Easyjet Analysis

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Impacts of Tourism
and
Travel, Transport and Logistics

EasyJet

TABLE OF CONTENTS

Introduction3
Background3
External Impacts5
Political and Legal impacts5
Economical impacts6
Sociocultural impacts7
Technological impacts8
Environmental impacts9
Other impacts10
Staffing and recruiting10
Branding11
Competitors and competitive advantage11
Future expansion12
Conclusion13
Recommendations:15
References16
Introduction

Nowadays aviation is a big industry. According to Hanlon (2004) it origins from 1919 just after the Second World War and half a century on it carries about 1.5 billion passengers a year, generating about $300 billion in revenue and employing about 1.7 million people. Lots of companies are involved in that industry. The author focused his attention on easyJet because it is the fastest growing low budget airline in Europe.

The aim of the report is to identify and analyse the variety of impacts that affect the company. The author has formulated the following objectives in order to meet that aim: - to provide a background information about easyJet;

- to analyse the political, economical, social, technological environment in which the company operates and the way they influence the organization; - to explore the internal issues of easyJet in terms of staffing, restructuring, switching to other products or services; - to look at the company’s competitors and critically evaluate its competitive advantage; - to summarize the company’s strengths, weaknesses, opportunities and threats and to provide recommendations

Background

EasyJet is one of the largest low cost carriers in Europe. This achievement is based on its strategy to provide point to point flying at low cost among the main European airports. Its mission statement is”To provide our customers with safe, good value, point-to-point air services. To effect and to offer a consistent and reliable product and fares appealing to leisure and business markets on a range of European routes. To achieve this we will develop our people and establish lasting relationships with our suppliers” (official web site of easyJet).

The company was launched in 1995 by Stelios Haji-Ioannou, the son of a Greek shipping tycoon. Stelios was inspired by the success of Southwest Airlines low cost strategy and focused on establishing similar company in Europe. The concept of easyJet is built on the principle of elasticity of demand of short haul flights- if the prices for traveling are reduced, more people will travel. The first booking was taken on October, 1995 using the company’s telephone reservation center. EasyJet began its operations with an initial budget of £5 million and with two leased Boeing 737s. At that time it only served the destination London Luton to Glasgow and Edinburgh. One year later, easyJet took delivery of its first wholly-owned aircraft. In 1997, easyJet launched its own website. However the first online bookings were done the next year. In March 1998, the first European base was opened after easyJet bought 40% of the Swiss charter operation, TEA Basel AG (official website). Four years later, the company purchased one of its rivals- Go, with its airport base. This decision was crucial for the company success because for less than a year the company’s revenue was up to 18 % on the previous period. (Page and Connel, 2006)

In 2004, easyJet operated 180 routes to 55 EU airports. The most challenging extension for easyJet was in 2006 when was announced massive expansion to new markets outside the EU- Marrakech, Istanbul, and Rijeka. (Page and Connel, 2006)

In order to follow its marketing strategy of cost leadership, easyJet doesn’t provide meal on board as a compulsory service. To increase guest satisfaction, in 2005 the company introduced easyJetLounges, offering complimentary beers, wines, spirits, snacks, comfortable settings and access to business facilities on...
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