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CEO McCall says committed to easyJet and battle with Ryanair

VENICE, Italy (Reuters) - The chief executive of British airline easyJet EZJ.L dismissed speculation that she was set to quit, telling Reuters on Monday she was committed to the battle with bigger rival Ryanair RYA.I which has started encroaching on its turf.

EasyJet CEO Carolyn McCall thumbs up in front of an easyJet plane during the inauguration ceremony of their new base at Venice airport February 1, 2016. REUTERS/Alessandro Bianchi

easyJet and Ryanair have been locked in a battle for supremacy in the low-cost market for years, with the Irish airline recently upping the stakes by moving to more primary airports and improving its customer service.

That has prompted fears that Ryanair could become a more direct competitor for easyJet and its Chief Executive Carolyn McCall, a threat she dismisses by saying Europe is big enough for the two of them.

“I’m staying at easyJet,” she told Reuters in an interview at Venice airport where she was opening a new aircraft base. “I love easyJet. I really like what I am doing and I am here to stay. No intention to leave.”

Some media reports had suggested last year that she had been in the running to take the top job at British retailer M&S MKS.L, a vacancy now filled by M&S veteran Steve Rowe.

easyJet, Europe's second biggest low-cost carrier, and larger rival Ryanair, have grown to dominate travel in Europe over the last decade, putting pressure on long-established or "legacy" carriers such as British Airways ICAG.L, Air France-KLM AIRF.PA and Lufthansa LHAG.DE on shorter routes.

easyJet has sought to appeal to more business customers in recent years, introducing allocated seating on flights and setting out plans for a loyalty scheme for its frequent fliers.

GROWING CAPACITY

At the same time Ryanair has moved to fly to more primary airports and improve its customer service over the last two years. Both airlines plan to grow capacity, or the number of seats flown, at about the same rate of 7-8 percent in 2016.

“I don’t think they are more of a competitor, I think our competition remains the legacy carriers,” McCall said of Ryanair when asked about the competitive situation compared to two years ago. “There’s a lot for both of us to go for.”

Ryanair upgraded its passenger volume forecasts on Monday by 1 million to 106 million, which some analysts said could be bad news for easyJet’s passenger growth.

easyJet and Ryanair only compete on 6 percent of routes between the same airports, unchanged since 2011, said McCall.

“There’s a lot of profitable growth to come and we know exactly where we’ll put our aircraft to drive profitable growth,” she said, adding that about three-quarters of the growth would come from adding frequencies to existing routes and connections between existing destinations, with the balance from new destinations.

The growth plan and the future challenge were enough to keep McCall hooked at easyJet, she said, where she took over in 2010.

McCall said opening an aircraft base in Venice fits with the airline’s strategy of attracting increasing numbers of business passengers who will now be able to take early morning flights from their companies in the industrialised zones around the picturesque city to business meetings elsewhere in Europe.

Reporting by Sarah Young; Additional reporting by Conor Humphries; Editing by Adrian Croft

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