1.0 Executive Summary:

This report talks about EasyJet’s company profile in terms of risk, shareholders

funds, ownership, and firms’ life cycle that are taken into consideration for

ascertaining future trends at EasyJet Plc. In order to get a closer look into the

company details there have been key details that have been taken into

consideration like the Income statement, balance sheet and cash flow statement.

There is a comparative analysis done between Easy jet and two other players in the

industry namely British Airways and Ryanair. The report highlights certain key

factors that have helped EasyJet remain competent and ensure a systematic cash

flow. This report aims to give an in-depth view into the airlines industry and how it

has remained sustainable against many odds.

1.1 Introduction:

EasyJet plc is an airline carrier operating principally in Europe. EasyJet provides high

frequency services on short-haul and medium-haul point-to-point routes within

Europe from its three airport bases at London, Luton, Liverpool and Geneva. EasyJet

offers simple no frills service aimed generally at both the leisure and business travel

markets. The fares offered are significantly below those offered by traditional full-

service or multi-product airline. EasyJet has a significant presence in major airports

and operates the leading network in European short-haul aviation on the top 100

routes. EasyJet operates around 25 A320 aircrafts across the network which has

enabled the company to extend their current network. We would be discussing the

company profile in various financial aspects and see how EasyJet has managed to

remain profitable inspite of adverse economic conditions, volatile oil price changes

and severe weather conditions. For this purpose a detailed trend analysis is being

conducted on various financial parameters.

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2.0 Aim and Objectives of the Firm

The aim of EasyJet is to achieve an average post tax ROCE (return on capital

employed) of 12% by 2011. This company has been able to benchmark cost

categories against other low cost carriers such as Ryanair and British Airways. In

order to save cost the company is focusing on its objective of building a greater

proportion of A320into the fleet plan. As per details in the annual report there are

currently 25 EasyJet 180 seat A320s in the fleet and it has been observed that this

introduction of fleet has ensured a reduction in cost per seat and has led to

significant increase in sales contribution. Through this measure the company has

been able to balance yield and cost to improve margins.

EasyJet also aims to have stronger supplier relationship to meet pre-agreed

performance targets and align it with EasyJet’s own internal performance goals to

have a continued successful business. The company’s main objective would be offer

lowest fare to increase passenger load. EasyJet’s strategy is growth with margin

improvement and therefore the management team continually focuses its efforts on

all three drivers of margin: yield, ancillaries and cost, with the aim of achieving a

15% return on equity in the medium-term.

The classic objective function of the corporate finance suggests that the objective of

a company should be to maximize firm’s value and stock prices. EasyJet has been

firmly focused on maximizing the value of the firm by improving margins to achieve

a profit per seat of £5. The other focus is on achieving a 15% ROE. The company’s

clearly and well stated strategy and systematic implementation of the said purpose

has helped the firm to achieve a higher level of profit on a year-on-year basis.

3.0 The composition of the board of directors for EasyJet.

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– As at 30 September 2010, the Board is comprised of seven non-

Executive Directors including the Chairman and two Executive Directors.

– Easy jet has not had any agency problem in the recent past and the company

does not predict any agency problem in the future since the management,

the shareholders and creditors have a uniform goal for the company in the

future. However, the company does offer a reward structure which includes

an annual performance-driven bonus, based on personal and Company

performance, which encourages all employees to contribute towards

achieving the company’s strategic objectives. Employees are eligible to

participate in a Group personal pension towards which EasyJet contributes, as

well as having the option to make their own contributions through salary

sacrifice arrangements. EasyJet offers a competitive rewards package and

reviews salaries annually in line with the market rates to ensure continued

alignment to the market.

NOTE: The composition of the share ownership and the implications.

The details about institutional investors, marginal investors, and percentage

of stock held by employees, insiders buying or selling stocks are not given in

the annual report. For this information we need to contact institutional

investors and analysts:

Rachel Kentleton, Investor Relations at +44 (0) 7961 754 468

NOTE: There is no evidence of the presence of any conflict of interests

between various stakeholders in the company.

