EasyJet Boss Johan Lundgren Will Step Down Next Year - Latest Global News

EasyJet Boss Johan Lundgren Will Step Down Next Year

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EasyJet boss Johan Lundgren is leaving the budget airline after seven years at the helm and will be replaced by chief financial officer Kenton Jarvis.

Lundgren, who began his career as a tour guide and joined easyJet in 2017, will leave the company early next year. He steered the airline through the pandemic crisis and has since tried to benefit from the recovery in travel.

Analysts said the choice of Jarvis, who joined easyJet in 2021 and previously led travel company Tui’s airline business, as Lundgren’s successor signaled the airline would continue with its current strategy.

Jarvis told the Financial Times he was 100 percent committed to the airline’s current strategy and as such it was a “continuity mindset.”

From his main base at London Gatwick, Lundgren has focused the airline on lucrative routes to major airports across Europe.

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

The airline has successfully competed 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 at many airports is limited.

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

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

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

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

Jarvis worked out the goals with Lundgren and said the airline must now “embark on a journey of continuous delivery.”

“I think we’ve got the fundamentals in place and, speaking to investors, they like the fact that the balance sheets are in great shape. “We’re much more investable than before,” he said.

The company returned to profitability last year for the first time since the pandemic, during a record-breaking summer that included the 12 months ending in September.

Lundgren said the airline is “absolutely focused on another record-breaking summer” and is on track to meet its financial goals.

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

Shares fell 3 percent in morning trading on Thursday as the airline announced the leadership change and pared winter losses.

The airline said it expected another strong summer, but analysts noted that its commentary on passenger returns had softened during the peak of summer.

The pre-tax loss for the six months to the end of March narrowed to £350m and the airline said it expected its planes to be fuller during the summer peak than last year.

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