Market disrupters have always excited us at The MBS Group. I will never forget the first time I flew Virgin Atlantic back home to South Africa. Up until then, international air travel had been a staid, unexciting and mediocre experience – but Richard Branson was determined to bring back some lost glamour to the skies.
Just over a decade later, along came another maverick. This time it was to be Stelios Haji-Ioannou (now Sir Stelios, of course), who followed Richard’s lead and shook up the airline industry, raising it up a notch like Virgin’s model and turning the way we look at the industry on its head.
The name of his business might be easyJet, but the ride hasn’t always been easy. The company stagnated at times and there was a moment when its reputation was beginning to become a serious risk. The perception was that they were usually running late, the planes were dirty more often than they were clean and the scrum at the boarding gate was just about the worst way to start and end a holiday.
In 2010, they appointed a brilliant new CEO in Carolyn McCall, one who brought vision and renewed energy to the brand. The results have recently been very clear to see. Announcing its full year results earlier this week, we saw profits in the 12 months to September 30th were up £581m – an increase of 21.5% – with total revenues up 6.3% to £4.53bn.
During McCall’s tenure, it has been fascinating to see the way the brand has evolved. Once upon a time, it was all about price; a few years ago they had the confidence to shift their marketing focus to destinations and more recently they have pushed ahead as a serious player in short-haul business travel.
Unpacking the results, I saw a few things that easyJet have been doing really well.
For example, they have put a new emphasis on customer loyalty, with passenger retention figures rising by more than 50%. This kind of loyalty does not come out of nowhere. In its long-running battle with Ryanair, easyJet has constantly strived to be portrayed as the ‘nice’ alternative; notwithstanding Ryanair’s recent rebranding efforts, it seems easyJet is still leading the way on that score.
On the digital front, they have completely overhauled their online offering and the firm’s app has now been downloaded by over 10 million people. It’s an astonishing figure that shows how easyJet has managed to capture the public’s trust and – dare I say it – affection.
The results were also good news for shareholders; rising profits have been matched by a dividend of £180m – up by more than a third. Meanwhile, the business will still be investing for the future by adding more routes to the network. Next on easyJet’s agenda are locations including Greece and the Canary Islands. UK director Sophie Dekkers says: “we want to start looking at more exciting leisure destinations.”
But the most striking thing for me was the news that, depending on increases in passenger charges over the next few years, the airline could feasibly begin to base itself at Heathrow in the coming years. This would make easyJet the first low-cost airline to move into the UK’s flagship airport, and shows just how far it has come.
I really admire what easyJet has done to push into new categories and redefine its position at the forefront of air travel. Which other ‘challenger brands’ are showing such ambition in a competitive marketplace? Let me know at moira@thembsgroup.co.uk, and have a great weekend!