4.0 Firm’s Life Cycle

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Figure: 1 Firms life Cycle.

The Life of any firm revolves around the stages of introduction, growth, maturity,

recession and decline. In the case of EasyJet the current stage that the firm is

experiencing in terms of its life cycle, would be the Growth stage. EasyJet is strongly

positioned to take advantage of the continuing profitable growth opportunities in

European short-haul aviation. This growth combined with the margin improvement

through a tight focus on costs and accessing new revenue opportunities, means

that EasyJet is poised to continue the strong operating cash generation of the past

few years. Consequently, the Board of the company has decided to trigger a

dividend payment in 2012. The company is also trying to ensure that the company

remains cautiously financed with a strong, liquid balance sheet which will ensure

that shareholders are able to benefit directly from the Company’s success while it

continues to extend its market share.

While the company focuses on growth, it is also faces some potential risk due to

environmental impact. The environmental factors have a significant impact on

public policy towards aviation, from restrictions on airport expansion to passenger

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taxes. Aviation contributes 2% of global man-made greenhouse gas emissions and

EasyJet is emphasizing on delivering sustainable aviation, allowing continued

growth while putting emissions on a downward trend. This means creating a

framework that drives airlines to use existing aircraft more efficiently but which also

ensures airframe and engine manufacturers bring forward the next generation

aircraft as soon as possible. EasyJet also plans to ensure that air travel

tax's are not blunt i.e. ineffective taxes on passengers such as APD in the

UK, but have emissions based taxes that are designed to encourage airlines

to minimize their impact on the environment.

This is how EasyJet plans to ensure growth by reducing the risk of environmental

factors.

5.0 Comprehensive Risk Profile of the firm:

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Figure: 2 Sales and operating profit margin of the company.

The airline industry faced major disruption in the last few years such as interruption

at European airspace due the eruption of the Eyjafjalla volcano, an unprecedented

level of snow and high levels of ATC (Air Traffic control) industrial action that caused

operational disruptions in 2009 back by economic downturns from 2008. Even

though there was a decline in figures in 2009, the figures improved considerably in

2010. EasyJet experienced an increase in the sales turnover over the last five years.

It rose from 1341 pounds in 2005 to 2973 pounds in 2010 which means there was

constant growth in business inspite of difficult times. This was possible because of

EasyJet’s strong network, good route management, and growth in ancillary

revenues. The operating profit increased by 76.6% in just one year from 44M in

2009 to 188M in 2010. This could be attributed to the strong network and the rising

consumer demand in 2010. The increase in profit margin was driven by a unit fuel

cost reduction equivalent to £122.7 million.

Beside this, EasyJet continued to deliver strong performance due to the high level of

professionalism and commitment on part of EasyJet’s staff.

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6.0 Retained Earnings

Figure: 3 Retained Earnings

The above graph predicts that the retained earning has shown a positive trend over

the last five years. Even though the company’s performance was very poor in 2009,

the company was able to give out a higher value of share premium each year. Even

though the company has not declared any dividends yet, the retained earnings

were mainly used for buying additional aircrafts and to increase the number of

routes. A number of new locations were added to increase the load factor. This

enabled in increase of revenue and the retained earnings from excess revenue have

been used to further expansion.

7.0 Key Risk Indicators

Key Risk indicators 2006 2007 2008 2009 2010

Degree of Operating Leverage 7.97 5.13 -1.44 -3.91 15.81

Degree of Financial Leverage 0.34 0.89 0.95 0.30 0.37

Degree of Total Leverage 2.75 4.56 -1.37 -1.17 5.92

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-10.00-5.000.005.00

10.0015.0020.0025.0030.0035.00

Key Risk Indicators

Degree of Operating LeverageDegree of Financial LeverageDegree of Total Leverage

Year

Mill

ion

in P

ound

s

Figure: 4 Key Risk Indicators

EasyJet works in the airline industry which is very risky and volatile. The airlines

industry has been worst performing industry in the history due to high operating

cost and less profit margins. The past decade posed maximum difficulty in terms of

