Eyes on business
According to chief executive Ray Webster, EasyJet and its fellow European LCCs can look forward to stunning growth. In five to 10 years, he says, "all intra-European traffic will be [on] low-cost carriers".
However, EasyJet's expansion plans reflect only relatively modest expansion rates of 25% a year. Nor is the company treating the "scramble for Europe" as a priority, as it plans to increase frequencies on existing routes first, reflecting an increasing emphasis on serving the business low-cost market.
Any new routes, such as the 16 accessible from EasyJet's new base at Paris Orly, have to meet certain criteria. EasyJet will "focus on large routes - flying to primary airports or an equal alternative with large catchments", and will not open a route unless it can halve a competitor's price, says Webster. EasyJet will not move out of short-haul travel: the long-haul business is "very different, both technically and in customer needs", he adds.
With a fleet of 24 Boeing 737s and another 22 already on order, EasyJet is the second-largest low-cost carrier in Europe. Its next aircraft order, still unplaced, could be one of the largest single purchases ever.
Founded in 1995 by the Greek entrepreneur Stelios Haji-Ioannou with two leased Boeing 737-300s, EasyJet first faced merger overtures from British Airways. After discarding the take-over plan, BA set up its own low-cost subsidiary, Go. The move led to bad blood at EasyJet, many of whose staff believed Go was a spoiling operation subsidised by its parent company. The rivalry continued until Go's demerger last year.
EasyJet is still based in the large orange shed at Luton Airport where it started. Webster believes it is crucial to keep headquarters costs low as the airline expands. Wide use of information technologyto manage operations has been helpful, as has a less tangible asset: the "cult of Stelios", now maintained by a seven-person team.
Eventually, Webster believes, full-service carriers will be compelled to abandon short haul services altogether. At present, many mainstream carriers operate short-haul services at a loss to serve a feeder market. But Webster claims "the feeder market is largely a fabrication of the network carrierÉ [short sectors are] costly, low yield, low customer satisfaction. Full-service airlines may withdraw from the regional market and focus on more profitable long-haul routes, while the low-cost carriers deal with shorter sectors." Webster is not planning any formal alliances with mainstream carriers - he thinks they won't be necessary - but believes they will work together informally.
"Most of Europe is still wide open" for expansion, Webster says - and although deregulation in Europe is slower than in the USA, he expects a truly open European airline market within five years.
Source: Flight International
