Easyjet boss to stand stand down as it heads for "record" summer

Easyjet boss Johan Lundgren is to step down after more than seven years at the helm, handing the controls to present finance chief Kenton Jarvis.

He announced that today as the low-cost carrier said it will expand its UK network by opening a three-aircraft base at London Southend in March.

For the six months to March, easyJet made a loss of £350 million. That’s usual for airlines in the summer months.

The City hopes it might make a profit of £1 billion in the summer months to make up for that. But the shares wobbled down 31p to 498p on growing fears that international strife could put off holiday makers.

Mark Crouch at eToro said: “As is always a potential spanner in the works for airlines, investors will have one eye on fuel costs, which have been creeping higher in 2024, weighing down EasyJet’s profit margins. Conflict in the Middle East has already cost the airliner £40m, causing chaos to flights, and should tensions re escalate it could send oil prices soaring, which for EasyJet will cause major turbulence.”

Easyjet rejected a takeover bid from rival Wizz Air in September 2021, but experts believe it remains a target.

Arch rival Michael O’Leary, the outspoken Ryanair boss, has said he thinks British Airways and Air France could launch a joint offer for the business.

Lundgren said: "easyJet's targeted growth and focus on productivity has delivered a reduction in winter losses, boosted by our trusted brand and network that we continue to invest in.

"Our two newest bases, Alicante and Birmingham, are achieving passenger numbers well above the network average and we have announced a tenth UK base at London Southend from next March, continuing the growth of our leisure network in the UK where easyJet holidays plays an increasingly important role.”

The promotion of finance chief Kenton will be queried by some corporate governance experts.

Analysts at Bernstein however, said, “in our view, Kenton should be seen as representing continuity with the existing strategy”.

Lundgren joined easyJet in 2017 and had to steer the airline through Covid, something which required hefty backing from shareholders to cope with the losses made the planes were grounded.

He was paid £2.2 million in 2023. Jarvis will see his basic pay jump from £542,000 to £800,000 with bonuses to follow if targets are mer.

Stephen Hester, the chairman, said: “We are sad that Johan will retire from easyJet. He has done an excellent job as our CEO since December 2017; steering the company through the immense challenges of the Covid period, and setting up a clear strategy and strong execution plan towards its ambition of ‘being Europe’s most loved airline, winning for customers, shareholders and our people.”

The holiday market has endured even amidst a cost of living squeeze, with analysts saying the British public regards an annual holiday as a necessity, and will look to cut back almost everywhere else first. Bookings at easyJet look strong.

Crouch added says: “With the peak summer season nearly upon us, the early signs are positive. Passenger numbers continue to climb, and bookings are gathering pace as sun-seekers seem determined to get away. EasyJet’s package holidays have stood out as a high-flyer, expected to deliver 40% year on year growth.”