TIDMEZJ

RNS Number : 1559G

easyJet PLC

23 November 2020

23 November 2020

easyJet plc

(the "Company")

Annual Report and Notice of Annual General Meeting

The Company confirms that the following documents are being posted or have been made available to shareholders today:

   --      Annual Report and Accounts for the year ended 30 September 2020 ('2020 Annual Report'); 
   --      Notice of Annual General Meeting ('AGM Notice'); and 
   --      Form of Proxy for Annual General Meeting. 

In accordance with Listing Rule 9.6.1 copies of the above documents have been submitted to the National Storage Mechanism and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism The documents are also available on the Company's website at http://corporate.easyjet.com .

The appendix to this announcement contains additional information which has been extracted from the 2020 Annual Report for the purposes of compliance with the FCA's Disclosure Guidance and Transparency Rules and should be read together with the Final Results announcement from 17 November 2020, which can be found at http://corporate.easyjet.com/investors/regulatory-news . Together these constitute the information required by DTR 6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service. This information is not a substitute for reading the full 2020 Annual Report.

Annual General Meeting arrangements

The AGM will take place on Wednesday, 23 December 2020 at 11.00 a.m. The Board takes the well-being of its employees, customers and shareholders very seriously. Given the UK Government's current restrictions on public gatherings in place at the date of this announcement, and in accordance with the regulations set out in Schedule 14 of the Corporate Insolvency and Governance Act 2020, we regret that it will not be possible for shareholders to attend the AGM in person.

The Company is offering facilities for shareholders to attend and to vote at the AGM electronically and to attend by conference call to ask questions in real time should they wish to do so. Further details are set out in Part III of the AGM Notice and a user guide to the electronic facilities is available on our website at:

https://corporate.easyjet.com/investors/shareholder-services/shareholder-meetings/agm-december-2020

We strongly encourage shareholders to vote on all resolutions in advance of the AGM by completing an online proxy appointment form appointing the Chairman of the meeting as their proxy and to register any questions in advance. Further details are included in the AGM Notice.

The Board will keep the situation under review and may need to make further changes to the arrangements relating to the AGM, including how it is conducted, and shareholders should therefore continue to monitor the Company's website and announcements for any updates.

Shareholders are urged to submit their votes by proxy before 11.00 a.m. on Monday, 21 December 2020 .

For further details please contact easyJet plc:

 
 Institutional investors and analysts: 
 Michael Barker     Investor Relations          +44 (0) 7985 890 939 
 Holly Grainger     Investor Relations          +44 (0) 7583 101 913 
 
 Media: 
 Anna Knowles       Corporate Communications    +44 (0) 7985 873 313 
 Dorothy Burwell    Finsbury                    +44 (0) 207 251 3801 
                                                +44 (0) 7733 294 930 
 

LEI: 2138001S47XKWIB7TH90

Appendix: additional information required by DTR 6.3.5

Page and note references in this appendix refer to page numbers and notes in the 2020 Annual Report.

Directors' Responsibilities and Statements

The following responsibility statement is extracted from the Statement of Directors' Responsibilities on page 132 of the 2020 Annual Report and Accounts and is repeated here solely for the purpose of complying with DTR 6.3.5. The statement relates to the full 2020 Annual Report and Accounts and not the extracted information presented in this announcement or the Final Results announcement.

The Directors are responsible for preparing the Annual Report and Accounts ('accounts') in accordance with applicable law and regulations.

Company law requires the Directors to prepare accounts for each financial year. Under that law the Directors have prepared the Group and Company accounts in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). Under company law the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group and the Company for that period.

In preparing the accounts, the Directors are required to:

-- select suitable accounting policies and then apply them consistently

-- make judgements and accounting estimates that are reasonable and prudent

-- state whether applicable IFRS as adopted by the EU have been followed, subject to any material departures disclosed and explained in the accounts

-- prepare the accounts 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 keeping adequate accounting records that are sufficient to show and explain the Group's and the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company. This enables them to ensure that the accounts and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group accounts, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of, amongst other things, the financial and corporate governance information provided on the easyJet website http://corporate.easyjet.com/. Legislation in the United Kingdom governing the preparation and dissemination of accounts may differ from legislation in other jurisdictions.

The Directors consider that the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group's and the Company's position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed on pages 80 to 83, confirm that, to the best of their knowledge:

-- the Group and Company accounts, which have been prepared in accordance with IFRS as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and loss of the Group and profit of the Company

-- the strategic report, included in the Annual Report, includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

In accordance with section 418 of the Companies Act 2006, each Director in office at the date the Directors' Report is approved, confirms that:

-- so far as the Director is aware, there is no relevant audit information of which the Group and Company's auditor is unaware

-- he/she has taken all the steps that he/she ought to have taken as a Director in order to make himself/herself aware of any relevant audit information and to establish that the Group and Company's auditor is aware of that information.

The Annual Report on pages 1 to 132 was approved by the Board of Directors and authorised for issue on 17 November 2020 and signed on its behalf by:

   JOHAN LUNDGREN          Chief Executive                  ANDREW FINDLAY  Chief Financial Officer 

Principal Risks and Uncertainties

The risks and uncertainties set out below are extracted from the pages 66 to 77 of the 2020 Annual Report and Accounts and are repeated here solely for the purpose of complying with DTR 6.3.5.

