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- IATA Code
- ICAO Code
- Corporate Address
- Hangar 89, London Luton Airport,
- Main hub
- London Gatwick Airport
- United Kingdom
- Business model
- Low Cost Carrier
- Domestic | International
- Airline Group
- Part of EasyJet plc
- Association Membership
Based at London Luton Airport, with its busiest hub at London Gatwick, easyJet was founded by Sir Stelios Haji-Ioannou in 1995. The carrier has experienced rapid growth since its establishment, expanding due to a combination of acquisitions and base openings triggered by consumer demand for low-cost air travel. Utilising a fleet of narrow-body Airbus and Boeing aircraft, easyJet operates an extensive network throughout Europe as well as to northern Africa and Israel. easyJet is listed on the London Stock Exchange under the ticker: EZJ.
Location of easyJet main hub (London Gatwick Airport)
easyJet share price
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider easyJet fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
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Europe's airlines: 1H2014 results season shows improving trend, but cost reduction is the key driver
Europe's airlines appear to be following a course to improved profitability, based on the 1H2014 results of the largest publicly quoted airline groups. Profits remain slender in most cases, but margins are improving in aggregate. Individually, financial performance varied widely, with LCCs both leading (Ryanair) and lagging (Norwegian) the operating profit margin rankings in 1H2014.
The European market offers volume growth, but is characterised by price pressure, with RASK falling for the majority of the larger airline groups and this points to the need for additional caution in capacity growth. The LCCs collectively enjoyed higher growth than the FSCs in 1H2014 and also achieved a more stable RASK performance (although not in all cases).
Profit improvement is largely being achieved through cost savings and CASK reduction. Although fuel prices are high on a longer term historic perspective, they are enjoying a period of relative stability and this has helped the cost picture. Although Europe's airline sector remains only thinly profitable, these 1H results hold out the prospect of better full year results in 2014 versus 2013.
easyJet's reported revenue growth of 8.6% for 3QFY2014 (i.e. Apr-2014 to Jun-2014), is an acceleration on 1H's 6.3%, with further growth in revenue per seat. However, load factors are already at industry-leading levels throughout the year and easyJet will probably need to focus more on revenue per passenger if it is to continue to see continued growth in revenue per seat. In 3Q, it experienced a rare (and slight) dip in revenue per passenger. To some extent, the change in the timing of Easter distorts year on year comparison for 3Q, but the airline's new FY2014 guidance implies a modest fall in revenue per seat in 4Q.
Strong capacity growth by easyJet at Gatwick, due to the acquisition of slots from Flybe, and a competitive environment of increasing capacity growth are making themselves felt in this modest yield weakness.
Nevertheless, easyJet's unit costs were lower than previously expected and it has a significant cost advantage versus legacy carriers at the primary airports on which its network focuses. Moreover, its FY2014 guidance implies another year of double digit profit growth and return on capital above the cost of capital.
Announcing his first set of annual results as Flybe CEO, Saad Hammad declared that the airline had been "reborn" in FY2014. It was certainly a year of great significance in Flybe's 35 year history. The company returned to profit after three years of losses and successfully raised GBP150 million in fresh equity, avoiding what was starting to look like a looming bankruptcy and buying more time to complete its restructuring.
The return to profit was built on network rationalisation and a seat capacity reduction in the core Flybe UK airline. This was accompanied by a significant headcount reduction which led to lower costs. Load factors were driven up by the capacity cut and lower fares, leading to higher revenues per seat and a slight increase in total revenues. Losses were also reduced at Flybe Finland, the joint venture with Finnair.
Importantly, too, Mr Hammad and the rest of the new management team seem to be bringing about a cultural change in Flybe, with a brand re-launch and his talk of 'Purple Power'.
The airline business is a seasonal one and European airlines tend to lose money in the winter. EasyJet is no exception in this respect, but it has again narrowed its winter loss in 1HFY2014. With targeted capacity growth, it increased its revenue per seat faster than cost per seat.
Revenue per seat was also helped by a growing number of passengers flying for business purposes. On a rolling 12 month basis, easyJet said that it carried 12 million business travellers in the year to Mar-2014, around 20% of total passenger numbers. Since it started to target business passengers in 2010, the number has grown by 44%, demonstrating what can be achieved without having a business class cabin.
Competitor capacity growth is accelerating this summer and easyJet will see its own growth accelerated by the inclusion of Gatwick slots acquired from Flybe. This may lead to some downward pressure on yields, although the strength of its network and product features such as allocated seating may mitigate this. Certainly, narrower winter losses place it well for another year of healthy growth in profit.
easyJet has recently concluded long term deals with Gatwick and Luton airports, its two largest London bases. The Gatwick deal follows a change in economic regulation that encourages a more tailored approach and the Luton agreement follows a change of concession ownership and a commitment to capacity expansion.
Last year, easyJet reached a similar agreement with Stansted, which is no longer subject to economic regulation. easyJet also operates from Southend, the smallest London airport, albeit not under a long term contract.
easyJet's London airport deals give it both a high level of visibility over airport charges and real flexibility about where to deploy its capacity. It has thrown an effective lasso around the UK's capital, and now appears to have tightened its grip on the rope.
Israel’s air travel market seems to be attracting attention. In recent weeks, there have been headlines about new routes from Vueling, TAROM, Arkia, Transavia, Jetairfly, Wizz Air, Yan Air, Med-View Airline, easyJet, Meridiana, Air Serbia and Air Onix; and increased frequencies by TAROM, Norwegian, easyJet, El Al, Alitalia, Lufthansa and airberlin.
Following the signing of an EU-Israel open skies agreement in 2012, a factor in increased services from the EU, countries including Russia, the Philippines and Kenya are also considering developing new air services agreements with Israel. In addition, a security-related restriction on Israeli carriers operating to Turkey (one of the few major aviation markets outside Western Europe and the US that has links to Israel) looks set to be lifted.
For a country of above average levels of wealth, as defined by GDP per capita, air travel penetration is also high, but lower than for other similarly wealthy nations. The Israeli market has generally seen healthy growth in recent years, but this has been uneven. Israel has significant potential for the airline industry, but its realisation will continue to be subject to politically-driven developments on traffic rights.