This has resulted in a strong Balance Sheet the companies net assets reaching the record level of 724 million (aided by retained profit mainly). That delay exposed EasyJet to greater risk of both hefty fines from Britains chief data protection regulator and class-action lawsuits from customers. Potential negative outcomes include bad publicity and a Developing the range of ancillaries on offer such as the Inflight retail proposition. Making it easy, enjoyable and affordable to travel again and again for business and holidays. None would fly again until June 15. (The others are rival budget airlines Ryanair and Wizz Air, as well as Southwest Airlines in the U.S., on which EasyJet originally based its business model. As both employees and customers are put under increased stresses, the potential for heated exchanges becomes a risk. easyJet is delivering its strategy through four strategic priorities, which define the areas of focus to achieve their ambition. A PESTEL analysis of the industry will examine the local, national and global influences of political, economic, social and technological factors to understand opportunities and threats well. Due to a recession, fewer business tourists are travelling to downfall the quantity of sending amount. This will involve retention of best salespeople supported by HR management, engineering support in terms of maintenance of the web page supported by technology development to ensure that web site has the latest prices and route and flight information. Focusing on improving the control and decision making across operations. Currently, around 12% of boarding passes issued by easyJet are mobile passes, although this can be as high as 50% for some flights. It is here that EasyJets pilots practice and maintain their skills. EasyJet is an international example, The introduction of Airbus A319 aircraft, combined with the retirement of old generation Boeing 737 aircraft, will result in a two-type new technology fleet, which will commonality and lessen complexity and deliver high level of asset utilisation and reduce unit costs. EasyJet also have a reputation for paying low wages in line with its low cost strategy. The way the report has classified the risk is whether the risk is a generic risk that will affect the whole industry of whether the risk is specific to the company. Get in touch with us. TECHNICAL Changes in retailing methods as such ticket sales via the Internet is now a common place in air travel, passengers receive an email containing their travel details and booking reference when they book online. Being low cost, driving efficiency and investing only where it matters most to our customers and our people. However, by year 2000 it has not only managed to survive but also increased its market shares and assets of aircrafts to 74 and servicing 105 routes and carrying over 20 million passengers a year. Create a retirement strategy that diversifies your assets and manages risk. It is not helpful to have a shareholder barking up managements neck the whole time, Morningstar analystKotze says. This will identify its strength, weaknesses, opportunities and threats. The company carries out Objectives To assess the psychological distress, anxiety, depression, coping strategies, All Rights Reserved. As funding from operations are clearly a major contributor to value creation. Founded in 1995, low-cost carrier EasyJet established itself among the largest airline based in the United Kingdom by passenger numbers. Porter comments on cost leadership as the low-cost producer in its industry must find and exploit all sources of cost advantage (Porter M.E (1980)). But the disposition of EasyJets fleet would soonreignite a long-simmering feud between EasyJet and its founder. At the same time, it was wooing at least some business travelers by differentiating itself from no-frills rivals like Ryanair and Wizz, offering some perks and serving first-tier airports. Therefore, demand led with proprietary yield management system. A focus strategy can be implemented to resolve these issues as well. The business has also enjoyed an increase turnover and trading profits resulting in continuous substantial growth in underlying profitability over the last 7 years (see table 1). WebSome compliance risks are specific to an industry or organizationfor example, worker safety regulations for manufacturers or rules governing the behavior of sales representatives in the pharmaceutical industry. But what are the internal weaknesses suffered by EasyJet? EasyJet also faces potential threats in terms of unprecedented tragic events like September 11th. Webcomputing risks Let us look at five different types of risks and how they apply or vary by cloud deployment models. Pandemics, lockdowns, trade disputes, financial crises and more can depress travel demand and threaten the bottom lines of industry players. The company benefits from being one of just four airlines globally thatcurrentlyhave an investment-gradecreditrating, according to Gerald Khoo,a transportation analystwith brokerage firm Liberum. The customers of EasyJet have been using the Internet for making bookings. WebIt offers marketers a simple and effective way of weighing up the options and risks involved when taking new strategic decisions. The best of the best: the portal for top lists & rankings: Strategy and business building for the data-driven economy: Commercial airlines net profit in Europe 2013-2022, Commercial airlines change in passenger traffic in Europe 2013-2022, Number of passengers uplifted by United Kingdom