FOXTROTS

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

Foxtrots – leading the industry in a dance.

September 22 2011

Stelios. Fast and loose.

 

 

I

LOOK at the troubles between Stelios Haji-Ioannou and the airline he founded, Easyjet, in a way different from many other commentators.

For me, Easyjet (EJ) would be well rid of Stelios Haji-Ioannou (just call him SHI). He is not as clever as he thinks he is (count up the ‘easy’ businesses that have not worked), and EJ itself was a copied idea. SHI was good in the early days of EJ, but then maybe the hagiography got him, and he began to believe what people said – that he was a good businessman.

Take the ‘serial entrepreneur’ on his business card – although I first thought that meant he was planning to invest in cornflakes. I too can create a lot of companies. But the trick is to make those companies profitable. For SHI, EJ is one of the few that has worked for him, and that has given him money to spend on his other badly-executed ideas – look at Easy Car, Easy Cruise, Easy Hotel.

Then there is EJ. There are not many people who know how to run low-fare-airlines. There’s Herb Kelleher (ex-CEO of Southwest, who actually admitted they copied the businessplan from PSA in California), Rollin King (sic; actual founder of Southwest; Kelleher was initially King’s lawyer), Michael O’Leary (not one of the founders of Ryanair, who started it as a regular airline, but MOL changed all that). Plus me, of course, and a few others.

But now EJ has sort of lost its way – partly because of its struggles with SHI. And EJ’s current leadership has not shown any clear sign of vision for the future – just to plod on with what it has always done.

We already suggested a way out for EJ – change its name, steadily. Some years back it bought Go (whose full name was Go Fly). Why not start changing to that – firstly by painting ‘Go Fly’ on its aircraft as a tagline?

For his part, SHI seems to be threatening to create a new airline, Fast Jet. Most think it is a ploy. But if it starts, it will be good for travellers (lower fares from Fast and from its competitors) but a disaster for investors in Fast – unless SHI re-learns the basic low-fare-airline businessplan.

Or he could try something newish – like longhaul LFA. One is already doing it (Air Asia X), and another plans it (Singapore Airlines with a subsidiary that I have named SingWing). However, the business model has not been proven (AAX says it is successful; I maintain its 80% loads are too low), but that has not stopped SHI in the past.

 

 

 

The Fox