Easyjet Share Discussion Threads

[foreverbull] 26/7/2024 16:04

Interesting article focussing on the US budget airlines.....It's the end of budget airlines as we know themTaylor Rains, Pete Syme?Jul 25, 2024 | 11:28 AM ETSouthwest Airlines is ending its famous open-seating policy.??Assigned seating could generate up to $2 billion in revenue for Southwest, one analyst estimated.??The change represents a larger evolution of budget airlines' business models in the US.Budget airlines are upending many of their original business plans as increased costs wreak havoc on their bottom lines.On Thursday, Southwest Airlines announced the end of its open-seating policy, a 50-year practice of letting passengers choose their seats based on their boarding order versus having them assigned.Instead, the airline will follow most other airlines in the world by assigning seats and offering premium options on all its flights, saying internal research found the vast majority of customers preferred this system. It plans to announce more details in September.The move was an expected but nonetheless stunning reversal by perhaps the last remaining low-cost US airline that had thus far resisted many competitors' changes.But industry conditions, such as higher labor and fuel costs and overcapacity, mean airlines like Southwest are struggling with reduced profits despite record travel demand - forcing them to seek alternative revenue opportunities.Savanthi Syth, an airlines analyst at Raymond James, estimated in June that paid seat assignments could generate between $600 million and $2 billion in revenue. Adding basic-economy and premium seating could add another $400 million and $1 billion in revenue, respectively, she said.Budget flying has been moving in this direction for yearsThe industry's sea change has left budget carriers scrambling to increase revenue without turning away customers, prompting major policy changes.Henry Harteveldt, a travel analyst, told Business Insider these adjustments come as operators evolve to keep up with changing customer preferences, adding that credit cards and certain routes could be lucrative for these carriers."The new seating policy can further pump up Southwest's credit card, where maybe it can offer cardholders free seats or other awards for being loyal frequent flyers," he said, adding that the introduction of red-eye flights would make it more competitive against legacy competitors.Other budget airlines have been similarly evolving their business models in recent years.Frontier Airlines and Spirit Airlines, for example, ditched most cancellation and change fees for ticket holders. These typically made money for the carriers but irritated customers.This month, Spirit warned of a revenue decline because fewer passengers were buying its add-ons, a mainstay of the budget-airline business model.Those fees were critical to carriers like Spirit, whose revenue models don't accommodate free carry-ons and sodas, unlike legacy airlines.Meanwhile, JetBlue now charges up to $50 for "Core Preferred" seats - the window and aisle seats toward the front of the regular economy cabin.That came after a federal judge blocked JetBlue's planned merger with Spirit. Struggles with profitability also saw JetBlue shake up its route network.The carrier has even delved into business-class seating with its lie-flat Mint product - something not typically seen on budget carriers.Frontier has recently added a "business class" where the middle seat is blocked off to attract more high-paying customers, while Spirit has its "Big Front Seat."United Airlines CEO Scott Kirby previously criticized ultra-low-cost airlines. "It's a fundamentally flawed business model," he said. "The customers hate it."What comes next for Southwest?Southwest said more details about its plans would be announced at its September investor day."This is what our customers want," CEO Bob Jordan told CNBC Thursday, adding that the company had been working toward the changes for over a year.An activist hedge fund breathing down the company's neck and demanding a C-suite shake-up, he said, had nothing to do with the changes."I know there are going to be customers who say, 'I want to stay with open seating,'" Jordan said. "It's a minority, but we had the same thing when we switched from plastic boarding passes; we had the same thing when we when we took peanuts out of the cabin, so I'm convinced we can win them over."

[trying2trade] 26/7/2024 15:37

TUI use TUI airways sapphire. They wet lease in capacity from ACMI operators and on a very select few routes they'll use flight only options from EZY. And as sapphire says, that's 10% as profitable for ezy as selling a holiday. Kudos to TUI for stopping EZY profits by filling their seats with the lowest margin customers.

[trying2trade] 26/7/2024 15:34

The pilots back dated pay at the new rate is being paid in August. But sapphire is spamming the board with more lies.

[sapphireblue1] 26/7/2024 13:13

Enjoy TUI then but be aware that many TUI holidays use easyJet.
My experience of BA is a disaster. Heathrow is just ridiculous, walking for miles and 20 minutes from the stand to the runway. Ridiculous turnaround times, horrible experience.
All the airlines are useless when things go wrong. The best thing about easyjet holidays is the hotel experience because you are a regular customer rather than a package customer. The reception cannot see that you are any different to a private guest. If there's an issue it's sorted by the hotel not referred to a pointless rep.

[noramping] 26/7/2024 11:46

Freedom, they are a low cost airline just like Ryanair despite what some think on here. They cater for the budget conscience travellers.

Hope you get your issue sorted.

[freedomexpress747] 26/7/2024 11:01

I have terrible personal experience with EASYJET and they seem to make it impossible to claim compensation. Personally, I and my close family will be avoiding this company. They seemingly have no accountability to passengers, heads they win tales you losrAs to alternatives, Tui seem to be better for joined up travel with a hotel.And BA better point to point.Thankfully not an EASYJET shareholder these days.

