Slide 1: Bringing it all together in the market
Bringing it alL together in THE market Gatwick site visit 23rd May 2013 1 1 1
Slide 2: Key messages
Key messages • Strong commercial and operational delivery is the key to the strategy • Gatwick is an example of what is happening across the network everyday • Robust operational processes have delivered cost agenda and customer proposition • Customer focussed approach to product development Standar
Slide 3: Visit Itinerary
Visit Itinerary 09.00 Arrival and issue of passes 09.30 Welcome & presentations 11.00 Travel to security 11.30 Ramp & Airside Tour 13.00 Lunch 13.30 Close 3
Slide 4: Welcome
Welcome Jason Holt Head of Gatwick 4
Slide 5: Agenda
Agenda Introduction Jason Holt Head of Gatwick Operations at Gatwick Thomas Doogan Regional general manager, Gatwick Gatwick and the Q6 process Chris Gadsden Head of regulation Gatwick strategy Paul Simmons UK Country director Patrick Johnson Senior UK Route Manager 5
Slide 6: 101 routes from LGW
101 routes from LGW 1997 2002 2004 2008 2013 Launch 1st based LGW 10th Acquisition 54 based LON-GVA LGW aircraft aircraft of GB aircraft airways No.1 20-34 aircraft overnight carrier in LGW • 54 aircraft (incl. 20 A320s) • 85M passengers to date • No.1 in LGW (41% share) • 320 flights/day • 14M pass
Slide 7: easyJet operations at Gatwick
easyJet operations at Gatwick Thomas Doogan 7
Slide 8: Operations at Gatwick
Operations at Gatwick Maintain cost advantage • On-time performance – maintaining industry leading OTP at LGW • Ground handling relationships –sub-contract ground services building tight relationships with suppliers • Airport charges – working to evolve pricing structure: pay per use • Crew – close
Slide 9: Operational challenges
Cost Operational challenges advantage Busiest single runway airport in the world Full slot utilisation up until lunch time More ground delays at peak than Heathrow Badly designed – typical BAA ‘add-on’ architecture On-going programme of refurbishment easyJet is spread across both termina
Slide 10: Operational Challenges: complex infrastructure
Cost Operational Challenges: complex infrastructure advantage 10
Slide 11: Efficient Operations driving cost advantage
Cost Efficient Operations driving cost advantage advantage Areas of focus Outcome Safety is our number one priority – No compromises On time performance - Current on time performance of 90% Customer friendly - Customer charter launch and CSAT survey Working with GAL on charges that Smart cost manage
Slide 12: Scale at Gatwick
Cost Scale at Gatwick advantage Aer Lingus 2% Ryanair Other 3% 10% Flybe 3% Virgin 4% easyJet 41% Norwegian 4% Thomas Cook 4% Monarch 6% BA 16% We are the largest airline at Gatwick – carrying 41% of all Gatwick passengers 12
Slide 13: What Gets Measured Gets Done - OTP
Cost What Gets Measured Gets Done - OTP advantage Ranking in April FYTD April 2013 YoY% & (Yearly) Totals easyJet 4 (2) 85.6% 6.6% 80.7% Aer Lingus 6 (3) 83.9% 5.1% 80.2% British Airways 8 (8) 81.0% 2.8% 72.2% Monarch Airlines 3 (9) 88.1% 13.8% 70.0% Thomas Cook Airlines 1 (7) 89.1% 6.5% 72.7% Thoms
Slide 14: OTP Integral To Driving Customer Satisfaction
Demand OTP Integral To Driving Customer Satisfaction Improvement in OTP pushes up customer satisfaction April Rolling Twelve ! YoY% 2013 Monthly Average Overall Satisfaction 87% 2% 85% Efficiency of Check in Staff 72% -2% 75% Control of Boarding Process 89% 1% 88% Cleanliness & Tidiness of Aircraft
Slide 15: 100% Online Check-in
100% Online Check-in Demand • Changing the behaviour of our customers to reduce costs and increase efficiency in our airport environment • Differentiated pricing in airport charges • Less requirement for passenger service staff • Next step – Mobile Boarding Passes 15
Slide 16: easyJet Turn
Cost easyJet Turn advantage 16
Slide 17: Summary
Cost Summary advantage • Significant challenges of operating at Gatwick – requires strong local team. • easyJet’s cost advantage at Gatwick underpinned by robust operational performance. • On-time performance is critical to maintaining cost advantage and customer satisfaction. • Initiatives in place
Slide 18: Gatwick Airport Regulation
