easyjet plc/media/files/e/easyjet/... · 2016. 11. 11. · easyjet plc (registered in england under...

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are inany doubt as to the action you should take, you are recommended to seek your own financial adviceimmediately from your stockbroker, bank manager, solicitor, accountant or other independent financial advisorduly authorised under the Financial Services and Markets Act 2000.

If you have sold or transferred your entire holding of Ordinary Shares in easyJet plc, please send this document,together with the enclosed Form of Proxy, as soon as possible to the purchaser or transferee, or to thestockbroker, bank or other agent through whom the sale or transfer was effected, for transmission to thepurchaser or transferee. If you have sold some of your holding of Ordinary Shares in easyJet plc, you shouldimmediately consult the stockbroker, bank or other agent through whom the sale or transfer was effected.

The Directors, whose names appear on page 5 of this document, accept responsibility for the informationcontained in this document. To the best of the knowledge and belief of the Directors (who have taken allreasonable care to ensure that such is the case) the information contained in this document is in accordance withthe facts and does not omit anything likely to affect the import of such information.

easyJet plc(Registered in England under company number 3959649)

Proposed Purchase of Airbus Aircraft

and

Notice of Extraordinary General Meeting

Your attention is drawn to a letter from the Chairman of easyJet plc, which is set out on pages 5 to 11 of thisdocument.

Notice of an Extraordinary General Meeting of easyJet plc, to be held at 10 a.m. on 12 March 2003 ateasyLand, London Luton Airport, Bedfordshire LU2 9LS, is set out at the end of this document. A Form ofProxy is enclosed for use by Shareholders in connection with the Extraordinary General Meeting. To be valid,Forms of Proxy, completed in accordance with the instructions printed thereon, must be received at theCompany’s registrars, Lloyds TSB Registrars, The Causeway, Worthing, West Sussex BN99 6ZL as soon aspossible but in any event by no later than 10.00 a.m. on 10 March 2003. Completion and return of the Form ofProxy will not preclude Shareholders from attending and voting at the Extraordinary General Meeting shouldthey so wish.

Contents

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Part 1 – Letter from the Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Part 2 – Summary of the Terms and Conditions of the Airbus Contract . . . . . . . . . 12

Part 3 – Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

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Definitions

The following definitions apply throughout this document, unless the context otherwise requires:

‘‘A’’ Euros;

‘‘Act’’ the Companies Act 1985, as amended;

‘‘Acquisition’’ the acquisition of the entire issued share capital of Newgo 1 Limited bythe Company pursuant to the Acquisition Agreement;

‘‘Acquisition Agreement’’ the agreement dated 16 May 2002 between the Company, Newgo 1Limited, 3i Group plc, other institutional shareholders and certainindividual sellers;

‘‘Acquisition and Rights Issue the circular issued by the Company to Shareholders dated 23 May 2002Circular’’ in relation to inter alia the Acquisition;

‘‘Additional Purchase Rights’’ the rights granted to the Company pursuant to the Airbus Contract toelect, at any time, to purchase, at the same basic price, up to 120additional Airbus A319 aircraft (provided that they are scheduled fordelivery up to 31 December 2012 and delivery slots are available),further details of which are set out in Part 2 of this document;

‘‘Airbus’’ Airbus G.I.E.;

‘‘Airbus Contract’’ a conditional agreement made between the Company and Airbus topurchase 120 Airbus A319 aircraft and incorporating the AdditionalPurchase Rights, further details of which are set out in Part 2 of thisdocument;

‘‘Boeing’’ The Boeing Company;

‘‘Boeing Contract’’ an agreement for the provision of 32 Boeing 737 aircraft, dated 23 July1998 as assigned to the Company;

‘‘CFM Selection Letter’’ a selection letter (with attachments) between C.F.M. International S.A.(‘‘CFM’’) and the Company, in which the Company selects CFM as itspreferred engine manufacturer subject to agreeing final documentationand CFM irrevocably agrees to provide certain credits to easyJet;

‘‘Company’’ easyJet plc;

‘‘Directors’’ the directors of the Company, as set out on page 5;

‘‘Deutsche BA’’ Deutsche BA Holdings GmbH;

‘‘easyJet’’ and ‘‘easyJet Group’’ the Company and its subsidiary undertakings (including easyJetSwitzerland and Go);

‘‘easyJet Brand Licence’’ the brand licence dated 5 November 2000 between easyGroup IPLicensing Limited, easyJet UK, Stelios Haji-Ioannou, the Company andeasy Group (UK) Limited under which, inter alia, easyGroup IPLicensing Limited granted easyJet UK a right to use the easyJet andother ‘‘easy’’ branding livery;

‘‘easyJet Share Option Schemes’’ the easyJet Key Employee Pre-Flotation Share Option Scheme, theeasyJet Switzerland Key Employee Pre-Flotation Share Option Scheme,the easyJet Approved Discretionary Share Option Scheme 2000, theeasyJet Non-approved Discretionary Share Option Scheme 2000 andthe easyJet Management Combination Incentive Plan;

‘‘easyJet Switzerland’’ easyJet Switzerland S.A.;

‘‘easyJet UK’’ easyJet Airline Company Limited;

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Definitions

‘‘Extraordinary General Meeting’’ the extraordinary general meeting of the Company convened foror ‘‘EGM’’ 12 March 2003 as set out in the notice contained in this document;

‘‘Form of Proxy’’ the form of proxy for use at the Extraordinary General Meeting;

‘‘FSMA’’ the Financial Services and Markets Act 2000;

‘‘Go’’ Newgo 1 Limited and its subsidiaries, Newgo 2 Limited and Go FlyLimited;

‘‘Global Offering Circular’’ the circular issued by the Company to Shareholders dated 15 November2000 relating to, inter alia, the placing by Credit Suisse First Boston andUBS Warburg of shares in the Company;

‘‘Listing Rules’’ the listing rules of the UK Listing Authority made in accordance withsection 74 FSMA;

‘‘Ordinary Shares’’ the ordinary shares of 25p each in the share capital of the Company;

‘‘Purchase’’ or ‘‘Proposed Purchase’’ the proposed purchase of 120 Airbus A319 aircraft over a 5 year periodfrom 2003 to 2007 with Additional Purchase Rights, to purchase, at thesame basic price, up to 120 additional Airbus A319 aircraft, for deliveryup to 31 December 2012 (provided that delivery slots are available),under the terms of the Airbus Contract;

‘‘Relationship Agreement’’ a relationship agreement dated 14 November 2000 entered intobetween Stelios Haji-Ioannou, easyJet Holdings Limited and theCompany, as amended;

‘‘Resolution’’ the ordinary resolution to approve the Purchase to be proposed at theEGM, notice of which is set out at the end of this document;

‘‘Rights Issue’’ the rights issue of Ordinary Shares as set out in the Acquisition andRights Issue Circular;

‘‘Shareholder(s)’’ the holder(s) of Ordinary Shares in the Company;

‘‘UK Listing Authority’’ the Financial Services Authority, acting in its capacity as the competentauthority for the purposes of Part VI of the Financial Services andMarkets Act 2000; and

‘‘US$’’ or ‘‘USD’’ United States dollars.

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Part 1 – Letter from the Chairman

easyJet plc(Registered in England under company number 3959649)

Directors Registered office

Sir Colin Michael Chandler (Non-Executive Chairman) easyLandRaymond Douglas Webster (Chief Executive) London Luton AirportChristopher John Walton (Finance Director) Bedfordshire LU2 9LSColin Richard Day (Non-Executive Director)Amir Eilon (Non-Executive Director)Nicholas Hartley (Non-Executive Director)Anthony Kim Illsley (Non-Executive Director)Diederik Karsten (Non-Executive Director)

24 February 2003

To the holders of Ordinary Shares and, for information only, to holders of options under the easyJet ShareOption Schemes

Dear Shareholder,

PROPOSED PURCHASE OF AIRBUS AIRCRAFT ANDNOTICE OF EXTRAORDINARY GENERAL MEETING

Introduction

As previously announced to Shareholders, on 26 November 2002 Stelios Haji-Ioannou retired as Chairman andresigned as a director of the Company and I assumed the office of Chairman of the Company. I am delighted totake on this role and look forward to the continued development of easyJet.

On 14 October 2002, the Company announced that it had selected Airbus as the preferred supplier for its newfleet expansion and had granted Airbus exclusivity for 45 days to agree documentation. On 31 December 2002the Company announced that it had entered into a conditional agreement with Airbus under which Airbus hasagreed to supply to the Company 120 Airbus A319 aircraft, which are planned for delivery over a five yearperiod from September 2003, and, in addition, to grant the Company the right to acquire up to 120 furtherAirbus A319 aircraft for delivery up to 31 December 2012 (provided that delivery slots are available) at thesame basic price.

Given the size of the Airbus Contract, completion of the Proposed Purchase is conditional upon the Companyobtaining Shareholders’ approval to the transaction. This approval will be sought at an EGM to be held at theCompany’s registered office at 10 a.m. on 12 March 2003.

Notice of the EGM is set out at the end of this document. The Resolution being proposed seeks approval for thecompletion of the Proposed Purchase.

