easyJet announced (27-Jan-2013) that Sir Mike Rake has informed the Board of his intention to step down as a non-executive director and as chairman of easyJet plc in summer 2013. Sir Mike will still seek re-election at the Annual General Meeting on 21-Feb-2013 and has agreed to remain in his post in order to ensure a smooth hand over and provide the Board time to identify a suitable replacement. The Board's Nomination Committee has commenced a process to select and appoint a successor, reviewing both internal and external candidates. Sir Mike Rake said: "easyJet has by any definition enjoyed a period of success and profitable growth in the last three years. As this takes the airline to the threshold of entry to the FTSE 100 it is the right time for me to stand down.... Carolyn McCall and her management team have developed and implemented the right strategy for the airline which is already bearing fruit with record profits, a healthy share price and strong dividends. The airline is now well positioned to continue to deliver profitable growth and returns for all its shareholders." [more - original PR]
easyJet announces Board change, carrier 'bearing fruit with record profits'
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Ryanair's 117million pax in 2016 tops European airline groups. The first time an LCC topped rankings
For the first time ever in Europe, in 2016 a low cost airline carried more passengers than any other airline or airline group, as Ryanair's 117 million passengers pushed Lufthansa Group's 110 million into second place. Ryanair had beaten Lufthansa itself, but not the whole Lufthansa Group. IAG's first full year of including Aer Lingus helped it to take third place from Air France-KLM. Europe's number two LCC, easyJet, was ranked fifth.
The big five can be expanded into a big seven to include Turkish Airlines and the Aeroflot Group, although these two had contrasting growth rates in 2016. A chasing pack of middle sized airline groups includes three LCCs (Norwegian, Pegasus and Wizz Air) and three legacy airlines with varying challenges to establishing sustainable profitability (SAS, Air Berlin Group and Alitalia).
Most of the faster growing airline groups in the top 20 are LCCs and the main growth drivers for Europe's big three legacy groups are their LCC subsidiaries. Just outside the top 20 are some fast growing legacy airlines in Eastern Europe, demonstrating the potential there. Nevertheless, unless there is a big merger or acquisition, Ryanair looks set to remain at number one for some time.
British Airways: cabin crew dispute tests the airline's resolve to reduce unit labour cost
A vote on 14-Dec-2016 by British Airways 'mixed fleet' cabin crew raises the real threat of strike action - and, as is often the case, in the lead up to a peak holiday period. This would be the first serious industrial action since strikes by cabin crew protesting at the 2010 introduction of mixed fleet crew. BA, and its parent IAG, have been praised by many observers (including CAPA) for their resolve in driving through important restructuring programmes in legacy airlines, while their European peers have fallen behind the field. A crucial part of this has been to generate labour productivity improvements, often in the face of union resistance.
British Airways has a good track record in improving the efficiency of its workforce, as measured by ASKs per employee. In 2015 it made its highest-ever operating profit margin, beating Europe's other major legacy airlines, and it looks likely to improve on this once again in 2016. However, it does not have a great record of lowering unit labour cost.
Moreover, BA is currently experiencing falling unit revenue. With help from lower fuel prices receding, cutting ex fuel unit cost will be vital if BA is to fight off the margin squeeze resulting from unit revenue weakness. Labour is a key element of ex fuel cost, so the cabin crew dispute is a test of BA's resolve.