Possible business prospect ...
INTERVIEW-EasyJet CEO threatens to shelve new planes order
2 hours ago by Thomson Reuters
(Adds details, background, further comments)
By Rhys Jones
MOSCOW, March 18 (Reuters) - EasyJet will abandon plans to upgrade its fleet with updated Airbus or Boeing jets if terms offered by the planemakers are not satisfactory, the airline's CEO said.
EasyJet is in talks with Europe's Airbus (part of EADS ) and U.S. rival Boeing about a significant expansion of its fleet. It has completed the technical evaluation of its favoured jets, the re-engined Airbus A320neo and Boeing 737 MAX.
"We have a young fleet and don't have to do a deal unless the terms are exactly what we want," CEO Carolyn McCall told Reuters aboard the airline's inaugural flight between London and Moscow. "A new generation of planes will become available from 2018 ... so we could always look beyond the neo and the MAX."
EasyJet's founder and largest shareholder Stelios Haji-Ioannou has been critical of many of its plans, including in fleet expansion.
McCall said easyJet was under no time pressure as it has a deal in place with Airbus allowing it to buy more current generation aircraft from now until 2018.
These options put easyJet "in a very strong bargaining position," she said on Monday.
EasyJet, which operates an all-Airbus fleet of 213 aircraft, wants to remain a single-manufacturer fleet, but is considering moving entirely to Boeing planes.
If Boeing were to be successful it would have to cover the cost of easyJet having a dual fleet for a certain period of time. Operating a single manufacturer fleet saves an airline on maintenance and training costs.
"For Boeing it's all about the bridge - what can they offer us and how can they manage the transition?," said McCall. "It will be harder for them to win our custom, but they are not just a stalking horse in this."
The budget airline is also in talks with Canadian planemaker Bombardier about buying some smaller jets, McCall said.
BUSINESS FLYERS
EasyJet made its debut on Britain's FTSE 100 blue-chip share index on Monday, after its valuation soared as legacy carriers retrenched and it picked up more cost-conscious business travelers.
Since McCall took over in 2010 easyJet has added flights between top business destinations, introduced flexible tickets and offered allocated seating in an attempt to steal corporate customers from airlines such as IAG's British Airways and Germany's Lufthansa.
Europe's second-largest budget airline behind Ryanair carried some 10 million business passengers last year, about 18 percent of its total. It aims to increase that to nearer 25 percent, said McCall.
"The yield from business travelers is around 25 percent higher than from normal leisure passengers ... we want to focus on winning more bookings from medium and small businesses who will find easyJet more affordable," said McCall, noting conditions were likely to remain tough in the sector.
"Fuel prices will remain high so I expect to see a lot of smaller carriers and ones with weak balance sheets suffering and expect to see more collapses," said McCall.
"Our idea would be to take up the spare capacity rather than look to acquire airlines, but you can never say never."
Stelios Haji-Ioannou has fought a long, high profile campaign against easyJet's management over a number of issues. The group's chairman Mike Rake said he would step down this summer after the company's founder called for his departure because of Rake's expanding role as deputy chairman of banking group Barclays. ($1 = 0.6609 British pounds) (Editing by Rosalba O'Brien and David Holmes)