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EasyJet Opens Talks Over Post-Brexit HQ Move

EasyJet (Other OTC: EJTTF - news) has opened talks with EU member states' aviation regulators about relocating its headquarters from the UK, underlining how the decision to leave the European Union is impacting corporate Britain.

Sky News has learnt that easyJet's chief executive Carolyn McCall has signalled in private meetings this week that moving its legal HQ from the UK is almost inevitable in the wake of last week's referendum result.

Details of the move are expected to take months to be ironed out, but sources close to the company said it had already held preliminary talks with a handful of unidentified EU member states about issuing easyJet with an air operator's certificate (AOC) that would enable it to base its HQ there.

Some of those member states are said by City sources to be keen on airlines seeking relocation to move the bulk of their operational HQs, which in easyJet's case Ms McCall and her executives would be unwilling to do.

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One insider said moving the HQ could entail relocating just a handful of staff, depending on the regime operated by the individual country's aviation regulator.

It (Other OTC: ITGL - news) would involve up-ending easyJet's current corporate structure by making its existing UK AOC entity a subsidiary of its newly incorporated legal headquarters.

British Airways' parent, International Airlines Group, already operates using a similar structure, while Ryanair could adopt such a model in future.

A source said that easyJet had received advice that "the most workable structure would be to be an EU-registered entity with a UK subsidiary".

EasyJet employs roughly 1,000 people at its Luton base, in functions such as finance, IT and marketing - separate to the staff who work on its operations at the Bedfordshire airport.

While those staff would not be relocated, the prospect of easyJet moving its legal HQ reinforces the fact that leaving the EU will have an impact on the corporate structures of some of Britain's biggest companies .

Vodafone said last Friday that it was "too soon" to determine whether the referendum result would trigger the relocation of its headquarters.

Existing rules in the EU mean that there is a single aviation agreement across the bloc, but the UK's continued membership of that is uncertain.

Ms McCall told Channel 4 News (Other OTC: NWSAL - news) earlier this week that it "remains to be seen" whether the company's HQ would be shifted following Brexit.

In a statement to the London Stock Exchange (Other OTC: LDNXF - news) in the aftermath of the Brexit vote, the company said: "EasyJet has been preparing for this eventuality in the lead up to the referendum vote and has been working on a number of options that will allow it to continue flying in all of its markets."

Ms McCall added that she had "written to the UK Government and the European Commission to ask them to prioritise the UK remaining part of the single EU aviation market".

In private discussions including with her fellow members of the Prime Minister's Business Advisory Group, however, Ms McCall has gone significantly further.

One person who had been told of her stance said she had concluded that it was "likely" that easyJet's HQ would move to the EU.

The airline is now expected to review all 27 of the remaining member states before holding further discussions with a number of them about the possible terms of an AOC.

A decision is likely later this year.

EasyJet declined to comment on Friday.