Investment: Take it easy to make it work
Wednesday 28 July 1999
PERSONAL DETAILS: Aged 32. Has homes in London, Athens and Monaco. "Why is commuting from Wales more acceptable than from Cannes?" he asks. Drives a Mercedes Convertible SL in Monaco and a BMW Convertible in Athens. Pay undisclosed. Despite owning his own airline, he has resisted becoming a pilot. When time allows he enjoys water sports and skiing. "I end up turning most of my business into a hobby," he says.
CHALLENGE: "The process of managing growth is always the biggest challenge especially in a new company," says Mr Haji-Ioannou. "There is a big execution risk."
Last year easyJet flew 1.7 million passengers but Mr Haji-Ioannou still sees, "lots of growth ahead of us". "Sticking to the knitting is key," he says. The industry as a whole has a bigger problem, he says. The big European airlines recognise that "people are not willing to pay serious sums of money to fly. They have to learn to adapt". British Airways, Europe's largest airline, launched its own low-cost service, Go, in 1998 to compete with easyJet. He says Go is a "poor execution of my idea".
CORPORATE BACKGROUND: He comes from a wealthy Greek shipping family and still owns the Stelmar tanker line. Based in Athens it has 12 ships, but Mr Haji-Ioannou says the challenge of running this was "not big enough". He decided he wanted to start an airline. "I think [Richard] Branson is to blame. He must have passed on the aviation bug".
STRATEGY: "More of the same. We have identified a very good cookie cutter." He says there is no difference between nations when it comes to fliers wanting value for money: "Why should a Swiss person want to pay more to travel on Swiss Air." There is a "universal language of money". So easyJet has launched a major assault on the Swiss Air monopoly with the establishment of its Continental European base in Geneva, from where easyJet will fly to a number of destinations including Amsterdam and Nice. Mr Haji-Ioannou notes that Paris is the market with no low-cost carrier. He is confident that his budget airline has wide appeal. "It can be replicated in any big city".
Last month, he opened easyEverything, the world's largest Internet cafe, based at London's Victoria. The 10,000sq ft site with 400 terminals is open 24 hours a day and charges an average pounds 1 an hour for access. Beginners can be taught how to use the Net by a staff of 24 tutors. The aim is to widen affordable access to the Internet. "If the airline was pioneering, this is off the wall," says Mr Haji-Ioannou, who believes he has "struck a chord with the public". Before the end of the year there are plans to open further stores in London's Trafalgar Square and Tottenham Court Road, with a move into other UK cities planned for early next year. A site for the first overseas easyEverything, in Amsterdam, is currently being sought.
Car rental firms might have cause to worry because Mr Haji-Ioannou is planning an assault on their market with the launch of an online easyRentaCar. He says the Internet gives him the ability to cut out the middlemen and lower costs. The same arguments can be applied to estate agents and travel agents: "I want to do to Hertz what I did to BA." He enjoys having "a multiplicity of activities and functions" but says he is "extremely focused".
The criteria he uses for whether to invest in a sector are whether there is the ability "to re-engineer" the business and thereby provide a substantial discount to the consumer. "My brand is about value for money and changing existing methods," he says.
easyJet is to be partially floated in January 2000. The flotation is expected to value the low-cost airline at around pounds 300m with the Haji-Ioannou family retaining a majority holding. The proceeds will be used to buy 42 aeroplanes and to increase the number of flights.
MANAGEMENT STYLE: easyLand is the name of the corporate headquarters and Mr Haji-Ioannou says this reflects the style of the business. It is an open-plan, paperless building. No one, including Mr Haji-Ioannou, has an office or secretary. Departmental heads are free to run their business with Mr Haji-Ioannou called in if necessary.
MOST ADMIRES IN BUSINESS: Richard Branson is definitely on the list, says Mr Haji-Ioannou, who says he tends to admire mavericks or underdogs rather than powerful businesses. He says he used to admire Bill Gates "but he is now too powerful".
CITY VERDICT: Anton Joiner, European editor of the bi-monthly Commercial Aviation Report, says that what Mr Haji-Ioannou has done so far has been very well managed. "He has got a very focused idea of what he wants to achieve," said Mr Joiner, who believes the real test will come when the new aircraft come on stream: "There is a lot of capacity in the low-cost market coming on line. This is going to place great strain on yields." But what easyJet has achieved so far "is very encouraging". He sees parallels with the successful Southwest Airlines. easyJet is "a very good textbook case of what you can do in a deregulated market taking on the majors".
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