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easyJet
File:EasyJet logo.PNG
IATA ICAO Call sign
U2 EZY EASY
Founded1995
HubsLondon Luton Airport
London Gatwick Airport
Berlin-Schönefeld International Airport
Geneva Cointrin International Airport
Edinburgh Airport
Glasgow International Airport
London Stansted Airport
Liverpool John Lennon Airport
Newcastle Airport
Belfast International Airport
Dortmund Airport
East Midlands Airport
Basel Airport
Orly Airport
Milan Malpensa Airport
Bristol International Airport
Madrid Barajas International Airport
Paris Charles de Gaulle Airport
From Spring 2008:
Lyon Airport
Manchester Airport
Fleet size137
(120 on order)
Destinations104
Parent companyEasyJet plc
Headquarters Luton, United Kingdom
Key peopleAndrew Harrison (CEO)
Cor Vrieswijk (COO)
Jeff Carr (CFO)
Websitehttp://www.easyJet.com

EasyJet (LSE: EZJ), styled as easyJet, is a low cost airline officially known as EasyJet Airline Company Limited, based at London Luton Airport. It is one of the largest low-fare airlines in Europe, operating domestic and international scheduled services on 387 routes between 104 European and north African airports.[1][2][3]

The company holds a United Kingdom Civil Aviation Authority Type A Operating Licence permitting it to carry passengers, cargo and mail on aircraft with 20 or more seats.[4]

EasyJet is a public limited company listed on the London Stock Exchange. It has 4,859 employees (at September 2007). It is a constituent of the FTSE 250 Index. [1][5]

Similar to its largest rival, Ryanair, EasyJet has seen rapid expansion since its establishment in 1995, having grown through a combination of acquisitions and base openings fuelled by consumer demand for low-cost air travel. The airline now operates 137 aircraft from 17 bases across Europe.[6][7][8]

EasyJet is well known throughout the United Kingdom, mainly due to the Airline series broadcast on ITV which followed the airline's operations at its home base in London Luton and later at a number of other bases. EasyJet's charismatic founder, Stelios Haji-Ioannou, featured heavily in the series.[9]

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 wet leased Boeing 737-200 aircraft. The aircraft were operated initially by GB Airways, and subsequently by Air Foyle as EasyJet had not yet received its Air Operator Certificate. EasyJet initially operated two routes: London Luton to Glasgow and Edinburgh.[3][10]

Business and financials

EasyJet was floated on the London Stock Exchange in October 2000.[10]

In October 2004 the FL GROUP, 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.[11][12]

In November 2005 Ray Webster stood down after 10 years as EasyJet's chief executive officer. He was replaced by former RAC plc chief executive officer, Andrew Harrison.

easyJet Financial Performance
Year Ended Passengers Flown Turnover (£m) Profit/Loss Before Tax (£m) Net Profit/Loss (£m) Basic EPS (p)
30 September 2007[13] 37,230,079 1,797.2 201.9 152.3 36.62
30 September 2006[14] 32,953,287 1,619.7 129.2 94.1 23.18
30 September 2005[15] 29,557,640 1,314.4 67.9 42.6 10.68
30 September 2004[16] 24,343,649 1,091.0 62.2 41.1 10.34
30 September 2003[17] 20,332,973 931.8 51.5 32.4 8.24
30 September 2002[18] 11,400,000 551.8 71.6 49.0 14.61
30 September 2001[19] 7,100,000 356.9 40.1 37.9 15.2
30 September 2000[20] 5,600,000 263.7 22.1 22.1 11.9

Marketing

File:Easyjet 737-200.JPG
EasyJet Boeing 737-200 sporting the old phone-number livery at London Luton Airport.

