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SCQ83
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Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 12:55 pm

easyJet recently announced they are cancelling routes from Brussels to Malpensa and Berlin by the end of this winter season.

BRU-SXF was already almost an "historical" route. For years it was the only way to fly from Brussels to Berlin (typical city break for Belgians) without paying the exorbitant fares of the Lufthansa/Brussels monopoly. But then Ryanair started flights from BRU to SXF and the rest is history.

So from summer, easyJet will have an astonishing 3 routes from all of Belgium: BRU to Bordeaux, Naples and Nice. Ryanair has already 16 routes from BRU and about 80 (!!!) destinations from Charleroi. And Norwegian and Transavia are not even in the Belgian market. So basically easyJet has completely left the country.

easyJet also recently left DUS (Germany's third airport) and CGN. So for the Rhin-Ruhr region (+20 million people with middle to high income) they have a single Dortmund to Luton (hardly a main route) left.

In the area they had found a niche as the only low-cost in Luxembourg (serving four destinations - LIS, OPO, LGW and MXP -) but Ryanair started last week with the exactly four same cities. easyJet was due to launch Luxembourg to Lyon this month and never started. So let's see what happens.

Spain is another example. easyJet (before Ryanair or Norwegian) was a very popular carrier in Madrid during the Spanish economic boom (before 2008). They closed their base during the crisis and now they have 11 routes. Norwegian now has 18 and Ryanair dozens of routes. Neither Ryanair nor Norwegian operated in MAD before 2008.

easyJet is leaving extraordinary important markets (Madrid, Brussels, Dusseldorf, Cologne) mostly to Ryanair or Norwegian. They have their niche airports (Paris, Amsterdam, Basel) outside the UK and some niche routes (Geneva or Amsterdam to London) but it seems they do well there because of the lack of Ryanair / Norwegian. And it seems that they are expanding on "beach" routes and competing with Thomas Cook or Monarch. A big change for the carrier that praised itself in being kind of the "smart" low cost.

So what are your thoughts on this company? I know airliners.net will talk me about profit (however profit for 2016 is due to decrease, the first since 2009) or stock market valuation (however see how they compare with Ryanair!). But it seems like they completely lack direction because of the competition of the kings of European low-cost: Norwegian and Ryanair.
 
sevenair
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Re: Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 2:36 pm

Unfortunately they are too short term an airline. They're bothered only about this years financial results, this years share price and this years management bonuses. They move aircraft where they can make money now and there's no long termism anymore. The product is outdated and is cheaper and better by Ryanair.

There's no sense of investment or development. AMS is a recent anomaly for them but they're not bothered. They seem to just gift routes or airports to the completion.

U2 are really exposed to Brexit. I think Brexit is a beautiful thing but it won't be good for easyJet.

They could offer connections through the major hubs. But that's like Ryanair talking about transatlantic or paying for the toilet in that there's lots of talk of it but in reality it won't happen.
Last edited by sevenair on Sat Nov 12, 2016 2:40 pm, edited 1 time in total.
 
Softaero
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Re: Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 2:40 pm

Please, stop bashing easyJet. We all know you hate it.
According to all known laws of aviation, there is no way a bee should be able to fly
 
sevenair
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Re: Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 2:50 pm

I think they're also betting on a surge in oil prices to take down some of the competition. Apparently some of their best days were when oil was st its highest price.
 
factsonly
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Re: Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 2:51 pm

easyJet has developed a clear strategy of building fortress focus cities, on which the airline concentrates its network.
These 'hub' cities tend to be tourist/business centres with strong year round traffic and reasonalble yields.
easyJet connects these hubs to other European points.

EasyJet hubs are (plus some smaller ones):

- many UK airports
- AMS
- CDG
- ORY
- LYS
- HAM
- SXF
- BSL
- GVA
- MXP
- VCE
- TLS
- NCE
- NAP
- TLS

some examples:

BUDAPEST is served from:
- AMS
- LGW
- SXF
- CDG
- LYS
- BSL
- GVA
- VCE

ROME is served from:
- AMS
- LGW
- SXF
- CDG
- LYS
- BSL
- GVA
- VCE
- LTN
- BRS
- TLS
- NCE
- MXP
- HAM

Malaga is served from:
- AMS
- LGW
- SXF
- CDG
- BSL
- GVA
- MXP
- UK airports

Krakow is served from:
- many UK airports
- CDG
- ORY
- LYS
- HAM
- SXF
- BSL
- GVA
- MXP
- VCE
- NAP

BRU is clearly no longer a focus city, neither is DUS or CGN.
 
SCQ83
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Re: Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 2:53 pm

It seems they are in a true spiral of death. Shares in free fall from 18 GBP in January to 9 in October, profits down 1/3 this year.

So their strategy is competing in UK-holiday routes with Ryanair, Norwegian and even Jet2 becoming more aggressive. Oh.. they open routes from Gatwick to Östersund and Ljubljana. :)

The only country they still thrive is France due to their protective policies that keep Ryanair and Norwegian somehow away, and a malfunctioning Air France.

sevenair wrote:
Unfortunately they are too short term an airline. They're bothered only about this years financial results, this years share price and this years management bonuses. They move aircraft where they can make money now and there's no long termism anymore. The product is outdated and is cheaper and better by Ryanair.

There's no sense of investment or development. AMS is a recent anomaly for them but they're not bothered. They seem to just gift routes or airports to the completion.


Exactly my thoughts

sevenair wrote:
They could offer connections through the major hubs. But that's like Ryanair talking about transatlantic or paying for the toilet in that there's lots of talk of it but in reality it won't happen.


Maybe they will finally be purchased by a major group like Lufthansa to have a feeder.
 
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Channex757
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Re: Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 3:05 pm

EZY have more to worry about at the moment. Brexit means they will need to completely shift the operational headquarters and aircraft registrations out of the United Kingdom within two years.

