Investor day 18 September 2014 Agenda Time me Agenda nda item - - PowerPoint PPT Presentation

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Investor day 18 September 2014 Agenda Time me Agenda nda item - - PowerPoint PPT Presentation

Investor day 18 September 2014 Agenda Time me Agenda nda item Led by Page 14.0 .00 Prov oven en strat ateg egy, , executio cution n and returns ns Carolyn McCall 3 14.15 A. Future ure profitabl ble growth th Future


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SLIDE 1

Investor day

18 September 2014

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SLIDE 2

2

Agenda

Time me Agenda nda item Led by Page 14.0 .00 Prov

  • ven

en strat ateg egy, , executio cution n and returns ns Carolyn McCall 3 14.15

  • A. Future

ure profitabl ble growth th

  • Future growth opportunities
  • Bringing it all together - France
  • Panel Q&A

Cath Lynn Francois Bacchetta 12 27 14.45

  • B. Indus

ustr try leadi ding g retur turn n on capital empl ploy

  • yed

d and margi gins ns thro rough ugh revenue nue and cost t initi tiati tives ves Revenu enue e initiat itiativ ives es

  • How we sell
  • Business travel
  • Panel Q&A

Peter Duffy Anthony Drury 38 49 15:30 Break ak 15:45 45 Cos

  • st initiat

iativ ives es

  • Why low cost?
  • Cost opportunities
  • Disruption management
  • Engineering & Maintenance
  • Innovation driving cost reduction
  • Panel Q&A

Chris Kennedy Warwick Brady Will Facey Gary Smith Ian Davies 60 63 76 80 89 16.45

  • C. Cash returns

urns for shareho reholde ders rs 16.45

  • Capital discipline and returns
  • Q&A

Chris Kennedy 97 17.10 Wrap ap up and clos

  • se

Carolyn McCall 17:15 Stall lls cover verin ing Regul gulatio ion, n, Revenue enue Manag agem ement ent and Digita ital Chris Gadsden, Jennifer Genevieve, Alberto Villaverde, James Millett

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SLIDE 3

Proven strategy, execution and returns

Carolyn McCall Chief Executive Officer

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SLIDE 4

4

Continuing to deliver

Proven strategy, execution and returns

  • easyJet has built the industry leading business model in European short-haul

aviation

  • Team, processes and culture will ensure continued successful execution
  • easyJet will continue to deliver

A. Future profitable growth B. Industry leading return on capital employed and margins through revenue and cost initiatives C. Cash returns for shareholders

1 2 3

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SLIDE 5

5

Proven strategy and execution

Platform to deliver growth & sustain leading returns 2010 0 - 2014

Passengers grew by 12 million1 Profitably increased number of routes from c.500 to c.700 Opened 5 new bases including Nice and Toulouse Continued to strengthen key bases

  • Flybe slots at

Gatwick

Compelling network Cost advantage

easyJet lean delivered c.£170m of sustainable savings OTP improved from 66% in 2010 to 87% in 2013

Capital discipline

Rigorous focus on return on capital introduced

  • Madrid base closure

Regular dividend introduced and increased to 3x cover Total cash returns to shareholders of £589 million

Culture & people

Strengthened team, succession planning and developed pipeline of talent Staff turnover declined from 7.6% in 2010 to 6.5% in 2013 Over 90% of easyJet people are now shareholders

Customer & product

Introduced the Customer Charter europe by easyJet & generation easyJet Enhanced product

  • Allocated seating
  • Business

passenger

  • Digital

Load factor increased from 87% to 89%1 Customer satisfaction increased from 73% in 2010 to 83% in 2013

1. 30 September 2010 to 30 September 2013

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SLIDE 6

6 2011 2012 2013

easyJet has delivered on key financial metrics

£53.07 £62.58 £45 £50 £55 £60 £65 2010 2013

Revenue per seat PBT Margin Profit per seat ROCE Dividends

Special dividend (million) Ordinary dividend (million)

5.2% 11.2% 0% 5% 10% 15% 2010 2013

£196m £85m £308m

£2.75 £7.03 £0 £2 £4 £6 £8 2010 2013 6.9% 17.4% 0% 5% 10% 15% 20% 2010 2013

Data relates to easyJet Financial Years ended 30 September 2010 and 30 September 2013

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SLIDE 7

7

Industry and market leading returns

2010–2013 T

  • tal shareholder return1

2013 FTSE 100 ROCE performance2

37.2% 30.6% 28.0% 27.3% 25.9% 24.9% 24.4% 23.8% 23.2% 21.8% 19.7% 19.2% 19.0% 19.0% 18.4% 18.3% 17.7% 17.4% 16.8% 16.1% 16.1% 16.0% 15.7% 15.6% 15.1% 14.8% 14.7% 14.6% 14.4% 14.4% 14.1% 13.8% 13.7% 13.3% 13.2% 12.9% 12.8% 12.3% 11.9% 11.8% 11.5% 11.1% 10.4% 10.3% 10.0% 9.9% 9.9% 9.8% 9.7% 9.5% 9.4% 8.8% 8.7% 8.5% 8.3% 8.0% 7.6% 7.6% 7.3% 7.3% 7.2% 7.0% 6.9% 6.8% 6.7% 6.7% 6.6% 6.6% 6.3% 6.2% 6.2% 5.3% 5.2% 4.3% 4.1% 3.9% 3.8% 3.4% 3.4% 3.0% 3.0% 2.8% NA BskyB Shire Intercontinental NEXT Croda ITV BAT Petrofac Reckitt Benckiser Antofagasta GSK ARM Fresnillo Astrazeneca Sage Unilever Burberry easyJet Centrica Aggreko Compass Smith & Nephew IMI Experian Rolls Royce Intertek Diageo Tate & Lyle Smiths AMEC William Hill BT Johnson Matthey Imperial Tobacco BHP Billiton Sports Direct Randgold Resources Weir Bunzl Persimmon BG Wolseley Royal Dutch Shell BAE SSE ABF Capita GKN Babcock Whitbread Mondi WPP Morrisons Rexam Marks & Spencer Meggitt Rio Tinto G4S National Grid SABmiller Kingfisher Tesco Sainsbury Severn Trent Anglo American Coca-Cola HBC TUI Travel Travis Perkins Tullow Oil BP United Utilities IAG Pearson Melrose Vedanta Resources Carnival Vodafone British Land Land Securities CRH Glencore Xstrata Hammerson Reed Elsevier 1st Quartile 37.2% - 16.1% 2nd Quartile 16.1% - 11.8% 3rd Quartile 11.5% - 7.3% 4th Quartile 7.2% - 2.8% Source: Capital IQ and Datastream. Note: Excludes financial institutions and insurance companies (1) Source: Datastream. Total shareholder return for the period 1 October 2010 to 30 September 2013. Assumes dividends are reinvested. (2) Source: Capital IQ, public filings. Represents ROCE for the LTM to Sep-2013. ROCE calculated as: LTM EBIT plus of 1/3 operating lease expense taxed at nominal tax rate divided by average capital employed (defined as financial net debt plus shareholders equity (including balance sheet value of minority interests) plus net pension deficit) adjusted for operating leases (capitalised at 7.0x).

