.84
3.84
5.04
–
–
–
5.09
4.07
3.25
–
Exercise
price
£
Expected
volatility
%
Option
life
years
Risk-free
interest rate
%
Dividend yield
assumption
%
0%
0%
0%
61%
0%
–
–
–
3.50
–
0%
0%
0%
5%
0%
–
–
–
2.5%
–
Fair
value
£
3.84
3.84
5.04
2.47
3.25
Share price for LTIPs is the closing share price from the last working day prior to the date of grant.
Expected volatility is based on historical volatility over a period comparable to the expected life of each type of option.
The total share-based payment expense recognised for the year was £18 million (2022: £26 million). The share-based payment liability, representing the
national insurance payments due, as at 30 September 2023, was £2 million (2022: £nil million).
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 177
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
23. RECONCILIATION OF OPERATING PROFIT/(LOSS) TO CASH GENERATED FROM OPERATIONS
24. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET CASH/(DEBT)
Operating profit/(loss)
Adjustments for non-cash items:
Depreciation
Loss on disposal of property, plant and equipment
Loss on sale and leaseback
Amortisation of intangible assets
Share-based payments
Loss on disposal of other intangible assets
Changes in working capital and other items of an operating nature:
Increase in trade and other receivables
Increase in current intangible assets
Increase in trade and other payables1
Increase in unearned revenue
Post employment benefit contributions
Decrease in provisions1
(Increase)/decrease in other non-current assets
Increase/(decrease) in derivative financial instruments
Cash generated from operations
2023
£ million
453
644
14
–
29
18
3
(16)
(179)
120
458
(2)
(7)
(40)
14
1,509
2022
(re-presented)
£ million
(27)
Cash and cash equivalents
Money market deposits
Eurobond
Term loan (UK Export Finance
backed facility)
Lease liabilities
Net (debt)/cash
1 October
2022
£ million
Foreign
exchange
£ million
New debt
raised in the
year
£ million
Other1
£ million
Net
cash flow
£ million
30 September
2023
£ million
3,514
126
3,640
(2,356)
(841)
(1,113)
(4,310)
(670)
(168)
–
(168)
28
105
94
227
59
–
–
–
–
–
(126)
(126)
(126)
–
–
–
(421)
(126)
(547)
2,925
–
2,925
(11)
444
(1,895)
(12)
(62)
(85)
(85)
748
218
1,410
863
–
(989)
(2,884)
41
1) Other includes deferred fees, lease extensions and rate changes.
539
7
21
25
26
10
(151)
(43)
312
197
(1)
(61)
64
(26)
892
1) The liability for compensation and reimbursements for airline customer delays and cancellations has been re-presented
from provisions for liabilities and charges to liabilities within other payables. Refer to note 1a for further detail.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials
178
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
25. 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 2023
Other non-current assets
Trade and other receivables
Trade and other payables2
Derivative financial instruments
Restricted cash
Money market deposits
Cash and cash equivalents
Eurobonds3
Other borrowings3
Lease liabilities
Equity investment4
Amortised cost
Held at fair value
Financial
assets
£ million
138
237
–
–
2
–
1,968
–
–
–
–
Financial
liabilities
£ million
–
–
(1,102)
–
–
–
–
(1,895)
–
(989)
–
Fair value
hedge
£ million
Cash flow
hedge
£ million
Other financial
instruments
£ million
–
–
–
–
–
–
–
–
–
–
–
–
–
–
142
–
–
–
–
–
–
–
–
–
–
11
–
–
957
–
–
–
31
Other1
£ million
–
106
(662)
Carrying
value
£ million
138
343
Fair
value
£ million
138
343
(1,764)
(1,764)
–
–
–
–
–
–
–
–
153
2
–
2,925
(1,895)
–
(989)
31
153
2
–
2,925
(1,756)
–
n/a5
31
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 179
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
25. FINANCIAL INSTRUMENTS (continued)
At 30 September 2022
Other non-current assets
Trade and other receivables
Trade and other payables2, 6
Derivative financial instruments
Restricted cash
Money market deposits
Cash and cash equivalents
Eurobonds3
Other borrowings3
Lease liabilities
Equity investment4
Amortised cost
Held at fair value
(Re-presented)6
Financial
assets
£ million
91
230
–
–
7
126
2,528
–
–
–
–
Financial
liabilities
£ million
–
–
(1,077)
–
–
–
–
(2,356)
(841)
(1,113)
–
Fair value
hedge
£ million
Cash flow
hedge
£ million
Other financial
instruments
£ million
–
–
–
58
–
–
–
–
–
–
–
–
–
–
264
–
–
–
–
–
–
–
–
–
–
120
–
–
986
–
–
–
31
Other1
£ million
–
137
Carrying
value
£ million
91
367
Fair
value
£ million
91
367
(682)
(1,759)
(1,759)
–
–
–
–
–
–
–
–
442
7
126
3,514
(2,356)
(841)
(1,113)
31
442
7
126
3,514
(2,081)
(841)
n/a5
31
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) During the year ended 30 September 2022, £322 million of obligations under the ETS scheme were presented as a financial liability within Trade and other payables. During the year ended 30 September 2023, management concluded these
obligations are a non-financial liability and have presented the current year obligations of £426 million within the ‘Other’ column. The prior year has been re-presented on a consistent basis, resulting in reclassification of £322 million from the Financial
liabilities column to Other within Trade and other payables.
3) For further information see Capital, financing and interest risk management section below in note 26.
4) The equity investment of £31 million (2022: £31 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 (2022: £nil).
5) n/a – lease liabilities are valued in accordance with IFRS 16 and a fair value determination is not applicable.
6) The liability for compensation and reimbursements for airline customer delays and cancellations has been re-presented from provisions for liabilities and charges to liabilities within other payables. Refer to note 1a for further detail.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 180
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
25. FINANCIAL INSTRUMENTS (continued)
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 remaining three 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 of 30 September 2023). 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.
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 is being held at £31 million (2022: £31 million) based on a
valuation report using this method by an external valuation firm which had no material increase in
valuation during the year. If the level 3 forecast cash flows were 10% higher or lower the fair value would
not increase/decrease by a material 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 2023
Designated as cash flow hedges
US dollar
Euro
Swiss franc
Jet fuel
1,820
1,446
241
2
Cross-currency interest rate swaps
1,406
Designated as fair value through
profit or loss
US dollar
Euro
1,195
619
At 30 September 2022
Designated as cash flow hedges
US dollar
Euro
Swiss franc
Jet fuel
1,721
675
185
1
Cross-currency interest rate swaps
1,230
Designated as fair value hedges
Cross-currency interest rate swaps
379
Designated as fair value through
profit or loss
US dollar
Euro
755
285
Quantity
million
Non-current
assets
£ million
Current
assets
£ million
Current
liabilities
£ million
Non-current
liabilities
£ million
Total
£ million
Quantity
million
Non-current
assets
£ million
Current
assets
£ million
Current
liabilities
£ million
Non-current
liabilities
£ million
Total
£ million
5
–
–
7
10
13
–
35
22
11
2
123
–
28
–
186
(11)
(3)
(1)
(1)
(12)
(14)
(12)
(54)
–
(2)
–
–
(8)
(4)
–
(14)
16
6
1
129
(10)
23
(12)
153
18
–
–
–
42
–
67
–
127
170
2
–
139
–
58
45
9
423
–
(12)
(9)
(65)
–
–
–
–
–
(3)
(2)
(17)
–
–
–
–
(86)
(22)
188
(13)
(11)
57
42
58
112
9
442
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 181
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
25. FINANCIAL INSTRUMENTS (continued)
For foreign currency forward exchange 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, the
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 within the next 18 months. Accumulated gains and losses resulting from these transactions are
deferred in the hedging reserve. The gains and losses will be recognised in the income statement in the
periods when 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.