Otherwise they are a solid enough company and responding quickly to market changes. Expecting them to continue loss-making routes indefinitely is idiocy in the extreme. Aircraft need to make money and make it today. The share price is low at the moment but that drastic drop is due to their oncoming problem of relocating the business and the costs involved. I can see a move to the Irish register coming soon, or even Switzerland.

Usual suspect hubs and airports won't help if they are becoming saturated by the golden harp. EZY needs to get to grips with their nationality problem as fast as possible and then keep busy market making in new areas. As for now they are solid enough in many places and still a major player in the leisure trade.
 
SCQ83
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Re: Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 3:08 pm

factsonly wrote:
easyJet has developed a clear strategy of building fortress focus cities, on which the airline concentrates its network.
These 'hub' cities tend to be tourist/business centres with strong year round traffic and reasonalble yields.
easyJet connects these hubs to other European points.


The issue is that in some of those hubs they are being overtaken left and right. For instance, Málaga (that you mention), which is one of the largest destinations (if not the largest) for British tourists in Spain, and closed 2015 with record numbers:

2008:

easyJet: 2,121,836
Ryanair: 628,632
Vueling: 367,134
Norwegian: 118,724

2015:

Ryanair: 3,025,494 (+381.28%)
easyJet: 1,717,521 (-19.05%)
Vueling: 1,645,984 (+348.33%)
Norwegian: 1,053,191 (+787.09%)
 
sevenair
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Re: Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 3:29 pm

If they bothered and were as dynamic as they claim to be they could be on the mainland promoting the UK & how it's suddenly cheaper here. No matter how much anti British hate spewed on a.net there is a lot of tourists visiting here.
 
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PatrickZ80
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Re: Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 3:36 pm

EasyJet is just too expensive for a low-cost carrier, Ryanair is always cheaper and mostly other LCC's like Norwegian are too. Sometimes even legacy carriers like Brussels Airlines or British Airways are cheaper than EasyJet. Nowadays if you want to fill an aircraft as a LCC you just got to be the cheapest, that's all that matters. Otherwise the passengers move to the competition.

It's logical EasyJet pulled back out of Dusseldorf and Cologne, they just can't compete with EuroWings and in Cologne they also face competition from Ryanair now. Ever since Ryanair has started flights out of Brussels EasyJet has suffered, Ryanair is taking over their passengers because they're cheaper.

The only thing that can save EasyJet is lower prices. I mean, Ryanair can offer a € 9,99 one way ticket on some routes. Why can't EasyJet do the same?
 
SCQ83
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Re: Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 3:53 pm

PatrickZ80 wrote:
It's logical EasyJet pulled back out of Dusseldorf and Cologne, they just can't compete with EuroWings and in Cologne they also face competition from Ryanair now. Ever since Ryanair has started flights out of Brussels EasyJet has suffered, Ryanair is taking over their passengers because they're cheaper.


Dusseldorf is interesting because it is the kind of airport that should work for them. No Norwegian, no Ryanair. Eurowings which is not either that competitive or cheap (certainly not 9.99 EUR fares with them either). Yet they are not able to make DUS-LGW work only competing with BA/EW on LHR and BA/FlyBe on LCY.

Is possible to get data by carrier for SXF? It would be interesting to see Ryanair's "progression". Berlin used to be one of those cities that worked well for them but Ryanair has opened a million routes.

So while still growing in terms of PAX, they are focusing in places like Lyon where they face little competition (notably FR and DY) with odd routes like Budapest or Stockholm (which seem the kind of routes that will out first if there are economic uncertainties or oil prices rise).
 
jeffrey0032j
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Re: Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 5:13 pm

PatrickZ80 wrote:
EasyJet is just too expensive for a low-cost carrier, Ryanair is always cheaper and mostly other LCC's like Norwegian are too. Sometimes even legacy carriers like Brussels Airlines or British Airways are cheaper than EasyJet. Nowadays if you want to fill an aircraft as a LCC you just got to be the cheapest, that's all that matters. Otherwise the passengers move to the competition.

It's logical EasyJet pulled back out of Dusseldorf and Cologne, they just can't compete with EuroWings and in Cologne they also face competition from Ryanair now. Ever since Ryanair has started flights out of Brussels EasyJet has suffered, Ryanair is taking over their passengers because they're cheaper.

The only thing that can save EasyJet is lower prices. I mean, Ryanair can offer a € 9,99 one way ticket on some routes. Why can't EasyJet do the same?


Because, based on what another user said, they are most likely busy chasing yields. Not that yield is not important, but always check your competitor's prices before looking at yields.

factsonly wrote:
easyJet has developed a clear strategy of building fortress focus cities, on which the airline concentrates its network.
These 'hub' cities tend to be tourist/business centres with strong year round traffic and reasonalble yields.
 
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PatrickZ80
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Re: Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 6:34 pm

jeffrey0032j wrote:
Because, based on what another user said, they are most likely busy chasing yields. Not that yield is not important, but always check your competitor's prices before looking at yields.


Very true. If you look at Ryanair, I suspect they're actually making a loss on some of their routes. Still they continue to operate them. Why? To drive the competition away, and with success. They've already started quite some routes that EasyJet was active on before, but EasyJet had to pull out because of Ryanair.

Currently EasyJet has a strong base at AMS. They can because Ryanair hardly has any presence at AMS. Only one destination (Dublin) and that's not served by EasyJet, so no direct competition. EasyJet is serving all of their London Airports from AMS. Now, what would happen if Ryanair would start STN-AMS? Not only would EasyJet have to pull out of that route, but most likely on all other AMS-London routes too. Yealds would go down because passengers that are now flying EasyJet would move to Ryanair. On other destinations from AMS they mostly got competition from Transavia which is also becoming cheaper by the day. Not as cheap as Ryanair, but enough to beat EasyJet when it comes to the lowest price.
 
