EasyGroup jumpstarts no-frills bus
By Tony Whincup
LONDON, England (CNN) -- The no-frills ethos of easyJet will be brought down to earth with a new bus venture to begin later this summer in the United Kingdom.
EasyBus will start pilot services along the M1 corridor in mid-July between Brent Cross in North London and Milton Keynes in Buckinghamshire.
The foray into road transport is a first for the London-based easyGroup, which apart from its easyJet airline has also expanded into the Internet café, cinema and car rental markets.
Unlike traditional coach routes, easyBus will avoid congested city centers altogether, instead operating between suburbs using 16-seater Mercedes minibuses.
The founder of the easyGroup brand, Stelios Haji-Ioannou, is keen to capitalize on the growth of the Internet and people-carriers to give more established operators a run for their money.
"The only reason (London's) Victoria Coach Station exists is demand aggregation -- so that people know where to pick up the bus," he told CNN. "The time has come to by-pass the hubs and take people from anywhere to anywhere."
While Haji-Ioannou admits there are far fewer 'frills' in the coach market to cut out than in the airline industry when easyJet was launched in 1995, he draws a parallel between the two types of travel.
"The Boeing 737 was a relatively small aircraft back then and I think it has found it's equivalent in the coach market today in the minibus," he says.
The high-frequency service will also mirror the airline's price-demand strategy: the earlier you book, the less you pay, with fares starting at £1 ($1.76).
EasyBus' principle rival in the market, Megabus, owned by Stagecoach, recently saw its Oxford-London route break into profit just eight months after its inception.
Stagecoach's Chief Executive, Brian Souter, says the key to such services being successful lies in persuading people to give up their cars.
"Of the 35 to 40 percent of our generated traffic, ie. people who wouldn't have otherwise made the trip if our service didn't exist, many have left their cars to use Megabus," he said.
But Denis Wormwell, the man at the wheel of Europe's largest coach operator, National Express, doubts whether either will make money in the medium- to long-term.
"Anybody can sell pound notes for ninety pence," Wormwell told CNN. "But you need to manage yields properly and a model based on selling everything cheap is not the way forward."