Amounts related to US dollar and euro foreign exchange derivatives held at fair value through profit or
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 value 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 US dollar and euro.
These trades are all expected to occur within the next 36 months.
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 remaining
cross-currency interest rate swap contracts are designated and qualify as cash flow hedges to minimise
volatility in the income statement. The cross-currency interest rate swap contracts designated as fair
value have been settled in the period.
The following derivative financial instruments are subject to offsetting, enforceable master netting
arrangements.
At 30 September 2023
Derivative financial instruments
Assets
Liabilities
At 30 September 2022
Derivative financial instruments
Assets
Liabilities
Gross
amount
£ million
Amount
not set off
£ million
Net
amount
£ million
221
(68)
153
(66)
66
–
155
(2)
153
Gross
amount
£ million
Amount
not set off
£ million
Net
amount
£ million
550
(108)
442
(108)
108
–
442
–
442
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.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 182
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
26. 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.
Capital employed comprises shareholders’ equity (excluding hedging and cost of hedging reserves), borrowings (including amounts related to IFRS 16 lease liability), cash and money market deposits (excluding
restricted cash).
In addition, easyJet also maintains committed access to capital through its undrawn credit facilities. This amounted to £1.8 billion at 30 September 2023 (2022 £1.1 billion) and contributed to easyJet’s total liquidity.
Consequently, the capital employed at the end of the current and prior year and the return earned during those years were as follows:
Opening capital employed
Shareholders’ equity (excluding hedging and cost of hedging reserves)
Borrowings
Lease liabilities
Cash and money market deposits (excluding restricted cash)
Reported capital employed
Closing capital employed
Shareholders’ equity (excluding hedging and cost of hedging reserves)
Borrowings
Lease liabilities
Cash and money market deposits (excluding restricted cash)
Reported capital employed
Average capital employed
Reported operating profit/(loss)
UK corporation tax rate
Normalised operating profit/(loss) after tax
Return on capital employed
2023
2022 (restated)1
Headline
£ million
Non-headline
£ million
Total
£ million
Headline
£ million
Non-headline
£ million
Total
£ million
2,358
3,197
1,113
(3,640)
3,028
2,676
1,895
989
(2,925)
2,635
2,832
476
357
12.6%
–
–
–
–
–
–
–
–
–
–
–
(23)
(17)
2,358
3,197
1,113
(3,640)
3,028
2,676
1,895
989
(2,925)
2,635
2,832
453
25%
340
12.0%
2,484
3,367
1,079
(3,536)
3,394
2,358
3,197
1,113
(3,640)
3,028
3,211
3
2
0.1%
–
–
–
–
–
–
–
–
–
–
–
(30)
(24)
2,484
3,367
1,079
(3,536)
3,394
2,358
3,197
1,113
(3,640)
3,028
3,211
(27)
19%
(22)
(0.7)%
1) Return on capital employed has been restated to exclude the hedging and cost of hedging reserves. Return on capital employed is calculated by dividing the normalised operating profit/(loss) after tax by the average of the opening and closing
capital employed.
Return on capital employed is calculated by dividing the adjusted operating profit/(loss) after tax by the average of the opening and closing capital employed.
Normalised operating profit is reported operating profit, less tax at the prevailing UK corporation tax rate at the end of the financial year.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 183
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
26. FINANCIAL RISK AND CAPITAL MANAGEMENT (continued)
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.
Liquidity raised in the year was primarily from sale and leaseback transactions, which were conducted on
eight aircraft generating gross cash proceeds of £77 million. Repayments in the year included the €500
million repayment of the Feb-16 Eurobond in February 2023 and a $950 million repayment of the drawn
element of the UKEF facility in June 2023, where the $1,770 million facility was terminated and replaced
with a new five-year sustainability linked undrawn UKEF facility of $1,750 million. There were no plans to
draw this facility as at 30 September 2023.
Further to the above repayments, the Oct-16 €500 million Eurobond was repaid in October 2023 and is
therefore still present in the financial statements as at the year end.
easyJet’s policy has consistently been to hold significant liquidity to mitigate the impact of potential
business disruption events. Throughout the year, easyJet’s target minimum liquidity requirement was to
cover unearned revenue plus £500 million. 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 2023 was £2,925 million (30 September 2022: £3,640 million) with total liquidity at
£4,686 million. Surplus funds are invested in high quality short-term liquid instruments, mainly money
market funds, bank deposits and tri-party repos.
The maturity profile of financial liabilities and derivatives based on undiscounted cash flows and
contractual maturities is as follows:
At 30 September 2023
Borrowings principal and interest
Trade and other payables
Lease liabilities
FX and jet derivative contracts – receipts
FX and jet derivative contracts – payments
Cross-currency swap contracts – receipts
Cross-currency swap contracts – payments
Within one year
£ million
One–two years
£ million
Two–five years
£ million
Over five years
£ million
458
1,764
254
(4,543)
4,334
(452)
476
457
–
412
(961)
938
(447)
469
1,087
–
278
(223)
222
(544)
556
–
–
139
–
–
–
–
At 30 September 2022 (re-presented)1
Borrowings principal and interest
Trade and other payables1
Lease liabilities
FX and jet derivative contracts – receipts
FX and jet derivative contracts – payments
Cross-currency swap contracts – receipts
Cross-currency swap contracts – payments
Within one year
£ million
One–two years
£ million
Two–five years
£ million
Over five years
£ million
523
1,759
297
(2,723)
2,271
(463)
420
566
–
443
(582)
503
(455)
471
1,368
–
280
(186)
162
(463)
484
1,075
–
258
–
–
(358)
346
1) The liability for compensation and reimbursements for airline customer delays and cancellations has been re-presented
from provisions for liabilities and charges to liabilities within other payables. Refer to note 1a for further detail.
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.
The credit ratings of counterparties that easyJet holds financial assets with are as follows:
At 30 September 2023
Financial assets
Trade receivables
Other non-current assets
Derivative financial instruments
Restricted cash
Cash and cash equivalents
Total
At 30 September 2022
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
–
–
153
2
2,922
3,077
–
–
–
–
3
3
343
138
–
–
–
481
343
138
153
2
2,925
3,561
A- and above
£ million
Below A-
£ million
Unrated/other
£ million
£ million
–
–
442
7
126
3,511
4,086
–
–
–
–
–
3
3
367
91
–
–
–
–
458
367
91
442
7
126
3,514
4,547
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. See note 1a for further detail.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 184
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
26. FINANCIAL RISK AND CAPITAL MANAGEMENT (continued)
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). At 30 September 2023, the
expected credit loss 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.