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mariner
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Re: Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 7:21 pm

SCQ83 wrote:
It seems they are in a true spiral of death. Shares in free fall from 18 GBP in January to 9 in October, profits down 1/3 this year. .


A "spiral of death"?

https://www.theguardian.com/business/ma ... -next-soar

"FTSE falls on US election worries but easyJet and Next soar"

I shrug.

mariner
aeternum nauta
 
anstar
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Re: Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 7:41 pm

SCQ83 wrote:
It seems they are in a true spiral of death. Shares in free fall from 18 GBP in January to 9 in October, profits down 1/3 this year.



Easyjet is not isolated in this respect. I think most UK airlines have stuggled this year with the drop in pound value and brexit. IAG (BA/IB/EI) shares have lost 1/3 of their value, Flybe have lost 2/3's of their value as well. Ive also heard its likely VS will barely break even this year.

PatrickZ80 wrote:
Now, what would happen if Ryanair would start STN-AMS? Not only would EasyJet have to pull out of that route, but most likely on all other AMS-London routes too. Yealds would go down because passengers that are now flying EasyJet would move to Ryanair. On other destinations from AMS they mostly got competition from Transavia which is also becoming cheaper by the day. Not as cheap as Ryanair, but enough to beat EasyJet when it comes to the lowest price.


Currently EZY have upto 21 flights a day from AMS to London airports.... which is about 1/3 of the market to all london airports.

In trying to predict the doom and gloom of easyjet.. Its probably worth pointing out that they will likely report next week a decent profit of around 450m GBP (less than last year, but still decent) and that they carried record numbers of pax this year - something like 70+ million... so its not like people are not choosing to fly with them.
 
santos
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Re: Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 7:51 pm

[quote="SCQ83"]easyJet recently announced they are cancelling routes from Brussels to Malpensa and Berlin by the end of this winter season.

Very poor analysis on a airline that is successful and profitable, yes they have closed routes in Belgium and Germany but if they're not making a profit why keep loosing money on then?

Yet they have opened a lot of new routes this winter plus a few others starting in December.

They have been affected by the Brexit vote, but overall they are still making a heathy profit and expanding(not as aggressively as other LCC)

New base In PMI next spring, new a/c coming with the new configuration and some A320'a receiving the new configutation.

They have also announced that they will concentrate and invest in France In the next few months. FR and DY have little presence in France so they are concentrating on what they do well, rather than expand aggressively. Perhaps a new base in France?
 
G-CIVP
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Re: Is easyJet strategy to become a real mess in the future?

Sat Nov 12, 2016 11:41 pm

DUS is a mix between business and liesure pax. Easyjet didn't have sufficient flights to London to make it work for buiness pax. As for liesure, the German carriers such as Air Berlin, Condor and TUI had this in the bag. As for CGN, Germanwings/Eurowings have that pretty much to themselves.
 
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TheLion
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 12:21 am

EasyJet have been for a long time my preferred LCC. However their product is becoming increasingly dated, their baggage policies are inferior to competitors, they don't allow a second small bag like laptop or handbag and fares are often not competitive. The one advantage they do still have is that their seats are wider and they fly the A320 family, which are more comfortable and a better experience than Norwegian & Ryanair's B737s.

I boycotted Ryanair for years over their nasty way of treating customers, baggage policies awful product. However they have got their act together at last and now look like the better airline with a #PaxEx to match. I can't believe I'm writing this but there you go. We're flying to SNN on them this Wednesday and I'm expecting a further improvement since my last Ryanair flight in 2014.
 
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kitplane01
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 3:53 am

SCQ83 wrote:
The only country they still thrive is France due to their protective policies that keep Ryanair and Norwegian somehow away,...


Um, say what? What protectionist policies?

Could you tell me more about this?
 
SCQ83
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 7:05 am

TheLion wrote:
EasyJet have been for a long time my preferred LCC. However their product is becoming increasingly dated, their baggage policies are inferior to competitors, they don't allow a second small bag like laptop or handbag and fares are often not competitive. The one advantage they do still have is that their seats are wider and they fly the A320 family, which are more comfortable and a better experience than Norwegian & Ryanair's B737s.

I boycotted Ryanair for years over their nasty way of treating customers, baggage policies awful product. However they have got their act together at last and now look like the better airline with a #PaxEx to match. I can't believe I'm writing this but there you go. We're flying to SNN on them this Wednesday and I'm expecting a further improvement since my last Ryanair flight in 2014.


That is the whole point about this thread, no matter what the hardcore easyJet fans can say :)

And you only mention Ryanair (which I completely agree), but look at Norwegian in LGW (easyJet's main base) and elsewhere.

So yes, their numbers are still positive (yet decreasing), but let's see where they are in a few years from know with that strategy.
 
santos
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 7:42 am

'That is the whole point about this thread, no matter what the hardcore say'

And you only mention Ryanair (which I completely agree), but look at Norwegian in LGW (easyJet's main base) and elsewhere.

So yes, their numbers are still positive (yet decreasing), but let's see where they are in a few years from know with that strategy.[/quote]

The point is that you have mentioned many times how much you dislike easyJet and how bad your experience was and yet you can't see that it's a successful and profitable airline.

They have announced more passengers than ever, so that statement of decreasing numbers is purely wrong.
Plus Norwegian has stopped growing at LGW(Short Haul).
 
xorrygva
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 8:02 am

I am not so sure to follow the issue here. This treat started by saying that EasyJet is not present or leaving key markets but the post above is more complaining about the product.

I personally believe that EasyJet has the right strategy in terms of destinations. They have a very strong presence in most of the main European markets (LON, PAR, AMS, MXP, SXF) and has strong bases in major airports sur as HAM, GVA, LIS, NCE.
EasyJet has been weaker in two main region I think: west of Germany and Scandinavia. The later because Norwegian is now the king and has locked most the markets, the former because of the strong local competition (Germanwings, Eurowings, Air Berlin or even HLX at some point), to some extend, Ryanair is strong here too.

