EasyJet Airline Company Limited (styled as easyJet) is a British airline headquartered at London Luton Airport. It carries more passengers than any other United Kingdom-based airline, operating domestic and international scheduled services on 500 routes between 118 European, North African, and West Asian airports. The parent company, EasyJet plc, is listed on the London Stock Exchange (LSE: EZJ) and is a constituent of the FTSE 250 Index. As at 30 September 2009, it employed 8,000 people, based throughout Europe but mainly in the UK.
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, along with franchise airline EasyJet Switzerland, now operates over 180 aircraft, mostly Airbus A319. It has 20 bases across Europe, the most important one being London-Gatwick. In 2009, EasyJet carried 45.2 million passengers and is the second-largest low-cost carrier in Europe, behind Ryanair.
EasyJet was featured in Airline series broadcast on ITV which followed the airline's operations at London Luton and later at other bases. EasyJet's founder, Sir Stelios Haji-Ioannou, was featured heavily in the series.
The airline was established in 1995. It was launched by Greek-Cypriot businessman Stelios Haji-Ioannou with two wet leased Boeing 737-200 aircraft, initially operating two routes: London Luton to Glasgow and Edinburgh. In April 1996, the first wholly-owned aircraft was delivered to Easyjet, enabling its first international route, to Amsterdam. Until October 1997, the aircraft were operated by GB Airways, and subsequently by Air Foyle as EasyJet had not yet received its Air Operator's Certificate.
Business and financials
EasyJet was floated on the London Stock Exchange on the 5th November 2000. In October 2004 the FL Group, owner of the 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 €325 million, securing a profit of €140m on its investment. In November 2005, Ray Webster stood down after 10 years as EasyJet's chief executive officer (CEO) and was replaced by former RAC plc CEO, Andrew Harrison.
|Year ended||Passengers flown||Load factor||Turnover (£m)||Profit/loss before tax (£m)||Net profit/loss (£m)||Basic EPS (p)|
|30 September 2010||48,754,366||87.0%||2,973.1||154.0||121.3||28.4|
|30 September 2009||45,164,279||85.5%||2,666.8||54.7||71.2||16.9|
|30 September 2008||43,659,478||84.1%||2,362.8||110.2||83.2||19.8|
|30 September 2007||37,230,079||83.7%||1,797.2||201.9||152.3||36.62|
|30 September 2006||32,953,287||84.8%||1,619.7||129.2||94.1||23.18|
|30 September 2005||29,557,640||85.2%||1,314.4||67.9||42.6||10.68|
|30 September 2004||24,343,649||84.5%||1,091.0||62.2||41.1||10.34|
|30 September 2003||20,332,973||84.1%||931.8||51.5||32.4||8.24|
|30 September 2002||11,350,350||84.8%||551.8||71.6||49.0||14.61|
|30 September 2001||7,115,147||83.03%||356.9||40.1||37.9||15.2|
|30 September 2000||5,600,000||263.7||22.1||22.1||11.9|
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.
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. 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 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".
Expansion and acquisitions
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 International Airport. This was EasyJet's first new base outside the United Kingdom. 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 Airport, East Midlands Airport and London Stansted Airport. The acquisition of Go almost doubled the number of Boeing 737-300 aircraft in the EasyJet fleet.
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. In 2007, EasyJet claimed to be operating more flights per day than any other European airline. On 25 October 2007 EasyJet announced that it had agreed to purchase the entire share capital of GB Airways from the Bland Group. The deal was worth £103.5 million and was used to expand EasyJet operations at London Gatwick Airport and also to establish a base at Manchester Airport.
EasyJet, like Ryanair, borrows its business model from United States carrier Southwest Airlines. 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. One main difference EasyJet and Ryanair have from Southwest is they both fly a young fleet of aircraft. Southwest have a fleet age of 14.1 years whereas easyjet's fleet age is just 3.6 years.
Initially, EasyJet's employment strategy was to maintain control with minimal union involvement. However in recent years, the airline has adopted a more committed approach with a strategy in place to accommodate unions.
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 further reduce costs. For example, EasyJet flies to Paris Charles de Gaulle Airport and Paris Orly, the primary airports in Paris, while Ryanair flies to the smaller 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 without charge.
In June 2007, EasyJet announced plans for construction of its own airliner, dubbed EcoJet. Featuring propfan engines, the EcoJet would feature an increase in fuel efficiency. It would be constructed with extensive use of carbon fibre composite material. The date for the first flight was given to be in 2015.