The Directors, who beneficially hold in aggregate 2,241,971 Ordinary Shares representing 0.57 per cent. of theCompany’s issued share capital as at the date of this document, intend to vote in favour of the Resolution. Inaddition, easy Group Limited, which is a company indirectly owned by Stelios Haji-Ioannou, the formerChairman, which as at the date of this document beneficially holds in aggregate 85,576,451 Ordinary Sharesrepresenting 21.75 per cent. of the Company’s issued share capital, intends to procure that all such shares arevoted in favour of the Resolution.

The Directors believe that the Airbus Contract, details of which are set out in Part 2 of this document, willprovide the easyJet Group with the necessary aircraft to meet its expected aircraft requirements so as to ensurethat it is well placed to continue its growth beyond 2003/4 and that easyJet has obtained favourable terms fromAirbus for the purchase and operation of such aircraft.

I am writing to you to provide you with further information regarding the Purchase and to explain why yourDirectors consider that it is in the best interests of the Company and its Shareholders as a whole and why theyunanimously recommend you to vote in favour of the Resolution.

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The New Airbus Contract and Fleet expansion

An important part of easyJet’s strategy is to operate a modern fleet. As at 30 September 2002, easyJet’s fleetcomprised of 64 aircraft (45 Boeing 737-300 aircraft and 19 Boeing 737-700 aircraft, of which 54 were leasedand 10 were owned) with an average age of 5.7 years.

12 Boeing 737-700 aircraft remain to be delivered by Boeing under the Boeing Contract in the period up toMay 2004. Under the Boeing Contract, six aircraft remain to be delivered in the financial year ending30 September 2003 and the final six are scheduled for delivery in the financial year ending 30 September 2004.

Under the terms of the Airbus Contract, and conditional upon Shareholders’ approval, the Company has agreedto purchase 120 new Airbus A319 aircraft, for delivery over a period of five years from September 2003 and hasacquired Additional Purchase Rights to enable it to purchase at any time and at the same basic price up to afurther 120 Airbus A319 aircraft for delivery in the period up to December 2012 (provided that delivery slotsare available). The Additional Purchase Rights give easyJet the flexibility to meet additional fleet expansionrequirements if they arise. At the date of this document, the Company has no present intention to exercise theAdditional Purchase Rights in the near future.

The Airbus A319 aircraft is part of the Airbus A320 family of aircraft, which also includes the A318, A320 andA321 aircraft. The first A320 aircraft entered airline service in April 1988. As at 30 September 2002, Airbushad delivered a total of 1,819 aircraft in the A320 family to over 100 customers. The first A319 aircraft wasdelivered in April 1996 and as at 30 September 2002, Airbus had delivered 472 A319 aircraft. As at 31 January2003, the major airline operators of the A319 aircraft are America West (with 29 aircraft), British Airways(with 33 aircraft), Lufthansa (with 20 aircraft), Northwest (with 57 aircraft), United (with 55 aircraft) andUSAirways (with 66 aircraft). Aircraft lessors have also acquired the Airbus A319 aircraft, including, as at30 September 2002, GECAS which owned 22 A319 aircraft and ILFC which owned 42 A319 aircraft. However,very few low cost operators have any experience of operating the A320 family of aircraft.

Airbus has agreed to provide easyJet with A319 aircraft in a single class configuration with 156 seats whichcompares with the 149 seats of the Boeing 737-700 aircraft presently operated by easyJet. The Company alsohas the right under the Airbus Contract, subject to certain conditions, to elect to receive the larger A320 and/orA321 aircraft instead of the A319 aircraft, in a single class configuration, with 180 and 220 seats respectivelyfor most of the order.

In the Global Offering Circular we included a schedule of the basic list price of the Boeing 737-700 aircraft plusthe seller purchased equipment for a Boeing 737-700 aircraft to be delivered to easyJet under the BoeingContract, which totalled approximately US$41.4 million (for September 2002, subject to price escalation toreflect inflation) and we stated that we had obtained from Boeing substantial confidential price and paymentterms concessions for our then order of 32 Boeing aircraft.

Under the Airbus Contract the aircraft basic price of each A319 aircraft (including the airframe basic list price,the sum of the specification change notices and the propulsion systems basic list price), as at January 2001 beingthe date by reference to which the contractual base price is quoted, was approximately US$44.2 million. Thusthe total list price for 120 new A319 aircraft would be approximately US$5.3 billion. However, the Companyhas been granted very substantial price concessions by Airbus and the selected engine manufacturer. TheCompany believes that it can now purchase Airbus A319 aircraft under the Airbus Contract (taking intoaccount these substantial price concessions) at a price approximately a third per seat below the price for theBoeing 737-700 aircraft delivered to it under the Boeing Contract in August 2002. These prices are subject toprice escalation to reflect inflation.

Airbus has agreed to provide extensive pre-delivery and ongoing support relating to the introduction of theAirbus A319 aircraft into easyJet’s fleet. Specific support will also be given regarding training for easyJet’spilots, cabin crew and maintenance personnel. Airbus has also undertaken to put in place arrangements, inkeeping with the low cost operation, to provide that the cost to easyJet of maintenance for the Airbus A319aircraft shall not exceed the cost of maintenance for its Boeing 737-700 aircraft.

easyJet expects to retain its aircraft on average for between seven to ten years. Assuming a ten year aircraftretention period so as to calculate the minimum number of Airbus deliveries required, and taking into account

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the remaining scheduled deliveries of aircraft under the Boeing Contract and the Airbus Contract and plannedretirements or sales of aircraft the easyJet fleet would grow as follows:

Year ending 30 September2003 2004 2005 2006 2007 Total

Remaining aircraft deliveries under the BoeingContract . . . . . . . . . . . . . . . . . . . . . . . 6 6 — — — 12

Aircraft deliveries under the Airbus Contract . 2 21 32 34 31 120(Expected Retirements/Sales) . . . . . . . . . . . . — (10) (9) (9) (6) (34)

Net Number of fleet at end of financial year . 74 91 114 139 164

Note: The above table does not take into account any expected deliveries, retirements or sales if the option to acquireDeutsche BA is exercised. Further details regarding this option are set out in Part 3 of this document.

The Airbus Contract sets out the terms of the Purchase, including the procedure for obtaining the aircraft, thelist prices and payment terms for the airframe and indicative prices for all the other necessary parts for theAirbus aircraft to be delivered to easyJet.

The suppliers of certain components to be fitted into the aircraft under the terms of the Airbus Contract,including the engines, avionics and certain other necessary components, have been selected by the Companyfollowing a selection process held by it between various component vendors and engine manufacturers in orderto determine which engines and components were, in the opinion of the Board, the most appropriate. Basedupon the tenders made to the Company as part of that process, the Company then selected those vendors as itspreferred suppliers.

Under letters of intent entered into between the Company and each such preferred supplier, the Company hassubstantially agreed the principal terms of a series of ancillary contracts and is in the final stages of negotiatingthese ancillary contracts with such suppliers. Under the CFM Selection Letter the engine manufacturer hasagreed to provide easyJet with very substantial credits which will be included in the final engine ancillarycontract; under the terms of the other ancillary contracts it is expected that the other preferred suppliers willalso provide easyJet with credits and/or other benefits. Credits will be used against the effective price payable byeasyJet for the aircraft being purchased under the Airbus Contract. The ancillary contracts are also expected toprovide easyJet with additional warranty protection that go beyond that offered by Airbus under the AirbusContract. As announced on 17 December 2002 the Company has selected CFM International S.A. (themanufacturers of the CFM 56 engine) as its preferred engine manufacturer and is in the process of negotiating afinal agreement with it.

Further details of the proposed Airbus Contract are contained in Part 2 of this document.

Rationale for Purchase

easyJet’s strategy, based on its current business model, requires easyJet to acquire a significant number of furtheraircraft whilst achieving a low total fleet operating cost.

The Company believes that the offer received from Airbus after taking into account the support granted byAirbus achieves these objectives and was significantly better value than the offer received from Boeing. TheDirectors consider that the value to easyJet of the aircraft proposed to be purchased under the Airbus Contractjustifies the price and terms upon which the aircraft are to be acquired.

The Company has been negotiating with airline manufacturers for a large order of aircraft for over 12 months.The events that have occurred in the airline industry since 11 September 2001, including the Company’sacquisition of Go, have significantly increased the Company’s bargaining position and, as a result, the Companyhas been able to acquire additional aircraft which will have a significantly lower purchase cost than its existingfleet. In addition, by obtaining the Additional Purchase Rights for a further 120 aircraft easyJet has obtained thesame basic price for these aircraft for its anticipated expansion until 2012.

In deciding whether to choose Boeing or Airbus aircraft the Directors have considered carefully that its businessmodel to date has, like most other large low cost operators, relied on a single aircraft manufacturer, Boeing. TheCompany has reached the decision to adopt a ‘‘mixed’’ fleet after a review of the operating and financial aspectsof the ‘‘mixed’’ fleet option, the performance of Airbus aircraft to date in other fleets, including that of Jet Blue,the only other low cost operator to use Airbus aircraft. The Company took account of the fact that the easyJet

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Group’s remaining Boeing 737 aircraft fleet is large enough to be operated as a discrete fleet and the favourableterms offered by Airbus.

The size of the new aircraft order is due to the Company’s need to provide aircraft for:

(1) Growth based on the recently enlarged easyJet Group

easyJet presently has a fleet of 66 aircraft and expects to replace 10 in the period to 30 September 2004.easyJet currently has a policy of operating aircraft on average for between 7 and 10 years. Assuming a10 year aircaraft operating life and the expected retirements, 34 of the 120 aircraft ordered from Airbuswill be required as replacements for the existing fleet and 86 will be used for fleet expansion.

