Like most decisions in Brussels, airline deregulation was telegraphed years in advance. The pre-E.U. European Commission laid out a three-stage liberalization process in 1993, with the final step--opening up domestic routes to foreign competitors--coming on April 1, 1997. So entrepreneurs had plenty of time to prepare, which is precisely what Haji-Ioannou (known on the continent as "Stelios") did. The son of a Greek shipping magnate, the London School of Economics�educated Stelios vowed to out-cheapskate even Southwest (by, for instance, charging money for peanuts and water) and add a strong dose of Richard Branson�style flamboyance to build his bright orange brand. With an initial investment of just $7.5 million, Stelios engineered a series of publicity stunts: convincing British television network ITV to launch a reality show called Airline; wearing a comical orange jumpsuit and handing out free easyJet tickets on the inaugural flight of the British Airways�backed low-cost competitor Go (since swallowed by easyJet); offering free flights to anyone who would come down to a Greek courthouse to support his legal fight with local travel agents; and so on.
Stelios' showmanship, combined with a few of his low-cost maxims ("Consumers behave in a rational way when confronted with a value judgment; give them a product at the right price and they will take it"; "Think how can we transfer the workload to the customers"), helped turn easyJet into the fastest-growing of the top 150 airlines in the world, according to Airline Business magazine, and even introduced a new word into the lexicon. "On 28 April, Ljubljana joins easyJet's destination list for an irresistible �80 return," London's New Statesman noted in April. (Travel features on new airline destinations have become a staple of British newspapers.) "All over the capital, Slovenes are bracing themselves for the onslaught of British weekenders. The easyJetters, it is acknowledged, will drink too much and talk loudly about how cheap everything is."
Stelios has stepped back from the day-to-day management of the airline, and now the self-styled "serial entrepreneur" is taking his low-cost "easy" brand and online purchasing model into car rentals, Internet caf�s, cruise ships, and even pizza delivery. "I think easyJet was instrumental in convincing people it was worthwhile to understand how the Internet works," he told The Independent in April. "It's been a watershed decade, an amazing period," he told the Times of London in May.
If Stelios and easyJet were the John the Baptist of European low-cost air travel, RyanAir and Michael O'Leary are Jesus himself--or perhaps the Antichrist. O'Leary, a foul-mouthed, jeans-wearing college dropout of an Irishman, took over RyanAir a decade ago, when it was a minor if profitable Irish airline serving 700,000 passengers a year, mostly between Dublin and London.
In business since 1985, RyanAir got the low-cost religion in 1991 and started aggressively hitting the newly liberalizing European market soon after Stelios popularized the no-frills concept to the masses. Unlike easyJet, however, RyanAir refused to take on popular routes at congested and expensive airports, sticking to a strict diet of cheaper regional flights to keep its prices the lowest in Europe. And unlike Stelios, who projects a friendly, go-getting cosmopolitanism, the 44-year-old O'Leary is a street brawler who has alienated swaths of the U.K. by brashly banning unions, hounding the Irish government to break up its state airport monopoly Aer Rianta, cadging subsidies from desperate airport towns, routinely referring to the European Commission as "the Evil Empire," and responding to his critics with a blanket "bollocks."
RyanAir is notorious for finding inventive ways of "penalizing" its passengers, such as setting absurdly low 15-kilogram (33-pound) baggage limits and charging four euros (nearly $5) for each additional kilo. (I once observed--and suffered heavily from--this practice at sleepy St. Etienne airport in France, where every penalized passenger I talked to said the limit had not been enforced on the flight out from London, where they could have easily switched airlines.) Even wheelchair users were charged an extra �18 ($33) fee, until a British court ruled the practice discriminatory in February. (RyanAir, which says it was simply passing along the standard British Airports Authority surcharge, announced that all tickets would be raised a half-pound to cover the difference.)
Still, the company makes up for customer grumbling by leading Europe in flight punctuality and keeping prices at absurd lows, which it (unlike most of the new low-cost competitors) can afford because of its massive cash reserve. Since O'Leary has taken over, RyanAir has become the most profitable major airline in the world (it had a 19 percent margin in 2003) and has the fourth-largest market capitalization ($4.7 billion as of June 3, just behind British Airways' $5 billion and Lufthansa's $5.5 billion).
From 1998 to 2003, thanks in part to RyanAir and easyJet, low-cost air traffic grew by 600 percent in Europe, compared to just 10 percent growth for full-service airlines, according to Tourism News. Forty new airlines have debuted since the September 11 massacre alone. (More than 100 have been launched in the last decade, but many of those have disappeared.) Europeans who not long ago used airplanes only to cross the ocean are now taking them to visit girlfriends, scope out real estate, and turn the E.U.'s theoretical freedom of movement into a reality.
Doing It for Themselves
A Slovak actor/playwright friend of mine marvels at his industrious college graduate son, who works a good white-collar job in the booming industrial belt adjacent to the Bratislava airport and spends as much free time as possible abroad. "He just flies to Spain or Western Germany like it's no big deal," my friend says, laughing.
Slovaks' freedom of movement has been no laughing matter since Czechoslovakia split up in 1993. Bratislava, whose city limits (and cheap domestic prices) end less than 20 miles from the borders of Austria, Hungary, and the Czech Republic, has been ill-served for decades by the microscopic Stefanik Airport, which makes JetBlue's home in Long Beach, California, look like O'Hare in comparison. "There was no major scheduled airline operating in Slovakia," Saling, the P.R. director for SkyEurope, says. "There was not a single carrier that would connect Bratislava with major European destinations."
No more. SkyEurope, founded in 2001, has brightened Stefanik's dark little corner, operating flights to 13 international destinations for as low as 17 euros. "It's a business, but at the same time it's a mission," says Saling, who did P.R. for three years in the Slovak prime minister's office. "We are giving the people the opportunity to fly. Many of our passengers are going to their destination for the first time. And on the other hand, we've put Bratislava on the map of the low-fare destinations, so people from London, Paris, Milan, and the other cities are flying to Bratislava for the first time."
For the first time in the 13 years I've been visiting Bratislava,
there is a year-round presence of tourists, noticeable even in the
bleak days of early January. The spruced-up Old Town is teeming
with good restaurants and live music venues where a few years ago
there were none. Locals are palpably proud of their city, whereas a
few years ago they were embarrassed. (A friend of mine once
remarked that if Prague was the Left Bank of the '90s, Bratislava
was surely the Cincinnati of the '70s.) And everyone I met wouldn't
stop talking about how packed the caf�s were with foreigners in the
summer of 2003. "It was really a boom of foreign tourists," Saling
says. "It was very different than other years."
SkyEurope is not only doing well for itself. The company is making Stefanik in Bratislava a legitimate low-cost alternative to Vienna's nearby Schwechat Airport. (Airport traffic at Stefanik has nearly doubled since 2001.) SkyEurope is hoping to do for Central Europe what easyJet and RyanAir have done for the West. "It is a low-cost airline based in a low-cost country," Saling says, "which means it has an advantage over any airlines based in a Western country, whose cost base is higher."
There are now 10 SkyEurope flights a day out of Budapest (where it competes with the energetic new entrant Wizz Air); two new regional hub airports, probably in Poland and the former Yugoslavia, will be selected sometime soon. Meanwhile, Austrian Airlines and Lufthansa recently have moved into Stefanik, and Slovaks who rarely used credit cards or the Internet are getting a crash course in both.
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