EasyJet unveils strategy and strong results
EasyJet is to target business travellers with a new flexible fare backed by a marketing and promotional campaign as part of its growth strategy.
The new product has been unveiled as the low cost airline posts a pre-tax profit for the year up 181% to £154m, attributed in part to rising passenger numbers, lower fuel prices and cost management.
Chief executive Carolyn McCall, previously CEO at Guardian Media Group, has outlined a strategy for building growth that includes recruiting more budget-minded business travellers for European flights.
She says: “The strategy will build on the strength of easyJet’s network and target leisure and business customers with its best value fares to convenient airports. EasyJet is strongly positioned to take advantage of the continuing profitable growth opportunities in European short-haul.
“This combined with margin improvement through a tight focus on costs and accessing new revenue opportunities, means that easyJet is poised to continue the strong operating cash generation of the past few years.”
McCall, who has been in the post for four months, adds that there are “clear opportunities for easyJet to continue to take market share” as weaker short-haul carriers change their model or fail.
The airline expects low cost carrier penetration across Europe to increase as there is room for growth in several major markets, including France, Switzerland, Italy, Netherlands and Portugal.
The flexible tickets will allow passengers to change their flight up to two hours before the scheduled departure time. Flexible ticket-holders will also benefit from automatic speedy boarding, no booking fees and a checked in hold bag at no extra cost.
However, the tickets will initially only be available through business booking channels, and self booking tools used by business travel companies. The plan is to roll the product out to all easyJet passengers at a later date.
EasyJet’s results show passenger numbers up 7.9% to 48.8 million. Profits would have been up an estimated extra £57m if not for the costs incurred and lost contributions due to the Icelandic volcano in April.
EasyJet recently settled a legal battle with founder Stelios Haji-Ioannou that allows the airline to retain the brand and have “greater commercial flexibility” but which gives Haji-Ioannou a royalty of 0.25% of annual total revenues.
British Airways has just launched a campaign promoting “high value flying” and pointing out the differences between itself and the low cost airlines, including an all-inclusive fare.
The flag-carrier is also keen to attract more high-paying first class passengers and is rolling out its new first class offering across long haul.
