«We want the Milan Linate slots»- Corriere.it

This year the challenges of Johan Lundgren, CEO of easyJet, are at least two. The first: bring the second largest airline back to Europe — by number of daily flights — at 2019 economic levelsbefore the outbreak of the pandemic. The second: take advantage of the Ita-Lufthansa wedding as much as possible get the most slots in a prized airport (and clogged) like the one in Milan Linate. “It is obvious that the European Commission will have to ask the Italians and Germans to release some take-off and landing rights,” Lundgren told the Courier during the chat.

The numbers

In the first six months of the fiscal year – which for the British carrier ended on 31 March – easyJet closed with 3.11 billion euros in revenues, a negative net result (pre-tax) of approximately 480 million euros. THE passengers were 33.1 million, the average aircraft fill rate is approaching 90% (87.5% to be exact). “We are approaching 1,800 flights a day, on May 29 we carried 285,000 passengers,” calculates Lundgren. «Bookings for the summer are going very well and we will soon reach record levels».

With all these bookings you have an even greater responsibility this summer: not to spoil the holidays of Europeans.
“That’s right. Of course, there are still complexities, but this time these are situations outside our remit, such as the strikes by air traffic controllers in France. However, we have worked to mitigate the consequences.

Have passengers changed since the pandemic?
«People are favoring spending on travel to the detriment of other types of investments such as renovations at home or a meal at a restaurant. There is a demand for flights and it is also for this reason that it was decided to reopen Malpensa Terminal 2».

Is this new approach to consumption destined to remain in the coming years as well?
«This is what we are asking ourselves: is the strong demand we see a consequence of the fact that people have not been able to travel due to the pandemic or is it a new type of demand? Habits have changed, not only due to the effect of Covid ».

Last summer we witnessed inconvenience in the airports of half of Europe. And this year?
“We have to consider two aspects. On the one hand there is greater “pressure” on the system: scheduled flights for the summer are 15% higher than a year earlier, there will be more traffic in the air. On the other hand, every part of the ecosystem in Europe – air traffic controllers, airports, handling workers, airlines – is better prepared than in 2022″.

How is easyJet doing on this point?
“We are in very good shape, we have been in first or second place in the main markets in terms of punctuality and with a flight completion rate of 99.8% despite the strikes in Europe, especially in France. But there are still problems due to unforeseen events beyond our control».

For example?
«The war in Ukraine (where you cannot fly and overfly, ed.) means that there could be further segments of airspace taken away from civil aviation for security reasons. There will be a NATO exercise in June which will have consequences in some parts of Germany.’

Then there are the strikes in France which force the cancellation of the connections that only have to pass over the country…
“Ironically, when summer arrives, French air traffic controllers tend to go on holiday so they don’t strike. They have had 40 days of unrest so far since the beginning of the year and I think there is still one left, on June 6th. Nobody criticizes the right to strike but it is unacceptable that there are no notice rules on their part to be able to reorganize and warn passengers in time. Overflights should be protected, which is not the case ».

How are sales going in Italy?
«Italy is a truly competitive market and we are doing our part. On the first day of reopening of Malpensa Terminal 2 (May 31, ed) we have transported over 20,000 people. On the domestic segment we recorded good performances and have already reached the levels of 2019. Demand is also strong on international flights».

Do you want to expand further in Italy?
«We will grow where we see there will be opportunities, throughout Italy. And this also applies to Linate».

Airport which will be at the center of the negotiations between Ita, Lufthansa and the EU Antitrust for the ok to the Italian-German “marriage”.
“We expect slots to be released, we want to take some of it so as to offer more choice to consumers because we believe there is not enough.”

In addition to Linate, will you also ask for slots in Rome Fiumicino and in German airports?
«First of all we want to work to increase our presence in Milan. Linate is an airport that suits us very well and for this reason it will be our priority».

May I ask how many slots you will ask for at Linate?
“You can ask but you won’t get an answer from me.”

But a number of slots will have it in mind…
“It is something that we will discuss with the European authorities when the time comes. After Paris and London, we also want a greater presence in Milan at the two airports».