Our risk Profile

The principal risks and uncertainties faced by the Group remain largely unchanged from 2019 and include the following types of risks:

-- Impact of COVID-19 - the impacts of government imposed travel restrictions in response to the COVID-19 pandemic, including their effects on consumer demand, the competitive landscape, and the financial markets (see page 67)

-- Asset efficiency and effectiveness - making the best use of capacity/slots and fleet mix in the right airports at the right prices, and driving value through our supply chain

-- Environment and sustainability - the impacts of climate change on our business and operations, carbon credit programmes, regulation/ taxation, and changing customer and people expectations

-- Legislative/regulatory landscape - being aware of, and compliant with, legislation and regulation affecting our business

-- Macro-economic and geopolitical - events that can affect our financial performance including supply/ demand imbalance, general economic trends, Brexit (see page 68), as well as impact of fuel cost, foreign exchange rates, and counterparty performance

-- People - having the right people through talent acquisition, retention, engagement, and succession planning

-- Safety, security, and operations - the delivery of a safe and secure operation which meets the needs and expectations of our customers

-- Technology and cyber - the availability, security, compliance and performance of website and critical technologies, and the protection of company and customer data including the impact of the data breach announced in May 2020 (see page 68).

As with all businesses, our principal risks and uncertainties are continually evolving.

IMPACT OF COVID-19

The impact the COVID-19 pandemic continues to evolve. Travel restrictions continue to be imposed by governments across our markets. Due to these restrictions, a portion of the easyJet fleet has remained grounded since 30 March 2020. The risks and uncertainties, stated in the first half of our 2020 financial year results, remain and continue to be actively managed:

In order to manage both high levels of volatility in demand and to protect the business from the risk of heavily loss making flying, we have put into place a dynamic planning and capacity management process over summer 20 and winter 20/21. This allows the review of planned capacity at three key intervals:

1. Six weeks prior to departure: On sale capacity is reduced significantly to remove the majority of loss making capacity. This is the biggest capacity modification.

2. Four weeks prior to departure: A further check is conducted on the forecast performance of the capacity that is left with further underperforming capacity removed at this point.

   3.      Three weeks prior to departure any flights with a very low load factor are removed. 

Ensuring the safety of our passengers and people is, and always will be, easyJet's highest priority. Whilst the rate of transmission of COVID-19 decreased from the peaks seen earlier in 2020, there continue to be new cases of infection in many countries and the rates have been increasing since the summer. The measures implemented by easyJet are based on our risk assessments and government, WHO, EASA, ICAO and public health guidance. easyJet has a comprehensive set of biosecurity standards in place to minimise the risk of transmission of infectious diseases which have been developed and are constantly under review by our Biosecurity Standards Group. These include all of our aircraft having industry leading filtration systems, to keep the cabin air as clean as possible. We have also implemented additional daily cleaning and disinfection of our aircraft. Furthermore, passengers and crew are required to wear masks on board all our flights.

Due to the extreme level of uncertainty created by the global COVID-19 pandemic, there remains a risk that multiple and prolonged waves of the pandemic could affect our markets, leading to further travel restrictions being imposed at short notice, which could reduce customer confidence in travelling at this time. Accordingly, easyJet has modelled severe but plausible downside scenarios based on further extended waves of the pandemic. These downside scenarios include combinations of a prolonged recovery period, decrease in yield, increased in forecast costs, planned cost initiatives not being achieved to the level forecast, adverse variations in fuel price, significant deterioration of relationships with card acquirers, cash collateralisation and unfavourable foreign exchange rate movements. Although these severe downside scenarios are not considered likely, in the event of some or all of these occurring, and to ensure the business meets its obligations for the next 12 months, the Group may need to secure additional funding, which is not contractually committed at 30 September 2020.

easyJet has taken several measures to preserve cash, reduce costs and generate liquidity. These include signing two secured term loans totalling circa GBP400 million, maturing in 2022. We have also successfully issued GBP600 million of Commercial Paper through the Covid Corporate Financing Facility (CCFF) as well as fully drawing down on a $500 million Revolving Credit Facility. This facility is secured against aircraft. In the second half of the financial year, easyJet raised GBP608 million through the sale and leaseback of 23 aircraft. Furthermore, during the 2021 financial year, easyJet continues to engage with an active lessor market interested in acquiring further aircraft from easyJet's fleet on a sale and leaseback basis, including a recently announced sale of 30 additional aircraft for proceeds of GBP717 million. In June 2020, easyJet also went to the equity market and successfully raised GBP409 million through a placing of new shares. In total, between March and September 2020, easyJet has secured more than GBP2.4 billion to protect it against the impact of COVID-19. easyJet continues to take decisive action to remove cost and non-critical expenditure from the business at every level. This includes reaching agreement with Airbus to delay the delivery of 24 aircraft, with easyJet now expecting its year end 2021 fleet size to be around 302 aircraft.

easyJet utilised Government support available across its network to furlough employees. To reflect the reduced fleet, and proposals relating to the optimisation of our network and bases, easyJet announced that it may need to reduce staff numbers by up to 30% subject to consultation with its employee representatives; several of those consultation processes are ongoing. During the organisation design process, the Group has considered the critical skills and capabilities needed to ensure it remains successful in the future. As easyJet progresses through the consultation process, there is a heightened risk of industrial action that may disrupt our operations.

In light of the global pandemic, the market for aircraft transactions has slowed significantly. However, asset recoverable amounts remain, based on value in use, in excess of the carrying values as at 30 September 2020. Management will continue to keep these valuations under review.

The significant increase in employees working at home has increased our IT and information security risks. We have an ongoing communication and awareness programme to remind all users of the associated risks, and have issued advice on secure home-working best practices. We have also changed our multi-factor authentication and password complexity controls to reflect changing IT Security threats. Furthermore a comprehensive wellbeing support microsite was launched to support people to work remotely as well as manage the personal impact of COVID-19.