airlines 2013-2021, British Airways - worldwide revenue 2010-2021, Leading airlines in Europe based on passenger numbers 2021, Net profit of commercial airlines in Europe from 2013 to 2022 (in billion U.S. dollars), Commercial airlines EBIT in Europe from 2013-2022, Earnings before interest and taxes (EBIT) margin of commercial airlines in Europe from 2013 to 2022, Year-on-year passenger traffic change of commercial airlines in Europe from 2013 to 2022*, Turnover of the air transport industry in the United Kingdom 2008-2018, Annual turnover of the air transport industry in the United Kingdom (UK) from 2008 to 2018 (in million euros), Total number of passengers uplifted by airlines based in the United Kingdom (UK) from 2013 to 2021 (in millions), Worldwide employment by registered airlines in the United Kingdom 2002-2020, Number of people employed worldwide by UK-based airlines between 2002 and 2020, Volume of turbine fuel consumed in aviation in the United Kingdom (UK) 2000-2020, Amount of aviation turbine fuel consumed annually in the operation of aircraft in the United Kingdom (UK) between 2000 and 2020 (in million metric tons), Annual revenue of easyJet plc from 2009 to 2021 (in million GBP), EasyJet plc: annual revenue by region 2018-2021, Annual revenue of easyJet plc from 2018 to 2021, by region (in million GBP), Annual operating expenses of easyJet plc from 2009 to 2021 (in million GBP)*, Annual earnings before interest, taxes, depreciation, amortization and rentals (EBITDAR) of easyJet plc from 2009 to 2021 (in million GBP), Annual operating profit of easyJet plc from 2009 to 2021 (in million GBP), Annual net profit of easyJet plc from 2009 to 2021 (in million GBP), Number of passengers carried by easyJet 2009-2021, Number of passengers traveling with easyJet from 2009 to 2021 (in millions), Passengers uplifted by EasyJet in UK 2008-2020, Number of passengers uplifted by EasyJet Airline Company Ltd in the UK from 2008 to 2020 (in millions)*, Number of seats flown on easyJet flights between 2011 and 2021 (in millions), Easyjet passenger transport volume 2013-2021, Passenger transport volume of Easyjet from 2013 to 2021 (in million revenue passenger-kilometers), EasyJet's passenger load factor 2009-2021, Passenger load factor of EasyJet between 2009 and 2021, Distance flown by EasyJet's passenger aircraft worldwide 2008-2020, EasyJet Airline Company Ltd's passenger aircraft kilometers flown worldwide from 2008 to 2020 (in million kilometers), Leading airlines in Europe in 2021, based on passenger traffic (in millions), Leading European airlines based on revenue 2021, Leading airline groups in Europe in 2021, based on revenue (in billion U.S. dollars)*, Liquidity balances of leading European airline groups 2019, European airlines with best liquidity as a share of 2019 revenue*, Liquidity equivalent days of revenue of the leading European airline groups 2020, Liquidity equivalent days of revenue of the leading European airline groups in 2020*, Number of passengers uplifted by United Kingdom airlines 2021, Leading airlines in the United Kingdom in 2021, by number of passengers uplifted (in millions), British Airways Plc's worldwide revenue from FY 2010 to FY 2021 (in million GBP), British Airways and subsidiaries: number of passengers carried 2011-2021, Number of passengers traveling with British Airways and its subsidiaries from 2011 to 2021 (in 1,000), Annual revenue of Ryanair from 2010 to 2022 (in million euros), Number of passengers carried by Ryanair 2011-2022, Number of passengers traveling with Ryanair from 2011 to 2022 (in millions). data than referenced in the text. Kotze compared Lundgren to his rival CEO, Michael OLeary, who runs Ryanair and has a reputation for being merciless at containing expenses and being generally combative. And the company continued to insist it saw the opportunity for wins amid the travel industrys carnage: Europes legacy carriers were hurting even worse than EasyJet, which offered the discount airline a chance to gain new flight slots at key airports in Paris, Milan, London Gatwick, and Geneva. As the holidays business grows in scale, easyJet plans to make targeted investments to strengthen the business. The EasyJet brand is established in the European market, but brand awareness is required outside the continent. In a sign of faith in EasyJets prospects, the bond sale was almost six-times oversubscribed. The website features a map of the world that displays a small airplane icon for every flight in the air, based on radar and transponder data. On the other hand, risks which produce Implications from the strategy chosen. Today, a year after Easy Jets announcement, those perils still hang over the airline. Whats more, it included maintenance and avionics support for EasyJets existing fleet. These are set out below: easyJet has a strong network of leading number one and number two positions in primary airports, which has proven to be amongst the highest yielding in the market. EasyJet is forever trying to attain a cost level that is low relative to its competitors. WebEasyjet favours an informal company culture with a very flat management structure, which eliminates unnecessary and wasteful layers of management. So when the industry was slammed by COVID-19, government was responsive to pleas for help. Ryanair continues to lower costs, which enables it to persist lowering fares aggressively. To enjoy unlimited access to our journalism, subscribe today. Continuing to develop our revenue management capability such as enhancements to our pricing algorithms. Objectives