[noramping] 26/7/2024 10:36

Excuse generator out again.

I’ve one question why isn’t this £6 like you promised over 3 months ago.

[sapphireblue1] 26/7/2024 10:32

I can't see why you expect or value any director buying. How much director buying have you seen in easyJet. Just those who take a salary bonus in shares.
The directors are rewarded by performance why would they buy shares? I wouldn't.
You need to understand that the things that derail the business are not seen or known by directors.
Easyjet even gets derailed by the nonsense spoken by another airline CEO. How can the directors of easyJet see any advantage

[essentialinvestor] 26/7/2024 10:13

No director buying post update..still

[sapphireblue1] 26/7/2024 10:03

Cogs if I were easyjet I would wait until September as it's a weaker hand for the pilots after the summer.

[sapphireblue1] 26/7/2024 10:02

Forever has it done that so far. They have gone from zero to £180m in a couple of years.
Easyjet holidays relationship with hotels is very different. This is why hotels are signing up.
The OTAs don't have aircraft so cannot act like this. Easyjet have no allocation or blocked rooms so zero waste. The hoteliers bid for the holidays. On days they want to fill they bid competitively on other days they either don't bid or bid high and likely it's not filled.
Hoteliers will choose easyjet over others because of the flexibility.
This means that the hoteliers are the ones varying their price not easyJet.

[foreverbull] 26/7/2024 09:38

If they try to grow the holiday business vs other players such as OTB, Booking etc this will nothing but impact holiday business margin. Any thoughts on that Saphh?

[cogs1] 26/7/2024 09:35

You would think though, if EZJ are so close to getting this over the line they would press on and get it sorted, from a PR point of view if nothing else.

[sapphireblue1] 26/7/2024 09:35

The performance is very visible and the last quarter landed firmly within my £220-250m range.
The airline business is producing modest growth and the holiday business substantial growth.
In 25 it's likely in my opinion for the holiday business to deliver around one third of the annual profit from around 8% of the seats flown. Clearly the priority is to grow the holiday business market share. This is going to further squeeze Ryan and Jet2.
Watch out for stress in the OTAs

[sapphireblue1] 26/7/2024 09:26

Still no vote on the pilot pay deal. No guidance from BALPA. This is for pay from April 25 onwards
Easyjet are in no hurry and there's no motivation to disrupt the summer. This is because despite the narrow rejection BALPA had recommended acceptance.
BALPA are keeping their heads down on this during this busy time.

[cogs1] 26/7/2024 09:10

Has this actually been reported anywhere then - if not, why not? Mind you, if it is confirmed the share price will probably drop!!! ?

[trying2trade] 26/7/2024 08:42

The pilots pay deal is all sorted. I know sapphire is in deep denial about it, but it is done.

[trying2trade] 26/7/2024 08:40

You said it would be 250 in the update just gone, before cutting your predictions in the weeks before. Even a broken clock is right twice a day

[sapphireblue1] 26/7/2024 08:25

The winter schedule is the biggest and they are flying genuine winter sun routes. I expect these to have a high percentage of easyjet holidays customers.
Looking ahead Q1 breakeven, reducing Q2 loss are the challenges. Next year the holiday business will grow substantially. £250m profit is possible.

[noramping] 26/7/2024 08:22

Profit in a quarter isn't profit for the year, some would like to calculate the PE based on the profitable quarter but not the ones they make a big loss in.

They won't make £1bn this year, you have to subtract losses.

[sapphireblue1] 26/7/2024 07:55

If the business wide performance continues the trend this year they would make a headline £603m profit when considering the holiday business increase. That's assuming the holiday business achieved £180m profit which it should from guidance given with just 5 weeks to go of the period.
Airline performance has been marginally up so far which leads me to think profit will be around £630m this year given this is the busiest quarter.
The good news is in Q3 they achieved a 49% increase in profit on a 33% increase of customers. So we see margin per head increasing with economy of scale.
The share price is absolutely ridiculous.

[sapphireblue1] 26/7/2024 07:15

This year they make £550m profit if Q4 is flat across holiday and airline. I think that they will exceed last year because they have more seats flying this year and easyJet holidays have a larger percentage of the more seats allocated. I believe that Easyjet will be around £600-700m headline profit for the year. That's up from £455m last year.
Huge range depending on the level of disruption but it will definitely be well ahead of last year as they have been at everything quarter.

[amt] 26/7/2024 06:46

If EZJ make their 1bn profit in the medium term then the on a pe of 10 the share price would be about 14 quid.
So how likely is the 1 billion.
Let's say they only make half that then still a share price of 7 quid.
It looks cheap to me but always a risk of a pandemic I suppose.

[essentialinvestor] 25/7/2024 16:16

I agree EZJ look to have nice profitability upside on the package holiday business.

They should be capable of winning market share from JET2.