Investor Day 17 September 2008

(1)

Investor Day

(2)

Introduction

easyJet – Turning Europe Orange

Andy Harrison

(3)

Introduction 3

Vision:

To be the best low fares airline in the world

Driving Financial Performance

Deliver a superior return on investment

Safety

Our No.1 Priority

Operational Excellence

Low cost and highly efficient

Customer

Low cost with care and convenience Measurement F ‘06 F ‘07 Strongly recommend 19% 23% Revenue per seat £ 41.66 40.42 Measurement F ‘06 F ‘07 OTP 75% 75%

Cost per seat ex fuel £ 28.36 26.55 Measurement F ‘06 F ‘07 Composite risk indicator 0.82 0.82 Target 15% ROE PBT per seat £5+ People

Make easyJet a great place to work

Measurement F ‘06 F ‘07 Satisfaction 68% 74% Turnover 22% 10% Absenteeism 5% 4.5%

(4)

Agenda

9.00 Introduction Andy Harrison, Chief Executive

Driving financial performance Jeff Carr, Group Finance Director

Operational excellence Cor Vrieswijk, Operations Director and team Neil Mills, Procurement Director

Q&A session

11.00 Break

11.15 Safety Simon Stewart, SMS Development & Training Manager

People Mike Campbell, People Director

Conclusion Andy Harrison, Chief Executive

Q&A session

Customer Saad Hammad, Chief Commercial Officer and team

(5)

Introduction 5

easyJet – painting Europe Orange

4 Europe’s 4

th

_{largest airline}

4 6.4% share

4 43 million passengers

4 165 aircraft situated in 20 bases

4 Pan European network

4 400 routes, 103 airports,

26 countries

4 Increasing geographic diversity

4 47% of passengers originate

outside UK

4 Third of flying does not touch the

UK

Growth in passengers 37% CAGR over past 10 years

0.0 10.0 20.0 30.0 40.0 50.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 0% 10% 20% 30% 40% 50%

Passengers Proportion Non UK Originating

(6)

Superior margin improvement

Focus on network, revenue and costs has driven improved performance

180 160 140 120 100 60 40 80

PBT Margin Performance 2005 – 2007 Indexed

easyJet Lufthansa British Airways Ryanair Air France 2005 2006 2007 % PBT Marg indexed

(7)

Introduction 7

Tactical reduction to growth in F’09

4 European short-haul aviation is

fundamentally a growth industry

albeit with occasional short term

corrections

4 easyJet has grown via market

share gains from charter and

legacy carriers not just market

stimulation - this trend will

continue

200 6 200 7 Full service Charter No-frills 198 6 198 7 198 8 198 9 199 0 199 1 199 2 199 3 199 4 199 5 199 6 199 7 199 8 199 9 200 0 200 1 200 2 200 3 200 4 200 5

Source CAA Airport Statistics

4 Higher fuel costs are causing capacity to be cut back for F’09

4 easyJet – low single digit growth for

the Winter, flexibility to increase for F’10

4 Consolidation is already evident

(8)

easyJet – strongly positioned

4 Low cost, financially strong and highly efficient

4 Europe’s No 1 Air transport network

(9)

Introduction 9

Low cost, financially strong and highly efficient

4 Focused, simple operation

4 New fuel efficient fleet - average age 3.5

years

4 Low ownership costs – Airbus contract

4 High asset utilisation

4 aircraft in operation 11.6 hours a day *

4 Average turn time of c.30 minutes

4 Strong cost reduction momentum

4 Cost per seat ex fuel reduced by 13% over the

past 3 years

4 Financial strength

4 Low gearing 29%

4 Strong cash position c.£900m

4 Agreed facilities of $1.25bn at attractive rates

(10)

Europe’s No 1 Air transport network

4 Convenient airports

4 Strong positions in key markets:

4 Gatwick No.1

4 Luton No.1

4 Milan No.1

4 Geneva No.1

4 Paris No.2

4 No.1 consumer reach

4 Over 289 million passengers within one

hours drive

4 Broad appeal across geographies

and customer types

(11)

Introduction 11

Europe’s No 1 Air transport network

Source: OAG May08

Presence on top 100 routes (market pairs)

36 29 19 8 21 ₂₀ 17 18 ₁₆ 14 3 7 18 1 0 5 10 15 20 25 30 35 40 45 easy Jet _BA AF -KLM Rya nair Lufth ansa -Sw iss Air Ber lin Iber ia Alit alia Vue ling SA S Other market pa Number of mark operated betwe primary airports easy Jet BA AF-KL M Ryanai r Air B erlin Alitalia _Vuelin g SAS Luftha nsa -Sw iss Iber ia

Non primary airports Number of market pairs Operated between 2 primary airports 36 29 19 8 21 ₂₀ 17 18 ₁₆ 14 3 7 18 45 40 35 30 25 15 10 5 0 20 1

(12)

4 Across all customer groups

4 Strong customer perception

4 Europe’s leading airline website

Strong customer proposition

Source: Gfk Brand tracker _easyJet _BA _Ryanair

Value for money No.1 No.3 No.2

Friendly service No.1 No.2 No.3

Efficient No.1 No.2 No.3

(13)

Introduction 13

Vision:

To be the best low fares airline in the world

Safety

Our No.1 Priority

Customer

(14)

Driving Financial Performance

Jeff Carr

(15)