At 30 September 2023, trade receivables had a total loss allowance of £5 million (2022: £8 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.
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 value reflects the sterling contractual leg amount.
FY23
Notional
£m
Gain/(loss)
£m
1,634
1,091
192
14
(8)
(2)
Foreign currency risk management
The majority of easyJet’s exposure to currency arises from fluctuations in the US dollar, euro and Swiss
franc exchange rates which can significantly impact easyJet’s financial results and cash flows. The aim of
easyJet’s foreign currency risk management is to reduce the impact of these exchange rate fluctuations.
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.
easyJet has maintained hedging in line with policy throughout the year, with the exception of revenue
hedging (Swiss franc and euro income) where exposures were hedged in line with policy from January
2023 onwards after hedging was paused during the pandemic.
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 easyJet hedged operational US dollar, euro, and Swiss franc exposures to an 18
month hedging policy (Swiss franc and euro exposures from January 2023, as above) with the aim of
maintaining average cover of c.60% over a rolling 12-month period.
Of note, the Group separately manages foreign exchange risk related to forecast cash outflows
associated with package holiday costs. Significant currency exposures relating to the acquisition cost of
aircraft are managed through the use of FX forward contracts where up to 36 months of forecasted
cash flows may be hedged.
easyJet has monetary liabilities denominated in US dollars and euros, which are largely offset by holding
US dollar and euro 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 used euro lease liabilities to hedge a
proportion of its euro revenue receipts in a cash flow hedge relationship. Revaluations of these euro
liabilities are held in reserves and released on a straight-line basis over the term of the lease agreement
through profit or loss.
Management may take action to hedge other currency exposures as deemed appropriate.
On 30 September 2023, 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 (EMTN) Programme on 7 January 2016.
Subsequently easyJet plc has issued three bonds under this programme, one of which has been repaid,
and easyJet FinCo B.V. has issued one bond. The three remaining bonds under this scheme are
guaranteed by easyJet Airline Company Limited, easyJet plc and easyJet FinCo B.V.
On 11 February 2022, the EMTN Programme increased in size to £4,000 million.
In February 2016, easyJet plc issued a €500 million bond under the £3,000 million EMTN Programme
guaranteed by easyJet Airline Company Limited. The Eurobond had a seven-year term and paid 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.
In February 2023, this bond reached maturity and was settled, with a corresponding gain realised on
settlement of the cross-currency swap.
In October 2016, easyJet plc issued a €500 million bond under the £3,000 million EMTN Programme
guaranteed by easyJet Airline Company Limited. The Eurobond has a seven-year term and 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 in November 2016
with settlement and notional exchange occurring in the same month. 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 2023 was £445 million. This
value does not include capitalised set-up costs incurred in the issuing of the bond. This bond was repaid
in October 2023.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 185
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
26. FINANCIAL RISK AND CAPITAL MANAGEMENT (continued)
In June 2019, easyJet plc issued a €500 million bond under the £3,000 million EMTN Programme
guaranteed by easyJet Airline Company Limited. The Eurobond is for a six-year term and 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 2023 was £441 million.
This value does not include capitalised set-up costs incurred in the issuing of the bond.
In March 2021, easyJet FinCo B.V. issued a €1,200 million bond under the £3,000 million EMTN
Programme guaranteed by easyJet Airline Company Limited and easyJet plc. The Eurobond has a
seven-year term and pays an annual fixed coupon of 1.875%. easyJet subsequently entered into four
cross-currency interest rate swaps to convert €600 million of the fixed rate Eurobond to a sterling fixed
rate exposure. All four swaps pay fixed interest semi-annually, receive fixed interest annually, and have
maturities matching the Eurobond. The Group designated these cross-currency interest rate swaps as a
cash flow hedge of the currency risk on the €1,200 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 hedged element of the fixed rate Eurobond net
of the cross-currency interest rate swap at 30 September 2023 was £1,031 million. This value does not
include capitalised set-up costs incurred in the issuing of the bond.
The weighted average sterling interest rate hedged for the three bonds was 2.59% with a weighted
average GBP/EUR foreign exchange hedge rate of 1.14.
Interest rate cash flow risk arises on floating rate borrowings and cash investments.
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 153 aircraft operating leases in place at 30 September 2023 (2022: 142), 95% were
based on fixed interest rates and 5% were based on floating interest rates (2022: 95% fixed, 5% floating).
In addition, easyJet has access to facilities which are fully undrawn at 30 September 2023; a $400
million Revolving Credit Facility due to mature in September 2025 (with potential extension to September
2026), and a $1,750 million UKEF backed facility maturing in June 2028.
Commodity price risk management
The Group is exposed to commodity risk in the form of jet fuel requirements and Carbon Emissions
Trading schemes (EU ETS, CH ETS and UK ETS) price risk. easyJet has maintained risk management
activities throughout the year in line with policy.
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.
In the year, easyJet hedged in line with its 18-month hedging policy with the aim of maintaining average
cover of c.60% over a rolling 12-month period. 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 volume of effective hedge transactions that occurred during the financial year to manage the jet
commodity price risk was 1.9 million metric tonnes. This resulted in a £68 million gain (2022: £581 million
gain) in the fuel line within the income statement.
The Group has a requirement to comply with EU ETS, CH ETS and UK ETS regulations and report on an
annual basis to the relevant environmental agencies. In addition to being in receipt of free allowances,
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
purchases its requirements on a spot or forward basis up to 24 months in advance. easyJet holds
allowances for 100% of all estimated ETS obligations for calendar year 2023.
ETS allowance spot and forward 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 2023.
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 the fuel price forward curve over the next 12 months.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 186
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
26. FINANCIAL RISK AND CAPITAL MANAGEMENT (continued)
At 30 September 2023
Income statement impact: gain/(loss)
Impact on other comprehensive income: increase/(decrease)
At 30 September 2022
Income statement impact: gain/(loss)
Impact on other comprehensive income: increase/(decrease)
1) GBP weakened.
2) GBP strengthened.
Currency rates
US dollar +10%1
£ million
US dollar -10%2
£ million
Euro +10%1
£ million
Euro -10%2
£ million
Interest rates
1% increase
£ million
Fuel price 10%
increase
£ million
(6)
135
5
(110)
7
3
(6)
(2)
21
–
–
93
Currency rates
US dollar +10%1
£ million
US dollar -10%2
£ million
Euro +10%1
£ million
Euro -10%2
£ million
Interest rates
1% increase
£ million
Fuel price 10%
increase
£ million
(18)
145
14
(119)
33
(39)
(27)
32
19
–
–
113
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 187
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
26. FINANCIAL RISK AND CAPITAL MANAGEMENT (continued)
The market risk sensitivity analysis has been calculated on spot rates for the US dollar, euro and jet fuel
at close of business on 30 September each year.