(2) Growth post-May 2004

The last delivery under the Boeing Contract is due in May 2004. The Airbus Contract will extend thedelivery of new aircraft to 2007 and gives easyJet the right to extend its delivery schedule to 2012 onfavourable terms.

In addition, the Company chose to purchase Airbus aircraft because:

➤ the Airbus Contract enables it to purchase Airbus A319 aircraft at a price approximately a third per seatbelow the price for the Boeing 737-700 aircraft delivered to it under the Boeing Contract in August 2002;

➤ the Directors believe that the offer from Airbus was significantly better value than the offer received fromBoeing;

➤ the Company believes that the Airbus A319 aircraft to be supplied under the Airbus Contract wouldachieve an approximate 10 per cent. improvement over the Company’s existing operating cost base in thefinancial year ending 30 September 2002 (measured per available seat kilometre);

➤ the Airbus Contract gives easyJet flexibility:

➤ in enabling the Company to choose to acquire the larger Airbus A320 aircraft and Airbus A321aircraft, at pre-agreed competitive prices; and

➤ in the delivery dates of the aircraft;

➤ Airbus has agreed to provide extensive support to the Company, especially with regard to training foreasyJet’s pilots, cabin crew and maintenance personnel;

➤ Airbus has undertaken to put in place arrangements, in keeping with a low cost operation, to provide thatthe cost to easyJet of maintenance for the Airbus A319 aircraft shall not exceed the cost of maintenance forits Boeing 737-700 aircraft;

➤ Airbus has agreed to assist in reducing the residual value risk on the remaining 10 Boeing 737-300 aircraftowned by easyJet (including by agreeing to grant to the Company the right to sell such aircraft to Airbus if,inter alia, the aircraft meets the contractual delivery conditions on a specified sale date, the required periodof notice is given and the other general conditions precedent are met); and

➤ Airbus has agreed to provide a guarantee as to the technical dispatch reliability of the A319 aircraft.

In order to facilitate the smooth integration of the Airbus A319 aircraft into easyJet’s fleet the Company willinitially introduce the Airbus aircraft solely in easyJet Switzerland, the easyJet business operating out ofeasyJet’s Geneva base, from September 2003. This business operates under a Swiss air operator’s license whichis separate from the core easyJet business. A self-contained management team in Geneva, that is not involved inthe Go integration, will focus solely on the introduction of the Airbus aircraft into the Swiss operation, in orderto build experience with the Airbus aircraft before the main delivery stream begins and to pinpoint and solveany initial problems that may arise, with the aim to make the subsequent introduction to the rest of easyJetoperations as smooth as possible.

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Financing

easyJet presently finances its fleet through a mix of bank borrowing, in each case secured on the relevant aircraftwhich is owned by easyJet, and sale and lease back transactions. As at 30 September 2002, following the Goacquisition, 84 per cent. of the Company’s fleet were financed under operating leases. The Company is likely tocontinue to have a high proportion of leased aircraft in the short term. Aircraft leasing is used in order to:

➤ allow easyJet to take advantage of 100 per cent. asset financing;

➤ take advantage of attractive lease rates which are at very low levels; and

➤ reduce easyJet’s residual value exposure on the disposal of aircraft.

easyJet has entered into commitments to sell and lease back the next aircraft under the Boeing Contract. easyJethas commenced seeking offers to finance the 11 remaining Boeing aircraft and the first five Airbus aircraft to bedelivered under the Boeing Contract and Airbus Contract, respectively. easyJet has not yet entered intocommitments or letters of intent in relation to the financing of the final 11 aircraft under the Boeing Contract orany of the aircraft under the Airbus Contract. The Company intends to retain flexibility in determining themethod of financing these additional aircraft, although it expects that it will use a number of sources of debtfinance, including sale and lease-back transactions, bank financing secured on the relevant aircraft and otherfinancing structures, which may include the sale or securitisation of aircraft, public debt offers, and easyJet’sinternal resources and cashflow. It is anticipated that the deposit and periodic advance payments under theAirbus Contract will be financed out of easyJet’s internal resources and cashflow or by debt.

The ability of easyJet to meet its obligations under the Boeing Contract and the Airbus Contract depends on itsability to access the methods of finance described above, or other financing on acceptable terms. The Directorsbelieve that such methods of financing are now available to it and are likely to remain available to easyJet butthere can be no assurance that such sources of finance will remain available in the future or that the Companywill not elect to use alternative finance, including public equity offerings, although no equity offering isenvisaged to take place within the foreseeable future, nor can there be any assurance that the cost of suchfinancing will not be higher than anticipated.

Current trading and prospects

On 26 November 2002, the Company announced its preliminary results for the financial year ending on30 September 2002, which were that its revenue increased by 55 per cent. to approximately £552 million andprofit after tax increased by 29 per cent. to approximately £49 million.

easyJet continues to implement its proven strategy for strong growth in passenger volumes. In today’s marketplace, easyJet will continue to use low prices to bring value to customers, to stimulate the market and to furtherdisadvantage competitors.

Forward booking volumes for flights over the spring and summer periods are encouraging, but softer farescontinue to be experienced compared to the same period last year. (In this context, fare means the average one-way revenue per booking.) This is primarily due to year on year growth in aircraft seat capacity, the sale ofadditional seats at lower fares to lift the load factor of the Go Fly network closer to the easyJet network leveland market and economic forces.

For the four months ending 31 January 2003, easyJet’s average fare has been approximately 6 per cent. lowerthan the average fare generated by the proforma combined easyJet and Go Fly networks during the same periodlast year. For the reasons outlined above, and in particular the sale of additional seats to increase the load factor,easyJet expects that the year on year decrease in average fare for the half year ended 31 March 2003, may bemore in line with the recently announced reduction in year on year yields experienced by the other leadingEuropean low-cost airline.

For the four months ended January 2003, easyJet’s load factor is not materially different to the load factor of theproforma combined easyJet and Go Fly operation for the same period last year.

Historically, easyJet has usually shown a loss in the first half of the financial year and has generated the majorityof its profits in the last quarter of the financial year. This year, the timing of Easter, falling in April, will aid thesecond half of the financial year. Although current forward bookings are robust, the overall profile of the lastquarter’s revenue, and hence the full year outcome, will not become apparent for at least several months.

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The current financial year will be impacted by the cost, as previously announced, of the integration of the GoFly operation, the costs in connection with the option over Deutsche BA and the amortisation of goodwill; theseare estimated to amount, in aggregate, to approximately £18 million in the first half.

The integration of the Go Fly operation has proceeded much faster than originally planned and operations arerunning well. Pricing and sales are now conducted from unified systems and the benefits of creating a largerairline are beginning to be realised.

In light of the progress in the integration of the Go Fly operation, the Company has announced changes in itsmanagement board to reflect the changing nature of the airline and certain individuals’ desires to progress theirown careers. Over the next six months, Mike Cooper, Business Development Director; Vilhelm Hahn-Petersen,Operations Director; and Graham Abbey, Human Resources Director are expected to leave the airline’smanagement team. All three positions will be replaced and there is no planned change to the executive structureof the company.

There has been some speculation about Deutsche BA. The rationale for the option to acquire Deutsche BAremains valid, but easyJet has to be certain that its business model can be fully applied before deciding whetherto exercise the option. An indication of easyJet’s intentions is likely to be made public later in the year.

The Directors continue to be confident about the future prospects of easyJet and believe that followingcompletion of the Purchase the Company is particularly well placed in the current environment to continue togrow the business in line with its stated strategy.

Further, the Purchase will substantially increase easyJet’s fleet size in the financial years to 30 September 2007,and as a result the Directors believe that the Purchase should have a beneficial impact on easyJet’s ability togenerate increased revenues in the future.

Relationship agreement and brand licence

The Company announced in the Acquisition and Rights Issue Circular that it would review the RelationshipAgreement, its Articles of Association and the easyJet Brand Licence as part of the arrangements for SteliosHaji-Ioannou to step down as Chairman of the Company. On 26 November 2002, the Company announcedthat it had decided not to make any amendments to these documents.

Under the terms of the Relationship Agreement and the Articles of Association, easy Group Limited has theright to appoint two directors to the board of directors of the Company as long as (inter alia) its shareholding inthe Company exceeds 25 per cent. and Stelios Haji-Ioannou has the right to be Chairman of the Company for aslong as he or easy Group Limited owns in excess of ten per cent. of the Company’s issued share capital and aslong as the easyJet Brand Licence remains in force.

easy Group Limited currently holds 21.75 per cent. of the Company’s issued share capital and so cannot appointtwo directors to the board of the Company. Both Amir Eilon and Nick Hartley, who were originally nominatedby easy Group Limited, will continue to serve as Directors. Stelios Haji-Ioannou shall retain the right to beappointed Chairman for so long as his indirect holding is greater than ten per cent. and the easyJet BrandLicence continues.

