EasyJet in Air Holland rescue bid

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The Independent Online

By Tim Jones

By Tim Jones

31 October 1999

LOW-COST airline easyJet is planning to increase its fleet by over a third and make Amsterdam's Schiphol airport a continental hub with a rescue bid for charter carrier Air Holland.

By turning the Netherlands' last independent airline into an easyJet franchise, owner Stelios Haji-Ioannou hopes to win the foothold he needs at Europe's third-largest airport to challenge dominant flag-carrier KLM on lucrative routes to Nice, Barcelona, Madrid and Athens.

It will also give easyJet a link to the transatlantic and long- haul market, allowing customers from regional UK airports, such as Edinburgh, Liverpool and Glasgow, to connect to flights from Schiphol. EasyJet's main hub is at Luton, which has limited international traffic.

Air Holland has been struggling for months. After the collapse of a bid from Dutch cargo airline Schreiner Luchtvaart last week, Mr Haji-Ioannou reaffirmed his interest in a call to Air Holland's management on Thursday. He will make a full presentation next Wednesday.

"I'm offering an easyJet franchise rather than cash because I think there's a black hole at the company," he said. "Schreiner obviously didn't like what they saw; the current revenue projections from sticking to the charter market are not enough to cover costs. Under this deal, I would get the fleet without owning the company and the management would have to turn it round."

Air Holland's fleet comprises three Boeing 737-300s, the only planes easyJet flies, and four 757-200s - large-bodied aircraft used on long-haul flights. Under the franchising deal, Air Holland's 737s would be repainted in easyJet's orange and white livery, and a bid would follow after the turnaround. Dan Solon, an aviation analyst, expects easyJet to return the 757s to Air Holland's leasing firm and swap them for extra 737s. EasyJet has announced that its 737 fleet now totals 17; an Air Holland tie-up could raise this to 24.

Mr Haji-Ioannou sees the Netherlands as a key element of his strategy. Last week, he announced that his internet café venture easyEverything would open its largest 24-hour shop in Amsterdam early next year.