Easyjet is continuing to complete deals with TMCs and technology providers as it seeks to make further inroads into the corporate travel market. Carolyn McCall, the airline’s chief executive, gave a recent update to investors on the progress made so far
Capturing a bigger share of business travellers has been one of the major goals for Easyjet’s boss Carolyn McCall since she joined the airline two years ago.
The introduction of Flexi Fares was one of the first steps forward in this process and has been followed by a succession of new agreements with all of the major GDSs and a high proportion of the leading TMCs.
These moves already seem to be paying off for the no-frills carrier which has carried 9.5 million business passengers in the last 12 months – around 20 per cent of its customers.
“The UK market for business travellers is flat but we are up by 4.1 per cent for Easyjet,” she said. “For business travellers, we get a 20 per cent uplift on yield and for Flexi Fares it goes up to a 25-35% yield increase.
But, as McCall says, the process is only in its relative infancy and is not expected to really pay off for the airline for a few years yet.
“We have put in a whole lot of building blocks that we needed to put in place – that’s what we have been doing over the last year,” said McCall.
“It’s a step change to attract this kind of business passenger – we will see the benefits in the next two to three years. The next financial year will be quite important as it should see us getting a lot more traction. It’s a long-term strategy.”
DISTRIBUTION
Easyjet has been busy completing new extended deals with the major GDSs – agreements have been announced in the last few weeks with both Sabre and Travelport, which owns the Galileo and Worldspan GDS platforms, which follow an earlier deal with Amadeus.
“We have roughly one in five passengers who are travelling on business,” said McCall. “We really want to reach those people on GDS – if they’re not on GDS, then they would have found us by now and come direct.”
Playing the GDS game is not new for Easyjet. McCall said they have been using them for more than five years but have “not done it seriously and properly”.
That’s all changed now, although being a low-cost airline, Easyjet is expecting the GDS to come up with the technology to help them drive their corporate sales.
“We are not going to change our model or make it complex and we are not going to change IT,” added McCall. “We are relying on the GDS to do it and make it easier to use so that business passengers don’t have to go through great big rigmarole. We have quite strict boundaries on what we will do and how we will do it. “
Another major plank of Easyjet’s distribution strategy is completing deals with major TMCs both in the UK and across Europe. Deals have been completed with American Express, FCm, Hillgate Travel and Portman Travel in the UK as well as some European TMCs.
“In every major market we have deals with the top TMCs,” she said. “We have deals with seven of the top 13 TMCs in the UK.
“We have also signed agreements with major corporates in sectors such as financial services, pharmaceuticals and public sector.
“It takes a lot of time and effort . It takes time to put agreements in place with TMCS because they are individual agreements and negotiations.”
McCall said it also took time to build up a sales team to go out to the market and let them know about the changes the airline was making to help business travellers.
But while the airline seems keen to go at least some of the way down the B2B route, it has promised not to go the whole hog. For example, the company is refusing to take part in the BSP system, which it deems is too expensive, as well as ruling out negotiated rates and volume-based incentives.
PRODUCT ENHANCEMENT
Easyjet says it has been listening to the corporate market in its attempts to improve the attractiveness of its flights on a practical basis.
This has included “refining” its Flexi Fares tickets, increasing frequencies on some key routes within Europe, offering fast-track services through airports and the trial of allocated seating.
“We need to look at fast-track because people were telling us that when they were travelling on business the airport was a real barrier for us to get through,” said McCall. “So we needed to look at fast-track and target business travellers which Easyjet has never really done before in order to show them what we have to offer.”
Allocated seating has also been operating on a few Easyjet routes for the last few weeks. An ABTN poll found the majority of readers would sell more Easyjet seats if this was introduced across the airline’s network.
But McCall said it was too early in the trial to make any definitive judgement on the success of the project.
“Leisure and business travellers have told us it would enhance their travelling experience,” she said. “We believe it will enable us to improve returns in the future if we roll it out.
“But we will only roll it out if it doesn’t have any operational impact and to date it has gone well but it’s too early to give any results.”
Increasing frequencies on business routes has been another key element in Easyjet’s strategy with extra flights being added on routes such as London-Amsterdam, London-Milan and Paris-Milan.
“We now have better frequencies on key routes – having the right frequencies for business travellers is absolutely vital,” added McCall.
Expect more developments in the near future as Easyjet tries to build on what looks to have been an impressive first foray into the corporate market with its UK operation leading the way.
“We have made steady progress but there’s still lots more to do,” said McCall.
easyjet.com