Driving Financial Performance 2

Growth with superior margin improvement

38.9 44.5 34.7 20% 12% 14% 0 10 20 30 40 50 60 F'05 F'06 F'07 0% 5% 10% 15% 20% 25%

Seats flown Growth in seats

Growth predicated on acceptable capital returns

£9.57 £9.98 £7.50 13.6% 10.1% 7.1% £0.00 £2.00 £4.00 £6.00 £8.00 £10.00 £12.00 £14.00 £16.00 F'05 F'06 F'07 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0%

Fuel cost per seat Return on equity

(16)

Fuel impacting industry margins

38.9 44.5 51.9 34.7 17% 14% 12% 20% 0 10 20 30 40 50 60 F'05 F'06 F'07 F'08 0% 5% 10% 15% 20% 25%

Seats flown Growth in seats

Continue to drive underlying business while adjusting short term tactics

£7.50 £9.98 £9.57 7.1% 10.1% 13.6% £0.00 £2.00 £4.00 £6.00 £8.00 £10.00 £12.00 £14.00 £16.00 F'05 F'06 F'07 F'08 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0%

Fuel cost per seat Return on equity 6.5% to 7% *

*Assumes PBT in F’08 of £110m to £120m

(17)

Addressing fuel cost increases

Network

4Tactical reduction in F’09 growth, minimises margin erosion

4Continue to invest in key markets

4Address areas of underperformance

4Fleet plan and financial strength allows flexibility in F’10

Revenue

4Target superior yield management versus peer group

4Capitalise on supply side changes

4Flexibility to react to changing demand patterns

4Continue to drive ancillary revenues

Cost

4Cost per seat ex. fuel down 13% over last 3 years

4Inflationary pressures primarily from airports and regulators

(18)

Network - reduced growth F’09

4 Accelerated sale and return of expensive aircraft

4 A321 sale progressing

4 Removal of older A319 – 5 offered for sale

4 Accelerated return of B737-700

4 Reduced winter utilisation

4 11.6 hours per day to 9 hours per day for Winter 08/09

4 Capacity removed from underperforming markets

4 Dortmund

4 Focus on higher value key markets as capacity exits

4 Milan & Gatwick

(19)

Network - winter focus on key markets

Madrid +17% Milan +91% Paris +28% Gatwick +20% Stansted -23%

Rest of UK

- 14%

Mainland Europe

+ 19%

(20)

Network – growth flexible beyond F’09

F’08 F’10 F’11

7

A320 (GB spec) 9 5 0 0

A320 (easyJet spec) 0 15 25 25

120 136 29 165 0 0 158 183 8 191 175 200 0 200 A319 135 F’09 A321 (GB spec) 0 A320 family 155 B737 17

Total

172

Current fleet plan – 85 deliveries in next 3 years

Airbus deferral rights add further flexibility for F’10 and F’11

(not exercised to date)

(21)

Growth supported by strong balance sheet

£m

Mar ‘08

Sep ‘07

Fixed assets 1,133 936

Cash & money market deposits 850 913

Goodwill and other intangible assets 432 311

Other assets 540 355

Total assets 2,956 2,516

Debt 566 519

Other liabilities 1,227 845

Shareholders’ funds 1,163 1,152

Total equity and liabilities 2,956 2,516

Gearing* 29% 20%

*Gearing defined as (debt + 7 x annual lease payments – cash including restricted cash) divided by (shareholders funds + debt +7 x annual lease payments – cash including. restricted cash)

(22)

And financial flexibility

4 Capital investment program

4 Continue to finance mainly on balance sheet

4 rebalancing owned versus leased mix; target 70:30

4 Indicative spend

4 F’09 - £500m

4 F’10 - £450m

4 Significant financing flexibility

4 Cash at September 2008 year end, expected to be around £900m

4 Significant financing available at excellent rates (<100bp’s)

4 2006 standby facility c. $250m

4 December 2007 facilities c. $1,000m

4 No MAC or financial covenants

4 Availability period c. F’11

4 Flexibility of 23 cash purchased aircraft owned outright on balance sheet

(23)

Revenue – market capacity continues to slow

4 OAG data still unclear; early tentative estimate for the winter is a

capacity reduction in European short-haul of between 2% to 4%

5.5% 7.2% 5.7% 3.4% -6% -4% -2% 0% 2% 4% 6% 8%

Winter '06 Summer '07 Winter '07 Summer '08 Winter '08

4 September OAG shows the

following reductions for Winter

’08 vs the prior year

4 SAS minus 6.2%

4 Alitalia minus19.9%

4 Span Air minus 25.5%

4 Jet2 minus 51%

4 ClickAir minus 25%

(24)

Costs - how we compare

3.71 3.41 2.79 _2.76 1.64 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00

Sky Europe Vueling Air Berlin easyJet Ryanair

Cost per ask - pence

0.6 pence due to decision to fly to more convenient airports

(25)

Costs - need to drive harder

F’04 F’07 Change Ownership £3.82 £2.40 £1.42 Maintenance £3.54 £2.21 £1.33 Overheads £5.33 £3.77 £1.56 Airports / handling £10.51 £10.39 £0.12 Navigation £3.04 £3.19 (£0.15) Crew £4.39 £4.59 (£0.20) Total £30.63 £26.55 £4.08

4 F’09 costs impacted by price increases at Gatwick, Stansted

and Amsterdam

4 Clear targets in place for future cost reduction; ownership, crew,

overheads and fuel burn

Improve m ent Wo rs e

(26)

Current trading

4 F’08 outlook unchanged

4 Profit before tax : £110m to £120m (before GB Airways one off costs)

4 GB Airways one off costs c. £12m

4 H2 total revenue per seat up mid teens versus prior year (including Euro benefit)

4 F’09 will be challenging

4 To minimise margin erosion from higher fuel costs, our growth has been reduced for

winter 08/09 to low single digit %

4 The strong year on year growth in total revenue per seat, seen in the summer, will

moderate due to annualisation of the benefit from the strong Euro and the weakening UK consumer environment

