EasyJet - 4
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Dont see the problem. Lufthansa have been charging a ticket admin fee for years . Up to €18 per person long haul. €8 medium haul. €5 short haul. Never seen anyone complain much about that.
One of the common behaviours exhibited by many businesses is to give a better deal to your better customers. At the most basic level this can be seen in the supermarket with large packs of food costing less per kilo than small packs. This encourages customers to put more in their shopping basket and spend more. A charge per booking has the same effect - cheaper to pay for two flights at the same time rather than buying one now and deferring a decision about whether to buy a second flight for a later date.
Last edited by davidjohnson6; 14th Jan 2012 at 20:56. Reason: Correct spelling
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For the business traveller it probably doesn't make a huge difference but for a family of four going on holiday a single 8GBP is fee much better than the 8x6GBP fee with FR who still charge per person per leg, unless of course you happen to have one of their credit cards. Having said that it is the total cost that really matters despite how deviously it is arrived at.
EZY have announced today that a 320 will replace a 319 at NCL later this year (when?) - not a huge change but the first bit of positive news from EZY at NCL in quite a while
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Good financial results for the airline. EasyJet boosted by rise in business passengers | Business | guardian.co.uk
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Clearly, the airline benefited a lot from Ryanair winter capacities drop, strong swiss and french bases (with very favourable market conditions given AF no-reaction attitud), BMI reductions on UK domestics and Milan LH Italia end of operations.
I really doubt any of those good results aredue to good strategy, new team or new product. I even think their focus on business strategy is wrong and quite sure they are selling very little fully flex tickets or gaining any big corporate contract. They say they gained a lot of business passengers, well, based on their Q1 numbers (Oct-Dec), this is true in actual term as they had more capacities, but their corporate share is still 18%, as it has always been for the last 5 years. easyJet will never get more than 20-22% of business PAX just with more sales people or not very usefull fully flex offer.
I really doubt any of those good results aredue to good strategy, new team or new product. I even think their focus on business strategy is wrong and quite sure they are selling very little fully flex tickets or gaining any big corporate contract. They say they gained a lot of business passengers, well, based on their Q1 numbers (Oct-Dec), this is true in actual term as they had more capacities, but their corporate share is still 18%, as it has always been for the last 5 years. easyJet will never get more than 20-22% of business PAX just with more sales people or not very usefull fully flex offer.
Last edited by h&s; 26th Jan 2012 at 21:30.
Clearly, the airline benefited a lot from Ryanair winter capacities drop, strong swiss and french bases (with very favourable market conditions given AF no-reaction attitud), BMI reductions on UK domestics and Milan LH Italia end of operations.
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I really doubt any of those good results aredue to good strategy, new team or new product. I even think their focus on business strategy is wrong and quite sure they are selling very little fully flex tickets or gaining any big corporate contract. They say they gained a lot of business passengers, well, based on their Q1 numbers (Oct-Dec), this is true in actual term as they had more capacities, but their corporate share is still 18%, as it has always been for the last 5 years. easyJet will never get more than 20-22% of business PAX just with more sales people or not very usefull fully flex offer.
Easyjet can charge fares slightly lower than BA and similar european flag carriers on routes with good frequency. The strategy of going to convenient/primary airports keeps them out of direct competition of Ryanair in many markets (yes there is a lot of duplication in some markets). Since they are then not in a lot of markets heavily competing with Ryanair but instread BA, IB, AZ, AF etc they can achieve more respectable yields.
I would also disagree that easyjet will only get 20-22% share of biz pax, I believe that the brand is growing in popularity. Bring in pre assigned seating, get that right and the offer is not far from most of its flag carriers competitors.
I don't see why it's the wrong strategy. Business passengers (individually or institutionally) travel more frequently, they travel all year round and they generally pay more for there ticket. What part of that makes it wrong?
The exposure to business travel trade is growing and there have been contracts signed with businesses in the UK and on the Continent. Remember also that the business passenger isn't always the suited and booted self employed business man or exec but also skilled blue collar workers, convention staff etc etc.
As EI-BUD says, the strategy of setting up shop at slot constrained airports has done wonders for EZY. Higher fares can be charged and yields have increased pretty much every year. Meanwhile being at a slot constrained airport makes it harder for FR and other LCC's to start throwing in loads of aircraft over night. It makes sense. It also makes sense to tap into the large business market that use these airports. If flexi-tickets aren't selling (i'm not sure whether they are or not) this doesn't automatically mean few business travellers. Not every passenger on business needs a flexible ticket.
