St Strong ong slot position ion at key ey airport orts s Summer „12 Gatwick departures Percentage of capacity in Level 3 co-ordinated airports 0600-0855 80% Others, 6% 70% 70% easyJet, 45% Aer Lingus, 4% 60% 50% Flybe, 6% 41% 40% Thomas Cook, 30% 6% 20% Monarch, 7% 10% 0% Thomson, 11% British easyJet Ryanair Airways, 15% • • easyJet has a strong position at easyJet has strong position in more congested (and popular) Gatwick first wave – enables large airports which supports our position portfolio of business friendly timings in these markets 19 19
Lea eading ding position ion on top 10 100 Eur uropean opean markets kets Presence in top 100 market pairs 4 4 50 29 9 2 2 Non primary airports 1 1 40 Number of market pairs operated between 2 primary airports 30 2 2 45 20 39 39 21 10 19 19 15 15 13 0 easyJet yJet air alia IAG IAG a Group ce-KLM KLM wegian Norwegian IKI lin-NIK anai Alital Ryan Air Berlin Air France ansa Lufthan • easyJet has a strong position across much of Europe on the top 100 markets • From all the EU city pairs, the top 100 routes have a 24% capacity share • easyJet‟s capacity share of the top 100 is 11.9% • 38% of easyJet‟s overall capacity is on the top 100 routes 20 20
Mul ultiple iple base se st strat ateg egy y en enables es net etwork ork optimisat misation ion SXFGVA GVAORY SXFGVA AMSSXF GVA GVAORY SXF Example of network optimisation Capi pita tal l discip scipline line CDGVCE ORY STN CDGVCE CDG CDG AMSPRG AMSPRG 21 21
Fo Focus us on net etwork ork qua ualit ity y and trading ing the e net etwork ork % of year-round capacity replaced during peak summer Allocation of new capacity FY 12 40% New 35% point nts, 12% 30% 25% Join n the dots, 16% 20% 15% Freque uenc ncy y increase, 10% 72% 5% 0% FCO FCO BSL ORY MXP CDG GVA BER MAD NCL LTN LGW LGW • • We adjust frequency to suit demand – Focus of new capacity allocation summer peak sees leisure capacity & in FY12 is to increase ease freque quenc ncy y routes significantly increased to support ort business ness proposit osition on Source: easyJet management plan 22 22
Range nge of schedules edules to sui uit all cus ustom omer er types es • Schedule flights to optimise gains from business and leisure mix • Use of triangle patterns and multiple bases to hit most appropriate times for different customer types • e.g. Luton – Belfast - Malaga 07.55 LTN - BFS 07.00 BFS - LTN 09.40 BFS - AGP 08.40 LTN – AGP 14.25 AGP - LTN 13.05 AGP - BFS 23 23
Absolute lute focus us on ROCE FY11 route performance Matur ure Imma matur ture ROCE 12% • Routes below 12% must perform a role in the portfolio: • Support corporate strategy and provide product range • Competitive battles • Retain strategic slots or achieve volume deals at high performing airports • Complete high performing line of flying • 6% of capacity allocated to summer-only routes • Tactical winter reductions in line with demand without grounding aircraft Source: easyJet management plan Line thickness indicates relative capacity 24 24
We e manage age and chur urn n the e net etwork work portfo tfolio lio • Evaluate network performance against ROCE targets and churn • Target churn (route drops / “ thinning ” ) of 5%-10% of capacity • Churn provides first option for incremental capacity & new routes Route dropped in following year % of networ ork Route capacity decreased in following year capacity y 14% 12% 10% Target churn n range 8% 6% 4% 2% 0% FY07 FY08 FY09 FY10 FY11 Source: easyJet management plan 25 25
Fo Focus us on ROCE has del elivered ered change nges s in net etwork ork • Markets culled • e.g. Helsinki, Gothenburg, Madrid-Morocco • Capacity reallocated • e.g. London-Milan, London- Barcelona, Paris-Milan • Profitable opportunities • e.g. growth at Gatwick, Geneva, Basel • New bases e.g. Toulouse and Nice 26 26
