‘Easy listening’ : Sir Stelios grants podcast interview as easyGroup turns 30
Sir Stelios stood down as non-executive chairman of easyJet in the early 2000s but he and his family are still major shareholders in the airline © Stelios Philanthropic Foundation
Sir Stelios Haji-Iannous spoke recently on Business Leader’s podcast « Off to Lunch » about how and why he embarked on his easy journey in the 90s, and the intervening 30 years that have seen the wider easy family of brands, and his Stelios Philanthropic Foundation, really ‘take off’.
Perhaps best known as the founder of the easyJet airline, Sir Stelios started out not in the air but on the high seas, as owner of his own shipping company, StelMar. However, shipping companies, as they are not customer-facing, felt too anonymous for the ambitious young Stelios. Not content to ‘just’ carry on in the familiar waters of his family’s business, he wanted to create a consumer brand that would become a household name.
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It was a “road to Damascus” trip to the US that convinced him to take on the national legacy airlines that had a virtual monopoly over European skies in the mid 1990s. He decided to research the low-cost model, invented in the US where private airlines were already in competition with each other. “How much to buy a plane?” he asked Boeing, and “Which airlines should I talk to?” That conversation led to him taking his first low-cost flight, with Southwest Airlines, and staying in his first budget hotel, Motel6. That in turn got him thinking about creating a brand that would cover both flights and accommodation with a name that would shout ‘value for money’. After StelMar, he toyed with StelAir before settling on easy. “The rest is history,” he said.
Investment from his father helped get things ‘off the ground’. Yet on day one, easyJet wasn’t an actual airline. It was more of a travel agency, selling tickets for flights that were operated by independent airline, GB Airways. The plane was leased, there were no frills and nothing was free. “My claim to fame was I sold the first cup of coffee on a plane, for 25p,” he laughed. “I can’t do everything well,” the Monegasque resident freely admits, so he left the airline aspect to those whose business that was, a philosophy he took forward into most of the industries he has since become involved in.
What the young Stelios DID do well, and differently, was marketing and selling direct to the public, also a world first.
29p for a flight, instead of a couple of hundred pounds, is newsworthy
Sir Stelios Haji-Iannous
It’s sometimes – well, easy – to forget just how much of a transformation Sir Stelios’ budget airline brought about in European air travel, since easyJet is such an established player in the aviation landscape today. Market disruption was the name of the game. The traditional airlines practiced high prices because they had high costs. The idea was to roughly halve those prices, which meant halving the cost of operating the flights… He therefore avoided the expensive ‘hubs’ such as London Heathrow and Roissy Charles de Gaulle and took out national newspaper ads for special deals and discounts, with seats being sold for 29p in some cases! It was an innovative idea to change the price in order to fill the aircraft, at a time when flights were maintained even if they were 2/3 empty.
No need for easyJet to poach British Airways passengers. A new market was created and it grew in response to demand from people who, until then, could not afford to travel by air within Europe. The company floated on the London Stock Exchange 5 years almost to the day after the first flight. Sir Stelios believes five years is the turning point after which a business can be considered sustainable.
A bumpy ride
There was some turbulence along the way during those first five years. Aircraft supply delays meant flight cancellations for 2 months. British Airways launched Go, its own low-cost airline as a direct competitor, whose launch Sir Stelios and other easyJet staff gate-crashed, turning up for its first flight in distinctive easy orange boilersuits, a somewhat cheeky but very effective publicity stunt. For the record, Go was ultimately bought out by easyJet. 9/11 also happened during the period…
Sir Stelios played the ‘David & Goliath’ card, but the airline’s success meant the approach was soon shelved. He also used legal proceedings to “keep British Airways honest” in particular in terms of unfair competition.
Asked if he had seen Go as a real threat at the time, he replied “I took it as a backhanded compliment. And it endorsed the low-cost model as safe and acceptable.”
Free publicity
And then came Airline in 1998, a behind-the scenes-documentary about easyJet, whose viewing figures in the UK were only surpassed by Eastenders and Coronation Street !
