Bringing it alL together in THE market Gatwick site visit 23rd May - PowerPoint PPT Presentation

Bringing it alL together in THE market Gatwick site visit 23rd May 2013 1 1 1 1

Key ey mes essa sages ges • Strong commercial and operational delivery is the key to the strategy • Gatwick is an example of what is happening across the network everyday • Robust operational processes have delivered cost agenda and customer proposition • Customer focussed approach to product development Standard processes, local knowledge and implementation 2 2

Visit Itinerary Arrival and issue of passes 09.00 Welcome & presentations 09.30 T ravel to security 11.00 Ramp & Airside T our 11.30 Lunch 13.00 Close 13.30 3 3

Welcome Jason Holt Head of Gatwick 4 4

Agenda Introduction Jason Holt Head of Gatwick Operations at Gatwick Thomas Doogan Regional general manager, Gatwi ck Chris Gadsden Gatwick and the Q6 process Head of regulation Gatwick strategy Paul Simmons UK Country director Patrick ck Johnson Senior UK Route Manager 5 5

101 routes tes from m LGW 1997 97 2002 2002 2008 2008 2013 2004 2004 Launc nch h 1 st st based ed GW 10 th th Acquis uisit ition ion 54 based ed LGW LON-GVA LGW GW aircraft aft of GB aircraf aft t aircraf aft t airway ays No.1 20 20-34 4 aircraft ft carrier in overni night ht LGW • 54 aircraft (incl. 20 A320s) • 85M passengers to date • No.1 in LGW (41% share) • 320 flights/day • 14M passengers in 2012 • 45,000 passengers/day • Positive customer • Over 2,200 Pilots and Crew perception vs. flag carriers • Largest easyJet base 6 6

easyJet operations at Gatwick Thomas Doogan 7 7

Ope perati ations ons at Gat atwick wick Maintain cost advantage • On On-time time performance formance – maintaining industry leading OTP at LGW • Ground nd handl dling ing relat atio ionships nships – sub-contract ground services building tight relationships with suppliers • Airpo port rt charges ges – working to evolve pricing structure: pay per use • Crew – close liaison with crew management; review performance and build new initiatives. 8 8

Cost Operational challenges advantage  Busiest single runway airport in the world  Full slot utilisation up until lunch time  More ground delays at peak than Heathrow  Badly designed – typical BAA ‘add - on’ architecture  On-going programme of refurbishment  easyJet is spread across both terminals and all 6 piers 9 9

Cost Operational Challenges: complex infrastructure advantage 10 10

Cost Efficient Operations driving cost advantage advantage Areas of focus Outcome Safety is our number one priority – No compromises On time performance - Current on time performance of 90% Customer friendly - Customer charter launch and CSAT survey Working with GAL on charges that Smart cost management - promote growth Turn compliance improving steadily with Simple schedule and operation - exemplary aircraft utilisation Rigorous performance management - Daily performance review to resolve issues Right people, right place - Platform for growth Engaged team 11 11

Cost Scale at Gatwick advantage Aer Lingus 2% Ryanair Other 3% 10% Flybe 3% Virgin easyJet 4% 41% Norwegian 4% Thomas Cook 4% Monarch 6% BA 16% We are the largest airline at Gatwick – carrying 41% of all Gatwick passengers 12 12

Cost What at Get ets s Mea easu sured ed Get ets s Do Done e - OTP advantage Ranking in April FYTD April 2013 YoY% & (Yearly) T otals easyJet 4 (2) 85.6% 6.6% 80.7% Aer Lingus 6 (3) 83.9% 5.1% 80.2% British Airways 8 (8) 81.0% 2.8% 72.2% Monarch Airlines 3 (9) 88.1% 13.8% 70.0% Thomas Cook Airlines 1 (7) 89.1% 6.5% 72.7% Thomson Airways 5 (5) 84.3% 2.4% 79.5% Virgin Atlantic Airways 10 (10) 73.4% 4.4% 69.0% Flybe 2 (1) 88.3% 2.9% 83.1% Norwegian Air Shuttle 9 (6) 79.9% -2.5% 76.4% Ryanair 7 (4) 83.7% 15.4% 79.7% Gatwick Average – top ten airlines 84.3% 6.3% 76.2% 13 13 Source: Gatwick Airport Limited

