The COVID-19 pandemic, and the subsequent national lockdowns and quarantine restrictions, have caused disruption and damage to many industries across the globe. This is particularly true for the airline and travel industry, which saw passenger numbers drop to record lows, practically overnight, as governments shut down borders and warned against all but essential trips.
The full impact of Coronavirus on the airline industry is starting to emerge, as European budget airline easyJet revealed today that for the first time in its 25 year history it has suffered significant losses. The news of a potential imminent vaccine was welcomed by CEO Johan Lundgren, but the company added that it expects to fly no more than 20% of planned capacity in Q1 2021.
However, as hope for a more travel season next year begins to take hold, easyJet is preparing for how it can not only reduce its costs and boost efficiency across its network, but also double down on its strategy to deliver excellent digital-first customer experience.
Simply put, easyJet wants to use this time of reduced demand to invest in services that will be digital-first and capable of taking advantage of a captive market, which has pent up demand, when things hopefully ease in Q2 next year.
In its full year results released today, easyJet revealed it had suffered pre-tax losses of £1.27 billion, compared to a profit of £430 million in the same period last year.
Commenting on the results, Johan Lundgren, easyJet Chief Executive said:
I am immensely proud of the performance of the easyJet team in facing the challenges of 2020. We responded robustly and decisively, minimising losses, reducing cash burn and launching the largest Cost Out and restructuring programme in our history - all while raising more than £3.1 billion in liquidity to date.
easyJet has not only withstood the impact of the pandemic, but now has an unparalleled foundation upon which to emerge strongly from the crisis. Our unmatched short haul network and trusted brand will see customers choose easyJet when returning to the skies.
While we expect to fly no more than 20% of planned capacity for Q1 2021, maintaining our disciplined approach to cash generative flying over the winter, we retain the flexibility to rapidly ramp up when demand returns.
Doubling down on digital
Whilst it has been a difficult year for easyJet, the company was keen to highlight its agile capabilities, pointing out how it has been able to respond swiftly to customer demand when the outlook changed, through its use of varying channels.
For example, when the UK government announced in late October that quarantine to/from the Canary Islands was being lifted, easyJet added 180,000 seats of additional capacity within 24 hours. Not only this, but the company updated its digital assets, including the homepage and app banners, carried out email marketing notifications to 8.5 million accounts, and conducted a proactive social media strategy on both Facebook and Instagram. The rapid response resulted in a 876% increase in sales over the following five days.
In addition to this, the airline is investing in what it calls a "seamless and digitally enabled customer journey" at every stage of the passenger experience, in the hope that it can win on service when people once again take to the skies en-masse.
These investments include:
Prior to travel - easyJet is focusing on a ‘direct is best' approach, led by its digital channels and an app/mobile first approach. It is rebuilding its web booking interface; driving app usage and improving the UI; enhancing self-service booking management, such as changing a passenger's details or baggage booking; improving online redemption management, such as vouchers; developing full pre-order capability for retail onboard; and introducing new payment mechanisms.
In airport - the airline is aiming to move customers from kerb to aircraft without the need for human interaction. This will involve improving boarding and reducing queuing; improving the automatic gates process; pushing for 100% digital boarding passes; developing ‘virtual boarding'; and reducing the need for check-in.
In flight - easyJet is committed to improving its on-time performance - "on time, every time" - by managing suppliers, empowering its crew, implementing pre-tactical planning, carrying out base operating reviews, building a customer-level data view to enable targeted offers for inflight retail, and reviewing the CRM lifecycle for more relevant customer engagement.
Support - the aim for easyJet customers is to provide them with the digital tools to easily self-serve when things do not go to plan, or to engage with the airline after their flight. As part of this, easyJet will deliver Self-Service Disruption Management (SSDM) to let customers quickly self-serve in disruption. It is also launching a new social strategy to engage with customers, is building a hub of ‘Voice of Customer' insights, is creating an ‘always on' feedback loop and is shifting focus from CSAT (customer satisfaction scores) to ‘life time value of the customer'.
CEO Johan Lundgren added:
We know our customers want to fly with us and underlying demand is strong, as evidenced by the 900% increase in sales in the days following the lifting of quarantine for the Canary Islands in October. We responded with agility adding 180,000 seats within 24 hours to harness the demand.
And last week we saw the welcome news about a possible imminent vaccine roll out.
I would like to thank everyone at easyJet for their work which has left us well positioned and expecting to bounce back strongly.