On 16 May 2023, Jet2 plc announced an update on its UK ownership and Operating Rights (see www.jet2plc.com/en/company-announcements). This webpage provides further details on the Company's UK share ownership and its Operating Rights.
What are Operating Rights?
Jet2's rights to fly to its chosen destinations ("Operating Rights") have been granted by those destination countries in line with rules relating to airline ownership and control set out in relevant bilateral arrangements with the UK. The rules which are applicable to Jet2, therefore, are not just set by the UK and EU authorities, but also by the authorities in non-EU destinations to which Jet2 flies and, looking ahead, to which it may wish to fly in the future. Where these rules exist in a relevant bilateral (which is commonplace), they require that UK airlines flying to the destination country be majority owned and controlled by UK nationals.
What is the Permitted Maximum?
The Company's Articles of Association (the "Articles") provide the Board with certain powers to take action to ensure that the number of shares in the Company held by non-UK nationals ("Non-UK Shares") does not reach a level which could jeopardise Jet2's current and future Operating Rights. In particular, the Board may set a Permitted Maximum, being the maximum percentage of the Company's issued share capital that may be owned by non-UK nationals. The Board have set the Permitted Maximum at 45%.
What will happen if the Permitted Maximum is exceeded?
In common with other industry participants, under its Articles, the Board has discretion to take steps to protect the Company's Operating Rights, given these are so material to its current and future operations. These steps include serving notice to holders of any Non-UK Shares ("Affected Share Notices") above the Permitted Maximum which require the sale of certain Non-UK Shares within 21 days. It is the Board's current expectation that, in such circumstances, it will serve Affected Share Notices on those Non-UK Shares which have caused the Permitted Maximum to be exceeded requiring their sale to UK nationals. In deciding which Non-UK Shares are to be subject to Affected Share Notices, the Board would have regard primarily to the chronological order in which such shares have been acquired (the so-called 'last in first out' principle).
How will the 'last in first out' principle work in practice?
Only non-UK Shares which have caused the Permitted Maximum to be breached will be subject to an Affected Share Notice. The directors would look at the chronological order in which non-UK Shares have been acquired, and only require Affected Share Notices to be served on such shares which have been acquired most recently, and the requirement would be limited to that number which is required to ensure that there is no risk to Jet2’s Operating Rights.
Will further announcements be made if the Permitted Maximum is exceeded?
A further announcement will be made should the new Permitted Maximum be exceeded in future. The number of Non-UK Shares as a percentage of the Company's issued share capital will be updated from time to time on this website.
Current number of Non-UK Shares
The Board has been advised that, as at 31 August 2023, the current number of Non-UK Shares, as a percentage of the Company’s issued share capital, was approximately 38.7%.
For the latest announcements relating to the Company's UK ownership and Operating Rights, please check: www.jet2plc.com/en/company-announcements
The contents of this webpage are provided for general guidance purposes only and do not constitute legal advice.