- CAPA Analysis
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- IATA Code
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- 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
- Codeshare Partners
- Transaero Airlines
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 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.
2,218 total articles
218 total articles
The last of Europe's stock market-listed airlines recently reported financial results for 2014, providing the opportunity to compare levels of profitability. Ranking them by operating margin, there is a wide range of performance from healthy double digit to negative figures.
LCCs typically performed better than legacy airlines. Most of the higher margin airlines improved in 2014, while most of those at the lower end of the scale suffered a fall in margins. Convergence of business models does not show itself in convergence of financial performance.
Beyond the listed airlines, Europe has a large number of mainly small and unprofitable airlines, which drag down the aggregate margin of the continent's airline sector. Europe's traffic growth and load factors are relatively healthy by world standards, but its margins are held back by its fragmented market structure.
The economic backdrop in Western Europe was sluggish in 2014 and remains fragile into 2015. In particular, the eurozone nations continue to struggle to recover fully from the global recession. A Jan-2015 poll of economists conducted by the Financial Times suggests that most experts expect GDP growth in the eurozone to be around only 1% in 2015.
This is a little better than 2014, but well short of the cyclical peak growth rates in excess of 3% that have not been seen since 2007.
For 2015, the two most important strategic issues facing Western Europe’s legacy airlines, particularly the Big Three flag carrier groups, will be restructuring in their core businesses and maximising their low-cost vehicles.
Just as Rome was not built in a day, the battle among the airlines at its main airport will also take its time to play out.
A year ago, CAPA examined the growing levels of competition at Rome Fiumicino. The fight was not only between the disruptive LCCs and the well-established, but struggling, Alitalia. It was also increasingly between the LCCs themselves. At that time, Ryanair had just entered the airport for the first time, Vueling was about to establish a new base and to inject massive capacity growth there and easyJet also planned strong growth. Alitalia faced further erosion of its market share.
A year on and the battleground continues to be fiercely contested. Vueling plans further huge growth this summer, Ryanair is to transfer more routes to Fiumicino from Ciampino and easyJet, while taking a relative pause for breath, is still set to grow capacity at a double digit rate this summer. Alitalia's share continues to fall, but at least it has ensured its survival after receiving an investment by Etihad.
Both Ryanair and easyJet recently reported strong progress during the quarter ended Dec-2014. Both demonstrated that losses in the traditionally weak winter period are narrowing. Ryanair even looks set to report a profit for its winter half year and raised its guidance for FY2015 (March year end).
Ryanair cautioned that high levels of fuel hedging would limit profit growth in FY2016, especially as it expects lower fuel costs to add to downward pressure on fares. easyJet too has fairly high levels of fuel hedging. Nevertheless, both look well positioned to take further market share from higher priced legacy carriers, building on initiatives around product and service quality and targeting business travellers (although they are at different stages in these areas).
Where there is a marked contrast between Ryanair and easyJet is in average revenue per passenger. Ryanair's lower costs allow it to sustain lower fares profitably. For many years, the two have mainly attacked different markets, but head to head competition between them is on the increase. In this report, we analyse the extent of their overlap.
CAPA's top 10 stories of the year - ranked by number of visits - is, we confess, weighted in favour of those which appeared in the first part of the year, but we offer them as holiday reading as we look back on another eventful 12 months. Ryanair is as always a popular topic; its Feb-2014 report topped the number of visits to a CAPA report by a long way. Our other SWOT analyses also feature, with Singapore Airlines and easyJet "swotted" in the Top 10.
Reports driven by CAPA's Airport Construction and Investor Databases have also been strong performers throughout the year; the unique and extensive detail they contain makes for compulsive reading for airport-related activities. And Dubai Airport's relentless rise through the capacity ranks secured it a place in the Top 10 as well.
Etihad has been a news leader during 2014, ending as CAPA's Airline of the Year in recognition of the structural change it is introducing to the world's system. Singapore Airlines, also an agent of change in some ways, now with three low(er) cost airline subsidiaries, appeared twice and the A380 and A350 also attracted attention.
We thank all CAPA Members and other visitors for your great support in 2014 and look forward to continuing to provide you with industry leading analysis, news and data in 2015.
Ryanair lags easyJet on business traveller & customer service initiatives; both have great potential
Ryanair recently raised net profit FY2015 guidance (year to March) for the second time. It now expects EUR810 million to EUR830 million, up from its previous range of EUR750 million to EUR770 million. This was thanks to faster passenger growth, stimulated by lower fares, but also reflecting improved customer service and new routes.
The largest carrier of passengers within Europe, Ryanair has rebounded very strongly from last year's profit warnings. Almost at the flip of a switch, it has raised its load factor and profit margins. It is opening new routes from more primary airports and with greater frequencies, increasing its appeal to business passengers.
Ryanair lags easyJet in its initiatives towards business travellers and regarding wider customer service improvements. Moreover, revenue per passenger is set to dip in 2HFY2015 as it absorbs strong capacity growth. Nevertheless, Ryanair has a significant opportunity to grow revenue per passenger as it follows easyJet up the yield curve. In this report, we compare the two on frequencies, presence in major airports and unit revenues. There is still room for both.