Easyjet CEO Carolyn McCall spoke to BBT journalists when she addressed the business travel industry at the GTMC conference in Marrakech, and at ACTE’s travel buyer event at Gatwick airport.
Easyjet’s low-cost model underpins its successful growth, according to Easyjet boss Carolyn McCall.
“What does ‘low-cost model’ mean? It means we have new engines, high fuel efficiency. Our plane utilisation, turn-time and load factors are very high, we use our assets really well. We don’t have fancy offices, we have a hanger – open plan offices, and we share space with plane maintenance. It’s very important to us, we’ll never lose sight of it – without that low-cost model, we wouldn’t be able to do the low fares.
McCall said she was not concerned about Ryanair’s recent moves to attract corporate travel business. “Ryanair only flies to a few primary airports – but not many. It’s an entire change to their network strategy if they’re going to really be relevant to business travellers.
“All our research confirms that business travellers want convenience, primary airports, speed – often they want to get there and back in a day, and don’t want a 1.5 to two-hour transfer city centres.”
McCall said Easyjet had considered flying its Moscow service from Heathrow, before deciding on Gatwick. The airline has also applied to join a key committee, which represents operational and strategic interests of carriers operating out of Heathrow.
“There’s been quite a lot of rumours that Easyjet would never fly from Heathrow, which is baffling, because we have 10 aircraft at Charles de Gaulle, we fly out of lots of hubs already, we’re the number two airline at Schiphol,” she said. “It all depends on cost, and Heathrow is an expensive airport.”
In a similar vein, she doesn’t give a definitive view on Gatwick’s and Heathrow’s bids for runway expansion.
“We’ve seen none of the economics behind either of those visions. Inevitably it will be the airlines and therefore the passengers, that will fund this. Therefore, it’s a very, very big decision for Easyjet – because any increase in passenger fares is something that affects our low-fare proposition.
“We make £7 profit per seat – that’s it. We’ve raised that from £4.50 over the last four years. I think Heathrow are talking around £15 billion, Gatwick are talking around £7-8bn. If you think about the price per passenger for that, you can see we have to be really, really careful about any capacity going into either airport, and before we take a view on it, we have to understand the economics.”
This scrutiny of the bottom line is key to Easyjet’s relationship with business travel buyers, said McCall – and why she’s not looking at traditional volume-based corporate deals.
“For us, it’s all about the fact that we save corporates a minimum of 30 per cent on their travel budget” – Easyjet says this claim is backed by independent TMC benchmarking for routes in 2013. “Legacies need the volume – we get a load of volume. The reason we want business travellers is because we know we get higher yields.”