EasyJet ups marketing spend by almost £40m as losses narrow
While last year the airline faced pre-tax losses of £1.1bn, this year that number has narrowed to £178m after flying an additional 50 million passengers.
EasyJet boosted its marketing spend by £37m over 2022, as the company reinvests to capitalise on the return of travel post-pandemic.
Selling and marketing costs overall tripled to £173m, from £60m in 2021. On top of increased marketing spend, an additional £76m was spent on sale and distribution costs as customer activity ramped back up, including fees associated with credit card bookings.
The airline launched its first post-pandemic, pan-European campaign in March this year, with a new tagline and brand platform – ‘NextGen EasyJet’. At the time, customer and marketing director Richard Sherwood told Marketing Week it was an “opportunity to move the brand forward” and marked a “new era” for the brand.
In August, EasyJet reinstated marketing within its C-suite by reintroducing the CMO position, with ex-ASOS marketing director Robert Birge taking the reins.
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According to the business, its increased marketing activity – combined with the release of airport charge accruals of £18m – helped to offset an overall rise in airport rates and operating costs this year, as well as an increase in passenger and security charges.
EasyJet, like most airlines, has faced unprecedented headwinds this year, such as the impact of the war in Ukraine on fuel prices and the Omicron variant taking hold in the first quarter.
However, CEO Johan Lundgren says EasyJet “does well in tough times”, adding that “legacy carriers” will struggle in the current high-cost environment as consumers look to value offerings, while budget airlines like EasyJet will be protected.
“Over the next year we are targeting customer growth and are well placed to drive returns and margins while maintaining a rigorous focus on cost. With one of the strongest balance sheets in European aviation, we are ready to take opportunities as they present themselves,” he adds.
While last year the company faced pre-tax losses of £1.1bn, this year that number has narrowed to £178m. Total revenue for the company increased by 296% to £5.7bn, up on last year’s £1.5bn, while EasyJet has flown almost 70 million people in the last year, up from 20 million in 2021.
EasyJet does well in tough times
Johan Lundgren, EasyJet
EasyJet Holidays, the airline’s package holidays arm, is up 83% on 2019 levels, with a profit before tax of £38m in 2022.
Peak holiday periods this winter, such as Christmas and the October half-term, have returned to “normal levels of volume”, while during the winter period, which the company notes is typically a loss-making one, the airline is investing in “building additional resilience” as it gets a head start on summer 2023 preparations.
EasyJet has also made changes to its strategy in order to drive its purpose and make “low-cost travel easy”, which includes “delivering ease and reliability” and transforming its revenue capability.
How EasyJet plans to ‘move the brand forward’ with its first post-pandemic campaign
The company is trying to keep costs down by introducing seasonal contracts for volunteering pilots and insourcing line maintenance, while the focus for driving savings in 2023 is on fuel, increasing self-service automation to help customer flows, and replacing aircrafts.