Business World

Wednesday 22 January 2020

EasyJet chief focused on ending delays

Carolyn McCall, EasyJet Plc’s new chief executive officer, said her primary task is to end flight delays at London’s Gatwick airport and open communications with founder Stelios Haji-Ioannou, who opposes growth plans.

McCall, 48, who joined Europe’s second-biggest discount airline from Guardian Media Group on July 1, will review crew and rostering issues in a bid to resolve staff shortages and delays at bases including Gatwick by November, she said on conference call today.

The CEO is open to talking with Stelios as the airline and the entrepreneur’s EasyGroup await a court ruling over rights to the “Easy” name, McCall said.

The flight delays aren’t relevant to a brand-license agreement which Stelios, who is known by his first name, has suggested could be scrapped within 90 days if the glitches aren’t resolved, she said.

“Our task now is to deliver a period of stability while we look over the business with fresh eyes,” McCall said on the call.

The fleet-expansion strategy opposed by Stelios, who is also EasyJet’s biggest shareholder with a 38pc stake, will be reviewed on an annual basis. “The first impression is that the network is strong.”

The CEO said she’ll attempt a short-term fix for the delays by focusing on early-wave flights, or the first departures of the day typically used by business travelers, as well as seeking solutions from the owners of Gatwick, where EasyJet is the biggest airline, and rescheduling later services to give a bigger buffer between operations.

Ash cloud

EasyJet’s sales rose 5.3pc to £759.2m (€910m) in the third quarter ended June 30 as the carrier targeted markets outside the UK and passenger defections from British Airways during a cabin-crew strike resulted in a £7m gain.

The results were “robust,” given the disruption from the ash cloud, which led EasyJet to cancel more than 7,000 flights and cost £65m in lost revenue and refunds, McCall said.

With less restrictive flight bans the cost would have been only £20m, she said.

EasyJet will “explore all options” to recoup losses from the eruption after the UK government said it wouldn’t be providing compensation, McCall said. Those options include participating in a class action lawsuit, she said.

Earnings target

The airline, which ranks second to Ryanair among Europe’s discount airlines, remains on course to report a full-year pretax profit of £100m to £150m, the CEO said.

About 64pc of seats are already sold for the fourth quarter and per-seat revenue may rise by a faster-than-expected 2.5pc for the full year.

EasyJet fell 5pc to 413 pence as of 10:30am in London. The stock has added 17pc this year, boosting the company’s market value to £1.77bn.

EasyJet has no plans to follow Air Berlin and join a global alliance, and doesn’t consider itself to be a “hybrid” between discount and full-service carriers, said Finance Director Chris Kennedy, who also joined July 1, from EMI Music.

The carrier has arranged to sell four remaining Airbus SAS A321 aircraft inherited with the purchase of GB Airways in 2008 back to the manufacturer or a subsidiary, it said in a statement today. The cash amount will be about equal to the jets’ book value.


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