2013 Return on Capital Employed2

17.4% 15.7% 9.3% 8.0% 7.4% 6.6% 5.3% 5.3% 0.8% easyJet Ryanair Delta Norwegian Southwest Lufthansa JetBlue IAG AF-KLM 261% 134% 97% 76% 39% 14% 13% 0% (35)% easyJet Norwegian Delta Ryanair IAG Southwest Lufthansa JetBlue AF-KLM

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8

48 23 39 9 24 24 21 18 17 15 14 14 3 3 1 20 1

  • 2
  • 10

20 30 40 50 60 Non primary airports Number of market pairs operated between 2 primary airports

Business model and brand to succeed in a dynamic environment

  • Pan-European
  • Strong and improving affinity and

recognition scores

  • Engaging communication
  • Easy and affordable

Brand and customer proposition Cost advantage Valuable markets Financial strength

easyJet 21.5% Ryanair 15.6% Norwegian 3.1% IAG 8.3% Lufthansa 11.6% Air France 2.5% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%
  • Adj. ROCE 1
  • Adj. Gearing 1

Strong balance sheet

  • Data based on 12 month period ending 31 March 2014
  • Includes capitalised leases capitalised at 7.0x
  • Bubble represents size of EBIT

8.0 2.0 4.0 6.0 0.0 500 250

0.99 1.65 65 2.14 2.94 3.11 4.60 5.60 Airport; ground handling, navigation and en-route charges

Seats (m)

CASK( p) Cost

  • Source: Airline Analysts; OAG, Pie chart FY 2014 – easyJet airport pairs
  • Data based on 12 month period ending 31 March 2014
  • CASK converted using opening period fx rates
easyJet Air France Alitalia British Airways KLM TAP Thomson Other 60 other airlines hold a lower than 2.5% share
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SLIDE 9

9

Team, processes and culture in place for continued execution

  • Customer is in our DNA
  • Engaged team working to deliver
  • ur cause
  • Strong focus on ensuring easyJet

has the necessary “bench strength”

  • Talent development and

succession planning

  • Simple processes
  • Material improvements in

employee engagement survey results

To be Europe’s preferred short-haul airline, delivering market leading returns To make travel easy & affordable

Ambition Cause

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SLIDE 10

10

Continuous pipeline of innovation

Platform to deliver growth & sustain leading returns 2015 5 onwar wards ds

Opening Amsterdam and Porto in 2015 Continued

  • pportunities from

industry restructuring Opportunity to deepen existing traffic flows in core markets and develop new routes

Compelling network Cost advantage

easyJet lean pipeline

  • f initiatives

Fleet up-gauging Engineering & Maintenance Engine selection for A320neo from 2017 Single terminal at Gatwick efficiency Airport deals Innovation

Capital discipline

Ordinary dividend payout ratio from one third to 40% of profit after tax Industry leading margins will deliver strong future cash flows

Culture & people

Succession planning and talent development Principles of easyJet lean and return on capital embedded throughout the

  • rganisation

Customer & product

New brand campaign Personalisation and data mining Product enhancements Continue to develop

  • Business

passenger

  • pportunity
  • Dynamic packaging

Single terminal at Gatwick

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SLIDE 11

11 11

easyJet best positioned to deliver what consumers want

1. Price/value

  • 2. Safety
  • 3. Staff/service
  • 4. Punctuality
  • 5. Comfort
  • 6. Reliability

7. Flight times 1. Price/value

  • 2. Reliability
  • 3. Safety
  • 4. Flight times
  • 5. Airport destination

/ convenience

  • 6. = Staff/service
  • 6. = Comfort
  • 6. = Punctuality

1. Staff/service

  • 2. Price/value
  • 3. Safety
  • 4. Comfort

/cleanliness

  • 5. Punctuality
  • 6. Company

reputation

  • 7. Reliability
  • 1. Price/value
  • 2. = Comfort
  • 2. = Staff
  • 4. Airport destination

/convenience

  • 5. Reliability/trust
  • 6. Safety
  • 7. Punctuality

1. Price/value

  • 2. Staff friendliness

/service

  • 3. Safety/security
  • 4. Punctuality
  • 5. Flight availability

/scheduling

  • 6. Reputation

Source: Millward Brown Brand Tracker 2014

Most important factors for European consumers when choosing an airline

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SLIDE 12

12

12

Future growth opportunities

Cath Lynn Group Commercial Director: Markets, Network & Pricing

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SLIDE 13

13 13

Agenda - future profitable growth opportunities

  • Quality of the network and how easyJet drives returns
  • Opportunities available to easyJet
  • Case study - France

1 2 3

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SLIDE 14

14 14

easyJet has leading positions across European airports

easyJet capacity easyJet’s #1 and #2 positions

EDI LPL LGW LTN STN ALC CDG AGP LYS GVA BSL

Source: OAG

SEN OLB

easyJet No.1 48% of capacity 35 million seats easyJet No.2 29% of capacity 21 million seats Other 23% of capacity 17 million seats

Majority of easyJet’s capacity is in airports where it has leading positions many of which are slot constrained

Slot constrained during peak times

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SLIDE 15

15 15

Milan

Convenient airports

Paris

Charles de Gaulle

  • 4th largest airport in

Europe, c.45m seats a year

  • easyJet No.2 with 11%

market share

Orly

  • 13th largest airport in

Europe, c.29m seats a year

  • easyJet No.2 with 12%

market share

Milan Malpensa

  • c.18m seats a year
  • easyJet No.1 with

40.5% market share

Beau auvais ais Charles rles de de Gaulle lle Orly ly Malpe lpensa Linate ate Bergamo amo

  • Over 300 million people live 60

minutes, or less, travelling distance from an easyJet airport

  • Leverage pan-European brand

with a broad and inter- connected network to stimulate demand at both ends of routes

  • Large, wealthy catchment areas

which are under-supplied with low LCC penetration Large addressable market for easyJet

Source: OAG

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SLIDE 16

16 16

Strong market share delivers value for customers

Great product

  • Range of destinations

for business and leisure Great schedule

  • Frequencies
  • Choice of time of day

Source: Millward Brown Brand Tracker 2014

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easyJet No2

Strong market share delivers financial value

  • Strong correlation between

market share and returns

  • Scale at No.1 or No.2

positions delivers

  • Cost advantage
  • Procurement

advantage

  • Strong network focus on
  • Maintaining industry

leading load factors

  • Sustaining high

utilisation of assets

easyJet generates highest returns where it hold a No.1 or No.2 network position

45 30 15 60 Seats (millions) easyJet No.1 Other

Returns vs. network position

24 airports

48% of capacity

29 airports

29% of capacity

87 airports

23% of capacity

Returns

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SLIDE 18

18 18

Network structure delivers flexibility

Belfast London Luton Malaga

  • Base to base

flying

  • Revenue
  • ptimisation
  • No dead-legs
  • High asset

utilisation

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SLIDE 19

19 19

Compelling network positions take time to develop

  • Constraints
  • Slot allocation
  • Timing of slots
  • Airport capacity
  • London, Paris, Milan, Berlin, Geneva,

Rome attractive both outbound and inbound

  • Maximise revenue potential
  • Significant amount of time to build

strong positions at primary airports

Source: OAG

0% 10% 20% 30% 40% 50% 60%

Milan Malpensa - Market Share FY 2006 vs. FY 2014

2006 2014 0% 10% 20% 30% 40% 50%

Geneva - Market Share FY 2006 vs. FY 2014

2006 2014 0% 10% 20% 30% 40% 50%

London Gatwick - Market Share FY 2006 vs. FY 2014

2006 2014

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20 20

Rigorous capital allocation framework

Decision process ensures capital is invested in most profitable parts of the network

  • Reposition
  • Opportunity to increase returns by

reallocating assets to more profitable network areas, or reposition to drive higher returns

  • Invest
  • Invest in core high returning

network positions

  • Grow
  • Invest in high returning network

area with low level of capacity investment

easyJet delivers superior returns by allocating assets in positions where it can leverage its sources of competitive advantage

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  • Dedicated business plan for every

route

  • Detailed financial and operational

analysis undertaken

  • Approach to route evaluation
  • Measure
  • Monitor
  • Action
  • Focused, granular decision making

led by the Network Development Forum

Granular approach to route planning

Year

easyJet capacity increase on an individual route easyJet capacity increase on an individual route

0.0 0.1 0.2 0.3 0.4 0.5 0.6 £- £1 £2 £3 £4 £5 £6 £7 £8 £9 2009 2010 2011 2012 2013 2014 Seats (right axis) Contribution 0.0 0.1 0.2 0.3 £- £1 £2 £3 £4 £5 £6 £7 2009 2010 2011 2012 2013 2014 Seats (right axis) Contribution

Returns Seat growth (million) Returns Seat growth (million)

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SLIDE 22

22 22

Low risk opportunities within the current network footprint

Source: OAG scheduled data for the 12 months to 30 September 2014 Other LCC Non LCC P2P (est.) 86m

Non LCC transfer (est.)