I imagine that the next slots you take at Linate will be used for international flights, as you did from the inherited slots when Ita took over from Alitalia.
“What we do is fly to Europe’s primary airports more than any other airline. So certainly the flights will focus on connectivity with European hubs, but also on national destinations ».

Will Lufthansa be able to relaunch Ita?
«The most important thing is that it is a success for the Italian consumer. And for this to happen we have to take other slots at Linate»

You have invested heavily in the German market. However, you recently returned slots to Berlin Airport. How come?
«Not only us, also Lufthansa and Ryanair have reduced their offer to Berlin where we remain the main airline. It was just a question of adjusting the supply according to the demand. In general, we have revised the network of connections precisely to follow the opportunities».

EasyJet seems to have changed the network: more flights on the big hubs and even more on the tourist markets. Is it a consequence of Covid?
«It’s true, we have oriented ourselves much more towards maritime destinations: in this period, beaches are much more in demand than they were in 2019, before the pandemic. Having said that, the balance is starting to change again, so we are moving towards normalisation, with the resumption of city-to-city travel, especially from next winter. We bring the planes where the demand is: we have repositioned 50 Airbuses elsewhere to satisfy the market».

As for the offer of seats, you are still below the values ​​of 2019. While Ryanair and Wizz Air are selling more seats than in the pre-Covid period.
«But they fly more to Eastern Europe, they operate in other territories. Our focus is on the primary airports — where they don’t fly — and since they are more congested we can’t add much more supply there. If we exclude Berlin, we are beyond the values ​​of 2019: we too are growing. And then our routes do not overlap too much with low cost, but more with traditional companies such as British Airways, Lufthansa, Air France, KLM and their low cost».

You don’t define yourself as an ultra low cost or a low cost, but neither as a “legacy”, just as you are not a hybrid. What are you?
«We are the company with the lowest prices on the network of connections where we operate, nobody beats our rates and this differentiates us from other low cost companies. Not only that: we hire people on the spot, we have trade unions, we have different employment contracts and we operate in the most expensive airports in Europe and this means that our cost structure cannot be compared with that of those who fly to airports no one has ever heard of it.’

But I would like to get back to the point. The industry has “labels” to define the type of airline…
‘Sorry I can’t give you an easyJet rating. We are in Europe the low cost in the main airports».

Speaking of low cost. We checked easyJet’s rates for the April-October period: booking three months in advance went from 83 euros in 2019 and 71 euros in 2022 to almost 93 euros this year. Do we have to get used to high prices?
(opens the calculator application on the phone for some calculations) «Tell me which other company in Europe sees an increase compared to 2019 of only 11%? He won’t find it. Our price increase is equivalent to two espresso coffees in the center of Milan, maybe one. And I tell you more: half of the tickets we are selling now start at 60 euros. Everyone has increased much more than us. And it is inevitable seen in the price increase of each material. Only the kerosene cost us 71% more».

How worried are you about the European climate and energy transition package?
“It is objectively a cause for concern. And what bothers me most is that these so-called “eco-taxes” or “sustainability taxes” don’t actually do anything to decarbonise the sector. They’re not needed.”

What does it suggest?
«We need to allocate the funds to encourage carriers to invest in reducing emissions, both in hydrogen – and we are doing it – and in the use of biofuels. I wouldn’t want that money to replenish public coffers and not end up directly in green initiatives. It is right that there is green taxation, but it must be fair and support decarbonisation”.

Is the French law on short flights a possible solution?
“It doesn’t affect us as easyJet. We didn’t have to cancel any routes. It’s useless. Also because it affects only three markets and certainly does not reduce CO2».

His company seems to have put all discussions on M&A on hold…
“Look, if there’s a transaction that gives shareholders value, I think it’s easy to close the deal. So obviously we’d be interested, why deny us the opportunity? But easyJet’s aim is to develop and expand to be successful, if we have to depend on a transaction to deliver results we probably have a problem. When there is a negotiation the distraction is considerable. In any case, I think there are few candidates left who do not cause headaches.’

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