easyJet Reveals Norwegian Expansion as Network Growth Continues

In what appears to be a direct response to the opening of a new operational base at London Gatwick Airport by rival low-cost operator, Norwegian, UK carrier easyJet has revealed plans to introduce its first ever flights to Norway with the introduction of a daily route between London Gatwick and Bergen from May 20, 2013.  This announcement follows a milestone month for the airline in which it reached the FTSE100, inaugurated a number of new routes including key links between London and Moscow and between Milan Linate and Rome Fiumicino.

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The timing of the expansion into Norway is an interesting move, given the growth of Norwegian in the UK market.  The arrival of an additional aircraft at its London Gatwick base, its largest point in its network will facilitate the expansion into the Scandinavian market, at the same time supporting a growth in capacity on easyJet’s existing route to Copenhagen which will grow from three to four times daily.  The new Bergen route will place easyJet in direct competition with Norwegian, while British Airways serves the coastal Norwegian city from London Heathrow.  SAS Scandinavian Airlines also served Bergen from London Gatwick up until 2011 when it cancelled the route in favour of a new link between Bergen and Manchester.

Bergen, known as the ‘Gateway to the Fjords’, represents a good fit for easyJet’s business model and will attract a mix of business and leisure passengers.  The airline expects to carry around 100,000 passengers annually, significantly increasing traffic between the UK and Norway, the 33rd different country within the easyJet network.  “The addition of Bergen will see easyJet flying more than half a million passengers between the UK and Scandinavia, and will take the total number of routes served from Gatwick to 101 across 27 countries,” said Paul Simmons, UK director, easyJet at an event at Bergen Airport this week to reveal the growth plans.

In 2012, over 200,000 O&D passengers flew between London and Bergen and easyJet expects its new flights to further stimulate market alongside attracting passengers from existing operators.  The arrival of Norwegian’s low-cost offering into the market has resulted in a significant reduction of average fares on the route.  The carrier initially operated between Bergen and London Stansted but switched London terminus in 2008.  Since its arrival average air fares on the route have fallen by two thirds from $303 each way in 2007 to just $100 last year. 

In the table below we look in greater detail at bi-directional O&D demand between London and Bergen.  In the last year O&D demand has increased 2.2 per cent after previous increases of 18.6 per cent in 2011 and 36.2 per cent in 2010.  Since 2007 point-to-point traffic has increased by 58.2 per cent to approximately 219,000 passengers a year.

SCHEDULED O&D DEMAND BETWEEN BERGEN AND LONDON (bi-directional O&D passengers)

Year

London Gatwick (LGW)

London Heathrow (LHR)

Other Airports

Total O&D Demand

% Change

2012

160,064

58,552

145

218,761

2.2 %

2011

166,832

47,091

111

214,034

18.6 %

2010

160,995

19,289

190

180,474

36.2 %

2009

101,965

29,025

1,471

132,461

(-11.1) %

2008

65,105

24,577

59,392

149,074

7.8 %

2007

41,110

20,812

76,339

138,261

-


Recent network expansion at easyJet has seen the carrier unveil a special aircraft ‘Discover Scotland’ to support its network growth from Edinburgh Airport, but it is the launch of its key links between London and Moscow and between Milan Linate and Rome Fiumicino that represent major breakthroughs in its ambitions to better compete with its rivals.  The latter route results in easyJet ending what it describes as the ‘last major aviation monopoly in Europe’ after the Italian competition authority (AGCM) made a landmark ruling to award the carrier rights to fly between Milan Linate and Rome Fiumicino.

Italian flag carrier Alitalia has traditionally been the only airline allowed to fly between Linate and Fiumicino and operates up to 30 services a day.  As a result of the monopoly position, fares on the one hour flights between the two cities can be as high as €289 one way.  easyJet has had a long running lobbying campaign to get access to this market and despite many other operators failing similar campaigns AGCM concluded in October last year that the route should be opened up to competition.

The current market between Milan and Rome is huge.  Next month there are more than 1,000 departures – more than 30 a day – offering more than 150,000 seats in each direction.  In 2011 an estimated 1.91 million O&D passengers flew between the cities, with many connecting on via the wider networks on offer from the two key Italian gateways.  Around a third of these passengers flew between Milan Malpensa and Rome Fiumicino, a market already served by easyJet, but more than 1.25 million O&D passengers flew to the capital city from Milan Linate, a route where up until now Alitalia has held a monopoly.

easyJet is initially operating two flights per day on the route using a specially branded Airbus A319 but plans to offer up to five flights every day between Milan Linate and Rome Fiumicino from April 8, 2013.  It believes its expanded schedule of flights between the Italian capital and its commercial centre - arguably the most important route for the Italian economy – will help stimulate demand.

“I’m extremely proud to celebrate this historic victory.  easyJet’s entry on the Linate-Fiumicino route means that passengers can finally benefit from more choice and lower light prices between the two cities,” said Carolyn McCall, chief executive officer, easyJet.

easyJet carried over 12.5 million passengers to, from and within Italy in 2011 – up 9.4% year-on-year. The airline has 24 aircraft based in Italy – 18 at Milan Malpensa (its second biggest base after London Gatwick) and six at Rome Fiumicino.  It expects to handle up to 350,000 passengers a year on the route.

