EasyJet looks into moving its HQ to EU following Brexit vote

The budget airline has applied for a certificate allowing it to operate in Europe

Friday 01 July 2016 17:53 BST

EasyJet is said to be in talks about relocating its headquarters away from the UK.

Following the shock decision of the UK to leave the EU, the budget airline is reportedly in talks with aviation regulators from EU member states about moving its headquarters overseas.

EasyJet said it has "no plans" to move its headquarters from Luton, but it did confirm that it has applied for an air operator's certificate in a European country so it can keep flying as normal.

“As part of easyJet’s contingency planning before the referendum, we had informal discussions with a number of European aviation regulators about the establishment of an AOC (air operator certificate) in a European country to enable easyJet to fly across Europe as we do today," a spokesperson for easyJet said.

“EasyJet has now started a formal process to acquire an AOC," the spokesperson added.

The AOC would give easyJet a legal base in another country and the right to operate an airline there.

The company said that until the outcomes of the EU negotiations are clear, it is not considering other structural changes.

"We have no plans to move from Luton – our home for 20 years," easyJet said.

But Carolyn McCall, easyJet chief executive, said in an interview that "it remains to be seen" whether the company headquarters would have to move.

EasyJet was one of the biggest losers on the FTSE 100 in the aftermath of the referendum. Shares dropped more than 20 per cent on the Monday after the vote to hit 1,020p.

In a warning to investors, easyJet said the vote would cause "economic and consumer uncertainty".

It joined IAG, the owner of British Airways, and Aer Lingus, in warning that a drop in travel demand and a slide in the value of the pound could hurt earnings for the rest of the summer.

Future of British people living in Europe not secure, admits Cameron

EasyJet said that revenue per seat in the second half of 2016 will be down by “at least a mid-single digit percentage” compared with the second half of 2015.

6 ways Britain leaving the EU will affect you

Show all 6

1/66 ways Britain leaving the EU will affect you

6 ways Britain leaving the EU will affect you

More expensive foreign holidays

The first practical effect of a vote to Leave is that the pound will be worth less abroad, meaning foreign holidays will cost us more

nito100

6 ways Britain leaving the EU will affect you

No immediate change in immigration status

The Prime Minister will have to address other immediate concerns. He is likely to reassure nationals of other EU countries living in the UK that their status is unchanged. That is what the Leave campaign has said, so, even after the Brexit negotiations are complete, those who are already in the UK would be allowed to stay

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6 ways Britain leaving the EU will affect you

Higher inflation

A lower pound means that imports would become more expensive. This is likely to mean the return of inflation – a phenomenon with which many of us are unfamiliar because prices have been stable for so long, rising at no more than about 2 per cent a year. The effect may probably not be particularly noticeable in the first few months. At first price rises would be confined to imported goods – food and clothes being the most obvious – but inflation has a tendency to spread and to gain its own momentum

AFP/Getty Images

6 ways Britain leaving the EU will affect you

Interest rates might rise

The trouble with inflation is that the Bank of England has a legal obligation to keep it as close to 2 per cent a year as possible. If a fall in the pound threatens to push prices up faster than this, the Bank will raise interest rates. This acts against inflation in three ways. First, it makes the pound more attractive, because deposits in pounds will earn higher interest. Second, it reduces demand by putting up the cost of borrowing, and especially by taking larger mortgage payments out of the economy. Third, it makes it more expensive for businesses to borrow to expand output

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6 ways Britain leaving the EU will affect you

Did somebody say recession?

Mr Carney, the Treasury and a range of international economists have warned about this. Many Leave voters appear not to have believed them, or to think that they are exaggerating small, long-term effects. But there is no doubt that the Leave vote is a negative shock to the economy. This is because it changes expectations about the economy’s future performance. Even though Britain is not actually be leaving the EU for at least two years, companies and investors will start to move money out of Britain, or to scale back plans for expansion, because they are less confident about what would happen after 2018

AFP/Getty Images

6 ways Britain leaving the EU will affect you

And we wouldn’t even get our money back

All this will be happening while the Prime Minister, whoever he or she is, is negotiating the terms of our future access to the EU single market. In the meantime, our trade with the EU would be unaffected, except that companies elsewhere in the EU may be less interested in buying from us or selling to us, expecting tariff barriers to go up in two years’ time. Whoever the Chancellor is, he or she may feel the need to bring in a new Budget

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Ms McCall, winner of personality of the year at the Evening Standard Business Awards, was a vocal opponent of the Leave campaign in the months before the referendum.

She argued in op-eds and interviews that Brexit could herald a return to the days when flying was "reserved for the elite".

"How much you pay for your holiday really does depend on how much influence Britain has in Europe," McCall said.

EasyJet shares were trading up 1.71 per cent on the day at 1,104.60 on Friday lunchtime.

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EasyJet looks into moving its HQ to EU following Brexit vote

The budget airline has applied for a certificate allowing it to operate in Europe

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6 ways Britain leaving the EU will affect you

6 ways Britain leaving the EU will affect you

More expensive foreign holidays

6 ways Britain leaving the EU will affect you

No immediate change in immigration status

6 ways Britain leaving the EU will affect you

Higher inflation

6 ways Britain leaving the EU will affect you

Interest rates might rise

6 ways Britain leaving the EU will affect you

Did somebody say recession?

6 ways Britain leaving the EU will affect you

And we wouldn’t even get our money back

Join our commenting forum