Since then, no news on the advances of the EcoJet project have been released. Therefore, it is unclear whether EasyJet still pursues its construction, or whether the original purpose of project was to put aircraft manufacturers Boeing and Airbus under pressure to construct an airliner that serves the need of EasyJet.
EasyJet is offering the possibility to carbon offset the CO2 to their customers' trips for a surcharge via a calculator which calculates a passenger's carbon footprint.
In February 2011, EasyJet painted 8 of it's aircraft with a lightweight, thin "revolutionary nano technology coating" polymer. It works by reducing build up of debris and reduces drag across the surface of the aircraft thus reducing the fuel bill. It is estimated they could save 1-2% annually equating to a £14m reduction in fuel costs. The idea has already been used by US Military aircraft and if successful EasyJet will apply the paint to it's whole fleet.
EasyJet's three largest bases in order are London-Gatwick, Milan Malpensa and London-Luton. London-Gatwick has over forty EasyJet aircraft based there, they operate roughly eighty routes from the base.
EasyJet prefers to fly to major/primary airports, usually very close to the city they serve. For example EasyJet flies to the primary airports of Paris, which are Paris-Charles de Gaulle airport, located 25 km or 16 miles away from the city, and Paris-Orly, located 13 km or 8 miles from Paris. EasyJet often have large bases at primary airports and they will avoid seconday airports where possible. EasyJet does still serve a number of minor/secondary airports including Doncaster-Sheffield and Rome-Ciampino.
EasyJet has a large number of European 'bases'. Despite this, they have a very large presence in Britain, where the airline is based.
The EasyJet fleet consists of the following aircraft (at February 2011):
|Airbus A319-100||142||13||156||Largest A319 operator|
|Airbus A320-200||26||45||180||Includes 2 orders inherited from GB Airways, to be delivered in 2013|
|Boeing 737-700||8||0||149||Being phased out by late 2011|
EasyJet is the largest operator of the Airbus A319. Subsidiary airline EasyJet Switzerland operates 17 Airbus A319 and two Airbus A320 aircraft under Swiss registrations, in addition to the above.
The average age of the EasyJet fleet, at February 2011, is 3.8 years.
Fleet strategy and aircraft orders
EasyJet initially operated Boeing 737 aircraft exclusively. In October 2002, it broke with its previous philosophy of operating just one aircraft type by ordering 120 Airbus A319 aircraft, plus 120 options, with CFM56-5B engines.
|30 December 2002||120||120|
|21 December 2005||140||100||20 purchase rights converted|
|13 November 2006||192||123||52 purchase rights converted
75 new purchase rights
|June 2007||227||24||64||35 purchase rights converted into orders
24 purchase rights converted into options
|July 2008||202||25||24||64||25 A319 changed for A320|
|February 2010||192||35||24||64||10 A319 changed for A320|
|December 2010||172||70||42||31||15 A320 options converted
20 A319 changed for A320
33 purchase rights converted into options
EasyJet's Airbus A319 aircraft were first introduced to EasyJet's Geneva base in October 2003. Due to toilet and galley configuration allowing the installation of more seats than a standard Airbus A319, 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. EasyJet has 33 outstanding options with Airbus valid until March 2013 and 40 outstanding options and purchase rights valid until 2015, which may be taken as any member of the Airbus A320 family.
EasyJet still operates the Boeing 737-700 from its London Luton base; however, beginning in December 2006, the airline started to return the Boeing 737-700 aircraft to their lessors. The Belfast base was converted to an A319 operation; the conversion finished in March 2010 with a total of 6 A319 aircraft. EasyJet plans to dispose of their entire Boeing 737 fleet by 2011.
Through the acquisition of GB Airways, EasyJet inherited nine Airbus A320 and six Airbus A321 aircraft. This gave the airline some time to evaluate the feasibility of operating these larger gauge aircraft. Based on this evaluation, EasyJet decided to swap 25 A319 orders for A320 in July 2008.