I believe that Easjet is following a good strategy in focusing on their key markets and airports rather than keeping lose making routes. They are trying to slowly expand in new markets (MUC, VIE, ZRH) but no reason to stay if it doesn't work.

Norwegian has been more aggressive but they are way behind in terms of profitability. Apart from Scandinavia, they haven't "locked" important markets yet. They could be in trouble once crude oil increases again (if it ever does...).

So yes, EasyJet might have to further update its product but I don't believe that their network strategy is weak just because they are not big in DUS, BRU (and sadly, it is understandable why the demande decreases) or CGN (which is a niche airport).
 
Waterbomber
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 8:20 am

Easyjet's strategy is flawed since a long time.
They come into main markets, try to steal market share the easy way, trying to take business clientele on the profitable routes of established airlines, but then spread themselves too thin and offer too few frequencies. They could have done much better in BRU, but they never went all-in, leaving the door open to FR and VY.
They were granted access to LIN-FCO too, but couldn't compete with AZ, can you imagine? They blamed it on the airport authorities but it's really their own fault for spreading themselves too thin again. They want to run a network out of each main airport, using 2 or 3 aircraft.

FWIW, IMHO the current Ryanair strategy is also flawed.
Ryanair is abandoning its core niche and trying too hard to climb the market. Short-term, they are booking a success with increased revenues, profits and overall volume. They are taking over Easyjet bases one by one.
Ryanair is leaving their secure market and lower costs and going after the easy money, the same way Easyjet has rendered itself vulnerable.

Don't get me started on Norwegian.
DY don't know what they are doing. They are like an airline version of Amazon, where market share comes first, profits come last/never and investors keep pumping in equity without ever seeing a return on it.

I think that we'll see big changes in the market in the coming years.
 
LTenEleven
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 8:31 am

xorrygva wrote:
I personally believe that EasyJet has the right strategy in terms of destinations. They have a very strong presence in most of the main European markets (LON, PAR, AMS, MXP, SXF) and has strong bases in major airports sur as HAM, GVA, LIS, NCE.


I think you are only further proving the point. Easyjet are now losing the battle almost half the markets you list (Milan, SXF, HAM, LIS). Outside the UK, the only places they have built real critical mess are Switzerland and France. Despite a relatively early entrance to CEE (from London), their market share there is now also totally insignificant.

The former because of the strong local competition (Germanwings, Eurowings, Air Berlin or even HLX at some point), to some extend, Ryanair is strong here too.


Germanwings never operated with low CASM, although under Eurowings and the latest crew agreements things seem to be improving. Air Berlin is a cost disaster. As for Ryanair, until very recently they had 3% of the German market concentrated at out of town airports. The presence at CGN, HAM, NUE, etc. remains quite recent but is still just 7% of the market in the last reported Q. Growing, but not exactly strong.

I believe that Easjet is following a good strategy in focusing on their key markets and airports rather than keeping lose making routes. They are trying to slowly expand in new markets (MUC, VIE, ZRH) but no reason to stay if it doesn't work.


You have to build a brand and put up some fight or you will eventually be quickly pushed out of every one of your core markets.
 
SCQ83
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 8:34 am

xorrygva wrote:
I am not so sure to follow the issue here. This treat started by saying that EasyJet is not present or leaving key markets but the post above is more complaining about the product.

I personally believe that EasyJet has the right strategy in terms of destinations. They have a very strong presence in most of the main European markets (LON, PAR, AMS, MXP, SXF) and has strong bases in major airports sur as HAM, GVA, LIS, NCE.
EasyJet has been weaker in two main region I think: west of Germany and Scandinavia. The later because Norwegian is now the king and has locked most the markets, the former because of the strong local competition (Germanwings, Eurowings, Air Berlin or even HLX at some point), to some extend, Ryanair is strong here too.


London Gatwick: Norwegian becoming more and more important. Not to mention long-haul. And IAG becoming more reactive (BA and VY)
Paris / Amsterdam: It seems their niche markets due to Ryanair and Norwegian "staying away". However Transavia is growing.
Malpensa: Another key market for them, however Ryanair growing there and enormous at BGY. Still easyJet are closing key markets from MXP like Brussels or Rome.
Berlin SXF: Again I would be curious to see how easyJet is faring face to Ryanair. FR has opened dozens of routes there lately.

Also you forget one key market: Spain, and notably Madrid which like it or not is EU's 5th largest airport. EasyJet was once a very well stablished carrier in Spain and now it has basically became a "holiday carrier". Their presence at MAD is minimal and in BCN they haven't kept with DY/FR/VY.

So basically easyJet cannot compete with Norwegian and/or Ryanair, or even Eurowings. They are only competitive when they have no one to face. And profit is expected to plummet for easyJet while Ryanair is expected to have record profit.

xorrygva wrote:
I believe that Easjet is following a good strategy in focusing on their key markets and airports rather than keeping lose making routes. They are trying to slowly expand in new markets (MUC, VIE, ZRH) but no reason to stay if it doesn't work.


Those are markets where Norwegian/Ryanair are not present, but FR or DY will start there routes some day (Ryanair starting FRA... even before easyJet!) so what will happen when Ryanair starts flights at MUC?

Some of easyJet's new routes are quite weird, they look like Ryanair 2009:

- London Gatwick - Ljubljana
- London Gatwick - Östersund
- Lyon - Budapest
- Lyon - Stockholm–Arlanda
- Paris CDG - Pristina

Some of those look the kind of routes (i.e. city breaks) that will be chopped easily if oil prices increase and/or demand slightly decreases. Finding a "niche" and not competing with anyone has those issues. There will be always people flying from Brussels to Berlin, but what about Lyon to Budapest?

xorrygva wrote:
Norwegian has been more aggressive but they are way behind in terms of profitability. Apart from Scandinavia, they haven't "locked" important markets yet. They could be in trouble once crude oil increases again (if it ever does...).


