Stelios admits EasyJet has been outflanked by Ryanair

EasyJet founder and chairman Stelios Haji-Ioannou has admitted that he underestimated demand for low-cost airline travel and allowed rival Ryanair to take a larger market share than his airline.

Speaking at the 2006 Association of British Travel Agents conference in Marbella, Haji-Ioannou describes Ryanair chief executive Michael O’Leary as “ruthless” in driving down costs, and admits that O’Leary spotted a market where he did not.

Haji-Ioannou says: “He invented a pocket of demand, which even I didn’t see. While we were taking passengers to Glasgow’s larger airport, Ryanair was planning the launch of routes to Glasgow’s smaller facility, Prestwick. I believed there was no demand. But credit to O’Leary: he found this massive and untapped demand from flying people to the middle of nowhere for a ticket that is £20 cheaper.”

Haji-Ioannou adds that he believes that his airline targets a wider market than Ryanair, and flies them in more comfort to mainstream airports, but says it irks him that the Dublin-based airline is the larger of the two.

He also used his speech to call on Chancellor Gordon Brown to resist the temptation to slap an extra tax on low-cost flights. He says: “Any extra tax will be a tax on the poor and price them out of air travel. The rich will still pay to fly to their second homes in Europe.”

Haji-Ioannou launched EasyJet in 1995 and operates 258 routes to 68 European airports. Ryanair has 362 routes between 130 airports in 20 European countries.