New ew rout ute e sel elec ectio tion n process cess • New route process looks at areas of Market t Attractiv ivene ness strategic focus Competit petitiv ive e Bilat later eral al • Detailed financial and operational Envir iron onmen ment Cons nstr train ints ts evaluations carried out • All short listed routes require AMB Detaile ailed d finan nancia ial l evaluatio uation sign-off before launch Join n the New networ ork dots ts poin ints New route ute shortl tlis ist Airpo port t Oper erat ations ions negot otiati iations ns revie iew Conti tinuou uous Fina nalis lise e New route ute perfo forman mance e New route ute sign-off off sche hedu dule le on sale monito nitorin ing 27 27
Contin tinuo uous us per erforman formance ce manage agemen ent of the e net etwork ork Weekly • Trading meeting Monthly • Country and route review meeting • Review of performance against ROCE targets • Review of best and worst performing routes with CFO Quarterly • Network forum with CEO and CFO Seasonal • Planning review meeting with CEO and CFO 28 28
ea easyJet Jet can still pen enetrat etrate e core e markets kets fur urther ther Country share of intra EU capacity FY11 14% 12% Share of intra EU capacity easyJet share Share of total EU 10% 8% 6% 4% 2% 0% Kingdom Germany Spain Italy France Turkey Norway Switzerland Greece Sweden Netherlands United • easyJet has c. 7.6% of European short haul market • Growth of existing network planned to be in line with underlying industry growth Source: OAG 12 months to Sep-11 29 29
Potenti ential al for fut utur ure e profit fitabl able e growth th 30% Unsized potential growth due: a) competitor withdrawals 25% b) yield improvement Capacity growth c) expansion into other geographical territories 20% 18% 16% 16% 15% 15% 14% Defined potential growth 10% Target net growth rate in plan 5% 0% 2011 2012 2013 2014 2015 • Growth of existing network in line with underlying industry growth of 1.5 x GDP • Analysis indicates profitable new opportunities still exist, even at higher fuel prices • New opportunities also exist at potential new bases in main easyJet territories • 0-5% capacity growth plan does not take account of significant market entries into Germany, Scandinavia, Eastern Europe or other territories Source: easyJet management plan 30 30
easyJet’s network uniquely positioned • Pan European network focused around primary markets • Route portfolio and network ork flex exib ibility ity ensures broad ad ap appeal al across consumer types • Absolute focus us on ROCE CE and continual performance rformance man anage agemen ment of the network • Strong platform gives easyJet significant potential for future profitable growth 31 31
Fleet strategy Chris Essex Head of Central & Fleet Procurement 32 32
Fl Flee eet t strategy tegy Integrated approach required to deliver lowest fleet cost across the lifecycle Fleet eet plan an flexibility exibility Lowest est life fe cyc ycle cost • Business case driven decisions • Network requirements • Negotiate fleet transactions define capacity needs • with range of suppliers – • Short lead times for • manufacturers and lessors capacity decisions Fleet Fleet • Maximising transaction • Fleet plan defines need planning procurement benefits for fleet transactions Lowest est cost of Lowest est cost of Finance Maintenance suppor port & Engineering owner nership ship • Maintain asset technical • Identify funding integrity requirements • Define and plan business • Portfolio approach – 70/30 needs owned/ leased mix • Maximise value from strategic • Alignment of owners‟ interests supplier relationships with operators' obligations 33 33
Econo onomi mic c jus ustific ficat ation ion for new ew aircra craft ft acqui uisi sitio tion Rationale Justification easyJet example • end of useful economic life 1. Economic Aug-98 98: • new technology available e.g. obsolescence order for 15 B737-700s • improved fuel efficiency • reduce unit costs e.g. 2. Deliver profitable Oct-02 02: • standardised equipment high growth order for 120 A320 opportunity specification family aircraft • maintenance “honeymoon” • right sizing aircraft to market 3. New mission Feb-09 09: demand first delivery of easyJet • different operational mission specification A320 34 34
