Balearic and canary islands are the engines of growth of easyjet in spain
Interview / the low-cost British closed 2014 beating the 12.3 million passengers, 3% more, standing as the fourth operator in Spain by traffic and being that more British airline brings to the country. 2015 announces the opening of 10 new routes and reaffirms its bet by one of its strategic markets. Its managing director in Spain and Portugal, Javier GÃ¡ndara, EU interviewed for the Edition January/February 2015 magazine HOSTELTUR.
how it easyJet maintained its leadership in the market between Spain and the United Kingdom?
How robust our business model is that we fly to many airports with different passenger profiles that allow us to combine winter traffic and traffic of summer with other interests throughout the year: those of businesses, which are already 20% of our customers, city breaks, VFR (visit friends and relatives) very important on many routes, the typical holiday…, are very attractive for many types of traffic.
what Spanish destinations work best in winter and in summer?
All year round Barcelona and Madrid are two very attractive destinations. In winter, recently, Canary is having much success, especially since the geopolitical situation that persists in markets competitors and, in summer, Baleares, Malaga, Alicante, Fuerteventura, typical of Sun and beach.
what is the main bet for the 2015 summer? do Spain continues to benefit from the provided tourists?
During 2014, easyJet grew up in Spain 3%, surpassing the 12.3 million passengers, and most of that growth has come by Balearic and Canary Islands. In 2015, we think to grow back, and again, the two archipelagos will be the main engines … on Arab spring, think initially it seemed temporary and fear for what would happen to the growth of international tourism in Spain, once they resolve the political situation in these countries was. For various reasons is spreading at the time, so we continue to see demand very important in winter to destinations such as the Canary Islands, since there are very few destinations for Sun and beach within reach of the short and medium haul with good weather at that time.
I.e., that Spain is winning those tourists…
For now, it seems that it is happening. We don’t know if, completely solve the situation in those countries, tourists return to consider them as an alternative, but so far, it seems that we are creating a loyalty or fidelity to our destinations. I think that the number foreign visitors record has to do in part with this situation.
And in the Spanish market, would EasyJet has seen some recovery mentioned?
The market that we serve mainly in Spain, the issuer to Europe, yes that we are noticing some recovery from the strongest origins, Barcelona and Madrid, although shy.
In this environment, do they activate new base at Madrid-Barajas?
We continue developing traffic at Madrid-Barajas, where we move more than 2,000,000 passengers per year, regardless of that do not have the base, but no we are asking ourselves to short or medium-term reopening a base.
and that why?
Basically because we believe that conditions which at the time we decided to close it, that were the weakness of demand and the excess offered capacity which, in turn was that unit income was lower that in other bases, coupled with charges that were set, they did that it was far less attractive for us to fly routes from Madrid to from other bases in the rest of European. Despite the timid recovery, there are certain conditions which remain structural market in Madrid and make that open a new base in other markets and put more capacity that we already have, are rather more attractive options.
This closure, would affect passenger business, since without a basis it cannot operate flights of the first hour and the last of return to Business destinations?
Obviously had an impact. However, we still have an airplane that overnight every night in Madrid and the other in Barcelona to go first thing in the morning to London Gatwick and return at the last minute, keeping five to six daily flights, respectively, with our top British destination. That allows us to offer an attractive product in the case of the London Airport. Yes it is true for other destinations of business we do not have it, and those flights to London are not so attractive for passenger business of Spain. But this segment of the Business represents 20% of the total traffic of easyJet and so that a route is actually profitable, while it is important to keep passengers from businesses that pay a high unitary income, it is also important to fill the rest of the seats to an income that is sufficient to obtain the entabilidad that our shareholders expect. We just close the fiscal year in September 2014 with a return of more than 20%, the highest of the airlines in Europe and one of the highest in the world, of which we are very satisfied.
The volatile issue of fuel
At easyJet, the precipitous oil prices fall has caught it by its coverage (hedging) contract?
Really don’t see it as that we caught but it is a conscious decision. With regard to the fuel – our main expense, since it reaches more than one-third of our costs – total, with hedging in the future what we do is to ensure a certain price. Right now we have more than 80% of the fuel that we consume in 2015 purchased at a certain price.
80% bought more expensive…
Obviously, which is now much cheaper not us we are benefiting, but this coverage does not see it as a game of roulette or begin to speculate on oil prices. EasyJet is a strategy that allows you to have visibility to future: right now because we know very well, with a very narrow margin, our cost of fuel for the entire year and that allows us to make all projections, also officially give estimates of benefits if we believe that we will have.
and has no impact on the ta Raffles?
The market in which we are is highly competitive, practically in all routes have a minimum of two or three competitors, and, ultimately, is the demand that determines rates.
But the fact of having bought more expensive, how affect them?
We could have a lower cost of fuel, but you never know. Now 50 and maybe in a month something big happens and goes up to 100 again. There is an additional element that is the type of change which, on the one hand, the price of the barrel in dollars, say, has dropped, but also now the euro is lower against the dollar as it was not very long, and that reduces the benefit. Ultimately, the biggest problem that has the fuel is high price volatility, facing what we prefer to have a policy of coverage enough constant which is always, at least 50% of our consumption to a year view insured to a certain price. In that sense, we do not benefit when low oil prices but also hurts us when it goes up. Our gain is that we can have certainty and visibility on what is our main cost and margins in which we operate.
interview with Javier GÃ¡ndara, director of easyJet for Spain and Portugal. Interview with Javier GÃ¡ndara, director of easyJet for Spain and Portugal.
files adjunto: Javier GÃ¡ndara, director of easyJet for Spain and Portugal-interviewing….