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Stelios Makes Growth Look Easy

By: Scott KirsnerWed Dec 19, 2007 at 12:38 AM
Stelios Haji-Ioannou, known throughout Europe by his first name, provides cheap travel for the masses. His formula for business success? It's easy -- as in easyJet, easyCar, even easyCinema. Just slash costs, maximize publicity, and "sweat the assets."

Stelios is also candid about the restructuring required to keep easyInternetCafé alive. After an ambitious (and rocky) start, Stelios got rid of easyInternetCafé's original management team and began paring back the cafés' operating costs. The first café, near Victoria Station in London, had a staff of 40, and many of the first generation of cafés, built during the dotcom boom, have 500 or more computers. The new template for a café has vending machines that spit out access passes as though they were Tube tickets, fewer computers, and only four full-time staffers. But even though expansion plans were put on hold last year, only one café, in Antwerp, Belgium, was closed. And the company has recently begun courting prospective franchisees, moving away from a 100%-owned-and-operated model.

On days when Stelios is working from the Camden office (he also spends a third of his time in Athens and a third on the road), he convenes a series of 10-minute meetings with the teams working on easyCar, easyInternetCafé, and easyCinema, the next company to launch.

He serves up questions with the speed and nimbleness of an Olympic table-tennis player. What was the peak PC usage last week in the new Kings Walk Internet café in London? What's the status of the new location for easyCar in Amsterdam, and how many cars can we fit there? A new wireless technology that would allow frequent car renters to gain access to cars without relying on an attendant is discussed briefly. Two of the three meetings actually come in under the 10-minute time limit.

After the last session disbands, it's closing in on 6 PM. Stelios buys a can of Diet Coke before returning to his desk to pound out a few more responses to emails. In the can, there is a missed opportunity: The soda costs 50 pence, regardless of the time of day, the number of cans left in the machine, or the temperature outside. Stelios remarks that he's sad that the Coca-Cola Co. backed away from a much-publicized plan to experiment with yield managing in its vending machines.

"I was so disappointed," he says, smiling. "Think of the possibilities!"

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The Value of Free Publicity
How do you get a new airline off the ground with a startup budget of just $7.5 million? Stelios Haji-Ioannou relied on lots of free publicity. Here are a few of the media-friendly events that Stelios engineered to promote easyJet and, later, easyCar.

When British Airways started Go, an easyJet competitor, Stelios boarded Go's first flight wearing a bright-orange jumpsuit and handed out free easyJet tickets to his fellow passengers.

Later, convinced that British Airways was trying to drive easyJet out of business by undercutting its fares at a loss, he sponsored a contest on the easyJet Web site: Guess Go's annual losses, and win a free flight on easyJet.

In 1999, after the now-bankrupt SwissAir tried to bar easyJet from flying the Geneva-Barcelona route, easyJet found and exploited a loophole: The airline declared itself a tour operator, set up a tent in a Spanish national park that few passengers would actually use, and, by offering a "vacation package," managed to continue flying the route.

Meanwhile, when Hertz Rental Car lodged a complaint about easyCar's advertising in the Netherlands (especially a newspaper ad intended to encourage price comparisons that read, "The best reason to use easyCar.com can be found at hertz.nl"), Stelios and a cadre of easyCar employees put on the orange jumpsuits again and demonstrated in front of a Hertz location in Amsterdam with Dutch signs that read, "What is Hertz afraid of?"

Scott Kirsner (kirsner@att.net) is a Fast Company contributing editor. Visit easyGroup on the Web (www.easygroup.co.uk).

From Issue 64 | October 2002

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