1. 1. 28 millio lion n seats on existing easyJet airport pairs

  • Low risk opportunities to consolidate

existing market positions by thickening routes

2. 2. 33 33 millio lion n seats represents

  • pportunity to connect existing

easyJet network points

  • Join the dots
  • Leverage pan-European network

3. 3. 25 millio lion n seats opportunity

  • Able to expand existing network

footprint

  • New network points
  • New bases

Opportunity at easyJet’s top 20 airports

  • 1. Curren

ent easyJet et airpo port pairs 28 million

  • n seats

‘Thicken routes’

  • 2. Opp

ppor

  • rtunity to

“join the dots” 33 million

  • n seats
  • 3. Other

er grow

  • wth
  • pp

pportunities es 25 million

  • n seats

easyJet

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SLIDE 23

23 23

50 100 150 200 250 300 350

Granular approach to fleet planning

2 3

Significant number of low risk opportunities for easyJet to pursue

1.

  • 1. Rolling 12 months to 31 August 2014

2.

  • 2. IATA, Eurocontrol, assumes GDP growth of 1.5%
  • 3. Current fleet plan as at 18 September 2014

Invest in existing network Growth

  • pportunities

Natural market growth of 2.2%2 FY19 easyJet

  • pportunity

Current easyJet fleet Route churn easyJet FY19 base case3 Minimum easyJet fleet3 Maximum easyJet fleet3

40-65 30-45 296- 356 20-30 10-20

3

226 204 316

Number of aircraft

  • Consolidate

market position by thickening routes

  • Join the

dots

  • New bases
  • New network

points

  • New routes
  • As at 30

September 2014

  • Expected

churn FY14 – FY19

  • Forecast

passenger growth2 on easyJet current markets

304

Range of easyJet FY19 fleet size

3 1 2

Load factor: 90.3%1 Average utilisation: 11 hours / day

1 2

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Time sensitive opportunities

London Gatwick

  • 9% capacity growth following

purchase of Flybe slots

  • Thickening routes such as

Amsterdam, Inverness and Vienna

Amsterdam

  • New base opening in Spring 2015
  • New routes include Hamburg from

November 2014

Hamburg

  • New base opened in 2014
  • Now connecting 23 points of the

easyJet network

United Kingdom +2.5% France +4.6% Spain -2.0% Germany +14.0% Switzerland +6.3% Italy +5.4% Netherlands +13.4%

easyJet H1 2015 capacity growth

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  • Local employment
  • Relationships with government and regulators
  • In-market management with good local knowledge
  • Airports like to work with easyJet: quality of

network and sustainable partner

Strong market share gives easyJet relevance

“easyJet is a loyal customer that flies to Schiphol since 1996. By opening a base, easyJet confirms this sustainable relationship that European destinations add to Schiphol1”

  • 1. Schiphol CEO, Jos Nijhuis
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Bringing it all together – easyJet Country Directors

Country Director

Local sales (B2B) Local marketing Public Affairs / Relations Regulatory affairs Airports Day-to-day

  • perations

People management Country plans

  • Network, bases,

airports, pricing

  • Sales & Marketing

Customer experience Country performance Employee / Industrial Relations

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SLIDE 27

Francois Bacchetta Country Director - France

Bringing it all together france

27

27

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easyJet in France 2006 Jan 2012 2014

Routes 53 157 176 Market share 5% 12% 14% Business travel 17% 21% 24% Routes with min 2 dailies 6 17 24 Customer satisfaction1 # 2 # 2

easyJet in France – strong progress

  • 1. GSK, Millward Brown

Since January 2012 investor day

  • Steady profitable growth: capacity increase of 5%
  • Business passenger continues to grow (up 3pp)
  • 14% market share overall, clear number 2 position in the market
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2 4 6 8 10 12 14 16 18 2008 2009 2010 2011 2012 2013

…delivering capacity growth and strong returns

Over the last 5 years

  • Capacity has increased by a CAGR of 11%
  • Returns have increased by a CAGR of 13%

(seats million)

Network built on No1 and No2 positions…..

easyJet has built a strong position in France

  • 1. Paris Capacity shares are given for short-haul addressable market (excluding Non open skies) and excluding

feeding traffic (30% in Charles De Gaule and 3% in Orly).

#2 – 19% #2 - 16%* #2 - 13%* #1 – 25% #2 – 14% #2 – 20% #2 – 18% #11 – 2% #2 – 21%

Ranking – Capacity share

easyJet has a number 1 or 2 position in 8 out of 10 major French airports

easyJet capacity in France

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210 205 169 136 133

50 100 150 200 250

UK Germany Spain Italy France Million seats 2014 (OAG)

12% 12% 5% 5% 5% 5% 5% 4% 4% 4%

  • 1%

1% 3% 5% 7% 9% 11% 13% 1 2 3 4 5 6 7 8 9

Spain-UK UK- Dom Italy- Dom France- Dom France-UK France-Italy UK-Italy Swiss-UK Germany-UK UK-Nether

Balanced traffic between outbound, inbound and domestic flows respectively sustained by an affluent population, tourism and business traffic

Significant market for easyJet

  • 1. Source: Top 10 capacity flows of easyJet – millions of seats

Million seats FY13 % weight on easyJet network

easyJet network1 European market

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Where is the future opportunity for easyJet

Take advantage of main competitor restructuring and limited presence of other low cost carriers Profitably grow market share over time by offering affordable fares and reliable product Use the easyJet network to increase travel into France Focus on business passengers, leverage France tourism attractiveness and high income residents propensity to fly Keep on building the brand and focus on customer experience

“Be the challenger brand to Air France”

1 2 3 4 5

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Respected in the French community

Employ over 1,000 people

  • Under French pay system, paying

French social service

  • Social responsibility

Development of regions

  • Connecting France through

the network

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easyJet is the only significant competitor to Air France

1 Time period: Oct 2013 – Sep 2014

Full year 2014 – French market share (in seats)1

47% 25% 45% 36% 49% 10% 25% 20% 19% 21% 5% 1% 5% 1% 7% 4% 1% 2% 2% 34% 49% 29% 42% 21%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% PAR NCE TLS LYS BOD

Others Vueling Airlines Ryanair easyJet Air France

1

Paris Nice Toulouse Lyon Bordeaux

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Gaining market share

Capacity in France

  • Market capacity flat in FY14 driven

by Air France reduction

  • LCC penetration in France lower

than Europe average

  • Increase in 2014 driven by easyJet and
  • ther LCCs

easyJet progress

  • Market share gain
  • Build on successful start of Nice and

Toulouse bases to establish strong regional network

  • Strengthen operations in Paris to

consolidate No 2 position

4.5%

  • 1.1%

7.8% 0.8% 3.2%

  • 0.8%

3.4% 4.7%

  • 4%

0% 4% 8% 12%

2013 2014

Market excl. easyJet LCC FSC easyJet

2

AirFrance-KLM 42% easyJet 14% Ryanair 8% Lufthansa Group 7% IAG 4% Vueling 4% Royal Air Marocco 2% Other 20%

Source OAG: Oct 2013 – Sep 2014

Legacy

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World’s leading tourist destination

  • 85 million arrivals in 20131:
  • 83% being from countries within easyJet network
  • Paris is the number one city in terms of

visitors, with 32 million arrivals in 2013

  • 38 easyJet network points connect with

Charles de Gaulle

  • 19 easyJet network points connect with Orly
  • The number of inbound arrivals in

France is expected to increase at a CAGR of 2%, rising to 90 million in 2017

France is the leading tourist destination in the world

3

1 Source: Euromonitor, 2013

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Business passenger opportunity in France

Most popular business

  • Multiple frequencies to EU cities
  • Domestics routes (Paris to regions and inter regional

network)

Continue to increase share of business / high yield passengers through

  • Targeted deals with main TMCs and corporate accounts

and develop GDS distribution

  • Product optimisation vs. competition and continuous
  • perational excellence

4

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Brand awareness industry leading in France

  • 13
  • 10
  • 4
  • 3
  • 27
  • 25
  • 29
  • 26

26 26 9 11 36 36 37 46 42 43 29 32 31 31 30 23 19 21 58 54 6 9 4 5

Brand consideration closing gap with Air France and strengthening against competition

Q2 13

easyJet

Air France Ryanair

Q2 14

Vueling

Q2 13 Q2 14 Q2 13 Q2 14 Q2 13 Q2 14

  • Brand awareness recovered

from a low level where education was needed to change people’s mind-set about low-cost

  • Consideration continues to build

by giving confidence to customers as we continue to make travel easy and affordable

