The Week In Review: easyJet rising above turbulence

Saeed Shah
Saturday 12 February 2005 01:02 GMT
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CHEESE-AND-pickle sarnies are off the menu on easyJet flights, replaced with tomato, mozzarella and pesto baguettes. With the company flying between an increasing number of destinations in Europe, the UK- centric menu was failing to appeal to the bulk of the no-frills airline's customers.

These little things are vital to an airline's financial health, when winning business in this cut-throat segment of the travel market depends on keeping the headline ticket prices as low as possible. By getting customers to buy more in-flight, or by insisting on excess baggage charges, the company has limited the decline in revenue per passenger. The winter fare war was not the "bloodbath" predicted, but investors will always need a strong stomach if they want to fly easyJet. Other areas of potential financial turbulence this year include fuel costs, which have risen sharply because of the rise in the oil price.

But don't forget the bigger picture. This airline is one of the great British entrepreneurial creations of the past few years. It flies 95 aircraft between 190 destinations and 58 airports, and we are many, many miles from a limit to the available growth in Europe, both in potential new routes and in higher frequencies of flights.

It is too early to say if easyJet will perform well over the Easter break, but the longer-term outlook is strong. Buy.

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