Under the terms of the easyJet Brand Licence, easyJet does not own the ‘‘easy’’ trademark and associated orangelivery, but instead licences them from easy Group IP Licencing Limited, which is a subsidiary of easy GroupLimited, for a royalty payment of £1 per annum in perpetuity. The licence imposes duties on easyJet to maintainits high standards in its use of the brand and restricts the expansion of its licenced business. The terms of theeasyJet Brand Licence and Relationship Agreement are set out in paragraphs 8.3 and 5.2.2 of Part 3 of thisdocument respectively. As part of these arrangements, Stelios Haji-Ioannou has agreed not to be involved inanother airline business with a core activity of passenger transport in fixed wing aircraft from the date of thelicence until the expiry of the period ending three years after the later of: (a) his ceasing to hold at least five percent. of the share capital of the Company; and (b) his ceasing to have control of easy Group IP LicensingLimited, or, if earlier, the termination of the easyJet Brand Licence. If the easyJet Brand Licence terminates forinsolvency the three year period will not apply. This covenant will not prevent Stelios Haji-Ioannou from beinginvolved in the chartering of private jets or the holding of 5 per cent. in a publicly quoted airline companyprovided he has no management role. For this purpose the chartering of private jets means the chartering ofentire jets to an individual or company but not selling seats directly or indirectly to members of the public andnot operating regular scheduled services. The Directors believe that this would not compete with easyJet’s corebusiness.

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Action to be taken

You will find enclosed a Form of Proxy for use at the Extraordinary General Meeting. Whether or not youintend to be present at the meeting you are requested to complete the Form of Proxy (in accordance with theinstructions printed thereon) and return it to the Company’s registrars, Lloyd TSB Registrars, The Causeway,Worthing, West Sussex BN99 6ZL as soon as possible and in any event so as to be received by no later than10.00 a.m. on 10 March 2003. The completion and return of the Form of Proxy will not preclude you fromattending the meeting and voting in person if you so wish.

Recommendation

Your Directors consider that the Purchase is in the best interests of the Company and its Shareholders as awhole.

Accordingly, your Directors unanimously recommend Shareholders to vote in favour of the Resolution to beproposed at the Extraordinary General Meeting. The Directors have indicated their intention to vote in favourof the Resolution in respect of their beneficial holdings amounting at the date of this document to an aggregateof 2,241,971 Ordinary Shares, representing approximately 0.57 per cent., of the existing share capital of theCompany.

In addition, easy Group Limited, which is a company indirectly owned by Stelios Haji-Ioannou the formerChairman (which beneficially holds 85,576,451 Ordinary Shares representing 21.75 per cent. of the issuedshare capital of the Company), has indicated its intention to procure that all such shares are voted in favour ofthe Resolution at the Extraordinary General Meeting in respect of its beneficial holding of Ordinary Shares inthe Company.

Yours sincerely,

Sir Colin Michael ChandlerChairman

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Part 2 – Summary of the Terms and Conditions of the AirbusContract

INTRODUCTIONThe Company entered into the Airbus Contract on 30 December 2002. The Company has conditionally agreedto purchase 120 new Airbus A319 aircraft and has obtained Additional Purchase Rights in relation to a further120 Airbus A319 aircraft. The Airbus Contract is conditional upon the approval by Shareholders at theExtraordinary General Meeting.

DELIVERY SCHEDULEUnder the Airbus Contract the Company is scheduled to take delivery of the first two aircraft in the financialyear ending 30 September 2003 (both arriving in September 2003). The subsequent deliveries are scheduled asfollows:

➤ 21 aircraft to be delivered in the financial year ending 30 September 2004,

➤ 32 aircraft to be delivered in the financial year ending 30 September 2005,

➤ 34 aircraft to be delivered in the financial year ending 30 September 2006, and

➤ 31 aircraft to be delivered in the financial year ending 30 September 2007.

At an early stage in the delivery schedule, the Company can elect to convert each subsequent A319 aircraft intoan A320 or an A321 aircraft, subject to basic price adjustments in respect of the aircraft type chosen. Certainpurchase incentives and credits similar to those given in respect of A319 aircraft will also apply to suchconversion.

Airbus has granted the Company the right to elect, at any time, to purchase up to 120 additional aircraft at thesame basic price (provided that they are scheduled for delivery up to 31 December 2012 and delivery slots areavailable). Certain purchase incentives and other credits will also apply to these Additional Purchase Rights.

The Airbus Contract also gives the Company delivery date flexibility in that it allows the Company to modifythe timing of a number of scheduled deliveries in each calendar quarter, subject to appropriate notice andconditions.

PRICEThe aircraft basic price (equivalent to a standard list price for an aircraft of this type) is made up of the airframebasic list price, the sum of the specification change notice (‘‘SCN’’) prices and the propulsion systems basic listprice. SCNs, in this document, refer to easyJet’s currently identified aircraft specifications which customise thestandard Airbus specifications for such aircraft.

The following table sets out the aircraft basic price:

Total (US$) asat January

Aircraft 2001

A319 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,208,268A320 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,155,282A321 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,494,984

The basic prices for the airframe, propulsion systems and SCNs are subject to price escalation by applying aformula reflecting increases in the published relevant labour and material indexes between the time the basicprice was set and the delivery of such aircraft. The Company is responsible for the payment of any taxes(including VAT) except for taxes relating to the manufacture of the aircraft in, inter alia, France and/orGermany, which will be payable by Airbus. The final basic price is subject to increases/decreases resulting fromchanges in the relevant specifications.

12

Part 2 – Summary of the Terms and Conditions of the Airbus Contract

Airbus and the selected engine manufacturer have granted to the Company very substantial price concessionswith regard to the A320 family of aircraft. These will take the form of credit memoranda or payments to theCompany for the amount of such concessions, which easyJet may apply toward the purchase of goods andservices from Airbus or toward payments in respect of the purchase of the aircraft. Airbus and CFMInternational S.A. (the manufacturer of the engines to be fitted on the purchased aircraft) have also agreed togive the Company certain allowances as well as providing other goods and services to the Company onconcessionary terms. As a result the effective price of each aircraft will be very substantially below the basicprice mentioned above. The Company believes that, under the Airbus Contract, taking into account thesesubstantial price concessions, it can purchase A319 aircraft at a price approximately a third per seat below theprice for the Boeing 737-700 aircraft delivered to it under the Boeing Contract in August 2002 and further thatit would achieve an approximate 10 per cent. improvement over the Company’s existing operating cost base inthe financial year ending 30 September 2002 (measured per available seat kilometre).

The prices set out above are exclusive of (i) the cost of ‘‘buyer-furnished’’ equipment which the Company hasasked Airbus to install on each of the aircraft which is estimated to be approximately $530,000 for the A319aircraft and $605,000 for the A320 and A321 aircraft and (ii) taxes.

PAYMENT TERMSOn execution of the Airbus Contract, easyJet paid a refundable deposit to Airbus, which will be deducted fromthe relevant first pre-delivery payment for each aircraft, which will be payable on passing the Resolution. If theResolution is not passed the Airbus Contract provides that the deposit shall be refunded.

Under the Airbus Contract, easyJet is required to make certain pre-delivery payments in respect of each aircraftof a portion of the basic list price for that aircraft prior to its delivery. The balance of the final aircraft price,after taking account of the escalation factor and deduction of any credit memoranda and other concessions, isdue at the time of delivery.

At the end of this Part 2 there is a table that sets out total payments at the aircraft basic list price which arepayable per quarter under the Airbus Contract. This table does not reflect the price concessions or escalationfactor.

PRINCIPAL CONDITIONSThe delivery of each of the aircraft will be conditional upon, amongst other things:

➤ the Company having paid the required advance payments prior to delivery and the final price;

➤ the Company having delivered a signed acceptance certificate.

AIRBUS SUPPORTIn addition to manufacturing and delivering the aircraft, the Airbus Contract will require Airbus to providevarious ancillary goods and services to easyJet both prior to delivery of the aircraft and throughout the periodwhen easyJet operates them. These ancillary goods and services include operations and field service engineering,technical support and training, spare parts support, training of easyJet’s flight crews in the operation of theaircraft and a complete set of technical manuals, software and other materials (including subsequent revisions)with respect to each aircraft.

Under the Airbus Contract, Airbus will also provide the Company with airframe and spare part warranties(including warranties against defects in design, materials or workmanship and a warranty that the aircraftcomply with agreed specifications). Airbus will also agree to indemnify the Company against any intellectualproperty infringement claims that may be brought against the Company in respect of the aircraft.

Airbus has also:

➤ agreed to assist in reducing the residual value risk on the remaining 10 Boeing 737-300 aircraft owned byeasyJet (including by agreeing to grant to the Company the right to sell such aircraft to Airbus if, inter alia,the aircraft meets the contractual delivery conditions on a specified sale date, the required period of noticeis given and the other general conditions precedent are met);

➤ provided a guarantee as to the technical dispatch reliability of the A319 aircraft;

13

Part 2 – Summary of the Terms and Conditions of the Airbus Contract

➤ undertaken to put in place arrangements, in keeping with the low cost operation, to provide that the cost tothe easyJet Group of maintenance for the Airbus A319 aircraft shall not exceed the cost of maintenance forits Boeing 737-700 aircraft; and

➤ agreed to assist easyJet in respect of the initial provision of certain spare parts.

TERMINATION AND ASSIGNMENTEither party may terminate the Airbus Contract if the other party becomes insolvent or subject to insolvencyproceedings. If any scheduled delivery of an aircraft is delayed for more than 12 months after the scheduledmonth of delivery because of an excusable delay (being a delay due to causes outside of Airbus’ control) eitherparty will have the right to terminate the Airbus Contract with respect to the affected aircraft.

