easyJet Agrees Long-Term Growth Framework with London Stansted

UK low-fare carrier easyJet has agreed a new long-term deal with M.A.G., the new owners of London Stansted Airport, which will enable it to more than double its traffic at London facility over the coming years. The long-term growth framework deal will support a growth in easyJet’s passenger numbers from their current annual level of 2.8 million to around six million per a year over the next five years.

easyJet currently operates eight aircraft on up to 27 routes from London Stansted, including new services introduced this year to Bulgaria, Morocco and Egypt. The new arrangement will see the number of based aircraft grow over the course of the agreement and additional network development. Over recent years the carrier has reduced its presence at the airport as it has concentrated much of its London growth at Gatwick Airport, now its largest network point, and more recently with the opening of a base at London Southend.

The conclusion of the growth framework agreement comes just three months after M.A.G completed its acquisition of Stansted in late February 2013 and will play an important role in the airport group’s ambition to make Stansted the best airport in London. easyJet is one of the fastest growing airlines in Europe and as well as offering new destinations from Stansted, its continued focus and growing share of the corporate market means the agreement could also facilitate an increase in the number of business travellers using the airport.

"We are delighted that easyJet has chosen Stansted. We’re working hard with existing and prospective airlines to drive passenger growth at Stansted so today’s announcement by easyJet on the new framework for growth is a positive first step,” said Charlie Cornish, Chief Executive of M.A.G. “London Stansted will flourish under M.A.G's ownership as we actively market the airport, the region and its strong connectivity, including direct rail access to both London and Cambridge, to airlines and introduce lots more airline competition into the London market.

“The quality of our offer is compelling and we strongly believe that London Stansted has a key role to play in any debate on South East capacity and today's positive announcement by easyJet confirms that,” he added.

In the past Stansted was an integral part of the easyJet London network but its position as been diluted over the past five years as the carrier has focused its growth efforts at Gatwick. In fact between 2007 and 2012 the airline’s capacity at the airport slipped by more than a third with available seats down 33.7 per cent. In the table below we highlight the carrier’s annual departures and capacity from Stansted over the past ten years to show how easyJet’s strategy has changed.

The data shows that with the exception of 2010, easyJet’s annual capacity at Stansted has been in decline since 2008, with double digit declines in 2009 (-14.0 per cent), last year (-16.6 per cent) and this year (-12.0 per cent), based on the carrier’s existing schedule for the full year. What is most interesting is that in 2004, Stansted accounted for 37.2 per cent of easyJet’s London seat capacity versus just 15.7 per cent last year with annual year-on-year declines in marketshare. Over the same period Luton’s share declined from 37.5 per cent to 20.7 per cent, while Gatwick grew from 25.3 per cent in 2004 to 60.7 per cent in 2012.