easyJet stated (15-Apr-2011) it is making progress on its AVOID (Airborne Volcanic Object Identifier and Detector) system and called upon the aviation industry to work together to avoid further disruption in European airspace from future volcanic activity. The LCC's call comes a year after the Apr-2011 ash cloud crisis, which closed European aerospace for a week. The AVOID system is a weather radar for ash. AVOID uses infrared technology that is fitted to aircraft to supply images to pilots and an airline’s flight control centre. The images enable pilots to see an ash cloud, up to 100km ahead of the aircraft and at altitudes between 5000ft and 50,000ft, thus allowing them to make adjustments to the plane’s flight path to avoid any ash cloud. On the ground, information from aircraft with AVOID technology would be used to build an accurate image of the volcanic ash cloud using real time data. This would open up large areas of airspace that would otherwise be closed during a volcanic eruption, which would benefit passengers by minimising disruption. The technology is awaiting approval from the European Aviation Safety Agency and easyJet is also hoping to be given financial support by the European Commission. [more]
easyJet update on volcanic ash AVOID system
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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.