If delivery of any aircraft is delayed for a reason other than an excusable delay or total loss of the aircraft,Airbus will pay liquidated damages to the Company at a fixed daily rate limited to a maximum agreed amount.If the Company were to terminate the Airbus Contract following such a delay, the liquidated damages may bethe sole remedy available to the Company.

Airbus may terminate the Airbus Contract, among other reasons, for non-payment of pre-delivery payments orfailure to take delivery of an aircraft.

The Airbus Contract also provides that the rights and obligations of the parties may not (subject to certainexceptions) be assigned or transferred without the consent of the non-transferring party, which shall not beunreasonably withheld.

The termination rights described above are without prejudice to either party’s rights and remedies available atlaw, for instance a suit for damages for breach of contract.

Total payments atthe aircraft basiclist price for 120

A319 aircraftYear Calendar quarter (US$ million)

2003 Q1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240Q2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70Q3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129Q4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166

2004 Q1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215Q2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401Q3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240Q4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202

2005 Q1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 432Q2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 498Q3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276Q4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254

2006 Q1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401Q2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420Q3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263Q4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177

2007 Q1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389Q2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354Q3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177Q4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0

5,305

Note: This payment schedule does not take account of the escalation formula described above, the very substantial deductions resultingfrom the credit memoranda, other concessions, the ‘‘buyer furnished’’ equipment and/or taxes. The total payment figure set out for2003 (Q1) is set out on the basis that the Airbus Contract will become unconditional in 2003 (Q1). This schedule also assumesdelivery of each aircraft taking place in accordance with the terms of the Airbus Contract (i.e. no changes in delivery time takingplace).

14

Part 3 – Additional Information

1 Directors and Other Interests1.1 As at the date of this document, the interests of the Directors, and of persons connected with them, which,

unless otherwise stated, are beneficial, in the issued Ordinary Share capital of the Company, which (i) havebeen notified to the Company pursuant to section 324 or section 328 of the Act or (ii) are requiredpursuant to section 325 of the Act to be entered in the register referred to in section 325 of the Act or(iii) are the interests of a connected person of a Director which would, if the connected person were aDirector, be required to be disclosed under (i) or (ii) above, and the existence of which is known or couldwith reasonable due diligence be ascertained by that Director are set out below:

Ordinary SharesDirectors 25p each

Raymond Douglas Webster . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,104,975Nicholas Hartley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,542Colin Richard Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,454

1.2 In addition to the interests in the share capital of the Company described in paragraph 1.1 above, thefollowing options (which, as at the date of this document, remain unexercised) have been granted toDirectors under the easyJet Share Option Schemes as follows:

Number ofOrdinary Shares

under Option/Award as adjusted

to reflect the Date from whichRights Issue, Exercise Price per options become

Directors where relevant Ordinary Share exercisable Normal lapse date

Raymond Douglas Webster . 4,946,986 £1.6112(a) 22/11/00 28/02/107,459 £4.0192(b) 6/12/04 6/12/11

51,029 £4.0192(c) 6/12/04 6/12/11230,782 Nil(d) See (d) below See (d) below

Amir Eilon . . . . . . . . . . . . 3,710,237 £1.6112(a) 22/11/02 28/02/10931 £4.0192(c) 6/12/04 6/12/11

Christopher John Walton . . 600,568 £1.6112(a) 22/11/00 28/02/107,459 £4.0192(b) 6/12/04 6/12/11

28,994 £4.0192(c) 6/12/04 6/12/11145,146 Nil(d) See (d) below See (d) below

Nicholas Hartley . . . . . . . . 118,924 £1.6112(a) 22/11/00 28/02/10931 £4.0192(c) 6/12/04 6/12/11

Colin Richard Day . . . . . . . 14,667 £2,0184(a) 22/11/00 26/09/10931 £4.0192(c) 6/12/04 6/12/11

Anthony Kim Illsley . . . . . . 14,667 £20184(a) 22/11/00 26/09/10931 £4.0192(c) 6/12/04 6/12/11

Diederik Karsten . . . . . . . . 15,599 £4.0192(c) 6/12/04 6/12/11

(a) Options granted under the easyJet Key Employee Pre-Flotation Share Option Scheme.

(b) Options granted under the easyJet Approved Discretionary Share Option Scheme 2000.

(c) Options granted under the easyJet Non-Approved Discretionary Share Option Scheme 2000.

(d) Share awards made under the easyJet Management Combination Incentive Plan. Each award is over a fixed number of sharesdivided into three equal tranches and each tranche may be exercised if the applicable performance milestone is reached by thespecified deadline. The board has determined that two of the three milestones have now been reached and so awards areexercisable over two-thirds of the total number of shares under award.

As part of the easyJet Key Employee Pre-Flotation Share Option Scheme, selected executives of the easyJetGroup (including certain Directors, whose outstanding options are detailed above) were granted optionsover Ordinary Shares by easyJet Trustees Limited. No options have been granted under this scheme since22 November 2000 (the ‘‘IPO date’’), although the options were adjusted to take account of the RightsIssue in August 2002, and no further options will be granted.

15


Options under the easyJet Key Employee Pre-Flotation Share Option Scheme are normally only exercisableto the extent that they have vested. 25 per cent. of these options vested on the IPO date, a further 25 percent. vested on the first anniversary of the IPO date and a further 25 per cent. will vest on each of the secondand third anniversaries of the IPO date. This is with the exception of Amir Eilon’s option, which vested infull on the IPO date but which only became exercisable on 22 November 2002.

Options under the easyJet Approved Discretionary Share Option Scheme 2000 and the easyJetNon-Approved Discretionary Share Option Scheme 2000 vest in full and become exercisable on6 December 2004 subject to certain performance criteria.

Share awards made under the easyJet Management Combination Incentive Plan are designed to reward keyparticipants in the process of combining the businesses of easyJet and Go with free Ordinary Shares ifperformance milestones are met within certain periods following completion of the Acquisition.

1.3 Apart from the interests set out in paragraphs 1.1 and 1.2 above there are no other interests of a Director,or of any person connected with a Director, which are required to be disclosed under the Act.

1.4 Save as disclosed in the Acquisition and Rights Issue Circular, none of the Directors has had any interest inany transaction which is or was unusual in its nature or conditions or significant to the business of theeasyJet Group and which was effected during the current or immediately preceding financial year of theCompany or which was effected during an earlier financial year and remains in any respect outstanding orunperformed.

1.5 Save as disclosed in the Acquisition and Rights Issue Circular, none of the Directors has any service contractwith the Company or any of its subsidiary undertakings.

2 Significant InterestsSo far as is known to the Company, the names of any persons other than a Director who, directly or indirectly,are interested in 3 per cent. or more of the Company’s issued capital as at 21 February 2003 (being the latestpracticable date prior to the publication of this document) are as follows:

Number ofOrdinary % of Issued

Name Shares Share Capital

Stelios Haji-Ioannou . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,576,451 21.75Polys Haji-Ioannou . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,954,575 12.19Clelia Haji-Ioannou . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,954,575 12.19Wellington Management Company, LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,944,283 5.32FMR/Corp Fidelity International Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,183,544 4.87Britannic Investment Managers Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,953,573 3.04

Apart from the foregoing, the Company is not aware of any person other than a Director who is directly orindirectly interested in 3 per cent. or more of the issued capital of the Company.

Stelios Haji-Ioannou is interested in Ordinary Shares through easy Group Limited, a company indirectly ownedby him which owns the beneficial interest in such Ordinary Shares. Pershing Keen Nominees Limited, asubsidiary of Credit Suisse First Boston (which is acting as joint sponsor in relation to this circular), holds suchOrdinary Shares within the CREST System as nominee for easy Group Limited.

3 Working CapitalThe Company is of the opinion that, following the Airbus Contract becoming unconditional, the workingcapital available to easyJet, taking account of its cash resources and existing bank and other available facilities issufficient for easyJet’s present requirements, that is for at least the next 12 months from the date of publicationof this document.

4 DEUTSCHE BAOn 14 August 2002 the Company announced that it had acquired an option to purchase Deutsche BA, BritishAirways’ German domestic airline subsidiary. The option to acquire Deutsche BA is exercisable by easyJet plc at

16


any time up to 3 August 2003. Deutsche BA presently operates 16 Boeing 737-300 aircraft, all of which are heldunder operating leases and are due to be retired between 2004 and 2006. The projections regarding the growthof the easyJet fleet set out in this document do not include the existing Deutsche BA fleet of 16 Boeing 737-300aircraft or their retirements. If the Company exercises its option to purchase Deutsche BA, it may use some ofthe Additional Purchase Rights to acquire aircraft to meet its increased requirements resulting from theacquisition of the Deutsche BA business.

5 Material Contracts5.1 Other than the Airbus Contract (details of which can be found in Part 2 of this document) and the CFM

Selection Letter (as described on page 7 of Part 1 of this document), the following are all of the contracts,not being contracts entered into in the ordinary course of business, that have been entered into by easyJetwithin the two years immediately preceding the date of this document and are, or may be material (all ofwhich have been available for inspection in the last two years and were summarised in the Acquisition andRights Issue Circular and will be available for inspection in accordance with paragraph 10 below):

5.1.1 the Acquisition Agreement, further details of which can be found in the Acquisition and RightsIssue Circular.

