We’re turning Europe orange plc Annual report and accounts 2007 report Annual plc Hangar 89 London Luton Airport Luton Bedfordshire plc LU2 9PF www.easyJet.com Annual report and accounts 2007 Overview Financial statements This annual report is printed on Revive 100 02 easyJet at a glance 58 Consolidated income statement uncoated, the paper is produced from 100% 04 Chairman’s statement 59 Consolidated balance sheet recovered waste. Both the paper mill and printer 60 Consolidated statement of involved in the production support the growth Business review cash flows of responsible forest management and are both 07 Business review 61 Consolidated statement of accredited to ISO14001 which specifies a process 13 Financial review recognised income and expense for continuous environmental improvement and 23 Corporate and social 62 Notes to the financial statements both are FSC certified. If you have finished reading responsibility report 85 Company balance sheet this report and no longer wish to retain it, please 86 Company statement of cash flows pass it on to other interested readers or dispose Corporate governance 87 Notes to the Company balance sheet of it in your recycled paper waste. 36 Directors’ profiles 38 Executive management team Other information Thank you. 40 Directors’ report 90 Summary of selected information 43 Corporate governance for five years This report is available at: 48 Report on Directors’ remuneration 91 Glossary http://easyjet.com/EN/Investor/investorrelations_ 56 Statement of Directors’ responsibilities 92 Shareholder information financialreports.html 57 Independent Auditors’ Report to the Members of easyJet plc At easyJet we are working towards turning Europe orange, country by country, city by city. We aim to be the best low-fares airline in the world, providing low cost travel with care and convenience for our passengers; resulting in superior financial returns for our investors. We strive to minimise our impact on the environment with our modern fleet and efficient working practices. This year has brought us a step closer to our objective. easyJet plc 01 Annual report and accounts 2007 easyJet at a glance At easyJet we remain focused on delivering growth with margin improvement, underpinned by our customer proposition of “low cost with care and convenience”. Financial highlights Headline figures +11% +48% Revenue Profit before tax* £m £m 03 932 03 52 04 1,091 04 62 05 1,341 05 83 06 1,620 06 129 07 1,797 07 191 2007 excludes the effect of £10.6 million profit from the reversal of the impairment* of the Group’s investment in The Airline Group. +18% +30% Cash flow from operations Profit before tax £m per seat* £ 03 77 03 2.13 04 161 04 2.16 05 221 05 2.38 06 222 06 3.32 07 261 07 4.30 * 2007 excludes the effect of £10.6 million profit from the reversal of the impairment of the Group’s investment in The Airline Group. Profit drivers –5% +14% –6% Passenger revenue Ancillary revenue Cost excluding fuel per seat £ per seat £ per seat £ 03 36.38 03 2.14 03 31.41 04 35.74 04 2.14 04 30.63 05 36.15 05 2.51 05 28.78 06 38.28 06 3.38 06 28.36 07 36.57 07 3.85 07 26.55 easyJet plc 02 Annual report and accounts 2007 Operational highlights Resources 137 289 77 Aircraft in fleet Routes in network Airports in network 120 88 46 routes added Improved frequency 8 new destinations 21 countries firm orders additional options in year on 58 routes and in the year 19 routes culled Other 37.2m 44.5m 5,674 Passenger numbers Seats flown Employees +13% +14% +17% Airports Aberdeen Glasgow Nice Alicante Grenoble Olbia in network Almeria Hamburg Oviedo/Asturias Amsterdam Ibiza Palermo Athens Inverness Palma Barcelona Istanbul Paris Charles de Gaulle Basel Krakow Paris Orly Belfast La Coruna Pisa Berlin Schonefeld La Rochelle Porto Bilbao Lisbon Prague Bordeaux Liverpool Riga Bournemouth Ljubljana Rijeka Bremen London Gatwick Rimini Bristol London Luton Rome Ciampino Brussels London Stansted Split Bucharest Lyon Tallin Budapest Madrid Thessaloniki Cagliari Mahon Toulouse Casablanca Malaga Tu r i n Catania Marrakech Valencia Cologne Marseille Venice Copenhagen Milan Linate Warsaw Dortmund Milan Malpensa Zurich East Midlands Munich Edinburgh Murcia Faro Naples Geneva Newcastle easyJet facts Customer satisfaction easyJet.com 92% of our passengers Average of 12 million unique would recommend other users every month easyJet people to fly with Total of 246 million hits in the year ended 30 September 2007 Voted the UK’s favourite travel website by Hitwise Home Welcome - already a user? Log in or Register Forgotten password Holidays Remember me Holidays Find your holiday > Find > For more information visit: U www.easyJet.com easyJet plc 03 Annual report and