4 Industry winter capacity changes expected to be in the range of minus 2% to minus

4%. Too soon to anticipate the impact of capacity change on yields

4 Hedging position for F’09

4 48% fuel requirement hedged at $1,225 per tonne

4 70% of anticipated F’09 US$ requirement hedged at $1.96

(27)

The strategy is delivering

0.24 0.34 0.26 0.35

0.46 1.14

0.81 _0.79 _0.72

0.62

2003A 2004A 2005A 2006A 2007A

Ryanair

Source: Company data

Note: Year-end September; Ryanair financials are calendarised to September ¹ RASK is revenue divided by available seat kilometres

² CASK is operating cost divided by available seat kilometres

³ Yield is revenue divided by RPK (number of passengers multiplied by number of kilometres those passengers were flown)

Margin performance: RASK-CASK (pence)

easyJet

easyJet Ryanair

(28)

Operational Excellence:

Reducing cost, driving efficiency

Cor Vrieswijk

Chris Hope

Ian Davies

Neil Mills

(29)

Operational Excellence 2

Operations at easyJet

4 4 4 4 4 Flight operations (1,700 pilots)

Cabin crew operations (4,000 cabin crew) Ground operations (28 countries,106 destinations, 400 routes, 4 self handing bases)

Engineering & Maintenance (165 aircraft, 4 base mtce bases, 21 line mtce bases) Operations control (20 aircraft/crew bases, 1,000 sectors/day)

(30)

Low cost and efficient delivery

4 Effective and efficient delivery of:

4 Safety

4 Cost improvement

4 On time performance

4 Customer care

4 Employee satisfaction

4 Ensuring that operations can support growth and European

expansion effectively and at lower cost:

4 Building a world class but low cost organisation

(31)

Building a world class but low cost organisation

Rapid growth and European expansion has meant the organisation

must change to continue be efficient, focused and simple

4 Organisation redesign implemented

4 Recruitment of experienced airline managers with low cost mindset

4 In-sourcing of strategic parts of engineering and maintenance

4 IT upgrades in progress

4 Organisation is able to scale up and expand efficiently

4 Clear KPI’s and performance management process in place

Mission KPI’s Performance

Management Daily, weekly, monthly Individual bonus Three year plan

(32)

Highly focused organisation

Highly standardised, automated, hands on, focused on

efficiency versus the legacy approach

Manage regulatory standards and compliance

Base performance management

including third party contracts New base deployment Manage regulatory standards and compliance Crew planning, resourcing, training and deployment Pilot performance management Delivery of Safety Service and Sales On-board retail Cabin crew performance management On time performance Disruption recovery On the day Crewing

Engineering of Maintenance Program and Modifications Continuous Airworthiness Mgt Maintenance delivery

Ground Operations Flight Operations Cabin Services OCC Engineering & Mtce Operations Director

Accountable Manager

(33)

Investing in systems to drive efficiency gains

Tail Assignment Scheduling Manpower Planning Crew Tracking Pairings Flight Planning On the day Operation Disruption Recovery Extent of AIMS Rostering Crew Interface Engineering & Maintenance

4 Current IT no longer efficient

4 Systems upgrade essential for future cost reduction

and robustness

(34)

Clear targets in place for cost reduction

Ownership

4Higher cost aircraft exit -Target £40m p.a. by F’11

Maintenance

4Near term additional costs from in-sourcing programme

4Medium term will drive savings –Target £10m p.a. by F’11

Overheads

4Continue to leverage scale

4Head office redundancies, 60 heads – Target £6m p.a. by F’09

Airports &

Handling

4Above inflation price increases at airports e.g. Gatwick, Stansted, Amsterdam

4‘Share the pain’ with suppliers – Target £9m spread F’08/F’09

Navigation

4Growth in line with inflation

Crew

4Wage inflation 4% p.a.

4Airbus conversion of 2 bases

410% efficiency programme – Target £30m by F’11

(35)

Fuel burn and crew efficiency

(36)

Fuel burn – target 3% reduction

4 Safety is our No.1 priority

4 Fuel bill is now nearly £1billion p.a. !

4 Factors impacting fuel efficiency

4 Aircraft efficiency

4 Average aircraft age 3.5 years

4 Engine efficiency

4 Tech 56 insertion

4 Crew efficiency

4 Operating procedures

4 Pilot technique

4 Fuel policy

4 Operating environment

(37)

Fuel – good progress made in 2008

4 Cross functional initiatives

4 Fuel burn assessment complete in 2007

4 Data driven analysis

695 700 705 710 715 720 725 730 735 2007 2008 2009 Burn USG/HR

(38)

Fuel – more to achieve in 2009

4 New 4D flight planning system

4 Improved fuel analysis

4 Overall cost optimisation

4 Engine performance monitoring

4 Weight saving programme

4 Removable items 4 Lighter equipment

4 Crew initiatives

4 Descent planning 4 Operating speeds 4 Acceleration altitude

(39)

Crew efficiency – target 10% improvement

4 Already highly efficient

4 More productive vs legacy carriers

4 Crew tidy cabin between turns

4 Unionised but few rules

4 The easyJet difference

4 Simple operation

4 Team orientated

4 Customer focused

4 No frills e.g. crew room

(40)

Crew supply chain and productivity

Fleet planning Schedule planning Manpower planning Pairings Training Delivery Rostering 1 2 3 4 5 6 Intermediate Rostering 7 Day to Day Crewing 8 Hours Seasonality Training Programme

Fixed Pattern Rostering

UK CAA Regulations Mic roso ft Exc el Network planning 9

Three streams for improvement

4 Processes

4 Connection to network planning

4 Systems implementation

4 Roster Optimisation

4 Improved flexibility

4 Seasonal contracts Mic roso ft Exc el Mic roso ft Exc el Mic roso ft exce l/ AIM S Mic roso ft exce l/ AIM S

(41)

Crew efficiency delivery already underway

Achievements so far…..