Impact on the financial statements during the year ended 30 September 2023
Details of major hedging arrangements at the reporting date are set out below, broken down by the
cash maturity of hedge instruments, notional 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
Greater than
one year
1
844
1,246
1.23
568
1.13
199
1.09
–
824
177
1.25
57
1.13
22
1.07
Notional expressed in the sterling 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.
In the year ended 30 September 2023, there were no occasions where easyJet’s hedges exceeded
forecasted exposures and therefore no hedge discontinuation took place.
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 loss (2022: £1 million gain) were recorded during the
period related to hedge ineffectiveness on hedges of foreign currency denominated borrowings that
continue to be effective hedge relationships.
27. CONTINGENT LIABILITIES AND COMMITMENTS
Contingent liabilities
easyJet is involved in a number of disputes and litigation cases which arose in the normal course of
business. The potential outcome of these disputes and litigations can cover a range of scenarios, and in
complex cases reliable estimates of any potential obligation may not be possible.
easyJet has previously disclosed an investigation by the Information Commissioner’s Office (ICO) into a
cyberattack and subsequent data breach that took place in 2020. The ICO has advised in this financial
year that no further action will be taken and the investigation against easyJet is now closed. Due to the
uncertainty surrounding the investigation no provision had been made for an estimated outcome from
the case, and as such there is no impact on the financial statements of the ICO’s decision to close the
investigation. Although the ICO investigation is closed, the associated class action filed in May 2020 in
the UK High Court by a law firm representing a class of customers affected by the data breach arising
from the cyberattack, remains in place. Similarly, other claims have been commenced or are threatened
in certain other courts and jurisdictions. The merit, likely outcome and potential impact of these actions
are subject to significant uncertainties and therefore the Group is unable to currently assess the likely
outcome or quantum of the claims, and as such a provision is not included in these financial statements.
Additionally, there is a possibility of a claim being made by a third-party supplier, for what would be a
material recovery. Management have assessed the likelihood of a case being brought, easyJet’s response
and likelihood of a successful defence, and at this stage do not consider it appropriate to provide for
such a possibility.
Contingent commitments
Letters of credit and performance bonds
At 30 September 2023, easyJet had outstanding letters of credit and performance bonds totalling £45
million (2022: £43 million), of which £12 million (2022: £10 million) expires within one year. The fair value
of these instruments at each year end was negligible.
No amount is recognised on 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 and the fair value has been
assessed to be £nil.
Aircraft orders
easyJet’s current order book with Airbus extends to calendar year 2028 and will deliver 158 aircraft (90
A320neo and 68 A321neo). This will continue the Company’s fleet modernisation, as the 156 seat A319
and some A320ceo aircraft (180 or 186 seat) leave the business and new A320neo (186 seat) and
A321neo (235 seat) aircraft enter, providing upgauging, cost and sustainability enhancements. Further,
easyJet has a commitment with CFM to purchase two LEAP engines in FY24.
In addition, easyJet has entered into conditional arrangements with Airbus to secure the delivery of a
further 157 aircraft (56 A320neo and 101 A321neo) between FY29 and FY34 as well as 100 purchase
rights (the ‘Proposed Purchase’). This provides easyJet with the ability to complete its fleet replacement
programme of A319 aircraft and replace approximately half of the A320ceo aircraft, alongside providing
the foundation for disciplined growth.
The conditional arrangement includes easyJet’s agreement with Airbus to exercise conversion rights of
35 A320neo deliveries into A321neo aircraft (the ‘Conversion’). Alongside the Proposed Purchase this
arrangement will deliver lower fuel burn, lower CO2 emissions and lower operating costs per seat.
The scale of the Proposed Purchase and the Conversion means that both are conditional on shareholder
approval at a general meeting of the shareholders which will be held in December 2023.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 188
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
27. CONTINGENT LIABILITIES AND COMMITMENTS (continued)
Based on latest list prices for aircraft published in January 2018, the Proposed Purchase and the
Conversion are expected to result in an aggregate commitment of approximately $19.9 billion, which will
be spread over a number of years. The aggregate actual price for the aircraft would be substantially
lower because of certain price concessions granted by Airbus.
At the year end date easyJet had a commitment for six aircraft lease contracts, where the aircraft had
not been delivered, with a combined value of £67 million. Subsequent to 30 September 2023, two
aircraft have been delivered reducing the commitment to £45 million.
Pathway to net zero
On 26 September 2022, easyJet announced its pathway to net zero. This roadmap references several
partnerships with other commercial companies to explore certain technologies which may assist with
the overall goal to decarbonise the aviation industry. The majority of these partnerships are in fact
agreements to work together on the areas identified and do not involve a financial commitment from
easyJet other than the time and effort involved in the collaboration over an agreed period. Where there
is a signed agreement requiring a financial commitment from easyJet in the future, any future payments
are contingent on project progress or product / service delivery and are therefore not certain, hence no
liability has been recognised for these payments.
28. GOVERNMENT GRANTS AND ASSISTANCE
During the year ended 30 September 2023, easyJet Airline Company Limited continued to claim ‘activité
partielle longue durée’, long-term partial activity (APLD), a scheme implemented by the French
Government under which, subject to agreement with trade unions, it is possible to reduce the activity of
employees, within the limit of 50% of their legal working time, while maintaining a compensation funded by
the Government. The total amount claimed by easyJet companies in the year ended 30 September 2023
amounted to £3 million (2022: £8 million, received through this scheme and similar ‘furlough schemes’
operated by the Governments of Switzerland and Germany) and is offset within employee costs in the
income statement. There are no unfulfilled conditions or contingencies relating to this scheme.
On 8 January 2021, easyJet Airline Company Limited signed a five-year term loan facility of $1.87 billion
(with easyJet plc as a Guarantor), 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, but does contain some restrictive covenants
including dividend payments. However, these restrictive covenants are compatible with easyJet’s existing
policies. In April 2022, easyJet repaid $100 million of this facility, reducing the overall UKEF facility size
from $1.87 billion to $1.77 billion and in June 2023 this facility was repaid and terminated. A new five-year
undrawn facility of $1.75 billion was entered into in June 2023. Embedded within the facility is a
sustainability key performance indicator linked to a reduction in carbon emission intensity in line with
easyJet’s SBTi validated target, with a margin adjustment mechanism (upward or downward) conditional
on the achievement of specific milestones. Other than the sustainability linkage the facility is on similar
terms to the 2021 agreement.
29. RELATED PARTY TRANSACTIONS
The Company licences 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 2023.
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 the 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 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 are as follows:
Annual royalty
Brand protection (legal fees paid through easyGroup to third parties)
2023
£ million
2022
£ million
20
1
21
14
2
16
At 30 September 2023, £6.0 million (2022: £11.1 million) was payable to easyGroup.