9/11 attacks, the oil-price surge, and the 2008 recession. These changes forced the

industry to adopt and change course abruptly. The industry sailed through the

troubled times but the rising oil prices proved to be terrible. This affected EasyJet

because of its principal focus on the low pricing strategy. Apart from this EasyJet

faced a major setback in terms of post 9/11 security fee. The chart below, provided

by the Transportation Security Administration, shows that the TSA has collected

more than $13 billion in proceeds since the inception of the 9/11 fee through 2009,

and it is estimated that TSA will collect another $12 billion over the next six years.

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Figure: 5 TSA 9/11 Security Fee Collections

Apart from the above factors another major challenge faced by EasyJet was the

increase in fixed costs in 2008 and 2009 because of the acquisition of new aircrafts

(GB airways), pre-delivery deposits for future deliveries which led to a negative

operating leverage in 2008 and 2009. The sales dipped in 2009 due to recession

and lack of demand from the consumers. However, in 2010 the turnover increased

considerably due to the improvements in route mix with investment in higher

yielding European routes and some capacity re-alignment within the UK including

the of some ineffective bases. The continuous emphasis on encouraging year-on-

year performance on routes from the UK led to an increase in demand from both

beach and European cities.

The operating leverage increased in 2010 because of maximum utilization of fixed

assets. Ideally if operating leverage is high a company is considered risky but in

case of EasyJet the fixed costs are high (aircrafts) but asset utilization is also very

high. EasyJet has been able to finance aircrafts at attractive rates. The company

reported pre-tax profit grew by £99.3 million to £154.0 million driven by a strong

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revenue performance as total revenue grew by 11.5% to £2,973.1 million. The

company has been able to fund growth and maintain a regular formulaic return to

shareholders. Hence the company has decided to pay an annual dividend based on

a dividend cover of five times. The first dividend will be payable in 2012 in respect

of the year ending 30 September 2011.

8.0 Financing Ratio

Financing Ratios 2006 2007 2008 2009 2010

Debt Service or Interest Cover (times) 5.4 5.4 3.6 1.6 7.1

Gearing Ratio (Debt/Equity) 31% 20% 29% 38% 32%

Debt Ratio 28% 25% 16% 3% 3%

Financial leverage refers to the ratio used to determine how easily a company can

pay interest on outstanding debt.

As per the above data, EasyJet has maintained a strong financial position. Even

during the tough financial year of 2009 the interest coverage was at 2.0. If we look

at the data for the past five years it clearly shows that the debt service was above

3.0 which proves that the company is at a good position to pay-off debts and would

not default.

Figure : 6 Debt Ratio and Gearing Ratio.

As shown in the graph above, the gearing ratio in the year 2009 has been highest at

38% mainly due to the possession of new aircrafts with the additional funds

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borrowed during the year. The other reason was the movement in the US dollar

exchange rate because of the global economic environment and the impact of

recession beside the volatile fuel price changes and reduction in aircraft utilization.

A high gearing (high leverage) often results in downturns in the business cycle

because the company must continue to service its debt regardless of a fall in sales

figure. The principal measure used by EasyJet to manage capital risk is the gearing

ratio of debt (defined as debt plus seven times aircraft operating lease payments

less cash, including money market deposits and restricted cash) to shareholders’

equity. Gearing ratio decreased in the year 2010 from 38% to 32%, principally due

to the strong operating cash flow wherein the net cash flow from operations

improved by £228.9 million to £363.4 million. The company is maintaining a

liquidity target of £4 million cash per aircraft, a leverage cap of £10 million adjusted

gross debt per aircraft and a 50% limit on net gearing.

As has been seen in the graph the debt ratio has fallen over the last 5 years with a

significant fall in 2010. The net debt in 2010 was £40.1 million compared with £45.7

million in 2009. Strong operating cash flow and the increase in net assets delivered

a reduction in gearing of six percentage points to 32% at in 2010.