A youn ung g flee eet t is an out utcome me of flee eet ev evolut ution ion No target fleet age: development of fleet has resulted in low average age currently c.4yrs Total fleet Avg age Boeing Airbus Avg age (right axis) 220 11 200 10 Go GB 180 9 acquisition ition acquisition ition 160 8 140 7 120 6 100 5 80 4 60 3 40 2 20 1 0 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Financial year ending 30 September • We have experience in managing a major fleet transition 35 35 Source: easyJet management data
Fl Flee eet t status us Fleet and financing strategies have created flexibility and a mix of types, ages and ownership profile Fleet at 31-Dec-11 Owned* Leased Total A319 111 56 167 A320 29 6 35 Total fleet 140 62 202 70 / 30 owned * / leased mix target Ownership profile Age profile * Owned Leased * No. aircraft Owned Leased 100% 40 35 80% 30 25 60% 20 40% 15 10 20% 5 0 0% 0 1 2 3 4 5 6 7 8 2003 2004 2005 2006 2007 2008 2009 2010 2011 Age (Years) Financial year ending 30-Sep * Includes finance leases 36 36 Source: easyJet management data
Airb rbus us contra tract ct • Airbus contract announced in 2002 for deliveries until 2014* • Provides strategic framework for A320 family pricing for up to 315 aircraft of which 242 have been ordered to date in five transactions • Transaction in January 2011 for 15 aircraft • 207 aircraft delivered by end 2011 • 35 further deliveries by September 2014 • 42 options + 31 purchase rights remaining • Fleet type flexibility (A319/A320/A321) • Contract provides substantial discounts to list price and easyJet continues to drive value * Excludes 2 GB Airways contracted deliveries 37 37
New ew tec echno hnology logy Airframe First delivery / Fuel First firm airline order saving* Airbus A320neo family 2015 / Virgin America 15% Boeing 737 MAX family 2017 / Southwest 16% Bombardier CSeries 2013 / Lufthansa (for Swiss) 20% Engine Available on aircraft family • Airbus A320neo P&W PurePower PW1000G • Bombardier CSeries • Airbus A320neo CFM LEAP • Boeing 737 MAX * Manufacturer’s estimate; compared to current generation aircraft e.g. A320 family 38 38
Fu Futur ure e flee eet t ev evalua uati tion on T echnical Economic Business iness cas ase Decision performance performance Sep‟11 - Jan‟12 Feb‟12 - Mar‟12 Apr‟12 – Jun‟12 Q4 FY12 Relative economics Ability to operate Phasing / speed of of new types Enhances premium competitively on transition and compared to existing of ROCE over WACC? easyJet‟s network flexibility fleet 39 39
Su Summ mmary ary • Fleet strategy based on key principles • Inherent flexibility in fleet plan • Fleet changes driven by business cases • Low average age is an outcome of fleet strategy • Airbus deal has provided competitive advantage • Future fleet structure under evaluation 40 40
Panel Q & a 41 41 41
Agen enda da Time Content Who Page • Welcome and introduction 10:00 Carolyn McCall 3 • Capital Allocation 10:20 • Introduction Chris Kennedy 8 • Network development and optimisation Alan McIntyre 16 • Fleet strategy Chris Essex 32 • Panel Q&A • Customer 11:40 tomer • Marketing ng Peter r Duffy 44 • Customer tomer and revenue ue: : focus on leisur ure Cath th Lynn 63 • Busine ness travel Andy Hodges 70 • Panel Q&A 12:40 ~ Lunch ~ Chris Gadsden Stalls covering Regulation & Environment, Slots & Website and Apps Richard Matthew Richard Levin • Costs 13:40 • easyJet lean: maintaining our cost advantage Chris Kennedy 86 • Delivering cost advantage through an efficient operation Warwick Brady 95 • Case study: Engineering & Maintenance cost performance Ian Davies 107 • Panel Q&A • Bringing it all together 14:40 Thomas Haagensen 116 • Case studies: Switzerland & France Francois Bacchetta 124 Steve Azevedo Taverney 130 • Final Q&A, wrap up 15:25 Carolyn McCall 138 • Close 42 42