30. EVENTS AFTER THE STATEMENT OF FINANCIAL POSITION DATE
After the statement of financial position date of 30 September 2023,
> in October 2023, the October 2016 Eurobond of €500 million was repaid;
> in October 2023, three A319 aircraft were sold and leased back with gross proceeds of £32 million; and
> in November 2023, easyJet signed two aircraft leases with a combined value of £12 million.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 189
COMPANY STATEMENT OF FINANCIAL POSITION
Non-current assets
Investments in subsidiary undertakings
Amounts due from subsidiary undertakings
Derivative financial instruments with subsidiary undertakings
Current assets
Amounts due from subsidiary undertakings
Derivative financial instruments with subsidiary undertakings
Current liabilities
Borrowings
Other payables
Derivative financial instruments with subsidiary undertakings
Net current (liabilities)/assets
Non-current liabilities
Borrowings
Deferred tax liabilities
Derivative financial instruments with subsidiary undertakings
Net assets
Shareholders’ equity
1,025
2,976
Share capital
Share premium
14
Hedging reserve
4,015
Cost of hedging reserve
Retained earnings
Total equity
As at
30 September
2023
£ million
As at
30 September
2022
£ million
Notes
c
f
f
d
d
1,042
3,138
–
4,180
438
–
438
(433)
(6)
(12)
(451)
(13)
(431)
–
(8)
(439)
3,728
448
58
506
(437)
(11)
–
(448)
58
(874)
(5)
–
(879)
3,194
As at
30 September
2023
£ million
As at
30 September
2022
£ million
Notes
207
2,166
1
–
1,354
3,728
207
2,166
13
3
805
3,194
The financial statements on pages 189 to 193 were approved by the Board of Directors and authorised
for issue on 28 November 2023 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 £532 million (2022: £72 million). Included in this amount are dividends
received of £436 million (2022: £35 million), which are recognised when the right to receive payment is
established.
Johan Lundgren
Director
Kenton Jarvis
Director
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials
190
COMPANY STATEMENT OF CHANGES IN EQUITY
At 1 October 2022
Profit for the year
Other comprehensive loss
Total comprehensive income
Share incentive schemes
Movement in reserves for employee share schemes
At 30 September 2023
At 1 October 2021
Profit for the year
Other comprehensive income/(loss)
Total comprehensive income
Share incentive schemes
Movement in reserves for employee share schemes
Share
capital
£ million
207
Share
premium
£ million
2,166
–
–
–
–
–
–
–
–
207
2,166
Share
capital
£ million
207
Share
premium
£ million
2,166
–
–
–
–
–
–
–
–
At 30 September 2022
207
2,166
Hedging
reserve
£ million
Cost of hedging
reserve
£ million
Retained
earnings
£ million
13
–
(12)
(12)
–
1
3
–
(3)
(3)
–
–
Hedging
reserve
£ million
Cost of hedging
reserve
£ million
(9)
–
22
22
–
13
4
–
(1)
(1)
–
3
805
532
–
532
17
1,354
Retained
earnings
£ million
707
72
–
72
26
805
Total
equity
£ million
3,194
532
(15)
517
17
3,728
Total
equity
£ million
3,075
72
21
93
26
3,194
An ordinary dividend in respect of the year ended 30 September 2023 of 4.5 pence per share, or £34 million, based on headline profit after tax, is to be
proposed at the forthcoming Annual General Meeting. These financial statements do not reflect this proposed dividend.
The disclosures required in respect of share capital are shown in note 21 to the consolidated financial statements.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 191
NOTES TO THE COMPANY FINANCIAL STATEMENTS
A) SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance
The financial statements of easyJet plc (the ‘Company’) have been prepared in accordance with
Financial Reporting Standard 101, ‘Reduced Disclosure Framework’ (FRS 101) and the applicable legal
requirements of the Companies Act 2006 as applicable to companies using FRS 101. The financial
statements are prepared based on the historical cost convention except for certain financial assets and
liabilities, including derivative financial instruments, financial guarantees and certain contingent liabilities
and commitments, which are measured at fair value.
easyJet plc is a holding company for a group of companies engaged in providing low-cost flights and
package holidays, principally in Europe. The Company is a public limited company (company number
03959649), incorporated and domiciled in the United Kingdom, whose shares are listed on the London
Stock Exchange under the ticker symbol EZJ. The address of its registered office is Hangar 89, London
Luton Airport, Luton, Bedfordshire, LU2 9PF, England.
Statement of preparation
The financial statements have been prepared on a going concern basis; details of the going concern
assessment are provided on pages 67 and 68.
The following exemptions from the requirements of IFRS have been applied in the preparation of these
financial statements, in accordance with FRS 101:
> IFRS 7, Financial instruments: Disclosures.
> The requirements of paragraphs 45(b) and 46–52 of IFRS 2, Share-based payment.
> The requirement in paragraph 38 of IAS 1 presentation of Financial Statements to present comparative
information in respect of: paragraph 79(a)(iv) of IAS 1.
> The requirements of paragraphs 10(f), 40A, 40B, 40C, 40D, of IAS 1 Presentation of Financial
Statements.
> The following paragraphs of IAS 1, Presentation of financial statements:
– 10(d) (statement of cash flows);
– 16 (statement of compliance with all IFRS);
– 38A (requirement for minimum of two primary statements, including statement of cash flows);
– 38B–D (additional comparative information);
– 111 (statement of cash flows information); and
– 134–136 (capital management disclosures).
> IAS 7, Statement of cash flows and related notes.
> Paragraphs 91 to 99 of IFRS 13, Fair value measurement (disclosure of valuation techniques and inputs
used for fair value measurement of assets and liabilities).
> Paragraphs 30 and 31 of IAS 8, Accounting policies, changes in accounting estimates and errors
(requirement for the disclosure of information when an entity has not applied a new IFRS that has
been issued but is not yet effective).
> Paragraph 17 of IAS 24, Related party disclosures (key management compensation).
> The requirements in IAS 24, Related party disclosures, to disclose related party transactions entered
into between two or more members of a group.
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.
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 (see note 22 of the consolidated financial statements), a capital contribution for the same
amount is recognised as an investment in subsidiary undertakings with a corresponding credit to
shareholders’ equity.
The recoverable amount of the investment balance and associated amounts due from the subsidiaries
have been assessed for impairment. This assessment represents a critical accounting estimate for the
Company. The cash flow projections, assumptions and stress testing are based on those disclosed in
note 10 to the consolidated financial statements. Individual risks in reasonably probable combinations,
including those associated with climate change and the current macro-economic environment, do not
give rise to an impairment. A further review as at 30 September using up to date key inputs (Fuel price
and exchange rates) and latest cash flow projections also did not give rise to an impairment.
Amounts due from/to subsidiary undertakings
Amounts due from/to subsidiary undertakings are recognised initially at fair value, and subsequently at
amortised cost using the effective interest rate method.
At each reporting date the Company recognises a loss allowance for expected credit losses on amounts
due from subsidiaries using the simplified approach. Under the simplified approach the Company
recognises a loss allowance at an amount equal to the lifetime expected credit losses.