Norwegian profit has doubled, so honestly betting your chances at oil prices increasing and putting Norwegian under pressure seems a bit naive.

xorrygva wrote:
BRU (and sadly, it is understandable why the demande decreases)


Both BRU and CRL have been growing (at +- double digits year on year) so there is nothing "sad" about any of them. Even Brussels Airlines has been growing quite consistently in the last few months and there are new routes to open for next year.
 
xorrygva
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 8:39 am

What makes you think that EasyJet is loosing ground at MXP, LIS or SFX? Can you share stats for these specific airports?
 
xorrygva
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 9:24 am

In terms of competition, Ryanair is clearly above everyone else but also in a slightly different category than EasyJet.

The others are not harming EasyJet which is btw still growing faster than Norwegian for example (+4.4mm passengers over the LTM vs +3.2mm).

Key issue on Easyjet's profitability is and will be Brexit, not its network ;-). Also note that despite a 3-year floor profit, EasyJet will make a c.USD600mm profit this year, vs. USD100mm for Norwegian...

So yes, not everything is perfect for EasyJet but saying that they are running away and being killed by competition is simply wrong!
 
santos
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 9:33 am

When VY announced routes from AMS, BCN and ZRH to LTN, U2 immediately doubled frequencies routes to those markets.

I'm pretty sure U2 is not the only airline to take advantage of the oil prices, new routes like transavia from Paris to Luton and Vueling from Gatwick to Paris and Rennes wouldn't exist if the oil was at $100 again.

As per your so called weird routes, they are perhaps testing new markets. Pretty sure FR has some very odd new routes too thanks to it's many subsidies and they announced a warning on their profit as it won't be as much as they forecasted.
Also new routes you failed to mention are
LGW to SPC and GRX
TRN to MAN, BRS, LTN
BSL to FNC
LIS to ZRH
NCL to SXF and LPA and many others.

And why should U2 compete at airports such as CGN/DUS where FR, AB and Germanwings are strong? Would just be a clash of prices and yields- good for the consumer but bad for the airline/revenues.
 
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ro1960
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 9:44 am

SCQ83 wrote:
Some of easyJet's new routes are quite weird, they look like Ryanair 2009:


I hear they just toss papers with city names into a hat and draw them. :mrgreen:
Do not compensate for the lack of skills with a surplus of opinion.


You may like my airport photos:
https://www.flickr.com/photos/aeroports
 
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 9:53 am

santos wrote:
And why should U2 compete at airports such as CGN/DUS where FR, AB and Germanwings are strong? Would just be a clash of prices and yields- good for the consumer but bad for the airline/revenues.


CGN is a recent Ryanair addition, but DUS I think it was a good example.

Someone said DUS-LGW didn't have enough frequencies to make it work... so why not adding more? Again LON-DUS (which is a 1 million passenger market) has only flights to LHR and LCY, so it is really not the market where Ryanair is giving away 10 euro tickets to STN. And even easyJet to LGW does not seem to make it work.

So back in the day easyJet had a strong position in some major airports in Europe and had "friendly" policies. Now they are leaving those main airports and routes to Ryanair and Norwegian (or Eurowings/Vueling/Transavia), changed their policies to make it less friendly (i.e. luggage policies worse than FR now) and shift their focus on some weird "niche" routes where they don't have FR/DY competition. It seems short-sighted to me.
 
steman
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 9:59 am

SCQ83 wrote:
Berlin SXF: Again I would be curious to see how easyJet is faring face to Ryanair. FR has opened dozens of routes there lately.


easyJet abandoned the Berlin-Rome (SXF-FCO) market as soon as Ryanair started flying the route too (SXF-CIA). U2 used to have a hub (or main base, not sure hub is the right term for a LCC) in FCO but dismantled it a couple of years ago, again, mostly when competition (FR, Vueling, Norwegian) became more aggressive.

They still have an impressive operation out of SXF but apparently they decided that the route to Rome was becoming too crowded to make it work profitably, with Air Berlin, Alitalia, Vueling and Ryanair flying from the two Berlin airports to the two Rome airports.
 
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PatrickZ80
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 10:08 am

SCQ83 wrote:
Someone said DUS-LGW didn't have enough frequencies to make it work... so why not adding more? Again LON-DUS (which is a 1 million passenger market) has only flights to LHR and LCY, so it is really not the market where Ryanair is giving away 10 euro tickets to STN. And even easyJet to LGW does not seem to make it work.


Let's not forget Ryanair's NRN-STN since NRN is serving the city of Dusseldorf as well. In the near future they'll be switching STN for LTN on this route, but what difference does that make? It's still basically Dusseldorf to London. And in this case you got to admit that NRN is working for Ryanair as an alternative to DUS. EIN is well within driving distance from Dusseldorf as well with several daily Ryanair flights to STN. I've flown from EIN quite often and there are always a lot of Germans flying from there.

EasyJet is pulling out too easy, they're not willing to fight for their market share. If they continue like this they'll have no market share left in a couple of years. I think they sould be more agressive, not afraid to pick on their competitors in a price war. Sure EasyJet can win price wars if they want to, but do they?
 
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 10:19 am

PatrickZ80 wrote:
Let's not forget Ryanair's NRN-STN since NRN is serving the city of Dusseldorf as well. In the near future they'll be switching STN for LTN on this route, but what difference does that make? It's still basically Dusseldorf to London. And in this case you got to admit that NRN is working for Ryanair as an alternative to DUS. EIN is well within driving distance from Dusseldorf as well with several daily Ryanair flights to STN. I've flown from EIN quite often and there are always a lot of Germans flying from there.

