Among the small number of business stars who are recognisable just by their first names, ‘Stelios’ – or Sir Stelios, as he became in 2006 when awarded a UK knighthood – is a well-known figure across Europe and in the aviation industry globally. Many who speak of him would be hard pressed to cite his surname (Haji-Ioannou), but his launching of the market-disrupting, orange-hued budget airline easyJet in 1995 at the age of 28 spawned a generation of business-school case studies.
The easyGroup, of which Mr Haji-Ioannou is chairman and the largest shareholder, now includes ‘easy’ options for rental cars, buses, hotels and, to be launched next year, food stores. Roughly 55 million passengers a year fly to 134 destinations on easyJet, which has a fierce rivalry with Ireland-based RyanAir, a battle that easyJet appears to be winning.
Mr Haji-Ioannou was born in Athens, attended university in the UK and now resides in Monaco, but is happily claimed as a famous son of Cyprus, where both his parents are from. He returned to the island in September to serve as keynote speaker at a business awards event, his first visit since a banking crisis shook the country earlier this year. Chatting with fDi over post-event poolside drinks at the Hilton Nicosia, he says he was struck by the level of optimism he found despite the economic hardships facing the population.
He maintains a close connection to Cyprus, but mostly of a personal and philanthropic nature (he funds a charity in his mother’s hometown of Limassol among other endeavours). Businesswise, his native land is a small piece of the easyJet pie mainly due to his well-documented eschewing of the hub-and-spoke model of aviation development.
“Cyprus is a destination, not a hub – it is a place where people go mostly on holidays and maybe some business. I am not a great believer in taking small islands and making them hubs, and hoping that people from Europe and people from the Middle East will suddenly fly via Cyprus.
"The only [countries] that prove this wrong, who defy gravity, are the oil-rich Gulf states,” he says. “If you are Qatar, if you are Dubai, if you are Abu Dhabi and wherever where oil is plentiful, you can afford to buy these big planes and probably run them below cost just to convince people to come. But I cannot see Cyprus doing that.
“If you look around the plane flying back from Cyprus, I bet 95% of the people are not Cypriots. The people who fill the seats are visitors to the island. The market is at the other end so I don't think aviation is really going be a big play for Cyprus. If there is anything I would look at personally, having been here briefly [on this visit], real estate seems to be where the opportunities are.”
A growth journey
For easyJet, although he is careful to point out that the strategic decisions are largely left to others now, growth opportunities in destinations beyond the borders of its bread-and-butter market of Europe present challenges. “A lot of north African and Middle Eastern countries have become unstable. At some stage, we had high hopes that Europeans would think of Egypt in the way that Americans think of Florida. But with all these developments it’s kind of difficult. US airlines are very fortunate, because they have enough [holiday options] on their own continent to do something in the summer and in the winter. In Europe it's very seasonal. You have to go further afield [to get reliably hot weather] and then that’s a different aircraft and it gets expensive.”
The auld foe RyanAir often snipes about easyJet’s comparatively higher prices, but Mr Haji-Ioannou insists the low-cost airline – while it makes a play for business travellers and adds perks such as assigned seating – will remain just that and will continue to pursue a slow and steady growth model.
“I have always been an advocate of lower growth, because it's easier to create the margins. It's difficult to be putting prices up and expect to grow. It's as simple as that. When the prices come down, the volumes go up; if the prices go up, the profits are going up at the same time, temporarily at least, but the volumes cannot go up forever.”