Easyjet CEO announces resignation
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Flying Quill - an excellent post and one of the few that shows any real grasp of the situation. As I read some of the comments here you could be forgiven for believing that easyJet is a terrible place to work. There are many pilots who really enjoy working here and I am one of them! I have had the benefit of working for several airlines and easyJet is no worse than any of them and better than most. But we digress....
As has been pointed out by a number of people, easyJet no longer enjoys the 'novelty' factor it once did and is now in a hard-rules fight with the big boys. BA are in the fortunate positon of being able to run their short haul operation at a huge loss and paying for it by their profit-making long haul routes. The short haul-only companies have to make profits on that operation alone and therefore have their backs much more against the wall. Despite negative posts here about accountants and so on, I recognise there is a clear need for accountants like Ray Webster to deal with fiscal issues in a professional manner and make sure that ultimately money in exceeds money out. I therefore do not knock him on that basis.
My struggle with him is that he has consistently put his foot in it with City investors. While O'Leary has managed to make the City think that Ryanair is the real deal (despite carrying less passengers and having less aircraft than easyJet) old Ray somehow has made easyJet appear as a financial liability. We have consistently make a profit in the toughest market conditions and yet we have failed to capitalise on that with the right people. For example, when the company announced a load of new routes, the thing that hit the news was a profits warning that turned out to be completely untrue. In the final analysis it will not be RW's lack of charisma or the fact that he never meets any of his crews at different bases etc that has seen him off. It is simply that he has failed to impress the big City investors to the required extent. The next guy (or gal!) in had better be sharp in that department or they will be gone pretty quickly. All very pleasant as it will be to have someone with a nice smile who can press the flesh and introduce the 'feel good factor', the number one requirement is that they do not say stupid things at the wrong time which causes ructions with the share price. They must be able to deal with the City and make financial institutions see that easyJet are here to stay and represent the very best in short haul operations.
As has been pointed out by a number of people, easyJet no longer enjoys the 'novelty' factor it once did and is now in a hard-rules fight with the big boys. BA are in the fortunate positon of being able to run their short haul operation at a huge loss and paying for it by their profit-making long haul routes. The short haul-only companies have to make profits on that operation alone and therefore have their backs much more against the wall. Despite negative posts here about accountants and so on, I recognise there is a clear need for accountants like Ray Webster to deal with fiscal issues in a professional manner and make sure that ultimately money in exceeds money out. I therefore do not knock him on that basis.
My struggle with him is that he has consistently put his foot in it with City investors. While O'Leary has managed to make the City think that Ryanair is the real deal (despite carrying less passengers and having less aircraft than easyJet) old Ray somehow has made easyJet appear as a financial liability. We have consistently make a profit in the toughest market conditions and yet we have failed to capitalise on that with the right people. For example, when the company announced a load of new routes, the thing that hit the news was a profits warning that turned out to be completely untrue. In the final analysis it will not be RW's lack of charisma or the fact that he never meets any of his crews at different bases etc that has seen him off. It is simply that he has failed to impress the big City investors to the required extent. The next guy (or gal!) in had better be sharp in that department or they will be gone pretty quickly. All very pleasant as it will be to have someone with a nice smile who can press the flesh and introduce the 'feel good factor', the number one requirement is that they do not say stupid things at the wrong time which causes ructions with the share price. They must be able to deal with the City and make financial institutions see that easyJet are here to stay and represent the very best in short haul operations.
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Quill
Excellent post. Must agree 100%, well said
My concern is what happens in the interim period. RW has done a good job. He did that using his long experience in aviation generally, and the experience of 10 years running eJ as a succesful low cost operator in the european market place.
I don't see to many individuals with that kind of experience / expertise leaping out of the woodwork to replace him. So what happens in interim period as whoever the new person ends up being, "learns the trade". The group of "managers" you correctly identify have massive potential for cockup's.
Excellent post. Must agree 100%, well said
My concern is what happens in the interim period. RW has done a good job. He did that using his long experience in aviation generally, and the experience of 10 years running eJ as a succesful low cost operator in the european market place.
I don't see to many individuals with that kind of experience / expertise leaping out of the woodwork to replace him. So what happens in interim period as whoever the new person ends up being, "learns the trade". The group of "managers" you correctly identify have massive potential for cockup's.
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Thanks guys, that was exactly what i was getting at in my little short post. Couldn't have explained it better myself.
The interim period is not going to be much of a problem as such, the big problem arises when the new CEO has to familiarise themselves with the thousand and one changes that are happening all the time. (guess that is what they get paid the big kahuna's for)
All CEO's like to make their own personal mark on a company and as an employee I'm really looking forward to (maybe in a couple of years disgust
) seeing what is going to happen.