5.1.2 The agreement dated 16 May 2002 between the Company, Credit Suisse First Boston and theCredit Suisse First Boston Equities, UBS AG and Salomon Brothers U.K. Limited, further detailsof which can be found in the Acquisition and Rights Issue Circular.

5.1.3 The purchaser’s warranty and indemnity insurance policy entered into on 16 May 2002 betweenthe Company and New Hampshire Insurance Company (‘‘AIG’’), under which AIG has agreed topay the Company the amount of any loss (including any damages, settlements, losses, liabilities,expenses and certain defence costs arising from any claim made against any company in the GoGroup) it incurs arising from a breach of the warranties given by certain individual sellers underthe Acquisition Agreement which are reported by the Company to AIG between 16 May 2002and 31 January 2004.

5.1.4 The excess warranty and indemnity insurance policy dated 16 May 2002 between the Company,AIG (as primary insurer) and Allied World Assurance Company Ltd (as underwriter) relating tothe policy referred to at paragraph 5.1.3 above.

5.1.5 The Placing and Open Offer Agreement entered into on 29 October 2001 between the Company,UBS AG, Credit Suisse First Boston Equities Limited, Merrill Lynch International, SchroderSalomon Smith Barney, easyJet Holdings Limited, easyGroup and Stelios Haji-Ioannou inrelation to the placing and open offer of ordinary shares in October and November 2001.

5.1.6 A services agreement dated 27 October 2001 between easyJet Airline Company Limited (‘‘easyJetUK’’) and London Luton Airport Operations Limited (‘‘LLAOL’’) (‘‘Luton Services Agreement’’),as supplemented by a supplemental services agreement dated 27 October 2001 between easyJetUK and LLAOL (‘‘Luton Supplemental Services Agreement’’), relating to the provision of airportservices and infrastructure at London Luton Airport and including the following principal terms:

(a) The Luton Services Agreement sets out the terms of easyJet UK’s use of London LutonAirport for the period of twenty years from 1 October 2001.

(b) LLAOL agrees to provide airport services and infrastructure to easyJet UK. In considerationfor the provision of the airport services, easyJet UK agrees to pay LLAOL a charge perdeparting passenger. In addition, the Luton Services Agreement provides for a reducedcharge for any growth in traffic, as a way of incentivising the Company to increase passengernumbers.

(c) LLAOL has agreed to implement certain short term infrastructure improvements as agreedbetween the parties and to ensure that any further infrastructure improvements are made inaccordance with industry best practice and that easyJet UK is consulted on any material newdevelopments.

17


(d) The Luton Services Agreement may not be terminated by notice, but may be terminated onthe occurrence of certain specified events, including insolvency of either party and forcemajeure.

5.1.7 A services agreement dated 7 February 2001 between easyJet UK and Liverpool Airport PLC(‘‘Liverpool Airport’’) (‘‘Liverpool Services Agreement’’) relating to the provision of airportservices and infrastructure at Liverpool Airport and including the following principal terms:

(a) The Liverpool Services Agreement sets out the terms of easyJet UK’s use of Liverpool Airportfor the period of twenty years from 1 April 2002.

(b) easyJet UK agrees to operate scheduled flights from Liverpool Airport on a daily basis inaccordance with the terms of the Liverpool Services Agreement and Liverpool Airport agreesto provide airport services and infrastructure to easyJet UK. In the event that easyJet UKincreases the minimum number of departing flights, easyJet UK and Liverpool Airport agreeto hold discussions in relation to the increased number of departing flights and the level ofairport services required for such an increase. Liverpool Airport also has the option at anytime on 90 days’ notice to cease to perform baggage handling services for easyJet atLiverpool Airport.

(c) In consideration for the provision of the airport services, easyJet UK agrees to pay LiverpoolAirport an all inclusive rate per departing passenger.

(d) The Liverpool Services Agreement may not be terminated by notice, but may be terminatedon the occurrence of certain specified events, including insolvency of either party and forcemajeure.

5.1.8 An amending agreement dated 29 October 2001 and made between the Company, easy GroupLimited (‘‘easyGroup’’), easyJet Holdings Limited and Stelios Haji-Ioannou replacing easyJetHoldings Limited with easyGroup under the Relationship Agreement referred to inparagraph 5.2.2.

The purpose of this agreement was to substitute easyGroup for easyJet Holdings Limited as partyto the Relationship Agreement referred to in paragraph 5.2.2 below following the liquidation ofeasyJet Holdings Limited, the distribution of a proportion of Ordinary Shares to easyGroup andother minor consequential changes.

5.1.9 A share purchase agreement between Newgo 2 Limited (‘‘Newgo 2’’) and British Airways plc(‘‘British Airways’’) in relation to the purchase by Newgo 2 of the entire issued share capital of GoFly Limited on 14 June 2001.

5.1.10 A deed of guarantee dated 14 June 2001 and made between British Airways and Newgo 1 Limited(‘‘Newgo 1’’) under which Newgo 1 guaranteed the due and punctual performance by it and itssubsidiaries of their obligations under the share purchase agreement and all its related agreementsand provided an indemnity to British Airways for any failure by Go to meet any of its obligations.

5.1.11 An investment agreement entered into between Newgo 1, Newgo 2, various Go Fly Limitedmanagement and various investors in relation to Newgo 1 on 14 June 2001.

5.2 The following contracts (not being entered into in the ordinary course of business) are all of the contractswhich contain a provision under which a member of easyJet has an obligation or entitlement which ismaterial to easyJet as at the date hereof, the disclosure of which Shareholders would reasonably require forthe purpose of making a properly informed assessment about the manner in which to exercise their vote:

5.2.1 Agreement number 2165 dated 23 July 1998 between easyJet Holdings Limited and The BoeingCompany (‘‘Boeing’’) as subsequently amended by a supplemental agreement dated 29 March2000 between easyJet Holdings Limited and Boeing and as assigned from easyJet HoldingsLimited to the Company under an assignment and assumption agreement dated 30 April 2000

18


between easyJet Holdings Limited and the Company (the ‘‘Boeing Contract’’). Details of theBoeing Contract can be found at paragraph 7 below.

5.2.2 The Relationship Agreement dated 14 November 2000, entered into between SteliosHaji-Ioannou, easyJet Holdings Limited (together the ‘‘Controlling Shareholders’’) and theCompany which is conditional on Admission, under which the Controlling Shareholders and theCompany have agreed that the following general principles shall apply to govern the relationshipbetween the Controlling Shareholders and the Company and any of their respective associates.easy Group Limited has replaced easyJet Holdings Limited as a Controlling Shareholder by virtueof the agreement referred to in paragraph 5.1.8 above:

(a) the Company shall have its own dedicated management and the Company shall operate andmake decisions for the benefit of shareholders as a whole and independently of theControlling Shareholders at all times;

(b) the business and affairs of the Company shall be managed by the Board in accordance withthe Memorandum and Articles of the Company and all applicable law and for the benefit ofthe shareholders as a whole;

(c) there shall at all times be a majority of Independent Directors (being a Director who is notand has not been a director, officer or employee of, or a person having a relationship,association or interest which is material to him with or in the Controlling Shareholders orany associate of the Controlling Shareholders, or with or in any person having a relationshipwhich is material to it or him with the Controlling Shareholders or any associate of theControlling Shareholders) on the Board and on all committees of the Board to whichsignificant powers, authorities or discretions are delegated; for this purpose at the date of thisdocument all the directors except for Nick Hartley and Amir Eilon are treated asindependent;

(d) the Company shall comply with the principles of best practice adopted by UK listedcompanies in relation to matters of corporate governance;

(e) for so long as either of the Controlling Shareholders directly or indirectly hold at least 25 percent. of the share capital of the Company and the Company is entitled to continue to use theeasyJet brand under the terms of the easyJet brand licence, easy Group Limited (or SteliosHaji-Ioannou) shall be entitled to appoint two non-executive Directors to the Company andStelios Haji-Ioannou shall be entitled to be the Chairman of the Company;

(f) for so long as either of the Controlling Shareholders directly or indirectly hold at least 10 percent. of the share capital of the Company and the Company is entitled to continue to use theeasyJet brand under the terms of the easyJet brand licence Stelios Haji-Ioannou shall beentitled to be the Chairman of the Company;

(g) no material amendments to any agreements between any easyJet Group company and anyassociates of the Controlling Shareholders shall be made unless approved by a resolution ofthe Board at which an Independent Non-Executive Director is in the majority;

(h) easyJet shall enforce the terms of all agreements with any associates of the ControllingShareholders unless approved by a resolution of the Board at which an IndependentNon-Executive Director is in the majority;

(i) all transactions and relationships between the Controlling Shareholders (or any of theirassociates) and easyJet shall be on terms which are arm’s length and on a normal commercialbasis;

(j) the Controlling Shareholders and the Company shall comply with all the regulatoryrequirements of the Listing Rules of the UK Listing Authority in connection with easyJet,including, without limitation, the provisions relating to transactions with related parties; and

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(k) Stelios Haji-Ioannou shall not receive any director’s fees or any reimbursement of expenses inrespect of his services for the Company.