EasyJet's early marketing strategy was based on 'making flying as affordable as a pair of jeans' and urged travellers to 'cut out the travel agent'. Its early advertising consisted of little more than the airline's telephone booking number painted in bright orange on the side of its aircraft.[3][10]

The Airline TV series created by LWT and filmed between 1999 and 2007 made EasyJet a household name in the United Kingdom. The series, while not always portraying EasyJet in a positive light, did much to promote the airline during this time.[9]

EasyJet has used a number of slogans since its establishment. Its current slogan is 'Come on, let's fly!', a reflection on the airline's cheeky, cheap and cheerful image. EasyJet has previously styled itself as 'the web's favourite airline', a play on the British Airways slogan 'the world's favourite airline'. This was chosen as EasyJet had sold a higher proportion of seats through its website, easyJet.com than any other airline.[citation needed]

Relationship with 'easy' brand

EasyJet does not own its brand, unlike most other airlines. Sir Stelios Haji-Ioannou, the founder and largest individual shareholder of EasyJet, has sole ownership of the 'easy' brand and licenses it to the airline (as well as to all other easyGroup businesses). For most 'easy' businesses, the business pays a specified fee to Stelios for the use of the name. However, given the strength of the EasyJet brand and the high amount of free advertising and publicity it lends to the other 'easy' businesses, it was agreed at the time of flotation that EasyJet could use the name on a perpetual license for £1.[21]

Expansion

EasyJet has expanded rapidly since its establishment in 1995, driven by base openings both in the United Kingdom and continental Europe, and by a number of acquisitions. Its expansion has also been fuelled by a rise in consumer demand for low cost travel.

In March 1998 EasyJet purchased a 40% stake in Swiss charter airline TEA Basle for a consideration of three million Swiss francs. The airline was renamed EasyJet Switzerland and commenced franchise services on 1 April 1999, having relocated its headquarters to Geneva Cointrin International Airport. This was EasyJet's first new base outside the United Kingdom.[10][3]

Go Fly Boeing 737

On 16 May 2002, EasyJet announced its intention to purchase rival airline, London Stansted based Go for £374 million. EasyJet inherited three new bases from Go, at Bristol International Airport, East Midlands and London Stansted. The acquisition of Go almost doubled the number of Boeing 737-300 aircraft in the EasyJet fleet.[6][22]

In 2001, EasyJet opened its base at London Gatwick Airport and between 2003 and 2007, EasyJet opened bases in Germany, France, Italy and Spain, establishing a sizeable presence in continental Europe. [10]

On 25 October 2007 EasyJet announced that it had agreed to purchase the entire share capital of GB Airways Ltd from the Bland Group.The deal is worth £103.5 million and will expand EasyJet operations at London Gatwick Airport. EasyJet also intends to retain the GB Airways base at Manchester Airport. GB Airways will continue to honour its British Airways franchise agreement until 29 March 2008. From 30 March 2008, GB Airways will operate its nine Airbus A320 and six Airbus A321 aircraft as a subfleet of EasyJet, and will operate its existing schedule under EasyJet branding for the summer 2008 period. Full integration is expected in late 2008. The deal will significantly expand EasyJet's operations from the United Kingdom to existing destinations in Spain, Portugal, Austria and the Canary Islands, and to new destinations in the north of Africa, France, the Greek islands and Gibraltar.[7][23][24][25][26]

Strategy

EasyJet, like Ryanair, borrows its business model from American air carrier Southwest. Both airlines have adapted this model for the European market through further cost-cutting measures such as not selling connecting flights or providing complimentary snacks on board. The key points of this business model are high aircraft utilisation, quick turnaround times, charging for extras (such as priority boarding, hold baggage and food) and keeping operating costs low.[27]

While the two airlines share a common business idea, EasyJet's strategy differs from Ryanair's in a number of areas. EasyJet flies mainly to primary airports in the cities that it serves, while Ryanair often chooses secondary airports to reduce costs. For example, EasyJet flies to Paris Charles de Gaulle Airport, the primary airport in Paris, while Ryanair flies to the smaller Paris Beauvais Tillé Airport, a 75 minute bus journey from Paris. EasyJet also focuses on attracting business passengers by offering convenient services such as the option to transfer on to an earlier flight for free.[27][28]

