Stelios Haji-Loannou (Pioneer of Low-Cost Air Travel)

Smart Finance

Born    : 14 February 1967 in Athens, Greece

Money Wise

Alma Mater     : London School of Economics

Occupation      : Entrepreneur

Net Worth       : GBP £1.29 billion

Stelios Haji-Loannou

Stelios is the man who introduced low-cost flying in Britain, and today he is a big guy with a personal fortune of $650 million. But he drives to his favorite casino in Monte Carlo in a tiny, orange (his favorite color) Smart car. He does not gamble, at least not in the casino.

Stelios single-handedly built the easy Jet, the orange-liveried airline from scratch and took on the mighty British airways head on. It might have seemed a surprise move, but the seed for starting a budget airline had germinated much earlier. When Stelios was a student he went to a conference where billionaire Branson was speaking, told him his easy Jet idea and asked him to back him.

Branson was wary not only of budget airlines, but he did not like Stelios’ plan to build a base at Luton, a small town in England located 50km north of central London. Branson said no.

In 1995 Stelios launched easy Jet on his own, from Luton, using two rented 737s with the reservations number in orange on the side, crew in orange sweatshirts, and £29 one-way fares to Glasgow. He advertised as ‘fly to Scotland for the price of a pair of jeans. Cynics thought it vulgar and said no one would fly from Luton. They were wrong. Vulgar orange, along with the brand name and prices that so undercut British Airways’ three-figure fares, proved alluring even to business travelers.

The young Stelios traveled in the mid-eighties to London to study at the London School of Economics. After obtaining a masters at the London Business School in 1988, he returned to Greece to join his father’s shipping empire and the opportunity for a life of opulence and hedonism. (“hedonism” subscribes to a theory that pleasure is the highest good, or whatever causes pleasure is right.)

But two events in the early nineties changed his life. In April 1991 when he is in aged 22, was the chief executive of his father’s business, their tanker, Haven, New up off Genoa, killing five crew members and disgorging up to 50,000 tons of (oil into the sea – arguably the Mediterranean’s worst-ever ecological disaster.

easyjet

The Haven disaster shaped his attitude to safety, influencing him to buy brand new Boeings as soon as he could after setting up his airline. One of his favorite mottoes is still : “if you think safety is expensive, try an accident.”

Then, in 1992, with the events of the Haven disaster still making headlines in Italian media, Stelios began to wean himself from his father’s business. He set ill his own shipping company, Stelmar Tankers. However, there was a big reluctance from his father to let Stelios go his own way. They clashed over business style, Stelios saying things like “we need computers” and his father “sticking to a very traditional style.” It marked the beginning of his flight from the gilded cage, as he has described it. He was still maintaining good relationships with his father and consulted him on important issues. He finally persuaded his father to lend him 5 million and in 1995 came to London to start easy Jet. Today, easy Jet is flying to 44 European destinations, and carries eight million people annually.

He is known as a “serial entrepreneur”, who likes to create businesses, not manage them. He would like to build the business, but does not want to deal will, stockbrokers, market analysts and the administration of it all.

For instance, in 2003, he launched easyCinema in London. It is called the world’s first no-frills cinema. Seats are booked online or by phone. The earlier you book the less you pay. From their own computers, customers print a barcode which they scan at the turnstiles to get into the theatre. There are computers in the cinema itself so that customers can book online while they are there. So there is no need for box office. Another advantage is that the movie-goers can bring their own popcorn and other eatables that are much cheaper than the prices charged by regular cinemas, and movie tickets cost only 20 dollar each.

Easyjet 2

After turning various industries upside down by launching the likes of easy Jet, easy Car and easyCinema, the Stelios’s easyGroup has now set its sights on one of the missing links in its travel to Entertainment Empire, that is accommodation. With easy affordable prices, the scheme called, easy Dorm was launched in London last year, (New York and Paris could be next, according to USA Today).

EasyDorm will concentrate on providing accommodation only, and will not offer a restaurant or other services. Bedding and toiletries will be available for purchase for those customers who do not bring their own. Rooms will consist of pre-fabricated fiberglass units (nothing to break, no dirt accumulation), and come with a shower unit, a lavatory and floor mattresses inspired by Japanese style bedding. An extra charge applies for those who choose not to clean their own room. These budget hotels would cost only $5 a night.

Stelios visits Athens to see his aging mother and sick father frequently. After all, he has to prove to his proud father that he made $1.6 billion out of the $ 5m his father gave his son, albeit reluctantly, years ago.

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