EasyJet head of legal and compliance: Plane speaking
1 April 2013 | By Joanne Harris
With a remit spanning Italian competition battles to seat-allocation issues, EasyJet head of legal Andrew Winterton has helped the company become a soaraway success
The past six years have been a period of enormous change for EasyJet. In March 2007, when head of legal and compliance Andrew Winterton took up his post, the airline was flying 34.5 million people around Europe annually. In 2012 55 million passengers flew with EasyJet and now the company is expecting to join the FTSE 100.
For Winterton, who leads the company’s day-to-day legal work, it has been a busy time, in which EasyJet has been consolidating and improving its processes and governance to keep up with its growing prominence in the competitive world of aviation.
The legal team has been key to many of the company’s successes in the past few years, helping it secure new routes across Europe, new destinations from a burgeoning London Southend Airport and most recently winning an Italian competition case that removes Alitalia’s monopoly on the busy Milan Linate to Rome Fiumicino route.
Winterton oversees most of this from EasyJet’s giant orange hangar at Luton Airport - although he meets The Lawyer on a day of zipping around London on a scooter sorting out the last details of the airline’s imminent launch of flights to Moscow.
The launch in Russia has been challenging, Winterton admits, as unlike most of EasyJet’s other routes, flying to Moscow takes the company out of the jurisdiction of European law and into a country where more stringent risk assessments are needed. The Moscow office of Herbert Smith Freehills(HSF), one of EasyJet’s panel advisers, has been advising on the process.
One of Winterton’s first jobs on arrival at EasyJet in 2007 was to help create the company’s first legal panel. As he worked alongside another recent arrival, general counsel Giles Pemberton, 10 firms were appointed. That was a significant reduction from the number the company used previously on a more ad hoc basis. “It was still too many, but we wanted to road test them,” Winterton says.
The idea was to review the panel after three years, but things slipped. EasyJet ended up putting a new panel in place early last year. All 10 panel firms were invited to pitch, along with another three non-panel firms. Making the final decision was tough, says Winterton, with some “very close calls” between firms.
Winterton is also in the process of finalising “mini-panels” of two or three firms in key European jurisdictions where EasyJet has a base or owns a subsidiary. In Italy, Dandria Studio Legale acted on the recent Milan-Rome dispute. Other European firms EasyJet turns to include French giant Fidal, which Winterton likes for its extensive network of offices across the country.
Commercial terms were an important factor in selecting panel firms.
“I prefer to have a capped fee, if not a fixed fee, for work, but I will look at hourly rates because you need to have a constant to benchmark against,” says Winterton. “If I don’t think I’ve got value I’ll push back. We pushed hard on headline rates when we started the panel process.”
The relationship with panel firms goes deeper, however. HSF has a trainee on secondment with EasyJet, rotating every six months, and Winterton has negotiated a deal whereby 1 per cent of fees paid to the firm go to fund advocacy work at a branch of the Children’s Society. Although EasyJet has a corporate charity programme, Winterton says the legal team wanted “to do something that had a bit more of a direct effect - we’re looking to see how we can grow that”.
Despite having a solid relationship with its panel firms, EasyJet does try to do much of its legal work in-house. The “lean” team is headed by Pemberton as general counsel, and the bulk of his work is board and company secretarial. Pemberton has two lawyers assisting him.
Winterton’s responsibility covers legal and compliance, including strategic and regulatory matters, and litigation. He has a team of two senior and two more junior solicitors, plus the HSF trainee, covering all areas of legal work except employment. Team members have a liaison responsibility with different departments in the company, but while each has a particular area of specialism - such as data protection - everyone helps on all aspects of work.
Winterton believes strongly in being able to provide generalist advice. “I enjoy law because it involves doing something different every day,” he says.
The variety of work in the past year or so proves his point, such as the Italian competition case. Much of the airline’s recent expansion has been down to being able to break into new markets and expand its network of routes.
“You have these state carriers who haven’t had to deal with competition,” Winterton says. “We use regulation where necessary to break into a market and create competition.”
He has also been providing legal and compliance advice on a new fleet and working on the popular introduction of assigned seating last year, as well as strengthening EasyJet’s compliance programme.
“We recognise that, while there’s no change to the company, when you go into the FTSE 100 more is expected,” Winterton adds.
So further expansion and continued innovation are on the cards for EasyJet, with the legal team at the heart of the process.
Andrew Winterton, EasyJet
Position: Head of legal and compliance
Reporting to: General counsel and company secretary Giles Pemberton
Total employees: 8,000
Company revenue: £3.9bn
Total legal capacity: Nine
Main external law firms:
ASB Law, DLA Piper, Gates & Partners, Herbert Smith Freehills, Norton Rose
Total annual legal spend: £3m
Andrew Levy, legal director, Stagecoach Group
The past nine months has been a pivotal period for the UK rail network. A major legal issue for Stagecoach Group was the challenge by its joint venture Virgin Rail Group (VRG) over the Department for Transport’s (DfT) handling and award of the West Coast rail franchise.
The case resulted in the original franchise award being overturned and VRG being granted a two-year extension. It also shone a light on how franchise competitions were handled, resulting in two reviews and the entire franchising system being put on hold.
The DfT has taken the first steps to getting the system back on track with the announcement in March of a detailed timetable for all rail franchises over the next eight years.
Despite the difficulties of the past year, the core franchising model works for passengers, government and investors. We will be working closely with the DfT and its newly established Franchise Advisory Panel to help deliver an improved franchising system that builds on the benefits the private sector has delivered for taxpayers and rail passengers.
At our biggest rail business, South West Trains, we established a groundbreaking alliance with infrastructure operator Network Rail last year. Agreeing the alliance’s structure required a significant amount of detailed planning to ensure legal and regulatory compliance. The alliance’s single management team is now focused on how both sides of the industry can work more effectively and efficiently together to deliver a better railway for passengers. This approach is a first for the UK rail industry and Stagecoach sees it as a potential model for other rail franchises.
Buses remain the biggest part of our group’s business and Stagecoach is the UK’s biggest bus operator. A two-year Competition Commission investigation into the local bus market concluded in 2011, having taken up a significant amount of management time and legal analysis. The inquiry largely gave the industry a clean bill of health. Since then, Stagecoach has continued to grow its business organically and over the past few months has completed a number of small targeted acquisitions.
Stagecoach’s biggest deal has been in North America, the fastest-growing part of the group’s transport portfolio. In July 2012, Stagecoach completed a large acquisition from Coach America. This significantly expanded the group’s footprint in North America and provides opportunities to expand the services of its budget inter-city bus brand megabus.com.