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easyJet

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easyJet
File:EasyJet logo.PNG
IATA ICAO Call sign
U2 EZY Easy
Founded1995
HubsLondon Gatwick Airport
Geneva Cointrin International Airport
Edinburgh Airport
Glasgow International Airport
London Stansted Airport
Berlin-Schönefeld International Airport
Liverpool John Lennon Airport
London Luton Airport
Newcastle Airport
Belfast International Airport
Dortmund Airport
Nottingham East Midlands Airport
Basel Airport
Orly Airport
Malpensa Airport
Bristol International Airport
Barajas International Airport¹
Fleet size118
Plus 66 on order
Destinations72
Parent companyeasyJet Airline Company Limited
HeadquartersLuton, England, United Kingdom
Key peopleAndrew Harrison (CEO)
Mike Szucs (COO)
Jeff Carr (CFO)
John Thorp (IT Director)
Saad Hammad (Commercial Director)
Mike Campbell (People Director)
Websitehttp://www.easyjet.com

easyJet is a low cost airline officially known as easyJet Airline Company Limited, based at London Luton Airport. The airline operates frequent scheduled services for leisure and business passengers and serves more than 200 routes between more than 65 European airports. It was founded by easyGroup entrepreneur Greek Cypriot Stelios Haji-Ioannou, but it is now a plc listed on the London Stock Exchange and members of the Haji-Ioannou family own approximately 49%. It is a constituent of the FTSE 250 Index.

The company holds a United Kingdom Civil Aviation Authority Type A Operating Licence, it is permitted to carry passengers, cargo and mail on aircraft with 20 or more seats.[1]

Relationship between easyJet and the "easy" brand

As far as the company's internal commercial arrangements are concerned, it is of particular interest to note that easyJet does not own its brand, unlike most other airlines. Sir Stelios Haji-Ioannou, the founder and largest individual shareholder of easyJet Airline Co. Ltd. has sole ownership of the "easy" brand and licenses it to his airline (as well as to all other easyGroup businesses) for a specified payment. This kind of arrangement is of vital importance should easyJet ever become the subject of a hostile takeover bid. Any bidder[s] will not automatically acquire ownership of the "easy" brand if their bid for the airline is successful. Without securing access to that brand, the airline will be worth a lot less to any new owner[s]. The afore-said arrangement is similar to the terms governing the use of the Jet Airways brand by that airline.

Strategy

Borrowing their business model from American air carrier Southwest, easyJet and its Republic of Ireland-based rival Ryanair are by far the largest low cost airlines in Europe, and the rivalry between them is intense and sometimes vituperative (especially on Ryanair's side from its high profile chief executive Michael O'Leary). The two companies have slightly different strategies. easyJet flies mainly to leading airports while Ryanair uses far more secondary airports to reduce costs. easyJet places more focus on attracting business travellers as well as leisure travellers, although all its aircraft have single-class cabins.

Comparisons with Ryanair

Ryanair makes much of the fact that easyJet's average fares are higher and its average punctuality is consistently lower. As of 2006, Ryanair flies more passengers, but easyJet has a higher turnover, leading both of them to claim to be "Europe's number one low cost airline". Ryanair has come in for criticism for using aggressive advertising techniques to inform consumers of their low fares. The Irish airline claims to be 50% cheaper than easyJet, despite their fees and taxes in some cases being up to three times more expensive than those of easyJet's.[citation needed] Ryanair often flies to secondary airports which are often further from the customer's intended destination; easyJet typically serves primary airports. The higher degree of congestion at major airports, and Ryanair's apparent practice of building additional "leeway" into the scheduled duration of flights, means that easyJet's punctuality is lower than Ryanair's.

On the other hand, easyJet has recently come under criticism in Germany for not observing EU-law 261/2004. In the case of annulment, passengers are granted the right of being reimbursed within one week. EasyJet does not return the money paid for a ticket unless massive pressure is exerted; e.g., by the media. So passengers regularly have to wait for months for reimbursement of their expenses. [2]

History

The airline was established on 18 October 1995 and started operations on 10 November 1995. It was launched by Stelios Haji-Ioannou with two leased Boeing 737-200 aircraft wet leased from GB Airways and operating two routes: London Luton to Glasgow and Edinburgh. Its early marketing strategy was based on 'making flying as affordable as a pair of jeans' and urged travellers to 'cut out the travel agent'. This caused much outrage among travel agents. In March 1998 it purchased a 40% stake in TEA Switzerland, renamed EasyJet Switzerland. easyJet was floated on the London stock exchange in October 2000. Operations were boosted in 2002 with the acquisition of rival airline, London Stansted based Go Fly. In December 2003 easyJet announced it would open a new hub in Berlin, at Schönefeld Airport, from which it started flying on 11 routes from May 2004. easyJet's main shareholder is Stelios Haji-Ioannou whose family owns 17%. It also holds a 49% stake in easyJet Switzerland.