One thing for sure, I haven't felt this kind of job security in a long long time! So for that I thank RW and his team (would be follish to think it was him alone) and as said over the years I have seen how big an impact the 24hrs a day had on Ray.
Believe me the man was breathing orange.
However I would have liked to see Upper Management (note: not only RW) take more notice of their employees and at least start moving towards a better career airline. At the moment it isn't, even I agree.... With a couple of tweaks mainly for the better of the employee this will be a very very nice company to work for!
The interim period is not going to be much of a problem as such, the big problem arises when the new CEO has to familiarise themselves with the thousand and one changes that are happening all the time. (guess that is what they get paid the big kahuna's for)
All CEO's like to make their own personal mark on a company and as an employee I'm really looking forward to (maybe in a couple of years disgust
) seeing what is going to happen. One thing for sure, I haven't felt this kind of job security in a long long time! So for that I thank RW and his team (would be follish to think it was him alone) and as said over the years I have seen how big an impact the 24hrs a day had on Ray.
Believe me the man was breathing orange.
However I would have liked to see Upper Management (note: not only RW) take more notice of their employees and at least start moving towards a better career airline. At the moment it isn't, even I agree.... With a couple of tweaks mainly for the better of the employee this will be a very very nice company to work for!
Bear Behind
Reading some of the replies here, one seriously wonders whether certain members shouldn't just quit their jobs flying for easyJet and go join a flying club - after all, it's only fun that they seem to want.
1) easyJet is successful - FACT!
2) easyJet has pretty much always been successful - FACT!
3) easyJet has effectively been lead by Ray since the very early days - FACT!
4) Without him, it would almost certainly not be where it is today - it would almost certainly be a lesser airline - FACT? Well, no, SPECULATION! But probably true nontheless.
I find myself generally agrreing with NSF except for the last point - the number one priority for Ray was to run a successful airline. Something he did in spades (continued 20% or more growth!) The strategy is sound, the airline is fun to fly with, relatively reliable and keeps food in it's employee's mouths. For goodness sakes, you lot seem to be after the perks (concessionary travel schemes et al) that are a part of the legacy airlines. If you want all of that jazz, go and work for a legacy airline - see how much fun that is these days!
Some people just don't know a good thing when they see it.
1) easyJet is successful - FACT!
2) easyJet has pretty much always been successful - FACT!
3) easyJet has effectively been lead by Ray since the very early days - FACT!
4) Without him, it would almost certainly not be where it is today - it would almost certainly be a lesser airline - FACT? Well, no, SPECULATION! But probably true nontheless.
I find myself generally agrreing with NSF except for the last point - the number one priority for Ray was to run a successful airline. Something he did in spades (continued 20% or more growth!) The strategy is sound, the airline is fun to fly with, relatively reliable and keeps food in it's employee's mouths. For goodness sakes, you lot seem to be after the perks (concessionary travel schemes et al) that are a part of the legacy airlines. If you want all of that jazz, go and work for a legacy airline - see how much fun that is these days!
Some people just don't know a good thing when they see it.
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Spot on NSF.
As a company that can't now do anything without the permission of the City, RW completely lost their confidence. With his tales of doom and gloom we ended up with a share price £1.18 and a minimal market worth. We were lucky not to have been taken over.
The new CEO is going to have to be a darling of the city and BC's fiasco and resignation over the Olympic bid hardly holds her in good stead.
Mind you, I see the new BA boss has come up with a great new concept-a low cost short haul operation X-LHR and removing First Class from the Paris flights. Inspired.
As a company that can't now do anything without the permission of the City, RW completely lost their confidence. With his tales of doom and gloom we ended up with a share price £1.18 and a minimal market worth. We were lucky not to have been taken over.
The new CEO is going to have to be a darling of the city and BC's fiasco and resignation over the Olympic bid hardly holds her in good stead.
Mind you, I see the new BA boss has come up with a great new concept-a low cost short haul operation X-LHR and removing First Class from the Paris flights. Inspired.
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Yes, Fletch, you're right about the lack of confidence in the City. In support of your point I offer the powerpoint presentation last year which was supposed to placate the concerns of the City by unveiling the radical new plan. Well, it was amateurish and childish; I felt embarrassed watching it.
But this is the attitude I was alluding to in my earlier post: the company is trying to to cling to its fun, quirky culture, but with the lack of experience, it simply doesn't work. I don't need to support my assertion with examples; those who work here should be able to think of some for themselves. The spotty nosed kid has now become a strapping teenager; big and strong, but bereft of the wisdom and experience of maturity. It's sitting at the back of the classroom, one of the bigger children, still trying to crack the jokes that made it so cute in primary school. But it's just not appropriate any more.
