EasyJet boss talks sustainability, business travel and uncomfortable decisions

The pandemic has demonstrated not only the opportunities of remote working but also the limitations.

Many travel executives are convinced business travel will come back, despite doom-laden predictions to the contrary.

Johan Lundgren, CEO of EasyJet, says that online tools work well for people you know and one-to-one meetings but not other elements of business.

“When it comes to establishing new relationships or talking with more than one person or when you start looking into complexities, if there’s a difficult decision that needs to be made, meeting in person is far superior. Human beings are social, they want to meet, they want to travel and to go establish those relationships. I don’t believe there is going to be a structural shift of any significance.”

Lundgren, who was speaking at the CAPA Live online event last week, adds that while there might be come changes, there will also be growth.

Like many others he tips leisure to recover faster than business and highlights an EasyJet study which reveals the current primary purpose for travel is holidays, followed by visiting friends and family and business travel coming third.

However, Lundgren says, we have seen similar trends following most crises.

As someone who had been in the travel industry for many years, in senior roles within TUI Group prior to EasyJet, he says he has seen many crises in travel.

“You’ll remember 9/11 and people said travel will never be the same again, well, there were some security restrictions and a couple of years later there were record levels. There was the global crisis of 2007-2008, people said business travel will never be back again.

“A couple of years later it was booming, it’s different (difficult) when you’re standing in a moment in time and take all the information you have and don’t think about underlying trends historically and drivers you know to learn what the future is going to be.”

One area he does see change however is in the spotlight on sustainability issues.

While many urge a reduction in flying as a means to address the carbon footprint of aviation, Lundgren says the point is to ensure less impact on the environment from aviation.

“To look only at the demand side and say we should introduce taxes and make it more expensive to fly is an awful, awful way of looking at it because it drives social inequality. It means you go back to the days before deregulation in the middle of the 90s where it was something that was available for wealthy and privileged people.

He says to go backwards and restrict flying in the name of sustainability will mean lower load factors and less efficiency.

“This is the danger with the pandemic, because it has removed funds that were desperately needed from the industry to invest in new technology. Some of the commitment from airlines has been withdrawn.”

Lundgren says EasyJet is one of the few airlines globally that offsets all carbon emissions.

“We’re staying with that commitment. We know that this is a solution that is a bridge before we get on to more ground-breaking technologies such as hydrogen or electric, which we are big believers in. That’s going to take 10 to 15 years before we get into those having any significant impact and until then carbon offset schemes are essential and it’s absolutely an appropriate solution at this time.”

He also touched on some of the tough decisions made over the course of the pandemic including a significant cost reduction program designed, according to Lundgren, to right size the organization and increase productivity.

Measures have included putting staff on part-time contracts to give the carrier increased flexibility and avoid redundancies.

“I don’t think anyone has done, in terms of the cost perspective, what we have done. It’s important because it will give us better margins going forward but it’s also a very good underlying thing if you want to look at growth again. One of the things that is dangerous about growing is that it flatters your cost base, it hides inefficiencies in companies in general because everything starts to look good when you’re putting on lots of capacity year after year.

Lundgren says no stone has been left unturned describing it as “pretty brutal” at times.

“There have been uncomfortable decisions, that had an impact on people but ultimately you have got to take a decision that you know is going to be the right one when you look back six, 12, 24, 36 months from now.”

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