EasyJet 2012 Annual Report Download - page 27

Aeroporti Di Milano Newcastle Airport
Geneva International Airport AENA
Aeroporti di Roma
London Southend Airport
Company
Aeroport Toulouse Blagnac Aeroport de la Cote D’Azur
ANA – Aeroportos de Portugal
At these airports our ground handling was carried out by:
Menzies Aviation Servisair
Group Europe Handling Aviapartner
Swissport SEA Handling
Swissport Menzies
Globeground Berlin Gate Aviation
Aviation Service
London Southend Airport
Company
Portway
Our main ancillary partners are Gate Gourmet, who provide our
in-flight merchandise, Europcar, who provide car rental services,
booking.com who broker hotels, Low Cost Holidays who provide
accommodation and transfers for easyJet UK Holidays and Alvia
who, through the Mondial brand, provide travel insurance.
Our credit card acquirers are Elavon, Lloyds TSB, Barclays Merchant
Services and American Express. Our payment service providers
areCyberSource.
The Company is regulated in the UK by the CAA and easyJet
Switzerland is regulated by FOCA. We have important relationships
with NATS and Eurocontrol in relation to air traffic services.
The main employee unions we deal with in the UK are BALPA, UNITE
and Prospect; in France they are SNPL and UNAC/SNPNC/CFTC;
inSpain they are SEPLA, STAVLA and CCOO; in Italy IPA, FIT-CISL
and FILT-CGIL; in Germany Ver.di; and in Switzerland SSP/VPOD.
We use contract pilots from Airline Recruitment Limited and CAE Parc
Aviation and flight simulation services from CAE and SIM Aerotraining.
We have a key relationship with easyGroup IP Licensing, who own
the easyJet brand, through the Amended Brand Licence, and with
Sir Stelios Haji-Ioannou through the Comfort Letter 1.
* These contracts contain provisions giving the other party the right to terminate if
there is a change in control in easyJet.
1 See Note 26 to the accounts on Related Party Transactions.
Policy and practice on payment of creditors
easyJet aims to have partnership agreements with suppliers, which
stresses the importance of strong suppliers aligned to the success
of easyJet as a business. Many of our supply agreements are unique
and tailored to the needs of the business, to make sure that
suppliers are rewarded appropriately for delivering services which
meet pre-agreed performance targets and align with easyJet’s own
internal performance goals. Our practice is to:
A Agree the terms of payment at the start of business with
thesupplier
A Ensure that those suppliers are made aware of the terms of
thepayments
A Pay in accordance with contractual and other legal obligations
At 30 September 2012, the number of creditors days outstanding
forthe Group was 10 days (2011: 8 days), and for the Company was
nil days (2011: nil days).
Going concern
easyJet’s business activities, together with factors likely to affect its
future development and performance, are described in the business
review on pages 8 to 17. Principal risks and uncertainties are described
on pages 26 to 30. Note 22 to the accounts sets out the Group’s
objectives, policies and procedures for managing its capital and gives
details of the risks related to financial instruments held by the Group.
The Group holds cash and cash equivalents of £645 million as at
2012. Total debt of £957 million is free from financial covenants, with
£129 million due for repayment in the year to 30 September 2013.
The business is exposed to fluctuations in fuel prices and US dollar
and euro exchange rates. The Group’s policy is to hedge between
65% and 85% of estimated exposures 12 months in advance, and
45% and 65% of estimated exposures from 13 up to 24 months in
advance. The Group was compliant with this policy at the date of
this Annual report and accounts.
After making enquiries, the Directors have a reasonable expectation
that the Company and the Group will be able to operate within the
level of available facilities and cash for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the accounts.
Significant contracts and creditor policy
Significant contracts
easyJet operates a single Airbus fleet with the last two Boeings
having been returned to lessors in the year to 30 September 2012.
Engines are provided by CFM International. Maintenance is
undertaken by SR Technics, Virgin Atlantic Engineering*, Monarch
Aircraft Engineering, General Electric, BF Goodrich, ATIS, Storm,
Nayak, Honeywell, Dublin Aerospace and Lufthansa Technik.
Themajor lessors of aircraft to easyJet are Amentum Capital,
AWAS*, GECAS*, Nomura Babcock & Brown*, SMBC Aviation
Capital*, Sumisho*, and Santander*. The major lenders to easyJet
for aircraft purchase are Alliance & Leicester*, Bank of Tokyo-
Mitsubishi*, BNP Paribas*, Calyon*, Commerz, HSH Nordbank*,
KfW*, Natixis*, PK AirFinance*, SMBC Aviation Capital*, Sumitomo
Mitsui Banking Corporation* and WestLB*.
Our main insurers are Global Aerospace, Allianz, AXA, Canada Life,
QBE Houston Casualty Company Europe and Generali.
One of our biggest costs is fuel and our main suppliers are Shell, Air
BP, Exxon, Air Total and Q8. Our IT systems include agreements with
AIMS, who provide crew, aircraft and flight management control
and operation software; SAVVIS who provide data centre hosting
facilities and our data network; Lufthansa Systems who provide
flight planning systems; SOPRA who develop and support our
reservations system and other areas of system development; AD
OPT Technologies who provide our pairings and roster optimiser;
and Unit 4 who provide our accounting system, Agresso.
As at 30 September 2012 easyJet had 23 bases and they were
operated by:
BAA Global Infrastructure Partners
AdP
EuroAirport Basel-Mulhouse-
Freiburg
Manchester Airports Group South West Airports
Abertis Peel Holdings
Aeroports de Lyon Flughafen Berlin-Schoenefeld
Performance and risk
easyJet plc
Annual report and accounts 2012 25