4 Pairings optimiser

4 Evaluation of rules & processes

4 Review of basing strategy

(42)

Engineering & Maintenance

(43)

Engineering & Maintenance overview

4 Objectives

4 Highest standards of safety through SMS System

4 High reliability of A319, A320 fleet & Boeing sub-fleet

4 Continued focus on maintenance cost management

4 easyJet maintenance activity predominantly outsourced

4 Outsourced maintenance represents 90% of all expenditure

4 General Electric (GE Wales) & SRT Technics key suppliers

4 In the latter stages of a transition programme to build in house

maintenance support functions to provide;

4 Optimised maintenance cost

4 Direct control over contract performance and SLA’s

(44)

Building a world class E&M team

4 Stage 1

4 In source Maintenance Operations Control (MOC) from SR Technics in Feb ‘08

4 Direct control over line maintenance planning and allocation

4 Line maintenance performed 18 locations (2 in-house Luton and Liverpool)

4 Stage 2

4 Development of internal Engineering Planning and Tech Services management

teams by Dec ’08

4 Implementation of Aircraft Maintenance Operations System (AMOS) by June ’09

4 Improved Airworthiness control to allow internal issue of ARC

4 Improved control of records, standards and cost management

4 Mitigate dependency on one supplier (SR Technics)

(45)

While delivering good reliability

A319 Operational Reliablity July 07 - July 08

98.7 98.8 98.9 99 99.1 99.2 99.3 99.4 99.5 99.6 99.7 99.8 Aust rian Air B erlin Easy Jet Iber ia Ger man Wi ngs _SAS Wo rld F leet Bruss els Air _bmi Lufh ansa Britis h A irwa ys Alita lia TAP A ir P ortu gal Air Fr ance 99.53%

(46)

…..and keeping a tight focus on costs

4 Renewal of major contracts

(airframes, engines)

4 Fleet investment (replacement of

737 700’s and ex GB 320 / 321)

4 Change in fleet ownership

structure

4 Leveraging cost reduction

through scale and competitive

tendering

£0.00 £0.50 £1.00 £1.50 £2.00 £2.50 £3.00 £3.50 £4.00 2005 2006 2007

Cost per seat

(47)

Airports & Ground Handling

(48)

easyJet is present in 37 of the top 50 airports

2008 Intra EU Capacity - Top 50 Airports (cover 88% of all capacity)

0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 MA D CD G LH R FR A FC O MU C BCN AM S LG W ORY ST N DU B OSL CPH PM I ZR H IS T VI E AR N DU S MX P BR U AT H TX L MA N HA M HE L LI S AGP GV A PR G LI N NC E ST R CG N LT N ED I AL C WA W BH X LP A LY S BU D VC E GL A VL C BGY MR S CT A BG O

(49)

easyJet’s ground handling operation

4 Working with strategic partners

4 To further reduce costs by increasing

efficiencies

4 Influencing equipment purchasing decisions

4 Close contract management

4 Deliver the customer service standards

4 Three suppliers account for 60% of volume

4 Key suppliers include at a network level

4 Menzies, Servisair,Swissport

4 At a regional level

4 Goldair Handling, Portway Handling,

(50)

Delivering results

4 GB Airways integration March 2008

4 GB Airways Ground handling saved circa 33%

4 Gatwick Menzies Contract (savings c£350 per turn) 40%

4 Malaga transition (saving c£720 per turn) 45%

4 Share the pain – short term

4 Short term “Share The Pain” programme re fuel costs

4 Delivered £9m of benefit spread between FY08 and FY09

4 Introduction of self handling in Spain

4 Introduced self-handling at 5 Spanish stations Spring 07 saved Eur4.5mil per year

4 Evaluating extension of self-handling at additional Spanish stations

4 Madrid and Barcelona the rates reduced 45%

4 Change of terminal / handler in Paris

(51)

Challenges at regulated airports

4 Sharp price increases at regulated airports

4 Stansted +88% to £12.57 per pax From 01 Apr 2007

4 Gatwick +25% to £13.66 per pax from Apr/Jul 2008

4 Amsterdam +32% to £28.53 per pax from Nov 2008

4 Paris CDG & ORLY inflation set at 5.5% per year for 3 years

4 The magnitude of increase is not acceptable

(52)

Opportunities at regulated airports

4 London Gatwick

4 Judicial review of the CAA regarding the regulatory settlement

4 Initial position very positive

4 The emerging thinking from the CC re terminal tendering

4 Amsterdam Schiphol

4 Formal complaint to the NMa (Dutch competition authorities) under various acts

4 Allocation of the costs is clearly incorrect and favour transfer passengers

(Air-France / KLM are 94% of transfer passengers)

4 We have had recent success with similar challenges

4 London Stansted

4 Challenge of the expansion plan at Stansted SG2

4 Review has already been delayed by one year

4 Further delay of 3 years is soon to be announced

4 The emerging thinking from the CC re terminal tendering

(53)

Regulated airports going forward

4 Regulated airports in the UK

4 Working with the Competition Commission (CC) for future airport regulation

4 Emerging thinking about the break up of the BAA is a first step but the best

outcome is effective regulation at airports, ownership is a secondary issue

4 Competition between terminals with the runways and taxiways being treated as a

“toll road” type infrastructure is a model which we have been proposing.

