As Carolyn McCall works her way rapidly to completing her second year as CEO of easyJet she has already faced a variety of challenges, perhaps inevitable in this industry, but more unusually has had to navigate a difficult relationship with a key shareholder which continues to play out very publicly. Notwithstanding this, she [...]]]>  

As Carolyn McCall works her way rapidly to completing her second year as CEO of easyJet she has already faced a variety of challenges, perhaps inevitable in this industry, but more unusually has had to navigate a difficult relationship with a key shareholder which continues to play out very publicly. Notwithstanding this, she has made very real progress in the airline’s operational and financial performance.

When I met her last year she made an interesting point concerning the period of appalling punctuality and poor operational integrity which was being experienced when she joined the company in late summer 2010.

This, she told me, taught her just how easily an airline can be brought to its knees and since this time she has ensured that the company has applied the necessary focus to now achieving more than acceptable levels of punctuality. It’s a point worth dwelling on because not all airline CEO’s are in sufficient touch with the complexities of operational delivery in an airline, preferring to focus on the more “sexy” commercial aspects of the business.

easyJet’s own experience  shows that no amount of marketing effort or brand profile is worth anything  without on time flights and minimal cancellations.

Very personable and an eloquent communicator (coming from a media industry background) Carolyn explained to me how she has simplified the company structure and ensured that internally everyone is singing from the same hymn sheet and that one hand knows what the other one is doing-very important considering the size easyJet has grown to since its modest beginnings.

She is certainly on the case with airline fundamentals, grappling with higher fuel prices and network and aircraft deployment issues.

When I asked her why easyJet wasn’t as opportunistic as Ryanair when it comes to route decisions she acknowledged that historically the company had greater choices in what to do with its aircraft, but with far fewer new deliveries coming, combined with the polarisation of winter losses and summer profitability, there now needs to be greater certainty of achieving adequate returns when these choices are made.

This fits closely with easyJet’s stated strategy in focussing more on business traffic; nevertheless it will still take new opportunities when appropriate.

With this in mind  easyJet sees weakness in Air France’s short haul network as an opportunity to grow in the French market and JLS Consulting client Aeroport de Lille http://lille.aeroport.fr/gb/  will gain 2 new easyjet routes  to Nice and Toulouse this summer.

Another market to benefit for the first time from new easyjet services in 2012 will be Keflavik Airport Iceland  http://www.kefairport.is/English/ operated by JLS Consulting client, Isavia. Flights from Luton begin at the end of March.

With record profitability for the year ended September 2011 and first quarter results just due out, I expect to check in again with Carolyn and her team on progress as the year plays out.

The industry faces incredibly challenging times-rising fuel prices, weak demand, increasing government taxes, not to mention natural disasters. At times like these real leadership quality and experience counts for everything and when I met Tim Clark, President of Emirates last year I was keen to know how he was successfully riding the storm.

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The industry faces incredibly challenging times-rising fuel prices, weak demand, increasing government taxes, not to mention natural disasters. At times like these real leadership quality and experience counts for everything and when I met Tim Clark, President of Emirates last year I was keen to know how he was successfully riding the storm.

At a time when many airlines are facing financial difficulties or are severely cutting back, Emirates retains a healthy balance sheet and continues its network and capacity expansion. This has resulted in respect for the airline by many in the industry matched perhaps by annoyance expressed by those who see it as making “unfair” inroads to others perceived “territory”!

“No we don’t get tax breaks. No we don’t get subsidised fuel!” is what the critics will hear strongly from Tim Clark. One thing is certain-the continuing success of Emirates is very much entwined with the character of its President.

Far from moaning about the economic gloom that the industry faces, Tim always expressed great optimism for the future on each occasion that I met with him in 2011. Looking at the results (fuel prices not withstanding), this optimism was not misplaced and Emirates is clearly benefitting from Tim’s long and broad experience.

For example, the airline is finding no difficulty in filling the capacity of its A380’s as it adds them to more routes and frequencies, Tim cites 90% load factors on these.

But how is it that Emirates can find new routes when others are struggling?

Talking to Tim and his network and commercial team, it appears that it has an entrepreneurial approach to route development which is not driven by mechanistic data. Emirates responds to trends when it sees them emerging and seeks to create markets whereas some other airlines wait until those markets are well established or base decisions on annual figures that are already out of date by the time they are published.

It is frequently surprised at the traffic flows which it uncovers and could never have predicted would arise from the provision of a service.

Tim himself remains a network planner at heart and waxes lyrical about the excitement of each new route added. He takes a pragmatic view based on experience, about the challenges faced, believing that it was ever thus and that this is the industry’s lot, like it or lump it.

Arabian Travel Market 2011

He has a depth of technical understanding which is appreciated by the manufacturers and which they ignore at their peril. Boeing has benefited from this in the development of the 777 family and so too has Airbus with the A380.

However Airbus is not gaining brownie points from Emirates at the moment in its revision of design specifications on the A350, definitely one to watch in 2012. Emirates faces other battles ahead in 2012 particularly on the aero political front with a number of governments resisting its expansion ambitions.

So there’s no doubt Tim Clark’s plate will remain full – but his diet of optimism and pragmatism is likely to keep Emirates well nourished for the year to come.