One thing I will disagree with EI-BUD on, and many others make the same assumption, and that is that free seating puts off business pax. From my experience and anecdotal evidence.....it doesn't. It actually appeals to many of these passengers. It's the leisure/VFR/infrequent flyers who generally hate free seating.
As for LH Italia, they found it hard to compete against Easyjet in MXP by all accounts although this Winter has admittedly so far been extremely kind to the industry.
The exposure to business travel trade is growing and there have been contracts signed with businesses in the UK and on the Continent. Remember also that the business passenger isn't always the suited and booted self employed business man or exec but also skilled blue collar workers, convention staff etc etc.
As EI-BUD says, the strategy of setting up shop at slot constrained airports has done wonders for EZY. Higher fares can be charged and yields have increased pretty much every year. Meanwhile being at a slot constrained airport makes it harder for FR and other LCC's to start throwing in loads of aircraft over night. It makes sense. It also makes sense to tap into the large business market that use these airports. If flexi-tickets aren't selling (i'm not sure whether they are or not) this doesn't automatically mean few business travellers. Not every passenger on business needs a flexible ticket.
One thing I will disagree with EI-BUD on, and many others make the same assumption, and that is that free seating puts off business pax. From my experience and anecdotal evidence.....it doesn't. It actually appeals to many of these passengers. It's the leisure/VFR/infrequent flyers who generally hate free seating.
As for LH Italia, they found it hard to compete against Easyjet in MXP by all accounts although this Winter has admittedly so far been extremely kind to the industry.
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In response to the comments about business/fully flex passengers, easyJet has recently signed three big contracts with travel management companies including American Express amongst them. I can see the percentage of business passengers travelling with EZY only going in one direction over the next few years and its not down..... 
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Due to the collapse of Spanair EZY brought forward the launch of MAD-BIO from 19th February to 30th January (last Monday).
EZY will open MAD-CPH 5 weekly (a former JK route) in May.
EZY will open MAD-CPH 5 weekly (a former JK route) in May.
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Yes EI-BUD/easyflyer83, I probably did not express exactly what I wanted to say. Targeting business passengers is a normal strategy and makes sense I agree with you, however, they will never do that with this ridiculous fully flex offer. CEO is trying to make a big fuzz about it while she embarrasly had to reconise that they sold only a few of them (quite frankly, who would be surprised?).
About assigned seats, Southwest, which yield is easyJet dream, has not assigned seat and is very popular for business paxs. Because easyJet is not run by airline people and don't have a marketing approach (keep it simple!), they don't really know what is important to have or not. When you think they still don't have frequent flyer program (i know they have nectar but quite different). Still remember A.Harrison asked one day why U2 had no FFP, he replied than it was not the model, then the journalist said it was as most LCC had one (LUV, Virgin, vueling etc) which looks to really surprised him - ...
Whatever they do, I still think they will never achieve more than 20%/22% corporate share split, they have too many others issues (too high LFs, no FFP, no lounge/poor terminals etc) and my point was to say that the new Flex ticket (not even refundable) is a ridiculous tentative to do so
@captain_caveman: you are actually wrong. It's been more than 6 years now that easyJet says they want to achieve 20% biz split (and I don't understand why every new CEO is trying to say this is their new brillant idea) and the % is actually going down (not in actual terms of course as their capacities grow) from roughly 19/20% to 17/18%.
Main reason for their good quarter is of course the snow (but that doesn't explain relative performances vs. others airline), but above all Ryanair capacities decrease (U2 is the first to benefit from it) or some markets more favourable conditions (eg. Milan, Basel, UK domestics) or competitors inactivity (eg. France). I hardly see any market where competition increase (except maybe Madrid).
Despite good results, I personally believe McCall is not doing a good job. No new good innovation at all since she's there, no decision on fleet replanning (while max and neos availability now very far away), poor relation with Stelios, no communication/media activity, big fees in army of consultants as she has no understanding of the business whatsoever, and she still arrives with her chauffeur!
(at least MOL does it for a reason)
About assigned seats, Southwest, which yield is easyJet dream, has not assigned seat and is very popular for business paxs. Because easyJet is not run by airline people and don't have a marketing approach (keep it simple!), they don't really know what is important to have or not. When you think they still don't have frequent flyer program (i know they have nectar but quite different). Still remember A.Harrison asked one day why U2 had no FFP, he replied than it was not the model, then the journalist said it was as most LCC had one (LUV, Virgin, vueling etc) which looks to really surprised him - ...