4 Regulated airports in Mainland Europe

4 Working with the authorities in Spain as to how the regulatory mechanism will

protect easyJet once the AENA group are partially privatised

4 Working with the authorities in France to ensure that the inflationary increases in

Paris are applied on an equitable basis

4 Working with the Competition authorities in Holland to realign the allocation of

(54)

Winning in Paris

(55)

Winning in Paris - the easyJet way

4 Paris is an important market for easyJet

4 Second largest airline with 6% share

4 Nine based aircraft between Orly and CDG

4 Broad range of routes

4 Making the low cost model work at busy airports

4 Lean, efficient operation

4 Driving cost savings

4 easyJet – “the acceptable face of low cost in France”

4 Positive engagement with key stakeholders

(56)

Managing turn times in busy airports

4 Turn time in Paris is 30 minutes

4 For cost reasons we use air bridges (thus only one point of exit/entry compared to

steps).

Delivered via:

4 Clear procedures and very close control of their execution

4 Cabin crew

prepare aircraft within seven minutes

4 Handlers

have agreed on contracts where they get penalized when

they are responsible for a delay upon departure.

4 Clear messages to our

passengers

4 if you are late we don’t wait, you must be at the gate 10 minutes before your

(57)

Reducing cost – CDG terminal move

4 Handling agent

4 Europe Handling, part of the CRIT Group

4 Eager to adopt easyJet approach

4 Actively supported ‘share pain initiative’ despite increasing labour costs

4 Aeroport de Paris

4 Move from terminal 3 to terminal 2 B March 2008; capacity to grow to 7 million

passengers

4 Longer term re -development of terminal 2B with ADP starts in early 2009

4 Aim is to design terminal efficient processes with lower cost infrastructure e.g

simple baggage belt

(58)

Conclusion

(59)

Reducing cost, driving efficiency

4 Clear targets for cost reduction

4 Investment in systems

(60)

Safety

(61)

Safety 2

Safety – our vision

“Safety is our No.1 priority”

4 Everyone committed to maintaining a safe and secure operational

environment for our customers, our staff, and our shareholders

4 Our goal is more that just regulatory compliance, our focus is

(62)

We manage risks inherent in the system

Key risks:

4 Cultural differences

4 Operational environment

4 Crew experience gradients

4 Fatigue

SAFETY

ENGINE

easyJet

SAFETY

RADAR

SIRA ©

Strategic

Decision

Making

System

Defence

Analysis

_Tactical

Decision

Making

Organisa-tional

Learning

Self- Regulation System Risk Assessment & Process Analysis

(63)

Safety 4

Tactical and strategic risk oversight

Risk Management

Rostering Environment Route risk Individual differences Hazardous Event/s Reactive Proactive Exploratory Evaluative Time critical

Risk

C O N T R O L C O N T R O L Risk Precursor examples

Detection Notify &

Inquire

Adjust system

Sensory Network

Risk

(64)

easyJet risk performance is improving

4 Composite risk index (value/thousand sectors represented as Airline

ASK/RV.)

4 Risk value current bench mark 0.8/1000. KPI set to maintain against company

expansion rate versus ASK. Currently 0.81/1000.

4 Safety Reporting Culture

4 Safety Reporting rate KPI 30/1000 flights. Currently 45/1000 sectors

4 Safety Investigations

4 90% MOR events Investigated within 30 days. On target.

4 90% ASR events Investigated within 60 Days. On target.

4 Flight Data Monitoring

4 Flight Data recovery within 24 hours.

4 98% recovery rate currently 100%

4 Quality Findings

4 90% findings closed within set time scale (30 or 60 set against risk level).

(65)

Safety 6

We manage the risks inherent in the system

Board Safety Review Board Airline Safety Action Group Departmental Safety Action Group Chair: CEO Chair: AOC Accountable Manager

Chair: Post Holder Director Safety and Security

Risk Transparency

(66)

easyJet continuing to invest in safety

4 easyJet strives to remain at the cutting edge of risk management

capability to meet easyJet operational risk oversight and future

regulatory requirement

4 Our strategic partners:

4 Regulators

4 Rule Makers

4 EU HILAS programme

4 NASA

(67)

People

(68)

Engagement into delivery

Investment

and growth

People

4 Job opportunities 4 Financial reward

4 Pride and satisfaction

Customers

4 Market-leading low-cost 4 Quality schedule 4 Reliable service

Shareholders

4 Capital growth

(69)

People 3

Reward focused on performance

4 Basic pay at market median

4 Pay linked to productivity and delivery

4 Pilots 15+%

4 Cabin crew 70+%

4 General and administration 40+%

4 Senior management 150+%

4 No frills, no seniority

4 85% employee share ownership

(70)

Great results

2006 2008 Norm Response Rate 67% 72% Overall Satisfaction 68% 72% 55% Engagement 65% 70% 51% Employer Advocacy 62% 74% 41% Service Advocacy 72% 72% 46%

(71)

People 5

Case study: our people deliver great results

4 GB Airways integration:

changing colours

4 15 Aircraft (9 x A320’s and 6 x A321’s)

4 28 Gatwick slot pairs (plus Manchester)

4 Occupying North Terminal at Gatwick

(72)

Case study: GB Airways

4 Tight process discipline

4 Light touch – no bureaucracy

4 Receiving manager – clear accountabilities

easyJet

has 36% of the capacity

(73)

