EasyJet 2010 Annual Report Download - page 28

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Risk description Potential impact Mitigation
Reputation
Business continuity: access to facilities and
key IT systems
easyJet is dependent on a number of key IT systems
and processes operated at London Luton airport
and other key facilities.
A loss of systems and access to facilities
could lead to disruption. A business continuity programme, including disaster
recovery is in place. This covers alternative sites
being available should there be a need to relocate
atshort notice due to loss of facilities.
Event causing wide-spread network
disruption
A number of factors can lead to wide-spread
disruption to our network, including epidemics/
pandemics, forces of nature (extreme weather,
volcanic ash, etc.) and actsofterrorism.
Adversely affect our reputation, operational and
nancial performance. Processes in place to adapt to wide-spread
disruption. A business continuity programme
is in place.
IT security and fraud exposure
easyJet faces external and internal IT security risk.
The Company receives most of its revenue through
credit cards and operates asan e-commerce
business.
A security breach could result in a material adverse
impact for the business and reputational damage. Systems are secured and monitored against
unauthorised access; this will receive continued focus.
Scanning software for fraudulent customer activity
is monitored and controlled by the Revenue
Protection team.
Brand ownership and brand reputation
easyJet does not own its company name or branding
which is licensed from easyGroup IP Licensing.
As for all brand licensees, the easyJet brand could be
impacted through actions of easyGroup or other
easyGroup licensees.
easyJet works closely with easyGroup
to ensure the integrity of the brand.
Major shareholder
easyJet has a major shareholder (easyGroup
Holdings Limited) controlling over 25% of
ordinaryshares.
Shareholder activism could adversely impact the
reputation of the Company. Dedicated investor relations team, utilising
a shareholder engagement programme.
People
Industrial action
Large parts of the easyJet workforce are unionised. The
same applies for our key third-party service providers,
where similar issues exist.
Adversely affect our reputation, operational and nancial
performance. Employee and union engagement takes
place on a regular basis.
Retention of key management
Due to easyJet’s lean business model, the Company
is reliant on certain key managers.
Loss of key personnel could result in short-term lack of
necessary expertise in certain positions. Bi-annual talent management and succession
planning of key positions.
Supplier
Dependence on third-party service
providers
easyJet has entered into agreements with
third-party service providers for services covering a
signicant proportion of its operation and cost base.
Failure to adequately manage third-party performance
could affect our reputation, operation and nancial
performance. Loss of these contracts, inability to renew
or negotiate favourable replacement contracts could
have a material adverse effect on future operating costs.
Processes in place to manage third-party service
provider performance.
Centralised procurement department that
negotiates key contracts.
Most developed markets have suitable alternative
service providers.
Financial review
continued
26 easyJet plc
Annual report and accounts 2010