In October 2004 the FL GROUP, the owner of airlines Icelandair and Sterling, purchased an 8.4% stake in easyJet. Over the course of 2005, FL increased its share in the company periodically to 16.9%, fuelling speculation that it would mount a takeover bid for the UK carrier. However, in April 2006 the threat of takeover receded as FL sold its stake for €325m, securing a profit of €140m on its investment.

In November 2005 chief executive Ray Webster stood down after 10 years at the helm. He was replaced by ex RAC/Lexx Group chief, Andy Harrison.

It has been prevented from launching its Milan Malpensa-Olbia route in April 2006 by the Italian aviation authorities. The route has been assigned to Meridiana as a public service obligation route. The Italian authorities have granted exclusivity in return for fixed low fares for Sardinian residents on routes from Milan and Rome to the Sardinian airports of Alghero, Cagliari and Olbia.

easyJet is claimed to be a more business-oriented airline than Ryanair, since it flies to major airports (as opposed to secondary airports) and has removed limits on hand luggage weight, provided the passenger is physically capable of placing luggage in the overhead lockers unaided.

easyJet Airbus A319-100 departs Bristol International Airport, England
easyJet Airbus A319 waiting for take-off clearance at Gatwick Airport, England
easyJet Boeing 737 at Amsterdam Schiphol Airport
easyJet Boeing 737-700 lands at Bristol International Airport, England
easyJet Boeing 737-700 takes off from Bristol International Airport, England

Hubs

easyJet's main base is London Luton (LTN), although its largest is now at London Gatwick (LGW). It also has hubs at:

Destinations

A detailed list of cities served can be found in easyJet destinations.

Services

It will inaugurate nonstop service London Gatwick-Glasgow on October 2, 2006. It will operate 3 flights a day. It will also increase the frequency from London-Gatwick to the following destinations from the winter season as follows to :

  • Bristol-Hamburg ends October 29, 2006.
  • Geneva-Hamburg starts December 1, 2006 operated by easyJet Switzerland.
  • Basle/Mulhouse-Munich: 2x daily A319-100 service starting on October 30
  • Bristol-Paris CDG: daily A319-100 service starting on October 30
  • Geneva-Prague: daily A319-100 service starting on October 29 operated by easyJet Switzerland
  • Milan Malpensa-Amsterdam: daily A319-100 service starting on October 31
  • Milan Malpensa-Prague: daily A319-100 service starting on December 15
  • Nottingham-Ibiza: weekly seasonal A319-100 service between July 15 and September 9

It will suspend various routes by the end of this summer timetable period:

  • Basle/Mulhouse-Palma de Mallorca (October 29)
  • Belfast Intl-Inverness (October 29)
  • Belfast Intl-Nice (October 28)
  • Belfast Intl-Palma de Mallorca (October 29)
  • Berlin Schönefeld-Krakow (October 29)
  • Berlin Schönefeld-Valencia (November 5)
  • Bristol-Budapest (October 29)
  • Bristol-La Rochelle (October 29)
  • Bristol-Valencia (October 30)
  • Dortmund-Paris CDG (November 5)
  • Geneva-Palma de Mallorca (October 29)
  • London Gatwick-Cork (October 1)
  • London Gatwick-Knock (October 1)
  • London Gatwick-Shannon (October 1)
  • London Luton-Bratislava (October 1)
  • London Luton-Rimini (October 28)
  • Newcastle-Berlin Schönefeld (October 30)
  • Newcastle-Budapest (October 30)

Fleet

The easyJet fleet consists of the following aircraft (at August 2006):

Aircraft # Seats Notes
Airbus A319-100 84*
 156 (56 on order)
Boeing 737-300 5
Boeing 737-700 32 149

* Includes 11 aircraft placed with easyJet Switzerland.

In August 2006, the easyJet fleet average age was 2.4 years.

Age Details

easyJet initially operated exclusively Boeing 737 aircraft. In September 2003 it broke with its previous philosophy of operating just one aircraft type (a strategy popularized by Southwest) by ordering 120 Airbus A319s (and 120 options) with CFM56-5B engines [3]. These were first introduced to easyJet's Geneva base, UK bases followed in 2004. Easyjet converted 20 of its options into orders in December 2005[4].

