Sky's the limit for easyJet fly

EasyJet Airline's founder, Stelios Haji-Ioannou, has revealed that he plans to take his no-frills carrier public in late 1998 or 1999. Mr Haji-Ioannou, a Greek shipping heir who started easyJet with pounds 5m of family capital in late 1995, said the UK airline turned its first annual profit in the financial year ending September.

easyJet would follow successful public offers this year of Ireland's Ryanair Holdings and the UK's Debonair Holdings, two other low-cost carriers founded to take advantage of the decade-long deregulation of the EU's aviation market.

easyJet could be even more attractive, industry analysts said. Known for its garish orange aircraft and a promise of fares "as cheap as a pair of jeans", the carrier plans to expand from Luton airport into new hubs in Liverpool, Amsterdam and Athens.

"You can't miss their aeroplanes," said Chris Partridge of Deutsche Morgan Grenfell. "There is a huge demand for their product. They have a good track record and will have pan-European appeal with their larger market spread."

Speaking in an interview, Mr Haji-Ioannou said the IPO would help fund the airline's purchase of 12 Boeing 737 jetliners worth pounds 350m, which will be delivered between August 1998 and November 1999.

The planes will triple the size of easyJet's fleet to 18 as it expands into new routes, challenging national flag carriers, KLM Royal Dutch Airlines and Greece's Olympic Airways.

"I believe we can successfully tap the capital markets," Mr Haji-Ioannou said, adding that he was speaking with investment bankers interested in preparing the carrier for sale.

easyJet started with two Scottish routes in late 1995 and now flies from London to Scotland, the Netherlands, Spain and France. It charges fares as little as one quarter those of established flag carriers.

Mr Haji-Ioannou has made no secret of his desire to sell his carrier to the public, but he has never set a deadline before.

The success of Ryanair and Debonair has demonstrated that investors are prepared to back low-cost carriers, convinced that they can stand up against powerful national carriers.

The European Commission has shown that is ready to protect low-fare carriers, vigorously pursuing Haji-Ioannou's claim that KLM engaged in predatory pricing on the London-Amsterdam route.

Copyright: IOS & Bloomberg

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