Need I say Moores

EasyJet: A new old strategy? ​

EasyJet’s new CEO, Johan Lundgren, is planning to develop the UK LCC’s presence in the holiday market – but how heavily is this strategy linked to his tour operator roots?

Lundgren joined easyJet last November, as successor to former CEO Carolyn McCall. He came from TUI Group, where he was deputy CEO.

On May 15, Lundgren detailed his strategy for the airline, which includes a greater push into holidays and hotels.

His expertise in the field is clear - Lundgren has years of experience with a tour operator - but the question is whether this is the right strategy in a world where tour operators and travel agencies have fallen out of fashion. Just look at UK leisure carrier Monarch as an example.

During a recent media dinner József Váradi, CEO of Central and Eastern European LCC Wizz Air, predicted that the vertically integrated tour operator model will “come under a lot of stress” as market consolidation continues.

Váradi explained that Millennials prefer to put together their own holiday experiences. “The average age of our customers is 28. These are the customers we’re dealing with. They will keep changing the model of the industry,” he said.

Is this, therefore, the right time to 'go more tour operator’?

Equally, easyJet is not a tour operator. Even Varadi, himself, said that successful airlines will be the ones who “own the customer experience and the customer themselves.”

Lundgren pointed out that he already has the hotel-stayers on board as a captive audience. He just needs to tempt them to book with easyJet.

EasyJet is planning to seek direct arrangements with hotels, rather than going to a consolidator. This will mean boosting manpower on easyJet holidays. When travelers have access to platforms like Booking.com, will they trust that easyJet can get them the best deal?

When I book a LCC flight, I skip through the endless pages of hotel, car hire and insurance upsells, because I just went there to book a flight. I want to control my own travel experience. Then again, I used to visit Amazon just to buy books. Times change.

History has shown that aviation moves in circles. Going back to pre-liberalized Europe, the short-haul product was very basic. Competition led to onboard catering and comforts, which were then stripped back by the advent of LCCs. Then unbundling turned into bundling, as the LCC’s set their sights on ancillary revenues, hub airports and business travelers.

Is Lundgren going to drive the next wave of LCC ancillaries, or is he attempting to resuscitate a dying model? Time will tell.

Victoria Moores victoria.moores@informa.com

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