Dividend income
Dividends received from investments in subsidiaries are recognised in the income statement when the
right to receive payment is established.
Derivative financial instruments with subsidiary undertakings
For the year ended 30 September 2023, this related to the Feb-16, Oct-16 and Jun-19 bonds as detailed in
the consolidated financial statements.
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 £532 million (2022: £72 million). Included in this amount are dividends
received of £436 million (2022: £35 million), which are recognised when the right to receive payment is
established.
The nine Non-Executive Directors of easyJet plc (2022: nine) are paid for their services 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 113 to 130.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 192
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
C) INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
Investments in subsidiary undertakings were as follows:
At 1 October
Capital contributions to subsidiaries
At 30 September
A full list of Group companies is detailed below.
2023
£ million
1,025
17
1,042
2022
£ million
999
26
1,025
easyJet Airline Company Limited1
England and Wales Airline operator
easyJet Switzerland S.A.2
Switzerland
Airline operator
Country of incorporation Principal activity
easyJet Sterling Limited3, 4, 9
Cayman Islands
Aircraft trading and leasing
easyJet Leasing Limited3, 4, 9
Cayman Islands
Aircraft trading and leasing
During the year, £17 million (2022: £26 million) capital contributions of share awards (as explained in
note a) above) were provided to Group companies. No other contributions were made during the year
(2022: £nil million).
The recoverable amount of the investment balance and associated amounts due from the subsidiaries
have been assessed for impairment. The cash flow projections, assumptions and stress testing used in
this exercise are based on those disclosed in note 10 to the consolidated financial statements. Individual
risks, and risks in reasonably probable combinations, including those associated with climate change and
the current macro-economic environment, do not give rise to an impairment.
easyJet UK Limited1
England and Wales Airline operator
easyJet Europe Airline GmbH5
Austria
Airline operator
easyJet FinCo B.V.6
easyJet MT Limited7
Netherlands
Financing company
Malta
Insurance
easyJet HQ Holdings Limited1, 8
England and Wales Holding company
easyJet HQ Limited1, 8
England and Wales Development of building projects
easyJet HQ Development Limited1, 8 England and Wales Development of building projects
easyJet Holidays Holdings Limited1
England and Wales Holding company
easyJet Holidays Limited1
England and Wales Tour operator
easyJet Holidays Transport Limited1 England and Wales Air transport
Percentage of
ordinary
shares held
100
49*
100
100
100
100
100
100
100
100
100
100
100
100
1) Hangar 89, London Luton Airport, Luton, Bedfordshire, LU2 9PF, England.
2) 5 Route de l’Aeroport, Meyrin, CH-1215 Geneve 15, Switzerland.
3) Although these companies are Cayman Islands incorporated they have always been, and continue to be, UK tax resident.
4) Governor’s Square, West Bay Road, Lime Tree Bay Road, UNIT # 2-105 , PO Box 1982, Grand Cayman KY1–1104, Cayman
Islands.
5) Wagramer Stasse 19, 11.Stock IZD Tower, 1220 Wien, Austria.
6) Westerdoksdijk 423, 1013BX Amsterdam, Netherlands.
7) 188, 21st September Avenue, Naxxar, NXR 1012, Malta.
8) The following UK entities, all of which are 100% owned by the Group, are exempt from the requirement to prepare
individual financial statements by virtue of s394A of the Companies Act 2006 relating to the individual financial
statements of dormant subsidiaries: easyJet HQ Limited, (12367394), easyJet HQ Development Limited (12367361) and
easyJet HQ Holdings Limited (12366723).
9) Dissolved on 9 November 2023.
* 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.
There have been no changes to the percentage of ordinary shares held during the year.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 193
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
D) BORROWINGS
At 30 September 2023
Eurobond
At 30 September 2022
Eurobond
Current
£ million
Non-current
£ million
Total
£ million
433
433
431
431
Current
£ million
Non-current
£ million
437
437
874
874
864
864
Total
£ million
1,311
1,311
easyJet plc uses cross-currency interest rate swaps with subsidiary undertakings to hedge currency and
interest rate risk on borrowings and these are held at a fair value, resulting in a £20 million liability as at
30 September 2023 (2022: £72 million asset). The fair value of these is determined as described in note
25 to the consolidated financial statements.
For full details on the borrowings and financial instruments see note 17 and 25 respectively of the
consolidated financial statements.
E) GUARANTEES AND CONTINGENT LIABILITIES
The Company has given formal undertakings 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
guarantees are required for that company to maintain its operating licence under Regulation 3 of the
Licensing of Air Carriers Regulations 1992, and to maintain its ATOL licence under The Civil Aviation (Air
Travel Organisers’ Licensing) Regulations 2012.
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 in accordance with treasury policy.
The Company has guaranteed the contractual obligations of easyJet Airline Company Limited to Airbus
SAS in respect of the supply of Airbus 320 family aircraft. Details of aircraft orders are disclosed in notes
11 and 27 to the consolidated financial statements.
The Company has guaranteed jointly and severally the contractual obligations with 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. In FY23 easyJet
did not to exercise the first extension option, therefore this facility now has a minimum of four and maximum
of five years.
On 8 January 2021, easyJet Airline Company Limited signed a five-year term loan facility of $1.87 billion
(with easyJet plc as a Guarantor), 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, but does contain some restrictive covenants
including dividend payments. However, these restrictive covenants are compatible with easyJet’s existing
policies. In April 2022, easyJet repaid $100 million of this facility reducing the overall UKEF facility size
from $1.87 billion to $1.77 billion and in June 2023 this facility was repaid and terminated. A new five-year
undrawn facility of $1.75 billion was entered into in June 2023. . Embedded within the facility is a
sustainability key performance indicator linked to a reduction in carbon emission intensity in line with
easyJet’s SBTi validated target, with a margin adjustment mechanism (upward or downward) conditional
on the achievement of specific milestones. Other than the sustainability linkage the facility is on similar
terms to the 2021 agreement.
The Company jointly and severally with easyJet Airline Company Limited has guaranteed the repayment
of borrowings that financed the acquisition of aircraft by subsidiary undertakings. This includes the
contractual obligations of the €1.2 billion bond that was issued on 3 March 2021 by easyJet FinCo B.V.
under the Euro Medium Term Note (EMTN) Programme. The bond has a coupon of 1.875% and matures
in March 2028. The Company has also guaranteed the payment obligations for the lease of aircraft by
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 and easyJet Holidays Transport Limited. The
guarantees are required for easyJet Holidays Limited and easyJet Holidays Transport Limited to maintain
ATOL licences under The Civil Aviation (Air Travel Organisers’ Licensing) Regulations 2012. easyJet plc has
also issued guarantees in favour of easyJet Holdings Limited relating to the processing of credit card
transactions and brand licence agreement with easyGroup Limited.
The Company has guaranteed certain letters of credit issued on behalf of subsidiary undertakings.
No amount is recognised on the Company statement of financial position with respect to any of these
guarantees as the fair value is deemed to be £nil per measurement under IFRS 9. The calculated loss
allowance on these financial guarantee contracts is immaterial.