When the last of the Airbus A319s has been delivered in 2007 easyJet still expects to be operating all its 32 Boeing 737-700s and to have completely retired its 737-300s.

easyjet will dispose of its first next-generation boeing 737-700s later this year (2006) as it begins to retire its older models from commercial service. the first two have been placed with brazilian low-cost carrier GOL and are scheduled for delivery in december. other 737-700s are expected to depart the fleet in early 2007. [5]

Booking

Initially booking was by telephone only, with all planes painted with the booking telephone number. There is no incentive for travel agents to sell easyJet bookings because there is no commission, a standard practice for the low cost carriers. When asked about the possibility of Internet sales, Stelios had replied that the Internet was "just for geeks". After a trial involving putting a different telephone reservations number on the corporate website, he changed his mind, and easyJet started to offer online booking from April 1998. Internet bookings were priced cheaper than booking over the phone, to reflect the reduced call centre costs and the planes were repainted with the web address. Within a year 15% of bookings were made using the web site, by April 2004 the figure had jumped to 98%. Now, flights can only be booked over the Internet except during the 2 weeks immediately before the flight when telephone booking is also available.

Passenger numbers

A pair of Easyjet Boeing 737 700 series at Glasgow International Airport, Scotland.

easyJet has published the following passenger numbers:

  • Year ended 30 September 2005: 29,557,640
  • Year ended 30 September 2004: 24,343,649
  • Year ended 30 September 2003: 20,332,973
  • Year ended 30 September 2002: 11,400,000
  • Year ended 30 September 2001: 7,100,000
  • Year ended 30 September 2000: 5,600,000
  • Year ended 30 September 1999: 3,100,001

These are "earned seat" numbers. Earned seats is a method of counting passenger numbers which includes all seats sold whether the passenger turns up or not, and also seats used for promotional purposes and staff business travel.

Controversy

easyJet's success arguably paved the way for the boom in cheap air travel in the late 1990s and early 2000s (though they were not the first budget carrier).

This has led easyJet being accused, amongst other budget carriers, of contributing to global warming through the high carbon emissions of aircraft. Low-cost carriers (and their trade association, ELFAA) argue that they tend to operate newer, more fuel-efficient aircraft than many full-service network airlines, and also that their point-to-point services use less fuel than connecting flights through a hub. (Most of the hub-and-spoke sytems run by traditional full-service network airlines, such as Air France-KLM, British Airways and Lufthansa as well as their US legacy carrier counterparts, generally rely on a range of mostly profitable long-haul flights being "fed" by a large number of often only marginally profitable or wholly loss-making short-haul connecting flights via their main hub airports. The reason the network carriers "feed" their long-haul services with short-haul connecting traffic is to shore up the profitability of the long-haul flights, most of which would not attract sufficient traffic on their own to be profitable.)


Against this, the budget carriers' aggressive price-based marketing has driven a rapid growth in their passenger volumes, so the negative environmental effects of aviation are growing rapidly[6].

Unlike arch-rival Ryanair, which used second-hand relatively highly-polluting Boeing 737-200 "Classic" aircraft in its early years, easyJet - apart from the initial pair of 737-200s leased from GB Airways - only ever operated new aircraft, either 737-300s, 737-700s or Airbus A319s. The newer aircraft produce lower emissions and are more environmentally friendly.

Calls for an aviation tax have been made - some industry observers expect the impact of this to be to cripple easyJet's and other "no frills" airlines' business model.[citation needed] It should be noted that in most countries, the aviation industry currently enjoys extensive financial incentives in the form of tax breaks and the lack of an aviation turbine fuel tax.

Other facts of interest

  • On 14 December 2004, easyJet and Hotelopia, a subsidiary of First Choice Holidays, launched a co-branded easyJetHotels accommodation booking service.
  • Due to higher density passenger seating and the enforced extra safety requirement, easyJet's Airbus A319 aircraft have two pairs of overwing exits instead of standard one-pair exits found on all other Airbus A319.
  • The UK television station ITV has run a series called "Airline" featuring easyJet and its staff at work at Luton airport (also aired in the US as A&E Network show Airline UK). A U.S. version of the show, begun in 2004, features Southwest Airlines, the company from which easyJet derives much of its business model.
  • In June 2006, the Easyjet website was awarded the Best Airline Website award TravelMole Web Awards. It beat rivals including British Airways, KLM and Vueling to win the award. Judges commented that although actual contact with the airline can be hard, the website was 'user-friendly and pleasing to the eye' [7].

Notes

¹ Madrid Barajas International Airport Base opens 16 February 2007

Wikimedia Commons has media related to EasyJet.
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