EasyJet

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easyJet
IATA U2	ICAO EZY	Callsign EASY
Founded		1995
Hubs		London 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 East Midlands Airport Basel Airport Orly Airport Malpensa Airport (Milan) Bristol International Airport Madrid Barajas International Airport
Fleet size		126 Plus 95 on order
Destinations		73
Parent company		easyJet Airline Company Limited
Headquarters		Luton, England, United Kingdom
Key people		Andrew Harrison (CEO) Cor Vrieswijk (COO) Jeff Carr (CFO)
Website: http://www.easyjet.com

easyJet (LSE: EZJ) 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 Sir Stelios Haji-Ioannou, but it is now a public limited company listed on the London Stock Exchange and members of the Haji-Ioannou family own approximately 17%. It is a constituent of the FTSE 250 Index.

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.^[1]

Contents 1 History 2 Relationship between easyJet and the "easy" brand 3 Strategy 4 Comparisons with Ryanair 5 Hubs 6 Destinations 7 Fleet 7.1 Historical fleet 8 Booking 9 Passenger numbers 10 Controversy 11 Other facts of interest 12 External links 13 References

[edit] 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 Boeing 737-200 aircraft wet leased from Independent Aviation Group Limited ("IAG"). IAG, in turn, sub-contracted the operation of the aircraft to GB Airways, and then to Air Foyle from May 1996 onwards. easyJet initially operated 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.

easyJet was 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 announced preliminary results for the year to September 2006. In the year it had grown its fleet to 122 aircraft and expanded its network to 262 routes and 74 airports in 21 countries (58 new routes and 11 new destinations had been introduced in the year). Passenger numbers rose by 11.5% to 33 million and it was able to post a record profit of £129 million before tax, a rise of 56% over 2005^[2]

easyJet Airbus A319-100 departs Bristol International Airport, England

easyJet Boeing 737-700 waiting for take off at Bristol International Airport, England

[edit] Relationship between easyJet and the "easy" brand

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 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 royalty free.

In this case, this kind of arrangement would be of 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 aforesaid arrangement is similar to the terms governing the use of the Jet Airways brand by that airline.

[edit] 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 (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.

[edit] 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 been criticised 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 often being much higher than those of their rival. Furthermore, Ryanair often flies to secondary airports which are farther from the customer's intended destination, while easyJet typically serves primary airports - the combination of these two factors can make flying with Ryanair much more expensive than easyJet.^[3] Upon comparing both companies' On-Time-Performance data, it is apparent that punctuality of both companies is not dissimilar. Both are trailing flag carriers in respect to OTP.

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. In 2006, easyJet had experienced difficulties in refunding tickets in a timely fashion. Passengers occasionally had to wait longer for reimbursement of their expenses.^[4][5][6]

[edit] Hubs

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

• Belfast International Airport (BFS),
• Berlin-Schönefeld International Airport (SXF),
• Bristol International Airport (BRS), (Largest base outside of London)
• Dortmund Airport (DTM),
• East Midlands Airport (EMA),
• Edinburgh Airport (EDI),
• EuroAirport Basel-Mulhouse-Freiburg (BSL),
• Geneva Cointrin International Airport (GVA),
• Glasgow International Airport (GLA),
• Liverpool John Lennon Airport (LPL),
• London Stansted (STN),
• Madrid Barajas International Airport (MAD)
• Malpensa International Airport, Milan (MXP),
• Newcastle Airport (NCL),
• Orly Airport, Paris (ORY)

[edit] Destinations

Main article: easyJet destinations

[edit] Fleet

The easyJet fleet consists of the following aircraft (at February 2007):^[7]

Aircraft	#	Seats	Notes
Airbus A319-100	96*	156	(95 on order)
Boeing 737-700	30	149

^{* Includes 11 aircraft placed with easyJet Switzerland.}

^{In August 2006, the easyJet fleet average age was 2.2 years.[8]}

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.^[9] 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.^[10] 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.^[11]

On the 14 November 2006, easyJet announced a major fleet expansion plan exercising 52 of its Airbus A319 options for delivery between 2008 and 2010. It has also secured a further 75 options for A320 family aircraft.^[12] This brings their total commitment to 315 aircraft, including options. Of the 120 A319s ordered in 2002, 88 have been delivered, with the remaining 32 due for delivery by September 2008. A further 20 aircraft ordered in 2005 will be delivered by 2010.^[2]

[edit] Historical fleet

• Boeing 737-300

[edit] 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.

[edit] Passenger numbers

easyJet has published the following passenger numbers:

• Year ended 30 September 2006: 32,953,287
• 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.

[edit] 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 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 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.^[13]

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 produce lower emissions and are more environmentally friendly.

[edit] 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 ITV1 has run a series called Airline (UK TV series) filmed at London Luton Airport and Liverpool John Lennon Airport. This was also aired in the United States as A&E Network show Airline UK. A US version of the show, first broadcast in 2004, features Southwest Airlines, the company from which easyJet derives much of its business model.
• easyJet is one of the most frequently cited examples of a mainstream company which has exploited the shift from multi-layer distribution to direct business to consumer transactions. easyjet's launch pre-dated the mass adoption of the Internet. But its direct to the consumer telephone based direct marketing philosophy rapidly embraced the online channel. There is much online discussion regarding the success of easyJet's marketing strategy.
• 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'.^[14]

[edit] External links

• Official site
• Fleet Age
• Passenger opinions
• Flightattitude.com
• Photos
• B Photos
• easyJet vs Ryanair Price Comparison

[edit] References

1. ^ UK Civil Aviation Authority
2. ^ ^{a b} Airliner World January 2007
3. ^ http://gospain.about.com/od/transportation/a/ryaneasycompari.htm
4. ^ http://money.guardian.co.uk/travel/story/0,,1873612,00.html
5. ^ http://money.guardian.co.uk/weekly/story/0,,1878762,00.html
6. ^ http://www.tritthart.net/easyjet.htm
7. ^ http://www.jethros.i12.com/fleets/fleet_listings/easyjet.htm
8. ^ easyJet's Fleet Age Details
9. ^ CFM Press Release 2002
10. ^ Airbus options exercised
11. ^ Easyjet disposals
12. ^ Fleet Expansion
13. ^ Flight Pledge
14. ^ http://news.cheapflights.co.uk/flights/2006/06/easyjet_wins_we.html

European Low Fares Airline Association (ELFAA)
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