EasyJet Dismisses Lufthansa Low-Cost Plan in Contest for Germanyby
Discount penetration of Europe's biggest economy still `tiny'
McCall to pour additional capacity into Berlin, Stuttgart
EasyJet Plc Chief Executive Officer Carolyn McCall singled out Germany and Switzerland as among markets where it aims to grow most in coming years, saying the expansion of Deutsche Lufthansa AG’s discount arm poses little threat.
Capacity is being added to German destinations including Berlin and Stuttgart, McCall said, even as Lufthansa merges its Eurowings and Germanwings brands into what the Cologne-based company reckons could become Europe’s third-largest low-cost carrier, after EasyJet and market No. 1 Ryanair Holdings Plc.
“Low-cost penetration in Germany is tiny,” McCall said in an interview at London Gatwick airport, EasyJet’s biggest base. “We don’t see Germanwings as a low-cost carrier, we don’t see them really offering low fares or having a very low cost base. There is an opportunity for a good low-fares carrier.”
EasyJet can sustain 8 percent passenger growth in the next three to five years, the CEO said, adding that it will hire about 310 pilots this year while seeking to double the proportion of women in each new intake to 12 percent. It’s also looking to add 830 cabin crew after saying last month that full-year profit would be higher than expected following a jump in summer bookings.
McCall said her attention is fixed on expansion in core European markets, with the focus on boosting frequencies and adding connections between existing destinations -- including more flights to Iceland -- rather than opening up entirely new routes and bases.
That’s especially so since a new trip to Tunisia was canceled after the terrorist rampage there in June, since when traffic on EasyJet flights to Morocco and Egypt has also slowed, McCall said, with many passengers instead choosing to travel within Europe.
McCall said discussions with network carriers about feeding traffic between networks, something that Ryanair has said is on its agenda, have been going on for at least four years without presenting any clearly viable opportunities.
“What I don’t want to do is over-complicate the network,” she said. “If it’s complicated -- it involves interlining or code-sharing -- it’s less likely. There would have to be a very big financial prize.”