easyJet soars

Courtesy easyJet

Courtesy easyJet

It is a dream come true for easyJet, which in October revised its full year pre-tax profit upwards to between £575m (US$899m) and £580m, previously expected to be between £545m and £570m. (See easyJet rides on Air France’s troubles, Oct 8, 2014)  The budget carrier announced profits of £581m for the year ending September 30, an increase of 21.5 per cent from last year’s £478m.

The good results arose from:

  1. Acquisition of additional slots at Gatwick Airport from rival airline Flybe;
  1. A 7-per-cent increase in traffic to 64.8m passengers carried, filling up 91 per cent of seats available’ and
  1. Cheaper fuel.

Going forward, easyJet expects positive results particularly in light of fuel prices continuing to dip. (See Falling fuel prices do not necessarily lead to lower airfare, Nov 13, 2014) the airline has not ruled out likely fare increases.

The success of the likes of easyJet and Ryanair reflects the competition that budget carriers pose to legacy airlines. (See Ryanair attributes success to its business model, 6 Nov 2014) Air France and Lufthansa, for example, are trying to give more punch to their version of low-cost travel via Transavia and Germanwings respectively. (See Budget phobia grips European airlines, Oct 22, 2014) Why should the experienced full-service airlines be concerned?

easyJet chief executive Carolyn McCall told the BBC: “When people sample us, when they try for the first time, they tend not to go back to legacy airlines.”

The lure of low fares is a starting point, and when budget carriers begin to focus a little more on service and what travellers genuinely want, therein lies the threat for the traditional airlines. Ryanair for one has said it was changing its image to be a more caring airline. (See A humbler and more caring Ryanair, May 22, 2014) For the short haul, budget carriers have finally shown that they can crack the legacy airlines’ dominance. They may not be able to afford the full complements of the big boys, but what they are offering is a value proposition, the strategy of balancing what travellers would pay or forgo for what they offer.

About Dingzi
Writer by passion, with professional expertise in aviation, customer service and creative writing. Aviation veteran with more than 30 years' experience, columnist, pubished author of fiction, poetry, plays and travel stories, editor and management consultant. Nature lover who abhors cruelty of any form to animals, and a tireless traveler.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: