TIDMEZJ
RNS Number : 6785V
easyJet PLC
04 December 2019
4 December 2019
easyJet plc
(the "Company")
Annual Report and Accounts
Further to the Final Results announcement released on 19
November 2019, the Company confirms that the Annual Report and
Accounts for the year ended 30 September 2019 ("2019 Annual
Report") has been published today and is available on the Company's
website at http://2019annualreport.easyjet.com. It has also been
submitted to the National Storage Mechanism and will shortly be
available at www.morningstar.co.uk/uk/NSM.
The appendix to this announcement contains additional
information which has been extracted from the 2019 Annual Report
for the purposes of compliance with the FCA's Disclosure &
Transparency Rules and should be read together with the Final
Results announcement, 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 2019 Annual Report.
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 2019 Annual Report.
Directors' Responsibilities and Statements
The following responsibility statement is extracted from the
Statement of Directors' Responsibilities on page 120 of the 2019
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 2019 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,
the Directors' remuneration report and the 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 these accounts, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRS as adopted by the EU have been
followed, subject to any material departures disclosed and
explained in the accounts; and
-- prepare the accounts on the going concern basis unless it is
inappropriate to presume that the 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
(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 68 and 71, 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 profit of
the Group and 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, 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 Company's auditor is unaware; and
-- he/she has taken all the steps that he/she ought to have
taken as a Director in order to make himself/herself aware of any
relevant audit information and to establish that the Company's
auditor is aware of that information.
The Annual Report on pages 1 to 120 was approved by the Board of
Directors and authorised for issue on 18 November 2019 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 38 to 47 of the 2019 Annual Report and Accounts and are
repeated here solely for the purpose of complying with DTR
6.3.5.
Our risk Profile
The key risks reviewed by the Board fall into seven broad themes
listed in alphabetical order:
-- 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 consumer and colleague 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, 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
Changes in the year
Our principal risks and uncertainties continue to evolve over
time. As we evolve our strategy in a dynamic industry against a
backdrop of political and economic uncertainty, new risks emerge
and we adapt our response activities as our risk exposure changes.
The roll out of the new corporate risk framework has been a
catalyst for reviewing the presentation of a number of these risks,
including the new themes set out above. The following changes in
our risk profile have been approved by the Board.
Since 30 September 2018, risks associated with the following
three themes have increased:
-- Asset efficiency and effectiveness
-- Environment and sustainability
-- Technology and cyber
These risks, together with our response plans, are monitored
regularly through our governance structure. Further detail on the
risks, the potential causes and consequences, together with key
controls and mitigations are detailed on the following pages.
This year, we have incorporated our 'third-party service
providers' risk into a broader 'continuity of services' risk, due
to the outsourced nature of our business model and the similarity
in management response.
Having reviewed our environment and sustainability risk profile
and including emerging risks, we have identified a number of
different risks, each with its own characteristics these relate
to:
-- Carbon trading schemes
-- Climate change
-- Changes in the legislative/regulatory environment
Further detail is outlined on page 41.
Brexit
easyJet has continued its preparations for Brexit. The focus has
been on ensuring that our network is unaffected by Brexit and that
our operations are uninterrupted by any eventual Brexit outcome,
including a potential no deal exit. The cross functional Brexit
programme continues to oversee Brexit planning, led by the General
Counsel. The Board has also had oversight of the preparations and
is regularly briefed.
Over the last three years easyJet has put in place a series of
measures to protect our flying rights regardless of the eventual
Brexit outcome, these include:
-- 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.
-- Focusing our investor relations programme on ensuring that we
remain majority EU27 owned and controlled and putting in place a
contingency plan to ensure that we remain compliant with the
requirement that EU airlines are majority owned and controlled by
EU nationals.
-- Ensuring that our operation is robust to the UK leaving EASA,
the European Aviation Safety Agency, including by 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 over the last year 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. We successfully worked
with the EU and UK governments to ensure that there is a
legislative framework in place for flights to continue even in the
event of a no deal Brexit. Alongside this the EU and UK have put in
place the necessary arrangements to govern safety issues.
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.
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.
