Interview with Stelios Haji-Ioannou in Davos
By Adam Reuters
SECOND LIFE, Jan 25 (Reuters) - Bureau chief Adam Reuters interviewed Stelios Haji-Ioannou on Thursday as part of a series of interviews from the World Economic Forum in Davos, Switzerland.
Stelios kickstarted the low-cost aviation revolution when he founded easyJet and has since created an empire under the easy brand, including car rental, hotel, cruise ship and Internet access businesses.
Here are selected excerpts. Stelios on:
The World Economic Forum
Davos is a place to think about the bigger picture, instead of worrying about the next quarter’s earnings. You can think about the risk to your industry, or to business. Climate change has completely taken over the agenda. Last year it was half a session, if that, this year it’s 17 sessions I counted.
The typical problem, and a forum like Davos can actually tackle, is there are so many players involved, and it’s a global problem. Today we were sitting with two European ministers, and even they admitted it’s a global problem and unless the Americans play ball, it won’t work.
Global warming and air travel
Aviation is not the single largest polluter. And as a company on this particular issue we do care and we’re going to do something about it. I’m not going to sit here and say it’s not my problem. And flying and traveling around is a good thing — for the economy, for social reasons.
I don’t want people to think flying is some sort of horrible thing, like smoking. There are so many positive side effects to flying. For the economy it’s good, for the receiving company it’s good. So many developing companies rely on tourism. I also believe it promotes cultural understanding.
Let’s not make it a sin to travel.
Virtual tourism
Getting people to buy a cruise is much more complicated purchase decision emotionally. It’s much easier to sell a bus ticket. A cruise is a holiday — a defined period of time where you’re committing yourself. So the more you can show them in advance what they’re likely to experience, the more likely you are to sell the holiday. So why not create the virtual Greek islands? Or the Caribbean equivalent?
Virgin Galactic
What you really want me to do is announce easySpaceflight! I have to say the easy brand is a lot more grounded than the Virgin brand. Richard Branson is someone I’ve been watching for years and I admire his ability to grab headlines, for something which is further out in the future. Let’s face it, the first flight is permanently two or three years away. I’m sure one day he’ll get there, but today there is no tangible evidence there is a commercially viable way of getting people to outer space.
Ryanair
I don’t know how many of our audience lives in Europe, but easyJet is often compared to Ryanair, which is the other large low-cost airline that started a little earlier than us and then they copied us in many respects. But if you want me to criticize some of my competitors I think Ryanair are so focused on low cost, they have actually lost customer service. When you get the chief executive to use foul language in the public all the time, to describe customers, politicians, even environmentalists now, I don’t think that’s the right way to build an image for an industry. We are a lot more caring than Ryanair.
The U.S. airline market
There is such oversupply by subsidized, bankrupt airlines in Chapter 11 that it is different for an entrepreneurial start-ups to flourish. In Europe we have a problem with the states (flagship airlines), but they are fewer now, and smaller. Olympic Air, Alitalia have managed to almost become irrelevant in Europe. But you can’t say that about United Airlines — it’s a bloody big airline, it’s permanently in Chapter 11, they keep losing money and yet they haven’t been grounded yet. I suspect the U.S. market won’t return to a healthy state of affairs until we see the liquidation, the collapse of a major carrier.
Airlines have an amazing ability to survive, either because governments pump more capital in, or there is another source of capital in what I call vanity capital, which is people who want to say they own an airline. I’m afraid to say I’ve been wrong in the past, I said in the past there would be market exit from airlines in Europe, but they seem to be a lot more resilient.
