EasyJet passes Go and sets up £10m bonus pool

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The top 40 executives at easyJet and Go are to receive bonus payments worth three times their salaries for successfully completing the integration of the two no-frills carriers.

Details of the incentive packages emerged yesterday as easyJet's £374m takeover of Go was completed after clearing all remaining financial and regulatory hurdles.

The bonus payments will be made in the form of free shares and will depend on the combined airline achieving certain "milestones" over the next two years.

The cost of the package to easyJet will be £10m. The average payment will be £250,000 although Ray Webster, easyJet's chief executive, stands to collect £750,000.

Mr Webster said that easyJet expected to award a £3.5bn order for 120 new jets to either Boeing or Airbus Industrie in "the next month or so". Easyjet will also take out non-deposit options on a further 120 aircraft.

He said that Boeing's 737 jet was the favourite to win the order over the Airbus A320 by dint of the fact that both easyJet and Go operated only Boeing aircraft. "It will require a stunning deal from Airbus to justify changing our fleet over," Mr Webster added.

The order will be one of the largest in the history of low-cost air travel following the order for 150 Boeing 737s placed by the Irish carrier Ryanair last year.

EasyJet is also very close to deciding where to locate the new headquarters of the combined airline and could make an announcement as early as next week. Stansted, the home of Go, is thought to be the favoured location. The alternatives are to expand easyJet's existing Luton headquarters or find new premises at the airport.

The combined airline will have a workforce of 2,800 but the 300 staff who currently work in the two separate headquarters will be directly affected. Mr Webster said the enlarged group would need 150 head office staff. Some employees could be redeployed but others would inevitably want to leave rather than relocate.

The aim is to start operating a common reservations system by December and then to begin flying under the single easyJet brand from next March.

EasyJet also plans to merge the two separate air operators' licences into one within 18 months and complete the integration of the airlines within 24 months.