F) RELATED PARTY TRANSACTIONS
Transactions with subsidiary undertakings principally relate to the provision of funding within the Group.
Apart from those relating to loans associated with the issuance of the Eurobonds, the outstanding
balances are placed on intercompany accounts with no specified credit period, are unsecured, and bear
market rates of interest. It is expected that balances will be settled when the associated funding is repaid
or via distribution of a dividend. The portion of the ‘Amounts due from subsidiary undertakings’ balance
that is expected to be settled within 12 months is classified as current.
The intercompany loan agreements associated with the issuance of the Eurobonds in October 2016
and June 2019 are on the same terms as the bonds themselves (see note 26 in the consolidated
financial statements).
For full details of the Company’s relationships with easyGroup Holdings Limited, see note 29 of the
consolidated financial statements.
G) EVENTS AFTER THE STATEMENT OF FINANCIAL POSITION DATE
The October 2016 Eurobond of €500 million was repaid in October 2023.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 194
FIVE-YEAR SUMMARY (UNAUDITED)
2023
£ million
2022
(as reported)
£ million
2021
(as reported)
£ million
2020
(as reported)
£ million
2019
(as reported)
£ million
2023
£ million
2022
(as reported)
£ million
2021
(as reported)
£ million
2020
(as reported)
£ million
2019
(as reported)
£ million
5,769
539
569
(27)
3
(208)
(178)
(169)
(147)
1,458
(425)
(551)
(910)
(1,036)
(1,036)
(1,136)
(858)
3,009
6,385
(358)
(273)
(899)
(777)
(1,273)
(835)
(1,079)
970
970
466
466
430
427
349
Other performance
indicators
Headline return on capital
employed1
Net cash/(debt) (£m)
Group total profit/(loss)
before tax per seat (£)
Group headline profit/(loss)
before tax per seat (£)
Airline total profit/(loss)
before tax per seat (£)
Airline headline profit/(loss)
before tax per seat (£)
(900)
(725)
349
Airline revenue per seat (£)
Airline headline cost
per seat (£)
Airline headline cost per
seat excluding fuel (£)
Seats flown (millions)
12.6%
41
4.67
4.91
3.35
3.59
79.84
(76.25)
(54.30)
92.6
0.1%
(670)
(25.2)%
(910)
(19.2)%
(1,125)
(2.55)
(36.75)
(23.09)
(2.19)
(40.29)
(15.16)
(3.01)
(36.33)
(22.66)
(2.65)
66.23
(39.87)
50.54
(14.68)
54.35
11.9%
(326)
4.10
4.07
4.10
4.07
60.81
(68.88)
(90.41)
(69.03)
(56.74)
(53.20)
81.5
(77.25)
28.2
(55.94)
55.1
(43.26)
105.0
1) Return on capital employed has been restated to exclude the hedging and cost of hedging reserves.
8,171
1,126
1,130
453
476
432
455
324
341
43.1
45.4
42.7
45.0
4.5
Income statement
Revenue
Total EBITDAR
Headline EBITDAR
Total operating profit/(loss)
Headline operating
profit/(loss)
Total profit/(loss) before tax
Headline profit/(loss)
before tax
Total profit/(loss) after tax
Headline profit/(loss)
after tax
Basic total earnings/(loss)
per share – pence
Basic headline earnings/
(loss) per share – pence
Diluted total earnings/(loss)
per share – pence
Diluted headline earnings/
(loss) per share – pence
Ordinary dividend per
share – pence
Statement of financial
position
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
(22.4)
(159.0)
(222.9)
(19.6)
(166.9)
(149.7)
(22.4)
(159.0)
(222.9)
(19.6)
(166.9)
(149.7)
–
–
–
5,711
4,130
(4,144)
(2,910)
2,787
5,525
4,929
(3,678)
(4,243)
2,533
5,608
4,165
(2,677)
(4,457)
2,639
5,910
2,563
(3,826)
(2,748)
1,899
88.6
88.7
87.8
87.8
43.9
6,044
2,119
(2,668)
(2,510)
2,985
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 195
GLOSSARY – ALTERNATIVE PERFORMANCE MEASURES (APMS) (UNAUDITED)
Non-headline items
Non-headline items are those where, in management’s opinion, their separate
reporting provides an additional understanding to users of the financial
statements of easyJet’s underlying trading performance, and which are
significant by virtue of their size/nature (see note 5).
Headline profit/(loss)
before tax
A measure of underlying performance which is not impacted by non-headline
items.
Statutory profit/(loss) before tax
Total non-headline charge before tax (see note 5)
Headline profit/(loss) before tax
432
23
455
(208)
30
(178)
Net cash/(debt)
Return on capital
employed (ROCE)
Year ended
30 September
2023
£ million
Year ended
30 September
2022
£ million
Borrowings
Lease liabilities
Cash and money market deposits (excluding restricted cash)
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 profit/(loss)
Add back:
Aircraft dry leasing
Depreciation
Amortisation of intangible assets
EBITDAR
Non-headline charge within EBITDAR (see note 5)
Headline EBITDAR
Year ended
30 September
2023
£ million
Year ended
30 September
2022
£ million
453
–
644
29
1,126
4
1,130
(27)
2
539
25
539
30
569
Net cash/(debt)
Total cash less borrowings and lease liabilities; cash includes money market
deposits but excludes restricted cash.
Year ended
30 September
2023
£ million
Year ended
30 September
2022
£ million
(1,895)
(989)
2,925
41
(3,197)
(1,113)
3,640
(670)
Profit/loss before interest and tax, applying tax at the prevailing UK corporation
tax rate at the end of the financial year, and dividing by the average capital
employed. Capital employed is shareholders equity, excluding the hedging and
cost of hedging reserves, plus net debt.
Headline return on
capital employed
(ROCE)
Headline profit/loss before interest and tax, applying tax at the prevailing UK
corporation tax rate at the end of the financial year, and dividing by the
average capital employed. Capital employed is shareholders equity, excluding
the hedging and cost of hedging reserves, plus net debt.
Average shareholders’ equity excluding hedging and cost of hedging
reserves
Average net debt
Average capital employed
Reported operating profit/(loss)
Tax rate
Adjusted operating profit/(loss) after tax
Return on capital employed
Reported operating profit/(loss)
Non-headline charge within operating profit (see note 5)
Headline reported operating profit
Tax rate
Adjusted headline operating profit after tax
Headline return on capital employed
Year ended
30 September
2023
£ million
Year ended
30 September
2022
Restated1
£ million
2,517
315
2,832
453
25%
340
12.0%
453
23
476
25%
357
12.6%
2,421
790
3,211
(27)
19%
(22)
(0.7%)
(27)
30
3
19%
2
0.1%
1) Average capital employed has been restated to exclude the hedging and cost of hedging reserves.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 196
GLOSSARY – ALTERNATIVE PERFORMANCE MEASURES (APMS) (CONTINUED)
Basic 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 –
pence
Total headline loss for the year divided by the weighted average number of
ordinary shares in issue adjusted to assume conversion of all dilutive potential
shares.