Potential Potential consequences Controls and mitigations
causes
AIRPORT
INFRASTRUCTURE * Increased competitor capacity * Weakened customer proposition * Where easyJet is affected by industrial action or
Flying to primary other service interruption by a key supplier,
airports is resources are deployed to manage this as effectively
an important * Environmental restrictions/ pressure restricting * Loss of market share as possible. See the significant operational
element of our airport expansions disruption risk on page 46 for further details.
customer
proposition. * Inefficient use of crew/aircraft
The airports * Delays in airport infrastructure expansion * Sophisticated processes and systems to ensure slot
to which we transactions are made in an efficient and effective
fly may already * Significant increase in costs manner.
be or may become * Increase in airport charges
congested.
Links to our * Effective cross-functional governance to ensure
plan * Changes in regulation optimal business decisions are made.
1, 2, 5
B, D
* Ineffective slot management * easyJet places emphasis on the management of airport
capacity through a dedicated airport development team
who ensure close collaboration on capacity plans. The
team helps influence the development of appropriate
capacity increases in a cost efficient and timely
manner.
* Managing aircraft gauge to improve our ability to
grow.
---------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------------
CONTINUITY
OF SERVICES * Failure of critical IT system * System unavailability for customers and/or staff * The four key areas of business resilience (IT and
easyJet is dependent processes, people, premises, and suppliers) all form
on a mixture part of easyJet's functional business and airport
of critical * Significant external incident (terrorism, weather, * Inability to access key buildings/facilities Business Continuity Plans.
IT systems and activism)
processes,
employees, * Unavailability of critical staff * Critical IT systems are identified with ongoing
buildings/facilities * Failure of third party efforts to match the business needs with recovery
and third-party capabilities. The risk of system unavailability is
suppliers. A * Reliance on inadequate supplier recovery plans now mitigated further, thanks to the adoption of the
loss of one * Industrial action cloud, in addition to easyJet's two data-centres.
or more of the
above components * Operational disruption
could lead to * Incident Management and Resilience teams are in place
significant and ready to respond to any IT related incident.
disruption to
operations and
could have an * Time-critical staff have been identified via Business
adverse Impact Assessments and Business Continuity Plans,
reputational, with regularly tested recovery desks allocated at
financial or alternate locations, should the usual place of work
legal impact. be unavailable. An increased provision of laptops and
Links to our tablets also enables greater mobility and remote ways
plan of working.
2, 3, 5
A, B, D, E
* Enhanced procurement processes include risk
assessments aligned with business objectives. These
require relevant third-parties to have their own
Business Continuity/Disaster Recovery plans and we
are implementing a process to review a sample of
these each year.
* Maintain close working relationships with key
stakeholders including, but not limited to, airport
authorities and slot coordinators lobbying where
appropriate.
---------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------------
NON-DELIVERY
OF STRATEGIC * Resource dedicated to change delivery and oversight * Business benefits not realised * Complex, large-scale programmes have been initiated,
INITIATIVES prioritised and are managed through the Project
The business Management Office.
continues to * Changes in organisation's priorities (may be driven * Financial underperformance
undertake a by internal or external factors)
number of * A project management framework, which sets out
initiatives * Inefficient use of resource approval processes, governance requirements, and key
to support its * Scope change/time available ongoing processes and controls, is followed by all
strategy. projects and programmes, and reviews are undertaken
Links to our to ensure continuous improvement in this approach.
plan
2, 3, 4
D, E * Each strategic initiative has an executive sponsor
from the AMB and its own steering group which
provides oversight and challenge to the project,
monitors progress against programme objectives and
ensures that decisions are made at the appropriate
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 AMB meets twice monthly. The executive sponsor
provides routine updates 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
SUPPLIER * Delays in the delivery of new aircraft * Schedule reductions/cancellations * There are approximately 8,500 A320 family (A319,
easyJet is dependent A320, A321) aircraft operating, with a proven track
on Airbus as record for safety and reliability.
its sole supplier * Technical/mechanical issues * Grounding of all/part of the fleet
for aircraft.
The Board considers * Introduction of the A320neo in part mitigates this
that the * Fluctuating second hand market * Loss of customer confidence single fleet supplier risk as the aircraft is
efficiencies equipped with a different engine type.
achieved by
operating a * Financial impact when aircraft leave the fleet
single fleet * easyJet continues to work closely with Airbus to
type outweigh ensure full visibility of the delivery schedule for
the risks associated new aircraft. In the event that there are material
with easyJet's delays, appropriate mitigation is put in place; for
single fleet example short-term wet lease arrangements are used to
strategy. minimise any operational impact.
