Slide 1: Allocated Seating and Digital
Analyst briefing ALLOCATED SEATING AND DIGITAL Wednesday 3rd October 2012 0
Slide 2: Agenda
Agenda Introduction Carolyn McCall Chief Executive Officer Allocated Seating Warwick Brady Chief Operations Officer Digital Update James Millett Head of Digital Conclusion Chris Kennedy Chief Financial Officer 1
Slide 3: Introduction
introduction Carolyn McCall Chief Executive Officer 2
Slide 4: Context
Context European Headwinds Competitive environment easyJet well positioned • Economic • Legacies carriers 1. Strong balance sheet uncertainty incurring significant 2. Efficient, low cost short haul losses • Industrial unrest model e.g. Air France • High fuel costs 3. Strong network and • Weaker carr
Slide 5: Strategy to drive growth and returns
Strategy to drive growth and returns 1. Build strong no. 1 and no. 2 network positions • Growth slightly above market growth of 1.5 x GDP • Build on positions of strength e.g. France • Exit structurally challenged markets e.g. Madrid 2. Maintain cost advantage • Efficient operation and high asset ut
Slide 6: Improved performance
Improved performance 16.0% 14% - 15% 14.0% 12.7% 11% - 12% 12.0% 9% - 10% 9.8% 10.0% 8.8% 7.9% 8.0% 6.9% 6.0% 5.6% 4.0% 3.6% 3.6% 2.5% 2.0% 0.0% 2009A 2010A 2011A 2012E 1 2 ROCE current measurement ROCE 7x lease adjustment ROCE NPV basis Industry margin Note 1: ROCE adjusted for NPV of Lease Commitm
Slide 7: Allocated seating
Allocated seating Warwick Brady Chief Operations Officer 6
Slide 8: How it works?
How it works? All passengers are allocated a seat, families sit together • All seats allocated on all flights • Seats can be selected in the booking funnel • ‘Upsell’ capability at customer touch points • Boarding passes with seat numbers available online or airport check-in (from -30 days) • Passen
Slide 9: On-board
On-board Three price bands, but with pricing ‘levers’ ‘Extra Legroom’, £12 available to manage yield post-launch Launch pricing ‘Up front’, £8 Remaining, £3 ‘Up front’ A319 seats ‘Extra Legroom’ = 18 seats F D E ‘Up front’ = 24 seats H H H H Remaining = 114 seats 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1
Slide 10: Trial results & feedback
Trial results & feedback 9
Slide 11: The trial
The trial • The objective of the trial was to measure performance against the following criteria: 1. Asset utilisation – On Time Performance and turn time performance 2. Cost – no negative impact on cost per seat 3. Customer – increased satisfaction 4. Revenue – match or exceed Speedy Boarding reven
Slide 12: Allocated v Network D+3 Turn Performance 24th April – 6th Sept
Allocated v Network D+3 Turn Performance 24th April – 6th Sept • Trial operated on a representative sample of routes and airport infrastructures • 4,500 allocated sectors flown to date (c. 50 sectors per day), representing 4-5% of the network when all trial routes launched (from end-May) Difference
Slide 13: Allocated vs. Free Seating
Allocated vs. Free Seating Boarding time comparison shows no material difference Pre-Boarding Zone (PBZ) fill level affects Aircraft Boarding Time & Cabin Settle Time Gate Boarding Aircraft Boarding Cabin Settle 1st Pax into PBZ 1st Pax on aircraft Last Pax on to to to last Pax into PBZ last Pax on
Slide 14: Allocated Seating – impact
Allocated Seating – impact Q. Thinking about your Better than the way seating works on other easyJet flights personal circumstances, do As good as the way seating works on other easyJet flights you think allocated seating is: Worse than the way seating works on other easyJet flights To date 72% 14%
Slide 15: Allocated Seating – impact
Allocated Seating – impact Q. Overall, following your Much more likely to use in the future experience of the boarding and A little more likely to use in the future seating process on this flight It would make no difference would say you are: A little less likely to use in the future Much less likel
Slide 16: Allocated Seating – impact with frontline staff
Allocated Seating – impact with frontline staff >65% of frontline staff (mainly cabin crew response) indicate allocated seating better than free seating Q. Thinking about your experience Better than free seating of allocated seating flights, overall As good as free seating do you think it’s: Worse t
Slide 17: Too early to assess revenue potential
Too early to assess revenue potential • 5% of network trialled for 4 months of summer • Significant variations in take up of allocated seating from 3% to 50% • F’13 focus on delivering operationally • F’14 onwards drive revenue from allocated seating 16
Slide 18: Rollout plan
Rollout plan 17
Slide 19: Allocated seating rollout plan, fully complete by 27th Nov
Allocated seating rollout plan, incorporating de-risk for Gatwick and Milan, fully complete by 27th Nov Date to Oct 11th Oct 11th Oct 16th Nov 13th Nov 20th Nov 27th from / to LGW from / to LGW Existing trial LGW NT from / LGW ST from / South (all North (all routes Route / base to AMS, ALC, to FCO,
Slide 20: Comms support
Comms support Transition existing bookings, maximise awareness & address other audiences September October onwards We’re introducing Your flight is now ‘It’s coming to all flights’ / ‘it’s here’ allocated seating allocated seating Media Announce Booked passengers Home Page update Emails /FAQs/Route
Slide 21: Summary
Summary • Improved customer experience • Removes key barrier to sampling easyJet • F’13 key focus will be ensuring efficient rollout across operation • F’14 onwards drive revenue from allocated seating 20
Slide 22: Digital overview
Digital overview James Millett Head of Digital 21
Slide 23: How does digital fit within our marketing strategy?