To help mitigate the risks from working from home, and meet our duty of care obligations, our Occupational Health and Safety team has issued guidance and a method of self-assessment to support employees. This includes information on how to correctly set up a home working environment and the need to take regular breaks. Those who are identified through this process as needing additional support due to health and safety concerns are being supported, and provided with equipment, as required.

Further support is being given to employees as the Group moves to a position where working from home is regularly required via our Remote Working Policy. This includes a support package to help facilitate a better, more productive homeworking environment. The policy also details support given via our Employee Assistance Programme (EAP) and the #YOUMATTER initiative, which helps to support our employee's wellbeing.

Brexit

easyJet preparations for the Brexit trade deal continue and the plan has not changed. The focus remains ensuring that our network is unaffected by Brexit and that our operations are uninterrupted by any eventual Brexit trade deal outcome, including a no deal exit. The cross functional Brexit programme continues to oversee Brexit planning, led by the Group General Counsel & Company Secretary. The Board has also had oversight of the preparations and is regularly briefed.

easyJet has in place a series of measures to protect our flying rights regardless of the Brexit trade deal outcome, these included:

-- Implementing a new operating model, with easyJet operating as a pan-European airline group with three operating airlines: in Austria, Switzerland and the UK. This will ensure we can continue to maintain our network

after Brexit

-- Ensuring that we meet the requirements that EU airlines are majority EU27 owned and controlled, through our investor relations programme and, if needed, activating our contingency plan that could involve suspending a small number of shareholders' voting rights

-- Ensuring that our operation is robust to the UK leaving EASA, the European Aviation Safety Agency, including transferring our EU27 based pilots to Austrian pilot licences and ensuring we have sufficient pilots and cabin crew of EU27 nationality

-- Continuing to engage with European governments, aviation regulators and the European Commission on Brexit issues

Of particular focus has been ensuring that easyJet is robust to a no deal Brexit outcome and that flights are able to continue between the EU and the UK.

To further support the robustness of our operation to a no deal outcome we have invested in operational measures to ensure that there is no reliance on EU/UK trading links in case these are disrupted, including putting in place stores for spare parts within the EU27.

A no deal Brexit carries potential financial risks for instance from changes in airport and tax charging structures and any unexpected outcomes. Alongside this there remains uncertainty about the economic effects of a no deal Brexit.

IMPACT OF DATA BREACH

On 19 May 2020, easyJet announced that it had been the target of a cyber attack from a highly sophisticated source. The attacker had access to the email address and booking details which had been input by approximately nine million bookers and, for a very small subset of customers (2,208), payment card details. The Information Commissioner's Office (ICO) has opened an investigation into the cyber attack. A class action law firm has filed a group claim against easyJet in the English High Court and claims have also been commenced or threatened in certain other courts and jurisdictions. The likely outcome and potential impact on easyJet of the investigation by the ICO, and the claims, are subject to a number of significant uncertainties and, therefore, any assessment of the likely outcome or quantum cannot be made at the date of this disclosure.

asset efficiency and effectiveness

We maintain our competitive cost advantage by making the best use of capacity/slots and fleet mix in the right airports at the right prices, and driving value through our supply chain.

 
airport                Potential causes                                          Controls and mitigations 
Infrastructure          *    Increased competitor capacity                         *    Where easyJet is affected by industrial action or 
Flying to primary                                                                       other service interruption by a key supplier, 
airports is an                                                                          resources are deployed to manage this as effectively 
important element       *    Environmental restrictions/ pressure restricting           as possible See the significant operational 
of our customer              airport expansions                                         disruption risk on page 76 for further details 
proposition. The 
airports to which 
we fly may already      *    Delays in airport infrastructure expansion            *    Sophisticated processes and systems to ensure slot 
be or may become                                                                        transactions are made in an efficient and effective 
congested.                                                                              manner. 
                        *    Increase in airport charges 
 
                                                                                   *    Effective cross-functional governance to ensure 
                        *    Changes in regulation                                      optimal business decisions are made 
 
 
                        *    Ineffective slot management                           *    easyJet closely monitors airport capacity through a 
                                                                                        dedicated airport development team. The team works 
                                                                                        with airports to ensure the development of 
                       Potential consequences                                           appropriate capacity for easyJet in a cost efficient 
                        *    Weakened customer proposition                              and timely manner 
 
 
                        *    Loss of market share                                  *    Managing aircraft gauge to improve our ability to 
                                                                                        grow 
 
                        *    Inefficient use of crew/aircraft 
 
 
                        *    Significant increase in costs 
Continuity of          Potential causes                                          Controls and mitigations 
services                *    Failure of critical IT system                        *    The four key areas of business resilience (IT and 
easyJet is dependent                                                                   processes, people, premises, and suppliers) all form 
on a mixture of                                                                        part of easyJet's functional business and airport 
critical IT systems     *    Destructive cyber-attack (i.e. ransomware)                Business Continuity Plans 
and processes, 
employees, 
buildings/facilities    *    Significant external incident (terrorism, weathe     *    Critical IT systems are identified with ongoing 
and third-party        r,                                                              efforts to match the business needs with recovery 
suppliers. A loss            activism)                                                 capabilities. The risk of system unavailability is 
of one or more                                                                         now mitigated further, thanks to the adoption of the 
of the above                                                                           cloud, in addition to easyJet's two data-centres 
components              *    Failure of third-party 
could lead to 
significant                                                                       *    Incident Management and Resilience teams are in place 
disruption              *    Industrial action                                         and ready to respond to any IT related incident 
to operations 
and could have 
an adverse             Potential consequences                                     *    Time-critical staff have been identified via Business 
reputational,           *    System unavailability for customers and/or staff          Impact Assessments and Business Continuity Plans, 
financial or legal                                                                     with regularly tested recovery desks allocated at 
impact.                                                                                alternate locations should the usual place of work be 
                        *    Inability to access key buildings/facilities              unavailable. An increased provision of laptops and 
                                                                                       tablets also enables greater mobility and remote ways 
                                                                                       of working 
                        *    Unavailability of critical staff 
 