People 7

Our people make the difference

4 Drive in-flight revenues

4 Customer care

Friendly Approachable

easyJet 49% 41%

BA 47% 38%

(74)

Customer:

Commercial Strategy and Execution

Saad Hammad – Chief Commercial Officer

Catherine Lynn – Head of Network Management

David Osborne - UK General Manager

(75)

Customer 2

Commercial strategy

4 Maximise product attractiveness

4 Distinctive customer proposition through:

4 broad customer appeal

4 focus on key purchase drivers

4 listening to customers and acting on it

4 Network development translates proposition into appealing schedule:

4 leading presence on key routes across Europe

4 continuous improvement in schedule quality

4 active management of route portfolio

4 Drive website footfall

4 High impact advertising, localised by market

4 Supplemented by structured promotional and website merchandising programme

4 Convert to purchase

4 Proprietary pricing system

(76)

Broad customer appeal

Business people VFR, 2nd _{Homers &} Commuters

Short breakers Long breakers

4Main city airports

4Schedule quality 4Excellent OTP 4Distribution key: 4easyJet.com 4GDS 4Self-booking tools

460 day online check-in; Speedy Boarding

4Ticket flexibility

4Opportunities from trading down

4Identify trends and respond to changing patterns e.g. 4 Poland downsizing 4 Romania to Spain/Italy 4 Bulgaria emerging 2nd _{home market} (ski) 4Additional seasonal capacity

4Attractive and ever-fresh mix of

destinations

4Quick city access

4Weekend timings

4Best-in-class hand baggage allowance

4Broad range of destinations

4Priority boarding for young families

4Pre-paid excess

baggage and Family Bundle

4Great deals with hotel and car rental

partners

(77)

Customer 4

We deliver against key purchase drivers

Sample: GfK Brand Tracker April '08 all airline passengers in last 12 months: UK, France, Germany, Italy, Spain & Switzerland (5,008) Key drivers of purchase intention

1

2 ₃

Good Value For Money

1

2 ₃

Friendly Service

1

2 ₃

Runs Flights On Time

easyJet vs Main Competitors: Pan-European ratings

Cost

Low Fares & Fare Transparency Value for Money

Convenience

Schedule & OTP Network & Airport Location Booking System & Online Check-in

Care

(78)

Customer advocacy is strong in the UK

-10 -13 -10 -8 24 36 30 27 14 27 -15 -15

Sample: GfK Brand Tracker 2008 all airline passengers: UK (2,700)

Strongly Recommend Recommend

Unlikely to Recommend Definitely not recommend

easyJe

t

British Airways Ryanair

2007

2008 %

(79)

Customer 6

Advocacy is also growing in Mainland Europe

easyJet + 13% Air France + 2%

Sample: GfK Brand Tracker 2008 all airline passengers in last 12 months: UK, France, Germany, Italy, Spain & Switzerland (5,008)

Growth in Domestic Recommendations

easyJet + 15% Lufthansa + 4% easyJet + 8% Alitalia - 13% easyJet + 8% lberia +1% easyJet + 14% BA -7% easyJet strengths vs

competitors in all markets

9 Good value for money

9 Low fares

9 Innovative

(80)

Customers - integral to product development

4 We have built a research forum to enable ongoing dialogue with our

customers

4 representative sample (2000 customers) which engages twice weekly

4 No other airline has an ongoing real-time customer dialogue in this

way

4 Recent topics include:

Destination Activities easyJet and the

Environment Hotels Booking Process Kids Range On-board Impact of Credit Crunch easyJet Destinations

(81)

Customer 8

Objective:

4 Paint Europe Orange: establish easyJet as the short-haul airline of choice across

Europe’s largest unique catchments and point-to-point passenger flows

Measures:

4 Population coverage; presence on top 100 routes

4 Market share; % where we are no. 1 or 2

Strategy:

4 Prioritise capacity investment in largest catchments and traffic flows

4 Deliver optimal product quality: easy-to-access airports, right time of day, frequency

4 Deliver lowest cost on any airport pair

4 Balance risk through portfolio approach (geographies, competitors, route types, passenger

profiles)

Network objective and strategy

(82)

Leadership in population coverage

273 240 194 289 161 226 100 150 200 250 300

easyJet Ryanair KLM Air France Lufthansa British Airways

Consumers (m)

289m consumers within 60 minutes drive time of an easyJet airport

Europe’s number 1 transport network

(83)

Customer 10

(84)

Europe’s No 1 Air transport network

Presence on top 100 routes (market pairs)

36 29 19 8 21 ₂₀ 17 18 ₁₆ 14 3 7 18 1 0 5 10 15 20 25 30 35 40 45 easy Jet _BA AF -KLM Rya nair Lufth ansa -Sw iss Air Ber lin Iber ia Alit alia Vue ling SA S Other market pa Number of mark operated betwe primary airports easy Jet BA AF-KL M Ryanai r Air B erlin Alitalia _Vuelin g SAS Luftha nsa -Sw iss Iber ia

Non primary airports Number of market pairs Operated between 2 primary airports 36 29 19 8 21 ₂₀ 17 18 ₁₆ 14 3 7 18 45 40 35 30 25 15 10 5 0 20 1

(85)

Customer 12

Investment in Europe is improving margin mix

APD – UK New bases- Europe

(86)

We have been improving schedule quality

Increasing peak departures for time sensitive customers

More routes with more frequencies

Daily Frequency 2005 2008 <1 9 141 48 3 18 30 4+ 20 20 68 1 242 2 55 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 05:00 - 08:59 09:00 - 15:59 16:00 - 20:59 21:00 - 23:59 W2005 W2006 W2007 W2008 Increasing frequency on top 100 routes

