EasyJet Plc (EZJ) Chief Executive Officer Carolyn McCall is targeting Europe’s legacy carriers in a bid to boost the low-cost airline’s share of the business travel market.
EasyJet is increasing daily flights on routes from key bases in London, Paris and Geneva, the CEO said yesterday in an interview on the carrier’s inaugural flight to Amman, Jordan. The airline is also rolling out flexible tickets, which it started testing in November, across its network in an effort to make the airline more attractive to business passengers.
“We do leisure and we do it really well,” said McCall, who took over in July. “The business traveler proposition is another kind of product. It’s quite a different thing. For the first time ever, EasyJet has two product propositions.”
The airline has also put together a 15-strong sales team that will target businesses and travel bookers in its U.K. home market, as well as continental Europe, and is aiming to offer flexible fares for sale via its website by the summer.
With 60 percent of EasyJet’s passengers embarking in continental Europe, McCall said the discount airline plans to take on full-service carriers such as Air France-KLM (AF) Group, as well as U.K. rival International Consolidate Airline Group SA’s British Airways.
Europe Competition
“We are not so UK-centric to think that we only compete with BA,” she said. “We compete with Air France out of France, we compete with KLM out of Amsterdam, so we compete with all of those carriers.”
McCall estimates that business passengers make up about 18 percent of EasyJet’s total and said she wants to boost that to 21 percent. Yields, a measure of fares, are as high as 20 percent for some business customers as they tend to book later and pay for Easyjet options such as priority boarding.
McCall in November began selling tickets offering flexibility to switch flights up to two hours before departure.
EasyJet, founded in 1995 as a two-plane airline offering flights from London to Scotland, still has a long way to go in catching up to the legacy carriers in terms of offering same-day frequencies, said Gert Zonneveld, an analyst at Panmure Gordon in London with a “buy” recommendation on the stock.
“You have to ramp up frequencies,” said the analyst, who reckons EasyJet has five or more daily flights on just 2 percent of its network, compared with 53 percent at British Airways, the biggest U.K. carrier. “I don’t think that other things are going to have a massive impact on demand for business passengers.”
Share Slump
EasyJet has slumped 26 percent this year after saying Jan. 20 that its loss in the first half ending March 31 would double to as much as 160 million pounds as fuel costs rose and snow and strikes caused flights to be canceled.
The share performance, the worst on the seven-member Bloomberg EMEA Airlines Index, has cut the carrier’s market value to 1.39 billion pounds ($1.39 billion). Ryanair Holdings Plc (RYA), Europe’s biggest discount carrier, is down 13 percent for a value of 4.86 billion euros ($6.8 billion), while International Consolidated Airlines Group SA, formed in January from a merger of BA and Madrid-based Iberia, is worth 4.25 billion pounds.
“There should be further growth for EasyJet in the business segment,” said Jonathan Wober, an analyst at Societe Generale SA in London who recommends buying the stock. “With each recession people have moved out of the premium cabin to the economy cabin and from full-service carriers to low-cost carriers, and while some move back with each recovery there has been a structural decline in short-haul premium travel.”
EasyJet will start paying dividends in 2012 so long as it’s profitable, McCall said in November following pressure from founder Stelios Haji-Ioannou
EasyJet is increasing daily flights on routes from key bases in London, Paris and Geneva, the CEO said yesterday in an interview on the carrier’s inaugural flight to Amman, Jordan. The airline is also rolling out flexible tickets, which it started testing in November, across its network in an effort to make the airline more attractive to business passengers.
“We do leisure and we do it really well,” said McCall, who took over in July. “The business traveler proposition is another kind of product. It’s quite a different thing. For the first time ever, EasyJet has two product propositions.”
The airline has also put together a 15-strong sales team that will target businesses and travel bookers in its U.K. home market, as well as continental Europe, and is aiming to offer flexible fares for sale via its website by the summer.
With 60 percent of EasyJet’s passengers embarking in continental Europe, McCall said the discount airline plans to take on full-service carriers such as Air France-KLM (AF) Group, as well as U.K. rival International Consolidate Airline Group SA’s British Airways.
Europe Competition
“We are not so UK-centric to think that we only compete with BA,” she said. “We compete with Air France out of France, we compete with KLM out of Amsterdam, so we compete with all of those carriers.”
McCall estimates that business passengers make up about 18 percent of EasyJet’s total and said she wants to boost that to 21 percent. Yields, a measure of fares, are as high as 20 percent for some business customers as they tend to book later and pay for Easyjet options such as priority boarding.
McCall in November began selling tickets offering flexibility to switch flights up to two hours before departure.
EasyJet, founded in 1995 as a two-plane airline offering flights from London to Scotland, still has a long way to go in catching up to the legacy carriers in terms of offering same-day frequencies, said Gert Zonneveld, an analyst at Panmure Gordon in London with a “buy” recommendation on the stock.
“You have to ramp up frequencies,” said the analyst, who reckons EasyJet has five or more daily flights on just 2 percent of its network, compared with 53 percent at British Airways, the biggest U.K. carrier. “I don’t think that other things are going to have a massive impact on demand for business passengers.”
Share Slump
EasyJet has slumped 26 percent this year after saying Jan. 20 that its loss in the first half ending March 31 would double to as much as 160 million pounds as fuel costs rose and snow and strikes caused flights to be canceled.
The share performance, the worst on the seven-member Bloomberg EMEA Airlines Index, has cut the carrier’s market value to 1.39 billion pounds ($1.39 billion). Ryanair Holdings Plc (RYA), Europe’s biggest discount carrier, is down 13 percent for a value of 4.86 billion euros ($6.8 billion), while International Consolidated Airlines Group SA, formed in January from a merger of BA and Madrid-based Iberia, is worth 4.25 billion pounds.
“There should be further growth for EasyJet in the business segment,” said Jonathan Wober, an analyst at Societe Generale SA in London who recommends buying the stock. “With each recession people have moved out of the premium cabin to the economy cabin and from full-service carriers to low-cost carriers, and while some move back with each recovery there has been a structural decline in short-haul premium travel.”
EasyJet will start paying dividends in 2012 so long as it’s profitable, McCall said in November following pressure from founder Stelios Haji-Ioannou
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