Source: Millward Brown

First choice Would seriously consider Might consider Would not consider

5

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SLIDE 38

How we sell

Peter Duffy Group Commercial Director: Customer, Product & Marketing

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Agenda

1. Driving demand through brand and communication investment

  • 2. Digital conversion
  • 3. Highly differentiated revenue management system
  • 4. Examples of revenue initiatives
  • Non-seat revenue (easyJet Holidays, in-flight)
  • Business passenger
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Source: easyJet Brand ranking study

Awareness

2014 (Q3)

Serious consideration

2014 (Q3)

Preference

2014 (Q3) 98% 62% 15% 98% 66% 19% 91% 28% 5% 97% 68% 22% 100% 71% 40%

Universal brand awareness in our key markets

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SLIDE 41

41 41

Strong brand awareness delivers sales

Passenger origination

64

million passengers

22.6

million bookings

10.5

million customers

57

easyJet database

million contacts

300

million

Catchment

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Improving customer experience

  • Customer satisfaction improved
  • 56% of customers have now flown with us before
  • Average age of customers increasing

Average age by market

Average age at departure

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SLIDE 43

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Structured re-targeting

  • 57 million customers on the database
  • 41% marketable
  • Marketable customer base has

increased three-fold since 2012

  • Data driven creative approach
  • Customers in the contact programme

are 33% more valuable than those who are not

  • Emailed customers book 24% more

frequently than non-emailed customers

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SLIDE 44

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Digital strategy

  • +500 million visits
  • +26% - overall traffic increase (including mobile)
  • c.15% - step 1 web conversion improvement
  • 8.6% - mobile (% ecommerce bookings)
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SLIDE 45

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Pricing

  • Low fares offered

across the entire network – c.45% of passengers pay under £50 per flight

  • Simple demand based

system

  • Every flight to deliver

positive contribution

  • Continued innovation
  • Allocated seating
  • Bag charges
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SLIDE 46

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Non-seat revenue

  • £64 million1
  • New deals with Europcar &

Allianz

  • Leverage CRM platform to

deliver sales

  • Significant Pan-European

holiday options

  • Hotelopia – flight sales and

holidays

  • Series seat sales
  • In-flight
  • 1. Year ended 30 September 2013
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SLIDE 47

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Quality revenue streams - easyJet Holidays

  • Major opportunity for easyJet
  • 10 million European flight package

bookings in UK - significant market in Germany, Switzerland & across Europe

  • New deal with Hotelopia

Proposi

  • sitio

ion

  • Package holidays as beach, city and

ski - full European coverage

  • Exclusive product range and prices

Including branded 5 star properties

  • Fully protected (ATOL in UK)
  • Segmented product to cater for

specialist requirements

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SLIDE 48

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Quality revenue streams - Inflight

  • New differentiated award winning products
  • Best Airline - Inflight Retail and Food &

Beverage

  • New products e.g. coffee sales up 17%
  • Margin improvements – up 9%
  • New brochure design from specialist

consultant to Waitrose

  • Stock loss, wastage and accuracy

improvements

slide-49
SLIDE 49

Business travel

Anthony Drury Director, Head of Business

slide-50
SLIDE 50

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Business journey

Distribution agreements with all major GDS’s Dedicated sales team in core markets Online booking tool integration Flexible corporate fares +12 million business passengers and growing Travel agency agreements Contracted Corporate Accounts Inclusive fares “Business sense” campaign Business

  • rientated

network Fast track security easyJet plus cards 2014 “Best short haul airline” Business travel awards Allocated seating

slide-51
SLIDE 51

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Delivering expected results

  • 12 million business passengers per

annum

  • 20% business passenger

penetration

  • +280 corporate agreements
  • +80 travel management companies

contracted

  • Distribution agreements with all

major GDS and self booking tools

YOY business passenger growth

Millions

13 12 11 10 6 9 8 7

slide-52
SLIDE 52

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What is the future opportunity

TMC Managed ged spend Direc ect spend easyJet market share across the managed segment is

3%

easyJet market share across the direct segment is

15%

  • EMEA short haul market opportunity is

estimated at £20 billio lion pa (165 65 millio lion n seats) ts)

  • 35%

35% of the short haul market is direct to airline websites

  • 65% of the short haul market is through travel

management companies

  • easyJet overall market share is 8.3%

3% across Europe

  • “Direct Business” market share is currently

15% of the direct opportunity which is indexed above our overall market share

  • “Managed Business” market share is currently

3% of the managed opportunity which is indexed well below our overall market share

  • Opportunity exists across both segments

with the “Managed Business” sector highlighting the most opportunity

European short haul market1

Manag aged ed spend

  • pp

pportunity 97% Direc ect spend

  • pp

pportunity 85% 5%

3% 3% 15%

  • 1. BCG analysis 2014
slide-53
SLIDE 53

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Seizing the opportunity

Product Network Marketing Distribution Sales

  • Market share growth opportunity

across all markets

  • Focused strategy to capitalise on the
  • pportunity across Europe through

both the managed and direct channels

  • Four strategic pillars supporting our

sales approach

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SLIDE 54

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“Multi channel” sales approach

Corporate contracts Travel Management Company (TMC) Direct

Corporate accounts Corporate spend

  • SME channel
  • www.easyjet.com
  • Distribution channel
  • Middle market growth
  • Management reporting
  • Corporate discounts
  • Dedicated stakeholder management
  • Savings / ROI value proposition
  • Contracted relationships
  • TMC supported (Online/Offline)
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SLIDE 55

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Seamless distribution through all channels

  • GDS connectivity improvements across

all channels

  • Self Booking Tool integration with

consistent display

  • Flexibility to book direct
  • Supporting the TMC’s preferred booking

channel across Europe

  • 100% YOY GDS penetration improvements
  • Displayed similar to all other carriers
  • Leading the industry with flexible distribution standards

Self booking tools

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SLIDE 56

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Delivering tailored business products

Inclusive Ticket Growth

  • Tailored fares and products

for the corporate customer

  • Fares distributed through the

TMC’s GDS systems

  • Fares available online through

all self booking tools

  • Fast track for Flexi fares &

easyJet plus at more than 35 airports

Flexi Ticket Growth

£ growth £ growth

slide-57
SLIDE 57

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Building a stronger business network

Presence in top 100 market pairs

2 4 6 8 10 12 14 16 Departures Daily

High Frequencies on key Business Routes

13 11 10 10 9 9 7 7 7 7 6 6 5 5 4

  • Largest footprint in the largest

European markets

  • Flying to more business friendly

primary airports

  • Multiple frequencies on top

Business routes

  • Maximising time and efficiency

through our business friendly schedule

48 23 39 9 24 24 21 18 17 15 14 14 3 3 1 20 1

  • 2
  • 10

20 30 40 50 60

Non primary airports Number of market pairs operated between 2 primary airports

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SLIDE 58

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Stakeholder focussed marketing campaigns

  • Targeted stakeholder advertising
  • Product re-enforcement
  • Leverage all media channels
  • Influencing behaviour
  • Brand awareness and perception
  • Educating the corporate traveller
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SLIDE 59

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Summary

  • Opportunity to grow market share

across both managed and direct segments in all markets

  • Largest opportunity across the

managed sector through TMC channel development

  • Marketing investment to increase

consideration

  • On-going focus on evolving the suite
  • f business products
  • Continue to develop and support

Industry partners

  • Business is part of our DNA
slide-60
SLIDE 60

Low cost everyday

60

60

Chris Kennedy Chief Financial Officer

slide-61
SLIDE 61

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Low cost everyday

easyJet’s low cost base provides the platform to make travel easy and affordable

Low cost t al allows lows eas asyJet Jet to to:

Offer affordab able e fares Continue e to compete te success ssfu fully lly Sustain in and grow margins ins

8.0 2.0 4.0 6.0 0.0 500 250

0.99 1.65 65 2.14 2.94 3.11 4.60 5.60 Airport; ground handling, navigation and en-route charges CASK( K( p)*

Capac pacity ity deplo loyed d on easyJe Jet t networ

  • rk1

Cost t base allows

  • ws easyJet

et acces ess to the oppor portu tunity nity

easyJet Air France Alitalia British Airways KLM TAP Thomson Other

60 Other airlines hold a lower than 2.5% share

  • 1. OAG full year 2014 – easyJet airport pairs capacity
slide-62
SLIDE 62

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easyJet lean will deliver £30 million - £40 million in sustainable savings per annum over the next 5 years

lean principle les: s:

