EasyJet would apply any suspension of shareholders’ voting rights on a last-in-first-out basis, should it need to resort to such measures to meet European Union ownership requirements following the UK’s withdrawal from the European Union.
The budget airline is currently 49%-owned by EU nationals which, it says, is just “marginally” below the 50%-plus-one threshold for compliance.
But in the event of the UK’s leaving the EU without a post-withdrawal arrangement – the so-called ‘no-deal Brexit’ scenario – the airline is prepared to enact provisions to ensure that it meets ownership requirements.
“This would be achieved by exercising the company's existing powers to suspend shareholders' voting rights, in respect of a small number of shares,” said chairman John Barton, addressing the carrier’s annual general meeting on 7 February.
“Given the current level of EU ownership, any suspension of voting rights should only apply in relation to a small percentage of shares and would be applied on a last-in-first-out basis, meaning it would affect shares most recently acquired by UK and non-EU nationals first.”
If EU ownership remained below the required level over time, the airline retains the right to force a share sale by non-EU stakeholders in order to achieve compliance.
Barton says the airline has undertaken “significant preparations” for Brexit and it remains “confident” in its ability to continue flying regardless of the outcome on the 29 March withdrawal date.
EasyJet has re-registered 133 aircraft from the UK to its Austrian division EasyJet Europe, transferred over 1,000 pilots and re-issued 3,300 cabin crew licences. This has enable the carrier to ring-fence operations in order to avoid its UK carrier division having to rely on current EU traffic rights.
The preparations have included creating a second spare parts hub in the EU to “limit exposure” to any UK-EU supply-chain risks, Barton adds.
“While we are operationally well prepared, as we get closer to Brexit we remain focused on the broader external risks that could emerge,” he says, particularly if there is no post-withdrawal deal.
“These risks may be sector [or] non-sector specific and their impact is, by definition, less certain. This would include any impact on consumer confidence or the potential cost and operational impacts arising from increased friction in travel between the EU and the UK.
“Our focus remains on monitoring any such risks and being as ready as possible to put in place scenario plans to address them.”