                                                                                  *    Enhanced procurement processes include risk 
                        *    Reliance on inadequate supplier recovery plans            assessments aligned with business objectives. These 
                                                                                       require relevant third parties to have their own 
                                                                                       Business Continuity/Disaster Recovery plans and we 
                        *    Operational disruption                                    are implementing a process to review a sample of 
                                                                                       these each year 
 
                        *    Brand/ reputation impact 
                                                                                  *    Maintain close working relationships with key 
                                                                                       stakeholders including, but not limited to, airport 
                        *    Sustained adverse media coverage                          authorities and slot coordinators lobbying where 
                                                                                       appropriate 
                      -------------------------------------------------------  ------------------------------------------------------------- 
 
 
Non-delivery   Potential causes                                              Controls and mitigations 
of              *    Resource dedicated to change delivery and oversight      *    Complex, large-scale programmes have been initiated, 
strategic                                                                          prioritised and are managed through the Project 
initiatives                                                                        Management Office 
The business    *    Changes in organisation's priorities (may be driven 
continues            by internal or external factors) 
to undertake                                                                  *    A project management framework, which sets out 
a                                                                                  approval processes, governance requirements, and key 
number of       *    Scope change/time available                                   ongoing processes and controls, is followed by all 
initiatives                                                                        projects and programmes, and reviews are undertaken 
to support                                                                         to ensure continuous improvement in this approach 
its            Potential consequences 
strategy.       *    Business benefits not realised 
                                                                              *    Each strategic initiative has an executive sponsor 
                                                                                   from the AMB and its own steering group which 
                *    Financial underperformance                                    provides oversight and challenge to the project, 
                                                                                   monitors progress against programme objectives and 
                                                                                   ensures that decisions are made at the appropriate 
                *    Inefficient use of resource                                   level 
 
 
                                                                              *    Key strategic initiatives are managed by experienced 
                                                                                   programme managers, complemented by appropriate 
                                                                                   subject matter specialist resource where appropriate 
 
 
                                                                              *    A Project Management Office is in place to oversee 
                                                                                   delivery of projects and programmes, including the 
                                                                                   allocation of support resource, budget tracking and 
                                                                                   realisation of benefits 
 
 
                                                                              *    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 associated 
                                                                                   with their delivery 
 
 
                                                                              *    The Internal Audit function provides independent 
                                                                                   programme assurance over our most significant 
                                                                                   initiatives, drawing upon independent subject matter 
                                                                                   expertise where appropriate 
Single fleet    Potential causes                                             Controls and mitigations 
supplier          *    Delays in the delivery of new aircraft                 *    There are approximately 8,672 A320 family (A319, 
easyJet is                                                                         A320, A321) aircraft operating, with a proven track 
dependent                                                                          record for safety and reliability 
on Airbus as      *    Technical/mechanical issues 
its 
sole                                                                          *    Introduction of the A320neo in part mitigates this 
supplier          *    Fluctuating second-hand market                              single fleet supplier risk as the aircraft is 
for                                                                                equipped with a different engine type 
aircraft. 
The Board        Potential consequences 
considers         *    Schedule reductions/cancellations                      *    easyJet continues to work closely with Airbus to 
that the                                                                           ensure full visibility of the delivery schedule for 
efficiencies                                                                       new aircraft. In the event that there are material 
achieved by       *    Grounding of all/part of the fleet                          delays, appropriate mitigation is put in place; for 
operating                                                                          example short-term wet lease arrangements are used to 
a single                                                                           minimise any operational impact 
fleet             *    Loss of customer confidence 
type 
outweigh                                                                      *    easyJet operates a rigorous established aircraft 
the risks         *    Financial impact when aircraft leave the fleet              maintenance programme. Maintenance schedules are 
associated                                                                         approved by the relevant regulatory body 
with 
easyJet's 
single fleet                                                                  *    easyJet regularly reviews the second-hand-market and 
strategy.                                                                          has a number of different options when looking at 
                                                                                   fleet exit strategies. Sale and leaseback facilitates 
                                                                                   the exit of aircraft from the fleet by transferring 
                                                                                   residual value risk, and also provides flexibility in 
                                                                                   managing the fleet size 
              ----------------------------------------------------------  -------------------------------------------------------------- 
 

environment and sustainability

The impacts of climate change on our business and operations, carbon credit programmes, regulation/taxation, and changing consumer and colleague expectations. easyJet's promise in Our Strategy is to be a safe and responsible airline. This is what guides our approach to sustainability, whether that be related to climate change, health and safety, diversity, or employee engagement. More information is in the Sustainability section on page 36.

 
carbon           Potential causes                                                Controls and mitigations 
trading           *    Political change                                           *    easyJet influences future and existing policy and 
schemes                                                                                regulations which affect the airline industry through 
Adverse                                                                                a number of different channels, including working 
changes           *    Uncertainty driven by Brexit                                    with relevant industry bodies to assist in this 
to carbon 
trading 
schemes,          *    International alignment                                    *    easyJet looks to optimise fuel usage to reduce 
including                                                                              emissions and therefore reduce the potential impact 
the existence                                                                          of those schemes, for example ensuring optimal 
and/or cost       *    External pressure groups                                        routings as well as using climb, descent and landing 
of                                                                                     techniques to improve efficiency 
the scheme. 
                 Potential consequences 
                  *    Closure of existing scheme                                 *    easyJet has an appropriate hedging strategy (to the 
                                                                                       extent possible) 
 