There are many impressive achievements that can be credited to RW and his team - and some failures. However, the next CEO needs to build on the success thus far and take the company to the next level. I don't care who this person is. I don't care if he or she dislikes pilots. I don't care if the the new CEO is from Mars. But I desperately hope that whoever - or whatever - it is steers this fledgling into maturity.
FQ
But this is the attitude I was alluding to in my earlier post: the company is trying to to cling to its fun, quirky culture, but with the lack of experience, it simply doesn't work. I don't need to support my assertion with examples; those who work here should be able to think of some for themselves. The spotty nosed kid has now become a strapping teenager; big and strong, but bereft of the wisdom and experience of maturity. It's sitting at the back of the classroom, one of the bigger children, still trying to crack the jokes that made it so cute in primary school. But it's just not appropriate any more.
There are many impressive achievements that can be credited to RW and his team - and some failures. However, the next CEO needs to build on the success thus far and take the company to the next level. I don't care who this person is. I don't care if he or she dislikes pilots. I don't care if the the new CEO is from Mars. But I desperately hope that whoever - or whatever - it is steers this fledgling into maturity.
FQ
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Panda-k-Bear: I would beg to differ on the issue of the number one priority. You can have the most 'successful' company in the world but if the City does not think you are cracking it then you are stuffed! easyJet, as you rightly point out is 'successful' by any criteria. They problem is that we have managed to snatch defeat from the jaws of victory by making the City think we are not! As I have said previously, you cannot criticise RW for being an accountant or having a handle on the finances. What you can say is that at critical moments the City got nervous with us when much higher confidence in the company was warranted. Ultimately that is a management failure and it is a situation that must change if we are to fulfil the huge potential we have as a company.
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A moron could have run easyjet for the first few years-Stelios' money and the basic business model was bound to make it a success. Now it needs to be sharp Webster isn't up to it.
I personally know five TRE's alone that have gone or are going and a dispatcher I met the other day said he has never seen such a turnover of staff and he's been at easy nearly from the beginning.
Maybe somebody eventually worked out what all that costs and who caused it?
I personally know five TRE's alone that have gone or are going and a dispatcher I met the other day said he has never seen such a turnover of staff and he's been at easy nearly from the beginning.
Maybe somebody eventually worked out what all that costs and who caused it?
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Panda K Bear
"easyJet has effectively been lead by Ray since the very early days - FACT!"
The fact is that Mr Webster has been an effective accountant, and a computer visionary since the very early days of E. J. . But an "effective leader", never, to effectively lead people takes much much more than having a good plan, being good at sums,and being very I.T. savvy.
"easyJet has effectively been lead by Ray since the very early days - FACT!"
The fact is that Mr Webster has been an effective accountant, and a computer visionary since the very early days of E. J. . But an "effective leader", never, to effectively lead people takes much much more than having a good plan, being good at sums,and being very I.T. savvy.
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being good at sums
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Finman you obviously don't know what you are talking about since the HUD's were a decision made by our last Chief Pilot M.K.
We had confirmation of the CAA that we wouldn't have to do ****loads of trialling and testing before we could use it, eventually that got turned back, and the cost involved making us eligible to use it was far greater than expected.
Indeed a good c*** up but not RW's fault. (ex fighter pilot's decision)
Our new CEO better be good and well known and respected by the City, I bet we can see the shares fly to FL410
We had confirmation of the CAA that we wouldn't have to do ****loads of trialling and testing before we could use it, eventually that got turned back, and the cost involved making us eligible to use it was far greater than expected.
Indeed a good c*** up but not RW's fault. (ex fighter pilot's decision)
Our new CEO better be good and well known and respected by the City, I bet we can see the shares fly to FL410
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The "confidence in the city " thing has been, and continues to be, grossly overstated. Perhaps some room for improvement but the figures were always presented honestly and without spin.
Now I'm an easyJet shareholder and I can tell you that the totally undeserved drops in share prices were due to hedge-fund manipulation. A lot of people made a lot of money during that campaign, I even made a few quid myself.
Now that the hedge-funds have moved on to other targets, the share price has stabilised. Creeping up nicely despite continuing concerns over fuel prices.
The lack of impact on the share price of Ray's departure signifies that the city thinks that the airline has a stable an competent board in place to guide the succession.
Lets hope they get a good replacement.
Now I'm an easyJet shareholder and I can tell you that the totally undeserved drops in share prices were due to hedge-fund manipulation. A lot of people made a lot of money during that campaign, I even made a few quid myself.
Now that the hedge-funds have moved on to other targets, the share price has stabilised. Creeping up nicely despite continuing concerns over fuel prices.