9.0 Current Ratio and Working Capital

Figure: 7 Current ratio Figure: 8 Working Capital

As seen in the above graph, EasyJet current ratio has remained over 1 over the past

five years which goes to prove that the company is capable of paying off its

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obligations. The current ratio give a sense of the efficiency of a company's

operating cycle or its ability to turn its product into cash.

The working capital for EasyJet showed a declining trend over the past five years

however there was an increase in 2010. Net working capital improved by £85.9

million to a net negative £589.8 million. As EasyJet’s passengers pay for their flights

at the time of booking which led to an unearned revenue of £356.5 million which

was an increase of £32.2 million during the year driven by

increased bookings and improvements in yield. A further benefit was

derived from renegotiating contract terms with key card acquirers,

contributing to a reduction in trade receivables of £81.9 million. This happened

since the company borrowed money to support expansion for buying aircrafts which

led to a significant increase in the liabilities. There was an increase in assets but the

proportion was lesser.

10.0 Inventories

EasyJet does not have any inventories.

11.0 Asset Turnover Ratio

The asset turnover ratio has remained constant over the last two years at 0.7 which

indicates that the company was able to use their assets to generate high volumes of

revenue. In 2006 and 2008 the ratio was at 0.8 which means assets were used to a

higher extent during these two years.

12.0 Profit margin and DuPont ROA

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Figure: 9 Profits -Margin and ROA

Figure: 10 DuPont ROA

As has been discussed earlier, the previous metric (profit margin) clearly has an

effect on DuPont analysis.

Profit margin is a key determinant in understanding the position of the company in

comparing companies in similar industries such as BMI, Ryanair and BA. As evident

from the graph there has been sharp decline in the profit margin between 2007 and

2009. The biggest challenge in this regard was faced in the year 2009 where the

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profit margin was at 1.02%. It was triggered by weak consumer confidence,

combined with fuel and currency volatility which resulted in an uncertain business

climate. However, if we see a year later there was a sharp rise in profit margin from

1.02% to 5.23%. This increase from £144.6 million to £188.3 million was primarily

driven by a unit fuel cost reduction equivalent to £122.7 million. The expansion

continued in 2010 across Europe and the company focused on its vision to ‘Turn

Europe Orange’ by adding new airports by the end of 2010. To achieve this target

EasyJet grew its seat by 6.0% improving the load factor of passengers.

The increase in profit margin was also due a considerable increase in the ROA

(Return on Assets) in 2010. As shown in the graph, the ROA was the best in 2007 at

5.83% but it kept on falling till 2009 since there could not be a proper utilization of

airplanes due to various environmental factors, oil prices, decline in consumer

demand backed by recession. But the scenario changed in 2010, as demand for low

cost air-travel resumed, EasyJet actively managed schedule with continuous flights

and used the aircrafts (Assets) onto leisure route for effective utilization of

resources.

13.0 DuPont ROE

Figure: 11 DuPont ROE

The graph above predicts that the return on equity was at the highest in 2007

because of the airlines network development and optimization, ancillary revenue

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growth and tough cost control. This resulted in a high return to the shareholders

even though there were significant challenges due to high fuel prices and the

unexpected doubling of Air Passenger Duty (“APD”) in the UK, but the company’s

business model based on low cost with care and convenience continued to prove

successful in continental Europe. Following this there was a gradual decline in ROE

for three consecutive years till 2009.In 2009 EasyJet’s strategy was to focus on

growth with margin improvement through yield, ancillaries and cost; however the

growth actually took place in 2010. This growth strategy strengthened the

fundamentals of the business, with improvements in network quality, lower cost

deals with key suppliers and enhancements to EasyJet.com giving EasyJet a great

platform for profitable growth. To ensure a 15% return on equity the Board agreed a

fleet plan which will deliver around a 7.5% growth per annum in seats flown over

the next five years. This fleet plan will enable EasyJet to grow its share of the

