ALLOC LLOCATED ATED SE SEATING TING AND ND DIGITAL IGITAL - PowerPoint PPT Presentation

Analyst alyst br briefing efing ALLOC LLOCATED ATED SE SEATING TING AND ND DIGITAL IGITAL Wednesday 3rd October 2012 0 0

Agenda Introduction Carolyn McCall Chief Executive Officer Allocated Seating Warwick Brady Chief Operations Officer Digital Update James Millett Head of Digital Conclusion Chris Kennedy Chief Financial Officer 1 1

in intr trod oduct ction ion Carolyn McCall Chief Executive Officer 2 2

Context Eur uropea opean n Head adwi winds ds Competitiv mpetitive envir vironme onment eas asyJet Jet well ll positi itioned oned • Legacies carriers • Economic 1. Strong balance sheet uncertainty incurring significant 2. Efficient, low cost short haul losses • Industrial unrest model e.g. Air France • High fuel costs 3. Strong network and • Weaker carriers market positions • Sovereign debt retreating or exiting e.g. Spanair, 4. easyJet.com • Slowing economic T our Ops growth • Consumers valuing low fares 3 3

Strategy to drive growth and returns 1. 1. Build d strong ng no. 1 and no. 2 netwo work rk posi sition tions • Growth slightly above market growth of 1.5 x GDP • Build on positions of strength e.g. France • Exit structurally challenged markets e.g. Madrid 2. 2. Maintai ain n cost t advant antage age • Efficient operation and high asset utilisation • Increase mix of 180+ seat aircraft in fleet • easyJet lean 3. Dri 3. rive ve demand nd an and conversi version on ac across oss Europe rope • Europe by easyJet campaign • Enhance easyJet.com and mobile apps • Continuous improvement to yield management • Provide friendly and efficient service so that customers come back 4. 4. Discip iplined ined use e of capit ital al • Focus on ROCE • Repay higher yielding debt • Dividend 4 4

Improved performance 16.0% 14% - 15% 14.0% 12.7% 11% - 12% 12.0% 9% - 10% 9.8% 10.0% 8.8% 7.9% 8.0% 6.9% 5.6% 6.0% 3.6% 3.6% 4.0% 2.5% 2.0% 0.0% 2009A 2010A 2011A 2012E 1 2 ROCE current measurement ROCE 7x lease adjustment ROCE NPV basis Industry margin Note 1: ROCE adjusted for NPV of Lease Commitments and target liquidity (£4m per aircraft) Note 2: Aggregated operating profit margin of global commercial airlines. (Source: IATA, September 2012) 5 5

Allocat ocated ed se seati ting ng Warwick Brady Chief Operations Officer 6 6

How it works? All passengers are allocated a seat, families sit together • All seats allocated on all flights • Seats can be selected in the booking funnel • ‘Upsell’ capability at customer touch points • Boarding passes with seat numbers available online or airport check-in (from -30 days) • Passengers with Reduced Mobility (PRM) friendly allocation • Key customer groups receive / retain the right to board the aircraft first • ‘Extra legroom’ & ‘Up front’ seat purchasers • Flex fare customers are entitled to an ‘Up front’ seat • easyJet Plus! cardholders can choose ANY seat on the aircraft, including extra Legroom, at no additional charge • Non- purchasers ‘randomly’ allocated at check -in • Passenger experience for non – purchasers better than current boarding process • PRMs will be pre-allocated, families seated together 7 7

On-board Three price bands, but with pricing ‘levers’ ‘Extra Legroom’, £12 available to manage yield post-launch Launch pricing ing ‘Up front’, £8 Remain aining, g, £3 ‘Up front’ A319 seats ‘Extra Legroom’ = 18 seats F D E ‘Up front’ = 24 seats H H H H Remaining = 114 seats 1 2 3 4 5 6 7 8 9 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 A B C 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 H H H H ‘Extra Legroom’ A320 20 seats F ‘Extra Legroom’ = 18 seats D E ‘Up front’ = 30 seats H H H H Remaining = 132 seats 1 2 3 4 5 6 7 8 9 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 3 3 A B C 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 H H H H ‘Up front’ seats 8 8

Tria rial l re resul sults ts & f & feedb eedback ack 9 9

The trial • The objective of the trial was to measure performance against the following criteria: 1. Asset utilisation – On Time Performance and turn time performance 2. Cost – no negative impact on cost per seat 3. Customer – increased satisfaction 4. Revenue – match or exceed Speedy Boarding revenue stream • Trial commenced 24/04/12 • Started on 11 flights per day, moving to 35 then 50 flights per day by 01/06/12 (approx. 5 % of network) on representative sample of routes (leisure / business) • Continues at 50 flights per day until rollout commences • Routes selected were on a par with average turn performance for the network • Rigorous operational analysis each month at go / no-go decision board meetings 10 10

