Easyjet chairman John Barton outlined the airline’s plans to continue flying in the event of a no deal Brexit at yesterday’s Annual General Meeting, saying he’s confident flights will go on in any event.
The carrier has spent the last two years making preparations for the UK’s exit from the EU, including opening new operating subsidiaries in Austria and the UK, ensuring there is no reliance on existing EU traffic rights by the British airline, transferring 1,000 pilot and 3,300 cabin crew licences and re-registering 133 aircraft from the UK to Austria, obtaining safety certificates in Austria and creating a second spare parts “hub” in the EU to limit the risk of supply chain disruption between Europe and the UK.
Barton said Easyjet had also been “focused on ensuring that the right to fly remains between the EU and the UK”. He claimed the carrier is confident this will be the case even in the event of a no deal based on draft proposals from the European Commission and the UK government’s intention not to allow disruption to flights.
If the UK leaves the EU without a deal on 29 March, airlines may have to prove EU ownership of 50 per cent plus one share to continue flying between the union and the UK, and Barton said Easyjet has now reached 49 per cent EU ownership.
Commenting on what could happen if a no deal occurs, Barton said: “If the EU does not give airlines any adjustment period to comply with the applicable EU ownership and control regulations, the board stands ready to activate existing provisions of our Articles of Association to ensure that the company will comply following Brexit.
“This would be achieved by exercising the company’s existing powers to suspend shareholders’ voting rights, in respect of a small number of shares. For the period of any such suspension, the relevant shareholders would not be permitted to attend, speak or vote at shareholder meetings in respect of the shares subject to the suspension.”
Barton stipulated that such a measure would only affect “a small percentage of shares” and would be applied on a “last-in-first-out basis, meaning it would affect shares most recently acquired by UK and non-EU nationals first”.
The airline has also not ruled out requesting non-EU shareholders to sell their stake in Easyjet to EU nationals if its ownership remains below the required level.
Barton concluded: “While we are operationally well prepared, as we get closer to Brexit we remain focused on the broader external risks that could emerge, in particular in the event of a ‘no deal’ Brexit. These risks may be sector and/or non-sector specific and their impact is, by definition, less certain. This would include any impact on consumer confidence or the potential cost and operational impacts arising from increased friction in travel between the EU and the UK. Our focus remains on monitoring any such risks and being as ready as possible to put in place scenario plans to address them.”
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