Chairman's statement

In a tough economic environment, easyJet’s continued resilient performance is a testament to the quality of its business model. Europe’s premier air transport network, our strong customer proposition and service delivery are linked to a highly efficient operating model that is predicated on simplicity and low cost.

As part of the annual strategy process, easyJet’s Board has agreed a fleet plan that will enable your Company to deliver growth of around 7.5% per annum¹ over the next five years. This fleet plan gives easyJet the ability to take advantage of the substantial commercial opportunities apparent in European short-haul aviation, whilst maximising margins and delivering positive cash generation beyond the period of the higher than normal capital expenditure associated with the replacement of the more expensive Boeing subfleet. The plan nevertheless retains sufficient in-built flexibility to allow a slowing of growth should our margins come under pressure.

Whilst some of our strategic debate during the past 12 months was perhaps a little too public, I believe that the subject matter and intensity of the discussion around the most appropriate rate of growth for the Company evidences the commitment of individual Board members to the Company’s cause. I am pleased to report that the whole Board believes we have come to a sensible outcome.

At easyJet we believe that good corporate governance is vital. At the heart of this is a strong Board team who both support and challenge the executive management so that together, we can unlock easyJet’s huge potential, whilst appropriately managing the risks associated with operating in such a volatile industry. easyJet is an exciting business that readily attracts talent and hence I am pleased to report on how we have been able to further strengthen the Board in the past year.

Sir Michael Rake was appointed Deputy Chairman and Senior Independent Director in June. Mike is an experienced international business leader and is currently Chairman of BT Group plc prior to which he was Chairman of KPMG International.

Keith Hamill joined the Board in February. Keith’s background as Chairman of Travelodge and Chairman of Go Fly! Ltd, prior to its acquisition by easyJet in 2002, is highly relevant and I have welcomed his robust and analytical approach to the assessment of risk in our Board discussions.

Bob Rothenberg MBE, senior partner in the accountancy firm of Blick Rothenberg, was appointed to the easyJet Board as a Non Executive Director with effect from 1 August 2009. His appointment was made under the terms of the Company’s Articles giving Sir Stelios Haji-Ioannou, the Company’s founder, nominee director appointment rights on behalf of himself and easyGroup Holdings Limited, his private investment vehicle and a shareholder in easyJet plc. Bob’s appointment was formally endorsed by the members of the Company’s Nominations Committee and he brings valuable financial advisory and general business experience.

Sir Colin Chandler stepped down earlier in the year as Chairman after seven years service to the Company. We thank him for his significant contribution throughout his tenure, as he chaired the organisation during the period which saw easyJet achieve its current leading position in the European market. Jeff Carr, our Group Finance Director since 2005, also left to take on a larger challenge and we thank him too for his contribution. Whilst we complete the search process for Jeff’s successor, we are very pleased that Mark Adams has joined us on an interim basis as Chief Financial Officer. Mark has held a number of senior financial positions across a range of sectors and we welcome his contribution during this interim period.

It has been a challenging year for easyJet’s people. I have spent a lot of time in the past few months with the easyJet senior management population and can testify to their exceptional level of passion for and belief in easyJet. In a tough industry this level of engagement is a real differentiator to the performance of the business. The commitment and enthusiasm of our crew continues to be a key driver of our successful customer proposition and the whole Board is grateful for the continued professionalism and commitment of all our people.

The regulatory framework we operate in is crucial, as alongside ensuring that we can operate in a safe environment, it has a significant effect on both our cost base and the opportunities available for future growth. We are working across Europe to persuade governments and the European Commission to deliver regulation that provides stability, is sensible and allows us to compete fairly. easyJet was born out of the liberalisation brought about by EU open skies and has been at the forefront of promoting fair competition for the benefit of consumers. We continue in that spirit with our campaign to ensure that local airport monopolies are not able to capture monopoly rents. We also need to ensure that easyJet continues to operate on a level cost playing field with legacy European carriers absent protectionist measures imposed by national governments. We have also committed to a greater focus on the remaining structural inefficiencies, such as the management of airspace and its associated charging mechanisms.

We know it is important that our industry addresses its wider responsibilities, in particular to ensure we play our part in tackling climate change. We have now taken the first steps towards aviation’s entry into the European Emissions Trading System, where we will operate within a system that caps overall CO₂² emissions, ensuring they are put on a downwards path towards agreed targets. However, environmental measures must deliver real gains in environmental efficiency, and cannot be used as a way to simply tax passengers and so we are continuing to work for the reform of UK Air Passenger Duty (APD) to operate as a genuine incentive to drive environmental change rather than the current blunt instrument to swell Government coffers.

As easyJet navigates what is still an uncertain and difficult landscape, I am confident that easyJet’s strengths will continue to prevail and that it will emerge as a clear winner in European short-haul aviation. I would also like in particular to thank Andy Harrison and his executive team for so successfully managing the Company during such a challenging year.