Whatever they do, I still think they will never achieve more than 20%/22% corporate share split, they have too many others issues (too high LFs, no FFP, no lounge/poor terminals etc) and my point was to say that the new Flex ticket (not even refundable) is a ridiculous tentative to do so
@captain_caveman: you are actually wrong. It's been more than 6 years now that easyJet says they want to achieve 20% biz split (and I don't understand why every new CEO is trying to say this is their new brillant idea) and the % is actually going down (not in actual terms of course as their capacities grow) from roughly 19/20% to 17/18%.
Main reason for their good quarter is of course the snow (but that doesn't explain relative performances vs. others airline), but above all Ryanair capacities decrease (U2 is the first to benefit from it) or some markets more favourable conditions (eg. Milan, Basel, UK domestics) or competitors inactivity (eg. France). I hardly see any market where competition increase (except maybe Madrid).
Despite good results, I personally believe McCall is not doing a good job. No new good innovation at all since she's there, no decision on fleet replanning (while max and neos availability now very far away), poor relation with Stelios, no communication/media activity, big fees in army of consultants as she has no understanding of the business whatsoever, and she still arrives with her chauffeur!
(at least MOL does it for a reason)
I've not seen any stats regarding the flexi fare so i'll take your word for it. However having the option of a flexi fare mustn't be costing the company much though. Despite that just because the flexi fare isn't selling particularly well is no indication that business travellers aren't using Easyjet. As i've said before we all stereotype the business passenger as being the executive/owner etc when actually much of what is quantified as business travel includes employee's of all grades from the executive right down to the blue collar workers on the shop floor. And partly as a consequence the flexibility of a flexi ticket isn't needed. They now have an established relationship with the business travel trade and have secured corporate contracts with several big businesses.
Leisure or VFR will always be extremely important to Easy and will probably always remain the majority of the Easyjet market. Of course Easyjet has built itself on encouraging folk to spend there disposable income on extra holidays and making it cheap enough for those people to make it possible. But at the same time they are at all these major European (often slot constrained) airports where the business passenger is in abundance. Why does chasing that passenger seem such a bad move? As i said they fly more, fly all year and generally pay more.
Allocated seating. You are one of the few people who recognise that the business traveller doesn't mind or even likes free seating. Many seem to think otherwise. There is however a hell of a lot of Easyjet's passengers who don't like it and whilst I always think that the "boarding scrum" term is somewhat an exageration....I do believe allocated seating is the way forward. It's something that, provided it doesn't impact on OTP, the airline can do to make the experience better at little cost.
The frequent flyer scheme comes up occasionally even from employees within the company. I think the line has always been along the lines that it hasn't been needed, they do quite well without it thankyou
Leisure or VFR will always be extremely important to Easy and will probably always remain the majority of the Easyjet market. Of course Easyjet has built itself on encouraging folk to spend there disposable income on extra holidays and making it cheap enough for those people to make it possible. But at the same time they are at all these major European (often slot constrained) airports where the business passenger is in abundance. Why does chasing that passenger seem such a bad move? As i said they fly more, fly all year and generally pay more.
Allocated seating. You are one of the few people who recognise that the business traveller doesn't mind or even likes free seating. Many seem to think otherwise. There is however a hell of a lot of Easyjet's passengers who don't like it and whilst I always think that the "boarding scrum" term is somewhat an exageration....I do believe allocated seating is the way forward. It's something that, provided it doesn't impact on OTP, the airline can do to make the experience better at little cost.
The frequent flyer scheme comes up occasionally even from employees within the company. I think the line has always been along the lines that it hasn't been needed, they do quite well without it thankyou
Last edited by easyflyer83; 11th Oct 2012 at 21:35.
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Can someone please explain to this person who's only been in aviation 30 years what the heck U2 means...?
Or am I being dim?
I'm also intrigued to hear that staff morale at EJ has improved. In which part of the staff I wonder (apart from the multi£M bonused-to-death management). Do tell!
Or am I being dim?
I'm also intrigued to hear that staff morale at EJ has improved. In which part of the staff I wonder (apart from the multi£M bonused-to-death management). Do tell!
Last edited by Agaricus bisporus; 3rd Feb 2012 at 00:27.