Easy does it: Ten years of no-frills but what does the next decade hold?

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The Independent Online

Today easyJet will ferry 10,000 people to, from and around Europe. Liverpool to Barcelona, Bristol to Hamburg, Nottingham to Venice? Such routes would have seemed preposterous a decade ago, as would the fares. Book deftly, and you can pick any of those trips for £50 return or so; easyJet and its emulators have made Britain the global hub of low-cost aviation. Whether you travel for business or beaches, culture or cuisine, shopping or sex, your expectations of Europe have been enhanced by the easyJet effect.

The man who started this short-haul, no-frills airline was, of course, Stelios Haji-Ioannou. I say "of course" because he has become a celebrity while expertly milking the media for coverage. A decade ago, hardly any journalists turned up to see the first easyJet flight; tomorrow, dozens of us will be queuing up to interview Stelios during the birthday celebrations at Luton airport.

The genial Greek Cypriot even has a docu-soap that bears his name: Cruise with Stelios, the Sky One programme that follows the fortunes of his venture into Mediterranean cruising. But most people know him for easyJet, the airline he started aged only 27 with no experience of the airline industry except as a passenger.

At the time, the lowest return fares between London and Glasgow cost about £100, and were heavily restricted. Stelios could sell you a seat for £29 and not care if you wanted to return the same day, the following year or not at all. "Fly to Scotland for the price of a pair of jeans" was his promise; these days, you can fly to somewhere in Eastern Europe that you've probably never heard of for the price of a pair of socks.

For that first flight, easyJet owned a grand total of zero planes, and employed the same number of pilots and cabin crew. It was the epitome of a "virtual" airline, with almost everything bought in. The fleet comprised a pair of Boeing 737s "wet-leased" from GB Airways, ie hired complete with pilots and cabin crew. The airline now has 3,000 flight-deck and cabin crew, with dozens more arriving every week for training at its new academy at Luton. They are needed to continue the expansion of an airline that now flies more people between the UK and Spain than the national carriers, BA and Iberia, combined. Stelios' mission to "paint the world orange" is well under way: key European airports, including Berlin Schönefeld, Geneva and Nice are dominated by easyJet.

Among UK cities, London has by far the widest range of destinations but the rest of the UK has benefited hugely.

How did the affable LSE graduate do it? Partly by tapping in to the twin British affections for a bargain and the underdog. Partly by having deep pockets: the first few months of operation consumed most of the £5m that he had borrowed from his billionaire shipping-magnate father. But mostly by creating an airline from scratch, designing out many of the crippling costs - from in-flight meals to travel agents' commission - that hamper "legacy" airlines. For example, the telephone number on the side of easyJet's first plane went through to a call centre where staff earned 80p for each flight, one-third of the level that agents would expect.

The legacy carriers are trying to catch up and save cash, with many scrapping commission and free catering and adopting ticketless travel. But any new airline has an automatic advantage over a carrier weighed down by pension liabilities and archaic union deals.

The charter airlines, too, have suffered. They have seen their "seat-only" business almost wiped out by no-frills carriers. At the end of last month, the UK's biggest charter airline, Britannia, ceased to exist. The operation - part of the huge German TUI combine - is still flying, but has been rebranded as Thomsonfly, the name of its tiny no-frills offshoot.

Even the cross-Channel ferries have been hit: Hoverspeed has just announced it will abandon its key Dover-Calais route.

Stelios remains the biggest shareholder in easyJet but takes a back seat with the airline to extend the "easy" brand. Today you can go into an easyInternetCafe and rent an easyCar or order an easyPizza. Each enterprise employs the same yield management principles as easyJet, whereby the price of a commodity depends on how far in advance you book, and the predicted level of demand for that particular bed or car or pizza at that specific time.

"Ten years later, I'm still trying to start businesses and make a difference in people's lives," says Stelios. But none of his other easy businesses has matched the success of easyJet. The airline has overtaken "flag carriers" such as Alitalia and Iberia to become one of the big five of European aviation.

David has become Goliath. Or perhaps that should be Goliath's younger brother: easyJet is smaller and less profitable than Ryanair, the Irish airline run by Michael O'Leary, who is seven years Stelios' senior and even more obsessed with driving down costs. Ryanair's deals with airports are legendary. For small cities across Europe, such is the lure of a link with London that sometimes the usual commercial arrangement has been turned on its head, with the local airport actually paying for the privilege of handling Mr O'Leary's passengers.

Passengers in the UK have become accustomed to the idea of cheap flights to places they didn't know they wanted to visit until Ryanair started flying there. In the past fortnight, an alphabet soup of Polish cities has joined the Irish airline's network from Stansted. Bydgoszcz, Rzeszow or Szczecin, anyone? Already there are plenty of takers, mainly Poles who previously endured the ghastly bus journey of 24 hours or more.

In contrast, easyJet is concentrating on bigger airports and major cities. The airline's main hub is now Gatwick, from which it flies to more European destinations than BA. Luton may have been eclipsed by the West Sussex airport, yet it still offers dozens more destinations than before Stelios.

The ability to travel cheaply has done far more to break down barriers and cement unity than any amount of initiatives from Brussels. We are all Europeans now, linked by a network of short, cheap hops. But low-cost aviation is changing lives for the worse, say those who live near once-tranquil airports, or environmentalists concerned with the thirst for fuel, caused by our hunger for low-cost aviation.

The next decade for easyJet looks just as challenging as the first. A tax on aviation fuel seems inevitable, as does tougher competition with the giants of European aviation. The three major airline groups - Air France/KLM, British Airways and Lufthansa/ Swiss - are reluctant to cede more ground to easyJet, Ryanair or the third-largest low-cost carrier, Air Berlin. Mr O'Leary believes that one of the big legacy airlines will take over easyJet, leaving Ryanair unchallenged as the no-frills giant. Yet the airline that Stelios started plans to expand remorselessly but carefully. By "joining the dots" on its existing network of major airports, the airline hopes to combine cost efficiencies with the higher fares passengers will pay for flying from airports they have heard of.

Whichever model prevails, the easyJet effect is spreading around the planet. "You're only buying the flying," goes the slogan of Virgin Blue of Australia, one of the many emulators of easyJet. That sentiment will resound at Luton airport tomorrow. While the average airline boss may be gloomy, for the rest of us happiness comes cheap.

Simon Calder is travel editor of 'The Independent' and author of 'No Frills: the truth behind the low-cost revolution in the skies' (Virgin Books)