                  *    Loss of free allocations, leading to significant cost 
                       impact 
 
 
                  *    Introduction of new schemes 
 
 
                  *    Inability to hedge in line with fuel policy 
climate          Potential causes                                                Controls and mitigations 
change            *    Increased CO 2 emissions                                   *    easyJet continues to bring Airbus neo aircraft into 
Weather                                                                                its fleet which are significantly more fuel efficient 
patterns                                                                               than the standard variant 
including,       Potential consequences 
but               *    Adverse customer experience 
not limited                                                                       *    easyJet offsets the carbon emissions from the fuel 
to,                                                                                    used on every plan flown 
winds,            *    Injury to customers 
storms, 
extreme                                                                           *    easyJet implements a range of fuel and carbon saving 
temperatures,     *    Operational disruption (including airspace and runway           initiatives, for instance operating flights at high 
are becoming           closures)                                                       load factors and using only one engine when taxiing 
increasingly                                                                           on the ground 
difficult to 
predict.          *    Aircraft damage 
                                                                                  *    Disruption management measures include advanced 
                                                                                       winter planning, standby crews and aircraft, as well 
                  *    Customers consider alternatives to air travel                   as the continual review of flight plans to ensure the 
                                                                                       optimal routings. In addition, to reduce the time it 
                                                                                       takes to resolve aircraft technical faults, easyJet 
                                                                                       has a contract for two light aircraft and crew to 
                                                                                       transport engineers and spare parts around its 
                                                                                       network, with dedicated engineers on standby to 
                                                                                       travel 
               -------------------------------------------------------------  -------------------------------------------------------------- 
Increased        Potential causes                                                Controls and mitigations 
Taxation           *    Political change                                          *    By engaging with key stakeholders, easyJet seeks to 
Future policy                                                                          reach a common understanding on the drive to impose 
measures and                                                                           policy measures and regulation to address the impact 
regulation         *    External pressure groups                                       of aviation on climate change 
to tackle the 
impact of 
aviation           *    Customer demand                                           *    easyJet continues to explain its environmental 
on climate                                                                             performance, and the further action it is taking, to 
change                                                                                 its customers and other stakeholders. For example, 
could impact      Potential consequences                                               this has included highlighting the introduction of 
easyJet's          *    Significant increase in cost of existing aviation              the A320neo and A321neo aircraft and their reduced 
business if             taxes/levies                                                   emissions compared to previous generation aircraft, 
they                                                                                   and work with partners in regards to new technologies 
impose                                                                                 to radically reduce the carbon footprint of flying 
limitations        *    Future expansion of taxes/levies 
and cost on 
how                                                                               *    easyJet is able to operate flexible routings in the 
easyJet            *    Policies to constrain growth/capacity                          event of constraints being brought in 
operates 
and the 
services           *    Increasing noise curfews                                  *    The new generation Airbus A320neo and A321neo 
it can                                                                                 aircraft are 50% quieter during takeoff and landing 
provide.                                                                               than the equivalent previous generation aircraft 
                   *    Pressure on margins 
               -------------------------------------------------------------  -------------------------------------------------------------- 
 

legislative/regulatory landscape

The airline industry is heavily regulated and there is a continual need to keep well informed and adapt (as required) to any legislative or regulatory changes across the jurisdictions in which easyJet operates.

 
brand license           Potential causes                                           Controls and mitigations 
and major                *    Shareholder activism                                  *    Active shareholder engagement programme 
shareholder 
easyJet has two 
major shareholders       *    Actions of easyGroup or other easyGroup licensees     *    Regular engagement with easyGroup Holdings Limited 
(easyGroup Holdings                                                                      alongside other major shareholders 
Limited and Polys 
Holdings Limited)       Potential consequences 
which, as a concert      *    Eventual loss of the brand licence                    *    Representatives from the Board and senior management 
party, control                                                                           take collective responsibility for addressing issues 
approximately                                                                            arising from any activist approach adopted by the 
28.69% of its                                                                            major shareholder. The objective is to address issues 
ordinary shares.                                                                         when they arise and anticipate and plan for potential 
easyJet does not                                                                         future activism 
own its company 
name or branding, 
which is licensed                                                                   *    Quarterly meeting of senior representatives from both 
from easyGroup                                                                           sides, attended by the Chief Financial Officer and 
Ltd. The licence                                                                         the Group General Counsel & Company Secretary, to 
includes certain                                                                         actively manage brand-related issues as they arise 
minimum service 
levels that easyJet 
must meet in order                                                                  *    easyJet makes contributions to the joint brand 
to retain the                                                                            protection fund 
right to use the 
name and brand. 
legal/regulatory        Potential causes                                           Controls and mitigations 
non-compliance           *    New or changes to existing legislation/regulation     *    Compliance framework including, but not limited to, 
Failure to comply                                                                        policies, procedures, and mandatory training 
with legislation                                                                         programmes 
and regulation,          *    Employee/agent ignorance 
such as local 
consumer laws,                                                                      *    easyJet has an in-house team of Legal experts to 
new case law or          *    Rogue employee/agent behaviour                             advise on legal issues and developments, and to 
policy changes                                                                           assist the business in interpreting any formal 
in relation to                                                                           regulatory requirements. Where appropriate, this 
customer                Potential consequences                                           expertise is supplemented with specialist external 
compensation,            *    Sustained adverse media coverage                           support relevant to a specific discipline or 
environmental                                                                            jurisdiction 
or airport 
regulation,              *    Fines/regulatory sanctions 
in the                                                                              *    Panel of external legal advisers, both in the UK and 
jurisdictions                                                                            in key easyJet markets, are briefed to keep easyJet 
in which easyJet         *    Reduction in future revenue                                informed of any changes or new legislation and to 
operates, or data                                                                        assist easyJet in developing appropriate responses to 
protection/                                                                              such legislation 
information              *    Operational disruption 
protection 
regulations                                                                         *    easyJet influences future and existing policy and 
could have an            *    Loss of operating licence                                  regulations which affect the airline industry through 
adverse                                                                                  a number of different channels, including working 
reputational                                                                             with relevant industry bodies to assist in this 
and financial            *    Significant spike in costs 
impact. 
                                                                                    *    easyJet adapts to new legislation and regulation, 
                         *    Share price movement                                       where possible adapting existing compliance 
                                                                                         frameworks (for example mandatory training programmes 
                                                                                         and clear policies and associated guidance) 
                         *    Loss of colleague/customer trust 
                     ----------------------------------------------------------  ------------------------------------------------------------- 
 