Stelios Haji-Ioannou has agreed not to be involved in another airline business with a core activityof passenger transport in fixed wing aircraft from the date of the agreement until the expiry of theperiod ending three years after the later of: (a) his ceasing to hold at least five per cent. of the sharecapital of the Company; and (b) his ceasing to have control of easyGroup IP Licensing Limited or,if earlier, the termination of the brand licence. If the brand licence terminates for insolvency thethree year period shall not apply. This covenant will not prevent Stelios Haji-Ioannou from beinginvolved in private jet charter or the holding of five per cent. in a publicly quoted airline companyprovided he has no management role. For this purpose the chartering of private jets means thechartering of entire jets to an individual or company but not selling seats directly or indirectly tomembers of the public and not operating regular scheduled services. The Directors believe thisdoes not compete with easyJet’s core business. There is a similar non-compete provision given byeasy Group Limited.

Other than the restrictive covenant referred to above, the Relationship Agreement terminatesupon both the Controlling Shareholders ceasing to hold Ordinary Shares of at least five per cent.of the Company.

5.2.3 The brand assignment, the brand consolidation agreement and the easyJet Brand Licence enteredinto between easyJet UK and the other companies in the ‘‘easy’’ group dated 5 November 2000,further details of which can be found in the Chairman’s letter and paragraph 8 of part 3 of thisdocument.

5.3 The contracts listed in paragraph 5.1 and 5.2 above are available for public inspection in accordance withparagraph 10 below.

5.4 Other than the Airbus Contract and the CFM Selection Letter, there are no contracts (not being a contractentered into in the ordinary course of business) which are, or may be, material to the assets the subject ofthe Purchase and which have been entered into during the two years preceding the date of this documentnor are there any other contracts (not being a contract entered into in the ordinary course of business)entered into in relation to the assets the subject of the Purchase which contain any provision which ismaterial to the Purchase as at the date of this document.

6 Litigation6.1 Other than the potential litigation in relation to Navitaire and Go Voyages (further details of which are set

out at paragraphs 6.2 and 6.3 respectively), no member of easyJet is or has been involved in any legal orarbitration proceedings (including any such proceedings which are pending or threatened by or against anymember of easyJet of which the Company is aware) which may have or have had in the 12 monthspreceding the date of this document a significant effect on easyJet’s financial position.

6.2 Potential litigation in relation to NavitaireOn 15 May 2002, Navitaire Inc. (‘‘Navitaire’’), a supplier to the Company of airline reservation software,issued proceedings against the Company alleging copyright infringement and breach of contract in relationto airline reservation software. Navitaire has stated on its Claim Form that ‘‘(it) cannot say at this stagehow much it might recover but the value of the claim is likely to be in excess of £15,000’’. Theseproceedings are being defended.

The Company has been advised that any such allegations bring with them the risk of damages and/or aninjunction. In the event of Navitaire being successful in any claim against the Company, any award ofdamages against the Company is, in the opinion of the directors, (based on legal advice) unlikely to bematerial. However, any injunction preventing the Company from using all or part of its reservation systemwould have a material adverse effect on easyJet’s results of operations or financial condition, if theCompany had not by that time procured an alternative solution. Such an alternative solution is currentlybeing progressed by the Company.

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6.3 Potential litigation in relation to Go VoyageseasyJet is currently engaged in a dispute with Go Voyages, a French travel company (‘‘Go Voyages’’). GoVoyages has commenced proceedings against Go in the French civil court in Paris alleging a trademarkinfringement by Go in relation to the trademark ‘‘Go Voyages’’ (which is owned by Go Voyages) and unfaircompetition. The action is to seek an injunction against Go to prohibit it from using the word ‘‘Go’’ inFrance, the cancellation of Go’s European Community trade marks, damages of up to A2 million forinfringement of trademark and A1 million for unfair competition. easyJet is currently defending the claim.It expects to reach a satisfactory settlement of this dispute. It does not consider the amount of any likelysettlement to be material. However, in the event that easyJet were to lose the case, it may have to paydamages and may also be prevented from using Go’s European Community trade marks, which may besubject to cancellation. As from December 2002 Go operated under the easyJet brand.

6.4 There are no legal or arbitration proceedings (including any such proceedings which are pending orthreatened in relation to the assets the subject of the Purchase of which the Company is aware) which mayhave or have had in the twelve months preceding the date of this document a significant effect on the assetswhich are the subject of the Purchase.

7 BOEING CONTRACT7.1 Delivery Schedule

The Company took delivery of the first 737-700 aircraft on 13 October 2000. As at the date of thisdocument, 20 aircraft had been delivered with additional deliveries currently scheduled as follows: 6aircraft in 2003 and the final 6 aircraft between January 2004 and May 2004.

7.2 PriceThe ‘‘Basic Price’’ (equivalent to a standard list price for an aircraft of this type) for each of the 737-700aircraft (defined as a per aircraft airframe price, including engines, plus the per aircraft price for certainoptional features agreed between the parties) is US$37,168,500 for the Block A aircraft andUS$39,781,000 for the Block B aircraft (in respect of aircraft to be delivered after 31 December 2003 thisprice is an estimate only). The ‘‘Basic Price’’ will be increased by (a) an estimated US$1.55 million perBlock A aircraft and US$1.6 million per Block B aircraft for certain ‘‘seller-purchased’’ equipment theCompany has asked Boeing to purchase and install on each of the aircraft, and (b) an ‘‘Escalation Factor’’designed to increase the Basic Price of any individual aircraft by applying a formula reflecting increases inthe published U.S. Employment Cost and Producer Price Indexes between the time the Basic Price was setand the period six months prior to the delivery of such aircraft. The Company is also responsible for thepayment of any taxes on the aircraft other than certain U.S. federal income taxes and Washington Statetaxes imposed upon Boeing.

Boeing has granted the Company substantial confidential price and payment terms concessions withregards to the 737-700 aircraft. Boeing and CFM International S.A. (the manufacturer of theCFM56-7B24 engines to be fitted on the purchased aircraft) have also agreed to give the Company certainallowances for promotional and other activities, as well as providing other goods and services to theCompany on concessionary terms.

7.3 Payment TermsSubject to the concessions granted, the Company was required to pay Boeing one per cent. of the BasicPrice of each of the 32 Boeing 737-700 aircraft at the time of signing the Boeing Contract and will berequired to make periodic advance payments of the purchase price for each aircraft it has agreed topurchase during the course of the two-year period preceding the delivery of each aircraft. As a result ofthese required advance payments, and subject to the concessions granted, the Company would be requiredto pay up to 30 per cent. of the total cost of each aircraft plus the ‘‘Escalation Factor’’ prior to its delivery(before the deduction of credit memoranda and other concessions due), with the balance of the net pricebeing due at the time of delivery.

7.4 Boeing SupportIn addition to manufacturing and delivering the aircraft, the Boeing Contract requires Boeing to providevarious ancillary goods and services to the Company both prior to delivery of the aircraft and throughoutthe period when they are operated by the Company.

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7.5 Termination and AssignmentThe Company and Boeing’s respective obligations to buy or sell any individual aircraft may be terminatedby either party in the event of a bankruptcy or similar event affecting the other party or if any scheduleddelivery of an aircraft is delayed for more than 12 months because of an ‘‘excusable delay’’ (which includes,acts of god, war, government acts, fires, floods, earthquake, strikes and other causes beyond Boeing’scontrol and not caused by its fault or negligence). The Boeing Contract also generally provides that therights and obligations of the parties may not (subject to certain stated exceptions) be assigned ortransferred to non-affiliated third parties without the consent of the non-transferring party.

8 BRANDOn 5 November 2000 easyJet UK entered into a number of agreements relating to the ‘‘easy’’ brandintellectual property rights.

8.1 Brand Consolidation AgreementThis is an agreement between easyGroup IP Licensing Limited (‘‘easyGroup IP Licensing’’) and all thecompanies in the ‘‘easy’’ group having rights in or using the intellectual property rights supporting the‘‘easy’’ brand, which contains the agreement amongst them to consolidate ownership of the easyintellectual property rights in easyGroup IP Licensing and for it to licence those rights back. The principalterms of this agreement are as follows:

8.1.1 easyJet UK (and other relevant easy brand companies) declares that it holds certain trade marksand domain names which do not relate to its business as nominee for easyGroup IP Licensing;

8.1.2 easyJet UK (and all of the other companies in the easy group having rights and/or using the easybrand) declares that it holds certain rights used in common (such as name ‘‘easy’’ and the orangeand white get up) for itself and as nominee for all other easy brand companies; and

8.1.3 easyGroup IP Licensing confirms its agreement to grant licences and subject to that grant easyJetUK (and the other easy brand companies) agrees to assign its intellectual property rights relatingto the ‘‘easy brand’’ to easyGroup IP Licensing.

8.2 AssignmentPursuant to the Brand Consolidation Agreement, easyJet UK assigned all its interests in the easyJetintellectual property and other ‘‘easy’’ intellectual property, brands and URLs to easyGroup IP Licensingsubject to the prior agreement of easyGroup IP Licensing to grant easyJet UK a perpetual licence for aroyalty of £1 per annum to use the easyJet brand and certain other ‘‘easy’’ intellectual property rights onthe terms of the easyJet brand licence referred to in 8.3 below. easyGroup IP Licensing agreed to indemnifyeasyJet against any capital gains tax liability it may suffer arising out of the assignment of the intellectualproperty rights.

