easyJet Agrees Seven Year Deal with Gatwick Airport

easyJet has agreed a new seven year deal with London Gatwick Airport from April 2014 which will incentivise the airline to grow at the airport under the new ‘commitments’ framework which replaces the current regulatory regime.

UK low-fare carrier, easyJet, has agreed a new seven year deal with Gatwick Airport (GAL) from April 2014 which will incentivise the airline to grow at the airport and provide the framework for easyJet and the London airport to further improve customer experience for easyJet’s passengers.

The agreement has been reached within the new ‘commitments’ framework which will replace the current regulatory regime as confirmed by the UK Civil Aviation Authority (CAA) last year‎. easyJet started flying from London Gatwick Airport in 1999 and now has 57 aircraft based there, operating on 108 routes.

“Gatwick is our largest base so it is of strategic importance to secure this new agreement with Gatwick Airport,” said Carolyn McCall, chief executive officer, easyJet. “easyJet shares the CAA’s view that Gatwick has market power but also supports the move towards a more commercial arrangement with the airport within a regulatory framework. This agreement gives easyJet certainty on passenger charges over the next seven years and a clear incentive to continue to grow.”

easyJet plans to continue to grow at Gatwick through increasing its slots and by deploying larger aircraft as it replaces 156-seat A319s with 180-seat A320s and, from 2017, A320Neos. In the next year (end March 2015) alone the airline will increase capacity and passenger numbers by around 10 per cent compared to the previous year.

In fact in the coming days easyJet will introduce a further five routes from London Gatwick as new links to Brussels, Paris Charles de Gaulle, Jersey, Newcastle and Strasbourg take off for the first time on March 30, 2014, at the start of the summer 2014 schedules. At the same time the carrier’s frequency on its domestic link to Inverness will also double from one to two return services each day.

According to data from the airline, 2.3 million passengers flew with the carrier on business in and out of London Gatwick in 2013 and over 800,000 passengers are expected to use the five new services annually. This will increase the number of passengers who fly easyJet to and from the airport by around five per cent.

In our analysis of schedule data from OAG Schedules Analyser, we look in greater detail at easyJet’s capacity at Gatwick Airport over the past ten years and how its available capacity has more than quadrupled from two million annual seats in 2004 to over eight million in 2013. The airline has reported positive year-on-year growth across the period, often double-digit rises and in 2008 a massive 43.9 per cent capacity rise. More recently the growth rate at Gatwick has reduced as the airline’s critical size has grown although rises of 6.9 per cent, 7.3 per cent and 7.0 per cent were recorded over the past three years.

This growth has seen easyJet become London Gatwick’s prominent air carrier and from holding just a 13.5 per cent share of the total annual capacity at the airport in 2004, it now has a 40.0 per cent share and highlights why it was so important for the airport operators to agree this new seven-year contract with the carrier

“This partnership with easyJet is a landmark deal in London Gatwick’s history. Four years after the end of the BAA monopoly at the airport, this partnership highlights how far we have come to be able to operate within a new framework of commitments and contracts,” said Stewart Wingate, chief executive officer, London Gatwick Airport.

It is clear that London Gatwick has become a strategic centre for easyJet, despite the carrier’s headquarters being on the opposite of London at Luton Airport. In 2004, departures at the airport accounted for 7.2 per cent of the airline’s total annual capacity, but this has now risen to 12.0 per cent in 2013. That means when you factor in the return services one in every four of its flights operates in our out of Gatwick. And, when you consider its scale at the London airport you can now get a good understanding of just how large the total easyJet network is today, having risen from 27.8 million annual seats in 2004 to 68.9 million in 2013.