macro-economic and geopolitical

The airline industry can be sensitive to macro-economic and geopolitical conditions. These risk events can affect our financial performance including supply/demand imbalance, general economic trends, Brexit (discussed on page 22), as well as impact of fuel cost, foreign exchange rates, and counterparty performance.

 
supply/demand     Potential causes                                                Controls and mitigations 
imbalance          *    Increased capacity                                         *    Enhancements to our Commercial organisation to 
easyJet's                                                                               provide even further focus on existing and new 
success                                                                                 initiatives to optimise the revenue position 
in the highly      *    Industry consolidation 
competitive 
European                                                                           *    Weekly trading meeting to review performance - 
short-haul         *    Increased competition from other airlines and                   attended by senior managers, including members of the 
aviation                transport providers                                             AMB 
market is 
built 
on our key         *    Government interventions                                   *    Relentless focus on maintaining easyJet's competitive 
competitive                                                                             advantages 
advantages: 
our                *    Fall in consumer demand (including but not limited to 
network, cost           macro-economic conditions and environmental concerns)      *    The Network Development Forum, a cross-functional 
base, brand,                                                                            panel of senior managers, including members of the 
digital                                                                                 AMB, approves the allocation of assets around the 
innovation         *    Internal growth plans                                           network in the context of expected market conditions 
and 
efficient and 
robust            Potential consequences                                           *    Competitor and consolidation activity is monitored in 
capital            *    Loss of market positions (relative market share)                detail by the Network team, enabling strategic 
structure. In                                                                           decision making on key market positions 
FY20 the 
pandemic           *    Pressure on margins 
has impacted                                                                       *    Fleet framework arrangements, together with the 
the                                                                                     Group's leasing policy, provide easyJet with 
balance,           *    Adverse financial position                                      significant flexibility in respect of scaling the 
decreasing                                                                              fleet according to business requirements 
demand 
significantly      *    Share price movement 
.                                                                                  *    Implemented a dynamic planning and capacity 
                                                                                        management process of summer 20 and winter 20/21 to 
                                                                                        manage supply and demand fluctuations 
VOLATILITY IN     Potential causes                                                Controls and mitigations 
FINANCIAL           *    Market price risk: volatility in jet fuel prices,          *    The Finance Committee (a committee of the plc Board) 
MARKETS                  foreign exchange rates, carbon prices, inflation                oversees the Group's treasury and funding policies 
easyJet is               rates or interest rates                                         and activities. See page 107 for further details 
exposed 
to a variety 
of                  *    Counter-party risk: default of counter parties used        *    Treasury policy sets out plc Board approved 
financial                for depositing surplus cash and hedging                         strategies for market price risk management, 
markets,                                                                                 counter-party credit risk management and liquidity 
volatility in                                                                            risk management. Monthly reporting on all treasury 
which could         *    Liquidity risk: inability to raise funds when                   activity including reporting on compliance with 
give                     required                                                        treasury policy 
rise to 
adverse 
pressure on        Potential consequences                                           *    Maintaining a liquidity buffer supported by cash and 
the                 *    Insufficient cash to meet financial obligations as              a business interruption insurance policy 
cash flows of            they fall due and/or the inability to fund the 
the Group.               business when needed leading to insolvency 
                                                                                    *    Ability to access diverse sources of funding to 
                                                                                         support liquidity requirements 
                    *    Significant increase in costs 
 
                                                                                    *    Rolling hedging programmes on jet fuel and foreign 
                                                                                         exchange market price exposure 
               --------------------------------------------------------------  -------------------------------------------------------------- 
 

people

Having the right people is a key part of Our Strategy. In today's environment, we need to create an inclusive and energising environment that attracts the right people and inspires everyone to learn and grow.