Customer 43 43 43
Marketing Peter Duffy Marketing Director 44 44 44
Objecti ectives ves • Hit yield and volume targets • Improve brand perception • Increase marketing spend effectiveness • Marketing cost per seat from £0.84 (2011) to £0.81 (2012) 45 45
Web eb facts • easyJet is a leading search term for travel across Europe • In 2011 easyJet.com had 364 million visits (+6.5% YoY) and 213 million unique visitors (+8.5% YoY) • On the final day of the 2012 January sale, easyJet.com had 2.2 million visits • easyJet supports 14 languages with their own website and has visits from over 221 countries • In 6 months (Jun 2011 – Dec 2011) the 6 pages of the easyJet booking funnel were viewed over 259 million times (excluding the homepages) • 46% of traffic to easyJet.com is direct – proving the strength of the brand. In the UK it‟s 54 % • In Dec 2011 mobile visits to easyJet.com accounted for 6.5% of all traffic. In Mar 2011 it was 3.2% 46 46
Per ersonal onalised ised web eb en environmen ronment • Defaults to „flying‟ airport • Remembers last search • Links to email for personalised experience • Supports third party dynamic content • Switches to „non - seat‟ post purchase • Deep link from Google search • Raft of usability improvements to improve conversion rates 47 47
Per ersonal onalised ised em email en environ ronme ment nt Repeat purchase by market • Increase sales from internal media • Switch from campaign to trigger/journey based approach • Abandoned basket • Ancillary upsell • Flight minus days • Research and resale 48 48
Per ersonal onalised ised mobile e en environ ronme ment nt • Sales and servicing platform • Key source of customer contact during journey • Disruption management including change flight/refund • Mobile boarding • Upsell capability core 49 49
Brand nd • Strong brand awareness across Europe • Preference key to driving conversion • Maintain strategy for UK, France & Switzerland • Improve position for Italy, Spain and Germany • Primarily known for price • Limited understanding of destination range and choice 50 50
De Demogra ographics phics - cus ustomer mers s age e profi file le Percentage Total of bookings France Germany Italy Spain Switzerland UK Up to 25 25-34 35-44 45-54 55-64 65+ 51 51
Aver erage age booking ng value ue by age e band Average Total booking France revenue Germany Italy Spain Switzerland UK Under 18 18-24 25-34 35-44 45-54 55+ 52 52
UK UK socio-economic economic profil file 53 53
Connec nnectin ting g Eur urope pe • Europe by easyJet positioning 54 54
Eur urope ope by ea easyJet Jet • Europe by easyJet positioning • Price driven resonant advertising 55 55
Eur urope ope by ea easyJet Jet • Europe by easyJet positioning • Price driven resonant advertising • Transparent pricing 56 56
Eur urope ope by ea easyJet Jet • Europe by easyJet positioning • Price driven resonant advertising • Transparent pricing • Build understanding of range and choice 57 57
Eur urope ope by ea easyJet Jet • Europe by easyJet positioning • Price driven resonant advertising • Transparent pricing • Build understanding of range and choice • More focused use of tactical promotion 58 58
Eur urope ope by ea easyJet Jet • Europe by easyJet positioning • Price driven resonant advertising • Transparent pricing • Build understanding of range and choice • More focused use of tactical promotion • Focus on business 59 59
Web eb share re for January uary 60 60
Bran and d res esea earch rch Call to action: Message take-out: positive but different Impact of ad on likelihood to book with easyJet Much more likely A little more likely 100 80 83 10 35 Old 60 66 63 40 52 20 New 22 38 0 Old New Old New 0 20 40 60 80 100 Fits with my image of Left me with good feeling about easyJet easyJet 61 61
Su Summ mmary ary • Focus on digital efficiency • Maximise value of internal media • T argeted use of third party media • Overall increased Marketing spend effectiveness resulting in reducing YOY marketing cost per seat 62 62