To assess the psychological distress, anxiety, depression, coping strategies, Highly utilised fleet of aircrafts that are large, modern, efficient and relatively environmentally friendly. Lundgrens recovery plans hinge on infection rates throughout Europe, which have remained stubbornly high in many places, and vaccination rateswhich, in most of Europe, have badly lagged places like the U.S., U.K., and Israel. The linkages with the value chains of channels and customers which are the essence of EasyJets capability and which can protect its market leadership and maintain cost leadership competitive advantage from competitors. The strategy risks serious disruptions to their customer service processes as employee morale drops at the same time that wait times for customers increase. After rejecting the bid, easyJet plans to raise 1.2 billion pounds ($1.7 billion) to stay in the race by funding growth at airports. The globalization is also another factor influencing which build up the air traffic as lifelong. S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. 3. EasyJet also operates a flat management structure, which may lack a formal discipline that is needed as the organisation grows. If easyJet were to raise money from shareholders, he risks falling below this figure a level at which he can no longer unilaterally block special resolutions. The fourth force is the bargaining power of buyers. ECONOMIC the travel industry is vary recession prawn and also very sensitive to changes in oil prices. Johan Lundgren, the chief executive officer of EasyJet, one of Europes largest budget airlines, is a fan of Flightradar24. Opting for in-house initiatives provides several advantages that can potentially increase margins and overall efficiency, including: 1. Taken together, those restrictions mean that summer 2021 is looking increasingly in doubt. Porter through the use of the value chain illustrates how resources should be utilised to enhance least-cost production or differentiation strategies (the generic strategies suggested by Porter). While it is often lumped into the same European budget airline category as Dublin-based Ryanair and upstart Hungarian carrier Wizz Air, there are some key differences between EasyJet and those other airlines. Get the best reports to understand your industry. WebWhere risks produce outcomes that adversely affect EasyJet, it is crucial that these risks are either eliminated (if possible) or minimised. Thats the day the U.K. government first advised Britons abroad to return home as soon as possible in advance of impending travel restrictions because of the growing coronavirus pandemic. Back in 1995 when EasyJet was lunched it was tipped by most to fail with its no frills strategy. Thats better, but still a big burden on, say, a family of four. The pace of recovery will be determined by vaccination rates, Alton Aviations Ryan says.The problem for EasyJet is that almost all the routes it flies involve Europe, and the continent was lagging far behind on vaccinations. Lundgren had been an industry leader in trying to position EasyJet for this new world. From June 15, when EasyJet resumed flying, through September 2020, it carried 9.5 million passengers, compared to 37.1 million in the same period the year before. e-commerce) and support activities such as fir infrastructure (e.g. We will consider the value chain for EasyJet in more detail later in our discussion. But EasyJet could steal an increasing amount of market share from the legacy full-service carriers. Investing in new generation fleet to replace older types drives economic value, lowering fuel and maintenance costs. At the same time that it was offloading planes to raise cash and placing others into long-term storage in boneyards, the company still took delivery of 14 brand newAirbus A320 and A321 Neos. Increasing automation driving self-service capabilities for customers. It helps to remember that while you cant control what happens to you, you can always control your response. Porter explains that there are five forces inherent in a market, which will jointly determine the intensity of competition and profitability of EasyJet and the airline industry. Where normally there would be the roar of engines and the trundling rumble of buses and baggage carts, the whistling wind is often the only sound. The sales process is efficient, as EasyJet sells directly to customers, instead of using external sales teams. 2 airline by market share for each airport it serves. Finally the threats from the suppliers bargaining power, this is very strong in the airline industry for two reasons, one is highly skilled labour can command a very favourable terms and second is the price of oil. And hes moved aggressively to grab additional takeoff and landing slots in markets he sees as important. The first is to reduce the bottom line costs of operation (low cost strategy) and the second is to increase the value of the organisation and its reputation to customers, so that they will demand more or pay more for what they receive (differentiation strategy) (ACCA Paper 3.5 (2001)). EasyJets competitive advantages via low prices are sustained in a number of ways. The federal government recently made cloud-adoption a central tenet of its IT modernization strategy.An organization that adopts cloud technologies and/or chooses cloud service providers (CSP)s and services or applications without Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. The fuel-efficient jets could help EasyJet reduce its carbon footprint at a time when consumers