EasyJet is pulling out too easy, they're not willing to fight for their market share. If they continue like this they'll have no market share left in a couple of years. I think they sould be more agressive, not afraid to pick on their competitors in a price war. Sure EasyJet can win price wars if they want to, but do they?


Dusseldorf to NRN is 85 km away according to Google Maps. EIN is 126 km away (!) Weeze is not even at the core of the Metropolregion Rhein-Ruhr. NRN-LTN is going to be 2 weekly.

Also as you say, Ryanair flies to STN while easyJet flew to LGW. So NRN-STN VS DUS-LGW seems like a very different market position and competition.
 
santos
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 10:33 am

Your whole debate seems to be on DUS/BRU, U2 has tried and didn't work, so they have moved on to other markets where they think they can make a profit on it.
As an example LGW-GVA has been increased to 12x daily on certain days this winter, up from 8/10 frequencies last winter, if they can make more money on a GVA, why not give up DUS/BRU for it?

And so should you, just move on an de let's see how it works out for them, rather than stating comments on doom and gloom about U2.
 
PhilInBRN
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 10:45 am

Btw, another key route that U2 has conceded to FR is LTN-CPH. Since FR entered with 4 daily flights on the route Easy has suffered tremendously and will cease the flights between these two airports next spring.

xorrygva wrote:
I believe that Easjet is following a good strategy in focusing on their key markets and airports rather than keeping lose making routes. They are trying to slowly expand in new markets (MUC, VIE, ZRH) but no reason to stay if it doesn't work.


As you state correctly, easyjet has recently expanded quite a bit at airports that have long been known for being very unkind to the requirements of LCC operations (MUC, VIE, ZRH). However, I see them committing the same mistakes as in BRU. For instance, they opened flights from ZRH to HAM, AMS, LIS and SXF. With the exception of LIS, these are all routes with high competition by multiple airlines with multiple frequencies. LX and AB serve SXF up to 6x daily each from Zurich. Easyjet currently offers a measly 6 weekly flights with varying departure times. Granted, they also offer up to 5 daily flights on BSL-SXF, but these low frequencies will just not cut it against the current competition. Same story for ZRH-AMS, which is served 3x weekly against 6 daily KL flights and 4 daily LX flights (and Transavia will also enter the market with 3 weekly flights in February). With these low frequency flights, U2 is simply not a viable option against the competition. Same story for VIE and MUC where they opened a handful of destinations but continue to serve them at lower frequencies. This has already come back to haunt them at MUC where Transavia has expanded aggressively.
 
Ryanair01
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 4:12 pm

There is so much odd logic in the thread above.

So easyjet had significant exposure to Spanish outbound travel, then the economy collapsed so they reduced it. Does sound like an insane strategy?!?

Travel to Brussels implodes in the midst of terror concerns, so they cut back. Again, sound dumb?!?

To an extent you see Ryanair copying easyjet's strategy, but with a lower cost base and Norwegian innovating with long haul and it will be interesting to see how easyjet responds.
 
SCQ83
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 5:18 pm

Ryanair01 wrote:
There is so much odd logic in the thread above.


I was curious about understanding easyJet's strategy. It seems same of their previously key markets are now much more competed (and no, I am not talking about BRU or DUS like santos say). Airports like SXF or MXP where they felt at ease 5 years ago, now they face more competition and give up key routes. So they start new airports (like MUC) but then they cannot compete with more aggressive carriers (like Transavia in MUC as PhilinBRN says). It seems their strategy is just moving planes to routes or airports with no FR/DY competition until those carriers move there and then start again.

Ryanair01 wrote:
So easyjet had significant exposure to Spanish outbound travel, then the economy collapsed so they reduced it. Does sound like an insane strategy?!?


easyJet closed not only MAD (understandable) but also BCN base. Even passengers to AGP today are lower than in 2008, where other low-cost have exploded (see previous message), and AGP-UK is largely British travel. So they left MAD and BCN to Ryanair and Norwegian (and BCN to VY).

Clearly easyJet in 2009 bet on an apocalyptic scenario for Spain (leaving the Euro, social riots, tourism collapsing, etc). On the other hand at that time they started routes to Egypt or Tunisia.

Ryanair01 wrote:
Travel to Brussels implodes in the midst of terror concerns, so they cut back. Again, sound dumb?!?


Which is not true because as I said in a previous message, both BRU and CRL are back at record passengers levels (obviously with a fall in the aftermath of the attacks). So basically easyJet cannot stand any competition with Ryanair or even Brussels Airlines (with their new more competitive fare structure) in BRU.
 
runway23
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 6:05 pm

SCQ83 wrote:
So from summer, easyJet will have an astonishing 3 routes from all of Belgium: BRU to Bordeaux, Naples and Nice. Ryanair has already 16 routes from BRU and about 80 (!!!) destinations from Charleroi. And Norwegian and Transavia are not even in the Belgian market. So basically easyJet has completely left the country.


Not quite, there is still BSL and more importantly GVA which sees and has seen multiple daily flights for more than a decade now. The seems to point that apart for NPL, easyJet has an easier time making Francophone markets work out of BRU (if we include BSL as Francophone due to MLH).

SCQ83 wrote:
Airports like SXF or MXP where they felt at ease 5 years ago, now they face more competition and give up key routes.


Two airports where easyJet is still the largest carrier at.

SCQ83 wrote:
easyJet closed not only MAD (understandable) but also BCN base. Even passengers to AGP today are lower than in 2008, where other low-cost have exploded (see previous message), and AGP-UK is largely British travel. So they left MAD and BCN to Ryanair and Norwegian (and BCN to VY).


