After Covid turbulence, Johan Lundgren sees a bright future for easyJet

Autumn is traditionally the season when airline bosses get jittery. As kids go back to school and the summer holidays become a distant memory, it is suddenly all too clear which carriers are in dire straits. 

In recent years, this has included Thomas Cook and Monarch, which both collapsed during the dreaded September and October slump. 

According to easyJet boss Johan Lundgren, more are likely to go under this winter. He says: ‘I would have thought there were going to be more failures than mergers and takeovers this year. 

‘For a number of airlines it looks pretty bad and if you’re coming into a difficult period right now…’ he trails off, before adding: ‘There are going to be some airlines which will have a very tricky situation ahead of them.’ 

He points to Blue Air, a Romanian carrier which appears to be buckling, as a recent example in Europe. 

Does he have any idea which other airlines are vulnerable? ‘Yes,’ he says, leaning forward and smiling. ‘But I’m not going to tell you,’ he adds. 

While his rivals may be quaking in their boots, the former classical trombonist and coach tour guide is calm and collected. He says easyJet is one of the ‘least indebted airlines’ and ‘one of the few that has an investment-grade credit rating’. 

The FTSE250-listed firm was forced to ground its fleet for 11 weeks during the lockdowns in 2020 without knowing when flights would start up again. It haemorrhaged cash during that time and within months raised more than £5.5billion through share sales, refinancings and loans. 

Once flights did restart, the UK was subject to constantly changing travel guidance and restrictions, which put many customers off going abroad. 

Even last year was difficult to navigate as the UK remained at odds with the rest of Europe, where vaccinated travellers were able to move around with relative ease. 

‘People in the UK don’t recognise that Europe was flying last summer,’ he says 

Lundgren, 55, is the quiet one compared with his arch-rival Michael O’Leary, the boss of Ryanair, but he was a vocal critic at the time of this messy guidance. 

When the UK’s restrictions were finally lifted in March, Lundgren and his team planned to come back with a bang with an ambitious expansion in the flight schedule. But after disruption in the Spring, it axed 10,000 flights from its summer slate in early July. 

But, in what may be a surprise to many who were forced to rearrange their first holiday since Covid struck in 2020, Lundgren insists easyJet’s customer ratings have actually improved. 

‘If you’re looking at July and August, we flew 16million customers over those two months with lower levels of disruption on the day than we had in 2019. But it’s been difficult, because not everything is within your control.’ 

The ‘summer of discontent’ also seems to have thwarted early expectations that easyJet could post a profit this year, after racking up a loss of £1billion in 2021. 

In May, Lundgren refused to give any guidance but said cryptically he was ‘not unhappy with the consensus out there that we’d be making a small profit’. 

Is this still on the cards? 

He hints the answer is ‘No’ though he declines to say so explicitly. 

‘We’ve never given any guidance on results for this. We will have a summer that’s profitable but the annual results are a different thing.’ 

He points again to following analysts’ guidance, which currently forecasts a loss of £127million.

The airline recently said its holiday business would turn a profit of at least £35million, though the extent of the flight disruption will become clear on October 13, when it releases its full-year figures. 

This will hopefully be a better day for Lundgren than the third-quarter update, when he and his wife were moving from a flat in Marylebone, Central London, to a house a few miles away in Hampstead with a garden for their dog, Molly, who heartbreakingly died on the same day. 

‘I loved that dog, I didn’t want a dog in the beginning, I really didn’t. But I lost, three against one, the family did and I didn’t. When we worked from home during the pandemic she was always there.’ 

While many airlines struggled to stay afloat, Lundgren had the added pressure of a vicious boardroom row – and an attempted coup – from easyJet’s biggest shareholder Stelios Haji-Ioannou, who founded the company in 1995. 

Stelios, who dubbed the directors ‘scoundrels’ and took particular umbrage with an order for more than 100 Airbus jets, at one point attempted to oust half of the board, including Lundgren. 

Tensions have since eased, with Stelios selling down part of his stake and relations are cordial between him and new chairman Stephen Hester. Lundgren shakes his head. ‘I’m harder on myself than [Stelios] ever could be.’ 

Now that Lundgren has seen easyJet through the pandemic, and almost out to the other side, does he have any plans to move on? 

‘No I have rarely planned my career in that way, I never did when I was younger.’ 

Lundgren had a more colourful start to the working world than most. A passionate musician, he left school at 16 to study the classical trombone and spent three years playing under some of the biggest names in Sweden, the UK and the US. 

But when he realised he would never reach the heights he hoped, he abandoned music entirely and began a career in the travel industry by becoming a tour guide on trips to the former Soviet Union. 

His brother Per, to whom Johan donated a kidney, is a musician. 

He then rose through the ranks at TUI, where he became second in command, before replacing Carolyn McCall, who moved to become ITV chief executive, in December 2017 at easyJet. For now, Lundgren’s eyes are firmly fixed on the future. He last week unveiled a wide-ranging plan to cut its carbon emissions that will see it use more efficient planes, sustainable fuel and carbon-capture projects. 

He has long lambasted the idea of environmental taxes, insisting they would result in travel becoming the preserve of the rich. 

In the shorter term, the potential for worried customers to tighten the purse strings is the biggest threat to easyJet this winter, though it has the advantage of being at the budget end of the market. ‘We are generally better off than our competitors when we’re heading into recessions and downturns,’ he says. 

But even he has to admit the choices for ordinary people are getting harder. ‘If people are struggling to pay their bills and, you know, do whatever they need to do in order to just make the house go round, that of course can have an impact,’ he says. 

Still, he maintains, holidays are still important. ‘We know people don’t want to let go of their holidays or to not go to see friends or family.’ 

He adds: ‘I think tourism is generally a force for good and it’s ultimately something that people value and treasure so much.’