CEO of easyJet: ‘I don’t think flying will be back to normal until at least 2023’

Susannah Butter
·9 min read
 (Daniel Hambury/Stella Pictures Ltd)
(Daniel Hambury/Stella Pictures Ltd)

So, I ask the chief executive of easyJet Johan Lundgren, when will we be able to go on holidays abroad again? “I can’t wait to fly,” he tells me, looking agonised. “Anywhere. But there are no certainties now. I think it will take until 2023 to get back to previous levels but you don’t know. If there is a positive soundbite from the PM we see bookings go up that day, if it is negative they go down. Some things — quarantine, restrictions and travel — have not been thought through by the Government. Rules have changed very rapidly, creating cost and complexity.”

This week has seen yet more crushing news for the travel industry, with the Government planning to make some people entering Britain quarantine in a hotel for 10 days, a move introduced by Australia and New Zealand in the early stages of the pandemic. With no indication of when normal life will resume, fewer than one in 10 of us expects to take an overseas holiday this summer, and UK-based airlines have lost nearly £7 billion since March.

For Lundgren, 54, this past year has been “tremendously difficult”, a phrase he repeats five times during our interview. Easyjet has lost £835 million (before tax) since the start of the pandemic and he had to oversee 4,500 job losses. At the start of the pandemic, he took a voluntary pay cut of 20 per cent, when they were offered to everyone in the company. He has been grounded at home in Cobham in Surrey, lifting his mood by going on lots of walks with his labradoodle, Molly. His twins, a daughter and a son, are at university in Toronto but “made it home for Christmas, which was fantastic but I think they were ready to go back when they did”. “Now it’s just me, my wife and the dog,” he says in his gently musical Swedish lilt. He moved here in 2010 when he became managing director of TUI and joined easyJet in 2017. He misses flying, and the freedom it gives him — usually he zips back and forth to Majorca, where he and a friend own a recording studio. Music is his other preoccupation, Lundgren trained as a trombone player but failed to get into the Royal Academy of Music so went into business instead. He has not been playing his trombone “because I don’t have the inspiration for it”. But he is determined to steer easyJet through this, adopting a coping strategy from The Old Man and the Sea by Ernest Hemingway: “It is about a man who faces challenge after challenge but he keeps his mood and rises up again. It helps to remember that while you can’t control what happens to you, you can always control your response. Feeling powerless is one of the worst feelings, not just in business.”

Lundgren is even-handed. He understands the need for emergency measures but says mixed messages have been catastrophic. “We know that the single factor that constrains customers from booking and travelling is restrictions like quarantine. That is why it is so important that governments have a roadmap to unwind restrictions as more people are vaccinated and when it is safe to do so.”

It is with a wry smile that he says this time last year easyJet was on course to have the best year the company had ever seen. “Look where we ended up,” he laughs. Despite everything, Lundgren has a natural optimism and sees this as “something that will pass”. In his white shirt, he looks a bit like Keir Starmer and has a similarly socialist outlook. At one point he tells me that flying should be “for the many, not the few”. This is why he is calling for cheaper Covid tests, or Easytests as I joke, to “unlock travel with no need for quarantine”. Easyjet charges £75 for tests at the moment, which he says is “prohibitive for most people and families”, especially if they also have to pay for quarantine hotels. “I want to democratise travel,” he says. “This is why we must make tests cheaper — if you add the cost of tests to holidays only wealthy people will be able to fly.

“We don’t want to hit normal, hard-working families for whom holidays were not available before companies like easyJet. That can’t be the right thing, it only creates further divisions.”

TIM ANDERSON
TIM ANDERSON

He does not believe in health passports, letting those who have had the vaccine fly, as Saga is now suggesting. “What is important is knowing whether you have the virus or not, which is why we need cheap, fast, testing. I don’t think the idea of mandatory vaccination for travel is the solution at all.”

What he wants more than anything from the Government is a clear plan on how the travel industry will recover. “We cannot afford for restrictions to linger on. And to remove air passenger duty for the summer. These savings will go to customers and there will be more demand. What is interesting is that hardly any government is approaching this in the same way. There are different lockdown rules and different types of support for businesses.

