The Hilary Clarke interview: Stelios Haji-Ioannou - Flying high in the big easy

Rising profits, a recession-proof business, and internet ventures in the pipeline - easyJet's founder has plenty to smile about

THE BOSS was on board last Tuesday's evening's easyJet flight from Athens to London. That did not faze the cabin crew though. EasyJet pilots and stewardesses are used to having the airline founder and chairman Stelios Haji-Ioannou on the plane.

The 31-year-old entrepreneur says he takes one of easyJet's flights to check out his business on the ground - or in this case in the air - at least five times a week.

The routine of the portly son of a Greek shipping tycoon is always the same. Dressed in a slightly crumpled suit with no tie, feet apart and hands behind his back, Stelios, as he is known to everyone, beams as he greets the boarding passengers. He then proceeds to gaze at them like a proud young father surveying his brood as they stash their luggage and take their seats on the brand new Boeing 737. Once everyone is safely belted in, Haji-Ioannou disappears into the cockpit, only to re-emerge when the plane has taken off. He then slowly makes his way down the aisle stopping to chat with each customer. Always quick with a joke and a smile he is the host with the most and the passengers seem to love it - even if his hostesses have trouble pushing their trolley past the boss.

Haji-Ioannou has every reason to be in such good humour. Three years since he bought his first plane and flew it from Luton - where the no- frills carrier is based - to Glasgow, easyJet can claim to have well and truly taken off. Earlier this month the airline reported its first profit, pounds 2.3m, against a pounds 3.3m loss in the fiscal year 1996/97. The carrier flies 17 routes to 12 destinations in Europe.

Haji-Ioannou jokes that the London-to-Athens flight is known in the company as the "chairman's route" because he is on it so often. Haji-Ioannou lives in a hotel when he is in London, his main home being in Athens where his family are based.

As the economic downturn starts to bite, Haji-Ioannou is confident more and more businessmen will see the advantage of flying easyJet rather than paying for expensive business-class seats for short-haul routes. "I believe we are recession-proof. As business people realise they are being ripped off, their financial directors will force them to fly easyJet, so I think we will bear the recession quite well," he says.

Judging by the number of young people on Tuesday's flight, the no-frills airline is already a big hit with students.

Not that Haji-Ioannou had to bother scouring the small ads to find low- cost flights when he did his degree at the London School of Economics. "I'd never even heard of Luton. I used to fly British Airways club class and come into Heathrow. For me there was no other way to fly," he says. "Even as a student, I was still the son of quite a wealthy man so I suppose I was really quite well pampered."

Indeed, it was with his father's capital - around pounds 5m - that Haji-Ioannou set up the airline. Inspiration also came from another source. "I was flying to London one time and sat next to a school friend who was a shareholder in a Greek company that was flying a franchised route for Virgin Atlantic from Athens to London. I was asked to buy a stake in that company."

Haji-Ioannou followed up the tip and met Richard Branson. "I decided not to buy the stake, which was a good move because the company went bust. But I think I caught the airline bug from Branson," he says.

Haji-Ioannou decided to go it alone - with the help of his family of course. Haji-Ioannou's brother and sister are also shareholders in easyJet. "The first thing I did was to agree on the concept." The concept was to cut any cost possible. You do not see an airline magazine on an easyJet flight; there is no easyJet business class or lounges, and all drinks and snacks are paid for by the customer. Fares are slashed even further by cutting out booking agents. EasyJet flights are booked by the customer directly over the phone or, increasingly, over the internet. "I chose the airport and found a couple of leased planes. The idea was if the whole thing didn't work I could pull the plug in six months."

The company is buying a new Boeing 737 at the rate of around one a month. The number of passengers grew last year by 63 per cent.

Haji-Ioannou is a fighter and, like Branson before him, his swords soon crossed with British Airways. "It was Bob Ayling who first told me I had cracked it," said Haji-Ioannou, recalling a meeting that took place between the two men in 1996. "He said `you're doing a fine job. In fact I'd like to do something together'."

BA spent about three months looking at the company with a view to buying it. Eventually Ayling decided against it and last year launched his own no-frills airline, Go, to compete head-on with easyJet. Last May, easyJet managed to convince the High Court to permit a lawsuit accusing BA of illegally subsidising Go. EasyJet claims the new airline gets unfair help from its large parent and that BA only started the low-fare arm to drive its rivals out of the market. However, in a dramatic twist to the no-frills air war, BA poached easyJet's lawyer, Robert Webb. "It was definitely a trick. They offered a job as an in-house legal council for pounds 500,000 a year," says Haji-Ioannou. Webb's replacement departed soon after, too - this time to become a judge.

Haji-Ioannou says he has not had a serious offer for easyJet since the discussions with BA, despite reports in the press. "The other thing is the airline is getting quite big now," he says. "Not many people can afford what I would ask for it today."

He says he will probably grow it a bit more, float it and run it as a public company for a few years. The sudden emergence of Go also scuppered Haji-Ioannou's plans to move easyJet to Stansted, where Go is now based. Frustrated with management at Luton airport, easyJet is expanding its base in Liverpool and, following the company's purchase of the Swiss airline TEA, it is also gaining a firm foothold at Geneva airport.

Rival airlines are not easyJet's only adversaries. In Greece, his legal battles with travel agents objecting to his policy of cutting out the middlemen are infamous. When Greek travel agents threatened to demonstrate outside the court where a hearing on the issue was taking place, Haji- Ioannou's riposte was to offer free tickets to London if customers joined a counter-demonstration in his favour. Some 850 came to cheer for easyJet. "An airline like ours is flying 4,000 seats a week between Athens and London, so it wasn't a lot," said Haji-Ioannou. Legal proceedings in Greece continue.

Haji-Ioannou says he caught his passion for aviation from Richard Branson. Some of Branson's penchant for publicity also seems to have rubbed off. A docu-soap is currently being shown on ITV featuring easyJet.

"They concentrate on everything that goes wrong but that's television," he says, not seeming to mind a bit about having his company's mishaps paraded before millions of viewers.

And, again like Branson, Haji-Ioannou, who also owns a commercial shipping firm called Stelios, has big plans to widen his business range.

"My job is to look at various industries that have been monopolised and over-priced and think of ways to re-engineer the product and service, make it cheaper, and more available to the masses."

Fuelled by the success of customer bookings for the airline via the internet, this summer Haji-Ioannou plans to launch a chain of internet cafes in central London to be called easyEverything.

"I believe that computers are too expensive. If we use a computer for 10 minutes a day and calculate how much it costs, and every two years you have to throw it out of the window because the technology is outdated, then putting some in a central location and charging a pound an hour is the cheapest way for the masses to access the internet."

Next year he is banking on starting the first internet-based car rental business. All these projects leave the Greek entrepreneur little time for play. He says he has not taken his boat out in Greece in months. He admits his main hobbies today are work-related - plane-spotting and surfing the internet.

He is still a bachelor. "I am still young so there is a lot of time before I get married," he says. At just 31, he has plenty of time for a lot of business ventures as well.