  • Governance and milestones
  • Covers the total cost base
  • Long and short term savings
  • Embedded throughout easyJet

culture Benchmarking ing process:

  • Costs benchmarked against key

competitors

  • Revealed a further pipeline of

saving initiatives easyJet lean will continue to deliver sustainable savings

Engine e selection Enginee eering g & Mainten enan ance Airpor

  • rt deals

als 2015 2016 2017 2018 2019 Up Up-ga gaugin ging A320 NEO’s

easyJ syJet et lean initiat ativ ives es

Pipeline of sustainable cost savings easyJet lean has delivered c.£170 million ion in sustainab able le cost savings

slide-63
SLIDE 63

Cost OPPORTUNITIES

63

63

Warwick Brady Chief Operations Officer

slide-64
SLIDE 64

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Our operation in 2014

Flight Operations

  • 2,440 Pilots

Cabin Services

  • 5,221 Cabin Crew

Ground Operations

  • 704 routes across 134 airports in 32 countries

Engineering & Maintenance

  • 226 aircraft
  • 6 maintenance bases
  • 27 line maintenance bases

Operations Control

  • 26 aircraft/crew bases
  • c. 1,350 sectors/day
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SLIDE 65

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Leading asset utilisation

Industry leading asset utilisation

Operatio ional al efficiency

  • Low overhead costs
  • Highest load factor
  • Uses its aircraft efficiently
  • Maintains industry leading on-time performance

66.0% 87.0% 0% 20% 40% 60% 80% 100% 2010 2013

On Time Performance 90.3% Load factor

1

  • 1. Rolling 12 months to 31st August 2014

Innovate to m maintain in cost advantag age

slide-66
SLIDE 66

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Maintaining cost advantage

All based on single aircraft type which allows for scale and simplicity benefits in all cost and operational areas

easyJ syJet t cost base se

  • Overall operational cost

base of £3.5 billion

  • Ex-fuel cost base of £2.4

billion

  • Ex-fuel costs are 67% of the
  • verall operational cost

base

  • easyJet has the ability to

directly impact c.60% of the cost base

Fuel 33% £1,182m Maintenance 6% £212m Crew 13% £454m Airports & ground handling 31% £1,078m Navigation 8% £294m Selling and Marketing 3% £101m Other costs 6% £226m

  • 1. Year end 30 September 2013

1

slide-67
SLIDE 67

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Pipeline of initiatives to maintain cost advantage

Short term <2yrs Medium term 2 – 4 yrs Long term 4yrs>

Increased pipeline of initiatives

  • easyJet lean continues to deliver

and develop significant cost reductions

  • Rolling 5 year plan to identify future

initiatives across

  • Airport charges
  • Ground Handling
  • Navigation
  • Crew
  • Engineering and maintenance

contract re-tender in 2015

  • Continued benefit of up-gauging

Size of savings per annum

(larger circle means bigger saving opportunity)

slide-68
SLIDE 68

68 68

Airport costs: the facts

  • 80% are regulated airports
  • 20% are non-regulated
  • Price deals:
  • London Gatwick price cap over

7 years

  • Luton 10 year growth deal

allowing doubling of passengers

  • Spain 10 year price freeze

(18 Airports)

  • Copenhagen price increase

capped for 4 years, low-cost terminal discount protected

  • Long term airport deals across

Europe

31%

slide-69
SLIDE 69

69 69

Airport costs: delivering savings

Continual focus to minimise price increases to below inflation

Structure of charges Culture change Airport deals

  • Deals recently completed:
  • Gatwick
  • Luton
  • Bristol
  • Develop relationships with airports to help deliver Airports
  • f the future program
  • Efficient use of capital
  • Deals not reliant on regional subsidies or state aid

Regulated airports

  • Participate in price regulation process in major

airports

  • Work with regulators to ensure a fair price setting

process is developed and adhered to

  • Push to have dual till pricing structures eliminated

from the easyJet network

  • Avoid any remaining bias towards legacy carriers
  • Develop relationships with regulators and work

together to ensure fairness in cost structures

  • Develop relationships with airports to ensure

efficiency is rewarded and airports are customer friendly and efficient

  • Ensure airport charges fairly reflect the easyJet product
  • Charges should reflect the underlying cost of services

provided

  • Pay per use
  • Recognition of higher load factor
  • Recognition of fast turns & limited use of assets
  • Avoid funding infrastructure that we do not use

31%

slide-70
SLIDE 70

70 70

Ground handling costs: the facts

  • Over 50 handling partners across our network
  • Our top 10 partners handle c.80% of our turns
  • Menzies Aviation & Swissport are our biggest

partners

  • 98% of our customers now use online Check-in
  • Misrouted bag rate of 0.4 per 1000 bags, one of the

lowest in the industry

  • De-icing technologies reducing winter disruption
  • Deals signed this year:
  • 6 UK airports
  • Copenhagen
  • Geneva
  • Schönefeld & Hamburg

31%

slide-71
SLIDE 71

71 71

Ground handling costs: delivering savings

External benchmarking confirms easyJet as one of the industry leaders in ground handling costs

To deliver an easy, efficient and friendly service at competitive prices

Evolving airport processes

  • Online Check-in
  • Carry on bags

Airports of the future

Making key airports customer friendly and efficient (e.g.: Gatwick single terminal consolidation)

Automation

Auto bag drop and auto gates will drive efficiency across the airport experience

Competitive market

Leverage new contracts based

  • n our volume

31%

slide-72
SLIDE 72

72 72

Crew: the facts

  • 13% of cost base
  • Are represented by 16 recognised unions
  • Crew are rewarded on productivity and

performance

  • e-Learning and bespoke training programs are
  • ffered that continually develop our crew
  • Our crew are a major reason why passengers

enjoy flying and continue to fly with easyJet

“I have no doubt in my mind that the quality and professiona

  • nalism of the cabin

n crew is a major reason why I will continue to use easyJet.”

13%

  • 1. easyJet CSAT YTD July 2014

1

slide-73
SLIDE 73

73 73

Crew: delivering a sustainable cost base

Crew cost per block hour is in line with low cost competitors

T

  • deliver an easy,

efficient and friendly service at competitive prices

Industrial Relations

Specialised employee relations team regularly liaises with our 14 recognised unions

Pay deals

Variant pay deals which are competitive in each of our jurisdictions with rewards based

  • n productivity and performance

Growing network

Improved flexibility through new entrant contracts & strategic flying from new bases (e.g.: Netherlands, Portugal)

Lifestyle options

Offer choices to enhance lifestyle - select between pay, time off or part time

IT systems

Optimisation software ensures our crew are as productive as possible

13%

slide-74
SLIDE 74

74 74

Fuel costs: the facts

  • 33% of the cost base
  • easyJet’s single largest cost line
  • Since 2011 our baseline fuel initiatives have

made savings of £22 million

  • A $10 movement per metric tonne impacts the

FY’14 fuel bill by +/-$1.0 million

33% 1

  • 1. Q3 IMS, 24 July 2014
slide-75
SLIDE 75

75 75

Fuel: delivering savings

  • Introduction of Sharklets for new

deliveries since August 2013

  • Retrofitted 6 additional Sharklet aircraft
  • Aircraft weight reduction programme to

remove unnecessary weight carriage

  • Lightweight seats and lightweight trolleys

remove 600kg per aircraft

  • Engine washing programme maximising

economy and minimising emissions

  • Lightweight Electronic Flight Bag

(removed paper charts) saving 25kg per aircraft

Pipeline of initiatives to continue to drive fuel efficiency savings

  • Analysis tools to identify opportunities for

cost savings

  • Zonal drying trial
  • Delayed engine start
  • Engine washing
  • Fuel burn information shared with flight crew
  • One engine taxiing
  • Continuous improvement together with

manufacturers

  • Flap 3 landing (requires less engine power

during descent)

What has been done so far Continuing to deliver savings

33%

slide-76
SLIDE 76

Disruption management

76

76

Will Facey Head of Operations Control Centre

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Role of the Operations Control Centre (OCC)

Being on the front foot – anticipating, mitigating and controlling execution

  • Deliver the daily network
  • Maintaining operational

resilience

  • Mitigation of operational risk
  • Centralised network decision

making

  • Crew support & co-ordination
  • Manage disruption
  • Communication flows
  • Crisis response
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OCC in disruption – considerations & outcomes

