EASYJET’S decision to convert options on 15 aircraft is good news for the company. Passenger numbers are still growing, up 8.2 per cent in November, while budget airlines are stealing market share from full-service carriers, helped by a cabin crew dispute at British Airways.
But the 15 orders represent less than a fifth (17 per cent) of the 88 options and purchase rights that easyJet has outstanding with Airbus. The firm should press ahead and convert yet more of these options, which were agreed in the downturn and come with a hefty recession discount.
Stelios Haji-Ioannou disagrees. He wants to cap aircraft numbers at 200 (compared to the 211-strong fleet that easyJet will fly after yesterday’s announcemnt); to operate year-round routes only (rather than grounding some planes in winter); and to reduce the annual target for growth in seats to “GDP plus something” (as opposed to the current 7.5 per cent).
He is being too cautious. easyJet still has room to grow, especially compared to Ryanair, which will fly a fleet of 299 planes by 2013. It can win share from regional players, while flying medium-haul routes like the London-Luxor service it launched at the end of 2010. Patience isn’t always a virtue.