COMMENT: A hard act to follow

As any business person will tell you, there are few things more satisfying than leaving an undertaking in better shape than you found it. Such might be in the mind this festive season of Dame Carolyn McCall as she departs her CEO’s office at easyJet after seven years for her new job at ITV. 

Founded in 1995, easyJet is in fine fettle by most measures despite McCall, who joined the airline in July 2010, having to declare in her half-yearly report in May another fall in profits. Proving she is worthy of her Master’s degree in Politics from London University, she concentrated on other things, including the announcement that easyJet had arranged to convert part of an Airbus order to larger models, and was also postponing some orders of smaller aircraft.

By June, easyJet again showed its strength, reminding the world with a ceremony at Airbus HQ in Toulouse that it had no fewer than 130 A320neo aircraft on order. A string of other positive stories followed, including the announcement of a new Vienna-based European operation and culminating in an agreement with Air Berlin to acquire part of the bankrupt carrier’s operations at Berlin Tegel Airport for €40m (about £35m). Just last week, easyJet was forging ahead with a new inflight entertainment offering (see this issue).

By July this year, as her move to ITV was announced, McCall was being dubbed “Britain’s most wanted boss”. It all adds up to being a hard act to follow; McCall in summary has expanded the easyJet network to primary airports and overseen an increase in passenger numbers and, despite the odd hiccup in the profit-and-loss area, a trebling in the share price. 

For many, it is that last point that shows easyJet’s strength. The airline was floated on the London Stock Exchange on 5 November 2000. The share price at close on Friday was 1,456.00, up 7.00 or 0.48%, below its historic high of 1,915.00 in 2015 but healthily above the 2017 low of 1,436.00. Shares are also well in favour; of a basket of 14 brokers canvassed, five rated easyJet a “strong buy” while six were neutral. 

That should be enough to put a smile on the face of the airline’s founder, Sir Stelios Haji-Ioannou, whose achievement in bringing flying to more people more of the time at a price they can afford should not be underestimated. His relationship with his creation has not always been easy since easyJet hit the big time but it has made him rich and, for those who notice these things, he has been quiet lately, which might indicate a certain – and justified – satisfaction.

Travel industry veteran Johan Lundgren, who now takes over from McCall, will have many eyes on him and life will be interesting. But by at least one measure, he has a good pedigree – he was previously deputy chief executive and chief executive for mainstream markets at the European tour operator TUI. The company said in his time there he increased profitability by some 48% from £370m to £546m between 2011 and 2014. A similar task at easyJet awaits.

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