•Solid financial growth
•Strong brand name
•Effective business strategy•Delicate cost position
•New routes and expanded operations•Strong competition •Decline in the European domestic air travel industry
•Consolidation in the European air transportation industry
The following arguments were built on the basis of the company’s Annual Report (easyJet, 2006). For an understanding of the drivers of this SWOT analysis and supporting literature, a PESTLE and Porter’s Five Forces analysis could be performed.
•Solid financial growth: 2005 saw an increase in profitability by some 9.1 percent over the previous year, totalling £67.9 million before tax. This reflected an increase in passenger numbers by 21.4 percent to 29.6 million and rise in the revenue per seat by 78 pence to £38.66.
•Strong brand name: easyJet built its name on the back of its flamboyant founder, Stelios Haji-Ioannou, its bright orange airlines and online booking system, which lead to the strapline, “The web’s favourite airline.” Together with the company’s affinity for picking fights with larger airlines, such as KLM, British Airways and Swiss Air, the company has become media friendly and synonymous with low-cost travel.
•Effective business strategy: easyJet has followed a focused strategy around its three cornerstones: “focus on our customers”, “own our markets” and “reduce our costs”, which has remained robust. This is exemplified in its online booking system, meal-less flights (food can be bought onboard), long-term maintenance contracts (e.g. with SR Technics) and a willingness to move away from overpriced...