EasyJet packing bags and moving its HQ to Austria
One of Europe’s most successful low-cost airliners, EasyJet, has decided to move its entire fleet and assets to Austria in order to avoid restrictions and business difficulties caused by Brexit.
The company will form a new airline, called EasyJetEurope, which will be headquartered in Vienna, Austria. The airline will be required to have an air operator certificate in an EU member country to allow it to continue flying between member states after Brexit.
The restructuring of the business, which will involve the re-registering of 110 aircraft under Austrian jurisdiction, is expected to cost at least £10m – although the overall costs of Brexit to the airline have run much higher, with currency devaluation alone hitting profits by £88m in 2016 and £82m in the first half of this year.
EasyJet still faces legal uncertainty over whether it will be able to fly between the UK and Europe, and on what terms, after Brexit. Ryanair repeated its warnings to the European parliament this week that there was a real prospect of no flights operating between the EU and UK for a period in 2019.
EasyJet said it was continuing to push for negotiators “to reach an aviation agreement which at a minimum will enable flights between the UK and EU”.
The company said the Vienna move would make it a pan-European aviation group – with three airlines based in Austria, Switzerland and the UK – that would be controlled by EasyJet plc, which would remain listed on the London Stock Exchange.
Since 1994, any EU airline has been free to fly between any two points in Europe, something that enabled companies such as EasyJet and Ryanair to grow to their present size. Current EU flying rights might have to be renegotiated and the new company would ensure EasyJet could operate within the EU.
The UK government has said maintaining “liberal access” to European aviation markets will be a top priority during Brexit negotiations. Unless British negotiators manage to secure preferential conditions, UK airlines could find it harder to launch new routes in Europe.
EasyJet already has an airline based in Switzerland, as well as its UK operation. The parent company – EasyJet PLC – will retain its London Stock Exchange listing and its Luton headquarters.
Earlier this week, the chief executive of EasyJet’s big rival, Ryanair, criticized the UK Government for its handling of aviation after Brexit. Michael O’Leary said “I think Brexit is going to be one of the greatest suicide notes in history. It’s a shambles.” He warned Ryanair planes would start moving to other EU countries from September 2018 unless an aviation agreement is in place.