Total profit/(loss) after tax for the year
Total non-headline charge before tax (see note 5)
Tax impact of non-headline items
Headline profit/(loss) after tax
Weighted average number of ordinary shares used to calculate basic
earnings/(loss) per share
Weighted average number of ordinary shares used to calculate diluted
earnings(loss) per share
Headline earnings/(loss) per share
Basic
Diluted
Constant currency
measures
Year ended
30 September
2023
£ million
Year ended
30 September
2022
£ million
324
23
(6)
341
751
758
45.4
45.0
(169)
30
(8)
(147)
753
753
(19.6)
(19.6)
These performance measures are calculated by translating the year ended
30 September 2023 income statement at the average exchange rate for year
ended 30 September 2022, excluding any income statement impact in either
financial year from foreign currency exchange gains and losses arising from the
revaluation of the statement of financial position. The purpose of this APM is to
provide a like for like comparison of underlying operating performance by
excluding the impact of exchange rate movements.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials Dry leasing arrangements relate solely to the provision of an
aircraft. Wet leasing arrangements relate to the provision of
aircraft, crew, maintenance and insurance.
Passengers
Number of aircraft owned or on lease arrangements of over one
month’s duration at the end of the period. This excludes operating
leased aircraft which have been acquired for future operations.
These are held at zero rent and are excluded from the fleet
numbers.
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.
Profit before tax per seat
Profit before tax divided by seats flown.
Revenue
The sum of passenger revenue and ancillary revenue, including
package holiday revenue.
Revenue passenger
kilometres (RPK)
Number of passengers multiplied by the number of kilometres
those passengers were flown.
Revenue per ASK (RASK)
Revenue divided by available seat kilometres.
Revenue per seat
Seats flown
Sector
Revenue divided by seats flown.
Seats available for passengers.
A one-way revenue flight.
197
GLOSSARY – OTHER (UNAUDITED)
Aircraft dry/wet leasing
Aircraft owned/leased
at end of year
Available seat kilometres (ASK)
Seats flown multiplied by the number of kilometres flown.
Block hours
Capital employed
Cash collateralisation
Airline cost per ASK (CASK)
Airline cost per seat
Airline cost per seat,
excluding fuel
Airline CSAT
(customer satisfaction score)
Load factor
Normalised operating
profit after tax
Operating costs excluding fuel
Other costs
Other income
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 excluding the hedging and cost of hedging
reserves, plus net debt.
The process of pledging cash to serve as a lender’s protection
against a borrower’s default.
Airline revenue less profit before tax, divided by available seat
kilometres.
Airline revenue less profit before tax, divided by seats flown.
Airline revenue, less profit before tax, adding back fuel costs,
divided by seats flown.
A weighted average of responses of surveys sent to customers
who experienced either an on-time, delayed, severely delayed or
cancelled flight.
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.
Includes costs relating to airports and ground handling, crew,
navigation, maintenance, selling and marketing, and other costs/
income.
Administrative and operational costs not reported elsewhere,
including disruption costs, IT costs, costs of third-party providers,
some employee costs, wet lease costs and insurance. Additionally,
some non-headline costs, such as loss on sale and leaseback
transactions, and restructuring costs, are included in other costs.
Includes insurance receipts, supplier compensation payments,
rental income, gains on sale of intangible assets, and gains on sale
and leaseback transactions.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 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.
WEBSITE
You can access the corporate website at
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
notifications of results and press announcements
as they are released by registering on the website.
198
SHAREHOLDER INFORMATION
GO PAPERLESS
We want our shareholders to receive
communications quickly and easily, while also
reducing the impact on the environment.
Shareholders can help us do this by signing up to
receive electronic communications through
Shareview at shareview.co.uk.
Registering for Shareview is free and provides the
following benefits:
> Update your details online including your email
address and postal address.
> Add bank details so that you receive dividend
payments directly, rather than waiting for a
cheque.
> submit your voting instructions for shareholder
meetings.
> Add a range of shareholding and investments
you have (including those with other registrars)
to monitor their value all in one place.
> Buy and sell shares easily.
MANAGING YOUR SHARES
If you have further queries relating to your
shareholding, you should contact Equiniti, the
Company’s registrars, using one of the methods
listed below:
> Online: help.shareview.co.uk.
> By telephone: + 44 (0)371 384 2577. Please use
the country code if calling from outside the UK.
Lines are open Monday to Friday 8.30am to
5.30pm, excluding public holidays in England and
Wales.
> By post: Equiniti Limited, Aspect House, Spencer
Road, Lancing, West Sussex BN99 6DA.
ANNUAL GENERAL MEETING
The Board currently intends to hold the AGM
on 8 February 2024. The arrangements for the
Company’s 2024 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.
DIVIDENDS
Dividends can be paid quickly and securely directly
into your bank account instead of being dispatched
to you by cheque. You can arrange for this through
Shareview at shareview.co.uk.
INDEPENDENT AUDITOR
PricewaterhouseCoopers LLP
40 Clarendon Road
Watford, Hertfordshire
WD17 1JJ
REGISTERED OFFICE
Hangar 89
London Luton Airport
Luton
Bedfordshire
LU2 9PF
Telephone: 01582 525019
Registered in England & Wales under number
03959649
SHARE PRICE INFORMATION
Details of our share price data and other share
price tools are available at corporate.easyJet.com.
SHAREGIFT
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.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 199
THANK YOU
We’d like to thank everyone who has helped to produce this report:
Jane Ashton, Sruti Bajoria, Michael Barker, Deborah Benady, Maxwell Bruce, Michelle Buckle, Ross Caley, Barbara Cant, Phil Chastell, Matt Clemens, Claire Combes, Sam Cottrell, Jonathan Diec, Ian Dodd, Rhys
Evans, Holly Gardiner, Lydia Gorton, Murshad Habib, Thomas Haagensen, Karishma Haria, Alison Jackson, Kenton Jarvis, Skye John, Chloe Jones, Hayden Jones, Tuntu Kapembwa, Akshay Katyal, Menara Khatun,
Anna Knowles, Hetal Kotecha, Matt Landsman, Alex Larkin, Kate Marks, Samuel Mapungwana, Ben Matthews, Marc McKenna-Coles, Martha McLelland, Mansur Miah, Holly Mitchell, Julie Morris, Adam Mould, Atif
Nasir, Simon Nicholson, Anthony Pallant, Roshan Patel, Liz Perry, Omer Pervez, Jennifer Powell, Lauren Pye, Lahiru Ranasinghe, Megan Richards, Paul Robbins, Kelly Robinson, Sam Screpis, Raminder Shergill,
Amanda Simpson, Chris Sominka, Ben Souter, Holly Steadman, Adrian Talbot, Tim Taylor, Lisa Tsavalos, Mark Warner, Dale Weston, and all of our employees across the network.
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 200
GovernanceeasyJet plc Annual Report and Accounts 2023ContentsStrategic reportFinancials 201
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