(87)

Customer 14 Market

Attractiveness

Route selection is a robust process

Competitive Environment

Rolling route shortlist

Detailed financial evaluation

Rolling airport shortlist ‘Wildcards’ End-product: Bilateral Constraints Geographical Scope Operational Scope

(88)

We actively manage our portfolio

Unsuccessful routes are eliminated quickly

4 Up to 12% annual route churn (past 4 years) depending on market

conditions

4 Dortmund routes

4 Poor ground transport links to Dortmund compared with Dusseldorf / Cologne:

thin market with challenging yields

4 Berlin (Schoenefeld) – Bratislava (Vienna)

4 Lower price insufficient to persuade customers to make long onward journey time

(89)

Customer 16

Building strength: Paris–Milan

PAR-MIL growth 5% 6% 8% 6% 15% 22% 23% 11% 17% 0 50 100 150 200 250 S04 W04 S05 W05 S06 W06 S07 W07 S08 Th ou s a nd s Capacity Mkt share Oct-08 6x daily CDG-MXP Sep-08 5x daily CDG-MXP Oct-07 4x daily CDG-MXP Jun-07 3x daily CDG-MXP Nov-06 2x daily CDG-MXP Mar-06 1x daily CDG-MXP May-04 1x daily LIN-ORY From Weekday freq Route

4 Average load factor exceeds 89%

4 High contribution per block hour

4 No. 23 in top 100

4 Unit revenue remains above starting level, despite capacity investment

LIN-ORY = Milan Linate- Paris Orly CDG-MXP = Paris CDG-Milan Malpensa

(90)

(91)

Customer 18

A campaign with proven cut-through

Source: easyJet/Millward Brown Link Test 2007. Base: 150

Impact & Engagement vs. ads in all UK categories Motivation

Distinctive Interesting Soothing Pleasant Gentle Weak Dull Boring Irritating Unpleasant Disturbing Involving Mean UK norm 4.58 ‘Objects’ 5.40 (Each axis 0-80%)

(92)

Campaign targeted by market

Re-branding the Metro in Madrid Outdoor innovation in Germany

(93)

Customer 20

Drives consumers to easyJet.com

Sustained BA decline

(94)

(95)

Customer 22

Conversion: Pricing for market share growth

4 Proprietary revenue management

system

4 Transparent and simple for our

customers

4 Target to be significantly cheaper

than our competitors

4 Drive annual improvement

subject to market conditions

4 Six pricing managers, three yield

developers

(96)

Conversion: maximising available revenue

Entry-price point = cost-plus

e.g. Luton - Lisbon 2367 19/08/08

Last-minute fare

Target to 100% sold out on the day

Pre-set fare classes triggered by days to go or demand

Bookings by price level vs days to go

140 0 20 40 60 80 100 120 140 160 180 200 120 100 80 60 40 20 0 220 Days to go Bookings

(97)

Customer 24

Reduction in capacity drives yield improvement

4 Newcastle - Jet2 pulled capacity out for

Summer ’08

4 Newcastle-Palma - 33% capacity reduction on

route

4 Newcastle-Malaga - 36% capacity reduction

on route

4 Milan Malpensa– Alitalia capacity

reduced from 47% to 21%

4 Milan-Madrid - Alitalia & Vueling reduced capacity by 63% and 50% respectively

4 Milan-Athens - Alitalia 100% capacity

reduction

4 Strong improvement in RPS versus last

year

(98)

Strong progress in driving ancillary revenue

Working with great partners with dedicated teams

€1.5bn travel insurance world

leader; part of Elvia Travel

Insurance (Allianz Group),

operating in 33 countries with 8000

staff

€2bn European market leader in

car rental, large fleet & guaranteed

availability

CHF2.5bn largest independent

provider of air catering services;

deep industry understanding (250

global airlines)

Part of TUI Group with over 20,000

hotels and pan-European product

teams

(99)

Customer 2626

Strong progress in driving ancillary revenue

We continue to provide significant focus on up-sell

4 Improved user interface in the booking flow

4 Enhanced in-flight range

4 Optimisation of fees & charges

4 Baggage charges

4 Speedy Boarding

(100)

We continue to drive ancillaries hard

4 Focused improvements on core products;

4 Better pricing & availability = improved conversion

4 Improved merchandising;

4 Simplify product communication on website

4 Improved post-booking (cross-sell) e-mails

4 In-flight range performance

4 Get the right product on the right plane

4 Clearer visibility for cabin crew

4 Continued focus on extensions to known

successes

4 Hostels

4 Credit card roll-out outside UK

4 Consolidation of ground transport partners

4 Market-by-Market focus to increase overall

performance

(101)

Customer 28

Commercial strategy

4 Maximise product attractiveness

4 Distinctive customer proposition through:

4 broad customer appeal

4 focus on key purchase drivers

4 listening to customers and acting on it

4 Network development translates proposition into appealing schedule:

4 leading presence on key routes across Europe

4 continuous improvement in schedule quality

4 active management of route portfolio

4 Drive website footfall

4 High impact advertising, localised by market

4 Supplemented by structured promotional and website merchandising programme

4 Convert to purchase

4 Proprietary pricing system

(102)

Winning in key markets

London Gatwick

David Osborne

(103)

Customer 30

Winning at Gatwick

4 We have made significant capacity investments

4 35 aircraft, reinforced by GB acquisition, combination of A319s and A320s

4 8.3m passengers in the next 12 months

4 Now the largest short haul airline at Gatwick and leader on 34 of the 44 markets

served

4 Structural cost advantage translates into significantly lower pricing

4 Communicated via aggressive local advertising

4 Successful outcome

4 Higher load factors than BA

(104)