Destinations

Main article: EasyJet destinations
EasyJet Boeing 737-700 waiting for take off at Bristol International Airport, England

EasyJet serves 104 destinations in 27 countries throughout Europe and the north of Africa.[2] Its home base is at London Luton, however its largest base is at London Gatwick which offers 63 destinations.[2][10] EasyJet maintains other bases throughout Europe, at Belfast, Berlin-Schönefeld, Bristol, Dortmund, East Midlands, Edinburgh, EuroAirport Basel-Mulhouse-Freiburg, Geneva, Glasgow, Liverpool, London Stansted, Madrid Barajas, Milan Malpensa, Newcastle and Paris Orly.

On 4 October 2007, EasyJet announced its intention to open two new bases, at Paris Charles de Gaulle in February 2008 and Lyon in April 2008, in order to continue its growth in France.[29]

On 17 December 2007, EasyJet announced that it would be significantly expanding its operations in the north west of England, by opening a base at Manchester Airport. This base is to be inherited from GB Airways on 30 March 2008.[7][25]

EasyJet was prevented from launching its Milan Malpensa-Olbia route in April 2006 by the Italian aviation authorities.[30] The route had been assigned to Meridiana as a public service obligation route. The Italian authorities had 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. This was however overturned and EasyJet commenced flights from Milan Malpensa to Olbia on 21 October 2007, and also to the Sardinian capital Cagliari on 29 October2007.[31]

Fleet

An EasyJet Boeing 737-300 landing at Madrid Barajas International Airport

The EasyJet fleet consists of the following aircraft (at January 2008):[8][32]

EasyJet Fleet
Aircraft Total Passengers
Airbus A319-100 107*
(120 orders) 		156
Boeing 737-700 30 149

* Includes 12 aircraft placed with EasyJet Switzerland.

The average age of the EasyJet fleet, at September 2007, was 2.7 years.[33]

Fleet strategy and aircraft orders

EasyJet Airbus A319 takes off

EasyJet initially operated Boeing 737 aircraft exclusively. In October 2002 it broke with its previous philosophy of operating just one aircraft type (a strategy popularised by Southwest Airlines) by ordering 120 Airbus A319 aircraft (plus 120 options) with CFM56-5B engines.[34][10]

Airbus A319 Orders
Date Orders Options Notes
October 2002 120[34] 120
December 2005 140[35] 100 20 options converted
November 2006 192[36] 123 52 options converted
75 new options
June 2007 227[37] 88 35 options converted

EasyJet's Airbus A319 aircraft were first introduced to EasyJet's Geneva base in October 2003.[38]

Due to their high density passenger seating, EasyJet's Airbus A319 aircraft have two pairs of overwing exits, instead of the standard one pair configuration found on most Airbus A319 aircraft, to satisfy safety requirements.[39][32][40].

EasyJet has 88 outstanding options with Airbus which may be taken as any member of the Airbus A320 family.[citation needed]

EasyJet still operates the Boeing 737-700 from its bases at London Luton, Belfast and Newcastle, however from December 2006 the airline started to return the Boeing 737-700 aircraft to their lessors. EasyJet plan to have disposed of its entire Boeing 737 fleet by 2011.[citation needed]

Through the aqcuisition of GB Airways, EasyJet will inherit nine Airbus A320 and six Airbus A321 aircraft. These aircraft will be operated by former GB Airways crew at London Gatwick and Manchester for the summer 2008 period. This gives the airline some time to evaluate the feasibility of operating these larger gauge aircraft. Based on this evaluation, EasyJet may decide to dispose of these aircraft or to retain them and integrate them into the existing fleet. EasyJet may also decide to convert its Airbus options to the larger gauge aircraft.[7][23][25][26]

Previously operated

Services

Booking

Initially booking was by telephone only, with all EasyJet aircraft 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.[3][10]