Links to our
plan
3, 5 * easyJet operates a rigorous established aircraft
A, D maintenance programme. Maintenance schedules are
approved by the relevant regulatory body.
* easyJet regularly reviews the second hand market and
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 Plan
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 48.
Potential Potential Controls and mitigations
causes consequences
CARBON
TRADING * Political change * Closure of existing scheme * 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 * Loss of free allocations, leading to significant cos with relevant industry bodies to assist in this;
to carbon t
trading impact
schemes, * International alignment * easyJet look to optimise fuel usage to reduce
including emissions and therefore reduce the potential impact
the existence * Introduction of new schemes of those schemes, for example ensuring optimal
and/or cost * External pressure groups routings as well as using climb, descent and landing
of the techniques to improve efficiency; and
scheme. * Inability to hedge in line with fuel policy
Links to our
plan * easyJet has an appropriate hedging strategy (to the
2, 3, extent possible).
A, B, D, E
----------------------------------- ------------------------------------------------------------ ------------------------------------------------------------
CLIMATE
CHANGE * Increased CO2 emissions * Adverse customer experience * easyJet continues to bring Airbus neo aircraft into
Weather its fleet which are significantly more fuel efficient
patterns than the standard variant;
including, * Injury to customers
but
not limited * easyJet aircraft use only one engine when taxiing on
to, winds, * Operational disruption (including airspace and runway the ground;
storms, closures)
extreme
temperatures, * easyJet operates flights with a high load factor, and
are becoming * Aircraft damage is a short-haul operator, which has a lower carbon
increasingly impact per passenger kilometre than airlines whose
difficult to operations include a significant amount of long-haul
predict. flight; and
Links to our
plan
2, 5, 3 * Disruption management measures include advanced
A, B, C, D, winter planning, standby crews and aircraft, as well
E 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.
----------------------------------- ------------------------------------------------------------ ------------------------------------------------------------
ECO-TAXES
Future policy * Political change * Significant increase in cost of existing aviation * By engaging with key stakeholders, easyJet seeks to
measures and taxes/levies reach a common understanding on the drive to impose
regulation to policy measures and regulation to address the impact
tackle the * External pressure groups of aviation on climate change;
impact * Future expansion of taxes/levies
of aviation
on climate * Customer demand * easyJet continues to explain its environmental
change * Policies to constrain growth/capacity performance, and the further action it is taking, to
could impact its customers and other stakeholders. For example,
easyJet's this has included highlighting the introduction of
business * Increasing noise curfews the A320neo and A321neo aircraft and their reduced
if they emissions compared to previous generation aircraft,
impose and work with partners in regards to new technologies
limitations * Pressure on margins to radically reduce the carbon footprint of flying;
and cost on
how easyJet
operates and * easyJet is able to operate flexible routings in the
the services event of constraints being brought in; and
it can
provide.
Links to our * The new generation Airbus A320neo and A321neo
plan aircraft are 50% quieter during takeoff and landing
2, 4 than the equivalent previous generation aircraft.
A, B, D, E
----------------------------------- ------------------------------------------------------------ ------------------------------------------------------------
LEGISLATIVE/REGULATORYLANDSCAPE
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.
Potential causes Potential Controls and mitigations
consequences
BRAND LICENSE
AND MAJOR SHAREHOLDER * Shareholder activism * Eventual loss of the brand licence * Active shareholder engagement programme;
* easyJet has two major shareholders (easyGroup
Holdings Limited and Polys Holdings Limited) which,
as a concert party, control approximately 33% of its * Actions of easyGroup or other easyGroup licensees * Regular engagement with easyGroup Holdings Limited
ordinary shares. alongside other major shareholders;
* easyJet does not own its company name or branding, * Relationship agreement with easyGroup and Polys
which is licensed from easyGroup Ltd. The licence Holdings in line with the controlling shareholder
includes certain minimum service levels that easyJet regime set out in the Financial Conduct Authority's
must meet in order to retain the right to use the Listing Rules;
name and brand.
* Representatives from the Board and senior management
Links to our take collective responsibility for addressing issues
plan arising from any activist approach adopted by the
3 major shareholder. The objective is to address issues
A when they arise and anticipate and plan for potential
future activism;
* Quarterly meeting of senior representatives from both
sides, attended by the Chief Financial Officer and
the Company Secretary and Group General Counsel, to
actively manage brand-related issues as they arise;
and
* easyJet makes contributions to the joint brand
protection fund.