Customer and Revenue: Focus on Leisure Cath Lynn Customer & Revenue Director 63 63
Cus ustom omer er and rev even enue ue tea eam Making ng travel el easy y and affordabl dable Customer • Customer Experie ience - putting the customer at the heart of everything we do, whilst remaining low cost • Customer Operations s - driving service efficiency in our contact centre operations • Network k and Schedule Development – optimising the use of our aircraft assets: where you want to fly, when you want to fly Product propos ositi ition on • Business Passenger - building the business passenger proposition and making it easy to book • Leisure Passenger - delivering a winning leisure proposition • Yield development and revenue m management – leading the industry in monetising every seat • seats, bags, speedy boarding Revenue • Non-seat at – increasing our share of wallet • In-flight , accommodation, cars, insurance, easyJet plus Europe‟s preferred airline, delivering market leading returns 64 64
Bui uilding ding on our ur strength ength in Lei eisure ure • Leisure is the foundation of our profitability Affordable • Carried approximately 45million Welcoming leisure passengers in FY11 ~ c. 80% From any in-flight channel experience of our business • Recognised for offering a Making leisure travel competitive leisure proposition easy and affor ordab able • We are winning share from charter Friendly & Fly to the carriers stress free right place • We know and understand our leisure business and customer • By understanding our customers we On time & Fly at the reliable right time are can maximise yields 65 65
Who are e our ur Lei eisure ure cus ustom omers? ers? Our Families travelling with children Visiting friends and family, regular of all ages, at peak times links across Europe Our retired /elderly customers have the luxury of time and desire to travel Our Groups normally travelling for occasions, for example hen & stag, golf or events Our Student/backpackers are adventurous, travel light and take multiple trips annually Our second home owners travel at least 2-3 times per year to their City Breaks or winter sun break in overseas property addition to main holiday Ski as a second holiday once a year 66 66
Lei eisu sure re drives es profita itabili ility ty • Price sensitive leisure passengers travel off peak enabling us to fully utilise our aircraft assets • Retired market is growing • Higher yields and loads are obtained at the weekend where the demand for Leisure travel is high Yield Load • Leisure demand complements our drive on business 67 67
Lei eisu sure re del elivers ers prem emium ium yiel elding ing passeng engers ers • Premiums from leisure passengers at peak are high Summer • Weekend breaks Easter Half-Term Christmas Half-Term • School Holidays Half-Term • Bank/religious holidays • Ski • Families travelling on beach routes at peak holiday periods 68 68
The e ea easyJet et lei eisur ure e ex experience erience - making ing it ea easy • Self help tools online helping prepare for travel and online check-in and manage your booking facility • Trusted reliability and on time performance • Welcoming and friendly in flight experience CSAT +90% • New communication channels with real time information • online flight checker • easyJet APP • Building on our network advantage • Customer lead network design • Growing mix of pan European leisure destinations • Convenient airports and timings 69 69
Business Travel Andy Hodges Director of Sales, Distribution and Business 70 70 70
Our ur Goal • Realise “fair share” of business travel market • Translates to £100m incremental margin pa • Delivery requires a behaviour change within mid to large corporates – so will take time • But a value message has resonance in today‟s market 71 71