Control

Operational routines Business disruption teams Legal liabilities

React to any situation

Realistic and pre-emptive decision making

Open communication

Be open and honest with passengers Flight tracker

Centralised procurement

E.g.: centralised hotel booking

Innovative technology

E.g.: pre loaded cash card refreshment vouchers

Increased customer satisfaction

  • Increased OTP and service completion

rates

  • High level of control and co ordination
  • Balance between customer value and cost
  • Consistent and pertinent communications
  • ‘..Doing the right thing..’ Higher propensity

to fly with easyJet again

Increased cost control

  • Lower disruption cost

Future cost initiatives / innovation

  • Seeking disruption solution optimisation
  • Hotel procurement / pax self help

Outcome

Disruption cost per cancelled flight decrease

2012 – £3,718 2013 – £3,551 2014 – £3,403

OCC Role Action / Process

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Case study: disruption incident management

Recovering well is the key to retaining the passenger

Aircraft at LGW suffers bird strike

Initial assessment undertaken

(LGW / BSL flight delayed)

Decision made to ground aircraft LGW / NCL rotation is cancelled as passengers not at airport yet LGW / NCL passengers informed

  • f cancellation

(majority informed prior to arrival at airport and placed

  • n first flight next day)

Swiss passengers moved in both directions & NCL passengers put on next

Quick decision required due to Basel curfew limited options to move passengers between UK / Switzerland in the coming days Is there enough time to inform NCL passengers

  • f cancellation

and stop them from travelling to the airport?

Bird strike ike Decis cision ion proces cess

Considerations Operationally committed to move Swiss passengers Aircraft scheduled to travel too and return from BSL to LGW

slide-80
SLIDE 80

Engineering and maintenance

80

80

Gary Smith Head of Powerplant and Fleet Transition

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Background to E&M re-tender

  • ‘Vision 2015 – engineering –

the future’ launch

  • Fleet selection

announcement

  • Significant lease extensions

beyond 12 years

  • Engineering cost

benchmarking completed

  • Implementation of

re-tender with selected suppliers/network

  • Insourcing complete
  • Current engineering team

formed

  • End-of-lease activity taken in-

house

  • 11 year SRT contract signed –

6 year break clause

  • GB Airways integration
  • Insourcing project underway

2008 2009 2010 2011 2012 2013 2014 2015

  • GB Airbus and Boeing 737s

exited fleet

  • New fleet evaluation

launched

  • Engineering and

Maintenance re-tender launch

  • Engine selection completed
  • New fleet technical evaluation

completed

Now

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How the E&M cost base breaks down

easyJet Engineering & Maintenance cost base

Primary Activity Description

Engine maintenance Engine workshop visits, unscheduled and scheduled (every 9 years approx.) Engine LLPs Cost of engine life limited parts, replaced at scheduled engine workshop visit Component support Network wide repair and logistics management for over 30,000 component removal transactions Logistics and Warehousing Transportation and warehousing for components and consumables Consumable parts Non-repairable parts consumed at line or heavy maintenance Heavy maintenance Hangar based maintenance – currently includes 6 and 12 year checks, end-of-lease maintenance and C-checks Line maintenance Line maintenance – network wide Equalised checks Overnight checks performed every 85-90 days on each aircraft

Engineering by Category

Engine gines Compo ponen ents ts Airfr frame me Main intena nanc nce

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SLIDE 83

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Implications of fleet transition on heavy maintenance

Increase in maintenance volume gives opportunity to leverage cost

20 20 31 31 24 24 25 25 20 20 9 9 23 23 25 25 20 20 8 9 17 17 27 27 19 19 19 19 5 4 10 10 22 22 10 20 30 40 50 60 70 80 90 100 6 Years 8 Years 10 Years 12 Years 14 Years 16 Years

48

1

33 20 39

1

94

21 21

3

64 74

T ype of check

  • A320 family requires a heavy

maintenance check at 6 and 12 years (14 and 21 days downtime respectively)

  • Beyond 12 years, aircraft require a

medium-maintenance check every 2 years, allowing opportunity to perform reliability modifications

  • Increased maintenance and larger fleet

provide significant leverage with maintenance providers

  • Predictable volume of the same aircraft

type offers opportunity to leverage ‘lean principles’ and technology to improve efficiency of maintenance

  • 1. Average age of fleet at end of respective financial year

Heavy maintenance demand forecast based on easyJet internal analysis: 2014-2020

Average age of fleet1

2014 2015 2016 2017 2018 2019 2020

Average age of fleet1 5.8 6.2 6.7 7.1 7.2 7.5 8.0

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Vision 2015

In spring 2013, easyJet engineering launched ‘Vision2015’

  • Cost benchmarking exercise carried out by independent experts
  • Objective of delivering best-in-class engineering cost, reliability and safety
  • Implementation to coincide with exit points from existing contracts

Outcome

  • easyJet engineering costs were benchmarked on a CASK basis
  • Considerable opportunities identified in:
  • Component repair, logistics and warehousing
  • Airframe heavy maintenance
  • Further opportunity identified in engine maintenance
  • Re-tender project was commenced to pursue the identified cost reduction opportunities within the

engineering supply base

  • Engine selection for A320neo would be leveraged to ensure best in class engine maintenance costs
  • Intention to implement new arrangements during FY2016
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Significant opportunities

Component support Heavy maintenance Current aircraft engine maintenance Line maintenance

Categories Strategy

  • Re-tender
  • Investigate dis-

aggregation of contract

  • Re-tender
  • Review

maintenance programme strategy

  • Current

maintenance contract in place until 2017

  • New engine

selection to drive cost reduction

  • Continue current

strategy of continuous re- tender

  • Gatwick

configuration to be reviewed

Key areas of focus following the benchmarking exercise Largest opportunities in component support and heavy maintenance

slide-86
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Engine selection

Rigorous, thorough and competitive process

  • CFM International selected to provide 270

engines to power 35 current generation A320s and 100 A320neos

  • Will also supply engines for any future exercise of

the 100 purchase rights over new generation aircraft

  • The A320neos will be powered by the CFM

LEAP-1A engines

  • expected improved aircraft fuel efficiency of 13-15%
  • reduce noise levels
  • The current generation A320 aircraft will be

powered by CFM56-5B engines

  • Engine selection delivers easyJet’s cost

reduction target

Engine selection delivers future cost certainty and a significant improvement

  • n current arrangements
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Next steps

Broad supplier base Issue of RFP Round 1 bids Supplier meetings

New contract ract(s)

Round 2 bids and down select Supplier selection Supplier meetings, site visits, Finalise Contract Jan 2014 March 14 April 14 May 14 June 14 Oct-Dec Dec July - Oct FY15 Tod

  • day

ay FY15-16 16 Implementation

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Goal of benchmarking exercise

  • No management action would

result in material increase in E&M cost per seat by 2019

Engine Selection 2014 2019e 2019e E&M re- tender Up-gauging, fleet management CPS increase Engineering & Maintenance cost per seat

  • Up-gauging, engine selection and

contract re-tender will result in lower E&M cost per seat in 2019 than in 2014

slide-89
SLIDE 89

Innovation driving cost reduction

Ian Davies Head of Engineering

89

slide-90
SLIDE 90

90 90

Continuous improvement by innovation

  • Eliminate operational disruption due to aircraft technical

defects by 2020

  • Prevent events occurring by intelligent prediction
  • Mitigate or resolve impact of technical issues by the

application of technology

Objective Outcome Identifying innovation

  • Improved passenger experience and satisfaction
  • Eliminate costs of technical disruption
  • Implement a step-change in engineering efficiency
  • Motivated and engaged engineering team
  • Technological awareness – build an ‘ecosystem’ of

innovation partners

  • Academic relationships
  • Industry partners & suppliers
slide-91
SLIDE 91

91 91

Development of bespoke software to drive efficiencies

Rapid software change – Fan blades management

  • Development of bespoke

apps to optimise existing processes

  • Fan blade management to

help engineers replace damaged blades

  • More time efficient
  • Optimises selection of

replacement blades reducing inventory

  • Apps co-developed with

aviation software specialists

  • Software in use
slide-92
SLIDE 92

92 92

Using technology to reduce delays

Front line support – real time video transmission

  • Enable remote engineering

teams to engage using virtual technology

  • Allows engineers to hold live

video calls with front line engineers, workshops and manufacturers

  • easyJet flies to 138 airports
  • Problems at remote

airports solved more quickly

  • Technology to reduce long

delays

  • In development with Epson

and Vuzix

slide-93
SLIDE 93

93 93

Damage assessment time minimised

Dent and buckle – augmented reality

  • Aircraft damage causes

multiple delays per day, complex assessment processes

  • All damage has to be

recorded and tracked for the life of the aircraft

  • Augmented reality allows

pilots and engineers to see previous damage super- imposed onto the aircraft, minimising time taken to assess new damage

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SLIDE 94

94 94

Drone and robotic technology

Remote inspections - drones

  • Modify existing technology
  • Drones programmed to

scan and assess any damage

  • Enhanced ability to

undertake remote checks

  • More time efficient
  • Greater accuracy
  • In development with

Coptercraft, Measurement Solutions and Bristol Robotics Laboratory

  • Trialling in coming months
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95 95

What can prognosis do for us?