BCN is still an easyJet base. MAD and FCO are the ones easyJet dropped in recent years.

santos wrote:
As an example LGW-GVA has been increased to 12x daily on certain days this winter, up from 8/10 frequencies last winter, if they can make more money on a GVA, why not give up DUS/BRU for it?


GVA has for a number of years always been above 10 flights per day on Saturdays during the winter. I very much doubt people will fly to DUS or BRU to go skiing... So yes increasing GVA during the winter isn't anything new or strange (in fact on a typical winter Saturday easyJet is around 100+ daily departures).

SCQ83 wrote:
- London Gatwick - Ljubljana
- London Gatwick - Östersund
- Lyon - Budapest
- Lyon - Stockholm–Arlanda
- Paris CDG - Pristina

Some of those look the kind of routes (i.e. city breaks) that will be chopped easily if oil prices increase and/or demand slightly decreases. Finding a "niche" and not competing with anyone has those issues. There will be always people flying from Brussels to Berlin, but what about Lyon to Budapest?


I don't see anything wrong with any of these routes. CDG-PRN targets ethnic traffic, Ostersund skiing, Ljubljana can also be a skiing destination/city break. LYS-ARN skiing or city break. Finally I don't get why starting a flight from the 2nd largest city in France to Hungarian capital is strange. I don't see it as being weirder than existing BUD routes to BSL or VCE for example.
 
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 6:14 pm

runway23 wrote:
BCN is still an easyJet base. MAD and FCO are the ones easyJet dropped in recent years.


Yes and no. BCN base opened only this year: http://www.elconfidencial.com/espana/ca ... a_1145999/

I think they have 3 planes based which is nothing compared to Norwegian, Ryanair and Vueling.

runway23 wrote:
I don't see anything wrong with any of these routes. CDG-PRN targets ethnic traffic, Ostersund skiing, Ljubljana can also be a skiing destination/city break. LYS-ARN skiing or city break. Finally I don't get why starting a flight from the 2nd largest city in France to Hungarian capital is strange. I don't see it as being weirder than existing BUD routes to BSL or VCE for example.


I don't see anything wrong either, but I find weird that are carrier closes main routes between European capitals (like Berlin-Rome or Brussels-Berlin) to focus on thin routes. Those thin routes (i.e. city break, ski) is the first thing to be affected when there is any change (political, exchange rate, economic, etc)
 
greg85
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 6:26 pm

They have over £1bn in the bank. Load factor up in the 90s. Certainly a lot healthier than many airlines out there across Europe.
 
LTenEleven
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Re: Is easyJet strategy to become a real mess in the future?

Sun Nov 13, 2016 7:39 pm

runway23 wrote:
SCQ83 wrote:
Airports like SXF or MXP where they felt at ease 5 years ago, now they face more competition and give up key routes.


Two airports where easyJet is still the largest carrier at.


At SXF, Ryanair are ahead of easyJet by available seat capacity this winter.
 
SCQ83
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Re: Is easyJet strategy to become a real mess in the future?

Mon Nov 14, 2016 6:47 am

LTenEleven wrote:
runway23 wrote:
SCQ83 wrote:
Airports like SXF or MXP where they felt at ease 5 years ago, now they face more competition and give up key routes.


Two airports where easyJet is still the largest carrier at.


At SXF, Ryanair are ahead of easyJet by available seat capacity this winter.


That is exactly the kind of situation I mentioned. Berlin used to be a "feud" of easyJet, specially since Air Berlin is such a dysfunctional carrier. Yet they cannot bother to fight Ryanair which has expanded very recently in SXF.
 
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TheLion
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Re: Is easyJet strategy to become a real mess in the future?

Mon Nov 14, 2016 11:17 am

santos wrote:
'That is the whole point about this thread, no matter what the hardcore say'

And you only mention Ryanair (which I completely agree), but look at Norwegian in LGW (easyJet's main base) and elsewhere.

So yes, their numbers are still positive (yet decreasing), but let's see where they are in a few years from know with that strategy.


The point is that you have mentioned many times how much you dislike easyJet and how bad your experience was and yet you can't see that it's a successful and profitable airline.

They have announced more passengers than ever, so that statement of decreasing numbers is purely wrong.
Plus Norwegian has stopped growing at LGW(Short Haul).[/quote]

Highly profitable isn't everything dude. It's an overall necessity for a company but should not supersede good service, looking after staff and customers and quality training and development.
 
f4f3a
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Re: Is easyJet strategy to become a real mess in the future?

Mon Nov 14, 2016 11:21 am

EasyJet has always steered clear of competing with Ryanair directly over there 20 year history. They have shrank at places like lpl where they have had dominant position. Although it seems defeatist it the flexibility of this approach has worked for them. Also if you look at fr they cut and change loads of routes all the time as well.
In Spain they pulled out of mad because the airport massively increased charges also crew cost were extremely high. Many other carriers did the same.
In Bcn was already a big destination from other bases with the equiv of 10 a/c being based there.

The problem with easyJet profits this year was lack of network resiliance due to staff and a/c shortage which meant many cancellations when there was disruption. This always seems to go in cycles last seen when Carolyn joined after Andy h left as CEO. Brexit and atc etc where a good scapegoat for too much cost cutting. Even with this they are going to make a healthy profit.

They are retrofitting all A320 this winter with new cabin which will help reduce costs also a321 order is imminent which will help too.
They also are Manley at slot constrained airports so will face less competition. Take Luton gatwick and ams and map for example easy are expanding as capacity becomes avail to stop the competition getting slots. At Gatwick they are bigger than the next 2 short haul carriers combined
I also think dy and frs costs will rise as they move into expensive airports.
Also there staff costs may rise with clamp down on casual self employed work contracts . Action is expected in Germany soon and in the U.K.
Uber have lost a court case to say their contract workforce are in fact employees.
Although there needs to be improvements at easy they are still in a strong position
 
spacecookie
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Re: Is easyJet strategy to become a real mess in the future?