The Italian domestic expansion followed just a week after easyJet inaugurated flights between London Gatwick and Moscow, the first time the Russia capital has been served from the alternative London gateway.  The budget carrier expects to fly more than a quarter of a million passengers on the route annually.

“Moscow is a landmark route and one we are delighted to be able to serve. Russia is the world’s largest country with a growing economy. Offering frequent and affordable flights enables easyJet to play a key role to aid trade links between the two countries,” said McCall during launch festivities for the route.  "Bookings for both of our Russian routes have surpassed our expectations and we look forward to flying hundreds of thousands of passengers in the coming months and years."

Speaking on these landmark route launches Carolyn McCall added: “easyJet is playing a central role in opening up significant markets for European consumers, further strengthening our commitment as an airline operator and investor in the European transportation industry.”

The month ended with further network growth including the launch on March 28, 2013 of a new link between Manchester and Moscow, the first time the Russian capital has been served directly from the UK from outside of London.  easyJet is offering a four times weekly service on the route, a major fillip for Manchester Airport and Northern communities across England, who have previously had to connect on travel down to London to fly to Russia.

According to MIDT data approximately 387,000 bi-directional O&D passengers travelled between the UK and Moscow in 2012.  Around 89.5 per cent of these passengers flew directly to Domodedovo, Sheremetyevo or Vnukovo airports in the Russian capital from London, the rest connecting indirectly from another UK airport.  When you consider the large number of passengers that would have used surface transport to travel domestically in the UK, the potential for a route outside of London is quite clear.  According to the data around 14,000 bi-directional O&D passengers flew between Manchester and the three Moscow airports that year. 

Speaking to The HUB this week ahead of the launch, Ken O’Toole, chief commercial officer at Manchester Airport’s parent MAG said: “To see the Moscow service added to our network, alongside the basing of an eighth aircraft, is exactly the type of growth we want to support for our airlines and passengers.  The Moscow service provides greater connectivity to the global marketplace while demonstrating confidence in our ability to support routes to growth economies like Russia.”  easyJet says it expects to carry around 60,000 passengers on the route during the first year of operation.

In the table below we look in greater detail at easyJet’s route network by destination last year and how capacity has changed since 2007.  We highlight all the points on its network in which it offered more than one million annual seats in 2012, markets of which 16 have seen growth since 2007.  Last year the carrier offered more than one million annual seats from 22 different markets, up from 15 in 2007, a period across which its total network capacity has grown 58.7 per cent.   The most notable change has been in the London market, where Gatwick has overtaken Luton as the carrier’s primary network point across its entire network with capacity at Gatwick up 117.7 per cent, versus a 26.5 per cent decline at Luton, where the carrier retains its corporate headquarters.  

EASYJET SECHEDULED ROUTE NETWORK (non-stop annual departures)

Rank

Network Point

Capacity (2012)

Capacity (2007)

% Change

1

London Gatwick (LGW)

7,649,496

3,514,212

117.7 %

2

Milan Malpensa (MXP)

3,472,296

1,365,780

154.2 %

3

Geneva Cointrin (GVA)

2,719,740

671,493

305.0 %

4

London Luton (LTN)

2,606,424

3,544,018

(-26.5) %

5

Paris Charles de Gaulle (CDG)

2,411,820

888,073

171.6 %

6

Berlin Schoenefeld (SXF)

2,138,244

1,816,973

17.7 %

7

Belfast International (BFS)

2,109,612

2,184,964

(-3.4) %

8

Amsterdam Schiphol (AMS)

1,977,144

1,128,205

75.2 %

9

London Stansted (STN)

1,944,192

2,986,525

(-34.9) %

10

Bristol International (BRS)

1,912,872

2,054,701

(-6.9) %

11

Madrid Barajas (MAD)

1,827,492

1,231,672

48.4 %

12

Barcelona El Prat (BCN)

1,734,252

979,604

77.0 %

13

Rome Leonardo da Vinci Fiumicino (FCO)

1,677,384

-

New Entrant

14

Paris Orly (ORY)

1,627,392

984,204

65.4 %

15

Nice Cote D'Azur International (NCE)

1,549,812

1,090,626

42.1 %

16

Edinburgh (EDI)

1,546,980

1,441,798

7.3 %

17

Liverpool John Lennon (LPL)

1,502,064

1,541,653

(-2.6) %

18

EuroAirport Basel Mulhouse Freiburg (BSL)

1,312,956

362,232

262.5 %

19

Glasgow International (GLA)

1,232,748

1,234,527

(-0.1) %

20

Toulouse Blagnac (TLS)

1,024,860

409,188

150.5 %

21

Lyon St-Exupéry (LYS)

1,018,140

199,056

411.5 %

22

Lisbon Portela (LIS)

1,000,656

276,233

262.3 %

OVERALL NETWORK TOTAL

65,163,828

41,066,205

58.7 %


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