8.3 Brand LicenceThe principal terms of the brand licence are as follows:

8.3.1 easyJet UK is granted a right to use the easyJet name exclusively and the other easy branding suchas orange livery non-exclusively for the licensed activities (the ‘‘Licensed Activities’’). TheLicensed Activities are the core activity of passenger transport in fixed wing aircraft and ancillaryand conducive activities provided, in the case of ancillary and conducive activities that a numberof easyJet’s peer group (being European flag carriers and European and American low-costairlines) are undertaking that activity and the aggregate of the ancillary and conducive activitiesdoes not exceed 25 per cent. of the easyJet’s consolidated revenues in a 12 month period;

8.3.2 easyJet UK must devote its efforts exclusively to the Licensed Activities and must use its bestendeavours to exploit its rights in connection with those activities;

8.3.3 whilst easyGroup IP Licensing undertakes not to license or permit any person to carry on a coreactivity which competes with easyJet’s core activity for the term of the licence and for three yearsthereafter, other licensees of the easy brand may have activities which are ancillary or conducive

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to their own core activity which compete with easyJet’s core activities; similarly easyJet’s ancillaryand conducive activities may compete with other licensee’s core activities;

8.3.4 easyJet UK agrees to maintain high standards of quality and presentation with regard to thebrand, to use the easy ‘‘get up’’ strictly, not to use its rights in a manner which would allow thebrand to: lose distinctiveness; become liable to mislead the public; or become generic and not touse the rights in a way which would be detrimental to the goodwill and reputation of easyGroupIP Licensing; easyJet also agrees to comply with all relevant laws and regulations and to obtain allnecessary consents and licences to carry on its business and not to infringe the intellectualproperty rights of any third party;

8.3.5 easyGroup IP Licensing has primary responsibility for maintaining and extending trade markregistrations; easyJet UK does, however, have limited rights to register and maintain registrationsitself; where easyJet UK does so, it must assign any trade mark it obtains to easyGroup IPLicensing;

8.3.6 easyGroup IP Licensing is responsible for taking proceedings against any third party infringersand has complete discretion as to whether to settle or dispute claims and as to the method ofconducting the litigation; if it does not bring a claim requested by easyJet UK within specified timeperiods, easyJet UK can bring proceedings itself, but cannot force easyGroup IP Licensing itself tobring proceedings against alleged infringers; easyGroup IP Licensing, at its option, may joineasyJet in any action brought by easyGroup IP Licensing against alleged infringers;

easyJet UK must provide all assistance which easyGroup IP Licensing requires in bringing anyaction against a third party infringer; this includes allowing the proceedings to be brought in thename of easyJet UK; easyJet UK bears all its own costs in so doing and is responsible for all costsincurred in claims or defences relating to the easyJet brand; easyJet’s obligation to meet costs iscapped at £100,000 per claim and £1 million per year, subject to annual indexation; thereafter itsconsent must be obtained which is not to be unreasonably withheld;

8.3.7 easyGroup IP Licensing retains sole discretion in bringing actions against other easy licensees forbreach of their licence except that easyJet UK can bring an action against a fellow licensee ifeasyGroup IP Licensing does not act within one year of easyJet UK making a complaint or aftersix months where the fellow licensee’s breach results from activity outside its own licensedactivities or in excess of the specified turnover tests and causes or is likely to cause loss or damagein relation to easyJet’s core activity;

8.3.8 easyJet UK has agreed to indemnify easyGroup IP Licensing against any capital gains tax liabilityit may suffer arising out of the assignment of and licence of the intellectual property rights;

8.3.9 easyGroup IP Licensing’s maximum liability is limited to £10 million over the term of the licence;the Company guarantees easyJet UK’s obligations and easyGroup (UK) Limited guaranteeseasyGroup IP Licensing’s obligations plus its indemnity as to tax in the assignment;

8.3.10 Stelios Haji-Ioannou has agreed not to be involved in another airline business with a core activityof passenger transport in fixed wing aircraft from the date of the licence until the expiry of theperiod ending three years after the later of: (a) his ceasing to hold at least five per cent. of the sharecapital of the Company; and (b) his ceasing to have control of easyGroup IP Licensing or, ifearlier, the termination of the brand licence; if the brand licence terminates for insolvency thethree year period shall not apply; this covenant will not prevent Stelios Haji-Ioannou from beinginvolved in private jet charter or the holding of five per cent. in a publicly quoted airline companyprovided he has no management role; for this purpose the chartering of private jets means thechartering of entire jets to an individual or company but not selling seats directly or indirectly tomembers of the public and not operating regular scheduled services; the Directors believe thisdoes not compete with easyJet’s core business;

8.3.11 easyGroup IP Licensing can terminate the brand licence if easyJet UK commits a material breachof any term of the licence which is not remedied within 90 days (except in the case of material

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breach arising out of ancillary and conducive activities exceeding 25 per cent. of consolidatedrevenues where easyJet UK must within six months demonstrate compliance with this provisionover the last three months); certain specified breaches automatically constitute a material breach(such as a failure to strictly comply with the easy ‘‘get up’’); easyGroup IP Licensing mayterminate if an insolvency event occurs in relation to easyJet UK and remains unremedied for oneyear;

8.3.12 easyJet UK may at any time terminate the licence; and

8.3.13 if the licence is terminated, easyJet UK must cease all use of the easy name and branding within90 days and must deliver up all branded materials; easyGroup IP Licensing will, however, berequired not to use easyJet UK’s URL and maintain a hotlink to an address of easyJet UK’s choicefor a further nine months after termination to enable easyJet UK to transfer its business to a newURL address.

9 Significant ChangeSave for softer fares and additional items of non-trading cost, as disclosed in the ‘‘Current Trading andProspects’’ section in Part 1 of this document, there has been no significant change in the financial or tradingposition of the easyJet Group since 30 September 2002, the date to which the Company’s latest audited resultswere prepared.

10 Documents Available for InspectionCopies of the following documents will be available for inspection during normal business hours on weekdays(Saturdays, Sundays and public holidays excepted) at the registered office of the Company and at the offices ofNorton Rose, Kempson House, Camomile Street, London EC3A 7AN from the date of this document up to andincluding the date of the Extraordinary General Meeting:

(a) the Memorandum and Articles of Association of the Company;

(b) the Company’s circular to Shareholders dated 15 November 2000 relating to, inter alia, the placing byCredit Suisse First Boston and UBS Warburg of shares in the Company, otherwise referred to in thisCircular as the Global Offering Circular;

(c) the Company’s circular to the Shareholders dated 23 May 2002 (which contains further informationabout certain of the material contracts referred to in (d) below), otherwise referred to in this Circularas the Acquisition and Rights Issue Circular;

(d) the Airbus Contract summarised in Part 2 of this document, the material contracts referred to inparagraphs 5.1 and 5.2 of Part 3 of this document and the CFM Selection Letter described on page 7 ofPart 1 of this document;

(e) the consolidated audited financial statements for easyJet for the financial years ending 30 September2001 and 30 September 2002 respectively; and

(f) the service contracts and letters of appointment for the Directors

(g) this document.

Dated: 24 February 2003

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NOTICE OF EXTRAORDINARY GENERAL MEETING

OF

easyJet plc(Registered in England and Wales No. 3959649)

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of easyJet plc (the ‘‘Company’’) will beheld at easyLand, London Luton Airport, Bedfordshire LU2 9LS on 12 March 2003 at 10 a.m. for the purposeof considering and, if thought fit, passing the following resolution which will be proposed as an ordinaryresolution.

ORDINARY RESOLUTION

THAT the Airbus Contract as described in the Circular to Shareholders dated 24 February 2003, of which thisnotice forms part, be approved and the Directors be authorised to enter into, waive, amend, vary or extend theterms of the Airbus Contract and to do all such things as they consider to be necessary or expedient to completeor give effect to, or exercise its rights under, or otherwise in connection with, the Airbus Contract, and anymatters incidental to it provided that no material amendment shall be made to the terms of the Airbus Contractwithout the approval of the Company’s Shareholders.

BY ORDER OF THE BOARDSir Colin Michael ChandlerChairman

Registered Office:easylandLondon Luton AirportBedfordshireLU2 9LS

24 February 2003

NOTES:

1. A member entitled to attend, speak and vote at the above meeting is entitled to appoint one or more proxiesto attend, speak and vote on his/her behalf. A proxy need not be a member of the Company.

2. A Form of Proxy accompanies this notice. To be effective, the Form of Proxy, together with any power ofattorney or other authority under which it is executed, or a notarially certified copy thereof, must be dulycompleted in accordance with the instructions set out on it and be received by Lloyds TSB Registrars, TheCauseway, Worthing, West Sussex BN99 6ZL not less than forty-eight hours before the time fixed for theholding of the meeting.

3. In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, will beaccepted to the exclusion of the votes of the other registered holder(s) and, for this purpose, seniority willbe determined by the order in which the names stand in the Register of Members.

4. Completing and returning the Form of Proxy does not preclude a member from attending and voting at themeeting should he/she so wish.

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5. Pursuant to Regulation 41 of the Uncertificated Securities Regulation 2001, entitlement to attend and voteat the above meeting or any adjourned meeting and the number of votes which may be cast thereat will bedetermined by reference to the register of members of the company as at 10 a.m. on 10 March 2003, or inthe event that the meeting is adjourned, as at such time falling 48 hours before the time of any adjournedmeeting. Changes to entries on such register after this time shall be disregarded in determining the rights ofany person to attend or vote at the meeting or any adjournment thereof, as the case may be.

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Merrill Corporation Ltd, London02LON2203