Easyjet adopts a more aggressive strategy to face rivals
Easyjet’s chief executive Johan Lundgren is reportedly adopting a more aggressive business strategy, following accusations of having behaved too cautiously during the pandemic.
Lundgren stated that, after seeing encouraging signs for next summer, he expects demand to go back to pre-Covid levels, allowing the company to buy slots at airports such as London Gatwick.
The chief executive hopes to satisfy a few “underwhelmed” investors, who have been calling for more a more aggressive approach.
“In times of uncertainty, there will always be a space for big mouths who fill the vacuum with endless expectations of growth in the long term. And that is attractive, perhaps, for some people to listen to,” the Swedish executive told the Financial Times.
Speaking on Wednesday at London’s World Aviation Festival, Lundgren stated “that this is a marathon, not a sprint,” apparently taking a jab at competing airlines such as Wizz Air and Ryanair, which are almost at pre-Covid levels and wish to expand their market presence.
According to the chief executive, his cautious approach to the post-Covid recovery has spared Easyjet from an increase in losses in third quarter, which was registered by competitors.
Lundgren’s comments come amidst the UK Government’s re-introduction of travel restrictions – including last week’s requirement for travellers to take a PCR test upon arrival and yesterday’s introduction of pre-departure tests.
Earlier last week, the company reported £1.1bn in losses, with capacity decreasing to 28.2 million passengers in the year ending 30 September. Despite results, the airline remained positive about its ability to weather the latest Covid storm.
“In summary, we remain mindful that many uncertainties remain as we navigate the winter, but we see a unique opportunity for easyJet to win customers and take market share from rivals in this period,” Lundgren told investors last Tuesday.
Analysts seemed to agree with Lundgren’s comments, highlighting Easyjet’s strong position in the market. “Having raised equity earlier in the year, the airline is sitting on ample liquidity to see it through oncoming headwinds, while it has also used the pandemic to make a meaningful difference to its cost base and operations,” said Brewin Dolphin’s senior investment manager John Moore.
“There is undoubtedly going to be some turbulence ahead, but easyJet has put itself in a good position to navigate its way through those challenges.”