  • Prognosis systems can be used to send real time data of components (e.g. time to
  • pen and close, temperature, pressure)
  • Live data can be used to establish when a unit is about to fail
  • Ability to monitor each individual unit and predict a failure before it actually happens

HOW IT would WORK…

SITA Network

ACARS Air-ground datalink

Data Snapshot

Ground System Engineering

  • Dept. & MOC

Component Rectification/ Removal Engineering Processing Pattern Matching Alert Generation Costumer Notification

Goal of prognosis is to minimise aircraft on the ground, standby aircraft, delays and passenger compensation

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SLIDE 96

96 96

Summary

  • Innovation cost saving improvements in easyJet engineering is part of the

Company’s DNA

  • Innovations are a mix of shorter term solutions which have already been

implemented and longer term research projects

  • A focus on efficiency allows easyJet to ‘future-proof’ easyJet’s operation

and leverage greater cost and efficiency savings as the fleet grows

  • Key driver behind easyJet innovation is to drive sustainable cost out of the

business and improve operational efficiency

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SLIDE 97

97 97

Capital discipline and returns

Chris Kennedy Chief Financial Officer

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SLIDE 98

98 98

Agenda

  • Capital discipline has driven industry leading ROCE
  • Strong balance sheet, prudent levels of liquidity and fleet flexibility are sources of

competitive advantage

  • Highly cash generative model delivers continuous and consistent dividends
  • Clear set of financial policies and metrics in place

1 2 3 4

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SLIDE 99

99 99

  • 1. Capital discipline has driven industry leading ROCE

Focus on capital discipline to deliver sustainable growth and returns

  • Rigorous approach to allocation of

capital

  • Network Development Forum
  • ROCE is now embedded through

the organisation

  • Network decisions
  • Route planning
  • Remuneration
  • Continued improvement in ROCE

year after year

Routes

12m to 30/6 /6/2 /2011 12m to 30/6 /6/2 /2012 12m to 30/6 /6/2 /2013 12m to 30/6 /6/2 /2014

Returns

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SLIDE 100

100 100

  • 2. Strong balance sheet provides competitive advantage

Between FY15-17, easyJet will target a gearing range of between 15% and 30%

  • Data based on 12 month period ending 31 March 2014
  • Includes capitalised leases capitalised at 7.0x
  • Bubble represents size of EBIT

Target range

easyJet 21.5% Ryanair 15.6% Norwegian 3.1% IAG 8.3% Lufthansa 11.6% Air France 2.5% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

  • Adj. ROCE1
  • Adj. Gearing

33% 28% 29% 7% 0% 5% 10% 15% 20% 25% 30% 35% 2010 2011 2012 2013

27% (historical average)

easyJet historical gearing

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SLIDE 101

101 101

  • 2. Prudent levels of liquidity source of competitive advantage

Target of £4 million per aircraft

  • Sufficient liquidity in the event of external shocks
  • Target cash balance reflects the significant amount of unearned revenue held

by easyJet from prepaid bookings

£0m £2m £4m £6m £8m FY2010 FY2011 FY2012 FY2013

easyJet’s historic cash1 per aircraft

  • 1. Cash & cash equivalents
slide-102
SLIDE 102

102 102 259 281 296 316 317 330 327 226 241 250 261 226 204 214 197 200 304 304 311 311 175 200 225 250 275 300 325 350 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Contracted Max Contracted Min Fleet Plan Previous Plan

  • 2. Fleet flexibility is a source of competitive advantage

Increased fleet flexibility to respond appropriately to market conditions

1. At the end of the relevant financial year 2. Based on the fleet plan – base case 3. Maximum fleet does not include the A320neo purchase rights

Maximum, minimum and base case fleet size following exercise of 27 purchase rights

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SLIDE 103

103 103

  • 2. Additional aircraft to deliver flexibility
  • 35 A320 current generation

with CFM engines for delivery between 2015 and 2017

  • As at July 2013, 6 options and 29

purchase rights remained over A320 current generation

  • 6 options exercised October 2013
  • 2 purchase rights exercised

February 2014

  • Remaining 27 purchase rights

exercised September 2014

  • 100 new generation A320neo

aircraft with CFM LEAP-1A engines

  • Aircraft for delivery from 2017 to

2022

  • A further 100 purchase rights
  • ver A320 family aircraft

New Framework Arrangements

2015 - 2017 Bridge 2017 - 2022

  • easyJet has exercised its

remaining 27 purchase rights over current generation aircraft

  • Will further increase

proportion of A320 aircraft in the fleet

  • All A320 aircraft to be

delivered with sharklets

  • Provides easyJet with

upside growth flexibility to support key strategic

  • bjectives
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SLIDE 104

104 104

  • 2. Fleet expenditure broadly in line with current levels

2005-20121 2013-142 2015-20173 2018-20223 Additional aircraft 49% 52% 66% 26% Replacement aircraft 42% 28% 9% 45% Maintenance 9% 20% 25% 30% T

  • tal

100% 100% 100% 100% T

  • tal expected fleet

acquisition and

  • verhaul expenditure

as a % of easyJet revenue

18% 9% 11% 10% - 12%

Fleet acquisition and overhauls will be funded through a combination of easyJet’s internal resources, cashflow, sale and leaseback transactions and debt

1. Based on actual revenue for the 2005 – 2012 Financial Years 2. Based on actual and estimated revenue 3. Based on estimated revenue

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SLIDE 105

105 105

  • 3. Highly cash generative model

* Includes money market deposits but excludes restricted cash

Self funding ordinary dividend and capex

2 25 148 316 283 416 85 69 161 112 497 Sep 2013* 1,237 FX Restricted Cash Sale & Leaseback Borrowings CAPEX Ordinary dividend paid Tax, net int & other Net Working Capital Depn & amort Operating Profit * Sep 2012 * 883 Other

£million

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SLIDE 106

106 106

  • 3. Consistent and continuous dividend payments
  • easyJet will increase the ordinary dividend payout ratio from one third of profit

after tax to 40% from the financial year ending 30 September 2014

46 85 133 150 175 FY2011 FY2012 FY2013 FY2014e

Special Ordinary

  • 1. FY2014 ordinary dividend is for illustrative purposes only and based on Bloomberg consensus

forecast for FY2014 profit after tax as at 15 September 2014

40% of FY14 profit after tax1

£ million

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SLIDE 107

107 107

  • 4. Clear set of financial policies and metrics in place

Capital discipline Capital structure Liquidity Dividend policy Returns

+ + +

=

Objectives

  • High asset efficiency
  • Maintain high level of fleet flexibility
  • Ensure robust capital structure
  • Retain ability to invest in profitable growth
  • pportunities
  • Maintain sufficient liquidity to manage

through industry shocks

  • Target consistent and continuous payments
  • Return excess capital to shareholders

Metric

  • Maintain industry leading returns

Top quartile ROCE Fleet size flexibility of between 204 and 316 aircraft by 2019 Gearing: 15% to 30% Moving to 80:20 ratio on

  • wned vs. leased aircraft

£4 million cash per aircraft 40% ordinary dividend payout ratio

Gearing defined as net debt (adjusted by adding seven times aircraft dry leasing payments for the year) dividend by the sum of shareholders’ equity and adjusted net debt