European short-haul market from around 7% to 10%. Another reason for low ROE

was an increase in unit fuel cost equivalent to £86.1 million besides the lowering of

interest income by £30.5 million. It was also further reduced because of increased

sector length, planned lower aircraft utilization during the winter and a £30.5 million

reduction in interest income. However, in 2010 the scenario changed and the ROE

shot up benefitting the shareholders by 13.6%, with underlying earnings per share

increasing 50.1% to 34.8 pence. The ROE increased in 2010, with a focus on

improving margins to achieve a profit per seat of £5. In order to ensure business

efficiency in 2010, 28 underperforming routes was closed in 2009 and 115 new

routes were launched. EasyJet has continued to manage the performance of its

network by careful allocation of aircraft to various routes and optimization of its

flying schedule.The Company continued to develop Europe’s No.1 air transport

network by increasing presence at primary airports and continued to enhance the

route offering, timing and frequency of the schedule. This investment in the network

resulted in increased revenue yields and profitability despite the backdrop of a

recessionary economic environment across Europe. The underlying profit before tax

increased by £144.6 million to £188.3 million and was primarily driven by a unit fuel

cost reduction equivalent to £122.7 million. In order to ensure a good return on

equity EasyJet is now planning an introduction of a dividend policy by 2012 and for

that EasyJet needs to achieve an average post tax ROCE of 12% in 2011.

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14.0 Z-Score

Figure: 12 Z-Score

The company has been able to achieve a significantly high Z score of 40.9 from

previous year’s score of 31.4 which means that the company has been performing

considerably well for the past two years and is far away from becoming financially

weak i.e. getting bankrupt.

15.0 Proforma Income Statement and Sources of Funds

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Pro Forma

Latest 2011

Easyjet's Income Statement

Sales 2973.1 3318.06

Cost of sales 2611.8 2915

EBIT 188.3 207

Interest 26.7 30

Tax 32.7 53

Net Income 121 124

Pro Forma

Statement of Sourses & Uses of Funds 2011

Net Income 121

Depreciation 72.5

Issues of Long-term Debt -6

Issues of equity 70Total Sources 258

Investment in net Working Capital 30 52

Investment in Fixed Assets 297 289

Dividends 0 0

Total Uses 327 341

External Capital required 217

Figure: 13 Performa Income statement and Statement of Sources and Uses of funds.

Based on the data from 2010, a Performa Balance Sheet was prepared taking into

consideration a growth rate of 10% in sales revenue and a projected long term debt

of 1273 M. The projected figures are mentioned in the Performa to get an

understanding of the company’s position. The projected external capital required is

around 217 M which means that the company has to borrow additional resources to

fund the business for operational activities. The company is expected to grow at

4.12% with higher cash generations with new aircrafts acquisition and with addition

of newer routes due to easy access of financing of aircrafts at attractive rates. The

company is planning to fund growth and a regular formulaic return

to shareholders to payout annual dividend based on a dividend cover of five times.

Apart from this, there is a focus on On Time performance (OTP) which will result in

reduced cancellations. Emphasis is also being put on having resilience into our

crew planning. These additional costs will be offset by reduced disruption and wet

leasing costs.

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With the amount of cash flow EasyJet is generating, the company would be able to

fund its business functions with an internal growth rate of 4.12%.

The sustainable growth rate is around 8.6% which means that the company can

fund the business operations up to the proposed limit. This is possible with

improvements in network quality, lower cost deals with key suppliers and

enhancements to EasyJet.com, giving EasyJet a great platform for profitable growth

which the company is already focusing on. EasyJet is planning to achieve the cash

flow based on its strategic plans, fuel prices, exchange rates and long-term

economic growth rates.