Allocated v Network D+3 Turn Performance 24th April – 6th Sept • Trial operated on a representative sample of routes and airport infrastructures • 4,500 allocated sectors flown to date (c. 50 sectors per day), representing 4-5% of the network when all trial routes launched (from end-May) Allocated to Network D+3 Diff Difference in 15 min D3 Turn All trial al rou outes es live Performance from om 1 June 12 between Allocated Seating routes and Network Early stabil bilisat ation at -9.0 pp Con onstan antly from om 8 June to o 19 July 12 impr provin ving g tren end Initial al IT issues es, , now rec ecov over ered ed D+3 Turn Performance is a measure of our ability to turn an aircraft around within scheduled ground time plus 3 11 11 minutes. In order that it is an effective measure, the effect of an early arrival into an airport is stripped out.

Allocated vs. Free Seating Boarding time comparison shows no material difference Pre-Boarding Zone (PBZ) fill level affects Aircraft Boarding Time & Cabin Settle Time Gate te Boar ardin ding g Aircraf aft t Boar ardin ding Cabin bin Settl tle 1 st Pax on aircraft 1 st Pax into PBZ Last Pax on to to to last Pax into PBZ last Pax on aircraft last Pax seated Allocated Seating vs. 1 min 0 Diff 0 Diff Free Seating Stati tistica cally valid d at 95% Stati tistica cally valid d at 95% Stati tistica cally valid d at 95% Confide denc nce Level Confide denc nce Level Confide denc nce Level 12 12

Allocated Seating – impact Q. Thinking about your Better than the way seating works on other easyJet flights personal circumstances, do As good as the way seating works on other easyJet flights you think allocated seating is: Worse than the way seating works on other easyJet flights To date 72% 14% 14% Week 19: 22.08 – 28.08 77% 13% 11% Base: All aware of allocated seating: To date (27663/) week 19 (1412) 13 13

Allocated Seating – impact Q. Overall, following your Much more likely to use in the future experience of the boarding and A little more likely to use in the future seating process on this flight It would make no difference would say you are : A little less likely to use in the future Much less likely to use in the future To date 45% 19% 27% 5% 4% Week 19: 22.08 – 28.08 49% 20% 24% 4% 2% Base: All aware of allocated seating: All to date (32287) / All week 19 (1720) 14 14

Allocated Seating – impact with frontline staff >65% 5% of fron ontli tline ne staf aff f (main inly cab abin n crew ew response) sponse) indi dicate te al alloc ocated ated seatin ating g bette ter than an free ee seatin ating Q. Thinking about your experience Better than free seating of allocated seating flights, overall As good as free seating do you think it’s: Worse than free seating 65% 21% 14% Preference for allocated seating likely to engender staff ‘goodwill’ over & beyond rollout period 15 15 Ground operations- 13% Flight operations – 20% Cabin services – 67%

Too early to assess revenue potential • 5% of network trialled for 4 months of summer • Significant variations in take up of allocated seating from 3% to 50% • F’13 focus on delivering operationally • F’14 onwards drive revenue from allocated seating 16 16

Ro Rollout lout plan 17 17

Allocated seating rollout plan, incorporating de-risk for Gatwick and Milan, fully complete by 27 th Nov to Oct 11 th Oct 11 th Oct 16 th Nov 13 th Nov 20 th Nov 27 th Date from / to LGW from / to LGW Existing trial LGW NT from / LGW ST from / South (all North (all routes Route / base to AMS, ALC, to FCO, **LUX, remaining remaining Rest of Network description AGP, GLA, RAK, MXP, PMO, ZRH routes), plus all routes), plus all (inc none from SSH (de-risk 1) (de-risk 2) LTN, STN, SEN, MXP, FCO & LGW) BRS & GLA CDG Add network 12 1 1 35 (+20*) 16 (+11*) 7 (+3*) points Total Network 12 13 14 (+1**) 50 (+20*) 86 (+11*) 104 (+3*) points Add av daily sectors 57 41 27 280 335 429 (approx.) Total av. daily 57 98 125 395 740 1169 sectors Add av daily pax. @ 85% LF 7,600 5,800 2,400 39,200 46,100 59,700 (approx.) Total av. daily 7,600 13,400 15,800 55,000 101,100 160,800 pax. @ 85% LF * Additional network points online ne thru following 7 days 18 18 ** LUX route commences 29 th October 12