Demand OTP Integral tegral To Dr Driving ing Cus ustom omer er Sa Satisfacti sfaction on Improvement in OTP pushes up customer satisfaction April Rolling T welve ! YoY% 2013 Monthly Average Overall Satisfaction 87% 2% 85% Efficiency of Check in Staff 72% -2% 75% Control of Boarding Process 89% 1% 88% Cleanliness & Tidiness of Aircraft 91% 4% 92% Welcome from Cabin Crew 88% 3% 89% Pilot Announcements 88% 2% 87% Friendliness & Approachability of Cabin Crew 84% 3% 83% Punctuality of Flight 87% 2% 88% 14 14 Source: easyJet

100% % Online e Chec eck-in in Demand • Changing the behaviour of our customers to reduce costs and increase efficiency in our airport environment • Differentiated pricing in airport charges • Less requirement for passenger service staff • Next step – Mobile Boarding Passes 15 15

Cost easyJ yJet t Turn advantage 16 16

Cost Summary advantage • Significant challenges of operating at Gatwick – requires strong local team. • easyJet’s cost advantage at Gatwick underpinned by robust operational performance. • On-time performance is critical to maintaining cost advantage and customer satisfaction. • Initiatives in place to maintain easyJet’s low cost base. Standard processes, local knowledge and implementation 17 17

Gatwick Airport Regulation Chris Gadsden Regulatory Affairs Manager 18 18

What at do does es bei eing a reg egulated ated airport port mea ean • Gatwick is price regulated by the Civil Aviation Authority (CAA) • The CAA determines: • The price Gatwick can charge • The capital expenditure it will allow Gatwick to charge for • The operating costs it allows Gatwick to charge for • The service quality levels Gatwick should deliver • There has been significant debate about changing the regulatory structure at Gatwick - but currently it looks like nothing will change from the list above Airport regulation is central to easyJet’s outcomes at Gatwick 19 19

The e Q6 pr process cess Set out initial Final proposals after proposed price cap consultation response December/ June October April Airline January CAA final Q6 CAA initial Final Q6 response to proposals Q6 proposals decision Q6 proposals easyJet Jet foc ocus us on eviden ence for lower er On On-goin going g involv olvem emen ent with h CAA pric ice cap p and d ensuri uring g othe her airline lines to prov ovide ide furth ther er eviden ence are e on side Detailed work between now and Autumn focussed on evidence to support a lower price cap 20 20

Q6 – what at the e CAA has s pr propo posed sed • Price cap of RPI+1 • Compared to the airport’s request for RPI+7.1 • Consultation close end-June • We believe we have credible arguments that CAA should move to a lower price cap: • Cost of capital (5.65%) – does not fully reflect lower overall market returns and debt costs • Gatwick has more room to increase commercial revenue • Some capital projects are unnecessary • Potential for tighter operating cost outcome 21 21

Gatwick strategy Paul Simmons, UK Country Director Patrick Johnson, Senior UK Route manager 22 22

Commercial ercial strate rategy gy at Gatw twick ick Network Build no1. or 2 network positions Disciplined use of capital • • ~50% market share of short- Route churn haul from Gatwick • Growing returns • Built up over 10+ years • Responding to competition • Range of early slots Drive demand • London strategy • T argeted marketing • Business travel • Allocated seating 23 23

Net etwor work: k: 101 1 routes tes from LGW Network 24 24

Net etwor work: k: rout utes es to app ppea eal l to custom stomers ers Network Broad mix of new routes over the last three years: • Summer only routes to Greece and T urkey • New year-round destinations, e.g. Amman and Luxor • Business routes, e.g. Aberdeen, Luxembourg, Moscow High success rate of new routes 25 25

Network: Strong slot position at Gatwick Network Summer 12 Gatwick departures London don Gat atwi wick k (LGW) W) - Up to 0600-0855 53 53 total al slots ts per hour ur • Up to 32 of which can be Others, 6% departures easyJet, 45% Aer Lingus, 4% • Hourly ‘spread’ is achieved Flybe, 6% through 15 minute limits, 13- 14 slots in each Thomas Cook, 6% Acquiring slots Monarch, 7% • Seasonal applications Thomson, 11% British Airways, • Slot purchase e.g. GB 15% • Baby sitting – eg. LT deals • easyJet has strong position in with Virgin / Delta Gatwick first wave – enables large portfolio of business friendly timings • Released e.g. Aer Lingus, Cimber 26 26

Net etwor work: k: How we have Network e achiev ieved ed our winning ing position ition …0 -54 aircraft in 10 years • Structured & continuous growth, initially leisure focused • Acquisition of GB airways in 2008 saw an increase from 20-34 aircraft over night & new medium haul markets • Focus on the business passenger- frequency, timing and price all leading to continued profitable growth • Route portfolio and network flexibili bility ensures broad ad appeal al across consumer types 27 27