In December 1997, Russell Sheffield of Tableau, one of EasyJet's Design and Adverting Agencies, suggested to Stelios that he should consider trialling a website for direct bookings. Stelios's reply was 'The Internet is for nerds, it will never make money for my business!'. However Tony Anderson, EasyJet's Marketing Director saw the potential and approved a website trial involving putting a different telephone reservations number on the website, to track success. Once Stelios saw the results he changed his mind, and EasyJet commissioned Tableau to partner with them develop an e-commerce website capable of offering real-time online booking from April 1998 — the first low cost carrier to do so in Europe.[10][41][42]

Internet bookings were priced cheaper than booking over the phone, to reflect the reduced call centre costs and the aircraft were repainted with the web address. Within a year over 50% 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.[10]

Cabin and Onboard Services

EasyJet Airbus A319 cabin

EasyJet's aircraft cabins are configured in a single class, high density layout.[43]

The airline's Boeing 737-700 aircraft carry 149 passengers plus three cabin crew, and its Airbus A319 aircraft carry 156 passengers plus four cabin crew. A typical Airbus A319 carries approximately 140 passengers in a single class configuration, but as EasyJet do not serve meals the airline opted for smaller galleys and had a lavatory installed in unused space at the rear of the aircraft. The airline's 29 inch seat pitch allowed for the installation of 156 seats. Due to this high density seating arrangement, EasyJet's Airbus A319 aircraft have two pairs of overwing exits, instead of the standard one pair configuration found on most Airbus A319 aircraft, to satisfy safety requirements.[32][40][39]

EasyJet does not provide complimentary meals or beverages on board its flights. Passengers may purchase items on board from the 'easyJetshop'. Products include sandwiches, toasted sandwiches, pizza slices, chocolate, snacks, hot drinks, soft drinks and alcoholic drinks. Onboard sales are an important part of the airline's ancillary revenue. EasyJet also sells gifts such as fragrances, cosmetics and EasyJet branded items onboard, as well as tickets for airport transfer services.[3]

EasyJet does not provide in-flight entertainment in order to keep aircraft weight and costs at a minimum. Passengers may travel with portable entertainment devices for use in-flight. EasyJet provides an in-flight magazine, published monthly, containing articles of interest to its customers and destination guides.[44]

EasyJetHotels and EasyJetHolidays

On 14 December 2004, EasyJet and Hotelopia, a subsidiary of First Choice Holidays, launched the co-branded EasyJetHotels accommodation booking service. EasyJetHotels offers accommodation products throughtout the EasyJet network. Customers booking flights through the EasyJet website are provided with quotes for a number of hotels at their destination. Alternatively, customers can book accommodation seperately at the EasyJetHotels website.[45][46]

On 28 June 2007, EasyJet announced it would expand its relationship with Hotelopia by launching EastJetHolidays, which offers Travel Trust Association protected package holidays made up of EasyJet flights and Hotelopia accommodation products.[47][48]

Controversy

Boarding an EasyJet Airbus A319

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 no frills carrier, nor the first large one in Europe).

This has led EasyJet being accused, amongst other no frills 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 systems 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 no frills carriers' aggressive price-based marketing has driven a rapid growth in their passenger volumes, so the negative environmental effects of aviation are growing rapidly.[49]

Apart from the initial pair of 737-200s leased from GB Airways - the airline has only ever operated new aircraft, either 737-300s, 737-700s or Airbus A319s. The newer aircraft are advertised to produce lower emissions and be more environmentally friendly.[50]

EasyJet has also come under criticism in Germany for not observing EU-law 261/2004. In the case of cancellation, passengers had the right to be reimbursed within one week. In 2006, EasyJet had experienced difficulties in refunding tickets in a timely fashion. Passengers occasionally had to wait longer for reimbursement of their expenses.[51][52]

EasyJet is a major supporter of the plans to replace the Air Passenger Duty (APD) tax in the UK with a new tax that varies depending on distance travelled and aircraft type.[53]

Wikimedia Commons has media related to easyJet.

Bibliography

  • Jones, Lois (2007). Easyjet: the Story of Britain's Biggest Low-Cost Airline. London: Aurum Press. ISBN 1845132475.

References

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