easyJet announced (05-Sep-2012) plans to roll out allocated seating across its network from Nov-2012. The move follows a trial of the system since Apr-2012. During the trial period over 800,000 passengers flew on 6000 trial flights. Research among passengers taking part in the trial showed more than 70% thing allocated seating is better than easyJet's current system due to the improved boarding experience. 60% of passengers said they would be more likely to fly with easyJet in the future due to the improved experience. The trial showed passenger satisfaction improved without adding cost or impacting the airline's ability to maintain high levels of punctuality. easyJet CEO Carolyn McCall said, "This is an example of easyJet trying to do all it can to make travel easy and affordable for our passengers. Our customers asked us to trial allocated seating and we are really pleased with the positive passenger feedback during the trial. As importantly, we have shown that we can do so while delivering strong on time performance – the most important driver of passenger satisfaction." Passengers will be able to pre-select their seat for a fee while those who do not will be allocated a seat free of charge. [more - original PR]
easyJet to bring in allocated seating on all flights
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Ryanair, easyJet, Norwegian, Wizz Air, Pegasus Airlines: Europe's top LCCs' collective margin drops
CAPA's previous analysis of the 3Q2016 results of Europe's big three legacy airline groups highlighted a fall in their collective operating margin, after growth in 1H2016. This report shows that Europe's five leading LCCs, in aggregate, also suffered a fall in profit and margin in the quarter.
Three of the five – Ryanair, Norwegian and Wizz Air – improved their profit margin in the quarter, but easyJet's drop in margin was heavy enough to bring down the collective result. Pegasus' margin also declined.
Nevertheless, the LCC five remain collectively far more profitable than the legacy three. Moreover Europe's two most profitable airlines, Ryanair and Wizz Air, look set to increase their margin lead this year. Even easyJet, which has had a bad year by its standards, achieved a higher margin for calendar 9M2016 than the most profitable of the big three legacy groups, which was IAG.
The divergence of results in the European sector suggest that not all airlines are following the same cycle. However the collective margin decline for the continent's leading LCCs, and its major legacy airline groups, at least gives reason to question whether or not the cyclical upswing may have run its course.
easyJet: accelerating growth to take share from legacy airlines in strong easyJet airports
In spite of challenging market conditions and falling profits, easyJet remains on the offensive in its fight for market share with legacy airlines. It is also making contingency plans to apply for an EU AOC to ensure continued intra-European traffic rights in the post-Brexit future.
easyJet's revenue per seat, pre-tax profit and return on capital employed all fell in FY2016 (year to Sep-2016), the first reversal since before CEO Dame Carolyn McCall took the helm in FY2010. In spite of lower fuel prices, easyJet could not lower its cost per seat fast enough to offset the drop in unit revenue. Load factor was just above flat at 91.6%, so the drop in revenue per seat was all price-related. A series of external events put pressure on pricing – including terrorism, ATC strikes and the UK's Brexit vote.
Some airlines might tighten their capacity growth in the face of weak pricing, but easyJet plans to accelerate its seat growth from 6% in FY2016 to 9% in FY2017. It has its sights on an opportunity to take share from legacy airlines in airports where it already has a strong market position.