--------------------------------------------------------- ----------------------------------------- ------------------------------------------------------------
LEGAL/REGULATORY
NON-COMPLIANCE * New or changes to existing legislation/regulation * Sustained adverse media coverage * Compliance framework including, but not limited to,
Failure to comply policies, procedures, and mandatory training
with legislation programmes;
and regulation, * Employee/agent ignorance * Fines/regulatory sanctions
such as local
consumer laws, * easyJet has an in-house team of Legal experts to
new case law * Rogue employee/agent behaviour * Reduction in future revenue advise on legal issues and developments, and to
or policy changes assist the business in interpreting any formal
in relation regulatory requirements. Where appropriate, this
to customer * Operational disruption expertise is supplemented with specialist external
compensation, support relevant to a specific discipline or
environmental jurisdiction;
or airport regulation, * Loss of operating licence
in the jurisdictions
in which easyJet * Panel of external legal advisers, both in the UK and
operates, could * Significant spike in costs in key easyJet markets, are briefed to keep easyJet
have an adverse informed of any changes or new legislation and to
reputational assist easyJet in developing appropriate responses to
and financial * Share price movement such legislation;
impact.
Links to our
plan * Loss of colleague/customer trust * easyJet influences future and existing policy and
2, 3, 4 regulations which affect the airline industry through
A, B a number of different channels, including working
with relevant industry bodies to assist in this; and
* easyJet adapts to new legislation and regulation,
where possible adapting existing compliance
frameworks (for example mandatory training programmes
and clear policies and associated guidance).
--------------------------------------------------------- ----------------------------------------- ------------------------------------------------------------
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 18), as well as impact of fuel
cost, foreign exchange rates, and counterparty performance.
Potential causes Potential Controls and mitigations
consequences
SUPPLY/DEMAND
IMBALANCE * Increased capacity * Loss of market positions (relative market share) * 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 * Pressure on margins
competitive
European * Weekly trading meeting to review performance -
short-haul * Increased competition from other airlines and * Adverse financial position attended by senior managers, including members of the
aviation transport providers AMB.
market
is built on * Share price movement
our key * Government interventions * Relentless focus on maintaining easyJet's competitive
competitive advantages.
advantages:
our network, * Fall in consumer demand (including but not limited to
cost base, macro-economic conditions and environmental concerns) * The Network Development Forum, a cross-functional
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
capital * Competitor and consolidation activity is monitored in
structure. detail by the Network team, enabling strategic
Links to our decision making on key market positions.
plan
1, 2, 3, 4,
5 * Fleet framework arrangements, together with the
B, D Group's leasing policy, provide easyJet with
significant flexibility in respect of scaling the
fleet according to business requirements.
------------------------------------------------------------- --------------------------------------------------------- ------------------------------------------------------------
VOLATILITY IN
FINANCIAL * Market price risk: volatility in jet fuel prices, * Insufficient cash to meet financial obligations as * The Finance Committee (a committee of the plc Board)
MARKETS foreign exchange rates, carbon prices, inflation they fall due and/or the inability to fund the oversees the Group's treasury and funding policies
easyJet is rates or interest rates business when needed leading to insolvency and activities. See page 94 for further details.
exposed
to a variety
of financial * Counter-party risk: default of counter parties used * Significant increase in costs * Treasury policy sets out plc Board approved
markets, for depositing surplus cash and hedging strategies for market price risk management,
volatility counter-party credit risk management and liquidity
in which risk management. Monthly reporting on all treasury
could * Liquidity risk: inability to raise funds when activity including reporting on compliance with
give rise to required treasury policy.
adverse
pressure
on the cash * Maintaining a liquidity buffer supported by cash, a
flows of the revolving credit facility (provided by a group of
group. relationship banks) and a business interruption
Links to our insurance policy.
plan
1, 3, 5
D * Ability to access diverse sources of funding to
support liquidity requirements.
* Rolling hedging programmes on jet fuel and foreign
exchange market price exposure.
------------------------------------------------------------- --------------------------------------------------------- ------------------------------------------------------------
PEOPLE
Having the right people is a key part of Our Plan. In today's
environment, we need to create an inclusive and energising
environment that attracts the right people and inspires everyone to
learn and grow.