16.0 Weighted Average cost of capital (WACC)

The WACC is the minimum return that a company must earn on an existing asset

base to satisfy its creditors, owners, and other providers of capital. EasyJet’s assets

are financed by 52% debt and 48% equity. WACC is the average of the cost of

equity (18.65%) and cost of debt (31.5%), each of which is weighted by its

respective use. EasyJet has a WACC of 21.05%, indicating that it has to earn a

return of 21.05% to pay the investors and debt holders. The WACC is dependent on

cost of equity and after tax cost of debt.

The estimated cost of equity for EasyJet using the CAPM model is 18.65%. Cost of

Equity is the return that stockholders require for a company and it represents

the compensation that the market demands in exchange for owning the asset and

bearing the risk of ownership. In case of EasyJet the average return on equity for

the past 5 years is 5.95%.

The difference is clearly around 12.7% (18.65-5.95) which indicates a shortage. So,

in order to fill the gap the company has to increase the profit margin further by a

higher percentage or reduce the debt. The company should also focus on increasing

the equity of the company so that the investors get a higher amount of return. For

this, we should consider the BETA value of the firm which represents the risk factor.

BETA is an indicator of the volatility or systematic risk factor that a company is

exposed to as against the market as a whole. This value helps in estimating the cost

of equity and the evaluation of a stock’s reasonable price. In the airlines industry,

the capital assets and the airlines operation is sensitive to systematic risks. This

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value gives a clear indication of the firms share price as against the market as a

whole. The Beta value for EasyJet is 1.17 which means the company would offer the

possibility of a higher rate of return, but would also pose a higher risk for the return.

Besides the Beta value, cost of debt also influences the WACC. This cost is aligned

to the charge that is incurred by a company for acquiring the current debt. EasyJet’s

cost of debt is around 31.5% which means that EasyJet has to pay 31.5% on various

borrowings undertaken by EasyJet to ensure a smooth function of the business. The

cost of debt forms a part of the capital structure of the company. If the cost of debt

is high it gives an impression to the investors that the firm is very risky.

Note: The BETA VALUE for the past five could not be found in the company’s

annual report or any finance websites so could not do a comparative analysis of the

same.

17.0 Net Asset Value Model

The total value of a company's assets less the total value of its liabilities is its net

asset value (NAV). Using the NAV model, the market value of EasyJet is estimated

as 1501M, compared to the current market capitalization of 1424.95 (Discount of -

5.07%). NAV is normally useful for valuation of shares where the value of company

comes from the assets it holds rather than profit that is generated by the business.

But in case of the service industry, the main profit comes in the form of the sales it

makes by selling tickets. The market has valued the airline above its book value,

based not only on the increased market value of the fleet and other assets, but also

because of the expectations of higher earnings and market growth.

Price to Earnings ratio is valuation ratio of a company's current share price

compared to its earnings per share. The EasyJet’s P/E ratio is 11.48, which is

moderately high value indicating that the company is highly rated by the stock

market. It means that investors are currently paying around 11.48 years worth of

earnings to own a share in EasyJet.

18.0 Rappaport Shareholder Value Model

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Rappaport Value Model calculates the value of a company by looking at the returns

it gives to its shareholders. Future cash flows are affected by growth, returns and

risk, and these aspects can be explained by seven key value drivers that must be

managed in order to maximise shareholder value: sales growth rate; operating

profit margin; income tax rate; working capital investment; fixed capital investment;

cost of capital and value growth duration. Using the Rappaport value model, the

market value of EasyJet is estimated and there is no discount estimated indicating

that the market value of the company overvalued taking future growth and

expansion into consideration.

19.0 Dividends

Since its incorporation as the holding company for EasyJet in 1996, EasyJet Plc has

not declared or paid dividends on its Ordinary Shares. Although the company is

profitable it chose not to pay dividend given the stage of the life cycle and the

consequent growth it has to fund. Investors have been rewarded by the high stock

price appreciation over the last years. In addition, the management of EasyJet

stated it does not intend to pay out dividends in the foreseeable future as it intends

to fund a large scale capacity expansion program and purchase more of new Boeing

Aircrafts. However the Board intends to commence the payment of an annual

dividend based on a dividend cover of five times. The first dividend will be payable

in 2012 in respect of the year ending 30 September 2011.

