Airline entrepreneur beds down in Basel

In August Stelios attended a photocall at his easyHotel in London Keystone

Having turned the airline industry on its head, the founder of easyJet tells swissinfo why he has chosen Switzerland to launch his first easyHotel outside Britain.

British-Greek entrepreneur Stelios Haji-Ioannou also explains why he selected Geneva and Basel as hubs for his low-cost airline.

Stelios, as he prefers to be called, founded easyJet in 1995 with two leased aircraft. The airline has since expanded to become one of the largest low-cost operations of its kind in the world.

easyJet is the biggest airline at Geneva airport in western Switzerland and earlier this year it announced plans to expand existing operations to and from Basel.

Last year the carrier withdrew services from Zurich – Switzerland’s largest airport and home to national airline Swiss – due to expensive airport charges.

Stelios opened his first easyHotel in London last month. Like its counterpart in the British capital, the new hotel in Basel offers small, cut-price rooms which can only be reserved online.

swissinfo: Are you spending the night at the easyHotel Basel?

Stelios Haji-Ioannou: Yes, absolutely. I’m staying the night in one of the smallest rooms without a window and I love it.

swissinfo: Switzerland has a reputation for being expensive as a tourist destination, and people in the tourist industry say they cannot offer better deals because of the high cost of goods and labour. What advice can you give the Swiss?

S.H-I.: We’ve managed to make relatively small rooms acceptable for use. Everybody is complaining about expensive real estate, but we can get more rooms out of it and have a high yield on property.

In our London hotel we employ only four people but can have the property attended 24 hours a day, seven days a week. We don’t offer room service and we don’t try to run a restaurant at the same time.

I think because Switzerland is a high-cost country in terms of labour and property, the easyHotel concept can make a difference. I think it will work anywhere where property prices and labour rates are high. Switzerland fits both these rules.

swissinfo: Geneva and Basel have grown into important hubs for easyJet. Do you see Switzerland as a test market for your businesses?

S.H-I.: The easyGroup, and me personally, have an affinity to Switzerland because of our early battles with [the now defunct] Swissair. I have very fond memories of those days back in 1998 when we were trying to open up Geneva and the skies of Switzerland.

We’re well known here, I think easyJet has almost home-carrier status in Geneva. The people of Geneva consider it their airline. Whenever I’m looking at a new business, I think about how I can link it to Switzerland.

swissinfo: How important was it to have the Geneva airport authorities agree to turn their old terminal into a low-cost terminal, to serve the needs of airlines like easyJet?

S.H-I.: I think airports everywhere, not just in Switzerland, should find ways of making airports cheaper for the consumer. An airline like easyJet spends about a third of its costs on airports. People complain about fuel prices, and there’s a lot of talk in the media every time oil prices go up that air tickets will get more expensive, but in reality airports are much more expensive than fuel and I think every airport should make an effort to make facilities more efficient and therefore cheaper for the consumer.

swissinfo: Have you received similar incentives from the Basel airport authorities?

S.H-I.: I don’t want to get into specifics about deals with individual airports.

swissinfo: You say airport fees are often prohibitive. What are the main challenges to low-cost airlines?

S.H-I.: There’s no doubt in my mind that there are too many low-cost airlines, or too many airlines that call themselves low-cost. At last count there were still 50 of them.

My prediction has always been that Europe will consolidate in terms of the aviation industry. I think there can only be three large intercontinental long-haul airlines centred around… Britain, France and Germany. The other smaller flagship carriers will have to consolidate with them, and then there will be two large low-cost carriers like easyJet and Ryanair and then maybe one or two others.

swissinfo: What plans do you have beyond easyHotel?

S.H-I.: So far I’ve created a total of 15 products. easyJet was the first that I created ten years ago, and easyWatch.com, which is online watch retailing, is the latest.

swissinfo: You’re taking on the Swiss watch industry?

S.H-I.: I’m taking on Mr Hayek [Nicolas Hayek, chairman of the Swatch Group].

swissinfo: Some would say you have a similar approach to business…

S.H-I.: I admire him for what he’s done. I think he’s a great entrepreneur but I think he’s failed to understand the power of the internet when it comes to retailing. He still sells most of his watches through shops. easyWatch.com is trying to change the way people buy watches.

swissinfo-interview: Dale Bechtel in Basel

Key facts

History of the easy brand:
1995: easyJet founded.
1998: establishment of easyGroup of companies, including a budget car-rental firm, online music downloading and telecom services.
2005: opening of easyHotels in London and Basel.

In brief

The rooms in both London and Basel are clean but small (very small or standard), with tiny ensuite bathrooms but no furniture. Some have no windows. Reservations can only be made over the internet.

At the opening in Basel, Stelios boasted that without any advertising, the London hotel already had an average occupancy rate of more than 90%.

The Basel hotel, operated on a franchise basis, has managed to have 50% of its rooms booked in its very first week.