Mon Nov 14, 2016 12:13 pm

factsonly wrote:
easyJet has developed a clear strategy of building fortress focus cities, on which the airline concentrates its network.
These 'hub' cities tend to be tourist/business centres with strong year round traffic and reasonalble yields.
easyJet connects these hubs to other European points.

EasyJet hubs are (plus some smaller ones):

- many UK airports
- AMS
- CDG
- ORY
- LYS
- HAM
- SXF
- BSL
- GVA
- MXP
- VCE
- TLS
- NCE
- NAP
- TLS

some examples:

BUDAPEST is served from:
- AMS
- LGW
- SXF
- CDG
- LYS
- BSL
- GVA
- VCE

ROME is served from:
- AMS
- LGW
- SXF
- CDG
- LYS
- BSL
- GVA
- VCE
- LTN
- BRS
- TLS
- NCE
- MXP
- HAM

Malaga is served from:
- AMS
- LGW
- SXF
- CDG
- BSL
- GVA
- MXP
- UK airports

Krakow is served from:
- many UK airports
- CDG
- ORY
- LYS
- HAM
- SXF
- BSL
- GVA
- MXP
- VCE
- NAP

BRU is clearly no longer a focus city, neither is DUS or CGN.


ROME is also served from PMI in summer (nice direct flight) and they will open a base there soon
Easyjet is not Norwegian, EZY make profit, if the dont they leave.

I pick easy over any other low cost airline.
 
SCQ83
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Re: Is easyJet strategy to become a real mess in the future?

Mon Nov 14, 2016 12:26 pm

f4f3a wrote:
EasyJet has always steered clear of competing with Ryanair directly over there 20 year history. They have shrank at places like lpl where they have had dominant position. Although it seems defeatist it the flexibility of this approach has worked for them. Also if you look at fr they cut and change loads of routes all the time as well.


The problem is now Ryanair is moving into main airports and routes. And then there is Norwegian, Eurowings, Vueling and Transavia becoming "pan-European" (so Norwegian everywhere, Vueling in Rome, Transavia in Munich...)

I think this is the whole issue. 5 years ago easyJet was pretty much the only low cost in many "main" airports and routes. Now they usually face Ryanair, Norwegian and someone else. And as others have mentioned, legacies have became more competitive, now it is common to find Swiss at GVA cheaper than easyJet in the same route, etc. So they can leave and focus on secondary/niche routes with no competition, but focusing on those markets has its own risks.

spacecookie wrote:
Easyjet is not Norwegian, EZY make profit, if the dont they leave.


So are they going to leave every main route and airport in Europe? (since FR and DY sooner or later will start any of them).
 
sevenair
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Re: Is easyJet strategy to become a real mess in the future?

Mon Nov 14, 2016 12:57 pm

I think easyJet do have a low cost base. They are well placed in terms of cost for the bloodbath that's upon us. Every winter for what seems like forever, MOL has predicted it. I think it's now here. Low fuel costs have kept airlines afloat which would otherwise be dead now. LCC fleets are growing and bread and butter routes and airports are now under attack. Time and time again the lowest fare wins and therefore I can see this a way to keep hold of market share. There was already deep discounting toward the mid to late summer and I can only see it continuing.
 
oldannyboy
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Re: Is easyJet strategy to become a real mess in the future?

Mon Nov 14, 2016 1:48 pm

Waterbomber wrote:
Easyjet's strategy is flawed since a long time.
They come into main markets, try to steal market share the easy way, trying to take business clientele on the profitable routes of established airlines, but then spread themselves too thin and offer too few frequencies. They could have done much better in BRU, but they never went all-in, leaving the door open to FR and VY.
They were granted access to LIN-FCO too, but couldn't compete with AZ, can you imagine? They blamed it on the airport authorities but it's really their own fault for spreading themselves too thin again. They want to run a network out of each main airport, using 2 or 3 aircraft.

FWIW, IMHO the current Ryanair strategy is also flawed.
Ryanair is abandoning its core niche and trying too hard to climb the market. Short-term, they are booking a success with increased revenues, profits and overall volume. They are taking over Easyjet bases one by one.
Ryanair is leaving their secure market and lower costs and going after the easy money, the same way Easyjet has rendered itself vulnerable.

Don't get me started on Norwegian.
DY don't know what they are doing. They are like an airline version of Amazon, where market share comes first, profits come last/never and investors keep pumping in equity without ever seeing a return on it.

I think that we'll see big changes in the market in the coming years.


I just have to laugh here!!! Sorry..we all are obviously are entitled to our own opinions, but to see someone saying that the 3 top LCCs in Europe (three giants in terms of market presence and share) -all of which are not only doing fine, but growing!- lack strategy and direction is pretty laughable to me... sorry...
 
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readytotaxi
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Re: Is easyJet strategy to become a real mess in the future?

Tue Nov 15, 2016 9:15 am

Interesting article here.

http://www.bbc.co.uk/news/business-37984549

Pre-tax profits in the year to 30 September fell 27.9% to £495m, but it was in line with a warning given last month. Passenger numbers rose 6.6%.
Easyjet also confirmed that it had set up a continental-based airline ahead of the UK's exit from the EU.
you don't get a second chance to make a first impression!
Growing older, but not up.
 
sevenair
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Re: Is easyJet strategy to become a real mess in the future?

Tue Nov 15, 2016 12:44 pm

The results are in.

73.1 million passengers up 6.6% on last year. Record load factors of 91.6%

Profit of £495m (half a billion pretty much), 9% growth next year, half of which will be in the UK (so much for the Brexit doomsday strategy).

New entitiy being set in EUland. Country to be decided but I should imagine it'll be a europhile country to limit having to move again should anyone else follows the UK's bold and progressive decision to leave the EU.

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