 
industrial     Potential causes                                       Controls and mitigations 
action           *    Adverse employee experience                      *    easyJet seeks to maintain positive working 
easyJet, and                                                                relationships with all trade unions and other 
the                                                                         representative bodies and has a framework in place 
aviation         *    Changes to terms and conditions                       for consulting and engaging with trade unions and 
industry                                                                    consultative bodies 
in general, 
has              *    Political unrest 
a                                                                      *    In the event of industrial action or expected 
significant                                                                 disruption, easyJet has processes to mitigate the 
number of       Potential consequences                                      impact to our operations. The Operations department 
employees        *    Sustained adverse media coverage                      also has specific procedures to deal with such events 
who are 
members 
of trade         *    Operational disruption                           *    In summer 2020, agreement with BALPA that avoids 
unions.                                                                     involuntary redundancies by moving to part time 
Each of the                                                                 working patterns 
European         *    Significant spike in costs 
countries in 
which 
easyJet          *    Reduction in future revenue 
operates 
has 
localised        *    Share price movement 
employment 
terms 
and              *    Loss of colleague/ customer trust 
conditions. 
As such its 
pilots, 
crew and 
engineers 
are members 
of 
24 trade 
unions 
across eight 
countries. 
There are 
also 
an 
additional 
seven 
consultative 
bodies 
including 
five Works 
Councils 
and a 
European 
Works 
Council. 
talent          Potential causes                                      Controls and mitigations 
acquisition      *    Uncompetitive remuneration packages               *    Benchmarking of reward packages 
and 
retention 
In today's       *    Lack of career progression                        *    Quarterly employee listening tool with action plans 
shifting                                                                     to address issues raised 
environment, 
we               *    Outdated ways of working 
need to                                                                 *    Talent mapping of senior employees to ensure 
place                                                                        continued investment and development of top talent 
even more       Potential consequences 
focus            *    Sustained inability to deliver key strategic 
on                    initiatives                                       *    Succession planning of key roles 
recruiting 
the right 
people                                                                  *    Diversity and inclusion strategy 
and building 
the 
right                                                                   *    Strategic programme to enhance ways of working for 
talent.                                                                      head office staff 
              ----------------------------------------------------  ------------------------------------------------------------- 
 

safety, security and operations

easyJet's number one priority is the safety and security of its customers, colleagues, and contractors. The delivery of a safe and secure operation which meets the needs and expectations of our customers is critical to our business.

 
significant        Potential causes                                           Controls and mitigations 
safety              *    Flight safety incident                                *    Functional Safety Action Groups from across the 
or security                                                                         airline are chaired by the appropriate senior manager 
event                                                                               and are responsible for the identification, 
easyJet's           *    Health and safety incident including biosecurity           evaluation and control of safety-related risks 
number                   incidents such as cases of COVID-19 
one priority is 
the safety and                                                                 *    The easyJet Safety Board meets monthly to review 
security of its     *    Major security threat                                      safety, security and compliance performance across 
customers,                                                                          all Air Operator Certificates (AOC) chaired by the 
colleagues,                                                                         Chief Executive Officer, attended by the three AOC 
and                Potential consequences                                           Accountable Managers and periodically by AOC 
contractors.        *    Significant injury/loss of life                            regulators 
The Safety 
Committee 
(a committee of     *    Sustained adverse media coverage                      *    Safety Review Boards are held locally, including at 
the Board)                                                                          AOC level, and are open for the local regulator to 
provides                                                                            attend 
oversight of        *    Reduction in future revenue 
the 
management of                                                                  *    A Safety Policy is published that promotes the 
easyJet's           *    Fines/regulatory sanctions                                 incident reporting process and supports this safety 
safety                                                                              culture 
processes and 
systems. See        *    Operational disruption 
pages                                                                          *    easyJet operates a Safety Management System using 
98 to 99 for                                                                        leading software systems to: 
further             *    Significant spike in costs 
details. 
The easyJet                                                                    *    report incidents and identify events; 
Safety              *    Share price movement 
Board, chaired 
by the Chief                                                                   *    identify hazards and threats and take appropriate 
Executive                                                                           risk-mitigating actions; 
and including 
the Chief 
Operating                                                                      *    collect and analyse safety data (enabling potential 
Officer and AOC                                                                     areas of risk to be projected); and 
Accountable 
Managers, 
are responsible                                                                *    enable learning from easyJet and industry 
for directing                                                                       events/incidents to be captured and embedded into 
overall safety                                                                      future risk mitigations. 
and security 
policy 
and governance.                                                                *    Timely, credible and reliable information upon which 
The Safety                                                                          to base operational decisions 
Board 
meets every 
month                                                                          *    easyJet has an emergency response process and 
to review                                                                           performs crisis management exercises 
safety 
performance and 
any emerging                                                                   *    Hull (all risks) and liabilities insurance (including 
security                                                                            spares) is held 
issues. 
 
                                                                               *    Security cleared specialists continually review 
                                                                                    geopolitical developments across the easyJet network 
                                                                                    in particular those countries deemed to be higher 
                                                                                    risk and report back to the Board any areas of 
                                                                                    concern 
 
 
                                                                               *    easyJet maintains an inspection regime of all our 
                                                                                    airports to ensure the security elements are being 
                                                                                    effectively managed 
 
 
                                                                               *    easyJet continually reviews and develops its safety 
                                                                                    management processes 
 
