Bloomberg News

EasyJet Plans Loyalty Rewards as Latest Pitch to Business Flyers

June 13, 2014

EasyJet Plc (EZJ) said it’s examining the introduction of a loyalty program as the latest pitch in a charm offensive aimed at luring more business clients to Europe’s second-biggest discount airline.

Perks could include dedicated customer-service phone lines for the best customers, while stopping short of an air-miles-for-flights offer, Anthony Drury, EasyJet’s head of corporate markets, said in an interview. The airline is also looking at ways to offer lounge access at London Gatwick, its biggest base.

EasyJet will spend 20 percent of its marketing budget on campaigns aimed at Europe’s 20 billion-pound ($34 billion) business-travel market in the year from Oct. 1, versus 10 percent previously. Introduction of flexible tickets, allocated seats, fast-track boarding and higher frequencies have already bolstered its credibility among corporate flyers, prompting low-cost leader Ryanair Holdings Plc (RYA) to examine similar benefits.

“It’s very easy to say you’re going to be relevant to business travelers, but it’s very difficult to do,” Chief Executive Officer Carolyn McCall said in a briefing at Gatwick. “This is a very demanding customer base and you have to fulfill not just one of their requirements but multiple requirements.”

EasyJet, based at Luton airport north of London, carried 12 million business passengers in the year through March, a gain of almost 50 percent in three years, aided by relationships with about 350 corporate clients, Drury said.

Network Challenge

The carrier is looking at ways of tracking frequent leisure travelers and business customers as it develops the loyalty program over the next six months, according to the executive, who joined EasyJet in February from American Express (AXP:US), where he was general manager for northern Europe.

EasyJet will boost seating 6.7 percent this summer and estimates that competitor capacity on its routes will grow by about 3 percent as other discount carriers including Ryanair and Norwegian Air Shuttle AS (NAS) chase market share.

Network airlines are still EasyJet’s biggest competitors for business travelers, though a shift to companies booking staff on cheaper flights spurred by the last recession shows no signs of reversing even as growth picks up, Drury said.

“That didn’t bounce back, even when the volume started bouncing back last year,” he said.

Still, Deutsche Lufthansa AG (LHA) and British Airways owner IAG SA (IAG) are seeking to boost short-haul earnings by embracing low-cost principles via their Germanwings and Vueling units, even as discount carriers adopt booking options more commonly associated with the full-service sector.

EasyJet will continue to limit its reliance on global distribution systems that allow ticket sales through travel agents, Drury said. While a mainstay of bookings with network airlines, GDS technology from providers such as Amadeus IT Holding SA (AMS) and Sabre Corp. can add cost and complexity for discount carriers.

To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net Christopher Jasper


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