Ho How we e get et ther ere • Optimise our product & pricing Be flexible • Re-position our brand through targeted advertising Access the best On time • Adapt our distribution fares channels to match our Making customers‟ needs business travel easy • Create a small but effective and affordable At the From any sales force to: right time channel • build partnerships with travel management companies Speed Fly to the through right the • sustain relationships with place airport mid-large corporates 72 72
A winnin ning formul mula • Schedule # Business Traveller Preference Competitive advantage? • OTP Network 1 • Value Punctuality 2 • Reputation Frequent flyer programme 3 Offered lowest fare 4 • Flexibility Airline reputation 5 n/a Best for my connecting flight 6 Value for money 7 Airport convenience 8 = Quality of service 9 = Safety standards 10 73 73
Enha nhanc ncing ing our ur propo positi sition: on: value ue Standard fares We are cheaper than our competitors*: easyJet £100 more • standard fares - on 80% of occasions £ 50-100 more (by more than £100 on 55% of flights) £ 20-50 more £ 0-20 more • flexible fares - on 92% of occasions £ 0-20 cheaper (by more than £100 on 65% of flights) £ 20-50 cheaper £ 50-100 cheaper £100+ cheaper Flexible fares easyJet £100 more £ 50-100 more £ 20-50 more £ 0-20 more £ 0-20 cheaper £ 20-50 cheaper £ 50-100 cheaper £100+ cheaper * Source: ITM survey 74 74
Enha nhanc ncing ing our ur propo positi sition: on: schedule edule Europe‟s number 1 air travel network Depth Breadth Delivery Flight htsta tats ts.co com m – OTP 3 month ths to end Decembe mber r 201 011 89 87 85 79 77 77 76 70 67 67 66 65 Source: Seabury Group YTD FY12 YTD FY11 easyJet Ryanair KLM Lufthansa Air France British Airways 75 75
Enha nhanc ncing ing our ur propo positi sition: on: flex exibi bilit lity Feature eJ New Legac acy Flex Fare Flex Fare Flexibility Within 4 Any date weeks No. of changes Unlimited Unlimited No extra fees Refundable x Free hold bag Priority boarding / allocated seats Points / miles x Flex Volume Free lounge x Sales support Corporate deals GDS distribution Test phase Live on web Partnership 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 76 76
Balan anced ced distrib ributi ution on strategy tegy PUSH TRAVEL MGT. COMPANIES PULL GDS AGGREGATORS 77 77
Pus ush: h: Bus usiness ess Se Sense, e, not Bus usiness ness Class advocates for common sense smart business value reliability decisions in innovation fairness general easyJet efficiency flexibility is the smarter er trav avel el choice entrepreneurial agility spirit Promotions that challenge perceptions of easyJet: any person with ‘business sense’ would never turn them down 78 78
Pus ush: h: stronge nger r rel elation ionsh ship ip with corpora porates tes • Become short haul carrier of choice • Multiple stakeholders: • Policy makers • Buyers • Bookers • T ravellers • T ailored messages through different media • Clear targeting by market • Range of products & channels to suit different needs 79 79
Dr Driving ing the e poten entia tial l of indirect irect chan annels nels Business travellers • Indirect channels drive margin for eJ (volume for legacies) • Costs recovered through POS • eJ.com always cheapest • Better terms with the GDSs: • greater commercial freedom Leisure travellers • improved technical performance Source: PhocusWright 80 80
Pul ull: : Partnerships tnerships with TMCs • T argeted incentives that drive incremental yield, not volume • Standard approach, tailored by market • Supplemented with limited number of pan-European deals • Managed by local sales teams • Supplements direct corporate partnerships • Simplified back-office payment 81 81
Summar mary • Leverage network strength • Enhance the product • Deliver through the right channels • Partner with corporates, TMCs & distributors – on our terms • T arget advertising & promotion • Don‟t break the model….. retain great value Business iness sense, se, not business ness class ss 82 82
Panel Q & a 83 83 83
