Try finding a copy of Simon Calder's book on No Frills airlines - it has a good section on the start-up of easyJet.
Not sure if many people gave them much thought at the time - two aircraft operating from LTN didn't pose much of a threat to the BA's and BD's. In hindsight maybe they regret not taking them seriously. BA even talked about buying them in about 1997 before setting up go, but that's another story....