After a bruising few years in the spotlight, one would understand if Johan Lundgren wanted to spend the summer with his feet up at his music studio in Majorca.
The EasyJet chief executive could put the billions of pounds of pandemic losses behind him, breeze over headlines of flight cancellations, and look back fondly at how he guided the airline through the Covid crisis.
But instead the 56-year-old Swede is gearing up for his busiest summer ever as families flock to get away, despite the cost of living crisis.
Surging demand led to EasyJet revealing in April that it expects to beat market expectations of full-year profits of £260million – a forecast that was more than double its previous guidance of £126million in January.
The low-cost carrier’s passenger numbers have also increased as just over 33m travelled with it in the first half of 2023, up from 23.4m in the same period last year.
Calling the tune: Music fan Johan Lundgren is preparing to lead EasyJet to better than expected full-year profits of £260m
‘In the UK, we are going to be 8-or-9 per cent capacity above 2019 levels, which was our biggest summer so far,’ Lundgren told the Daily Mail.
This growth has led to fears there will be a repeat of the disruption that plagued airports last summer – but Lundgren is confident airlines and airports have learnt their lesson.
He said that during the Easter holidays, EasyJet completed 99.8pc of flights, despite strikes across Europe.
‘We have taken a lot of actions to increase resilience,’ he said, citing the influx of new crew. ‘Airports are also much better prepared than they were last year.’
His optimism is reflected in the company’s share price, which has shot up by almost 50 per cent in the past six months. EasyJet is now valued at nearly £4billion.
This is music to the ears of Lundgren, who insists he will not be following rival Ryanair in ditching London for a listing in New York.
‘We believe we are in the right place,’ he said.
But one area that has raised eyebrows in recent years is the amount of money EasyJet makes from add-ons such as cabin baggage and seat bookings.
The spiralling charges now make up a third of the airline’s total turnover, which is up from a fifth in 2017.
On average, each EasyJet passenger spends around £20 on add-ons – 77 per cent more than they did six years ago.
However, Lundgren – who once aspired to be a trombonist – bristles at the thought of EasyJet overcharging customers.
EasyJet revealed in April that it expects to beat market expectations of full-year profits of £260m – a forecast that was more than double its previous guidance of £126m in January
He points to the firm’s first-half losses of £411million to reject claims of profiteering. He said the airline needs to recover ‘inflationary costs’ from customers as the airline copes with the soaring price of fuel, adding that ultimately it is their choice what luggage they bring. He adds that customers will simply vote with their feet if they think EasyJet is ripping them off.
When asked about rising fares generally, Lundgren accepted that there will be periods where trips will be more expensive but stressed that over 40 per cent of EasyJet flights are still available for less than £50.
‘If you compare that to a pint of lager, a Big Mac or a cup of coffee, this still represents amazing value for customers,’ he said.
Financially, the low-cost carrier’s balance sheet is in a much healthier position than it was two years ago, when losses peaked at £1.27billion.
The airline has also cautiously managed its debt pile, which hovers at around £200million.
Lundgren said this puts it in a much better position for potential acquisitions, particularly compared to British Airways owner IAG, with roughly £9billion of debt.
A return to profit this year could also pave the way for the re-introduction of dividends to shareholders, cancelled since Covid.
But despite his optimism, there is one growing bugbear for Lundgren. He said it is ‘unacceptable’ that Europe is yet to modernise its airspace, as planes are still obliged to use corridors that were developed shortly after the Second World War.
This means EasyJet’s gas-guzzling planes have to fly longer routes, which costs passengers more and leads to greater environmental harm.
Lundgren said that the implementation of more direct routes would be the ‘quickest way to achieve significant decarbonisation’.
‘It would mean cheaper flights, less disruption in the airspace and less carbon emissions,’ he said.
This latest campaign is proof that the fire is still burning strongly in the businessman, who, despite coming up to six years in the job, and almost 40 in the travel trade, is not jetting off to the music studio just yet. ‘Even on a really bad day, it’s a great job.’
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