EasyJet chief says: vive la différence

Carolyn McCall, easyJet chief executive, sees her airline as distinctly different to other low-cost carriers.

“We don’t do things the way everybody else does them,” she says.

While easyJet’s rival Ryanair – for long the darling of the European airline industry for investors – has been forced to issue two profit warnings in as many months, blaming a weak economy and competition, easyJet has managed to fly well above the turbulence.

Since Ms McCall became chief executive in 2010, easyJet has gone from flying 50m passengers a year to 61m – earning her widespread praise from industry analysts.

In March, the airline joined the FTSE 100 and Ms McCall navigated her way past opposition from easyJet’s founder and largest shareholder, Sir Stelios Haji-Ioannou, to secure a new aircraft fleet order.

Investors seem to regard easyJet as different to other carriers, too. Its shares are up more than 75 per cent since the start of the year – in sharp contrast to Ryanair’s, which have risen 18 per cent over the period, during which the company had to sharply change course on its customer service.

Having carved out a distinct identity – and one that keeps passengers coming back – Ms McCall repeatedly emphasises that difference.

“Our differentiation is a really important part of what we do,” she says. “And we’ll remain different. We’re less formal, we’re more vibrant and our cabin crew smile a lot.” However, she adds: “No one is immune from economic conditions.”

Much work has gone into developing and positioning the brand, she said, to make it “warmer, friendlier and more accessible” – although she challenges the suggestion it has moved upmarket.

Nevertheless, easyJet appears to regard the flag carriers – Air France, British Airways, Alitalia – as its competition: it recently said its opportunity lay in the 86m seats flown point to point by non low-cost carriers from Europe’s top 20 airports.

Business travellers remain a focus, but Ms McCall rules out changing easyJet’s model by introducing a separate business class.

“They get everything they want without us having to change the way we segment the aircraft or our seat configuration,” she says. “That’s when you start tampering with the model in my view, and that’s what we would never do.”

Instead, she says her priority is to increase yield by offering easyJet’s 11m business travellers paid-for extras. WiFi will be offered, she says, because all other airlines will provide it.

In spite of these moves, she dismisses the risk of losing focus. “We’re very clear about our strategy, we’re very clear about what works and it’s about delivering that relentlessly and improving what we do,” she says.

John Strickland, an aviation consultant, believes this clarity will be essential. “They’ve got to keep management focus and I think they can do it,” he says. “It means keeping your eye on the ball. Carolyn McCall has got focus and has been able to unite the team. The risk is doing something differentiated and ending up undermining what they’ve done so far.”

Even Sir Stelios Haji-Ioannou has become less vociferous in protest over management decisions. Ms McCall is diplomatic: “Our relationship with easyGroup has always been constructive. We’ve had a really good dialogue with them.”

On Tuesday, he praised the decision to pay the dividend: “Another victory for all the shareholders of easyJet PLC. The directors have now accepted that more money has to be returned to the shareholders – if only they would accept that less cash should go to Airbus for more planes.”

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