Wednesday 19 September 2018

EasyJet boosts EU ownership of shares

EasyJet chief executive Carolyn McCall steps down next month
EasyJet chief executive Carolyn McCall steps down next month
John Mulligan

John Mulligan

EasyJet is intensifying efforts to shift more of its shares into the hands of European investors as it begins preparations for Brexit.

Reporting full-year results yesterday, EasyJet said that under EU law, EU member states can only permit an air carrier to operate airline services if the majority of its share capital is owned, and the carrier is effectively controlled, by member states of the European Economic Area or their nationals.

EasyJet has already established a new airline, EasyJet Europe, which is based in Vienna. That will enable EasyJet to continue operating flights across Europe and domestically within EU countries once the UK leaves the European Union.

EasyJet, whose outgoing CEO Carolyn McCall is set to be succeeded by ex-TUI executive Johan Lundgren on December 1, will have three airlines, in the UK, Austria and Switzerland that will all be owned by EasyJet plc, which will in turn be EU-owned and controlled.

EasyJet has also recently agreed to buy part of failed Air Berlin's assets, including leases for 25 jets.

At its annual general meeting next February, EasyJet proposes to change its Articles of Association to ensure the carrier is able to remain EU-owned and controlled after Brexit.

That will mean ensuring that more than 50pc of its share capital is owned by EU nationals.

The airline assured investors that it already begins the process "from a position of strength", with close to 50pc of its shares already owned by European Economic Area nationals, excluding UK-only nationals.

"The company has already begun a more rigorous investor relations programme across Europe with the intention of increasing EEA (non-UK) ownership above 50pc prior to the UK's exit from the EU," it noted.

Ryanair chief executive Michael O'Leary has previously warned that its UK shareholders could have to sell shares in the carrier, as it also needs to ensure that more than 50pc of its shares are owned by EU nationals.

About 20pc of Ryanair's shares are owned by UK investors.

The airline also has a substantial investor base in the United States.

Shares in EasyJet soared as much as 6pc yesterday despite its full-year, headline pre-tax profit tumbling 17.3pc to £408m (€459.6m). Revenue rose 8.1pc to £5bn (€5.6bn).

The airline carried 80.2 million passengers in the 12 months to the end of September, a 9.7pc increase. It notched up a record load factor, or percentage of available seats sold, of 92.6pc.

Ms McCall said EasyJet has a "huge amount of positive momentum".

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business