EasyJet has operated the following types of aircraft:
|Airbus A319||2004||—||In service|
|Airbus A320||2008||—||In service|
|Airbus A321||2008||2010||Inherited from GB Airways|
|Boeing 737-300||1996||2007||Replaced by A319's|
|Boeing 737-700||2000||—||To be retired by the end of 2011|
Easyjet's head office is Hangar 89 (H89), a building located on the grounds of London Luton Airport in Luton, Bedfordshire; the hangar, a former Britannia Airways/ TUI facility, is located 150 metres (490 ft) from EasyLand, the previous headquarters of EasyJet. Hangar 89, built in 1974, has 30,000 square feet (2,800 m2) of office space and can house three aircraft the size of an Airbus A319 or Boeing 737 at one time. When EasyJet received H89, it had a 1970s style office setup. EasyJet modernised the building and painted it orange.
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.
In December 1997, Russell Sheffield of Tableau, one of EasyJet's design and adverting agencies, suggested to Stelios Haji-Ioannou that he should consider trialling a website for direct bookings. Haji-Ioannou's reply was "The Internet is for nerds, it will never make money for my business!". However Tony Anderson, EasyJet's marketing director, and Michael Coltman, EasyJet's business manager, saw the potential and approved a website trial involving putting a different telephone reservations number on the website, to track success. Once Haji-Ioannou saw the results he changed his mind, and EasyJet commissioned Tableau as partners to 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.
In December 2001, easyJet switched from a third-party reservation system to an in-house system designed and developed for them by BulletProof Technologies, Inc. This is notable because it was the first successful implementation of an airline reservation system using a relational database and modern development tools. 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 3 months immediately before the flight when telephone booking is also available.
Cabin and onboard services
EasyJet's aircraft cabins are configured in a single class, high density layout.
The airline's main fleet, comprising the Boeing 737-700, Airbus A319 and Airbus A320-200, carry 149, 156 and up to 180 passengers respectively, depending on layout. A typical Airbus A319 carries approximately 140 passengers in a single class configuration, but as EasyJet do not serve meals on their shorter flights, the airline opted for smaller galleys and had a lavatory installed in unused space at the rear of the aircraft. The space saved by having smaller galleys allowed for the installation of 156 seats. Due to this 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.
EasyJet does not provide complimentary meals or beverages on board its flights (apart for some occasional charter flights operated by the airline). Passengers may purchase items on board from the "EasyJet Bistro" buy on board programme. Products include sandwiches, toasted sandwiches, hot meals, 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 or train tickets.
easyJet provides In-Flight Entertainment (IFE) on-board certain aircraft, with the ability to rent a PSP Device, which comes with 4 movies, games and TV shows pre-loaded, and available in different languages. This replaces the standard IFE that Airbus have, with the drop down screens. easyJet will still use the screens, however only to show the Airshow map, the route the aircraft is taking, and how long until arrival. easyJet also has headsets available to purchase, along with a travel pillow and eyeshades, subject to stock. EasyJet provides an in-flight magazine, published monthly, containing articles of interest to its customers and destination guides. As of May 2010, easyJet has been selling copies of Hello Magazine, Top Gear Magazine, and The Mail on Sunday, all at cover price. The Daily Mail is also available onboard, at a price of £0.50. Subject to stock.
EasyJet Hotels and EasyJet Holidays
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 throughout 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 separately at the EasyJetHotels website.
On 28 June 2007, EasyJet announced it would expand its relationship with Hotelopia by launching EasyJetHolidays, which offers Travel Trust Association protected package holidays made up of EasyJet flights and Hotelopia accommodation products.
On 6 November 2010, easyJet announced its venture with Low Cost Travel Group to offer EasyJet flights, dynamically packaged with Low Cost Travel Group's accommodation through the EasyJet Holidays website. As of March 2011, EasyJet Holidays will provide holidays and city breaks to all easyJet routes.
EasyJet has also come under criticism in Germany for not observing European Union law on compensation (and assistance to passengers) in cases of denied boarding, delays or cancellations ( Regulation 261/2004). In the case of cancellation, passengers should be reimbursed within one week. In 2006, EasyJet did not always refund tickets in a timely fashion. Passengers occasionally had to wait longer for reimbursement of their expenses.
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.
In July 2008, the Advertising Standards Authority criticised a press campaign by EasyJet for a misleading environmental claim that its aircraft made 22% less emissions than rival airlines. The figures used were not based on emissions produced by an EasyJet aircraft or emissions produced by EasyJet airline overall as the ad implied, and ASA declared that airline had broken advertising rules. The judgement follows the airline being reprimanded in April 2007 after it made comments that its aircraft created 30% less pollution per passenger than some of its rivals.