accounts 2007 Chairman’s statement Investors can be assured that our focus will stay firmly on enhancing revenue and on the efficient management of the cost base, in order to continue to improve shareholder value. Return on 4.4% 5.3% 7.1% 10.1% 13.6% equity 13.6% 03 04 05 06 07 2007 excludes the effect of £10.6 million profit from 2006: 10.1% the reversal of the impairment of the Group’s investment in The Airline Group. +3.5 pp Earnings 8.2p 10.3p 14.8p 23.2p 34.8p per share 34.8p 03 04 05 06 07 Basic earnings per share except for 2007 which excludes 2006: 23.2p the effect of £10.6 million profit from the reversal of the impairment of the Group’s investment in +50% The Airline Group. Gearing 20.4% 30.8% 27.0% 32.5% 31.0% 20.4% 03 04 05 06 07 2006: 31.0%p –10.6 pp easyJet plc 04 Annual report and accounts 2007 Profitable growth and improved our original home at easyLand to Hangar 89 at London shareholder return Luton Airport. Staff and visitors alike have praised the We are proud to report on another great year much improved working conditions of this facility. at easyJet. Our performance has been excellent and Investment in the recruitment and retention of both it is very pleasing to announce a 48.1% increase in flight deck and cabin crew has enabled us to match underlying pre tax profits, especially coming on top the growth in our network with quality people. of an increase of 56.4% in the prior year. This demonstrates our commitment to sustaining During the year we experienced some significant easyJet’s well deserved reputation for good service. challenges; not least continued higher fuel prices and My fellow directors and I continue to be very grateful in February, the unexpected doubling of Air Passenger for the commitment of our people to maintaining Duty (“APD”) in the UK. However our business easyJet’s standards and we extend a warm welcome model, based on low cost with care and convenience, to those who have joined us during the year. continues to prove as successful in continental Europe as it has been in the UK. In October we announced an agreement to purchase GB Airways, this is subject to normal regulatory The Board set return on equity as its key financial approval and we anticipate a completion date no later measure and this year our shareholders have benefited than 31 January 2008. Over the next few months from an underlying improvement of 3.5 percentage we will be planning the integration of GB Airways points to 13.6%, with underlying earnings per share into the easyJet family. This acquisition will help us to increasing 50.1% to 34.8 pence. grow and be a stronger airline, and we welcome the GB Airways team which I am sure will be a positive The environment addition to easyJet. We fully recognise the importance of environmental issues in the context of the value for money services The Board we provide to our customers. We have taken and Stability in the structure of the Board and the senior will continue to take responsible actions such as management team has considerably helped the continuing to operate one of the youngest and most achievement of this year’s results. We have a environmentally efficient fleets of aircraft in Europe. combination of experience, expertise and talent Our investment in modern aircraft continues with the which has served us well and on which we can confirmation of further orders for 87 new Airbus A319 continue to build the Company’s future. aircraft announced during the year. I was delighted that John Browett accepted our Looking to the longer term, we are active participants, invitation to join the Board as a Non-Executive with both Boeing and Airbus, in the teams developing Director after an extensive search. John’s experience the next generation of environmentally efficient aircraft. and achievements at Tesco PLC, together with his easyJet continues to support the inclusion of aviation forthcoming position as Chief Executive of DSG in the EU Emissions Trading Scheme. We have international plc, will enhance the present board consistently and coherently argued for the abolition structure and aligns with the future direction of of APD, and its replacement by a method of taxation the Company. which is sensibly related to emissions not passengers. Sadly, we will lose the services of Diederik Karsten The recognition of our case by all three of the main who will step down after the Annual General Meeting political parties in the UK, and in particular by the in February 2008. Diederik has been an outstanding Chancellor in his pre-budget report, is most welcome. contributor to the Board since the Company was listed In addition we are encouraging our passengers to on the London Stock Exchange in November 2000.