Agen enda da Time Content Who Page • Welcome and introduction 10:00 Carolyn McCall 3 • Capital Allocation 10:20 • Introduction Chris Kennedy 8 • Network development and optimisation Alan McIntyre 16 • Fleet strategy Chris Essex 32 • Panel Q&A • Customer 11:40 • Marketing Peter Duffy 44 • Customer and revenue: focus on leisure Cath Lynn 63 • Business travel Andy Hodges 70 • Panel Q&A 12:40 ~ Lunch ~ Chris Gadsden Stalls covering Regulation & Environment, Slots & Website and Apps Richard Matthew Richard Levin • Costs 13:4 :40 ts • easyJet t lean: n: maintaini ntaining g our cost t advantag ntage Chris Kennedy dy 86 • Deliveri vering ng cost t advantag ntage through ugh an efficient cient operati tion Warwick ck Brady 95 • Case study dy: : Engine neering ng & Mainten ntenanc nce cost t perform rmanc nce Ian Davies 107 • Panel Q&A • Bringing it all together 14:40 Thomas Haagensen 116 • Case studies: Switzerland & France Francois Bacchetta 124 Steve Azevedo Taverney 130 • Final Q&A, wrap up 15:25 Carolyn McCall 138 • Close 84 84
Costs 85 85 85
easyJet lean: maintaining our cost advantage Chris Kennedy Chief Financial Officer 86 86 86
easyJet’s low cost base a significant advantage easyJet lean aims to protect and enhance this advantage Key areas of focus: • airports and ground handling • crew 10.0 Cost/ASK Catering costs € cents Other non specified costs Commercial cost 8.0 Airport and handling charges Route charges 6.0 Aircraft Rentals and Leasing Costs Maintenance and Repairs Fuel 4.0 Depreciation and Amortization Personnel Costs 2.0 0.0 Ryanair Vueling Wizzair easyJet Air Berlin Iberia British Airways Source: 2010 anual reports except (Wizzair) 87 87 Wizz air source: Orbis database Currency exchange: € 1.00~$1.35~£0.82
ea easyJet Jet lea ean targets gets sup upport orted ed by b ben ench chmarking marking Efficiency Business model opportunity CASK ex-fuel Mid size Scale Specifics of easyJet A319 Airbus easyJet Other best in Advantage easyJet current capacity contract lean class LCC model unit cost 88 88
Inherent cost advantage in easyJet’s model Legacy A319 easyJet A319 easyJet A320 124 seats 156 seats 180 seats (source: Airbus) 70.1% load factor 87% load factor 87% load factor (2010) (2010) (source: AEA Europe figure Jan - Dec 2010) 84 passengers 136 passengers 156 passengers Fewer passengers 56% more passengers 15% more passengers with higher costs against legacy A319 against easyJet A319 89 89
ea easyJet Jet lea ean – lowes est t cost for our ur net etwork ork • Fuel Programme with governance effici ficiency cy and milestones (28%) %) Airpo ports ts & ground d • Crew Aimed at both long term and handlin ing (13%) 3%) short term (29%) %) • Embedding a lean culture and continuous improvement Other & Sales s and • Fixed Covers whole cost base marketin ing (5%) (3%) • Sustainable benefits, not one-off benefits Owners rship ip Engineerin ing (7%) %) (6%) Navigation tion (9%) (%) percentage of overall cost base 90 90
Fo Focus us area eas • Airports and Ground Handling • Driving down margins • Working to develop a more appropriate and consumer friendly regulatory environment • Encouraging efficient airport capital expenditure • Encouraging pay per use charging structures • Crew: increasing flexibility and robust management of the establishment • Fleet: increasing mix of A320s in fleet to deliver reduced operating and capital cost per seat • Fuel: FY11 £917m cost - small % savings can generate large cost reduction 91 91
ea easyJet Jet lea ean gover ernance nance and project ject plans ns • Example of easyJet lean project Key easyJet lean statistics tracking report • Programme Management Office to provide clear support and accountability • Bimonthly AMB Programme Steering Group • Eight main workstream programmes – bimonthly project boards • Twenty five sub stream programmes • Weekly and monthly financial performance tracking 92 92