Potential causes Potential Controls and mitigations
consequences
INDUSTRIAL
ACTION * Adverse employee experience * Sustained adverse media coverage * easyJet seeks to maintain positive working
easyJet, and relationships with all trade unions and other
the aviation representative bodies and has a framework in place
industry in * Changes to terms and conditions * Operational disruption for consulting and engaging with trade unions and
general, has consultative bodies.
a
significant * Political unrest * Significant spike in costs
number of * In the event of industrial action or expected
employees disruption, easyJet has processes to mitigate the
who are * Reduction in future revenue impact to our operations. The Operations department
members also has specific procedures to deal with such
of trade events.
unions. * Share price movement
Each of the
European
countries * Loss of colleague/customer trust
in which
easyJet
operates has
localised
employment
terms and
conditions.
As such its
pilots and
crew
are members
of 22 trade
unions
across
eight
countries.
There are
also
an
additional
11
consultative
bodies
including
five Works
Councils
and a
European
Works
Council
that operate
under EU
legislative
guidance.
Links to our
plan
2, 4
A, B, C
------------------------------------------- ---------------------------------------------------- -----------------------------------------------------------
TALENT
ACQUISITION * Uncompetitive remuneration packages * Sustained inability to deliver key strategic * Benchmarking of reward packages.
AND initiatives
RETENTION
In today's * Lack of career progression * Quarterly employee listing tool with action plans to
shifting * Increased costs address issues raised.
environment,
we need to * Outdated ways of working
place * Talent mapping of senior employees to ensure
even more continued investment and development of top talent.
focus
on
recruiting * Succession planning of key roles.
the right
people
and building * Diversity and inclusion strategy.
the right
talent.
Links to our * Strategic programme to enhance ways of working for
plan head office staff.
3, 4
C
------------------------------------------- ---------------------------------------------------- -----------------------------------------------------------
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.
Potential causes Potential Controls and mitigations
consequences
SIGNIFICANT
SAFETY OR SECURITY * Flight safety incident * Significant injury/loss of life * Functional Safety Action Groups from across the
EVENT airline are chaired by the appropriate senior manager
* easyJet's number one priority is the safety and and are responsible for the identification,
security of its customers, colleagues, and * Health and safety incident * Sustained adverse media coverage evaluation and control of safety-related risks.
contractors.
* Major security threat * Reduction in future revenue * The easyJet Safety Board meets monthly to review
* The Safety Committee (a committee of the Board) safety, security and compliance performance across
provides oversight of the management of easyJet's all Air Operator Certificates (AOC) chaired by the
safety processes and systems. See pages 85-86 for * Fines/regulatory sanctions CEO, attended by the three AOC accountable managers
further details. and periodically by AOC regulators.
* Operational disruption
* The easyJet Safety Board, chaired by the Chief * Safety Review Boards are held locally and are open
Executive and including the Chief Operating Officer for the local regulator to attend.
and AOC Accountable Managers, is responsible for * Significant spike in costs
directing overall safety and security policy and
governance. The Safety Board meets every month to * A Safety Policy is published that promotes the
review safety performance and any emerging security * Share price movement incident reporting process and supports this safety
issues. culture;
Links to our * easyJet operates a Safety Management System using
plan leading software systems to:
2, 4
A
* report incidents and identify events;
* identify hazards and threats and take appropriate
risk-mitigating actions;
* collect and analyse safety data (enabling potential
areas of risk to be projected); and
* enable learning from easyJet and industry
events/incidents to be captured and embedded into
future risk mitigations.
* Timely, credible and reliable information upon which
to base operational decisions.
* easyJet has an emergency response process and
performs crisis management exercises.
* Hull (all risks) and liabilities insurance (including
spares) is held.
* Security cleared specialists continually review
geopolitical developments across the easyJet network
in particular those countries deemed to be higher
risk and report back to the Board any areas of
concern.
* easyJet maintains an inspection regime of all our
airports to ensure the security elements are being
effectively managed.
--------------------------------------------- --------------------------------------------------- --------------------------------------------------------------
SIGNIFICANT
OPERATIONAL * Adverse weather * Customer dissatisfaction * Key strategic project, Operational Resilience,
DISRUPTION focusing on:
* This year there has been a significant reduction in
disruption events (three hour delays, cancellations * Industrial action * Compensation ad welfare payable to customers
and overnight delays). Events within easyJet's * Building appropriate resilience into the flying
control ('non-extraordinary') have reduced against schedule;
2018 by 25%, as a result of the Operational * Technology failure * Inefficient use of crew/aircraft
Resilience programme and a range of easyJet
interventions, and events outside of easyJet's * Aircraft and crew standby;
control (e.g. weather, strikes) have reduced by 34%. * Supplier failure * Adverse media coverage
* Operations Control Centre reporting on the day of
* On Time Performance has remained stable against 2018, * Infrastructure failure * Share price movement operations, including customer communication;
despite a significant reduction in cancellations.
