EASY-JET’S plans for expansion look set to take on not only other UK-based competitors, but possibly also Cyprus’ national carrier.
The no-frills airline owned by innovative Cypriot entrepreneur Stelios Hadji-Ioannou yesterday announced it had placed firm orders for 15 new generation Boeings in addition to taking out options on a further 15. The company currently possesses 12 older generation Boeings.
The move seems ceratin to increase competition between low-cost airlines in the UK.
Based at Luton airport, Easy-Jet has established a second hub at Liverpool airport, with flights to Amsterdam, Nice, Barcelona and Athens. The company has taken advantage of the liberalisation of the European aviation market.
The London to Athens flight was perhaps a sign of things to come for Cyprus Airways (CY). When Easy-Jet began flying to Athens in July for a mere £69 sterling one way, CY quickly responded to the challenge by agreeing with Olympic Airways to offer a cheap shuttle service between Athens and Larnaca at £90 return.
But Hadji-Ioannou also announced in June plans to service the Larnaca- London route at a cost of just £79 sterling, starting next year.
Since then, the government has been debating whether to grant Easy-Jet landing rights, putting the cut-price company in direct competition with CY. The government has no obligation to do so until it becomes a full EU member.
Commerce, Industry and Tourism Minister Nicos Rolandis has told the Cyprus Mail that liberalisation of flights is inevitable and that CY would have to deal with the challenge sooner or later. Rolandis had also suggested that this challenge might be a wake-up call for CY to set its financial record straight.
Meanwhile Hadji-Ioannou is currently involved in two legal battles. In the UK, he won the right this year to challenge British Airways’ support for its own subsidiary low-cost airline, Go, although he failed to win an injunction to prevent Go from operating. In Greece, he is being sued by travel agents objecting to his refusal to use their services.
In a recent interview to a Greek paper, Hadji-Ioannou was asked to explain how his company was doing well despite the low air fares. His “secret of success” seems to be threefold. First, by eliminating the travel agents as middlemen, he has significantly cut down on commissions. Second, catering on Easy-Jet flights is available to passengers at an extra charge. And lastly, the fees for using Luton airport as a hub are relatively low compared to other airports.