 
                                                                               *    easyJet maintains a comprehensive set of biosecurity 
                                                                                    standards to minimise the risk of transmission of 
                                                                                    infectious diseases, such as COVID-19. Their efficacy 
                                                                                    is monitored by the Biosecurity Standards Group 
 
 
significant           Potential causes                                       Controls and mitigations 
operational            *    Adverse weather                                   *    Key strategic project, Operational Resilience, 
disruption                                                                         focusing on: 
Non-cancellation 
disruption             *    Industrial action 
events                                                                        *    Building appropriate resilience into the flying 
reduced                                                                            schedule 
significancy           *    Technology failure 
in 2020 due to 
reduced ATC and                                                               *    Aircraft and crew standby 
airport                *    Destructive cyber-attack (i.e. ransomware) 
congestion. 
Reduced flying                                                                *    Operations Control Centre reporting on the day of 
in Europe, OTP         *    Supplier failure                                       operations, including customer communication 
Arrivals within 
15 Minutes 
improved               *    Infrastructure failure                            *    Airport performance and strategic supply chain 
greatly: FY19 
75% vs FY20 84%. 
Pandemic related       *    Airspace/airport restrictions/closure             *    Air traffic control system lobbying and flight 
reduced traffic                                                                    planning enhancements 
demand resulted 
in The European       Potential consequences 
Air Traffic            *    Customer dissatisfaction                          *    The use of data across the operation to predict and 
Control                                                                            manage events and aid decision support 
system seeing 
significant            *    Compensation and welfare payable to customers 
reduction                                                                     *    Liquidity buffer to better manage the impact of 
in ATM delays.                                                                     downturns in business or temporary curtailment of 
                       *    Inefficient use of crew/aircraft                       activities (see the volatility in financial markets 
                                                                                   risk outlined on page 73) 
 
                       *    Adverse media coverage 
                                                                              *    Business interruption insurance which provides some 
                                                                                   cover for very significant shock events such as 
                       *    Share price movement                                   extreme weather, air traffic management issues and 
                                                                                   loss of access to key airports. The policy would 
                                                                                   allow us to claim in the event of a very substantial 
                                                                                   number of cancellations. This is included within our 
                                                                                   definition of liquidity 
 

technology and cyber

The nature of these risks, easyJet's reliability on technology (particularly online devices) and the ever-increasing sophistication of serious organised crime groups, terrorists, nation states and even lone parties means that, despite all the mitigation detailed, easyJet will inevitably retain an element of vulnerability regarding the availability, confidentiality and integrity of its information and data.

 
data breach       Potential causes                            Controls and mitigations 
A data breach      *    Cyber attack                            *    A data and cyber risk governance structure exists to 
involves the                                                         regularly review the data and cyber risk landscape 
unauthorised                                                         and determine required action to take place in order 
access to          *    Third-party incident                         to manage risk effectively 
customer 
or employee 
data.              *    User error                              *    Dedicated Information Security team who provide 
Protecting                                                           assurance over third parties, proactively monitor 
that                                                                 threats and respond to incidents 
data and its       *    Misconfigured systems 
privacy 
remains a                                                       *    Employee education and awareness programme including 
priority          Potential consequences                             a network of champions, online training and awareness 
for easyJet.       *    Sustained adverse media coverage             campaigns 
 
 
                   *    Fines/regulatory sanctions              *    Security logging and monitoring 
 
 
                   *    Third-party liability/class actions     *    Vulnerability scanning and penetration testing 
 
 
                   *    Reduction in future revenue             *    Digital Safety programme to ensure compliance with 
                                                                     various and ensure data control and protection 
 
                   *    Operational disruption 
                                                                *    Credit card data is protected through PCI DSS 
                                                                     compliance as a Level 1 Merchant. This is revalidated 
                   *    Significant spike in costs                   annually by an external body, which we (and they) 
                                                                     attest to 
 
                   *    Share price movement 
 
 
                   *    Loss of colleague/customer trust 
Failure of        Potential causes                              Controls and mitigations 
critical           *    Destructive Cyber attack (i.e. rans      *    Monitoring and alerting of availability of critical 
technology        omware)                                             technologies and their inter-dependencies 
easyJet relies 
on a number of 
critical           *    Hardware failure                         *    Security logging and monitoring 
technologies 
that are key 
to                 *    Aged infrastructure                      *    Vulnerability scanning and penetration testing 
the delivery 
of 
essential          *    Data Centre Outage                       *    Business Interruption Insurance in place 
business 
processes. 
These              *    Third-party Outage                       *    IT Change Management Process embedded to assess risk 
include, but                                                          of all changes to technology including changes made 
are                                                                   by third-party providers 
not limited        *    Technological Dependency Failure 
to, 
operational,                                                     *    Critical technologies are either cloud hosted, hosted 
commercial         *    IT change                                     across two data centres or at third-party provider 
and financial                                                         locations with necessary failover protocols and 
systems. A                                                            security perimeters in place 
critical          Potential consequences 
technology         *    Sustained adverse media coverage 
failure                                                          *    IT Major Incident Management team is in place to 
includes any                                                          respond rapidly to any unforeseen critical technology 
technical          *    Reduction in future revenue                   incidents including those of a security nature 
failure which 
is sufficient 
enough to          *    Fines/regulatory sanctions               *    IT Supplier Relationship Management process to ensure 
interrupt                                                             that third-party services and associated risks are 
critical                                                              regularly reviewed and assessed 
business           *    Operational disruption 
operations 
(which                                                           *    easyJet are progressing the delivery of a hosting and 
may include        *    Significant spike in costs                    network programme that will further improve the 
one                                                                   resiliency of core infrastructure and cloud 
or more                                                               connectivity capabilities 
systems).          *    Share price movement 
This includes 
system                                                           *    Digital Safety Policies and Standards that set out 
unavailability                                                        the technical and organisational measures for keeping 
or a failure                                                          our data and systems safe 
which 
results in the 
loss or                                                          *    As an Operator of Essential Services under the NIS 
corruption                                                            regulation In the UK, we have to comply with the 
of data.                                                              requirements laid out in the CAF for Aviation which 
                                                                      focuses on critical systems availability 
                -------------------------------------------  -------------------------------------------------------------- 
 

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November 23, 2020 04:08 ET (09:08 GMT)

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