Sir Stelios believes the airline industry is particularly media-friendly, and “gets a lot more attention than it deserves,” so there was a lot of free publicity to be had by agreeing to the series, which ran for several years. He believes it was the right decision back then, because it was innovative, but he wouldn’t do it today. “It’s the sort of thing you do when you’re young and small.” It was “warts & all” but the show took the easy brand into 12 million households every week on prime-time TV. “You can’t buy that kind of brand familiarity,” he maintains.
“The baby has grown up”
Sir Stelios stood down as non-executive chairman of easyJet in the early 2000s but he and his family are still major shareholders in the airline. “The City wanted an independent chairman and I had a conflict of interest since I owned the easyJet brand,” explains the founder. Since he owns the easyGroup brands, and receives royalties for use of the brand, he felt it “only fair not to be on the board.” He also believes it is a sign of a company’s maturity if there is another designated CEO and chairman. “The baby has grown up,” he says, finding a “happy medium” in being involved and gaining profit from the company, but not running it day to day. His relationship with easyJet management has sometimes been complicated in the past, but he feels they should be congratulated, in particular, for how they enabled the airline to recover after Covid in what is a challenging industry.
Were there ever moments of doubt? Secretly yes, he admits. Mid-2020 when the airline was grounded during Covid for example… However, “it’s incredible how quickly you can recover from a very difficult situation,” the billionaire maintains.
Since standing down from easyJet, the billionaire has turned to expanding the easy family in other domains. He now manages a private company, easyGroup, which runs the brands, and this takes up roughly a third of his time, including in the courts to stop people using the easy brand without permission. Two reasons drive this. The first being to protect consumers from confusion. As there are many bona fide easy brands, a customer could be tricked into trusting ‘easyABC’ brand because they trust the easy name, when in fact easyGroup has no control over that company’s standards. The second reason is the rule of law. The Group’s 1200 trademarks all have a legal function, similar to property rights, or copyright.
Another third of his time is devoted to an active stocks and options trading strategy. Given his success, he feels he has a duty to invest in other areas, outside his own brand. And the final third of his time involves giving back to society, through his young entrepreneur awards for example, the charities he has founded, and partnerships with other charities, such as the Prince’s Trust, the Red Cross, and the Prince Albert II Foundation.
Now that young entrepreneurs are learning from him, he was asked what he learned from his father, his first and only boss. “Many good things. He was entrepreneurial, he had a good sense of timing of markets.” Sir Stelios explained that in many industries it is important to time one entry into an asset and to know when to get out. “But he was also very old fashioned, and he didn’t really know how to delegate.”
Asked if his father had been supportive of the airline idea, Sir Stelios said he was proud that his son wanted to go out and build a brand. He flew on the airline and was proud his son had created it. But he would complain about the quality of the coffee! To which Stelios replied, “Dad, they’re not flying with us because of the coffee. They’re flying with us because of the price.”
Giving back and creating jobs
“We have been running entrepreneurial awards schemes in all the countries I call home, including the UK, for many years,” said the billionaire philanthropist of his Foundation. He feels the Leonard Cheshire disability awards and its winners are very inspiring, but it is a narrow field. He therefore wanted to create a new awards scheme in parallel, to encourage young people to start a business with the aim of creating jobs.
He has sought to cross the divide in Cyprus, with awards to Greek and Turkish Cypriots who are creating jobs, prosperity and trust, hopefully moving towards a lasting peace. During the economic crisis in Greece and since, his Foundation provided substantial support for businesses. At “the other end of the scale” the Foundation has also provided food to people in desperate need.
Asked what skills he thinks an entrepreneur should have, Sir Stelios replies that it takes someone who wants to be his or her own boss, who is prepared to take financial risks with their own money, even though capital can obviously be raised through other means to scale up the business, as he did himself. And they have to be able to deal with the fact that they could win or lose.
His best advice to someone starting out? “While I’m known mostly for the marketing ideas and promoting businesses and brands, it’s important to have a good accountant at your side, and a good lawyer … Don’t underestimate the need for monthly management accounts. Focus on marketing, most of which happens online, so if that’s not your area of expertise, hire someone to do it for you. Then go out there and find customers,” he said in conclusion.