On target et to del eliver er £90m of savings ngs in FY FY12 12 easyJet lean initiatives Enginee eering g and Mainten enan ance FY12 Shop visit timing In progress • Minimising impact of Line maintenance contracts Delivered LLP pre-purchase Delivered controllable inflation Wheels & Brakes contract Delivered Crew ew • Delivered £19m at the end FY12 pay deal In progress of Q1 UK + Europe pilots In progress Establishment In progress • 21% of FY12 target with Fuel plans fully developed to Differential contracts Delivered Discretionary fuel In progress deliver full year Delayed engine starts Delivered Weight reduction Delivered Airpor orts & Grou ound d Handli dling Leveraging growth at commercial airports In progress Regulatory In progress GH margins In progress Tourism funding In progress Contract compliance In progress Other er / F Fixed In progress 93 93
Su Summ mmary ary • easyJet lean is fully embedded • Programme plans are fully formed • Clear targets and milestones have been set across the business • FY12 is already delivering well and is set to meet plan of £90m 94 94
Delivering cost advantage through an efficient operation Warwick Brady Chief Operations Officer 95 95
Oper erat ation ions s at 49 49 of top 10 100 Eur uropean opean airport orts Turning g Europe pe Orange ge Flight ight Oper erations ations Our operation is large-scale and Pan-European • 1,900 Pilots Cabin Servi vices ces • Legend end 4,300 Cabin Crew Ground und Oper eration tions • 611 routes across 130 airports in 30 countries Engi gineering neering & Maintenan nance ce • 204 aircraft • 5 maintenance bases, • 22 line maintenance bases Oper erat atio ions ns Control • 23 aircraft/crew bases, • c. 1,200 sectors/day Source: Seabury Group 96 96
Effici icien ent t oper erat ation ion drives es sup uper erior ior ROCE Areas of focus Outcome: FY11 Operations KPIs • Safety is our number one priority • On time performance up 13ppts • On time performance • Cost per seat (excl. fuel) • Smart cost management down 1.6% • Simple schedule and operation • Aircraft utilisation exemplary • Rigorous performance • T urn compliance improving management steadily • Right people, right place • Customer satisfaction up • Customer friendly 6ppts • Engaged team 97 97
What at get ets mea easured ured get ets done • 5 daily operations calls, (E&M, OCC, Ground Ops, IT, Executive) covering operational issues and successes • Daily, weekly and monthly Operations reports • Identifying trends, issues and problematic areas / bases • Total clarity around financial objectives and KPIs Rolling ng 12 month average KLM Lufthansa Air France 23ppts % Flights on time British Airways easyJet Ryanair 90% improvement in 85% YoY rolling 12 month 80% OTP scores 75% 70% 65% 60% Feb 09 Apr 09 Jun 09 Aug 09 Oct 09 Dec 09 Feb 10 Apr 10 Jun 10 Aug 10 Oct 10 Dec 10 Feb 11 Apr 11 Jun 11 Aug 11 Oct 11 Dec 11 98 98
OTP integ egral al to driving ing cus ustom omer er satisfac factio tion Improvement in OTP has helped push up customer satisfaction 100 Actual OTP - % within 15 minutes Journey satisfaction on this occasion* 90 Overall impression of easyJet* 80 % % 70 60 50 Oct-Dec Dec 09 Jan-Mar ar 10 Apr-Jun 10 Jul Jul-Sep p 10 Oct-Dec Dec 10 Jan-Mar ar 11 Apr-Jun 11 Jul-Sep Jul p 11 Oct-Dec Dec 11 • Brand reputation takes longer to recover 99 99 * % completely / very / quite satisfied
Ground und handli ndling ng costs red educing ucing • Airports & Ground handling is 44% of cost base (excl. fuel costs) • Costs down despite inflation (-0.5 FY09 to 5.2% FY11) Turn time success • Improved efficiency 74% 72% 70% 69% 66% 66% • 58% New world contract • Focus on short shipped bags • Increased internet check-in • Allocated seating trial • Simple baggage reconciliation Jul/11 Aug/11 Sep/11 Oct/11 Nov/11 Dec/11 Jan/12 systems • Forced air de-icing & brushing • Ensure the customer stays front of mind, every flight, every day 100 100
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