Low-cost airline EasyJet’s (EZJ) preparations for dealing with any potential fallout from the Brexit negotiations coincide with news that chief executive officer (CEO) Carolyn McCall is leaving the company.

On 14 July EasyJet announced plans to establish a new holding company, EasyJet Europe, in Vienna. The company indicated it will shortly be issued an air operator certificate from Austro Control and an airline operating licence from the Austrian Ministry of Transport.

With this licence, EasyJet can operate flights across Europe and domestically within European countries once the UK has left the European Union. This should help protect the firm from the outcome of future UK-EU aviation talks.

Stockbroker Goodbody is positive about the move. ‘While this will add some complexity and additional cost to the business, it does represent a significant step in overcoming the risk of the UK’s exit from the EU says analyst Mark Simpson.

Hard act to follow

On Monday (17 Jul), it was announced McCall is leaving EasyJet after seven years at the helm to become the new chief executive at broadcaster ITV (ITV) in January 2018.

According to Panmure Gordon analyst Mark Irvine-Fortescue, McCall has performed well, measured on the operational, financial and shareholder performance.

While he says the ‘timing is not ideal’ he believes EasyJet will be able to attract a strong successor.

Whoever follows McCall will have to address issues relating to weak free cash flow conversion and operational concerns, says Irvine-Fortescue.

In May, EasyJet suffered a £212m half-year pre-tax loss as higher fuel costs, the weaker pound and a delayed Easter break took effect.

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