gren said on the sidelines of the Aviation Festival in
London in September.
SIA SVP sales & marketing Campbell Wilson noted
SIA already had partnerships with other LCCs, including Virgin Australia, as well as US LCCs JetBlue Airways and Alaska Airlines. He sees no conflict between
SIA’s full-service product and easyJet’s LCC product,
because passengers book according to their needs.
Wilson first approached easyJet two years ago, when
he was Scoot CEO, and was attracted by the strength of
easyJet’s network. Those talks intensified about a year
ago, leading to the deal. There were no talks with other
potential European LCC partners. “EasyJet was our first
choice,” he said.
Passengers need to go to the Worldwide by easyJet
portal to make a through-booking; the service is not
available through SIA’s own website.
Together SIA and Scoot serve 16 destinations in Europe, but the agreement will initially be limited to SIA’s
flights via Milan Malpensa and Scoot’s flights via Berlin
Tegel. “SIA would be happy to extend the agreement
as soon as Worldwide by easyJet expands,” Wilson said.
SIA and Scoot join the eight existing Worldwide by
easyJet partners: Guernsey regional Aurigny, French
carriers Corsair and La Compagnie, Scottish regional
Loganair, LCCs Neos and Norwegian, leisure carrier
Thomas Cook and Canadian LCC WestJet.
An easyJet spokeswoman said tickets on all these airlines were being sold through the Worldwide by easyJet
portal, but so far only three airlines—Neos, Norwegian
and WestJet—can be booked as connecting flights. “By
the end of the year, all of them will be connecting and
live,” she said.
Meanwhile, easyJet is working to address several
other operational challenges. The UK LCC is working
to integrate the assets that it acquired from German carrier airberlin in December 2017, transitioning the Berlin
Tegel operation from wet-leased aircraft to its own fleet.
“We always knew it was going to be a difficult year because we have been operating an inefficient program,”
EasyJet has also been affected by delays to its Airbus
A320neo deliveries. Lundgren said the airline has been
in “contractual dialogue” with Airbus. “The key thing is
that there is no effect on our customers,” he said.
When it comes to product development, easyJet is
working on a new frequent flier program and forming
direct relationship with hotels, rather than using consolidators. Lundgren said an update on this strategy will
be given at the release of the airline’s full-year results.
The effects of the demise of airberlin and its 100% subsidiary, NIKI, has rippled through the European industry, touching the LCCs and the legacies. Beyond easyJet’s acquirements of some airberlin assets, Lufthansa is
acquiring airberlin aircraft and integrating them into its
Eurowings LCC unit, which it has put on a fast-growth
track. And NIKI was ultimately bought by Niki Lauda,
the former Formula 1 racing driver who founded NIKI.
Renamed LaudaMotion, his “new” airline is being developed out of its Vienna base in partnership with LCC
For Lufthansa, the Eurowings growth plan is not
without pain. Lufthansa Group delivered a €677 million
($812.4 million) net profit for the first half of 2018, up
slightly (0.7%) from €672 million net profit a year ago,
but Eurowings' expansion burdened group earnings.
“Without the integration costs at Eurowings, which we
willingly accepted to further strengthen our market position in Europe, the Group’s result would have grown,”
Lufthansa Group CFO Ulrik Svensson noted.
Eurowings, in its build-up phase, raised total 1H revenues to € 1. 9 billion, a 9.2% increase year-over-year, but
has been challenged with sizeable capacity expansion.
For the entire year, total integration costs of Eurowings
are forecast at €170 million, Svensson said.
But Lufthansa chairman & CEO Carsten Spohr
has determined the goal is worth the cost. “Eurowings
is the fastest-growing airline in Europe and will again
be profitable next year,” he told AT W in Vienna. “We are
reaching our strategic goal to operate Eurowings with
210 aircraft and become No. 3 in Europe in terms of size
[after easyJet and Ryanair]. However, the main problem
with Eurowings for us is that we have put growth before
profitability for strategic reasons.”
To quickly become the third largest LCC in Europe,
Eurowings has made massive investments—especially
with significant one-off costs from the integration of for-
mer parts of airberlin. For example, the LCC integrated
77 former airberlin aircraft and acquired several new air
operator’s certificates, including LGW.
“The airline business is a size game.”
Skuli Mogensen, WOW Air CEO