EasyJet chief Johan Lundgren will step down next year

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EasyJet CEO Johan Lundgren will leave the budget airline after seven years in the top job and will be replaced by financial director Kenton Jarvis.

Lundgren, who started his career as a tour guide and joined easyJet in 2017, will leave the company early next year. He guided the airline through the pandemic crisis and has since been trying to capitalize on the recovery in travel.

Analysts chose Jarvis, who joined easyJet in 2021 and previously led travel company Tui’s aviation operations, as Lundgren’s successor indicated the airline would continue with its current strategy.

Jarvis told the Financial Times that he is “100 percent behind the airline’s current strategy,” and in that sense he is a “continuity appointment.”

From its main base in London Gatwick, Lundgren has focused the airline on lucrative routes to key airports across Europe.

But like many airlines, easyJet’s management has struggled to convince investors to fully support its vision, despite the current travel boom. The airline’s shares are languishing 60 percent below pre-pandemic levels.

The airline has competed successfully with national carriers such as British Airways, but some analysts and investors have questioned how much the company can grow in a mature market where capacity is limited at many airports.

Line chart of share prices rebased in pence terms, showing Ryanair has outperformed easyJet and other airlines since the pandemic

To the frustration of some investors, Lundgren refused to abandon his strategy during the pandemic to take on Ryanair and Wizz Air in a land grab for market share in new countries amid the industry-wide disruption.

Lundgren has instead focused on the less capital-intensive task of growing the package travel business at airline easyJet Holidays, which has grown rapidly and generated a quarter of the airline’s pre-tax profit in the last financial year.

The airline also turned to growth in October when it ordered 157 short-haul aircraft and announced new financial targets, including achieving pre-tax profits of £1 billion in the medium term by reducing winter losses, upgrading the fleet with larger aircraft and expanding the fleet. easyJet holidays.

“We are focused on delivering the medium-term plan and associated financial targets set earlier this year and see Kenton as the ideal person to lead our executive team to this end,” said easyJet chairman Stephen Hester.

Jarvis devised the targets with Lundgren, saying the airline must now “go on a journey of constant delivery”.

“I think we have the right foundations and, when we talk to investors, they really like that the balance sheets look good. We can invest much better than before,” he said.

The company returned to profit for the first time since the pandemic last year, during a record summer that covered the 12 months to the end of September.

Lundgren said the airline was “absolutely focused on another record summer” and on track to achieve its financial targets.

He added that he had worked with the board to ensure an “orderly transition,” and that his departure after seven years, two of which were spent dealing with the chaos of the pandemic, was “the right thing to do.” to do’.

Shares fell 3 percent in morning trading on Thursday after the airline reported leadership changes and cut winter losses.

The airline said it expected another strong summer, but analysts noted that commentary on passenger revenues had weakened during the peak summer.

Pre-tax losses for the six months to the end of March fell to £350 million, and the airline said it expected its planes to be fuller than last year during the summer peak.

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