How does digital fit within our marketing strategy? Attract Customers Improve Conversion & Make the most of existing Digital Reach Customers & Prospects • Create a brand that people know, • Focus on conversion • Customer segmentation like & understand • Optimise & Personalise • Relevant communicatio
Slide 24: A leading multi channel online business
A leading multi channel online business Search easyJet is the 3rd most searched for airline globally 48% of easyJet visits originate from Google Web 389m visits in the past 12 months (60% outside the UK) 340k flight status checks in the past week 63% of passengers check in online Mobile 2.9m app dow
Slide 25: Digital Agenda
Digital Agenda ete) DRIVE REVENUE EXTEND REACH CUT COSTS
Slide 26: Digital Agenda: Drive Revenue
Digital Agenda DRIVE REVENUE europe by easyJet
Slide 27: Personalisation - New Content Management System
Personalisation - New Content Management System Why? • Agility • Operational efficiency • Personalisation Functionality • Relevant / dynamic flight pricing • Personalised ancillary messages • Personalised online check in • Banners based on airports & types of travellers • Campaign functionality incl
Slide 28: Web Optimisation
Web Optimisation Using testing to drive commercial value Overall Revenue • All combinations • Test live Creative Design • 80 variants • + 27% attachment rate 4 Upsell Design & Layout • Design, layout & position tested • Test live 27
Slide 29: Lowest Fare Finder (MVT)
Lowest Fare Finder (MVT) What? • A graphical representation of our 3 week and year views on Step 1 Why? • Supports low fare positioning • Drive conversion Status Live through MVT on 30% of UK traffic 28
Slide 30: Abandon Basket Email
Abandon Basket Email What? • Trigger email to prospects who reach step payment stage of booking funnel • Sent following day after abandonment Why? • Industry proven approach • Stay top of mind • Quick link back to booking pages • 68,000 exited last week Status Target: Trial w/c 8th October 29
Slide 31: InspireMe
InspireMe What? • Map based search based on customer preferences • Link into booking funnel & to destination guides Why? • Target those people who don’t know where & when • Supports our cause • Enable greater communication opportunities Status 2nd October live 30
Slide 32: Digital Agenda: Extend Reach
Digital Agenda EXTEND REACH europe by easyJet
Slide 33: Extend digital reach
Extend digital reach Launch core functionality through iPhone and Android Apps Launch Mobile site to maximise reach Optimise and focus on ancillaries Mobile Boarding Passes Focus on ‘Making travel easier,’ particularly in Airport 32
Slide 34: US website
US website What? • Dedicated website for US customers • Dynamic pricing in $ • Booking funnel “locked” to $ Why? • $55.5 million worth of bookings • US ranks 7th in the list of revenue generating countries • 5.7 million visits from the US Status Live 33
Slide 35: Digital Agenda: Cut Costs
Digital Agenda CUT COSTS europe by easyJet
Slide 36: Flight Tracker
Flight Tracker What? • New tool to track arrivals & departures Why? • Make customers feel updated & informed • Reduce customer contacts • 13m visits a year Status Live 35
Slide 37: My easyJet / Manage bookings
My easyJet / Manage bookings What? New “manage bookings” website for all post purchase requirements Why? • Reduce customer contacts • Drive ancillary upsell more aggressively • Improve customer experience Status On Track: Phase 1 January 2013 36
Slide 38: Mobile boarding passes
Mobile boarding passes What? • Mobile check-in • Mobile boarding passes Why? • Supports cause • Business traveller focus • Huge customer demand • Save paper! Status Internal Trial: October 2012 Roll Out: 2013 37
Slide 39: Summary
Summary • Digital a key part of our overall marketing programme • Focused on commercial drivers • Revenue • Extending reach • Taking cost out of the operation 38
Slide 40: Conclusion
conclusion Chris Kennedy Chief Financial Officer 39
Slide 41: F'12 Outlook
F’12 Outlook Outlook As at 25 July IMS Revised Outlook Capacity growth1 +7% +7% Revenue per seat (constant currency)1 Low to mid-single +5% to 5.5% digits Cost per seat ex fuel (constant currency)1 +1% to 2% +1.5% to 2% Full year pre-tax profit (PBT) £280m to £300m £310m to £320m 1 Compared to six m
Slide 42: F'13 Outlook
F’13 Outlook Percentage of anticipated Fuel requirement US Dollar requirement Euro requirement requirement hedged Full year ending 30 77% 80% 65% September 2013 Average rate $985 m/t $1.60 €1.18 Full year ending 30 54% 60% 45% September 2014 Average rate $994 m/t $1.58 €1.22 • It is estimated that a
Slide 43: 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