Easy Jet Ecommerce

Topics: Airline, Low-cost carrier, Legacy carrier Pages: 6 (1531 words) Published: May 13, 2013

EasyJet was launched in November 1995 with a fleet of two Boeing 737-300 aircraft flying from London to Glasgow and Scotland. Its mission was to offer low-cost airline service to the masses. This was successfully achieved by offering customers low fares with its no frill flights and adopting an efficiency-driven operational model; high brand awareness, maintaining a high level of customer satisfaction making it one of the leading low-cost airlines in Europe.  One firm that has successfully followed the low-price strategy is easyJet, founded by Stelios Haji-Ioannou, a graduate of London Business School, in 1995 with £5 million borrowed from his father, a Greek shipping tycoon. Copying, similar operations in the USA, and Ryanair flying out of Ireland, easyJet was one of the first ‘low-cost’ airlines in the UK, flying from Luton to Scotland. He then launched similar low-cost, no-frills services to continental Europe. The company has transformed the European air travel market and has spurned many rival imitators. easyJet was floated on the Stock Market in 2000 at 310p a share, making Stelios £280 million profit.

Vision: To Be The Best Low Fares Airline in the World.

Strategic Priorities
1. Safety
* Flight management data.
* Safety management system.
2. Building Europe's No 1 Air Transport Network
* Build frequency and stability to core routes.
* Number of aircraft based in countries is constantly being reviewed.
3.Develop a winning customer proposition
* Arrive at destination within 15mins of scheduled time.
* Tailored marketing email offer according to preference of individual customer.
4.Deliver low cost and maximize margins
* Focus on fuel conservation.
* Own family of aircraft which is cheaper to operate.

Strategic Evaluation - Situation Analysis


* Low Pricing - Easy Jet's strategy is growth with margin improvement and therefore the management team continually focuses its efforts on all three drivers of margin: yield, ancillaries and cost, with the aim of achieving a 15% return on equity in the medium-term. * Low Cost - Easy Jet's built into the DNA of our business model. We always aim to reduce our costs, to eliminate waste, to operate efficiently. Some will buy always by the cheapest available regardless of the level of service. Many more demand great value and expect good service. * Financial performance - Under its (not so) new management team of CEO Carolyn McCall and CFO Chris Kennedy, easyJet has improved its financial performance over the past couple of years. Its strong balance sheet and cash generation and returns that exceed the cost of capital make it all too rare in the airline industry globally.

* Brand vs legacy carriers - easyJet’s brand is probably stronger than many LCC competitors, but LCCs as a whole probably still suffer from a brand disadvantage relative to the major legacy carriers. As noted above, however, this is slowly changing as easyJet improves its on-time performance, continues to focus on primary airports and offers additional product features such as allocated seating and re-ticketing flexibility (for a premium). Nevertheless, the product still has fewer ‘frills’ than that of legacy full service carriers and this means that price will remain the key dimension of competition. * Seasonality of earnings - As for the industry in general, easyJet’s earnings are highly seasonal, with its profits increasingly relying on a strong summer half year (April to September) to offset a loss-making winter (October to March). This makes it vulnerable to any unexpected problems in the summer in an industry that is beset by ‘one-offs’. OPPORTUNITIES

* Market growth - Although notoriously cyclical and currently going through a sluggish phase, the aviation sector remains a growth industry in the medium to long term, by common consensus. easyJet, as a significant market player, is well...
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