UK Ownership and Operating Rights
On 19 November 2024, 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 49% (as announced on 19 November 2024).
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 (amongst other rights) serving notice to holders of any Non-UK Shares above the Permitted Maximum ("Affected Share Notices") notifying them that they are no longer entitled to attend, vote or to speak at any general meeting of the Company. 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 removing the right to attend, vote or speak at any general meeting of the Company, whilst reserving the other rights set out Article 44.6 of the Articles, including the right to require the sale of certain Non-UK Shares within 21 days.
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 Board 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 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 monthly on this website.
What is the current number of Non-UK Shares
The Board has been advised that, as at 31 October 2024, the current number of Non-UK Shares, as a percentage of the Company’s issued share capital, was approximately 39%.
Where can I read more about the rights which the Company has in connection with Non-UK Shares?
Please click here to view the Company’s Articles of Association (see Article 44).
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.