Great access to a large & affluent catchment area

4 It’s big:

4 9.3m catchment 4 35.2 m passengers in 2007

4 It’s wealthy:

4 76% of the Top 50 UK

councils are within the LGW catchment

(Source: Centre of Int’l Competitiveness)

4 It’s easy to get to:

4 Direct, fast and frequent

train service to/from London in 30 minutes, every 15 minutes

4 Good motorway access

(105)

Customer 32

Now the largest short haul airline at Gatwick

New easyJet routes this winter: Istanbul, Helsinki, Lyon, Salzburg and Basel Now market leader on 34 of the 44 markets served

Source: CAA and OAG for short haul traffic (Europe, Turkey and North Africa), Sep 08 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 2002 2003 2004 2005 2006 2007 2008 easyJet British Airways

(106)

BA tried to fight back this summer

BA sun routes: daily to Paphos, Malta, Alicante, Faro, Gibraltar, Ibiza, Palma and

(107)

Customer 34

We fly 8 daily to Malaga (vs. 2 daily from BA)

(108)

We offer significantly lower fares on

Gatwick-Malaga which we advertise vigorously

0 50 100 150 200 250 300 350 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91

Days Before Departure

Av er age Fa re (£)

British Airways easyJet

Average Fare (£)

(109)

Customer 36

As a result, our planes are fuller

In past 3 yrs, BA has dropped 10 routes from Gatwick:

4 Domestics: Aberdeen, Newcastle

4 Euro-cities: Nice, Munich, Prague, Budapest, Athens, Split

4 Beach: Murcia, Almeria

Airport Pair from Gatwick

British Airways

59.4% 68.7% 77.4% 78.7% 79.4% Pisa 82.0% 87.6% Gibraltar 83.6% 89.1% 85.9% Malaga 88.8% easyJet Malta 91.2% Palma 84.0% Alicante 84.2% Faro 86.9% Thessaloniki 89.2%

(110)

Winning in key markets

Milan breakthrough

Francois Bacchetta

(111)

Customer 38

Milan breakthrough

4 We have made significant capacity investment in the largest

catchment in Northern Italy

4 Moving rapidly to fill Alitalia vacuum

4 Network serves the best business & leisure routes

4 We are now the biggest carrier at Malpensa

4 We have generated significant local support

4 Driving rapid build-up of brand awareness

4 Successful outcome

4 Significantly higher load factors than our competitors

(112)

4 Malpensa centre of catchment area of over 17m passengers within 2h

4

x2 Linate catchment x3 Bergamo catchment

4 With Lombardy, richest region in Italy

4 Biggest Business Pool (mostly SMEs)

4 Relative low competition (Alitalia exit) and high growth potential

Malpensa – largest, wealthy catchment

Milan Malpensa 40min

1h10 _1h40 2h

(113)

Customer 40

Strong capacity investment at Malpensa

Over 3.5m pax p.a. to/from MXP at the end of FY08 (+41% growth vly)

Sum of Aircraft Sum of Routes

(114)

(115)

Customer 42

We are now the leading carrier at Malpensa

easyJet Alitalia Volare Lufthansa Air One Air France Vueling KLM Iberia Swiss Summer 2008 Winter 2007

Top 10 Airlines at MXP (07 “Nov” & S08 “Aug”) Weekly Departing Seats Source OAG)

(116)

(117)

Customer 44

Brand awareness has increased significantly

90% awareness already reached

2008 2007 60% 50% 40% 30% 10% 0% 20% 90% 80% 70% 100% Italy Milan

(118)

We are outperforming our competitors

Load factor performance

Average easyJet load factor at Malpensa > 90% for the past 7 months

Airport Pair

Alitalia

68% 71% 70% 68% 60% Malpensa-Paris CDG 57% 87% 48% Malpensa-Naples 92% easyJet Malpensa-Bari 92% Malpensa-Catania 94% Malpensa-Palermo 93% Malpensa-Amsterdam 93% Malpensa-Prague 87%

(119)

Customer 46

Our yields have developed strongly too

Revenue per seat growth of 9% on all routes touching Malpensa

Rolling year capacity (m) Rolling year revenue per seat (€) Sep 07

Sep 07 Ovt 07 Nov 07 Dec 07 Jan 08 Feb 08 Mch 08 Apr 08 May 08 Jun 08 Jul 08 Aug 08 Rolling 12 month revenue per seat Rolling 12 months capacity (m)

(120)

Conclusion

Andy Harrison

(121)

Conclusion 2

Vision:

To be the best low fares airline in the world

Safety

Our No.1 Priority

Customer

(122)

Summary

4 2009 will be a tough year

4 Weakening consumer environment

4 Uncertainty over scale and timing of

competitor reductions

4 Volatility of fuel and US dollar

4 easyJet strongly positioned

4 Strong, low cost highly efficient organisation with scale benefits

4 Europe’s No.1 air transport network

4 Great customer proposition

4 Financial strength

4 Market will return to growth once the economic, environment stabilises

(123)

Conclusion 4

Summary

4 2009 will be a tough year

4 Weakening consumer environment

4 Uncertainty over scale and timing of

competitor reductions

4 Volatility of fuel and US dollar

4 easyJet strongly positioned

4 Strong, low cost highly efficient organisation with scale benefits

4 Europe’s No.1 air transport network

4 Great customer proposition

4 Financial strength

4 Market will return to growth once the economic, environment stabilises

(124)

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.

(125)