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AIRLINE NEWS easyJet views onboard as ‘profitability driver’


Total ancillary revenue, which includes fees from checked baggage, allocated seating and inflight sales, surged by 24% in the six months ending 31 March to reach £454m ($614m), low-cost carrier easyJet announced in the six months ending 31 March. In an investors presentation, CEO


Johan Lundgren identified the onboard experience as the ‘driving force’ of easyJet’s profitability in the future. “For example, predicted assortment


amounts for certain items of food and drink on each flight so that supplies match customer demand and tailoring offerings onboard so we know what you want to buy from us,” he outlined to analysts. “This is such an exciting area of the


business and one I know will drive value across the whole of the airline.” Total revenue per seat increased by 10.9% to £54.1 ($73.1), partly reflecting easyJet’s


January acquisition of part of Air Berlin’s operations at Berlin Tegel, as total revenue (excluding Tegel) rose by 19.5% to clear £2bn (£2,183m/$2,952m). Revenue per seat (excluding Tegel) grew by


12% to £56.6 ($76.5), with ancillary revenue per seat rising by 16% (14% at constant currency) to £11.39 ($15.4) as easyJet moved to consolidate its position across core UK airports and benefitted from the positive


impact of lower market capacity linked to factors including the bankruptcy of Air Berlin and Monarch. Full-year profit before tax guidance to


30 September is forecast to fall within the range of £530m ($716m) to £580m ($784m).


SIA to get cabin upgrades


Singapore Airlines’ (SIA) regional wing SilkAir is undergoing a sizeable investment to improve its cabin offering as it prepares to merge into the flag carrier. The upgrade, which will cost more


than $100m, will equip the wholly-owned subsidiary’s cabins with new lie-flat seats in Business Class and seat-back in-flight entertainment systems in both Business and Economy classes to deliver product and service consistency across the SIA Group’s full-service network. It will expect to begin in 2020, with


Ryanair tracks 30% ancillary rev target


Ryanair has revealed that its ancillary revenue – which includes inflight retail and F&B sales, reserved seating, priority boarding and car hire – now represents 28% (roughly $2,353m) of its total revenue. In its FY 2018 results, Ryanair reported


a 10% increase in full-year profit after tax to €1.45bn ($1.7bn), as lower fares (down 3%) stimulated +9% traffic growth to over 130m passengers. Revenue jumped 8% to reach €7,151 ($8,406m). The airline says improved mobile and


digital platforms have delivered a +13% increase in ancillary revenues (+4% per guest) to over €2bn. “Ancillaries now deliver 28% of revenue


and we are well on track to achieve our 5-year goal of 30%,” it says. Although the company has much to be positive about, it does remain concerned at


JUNE 2018


‘the likely impact of a hard Brexit’. “While there is a general belief that


an 18 month transition agreement from March 2019 to December 2020 will be implemented and further extended, it is in the best interest of our shareholders that we continue to plan for a hard Brexit in March 2019,” it said in a statement. “In these circumstances, it is likely that


our UK shareholders will be treated as non-EU and this could potentially affect Ryanair’s licencing and flight rights.” Ryanair says that it intends to restrict the


voting rights of all non-EU shareholders in the event of a hard Brexit so it can ensure it is majority owned and controlled by EU shareholders at all times to comply with its licences. This would result in non-EU shareholders not being able to vote on shareholder resolutions.


the SilkAir merger taking place once a ‘sufficient number’ of aircraft have installed new cabin products. In March, SIA, DFASS and SATS


established a joint venture to pursue travel- related retail operations in Singapore under the KrisShop and Scootalogue brand names.


www.scorpioworldwide.com TRBUSINESS 11


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