EasyJet: a digital leader growing ancillary revenue, but profit falls again as Dame Carolyn departs
EasyJet has been a leader among European airlines in digital innovation, particularly in its commercial strategy. Its digital initiatives are widening its distribution channels, facilitating a smoother customer experience and adding to payment options. This is helping to grow customer loyalty and to drive both revenue growth and cost efficiencies.
In addition to developments in distribution and customer relationship management, other innovations enabled by IT and digital technology include easyJet Worldwide (the new partner airline flight connecting product); actions in easyJet's 'lean' cost saving programme; the use of iPads for pre-flight checks in Palma; predictive maintenance, and engineering initiatives to reduce fuel use and carbon emissions.
However, it will be a source of at least some disappointment to the departing CEO Dame Carolyn McCall, when looking back on her otherwise successful seven years in charge, that easyJet's profits have fallen for the past two years.
The problem has mainly been related to weak unit revenue. Digital developments helped ancillary revenue to outpace fare revenue and to grow to 20% of the total in FY2017 from 16% two years ago. However, this was only back to the level when Dame Carolyn took over, and suggests that easyJet's digital strategy is not yet yielding its full potential.
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