Delegates’ report on USAIRE Conference – “The low cost carrier market dynamics: An easyjet perspective” – François Bacchetta – Feb. 15, 2019 – Pullman Hotel – Blagnac – France

By Sankha Ganguli

The USAIRE luncheon in mid-February had a lot of high points but none higher than the engaging speech by Francois Bacchetta, Regional General Manager heading the France and Italy markets for Easyjet, arguably the most successful budget carrier in Europe. A former marketing boss at L’Oreal, Mr. Bacchetta has been with the airline for over a decade now and has literally seen it grow from a promising LCC to becoming the second biggest airline in Europe in terms of annual passengers flown.

Following in the footsteps of Southwest and Ryanair, Easyjet has shown an unwavering commitment to control costs right from its inception which, among other things, has made it the most cash rich airline in Europe, if not in the world. Mr. Bacchetta reminded us that in the true spirit of low-cost airline operations, Easyjet has unflinchingly stuck to the principles of one aircraft type, short-haul point-to-point flights offering no connections, operations from secondary airports, direct booking engine minimizing agency fees, high aircraft utilization and low turnaround time. And all this was achieved without compromising on customer satisfaction, with approval ratings going beyond 75% in some years – certainly no mean achievement for a LCC.

Looking to the future, Mr. Bacchetta spoke at length about Easyjet’s investment in personalization of passenger experience through use of data and achieving efficiency with more of automation and digitalization. By increasing data scientist headcount rapidly, Easyjet was able to hit the ground running in its quest to becoming the most data driven airline in the world, thereby looking beyond the traditional focus areas for LCCs.

He also seemed to be pretty relaxed as far as the implications of Brexit are concerned and stressed on the fact that Easyjet is the most prepared among airline companies in UK, with existing operations already under UK, Swiss and Austrian AOCs.

According to Mr. Bacchetta, Easyjet is either #1 or #2 in almost all major markets it is present in. Operating in excess of 1000 flights daily with a strong fleet of more than 300 A320s, the airline was able to add 150 new routes in 2018. With a young fleet, high customer approval, strong financials and embracing of new trends in technology, Easyjet is very much poised for the next phase of growth with one eye firmly on the future.

 


By Yongji “Ale” Zhang

On February 15, Pullman Hotel, Blagnac, Toulouse, the former L’oreal marketing director, current Regional Managing director of EasyJet for France and Italy, Francois Bacchetta, was invited to deliver the topic speech of  An Easyjet perspective, the low cost carrier market dynamics, EasyJEt now is the second biggest airline in Europe in passengers flown and has a growing influence on the market. As a delegate of TBS AEROSPACE MBA, I took part the event with my collegue Sankha Ganguli and our director of the program Christoph Benaroya together with delegates from the MSC. We attend the lecture and has some interactions with participants from Collins Aerospace, Aeromorning ,Wesco Aircraft, F. Inciativas ,Kuehne and so on.

  • Quick Review

As far as my understanding, the presentation of Mr. Bacchetta is divided into 3 parts: achievement of Easyjet; market demand; technology and partnership leadership of Easyjet, with the aim to highlight the advantage of the company and promote its strategy and vision,taking advantage of this event.

As for achievement, the company achieved great in market, by connecting 158 airports, transporting 88.5 Million passengers, operating 314 aircrafts and has a 71 % customer satisfaction.

Regarding to the market demand, he highlighted 5 aspects: the demand, supply and airspace management, environmental and social impact, fuel foreign exchange.

Combining the market demand and company’s achievement, he then introduced the strength of the company such as: the unparalleled network, customer loyalty, strong balance sheet, driving growth, value by efficiencies

In the last part he introduced the continuously improvement by presenting 2 aspects, digital and data leadership and leading partnership.

  • Reflection

Generally, the essence of the lecture it is a standard presentation in order to promote company’s market expansion strategy. Under the covered cosmetic, the speech raised the concern of an old topic: could and how a LCC compete with legacy?

According to Bacchetta, Easyjet is either #1 or #2 in almost all major markets it is present in. With a young fleet, high customer approval, well performed balance sheet and leading in technology, Easyjet is active for future market

Beside being a traditional LCC inspired by Southwest, EasyJet’s goals in the long-haul market are ambitious, as the airline aims to double its passenger numbers as a result of the international partnerships. The “ Worldwide Easyjet”  model, allows easyJet to transit from only short-haul in Europe to the worldwide flight. An expansion of the market allows passengers connect from an easyJet flight to a long-haul flight of another airline. In 2002, easyJet created his dominant advantage by signing a long–term contract with Airbus for up to 120 A319s at a time when the big manufacturers were desperate for orders. It is possible to estimate the superior discounts of those aircraft delivered could contribute to more than half of the company’s total balance sheet equity.

Facing the competition of Ryanair, Easyjet choose to adopt some of the legacy character. By launching the advertisement, why not, it highlights its’ difference with Ryanair and brings the customer preference concept to table.

Actually, the company is trying to emphasize its’ digitalization and customer service as two major approach, as well as fulfilling its’ social responsibility of being green. Sure, to achieve this, it can take full advantage of it’s young and efficient fleet and its’ strong partnership and the wide application of its mobile app, leading the digitalization development.

After the presentation, when being asked about the quiet shift of its strategy and how they will evaluate and reposition themselves, the speaker nicely avoid a straight answer by giving a interesting remark, leaving space for the audience to discover the real dynamic behind its mask:

The sky is limitless, and we are big.

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