EasyJet 2015 Annual Report Download - page 15

Strategic report Governance Accounts
11
www.easyJet.com
1BUILD STRONG NUMBER ONE
AND TWO NETWORK POSITIONS
easyJet flies to a network of primary airports and routes that tap
into deep, wealthy markets with populations that have a high
propensity to fly. We have chosen to establish ourselves at the right
airports, serving valuable catchment areas that represent Europe’s
top markets by GDP, driving both leisure and business travel. This is
also where strong markets already exist, built up over a period of
time by legacy carriers. We have the opportunity both to capture
further market share and to grow the overall market.
Driven by strong underlying demand and an attractive customer
proposition, we will continue to invest in growing our network.
We operate more of the top 100 routes in Europe than any other
airline and our route frequencies deliver choice and flexibility for
our customers while increasing returns. Our competitive advantage
is reinforced by the overall portfolio of peak time slots at airports
where either total slot availability or availability at customer-friendly
times is constrained.
We regularly review the route network in order to maximise returns
and exploit demand opportunities in the market. During the year we
added a net 60 routes to the network, slightly more than last year.
These were allocated to new bases, such as Amsterdam, Hamburg,
Naples and Oporto, and to markets where we want to consolidate
our position and grow our share, such as Switzerland and Italy.
We have recently announced new base openings in Venice and
Barcelona. Our plans for fleet expansion will help us to capitalise
on expected demand in markets that we understand.
Over time, increased route maturity and greater numbers of
frequencies have contributed to increasing profitability and returns.
We continue to establish stronger leadership positions in all of our
markets, to achieve the aim of holding the position of number
one or number two in each market. We currently have 52% of
our capacity in airports where we have the number one position
by share and 83% as one of the top two.
Progress in our main markets is as follows:
United Kingdom
easyJet is the UK’s largest short-haul airline, where we have a
20% market share(2). At year end the UK had 134 based aircraft.
We are continuing to reinforce our already strong position in the
UK market, both London-based and regional. easyJet remains the
number one carrier by market share at almost all of its UK bases,
including its major bases of London Gatwick, London Luton, Bristol,
Belfast and Edinburgh. Our positioning, market share and airport
bases are driving both leisure and business passengers. We
increased capacity by 3% in the twelve months to 30 September
2015, launching new routes such as London Gatwick to Stuttgart
and London Luton to Essaouira, while continuing to increase
frequencies on selected routes. Our competitors increased their
capacity on our markets by 9%.
France
easyJet is France’s second largest short-haul airline with a 14%
market share. At year end France had 26 based aircraft.
We see opportunities to grow our market share in France, leveraging
our competitive market position, adding capacity at Charles de
Gaulle through up-gauging and strengthening our domestic network
(we are the number one or two carrier after Air France in most of the
airports where we operate). We increased capacity in France by 6%
in the year, against competitor growth on our markets of 5%,
launching eight new routes in the year such as Toulouse to Seville
and Paris Orly to Split.
Italy
easyJet has a 12% market share in Italy. At year end Italy had
29 based aircraft.
We continue to target increasing market share in Italy, by
reinforcing our existing strong positions and investing more in the
higher value catchment areas. We are the biggest operator at Milan
Malpensa with 22 touching aircraft, have recently opened a new
base at Naples and will open a base in Venice early in 2016 (and we
are already the number one airline at both). We are supporting this
by redeploying aircraft and crew from Rome Fiumicino, which still
remains an important part of our network with an expected two
million passengers a year. During 2015 we increased capacity in
Italy by 7% launching 23 new routes in the year, including Milan
Malpensa to Munich, Milan Linate to Paris Charles de Gaulle and
Milan Linate to Amsterdam.
Switzerland
easyJet is Switzerland’s second largest airline with a 23% total
market share. At year end Switzerland had 23 based aircraft.
easyJet is the number one operator at both Geneva and Basel
airports, with the latter also part of the Zurich catchment area.
We increased capacity by 9% in the twelve months to 30
September 2015, building and reinforcing our leading positions
at both airports. As the leading airline brand in Geneva and Basel
easyJet’s strategy is to continue to build customer preference in
the market. Competitor capacity growth on our markets was
also 9%. easyJet launched eleven new routes in the year such
as Geneva to Menorca and Basel to London Luton.
Germany
easyJet has 4% market share in Germany. At the year end Germany
had 12 based aircraft.
Germany is a large and attractive market, although with a more
regional, federal structure than other European countries. easyJet
is focused on its two bases at Berlin Schoenefeld, where it is the
number one airline, and Hamburg, which opened in 2014. We target
continued growth in Germany, taking share from the incumbent
operators. We have increased capacity by 15% during the year.
Competitor growth on our markets was 6%. We launched sixteen
new routes in the year such as Hamburg to Lanzarote and
Hamburg to Paris Orly.
Portugal/Spain
easyJet has 13% market share in Portugal and 8% market share in
Spain. At year end Portugal had six based aircraft.
Portugal and Spain are principally an in-bound market for easyJet,
with strong demand on key flows to the region from the rest of
Europe. We increased capacity by 8% and 2% in Portugal and Spain
respectively, reflecting in particular the investment in a new base in
Oporto from where we launched six new routes to Luxembourg,
Nantes, Stuttgart, Manchester, Bristol and London Luton airports.
We also announced that a new base at Barcelona would be
opening in February 2016. Competitor market growth on our
markets was 10% in Portugal and 7% in Spain.
Netherlands
easyJet is the Netherlands’ second largest short-haul airline
with a 9% market share. At year end the Netherlands had three
based aircraft.
The Netherlands is a significant opportunity for easyJet, where
we currently carry four million passengers a year. In March 2015
we opened a new base at Schipol Airport, Amsterdam (where
we are now the second biggest operator) and we are continuing
to invest in growth of our market share. As a result we have
increased capacity by 17% during the year against competitor
growth on our markets of 9%. easyJet launched nine new routes
in the year, such as Amsterdam to Nice.