Increasing staff is crucial to reducing flight delays, insists new EasyJet CEO
Published 29/07/2010 | 05:00
Carolyn McCall, EasyJet's Plc's new chief executive officer, has said that addressing flight delays at London's Gatwick airport is her most immediate objective.
The company fell as much as 6.8pc in London trading, the biggest drop since April 28, 2009, after Ms McCall -- in her first comments as CEO -- outlined the need for a reassessment of staffing levels in order to combat the delays.
Ms McCall (48), who joined from Guardian Media Group Plc on July 1, also said she had opened communications with EasyJet founder Stelios Haji-Ioannou, who opposes the carrier's growth plans.
The company is locked in a legal tussle with Stelios over its use of the 'Easy' name, with Stelios threatening to terminate a license to the brand if the "on-time performance" issues aren't resolved within 90 days.
"They (EasyJet) can't afford to be running bad punctuality figures," said Gert Zonneveld, an analyst at Panmure Gordon in London.
"They have a pretty intensive schedule and there isn't much flexibility, so if they suffer disruption it's tough to make up for it, and that results in less efficiency."
Mr Zonneveld also pointed out that Ms McCall failed to address strategic questions and concerns regarding EasyJet's schism with Stelios, who is the airline's top investor with a 38pc stake.
Ms McCall said lines of communication "are open" with Stelios as the entrepreneur's EasyGroup awaits a court ruling over its questioning of the airline's right to use the 'Easy' name for revenue-generating activities not directly related to flights.
Ms McCall said EasyJet had separately been advised that the delays at Gatwick and elsewhere were not relevant to a brand-license agreement.
"Our task now is to deliver a period of stability while we look over the business with fresh eyes," Ms McCall said.
EasyJet's fleet-expansion strategy, which is also opposed by Stelios, would be reviewed on an annual basis, she said. She added that she was seeking a fix for the delays by November and in the meantime would focus on the first departures of the day typically used by business travellers.
She said she would also seek solutions from the owners of Gatwick, where EasyJet is the No 1 airline, and reschedule services to give a buffer between trips.
The results were "robust," given the disruption from a volcanic eruption in Iceland, which forced EasyJet to cancel more than 7,000 flights, to the cost of £65m (€78m) in lost revenue and refunds. With less restrictive flight bans, the cost would have been only £20m (€24m), MsMcCall said.
She said EasyJet would "explore all options" to recoup the losses after the UK government said it would not compensate the company. Those options included participating in a class action lawsuit, the CEO said.