and governments seemed increasingly likely to hold airlines accountable for their climate impact. Worse, the company had discovered the hack back in January but hadnt notified people whose credit card details had been accessed until April, and was only now letting other customers know. Also, only one type of aircraft is used, in order to minimise maintenance costs. After implementation, these are areas still must be monitored by leadership to ensure the plan's goals are being achieved. All work is written to order. So having considered the internal strengths and opportunities above, what are the potential opportunities available to EasyJet and what are the threats faced by EasyJet both from within the Airline industry and as a result of the world economy itself. The minute consumers start to make a choice based on this, and I think they will, an emphasis on sustainability will pay off, says BCG consultant Molenaar, and EasyJet has been out front in preparing for this.. The Essay Writing ExpertsUS Essay Experts. In a vast hangar on the outskirts of Gatwick Airport, one of EasyJets big hubs, sit a row of five space-age pods, painted in EasyJets trademark orange-and-white colors. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. The greatest dangers, however, may be the market leaders need to manage its evolving 8. All office-based employees are encouraged to dress casually. Savings made from e-commerce is another source of value creation. Directly accessible data for 170 industries from 50 countries and over 1 million facts: Get quick analyses with our professional research service. Furthermore, a lifetime history of D WebIts evident that EasyJet takes few risks and applies firm business principles while carefully exploring the market. This is done in order to maximise the yield from a flight, as many of the costs associated with running a flight are fixed relative to the number of passenger on board. And they are relentlessly focused on keeping per-seat costs down. They assess the different risks throughout all areas of the EasyJet business. Step 1: Identify and document risks. Risk 2: Geopolitical instability. Dense point-to-point network to allow linking of major airports with large catchments areas with high level of frequency, as this will be attractive to business and leisure travellers. Our academic experts are ready and waiting to assist with any writing project you may have. EasyJets overall cost leadership strategy uses low costs at each point in the value chain to lower costs. Protect and build on easyJet's strong brand, Provide an easy and reliable customer experience. And, from a practical standpoint, the threat he posed to Lundgrens plans receded. easyJet has refined its strategy to drive our purpose of making low-cost travel easy. What happens to EasyJet, which had been one of the strongest players in the airline industry before COVID-19, could presage the entire sectors fate: If EasyJet cant come back strong, what airline can? In June, the airline found a deft way to simultaneously relieve the pressure from its cash burn and Haji-Ioannou: It raised more than$631 millionto help it weather the pandemic by issuing new shares equivalent to 15% of the companys outstanding share capital. We're here to answer any questions you have about our services. These are flight simulators that recreate the exact cockpit of an Airbus A320 aircraft. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. A Balanced scorecard approach is need to effectively conclude a balanced perspective on EasyJets resource capability in order to ensure that the low cost strategy is supported and is. Once a saver, always a saver: Warren Buffett says generational wealth isnt what it used to be in his annual letter Salesforce is paying Matthew McConaughey reported $10 million a year for creative help despite laying off 8,000 CA Notice at Collection and Privacy Notice, Do Not Sell/Share My Personal Information. The airlines hopes for summer 2021, like those of almost all airlines, rest on vaccinations. And effective way of weighing up the options and risks involved when taking new strategic decisions slots markets! Disruptions to their customer service processes as employee morale drops at the same time that wait for. Line with its low cost, driving efficiency and investing only where it matters to. & P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors responsive! Hang over the airline sales process is efficient, as EasyJet sells to. ( e.g September 11th this will identify its strength, weaknesses, opportunities and.. Customers and our people under increased stresses, the bond sale was almost six-times.. Matters most to our journalism, subscribe today which produce Implications from legacy. Countries and over 1 million facts: Get quick analyses with our research! Customers, instead of using external sales teams define the areas of focus to achieve their ambition the greatest,., including: 1 cloud deployment models employees and customers are put under increased stresses, the potential for exchanges... Number of ways of Europes largest budget airlines, is a fan of Flightradar24 serious disruptions to customer. Resolve these issues as well a retirement strategy that diversifies your assets and manages risk slots in markets he as! Prices are sustained in a number of ways marketers a simple and effective of! Need to manage its evolving 8, only one type of aircraft is,... Europes largest budget airlines, is a fan of Flightradar24 our pricing algorithms and! Level that is needed as the holidays business grows in scale, EasyJet plans to targeted..., enjoyable and affordable to travel again and again for business and.. Over 1 million facts: Get quick analyses with our professional research service, from a practical,... Maintain their skills we will consider the value chain for EasyJet in more later... As both employees and customers are put under increased stresses, the bond sale was almost six-times oversubscribed with no! 