Gatwick Airport Regulation Chris Gadsden Regulatory Affairs Manager 18
Slide 19: What does being a regulated airport mean
What does being a regulated airport mean • Gatwick is price regulated by the Civil Aviation Authority (CAA) • The CAA determines: • The price Gatwick can charge • The capital expenditure it will allow Gatwick to charge for • The operating costs it allows Gatwick to charge for • The service quality l
Slide 20: The Q6 process
The Q6 process Set out initial Final proposals after proposed price cap consultation response June December/ April October Airline January CAA initial CAA final Q6 response to Final Q6 Q6 proposals proposals Q6 proposals decision easyJet focus on evidence for lower On-going involvement with CAA pric
Slide 21: Q6 – what the CAA has proposed
Q6 – what the CAA has proposed • Price cap of RPI+1 • Compared to the airport’s request for RPI+7.1 • Consultation close end-June • We believe we have credible arguments that CAA should move to a lower price cap: • Cost of capital (5.65%) – does not fully reflect lower overall market returns and deb
Slide 22: Gatwick strategy
Gatwick strategy Paul Simmons, UK Country Director Patrick Johnson, Senior UK Route manager 22
Slide 23: Commercial strategy at Gatwick
Commercial strategy at Gatwick Network Build no1. or 2 network positions Disciplined use of capital • ~50% market share of short- • Route churn haul from Gatwick • Growing returns • Built up over 10+ years • Responding to competition • Range of early slots Drive demand • London strategy • Targeted m
Slide 24: Network: 101 routes from LGW
Network: 101 routes from LGW Network 24
Slide 25: Network: routes to appeal to customers
Network: routes to appeal to customers Network Broad mix of new routes over the last three years: • Summer only routes to Greece and Turkey • New year-round destinations, e.g. Amman and Luxor • Business routes, e.g. Aberdeen, Luxembourg, Moscow High success rate of new routes 25
Slide 26: Network: Strong slot position at Gatwick
Network: Strong slot position at Gatwick Network Summer 12 Gatwick departures London Gatwick (LGW) - Up to 0600-0855 53 total slots per hour Others, 6% • Up to 32 of which can be Aer Lingus, 4% easyJet, 45% departures • Hourly ‘spread’ is achieved Flybe, 6% through 15 minute limits, 13- Thomas Cook,
Slide 27: Network: How we have achieved our winning position
Network: How we have achieved our winning position Network …0-54 aircraft in 10 years • Structured & continuous growth, initially leisure focused • Acquisition of GB airways in 2008 saw an increase from 20-34 aircraft over night & new medium haul markets • Focus on the business passenger- frequency,
Slide 28: Network: New routes and frequencies
Network: New routes and frequencies Network New routes • S08 – GB Airways • S09 – Aer Lingus H2Hs • Steady growth thereafter Frequency increases S13 with targeted business pax growth • Amsterdam – 5 to 6 daily • Belfast – 4 to 5 daily • Copenhagen – 3 to 4 daily • Edinburgh – 4 to 5 daily • Milan MX
Slide 29: Demand: Gatwick, a valuable catchment area
Demand: Gatwick, a valuable catchment area Demand 12.7 Million pax STN / LTN catchment LTN / STN LHR Core STN Core (LTN) LTN Core LHR / LTN STN / LGW LGW / STN LHR Core (LTN/LGW) LHR Core (LGW) LGW Core LHR / LGW • Large and affluent core catchment area and significant overlap with Heathrow • Gatwic
Slide 30: Demand: Our business proposition
Demand: Our business proposition Demand • Fast track security • Access to pier 5 • Flexi-fares • + other developments 30
Slide 31: Demand: Business routes
Demand: Business routes Demand Base capacity 100% 90% 80% 70% 68% 60% 52% 50% 43% 40% 30% 20% 18% 12% 10% 0% 6/day 5/day 4/day 3/day 2/day Barcelona Milan (MXP) Rome Toulouse Lyon Geneva Amsterdam Berlin Venice Zurich Aberdeen Malaga Madrid Belfast Munich Milan (LIN) Nice Glasgow Copenhagen Hamburg
Slide 32: Winning Results
Winning Results • Gatwick a leading part of the easyJet network • PwC Gatwick diamond business of the year 32
Slide 33: Thank You
Thank You 33
Slide 34: Disclaimer
Disclaimer This communication is directed only at (i) persons having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001; or (ii) high