The lack of impact on the share price of Ray's departure signifies that the city thinks that the airline has a stable an competent board in place to guide the succession.
Lets hope they get a good replacement.
easy's 1/2 yr results
Interim results for the 6 months to 31st March 2005
25% INCREASE IN PASSENGERS. MARGINS MAINTAINED.
Revenues up by 26% to £553m with the pre-tax margin before goodwill maintained.
Seasonal pre-tax loss before goodwill of £22m (2004: £19m). Reported pre-tax loss of £31m (2004: £27m).
Passenger numbers up 25% to 13.5 m. Slight improvement in load factor to 83.8%.
Total revenue per passenger up 1.1%. Per Available Seat Kilometre (ASK) down 5% reflecting longer stage length.
Total cost per ASK down 5%.
Strong cash generation with gross cash increasing by £127m to £637m.
Balanced growth in network to 187 routes and 57 airports utilising 103 aircraft.
Commenting on the results and prospects, Ray Webster, Chief Executive, said:
“This performance is in line with expectations. Much has been achieved in the last six months - growing passengers by a quarter, launching 40 new routes and inaugurating service to 14 new airports. We have just taken delivery of our 100th operational aircraft and welcomed our 100 millionth passenger. Both are major achievements in our 10th anniversary year.
“We have made steady progress on costs and, so far, mitigated the impact of a higher fuel price. But there is more to do as we seek balanced growth, extending our reach in Europe while protecting our margins. easyJet is a financially strong company and is in a good position to capitalise on the opportunities in the European airline market.
“Based on our current trading outlook, total revenue per seat for the year to September 2005 is likely to be unchanged compared to the same period last year.
“At prevailing fuel prices and exchanges rates, we continue to expect reported pre-tax profit to be below last year but in line with current expectations
25% INCREASE IN PASSENGERS. MARGINS MAINTAINED.
Revenues up by 26% to £553m with the pre-tax margin before goodwill maintained.
Seasonal pre-tax loss before goodwill of £22m (2004: £19m). Reported pre-tax loss of £31m (2004: £27m).
Passenger numbers up 25% to 13.5 m. Slight improvement in load factor to 83.8%.
Total revenue per passenger up 1.1%. Per Available Seat Kilometre (ASK) down 5% reflecting longer stage length.
Total cost per ASK down 5%.
Strong cash generation with gross cash increasing by £127m to £637m.
Balanced growth in network to 187 routes and 57 airports utilising 103 aircraft.
Commenting on the results and prospects, Ray Webster, Chief Executive, said:
“This performance is in line with expectations. Much has been achieved in the last six months - growing passengers by a quarter, launching 40 new routes and inaugurating service to 14 new airports. We have just taken delivery of our 100th operational aircraft and welcomed our 100 millionth passenger. Both are major achievements in our 10th anniversary year.
“We have made steady progress on costs and, so far, mitigated the impact of a higher fuel price. But there is more to do as we seek balanced growth, extending our reach in Europe while protecting our margins. easyJet is a financially strong company and is in a good position to capitalise on the opportunities in the European airline market.
“Based on our current trading outlook, total revenue per seat for the year to September 2005 is likely to be unchanged compared to the same period last year.
“At prevailing fuel prices and exchanges rates, we continue to expect reported pre-tax profit to be below last year but in line with current expectations
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I agree with no sig that easyJet would probably not be here today had it not been for RDW's stewardship. He has been instrumental in building a very successful company. To quote no sig, "credit where credit's due...."
HOWEVER (before you all shoot me!!), whilst I believed the first 7 years or so were generally very positive, I have serious doubts about some of the decisions taken in the past couple of years. The constant re-structures, the loss of support in key areas, etc. I really believe that much of the current structure simply is not sustainable in the long-term, particularly for a fleet of 100+ with multiple bases across an expanding Europe.
I also agree that morale and that great orange value of "people" has been forgotten along the way.
As a relatively young, exciting start-up carrier people didn't mind working their nuts off because it was a good place to work. That has (to a large extent) gone now, and you can't rely on goodwill forever.
HOWEVER (before you all shoot me!!), whilst I believed the first 7 years or so were generally very positive, I have serious doubts about some of the decisions taken in the past couple of years. The constant re-structures, the loss of support in key areas, etc. I really believe that much of the current structure simply is not sustainable in the long-term, particularly for a fleet of 100+ with multiple bases across an expanding Europe.
I also agree that morale and that great orange value of "people" has been forgotten along the way.
As a relatively young, exciting start-up carrier people didn't mind working their nuts off because it was a good place to work. That has (to a large extent) gone now, and you can't rely on goodwill forever.