Note: Information on marginal investor, percentage of shares held by employees is

not available in the annual report. Neither can we get information on the

percentage of stock that is held by employees. I also could not get information on

insiders buying or selling stock in the country in recent years. As per the details in

the websites and annual reports, no conflict could be ascertained in the company.

The company does not pay any dividends at this time. But will pay in future i.e.

2012.

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20.0 Future Financing Needs

At EasyJet, financial hedge is used to estimate a highly probable forecast

transaction wherein the related gains and losses remain in other comprehensive

income until the transaction takes place. When a hedged future transaction is no

longer expected to occur, any related gains and losses previously recognized in

other comprehensive income are immediately documented in the income

statement. Based on the cash flow forecasts and projections, the EasyJet’s Board is

satisfied that EasyJet will be able to operate within the level of its available facilities

and will have available cash for the foreseeable future. For this reason, EasyJet

takes precaution in preparing its accounts and the cash flow projections beyond the

forecast period that have been extrapolated using growth rate scenarios ranging

from zero up to an estimated average of long term economic growth rates for the

principal countries in which EasyJet operates.

21.0 Mergers and Acquisitions

EasyJet have had two acquisitions in the recent past. In 2003, EasyJet acquired GO

and GB Airways in 2007. These investments were much in the line of acquisition.

This was a vertical integration. The recession in 2008 had a negative effect on the

airlines industry and the extraordinary fuel price spike that depressed profits in

FY09 was not foreseen; nor was 2010’s volcanic ash affair; and it would surely be

overly Panglossian to assume that nothing comparable will go wrong in the years

ahead.

Note: The details about the various undertaken could not be found on Annual

report and other financial websites.

22.0 Conclusion:

EasyJet’s simple low fare business strategy model offers major economies of scale

with high levels of revenue and increased returns on share prices which no other

low cost airlines has been able to implement. In the airline sector where profit is a

far cry for most airlines EasyJet has emerged as a leader in offering low fares with

minimum profit but high revenue which has proved to be successful and this

company has emerged as Europe’s largest and most successful airline company

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with a promise high return on shares. Over the coming years, it is expected that

Easyjet will deliver a high level of cash flow and EPS, with growth driven by rising

demand for low cost tickets, declining unit costs, optimization of the route network

and increase in the passenger load factor

23.0 References:

1. EASYJET ANNUAL REPORT, 2010.Available From

http://2010annualreport.easyjet.com/files/pdf/Full_Report_easyJet_AR10.pdf [Accessed 19

April 2011]

2. EASYJET ANNUAL REPORT, 2009.Available From

http://2009annualreport.easyjet.com/files/pdf/easyJet_AR09.pdf [Accessed 19 April

2011]

3. EASYJET ANNUAL REPORT, 2008.Available From

http://2008annualreport.easyjet.com/?id=23538 [Accessed 20 April 2011]

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4. EASYJET ANNUAL REPORT, 2007. Available From

http://www.easyjet.com/common/img/annual_report_accounts_2007.pdf [Accessed 15

April 2011]

5. EASYJET ANNUAL REPORT, 2006. Available From

http://www.easyjet.com/common/img/investor_pres_annual_report_2006.pdf [Accessed

12 April 2011]

6. EASYJET ANNUAL REPORT, 2005. Available From

http://www.easyjet.com/common/img/annual_report_2005j.pdf [Accessed 10 April

2011]

24.0 BIBLIOGRAPHY:

1. MORRELL, S.P, 2007, Airline Finance, Ashgate; 3Rev Ed edition

2. BREALEY, A.R, MYERS, C.S., 2010, Principles of Corporate Finance - Global

Edition, 10th edition, McGraw-Hill Higher Education.

3. DAMODARAN, A, 2003, Corporate Finance: Theory and Practice, John Wiley & Sons; 2nd Edition edition

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