Easyjet

Topics: Low-cost carrier, London Gatwick Airport, Ryanair Pages: 70 (5600 words) Published: January 23, 2015
Driving returns and
profitable growth in
European aviation
10 September 2013

1

Agenda
Introduction

Carolyn McCall, CEO

Build No.1 and No.2 network positions

Carolyn McCall, CEO

Maintain cost advantage

Warwick Brady, Chief Operations Officer

Drive demand, conversion and yield

Peter Duffy, Group Marketing Director

Capital discipline

Chris Kennedy, CFO

Summary

Carolyn McCall, CEO

2

Europe's leading short haul air travel network


60.5m passengers, 67.8m seats flown
load factors 89.2% (1)



fleet of 212 aircraft with an average
fleet age of 4.9 years



leading presence on Europe’s top
100 routes



over 612 routes across more than
30 countries



strong position in key markets:
No.1 in London Gatwick, Milan, Geneva



employs over 8,000 people including
2,000 pilots and 4,500 cabin crew



300 million people live within a one
hour drive of an easyJet airport

(1) As at 31 August 2013 or 12 months to 31 August 2013

3

Delivering returns and profitable growth
Growing returns
ROCE incl. lease adjustments
10%

16%
11%

7%

Competitive advantages

4%

1. Efficient, low cost model
2009

2. Strong network and market
positions

2010

2011

2012

Profit per seat and margin growth
c.11%

8
7

3. easyJet.com and brand

8.2%

6

5
P BT / seat

4. Strong balance sheet

Mar'13
(annualised)

6.3%

4.81

4
3

2
1
0

>£6
>£6

7.2%

3.36

3.97

1.6%
0.83
2009

2010
PBT / seat

2011

2012

2013 consensus

PBT margin

Year
Source: Bloomberg consensus profit before tax of £470m for the financial year ending 30 September 2013. Data as at 6 September 2013

4

Evolving industry dynamics
Competition
& supply

Consumers
• Continue to value low
fares and convenience

• Restructuring
and
consolidation

• Price, frequency and
availability are key

• Legacy losses
• Convergence of
models
• New fleet
orders from
successful
airlines

well
positioned
to be a
structural
winner

Government
• Rising airport charges
and taxes
• Infrastructure projects
need funding

5

easyJet’s competitive position
On an airport pairs basis, easyJet’s main competitors are the legacy carriers 60%

IAG

50%

Air France
KLM

% Overlap on a city basis

40%

Ryanair

30%

Network / legacy carriers
Low-cost competition

Lufthansa Grp

20%

Alitalia

Air
Berlin

10%

Wizz
0%

Jet2

Charter carriers
Size of bubble reflects market share
in European short haul market

TUI
Vueling

CompDrop
CompDrop
CompDrop
CompDrop
CompDrop
CompDrop
CompDrop
CompDrop
CompDrop
CompDrop
CompDrop
CompDrop
CompDrop
CompDrop

Monarch

Thomas
Cook

Norwegian

% overlap on an airport pairs basis
-10%
0%

5%

10%

Source: easyJet analysis using OAG

15%

20%

25%

30%

6

Structural advantage against legacies
On-going cost advantage
against legacies and
charter airlines
• Seat density
• Load factors
• Point to point vs. feeder
• Fleet
• Pensions / crew costs
• Overheads

Typical A320 aircraft

easyJet

Typical Legacy

Seats

180

156

Load factor

90%

70%

Passengers / flight

162

109

Daily sectors

5.45

4

£278k

£278k

£68/pax

£136/pax

Revenue / a.c.per day
Ave fare

Source: Redburn, 13 March 2013

Legacy would have to charge double easyJet
fare to generate same revenue per aircraft

Cost advantage and ability to offer affordable fares allows easyJet to continue to grow profitably and to take share from legacies

7

Winning against low-cost competition
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