Like Easyjet, “the Government have a tremendously difficult challenge”. “Nobody will get everything right and they seem to be doing a very good job at the vaccination programme, which is key to the future of travel.” What does he make of Transport Secretary Grant Shapps’s handling of the crisis? “Ja ja, we talk, he is supportive.” What about his competitor, Michael O’Leary of Ryanair and his “jab and go” ad campaign? “We only speak rarely, we are all busy”.

While the Government changed its mind on travel corridors, Lundgren knew he had to adapt his own company rapidly, which meant job losses. “No one wants to announce losses, it has been tremendously difficult,” he says. “It is particularly hard when you work in a people-orientated business. But if you are avoiding the fact that you need to right size it will potentially damage the company even more in the longer term. You cannot delay these decisions because then you have even more problems but you can be compassionate about them.” That means “explaining why you have made these decisions and that it is ultimately not down to individual performance. It may be painful on the day but if you believe it is the right thing for the company in the long term that is what you have to keep in mind”. Easyjet has a pool of redundant staff who they will call the minute they can hire again.

“Whenever you have a big decision to make, you feel like you want more time and more information and that is in normal times,” he says. “With Covid I have felt like I had very little time or insight to base decisions on. But after the tough call you have to take the next call. It is good to stay focused on the task you are doing. Sometimes in the morning you wake up early and it feels overwhelming but the moment you start breaking it down into smaller pieces you get by. This is not going to last forever. When you look in the mirror you want to think you did the best you could with the information you had available and one day will look back and think you did your upmost. We cant do more than that.”

THen there has been Brexit, which actually hasn’t affected easyJet much yet. “We prepared for a long time so we had everything set up,” says Lundgren. “31 December was still a big day here but I am proud to say that even with reduced flying in place we did not get any operational difficulties.”

Still, there have been moments this year when he has woken up “and felt overwhelmed”. Does he ever want to retire and have an easy life? “No, not now,” he says. “This is a challenging time but it is also extraordinarily exciting. We have a goal to come out of this stronger. There are millions of people who rely on this company, who commute with us, to Amsterdam, Geneva or use it to see their partners because it is affordable and attractive. If we aren’t there they can’t do that. I was asked by someone, why do you do this at this challenging time? I knew from the start that I wanted to work with talented people in challenging situations and that is what I have got.”

Lundgren occasionally sounds like he is quoting management books, so it makes sense when he says that he “was addicted to them for 16 years — I read more of them than is healthy”. But then his own manager told him to stop and start reading the classics instead.

His ambition extends to keeping up easyJet’s pledge to be green, despite current pressures on budgets. In 2019 it announced it would offset all fuel emissions, which would cost around £25 million. Lundgren laughs at my mis-pronounciation of the Swedish word flygskam, or flight shaming, and adds seriously: “We cannot make any change to that commitment at all. I know some companies have but I see that as part of how we operate, embedded in how we do things. There is a cost attached to it of course but it is the right thing to do.” Fellow Swede Greta Thunberg has “had an amazing impact”. But as he sees it “the solution is not to fly less, it is to fly smarter.”

He also wants more female pilots and a more diverse workforce — when he took over from Carolyn McCall he took a £34,000 pay cut to match her salary and close the pay gap. “Every company is better equipped to deal with challenges if they are more diverse. We had a lot of measures in place before the pandemic and now they are helping as we think about how to come back. We are doing this because on one hand it is the right thing to do but there is also a hard commercial reason, you get the best out of people if you treat them better.” He has “the highest respect” for pilots, having tried and largely failed to fly simulators.

When he isn’t thinking about planes, he speaks to friends and family, inclduding his brother in Sweden. He donated a kidney to him in 2009 and says: “It wasn’t pleasant but the decision was a no-brainer. He’s doing well, I keep reminding him how fantastically my kidney I gave him is working.” He remembers the first flight they took together, on holiday to the Canaries with his father. So where will he go when it is possible to fly again? “I’d like to go to the Mediterranean. I believe that the next holiday most people have will be the best holiday they have ever had.”