FOXTROTS

Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning. 

Foxtrots – leading the industry in a dance.

August 01 2010

 

Easyjet. Carolyn McCall takes over.

 

C

AROLYN McCall, 49, takes over as Easyjet CEO from Andy Harrison, who announced his resignation last year.

McCall was head of GMG, a UK media company whose main assets are the Guardian and Observer newspapers. She joined the Guardian group in 1986 and got her first CEO job there in 2004, then the current one in 2006. GMG’s turnover is around US$664mn (at US$1 to £0.89), compared with Easy’s US$4.22bn. But GMG’s operating loss is around US$150mn, compared with Easy’s operating profit US$73mn.

Most critical comment dwells on her lack of airline experience. To us that is not a factor (in fact it could be an advantage), but we do note her UK-centric view. Although born in Bangalore, India, and educated in Asia until her teens, her corporate outlook seems to be entirely UK-oriented.

This could be a shortcoming. Perhaps most of Easy’s passengers are not UK residents. About 37% fly on Easy flights that do not touch the UK (such as Berlin-Rome). And we estimate that 30% of those travellers who do touch the UK start their journeys outside the UK (such as a Spain resident flying Madrid-London). That would add up to 55% of the airline’s seat sales. McCall shows no indication of knowing that fact and so has no chance of understanding its implication.

In addition, current skills required in the media business include scrambling to reduce loss of customers in a sunset industry. That seems unsuitable for work in a (relatively) new type of airline, low-fare-airlines – although dynamism is an important skill in most CEO jobs.

Her comments on her appointment:

“My priority will be to build on Easyjet’s strengths – a strong consumer proposition [we assume this means ‘product’, ie low fares, good network, efficient service], leadership positions in many of Europe’s key airports [by this she means outside UK], and an operating model built around simplicity and low cost.”

The Fox

 

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