Flying EasyJet is better value than a pint or Big Mac, says boss Lundgren

After spending a few years in the spotlight, one would understand that Johan Lundgren wanted to spend the summer feet up in his music studio in Majorca.

EasyJet’s CEO was able to leave behind billions of pounds in pandemic losses, pass the headlines of flight cancellations and look back fondly on how he guided the airline through the Covid crisis.

But instead, the 56-year-old Swede is gearing up for his busiest summer yet, as families flock away despite the cost-of-living crisis.

Rising demand led EasyJet to reveal in April that it expects to surpass market expectations of a full-year profit of £260m – a forecast that was more than double the previous expectation of £126m in January.

The low-cost carrier’s passenger numbers have also risen, with just over 33 million traveling on it in the first half of 2023, compared to 23.4 million in the same period last year.

“In the UK we will have 8 or 9 per cent capacity above 2019 levels, which was our biggest summer yet,” Lundgren told the Daily Mail.

This growth has led to fears of a repeat of the disruption that plagued airports last summer, but Lundgren is confident that airlines and airports have learned their lesson.

He said EasyJet completed 99.8% of flights over the Easter holiday, despite strikes across Europe.

“We have taken many measures to increase resilience,” he said, citing the influx of new crew members. ‘Airports are also much better prepared than last year.’

His optimism is reflected in the company’s share price, which is up nearly 50 percent in the past six months. EasyJet is now valued at nearly £4 billion.

This is music to Lundgren’s ears, who insists he will not follow rival Ryanair in leaving London for a listing in New York.

“We think we’re in the right place,” he said.

But one area that has raised eyebrows in recent years is the amount of money EasyJet makes from add-ons such as hand luggage and seat bookings.

The sky-high fares now make up a third of the airline’s total revenue, up from a fifth in 2017.

On average, each EasyJet passenger spends around £20 on add-ons – 77 per cent more than six years ago.

Lundgren – who once aspired to become a trombonist – is shocked by the thought that EasyJet is overcharging customers.

EasyJet revealed in April that it expects to surpass market expectations of a £260m annual profit – a forecast that more than doubled its earlier expectation of £126m in January

He points to the company’s first-half losses of £411m to dismiss claims of profit-seeking. He said the airline must recover “inflationary costs” from customers as the airline copes with rising fuel prices, adding that it is ultimately their choice as to what luggage they bring. He adds that customers will simply vote with their feet if they think EasyJet is scamming them.

When asked about rising fares in general, Lundgren accepted that there will be periods when travel will be more expensive, but stressed that more than 40 per cent of EasyJet flights are still available for less than £50.

“If you compare that to a pint of lager, a Big Mac or a cup of coffee, it still represents great value for customers,” he said.

Financially, the low-cost airline’s balance sheet is much healthier than two years ago, when losses peaked at £1.27 billion.

The airline has also prudently managed its mountain of debt, which hovers around £200 million.

Lundgren said this puts it in a much better position for potential takeovers, especially compared to British Airways’ owner IAG, which has around £9bn in debt.

A return to profit this year could also pave the way for the reintroduction of shareholder dividends, which have been canceled since Covid.

But despite his optimism, there is a growing annoyance for Lundgren. He said it is “unacceptable” that Europe has yet to modernize its airspace, as aircraft are still required to use corridors built shortly after World War II.

This means EasyJet’s gas-guzzling planes have to fly longer routes, costing passengers more and leading to greater environmental damage.

Lundgren said implementing more direct routes would be the “fastest way to achieve significant decarbonization.”

“It would mean cheaper flights, less airspace disruption and less carbon emissions,” he said.

This latest campaign is proof that the fire is still burning strong in the businessman, who, despite having worked for six years and been in the travel business for nearly 40 years, is yet to fly to the music studio. “Even on a really bad day, it’s great work.”