* Airspace/airport restrictions/ closure * Airport performance and strategic supply chain;
* The European Air Traffic Control system experienced
fewer total delay minutes than in 2018. easyJet
flight planning interventions further reduced the * Air traffic control system lobbying and flight
proportion of these delay minutes that impacted planning enhancements; and
easyJet. En-route delay minutes reduced, largely
driven by fewer ATC strikes than in 2018. Airport
delay minutes worsened. The ATC system still * The use of data across the operation to predict and
performed worse than 2017. manage events and aid decision support.
Links to our * There is also continued focus on the EU261 claims
plan management process which has been further
2, 3, 5 strengthened during the year by increasing the size
B, D, E of the team handling legal claims.
* New incident and crisis management framework to
further enhance the effectiveness of response.
* Liquidity buffer to better manage the impact of
downturns in business or temporary curtailment of
activities (see the volatility in financial markets
risk outlined on page 43).
* Business interruption insurance which provides some
cover for very significant shock events such as
extreme weather, air traffic management issues and
loss of access to key airports. The policy would
allow us to claim in the event of a very substantial
number of cancellations. This is included within our
definition of liquidity.
--------------------------------------------- --------------------------------------------------- --------------------------------------------------------------
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.
Potential causes Potential Controls and mitigations
consequences
DATA BREACH
A data breach * Cyber attack * Sustained adverse media coverage * 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 * Fines/regulatory sanctions to manage risk effectively.
customer
or employee
data. * User error * Third party liability/class actions * Dedicated Information Security team who proactively
Protecting monitor threats and respond to incidents.
that data and
its privacy * Misconfigured systems * Reduction in future revenue
remains a * Employee education and awareness programme including
priority a network of champions, online training and awareness
for easyJet. * Operational disruption campaigns.
Links to our
plan
2, 5 * Significant spike in costs * Security logging and monitoring.
A, B, D
* Share price movement * Vulnerability scanning and penetration testing.
* Loss of colleague/customer trust * Ongoing General Data Protection Regulation (GDPR)
programme to ensure compliance with GDPR regulations
in support of the Data Protection Officer (DPO).
--------------------------------------- ------------------------------------------ -------------------------------------------------------------
FAILURE OF
CRITICAL * Cyber attack * Sustained adverse media coverage * Monitoring and alerting of availability of critical
TECHNOLOGY technologies and their inter-dependencies.
easyJet relies
on a number * Hardware failure * Reduction in future revenue
of critical * Security logging and monitoring.
technologies
that are key * Aged infrastructure * Fines/regulatory sanctions
to the * Vulnerability scanning and penetration testing.
delivery
of essential * Data Centre Outage * Operational disruption
business * Business Interruption Insurance in place.
processes.
These include, * Third Party Outage * Significant spike in costs
but are not * IT Change Management Process embedded to assess risk
limited to, of all changes to technology including changes made
operational, * Technological Dependency Failure * Share price movement by third party providers.
commercial and
financial
systems. * IT change * Critical technologies are either cloud hosted, hosted
A critical across two data centres or at third party provider
technology locations with necessary failover protocols and
failure security perimeters in place.
includes
any technical
failure which * IT Major Incident Management team is in place to
is sufficient respond rapidly to any unforeseen critical technology
enough to incidents including those of a security nature.
interrupt
critical
business * IT Supplier Relationship Management process to ensure
operations that third party services and associated risks are
(which regularly reviewed and assessed.
may include
one or more
systems). This * easyJet are progressing the delivery of a hosting and
includes network programme that will further improve the
system resiliency of core infrastructure and cloud
unavailability connectivity capabilities.
or a failure
which results
in the loss
or corruption
of data.
Links to our
plan
2, 3
A, B, D, E
--------------------------------------- ------------------------------------------ -------------------------------------------------------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ACSLLFIFFVLSIIA
(END) Dow Jones Newswires
December 04, 2019 07:06 ET (12:06 GMT)
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