Podcast notes
The business news that matters
Hello and welcome to the latest edition of Off to Lunch…
The latest episode of our Business Leader podcast features an interview with Sir Stelios Haji-Ioannou about building easyJet and entrepreneurship more broadly. The episode features more insight into the challenges of scaling-up a business - in particular, what happens when the market leaders fightback.
EasyJet’s first flight was in November 1995. Less than three years later, in May 1998, with easyJet and Irish rival Ryanair growing fast, British Airways launched its own-cost airline called Go.
EasyJet and Sir Stelios gatecrashed that launch by buying tickets for the first flight and turning up dressed in orange boiler-suits. But despite this marketing ploy, easyJet still faced a big new challenge and competitor. This is what Sir Stelios says about that challenge in the podcast episode:
“I thought it was a backhanded compliment in the sense that it confirmed the business model in Europe. I remember having a quiet chat with the chap who was chairing Ryanair at the time, David Bonderman. He told me it's not a bad thing because it shows that it’s not something that only the Paddies and Greeks do, but also the British. Remember, it was the Irish and me, a Greek, that was actually doing low-cost until that point. All of a sudden the mighty British Airways endorses the low-cost business model. So it was a backhanded compliment because it endorsed the business model in Europe. From that point onwards, people accepted that it's a different way of flying, but it's safe and acceptable.
“The other thing is that I called the lawyers. We didn't hesitate to go to court and claim unfair competition. I think that actually forced them in the end to sell the business to 3i and then we bought it from 3i. In competition law there is something called abuse of dominant position. So when you have a dominant position, like British Airways did in 1998, you don't want to be accused in court by a smaller competitor that you're abusing your dominant position. So it was the use of legal means that I think kept them honest.”
As Sir Stelios touched on there, easyJet eventually bought Go for £374 million in 2002. Today easyJet is valued on the stock market at £4.3 billion and is the largest airline in the UK by passenger numbers.
You can hear more of the easyJet story and listen to the episode in full on Substack here, Apple here or Spotify here
Other stories that matter…
1. Zuber Issa could offload his 22.5 per cent stake in Asda, according to weekend reports. Zuber Issa bought Asda alongside his brother Mohsin Issa and private equity firm TDR Capital for £6.8 billion in 2021. Zuber has approached buyout firms and other retailers about a deal, according to a story in The Sunday Telegraph, which you can read here. This story has emerged just days after Mohsin Issa confirmed that he is in a romantic relationship with a former partner at EY, the accountancy firm, which used to be Asda’s auditor. You can read more on that here. I also recommend reading a background piece on this story from Manchester-based business journalist Chris Maguire. You can find that here
2. More than eight in ten UK companies expect to increase the price of their goods or services over the next two years despite inflation easing, according to a new report by PwC. More from The Times here
3. Sir Tim Clark, the president of the airline Emirates, has made some remarkable comments about Boeing. Clark said that Boeing was in "last chance saloon” and that he had seen a “progressive decline” in its performance. Emirates is a key customer for Boeing, the planemaker. He made the comments in an interview with the Financial Times which you can read here
4. The Information, the tech website, has published a fascinating piece about how Steve Jobs, Larry Page, Sheryl Sandberg, Satya Nadella and other key business leaders in Silicon Valley have used executive coaches. These coaches have advised them about how to run and manage their companies. The piece also looks at the price of these - at least $2,000 a month - and who the most popular ones are. You can read the piece here
5. The latest newsletter on tech from analyst Benedict Evans (you can sign-up for it here) has unearthed a remarkable article from The New York Times in 1985 that looks at why laptop computers will never be popular. Here is one extract: “On the whole, people don't want to lug a computer with them to the beach or on a train to while away hours they would rather spend reading the sports or business section of the newspaper.” The piece is a great example of how new technology can take a while to reveal its benefits and what makes it succeed in the end. You can read the piece in full here
And finally…
Here is a unique opportunity for an entrepreneur in the UK. Richard Harpin, the founder of HomeServe and owner of Business Leader’s parent company, is offering a CoachMent session to an entrepreneur. This is a personalised mixture of coaching and mentoring. The deadline to apply for the session is this week. You can find more details here and apply here
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Best
Graham