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SLIDE 108

108 108

Summary

  • Capital discipline has driven industry leading ROCE
  • Strong balance sheet, prudent levels of liquidity and fleet flexibility are sources of

competitive advantage

  • Highly cash generative model delivers continuous and consistent dividends
  • Clear set of financial policies and metrics in place

1 2 3 4

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SLIDE 109

Summary

Carolyn McCall Chief Executive Officer

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SLIDE 110

110

Summary

Proven strategy, execution and returns

  • easyJet has built the industry leading business model in European short-haul

aviation

  • Team, processes and culture will ensure continued successful execution
  • easyJet will continue to deliver

A. Future profitable growth B. Industry leading return on capital employed and margins through revenue and cost initiatives C. Cash returns for shareholders

1 2 3

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SLIDE 111

presenters

slide-112
SLIDE 112

112

Presenters enters

Carolyn

  • lyn McCall,

all, OBE – Chie ief Execu ecuti tive

Carolyn joined easyJet on 1 July 2010 as Chief Executive and was appointed to the Board of easyJet. Prior to this, she was Chief Executive of Guardian Media Group. She was a Non-Executive Director of Lloyds TSB from 2008 to 2009, Non-Executive Director of Tesco PLC from 2005 to 2008 and Non-Executive Director of New Look from 1999 to 2005. She was Chair of Opportunity Now and a former President of Women in Advertising and Communications London (WACL). Carolyn was awarded the OBE for services to women in business in 2008. In April 2008, she was named Veuve Clicquot Business Woman of the Year. Carolyn graduated from Kent University with a BA in History and Politics and from London University with a Masters in Politics.

Chris is Kenne nedy dy – Chief ef Fina nanc ncial ial Office ficer

Chris joined easyJet on 1 July 2010 in the position of Chief Financial Officer and was appointed to the Board of easyJet. After graduating from Cambridge with a degree in Engineering, Chris worked in Audit and Consultancy before a two year stint as a venture capitalist and banker. In 1993 Chris joined EMI Music where he worked both in the UK and the US, covering a variety of roles including UK Chief Financial Officer, European Chief Operating Officer and International Chief Financial Officer. In early 2008 he joined the EMI Music Board as Chief Financial Officer and then Chief Investment Officer.

Cath th Lynn – Grou

  • up Commer

ercial ial Direct ector

  • r: Markets

ets, Networ

  • rk & Pric

icin ing

Cath joined easyJet in 2002 following the merger with Go, in which she played an active role. Cath has carried out a number of senior leadership roles at easyJet including Head of Ground Operations, Head of Airport Development and Procurement and Head of Network Development. In April 2011, she was appointed as Customer and Revenue Director, and to Group Commercial Director in April 2012. Cath spent 12 years in retail for J Sainsbury before joining Go where she was part of the management buy-out team and headed up cabin services, ground operations and customer service. Cath graduated from the University of Leicester with a BA (Hons) in Geography.

Franc ancois

  • is Bacc

acche hetta tta – Coun untry try Direct ector

  • r, Franc

ance

Francois joined easyJet in may 2005 as Country Manager for France and Benelux, then taking the responsibility of Italy and Spain as easyJet was expanding in Southern Europe. Since 2010, Francois , as Country Director for France, has taken the easyJet business in France to the next step after the opening of Charles de Gaulle and Lyon bases in 2008 and Nice and Toulouse in 2012. Before joining easyJet Francois held various senior position within L’Oreal Group in France, Asia and Eastern Europe as Marketing and Country Director. Francois graduated from HEC business school in France.

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SLIDE 113

113

Presenters enters

Peter er Duff ffy – Grou

  • up Commer

mercia ial Direct ector

  • r: Custo

tomer, mer, Prod

  • duct

uct & Marketing eting

Peter joined easyJet in February 2011 as Marketing Director and leads on all aspects of easyJet’s marketing, e-commerce, contact centre and customer programme across Europe. Before joining easyJet, he was Marketing Director for Audi in the UK. Prior to that, Peter was Marketing Services Director at Barclays. Peter has a degree in Economics and an MBA.

Anthon thony Drury ury – Direct ector

  • r: Head

ad of

  • f Busine

iness

Anthony joined easyJet in March 2014 as the Director, Head of Business and leads all aspects of easyJet’s Business program across Europe. Before joining easyJet Anthony held a number of senior leadership and board positions with American Express. Most recently Anthony was the Vice President and General Manager across northern Europe within the company’s global business travel organisation. Anthony has a masters in eCommerce management and an MBA.

Warwic ick Brady ady – Chie ief Oper erat ations ions Office ficer

Warwick is currently Chief Operations Officer responsible for all of easyJet operations. He joined easyJet in May 2009 as the Procurement Director responsible for fleet management, airport, central procurement and regulation. In October 2010 he was appointed Director of Group Operations. Before joining easyJet Warwick was the CEO at Mandala Airlines in Asia. He also spent two years as Chief Operating Officer of Air Deccan/Kingfisher which, at the time, was India’s second largest airline. Prior to this Warwick was Deputy Operations Director at Ryanair from 2002 to 2005, where he held various senior executive roles including Deputy CEO of Buzz, following its acquisition from KLM. Prior to this Warwick worked in private equity for 6 years as well as a number of years with Thomson Airways. He also holds an MBA.

Will Face acey – Head ad of

  • f Network
  • rk Oper

erat ations ions / Oper erat ations ions Contr trol

  • l Centr

tre

Will joined easyJet In November 2008 into his current position and is responsible for the Day of Operations delivery of the flying program and ensuring that the expectations of the company and customers are delivered on a daily basis . Prior to joining easyJet, Will worked for 20 years with DHL Express in various countries and roles across Europe however always within Operations and Network logistics. Will has a degree in International Transport Management.

slide-114
SLIDE 114

114

Presenters enters

Gary Smit ith – Head ad of

  • f Powerpla

erplant and Trans ansit itio ion

Gary joined easyJet in 2009 as part of the engineering insourcing project as Head of Powerplant and Transition, responsible for all aspects of engine management, new aircraft delivery and fleet exit management. Prior to joining easyJet, Gary was General Manager – Component repair at Rolls-Royce and prior to that had worked in the airline / aircraft maintenance industry for 17 years. Gary has a degree in Aeronautical Engineering and an MBA from Cranfield University.

Ian Davies es – Head ad of

  • f Engin

ineering ering

Ian is the Technical Director and Head of Engineering at easyJet where he is responsible for the airworthiness of all easyJet’s Airbus A320 family of

  • aircraft. He runs a team of around 250 support managers and engineering staff all of whom ensure easyJet aircraft are always kept in a safe and

highly maintained condition. Ian is a Licensed Aircraft Engineer with over 35 years of experience in civil aviation and has worked for easyJet for six years. Prior to his appointment at easyJet Ian was Director of Engineering at BMI British Midland for seven years.

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115 115

Disclaimer

This communication is directed only at (i) persons having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001; or (ii) high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001. Persons within the United Kingdom who receive this communication (other than those falling within (i) and (ii) above) should not rely on or act upon the contents of this communication. Nothing in this presentation is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotion contained in the Financial Services and Markets Act 2000. This presentation has been furnished to you solely for information and may not be reproduced, redistributed or passed on to any other person, nor may it be published in whole or in part, for any other purpose. This presentation does not constitute or form part of, and should not be construed as, an offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities of easyJet plc (“easyJet”) in any jurisdiction nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. This presentation does not constitute a recommendation regarding the securities of

  • easyJet. Without limitation to the foregoing, these materials do not constitute an offer of securities for sale in the

United States. Securities may not be offered or sold into the United States absent registration under the US Securities Act of 1933 or an exemption there from. easyJet has not verified any of the information set out in this presentation. Without prejudice to the foregoing, neither easyJet nor its associates nor any officer, director, employee or representative of any of them accepts any liability whatsoever for any loss however arising, directly or indirectly, from any reliance on this presentation or its contents. This presentation is not being issued, and is not for distribution in, the United States (with certain limited exceptions in accordance with the US Securities Act of 1933) or in any jurisdiction where such distribution is unlawful and is not for distribution to publications with a general circulation in the United States. By attending or reading this presentation you agree to be bound by the foregoing limitations.