East Midlands to close and Luton to be reduced by 20%
easyJet today announced proposals to reduce its flying programme at Luton by 20% and to close its East Midlands base. The airline will move this capacity to more profitable airports and expects that most of the aircraft will be redeployed to continental European bases. easyJet is committed to developing Europe’s premier short haul network and its overall growth plans remain unchanged at around 7.5% per year over the medium term.
The proposals to reduce flying at Luton are a function of the airport’s failure to recognise the commercial realities of the recession and that easyJet has opportunities to move capacity to more attractive locations elsewhere in its network as weaker competitors retrench in today’s tough climate.
Airport costs at Luton have risen by 25% over the past three years which makes the base no longer competitive. easyJet has been in protracted negotiation with Abertis, the Spanish operator of Luton and its owner Luton Borough Council, which is understood to receive over half of the airport charges. These negotiations have broken down leaving easyJet no alternative but to reallocate parts of its flying programme.
easyJet’s base at East Midlands has remained stagnant with 3 aircraft for many years and easyJet will focus its assets on higher priority markets. easyJet has therefore opened a formal 90 day consultation with its crew at Luton and East Midlands.
The situation at both of these airports has been exacerbated because all flying from the UK, especially from regional bases like East Midlands, has been undermined by the rise in Airport Passenger Duty. APD in its current form is particularly damaging to regional airports which do not benefit from transfer passengers for whom APD is not applicable. easyJet regrets the Government’s decision to backtrack on the reform of APD which would have made it an emissions-based tax rather than simply a blunt holiday tax.
Andy Harrison, easyJet’s Chief Executive, said:
“easyJet is a pan-European airline, winning market share right across Europe, as demonstrated by another strong traffic performance in August. We are one of only a few airlines expecting to make a profit this year. A critical part of our success has been optimising the allocation of our aircraft across our 19 European bases. This means responding to airports with uncompetitive costs, as well as moving swiftly to seize opportunities as competitors retreat.”
“I am deeply disappointed that Abertis and Luton Borough Council have not taken a more far-sighted approach which would have protected jobs at Luton. At a time when jobs are under threat in the town the airport should be an engine for growing employment, not a source of further unemployment. This can only happen, however, if the owner and the operator make the right commercial decisions and deliver a competitive cost base.”
“In regard to East Midlands we cannot see a growing long term future and we have decided to move our assets to markets with better long term potential.”
“The rise in APD hits regional airports hardest and increases the pressure to move aircraft to mainland Europe. The Government seems to think that APD is a free lunch. It isn’t; it costs jobs in the UK.”
In addition to the proposal to move aircraft from Luton and East Midlands, easyJet will consult on a reduction of the number of flight crew at Belfast, Bristol, Newcastle and Stansted. The number of aircraft based at these airports is expected to remain stable. The move simply aims to ensure the right crewing levels for future flying.
There are sufficient opportunities within easyJet’s growing network for all employees who are affected by today’s announcement, and it is easyJet’s intention to redeploy as many as possible.
Notes to editors:
easyJet issued its August traffic numbers this morning which showed that easyJet carried 4,800,336 passengers in August 2009, an increase of 4.7% on the previous August. Passenger load factors increased from 91.3% to 91.8% year on year.
In its third quarter Interim Management Statement (IMS) released on 29 July 2009 easyJet made the following comment on current year financial outlook: “For the year to 30 September 2009 easyJet will deliver underlying pre tax profit in the range of £25million to £50million.“
The Company also announced in that statement that it anticipated that its “average annual growth rate over the medium term measured in seats flown will be around 7.5% per annum.“
Luton is one of easyJet’s largest bases, flying 4.7m passengers a year with 16 aircraft. easyJet employs 530 pilots and cabin crew at Luton. At East Midlands, easyJet currently employs 120 staff, operating 3 aircraft, carrying around 0.7 million passengers a year. The consultation on crew numbers at Belfast, Bristol, Newcastle and Stansted affects approximately 40 pilot and cabin crew jobs.
Flights to and from East Midlands up to the end of 2009, including the Christmas and New Year period, are wholly unaffected. Passengers do not need to take any further action and their flight will be operated as planned. Passengers travelling after this period will be informed well in advance if and how their travel might be affected. Flights from Belfast, Bristol, Newcastle and Stansted are wholly unaffected and will operate as planned. Currently there are no changes to the operation at Luton. Passengers flying in and out of this airport will be advised if their flights are affected.
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