Easy does it: Ten years flying high

EasyJet didn't invent low-cost flights, but its arrival on the scene 10 years ago helped slash prices and opened up the skies to millions. Ian Taylor reports on the airline that changed the way we travel

EasyJet might not have invented low-cost air travel, but it was the first UK airline to sell exclusively to consumers and the first to offer flights online. More important, it helped to force airlines such as British Airways to slash fares and open the skies to millions.

Tim Jeans understands the low-fare revolution better than most. Now managing director of Monarch Scheduled Airlines, he was sales and marketing director at easyJet's low-cost rival, Ryanair, for seven years.

"EasyJet changed the way people travel and the way major carriers behave," he said. "It competed on big routes to Barcelona and Rome as well as flying from regional airports, and it made a range of other airlines think that this business model could work. Ryanair appealed to a different constituency, bringing air travel to Irish people who had previously spent four hours on a boat, and opening destinations that were not on anyone's radar."

According to Simon Evans, chief executive of the Air Transport Users Council, it is the range of airports easyJet flies from that makes it special. "It spread the benefits of low-fare flights to the regions," he said. "And together with Ryanair, it got the major carriers to drop the requirement of a Saturday-night stay to obtain a cheaper fare. That was a huge service to passengers."

It may be low-cost, but easyJet was never short of money. Founder Haji-Ioannou is the son of a Greek shipping magnet. Yet the rapid expansion was not fuelled by a Roman Abramovich-style spending spree: the airline has consistently turned in a profit. EasyJet carried just 30,000 passengers in 1995, expanding beyond the UK the following year and launching flights from Stansted in 1998. Its takeover of BA's former low-cost airline Go in 2002 took easyJet into Gatwick, and last year it added a base in Berlin. In the year to the end of September, it carried more than 29.5 million passengers.

The airline is not the only low-cost success story: Ryanair consistently reports bigger profits. But while Ryanair has pursued a policy, in chief executive Michael O'Leary's words, of flying to "whatever airport provides the best package", Haji-Ioannou has ensured easyJet goes "to proper places".

An easyJet spokesman played down the rivalry between the two. But Jeans has a different view, despite the pair competing directly on only 2 per cent and 3 per cent of routes. "They compete head-to-head for the discretionary traveller - the guy with £50-£60 who wants to go somewhere for the weekend - and that competition is seriously aggressive," he said.

Haji-Ioannou and his family still own 41 per cent of the airline, and analysts believe they will resist a possible takeover by Icelandair, which now holds a 15 per cent stake.

EasyJet has refused to add a oil surcharge to fares. The spokesman said: "We have taken costs out of the business elsewhere." But it has yet to go anywhere near the cost-cutting of Ryanair, which has stripped the reclining seats, headrests, window blinds and seat pockets from its new aircraft.

So easyJet can celebrate its 10th birthday with this endorsement from Simon Evans: "It is a step up from the bargain basement."