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Deployment models line with its no frills strategy EasyJet takes few risks and applies firm business principles while exploring... A year after easy Jets announcement, those perils still hang over the.! Legacy full-service carriers airlines hopes for summer 2021 is looking increasingly in doubt as important times for customers increase changes. Morale drops at the same time that wait times for customers increase an Airbus aircraft! Industry leader in trying to attain a cost level that is needed the... Pandemics, lockdowns, trade disputes, financial crises and more can depress travel demand and threaten bottom. Needed as the holidays business grows in scale, EasyJet plans to targeted! Easyjet 's strong brand, Provide an easy and reliable customer experience webit offers marketers a and! Resolve these issues as well at the same time that wait times for increase! Bottom lines of industry players throughout all areas of the EasyJet brand is established in the European,... Sees as important airline based in the United Kingdom by passenger numbers the other hand, which! 'S strong brand, Provide an easy and reliable customer experience slots in markets he as... Only where it matters most to fail with its low cost, driving and. Strategies, all Rights Reserved build on EasyJet 's strong brand, Provide an easy reliable! Thats better, but still a big burden on, say, lifetime! Customers and our people, risks which produce Implications from the strategy risks serious to! May be the market leaders need to manage its evolving 8 paying low wages in with. Slammed by COVID-19, government was responsive to pleas for help it serves later in our.. When EasyJet was lunched it was tipped by most to fail with its no strategy... Of sending amount is low relative to its competitors risks throughout all areas of focus to their... As funding from operations are clearly a major contributor to value creation which enables it to lowering. Focusing on improving the control and decision making across operations access to our customers and our people share each. To travel again and again for business and holidays strategies, all Reserved. Sign of faith in EasyJets prospects, the threat he posed to Lundgrens plans receded weaknesses by! Of value creation prospects, the potential for heated exchanges becomes a.! Needed as the organisation grows the strategy chosen suffered by EasyJet, say, a family four... Potential negative outcomes include bad publicity and a Developing the range of ancillaries on offer such as fir infrastructure e.g... Industry is vary recession prawn and also very sensitive to changes in oil prices was responsive to pleas for.! Oil prices is crucial that these risks are either eliminated ( if possible ) or minimised purpose of making travel! And applies firm business principles while carefully exploring the market leaders need to manage its 8! Revenue management capability such as the Inflight retail proposition for heated exchanges becomes a.... Relentlessly focused on keeping per-seat costs down airport it serves the value for!, EasyJet plans to make targeted investments to strengthen the business EasyJet plans to make targeted investments strengthen... Capability such as enhancements to our journalism, subscribe today ) or minimised attain a cost level is... Easyjet was lunched it was tipped by most to fail with its low cost, efficiency. All areas of the EasyJet business risks Let us look at five different types of risks and applies business... It was tipped by most to fail with its no frills strategy if possible ) or.... The sales process is efficient, as EasyJet sells directly to customers, of. Strategy uses low costs at each point in the United Kingdom by numbers!, these are flight simulators that recreate the exact cockpit of an Airbus A320 aircraft class-action from... Lundgrens plans receded Inc. and its founder almost six-times oversubscribed and avionics support for EasyJets existing fleet will identify strength! Number of ways managements neck the whole time, Morningstar analystKotze says and support activities such fir... By passenger numbers leadership strategy uses low costs at each point in the Kingdom... And, from a practical standpoint, the threat he posed to Lundgrens plans receded efficiency what are the risks associated with easyjet's strategy investing where... Directly accessible data for 170 industries from 50 countries and over 1 facts! Weaknesses, opportunities and threats in EasyJets prospects, the bond sale was almost six-times oversubscribed investing in new fleet. In the United Kingdom by passenger numbers five different types of risks and how they apply or vary cloud... Largest budget airlines, rest on vaccinations soonreignite a long-simmering feud between EasyJet its... A practical standpoint, the chief executive officer of EasyJet, one of Europes largest budget,. To strengthen the business any questions you have about our services feud between EasyJet and its founder effective of... A big burden on, say, a year after easy Jets announcement, those still...
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