Easyjet Analysis

Topics: Low-cost carrier, Airline, Southwest Airlines Pages: 27 (7797 words) Published: June 4, 2013
Despite an increase in operating costs in 2010, Easyjet has achieved a remarkable performance compare to 2009. It has reinforced its position in short-haul travel aviation increasing its market share from 6.5% to 7.6%. Additionally, its total revenue per seat grew by 5.1&capacity measured in seat flown. Easyjet also managed to lower its underlying pre-tax loss increasing its cash-flow by million to million

Table of Content

Introduction

I/ Easy Jet : General Overview

II/ Comparison
A/ Low costs airlines versus traditional airlines
B/ EasyJet compared to other low-costs airlines

III/ Global Strategy
IV/ What’s next? What are the future predictable trends?

Conclusion
Introduction

Just recently, on December 17, 2003, the world celebrated a hundred years of flight to honor the Wright Brothers’ first controlled, powered, heavier-than-air human flight at Kitty Hawk, NC. Only about five decades later, after World War Two had drawn to an end, civil aviation cut its teeth and started to become a reliable, viable and convenient means of mass transportation on a global scale. However, in the pioneering years of commercial aviation, scheduled air services were mostly inexistent and customers had to charter their flights on a personal level. This changed after World War One. Thousands of ex-military pilots were released on the civil market and fundamental improvements of the available aircraft slowly altered the public’s perception of civil aviation from adventure to convenience. Nevertheless, at this time airships were still thought to be the future of civil aviation.

Another World War had to occur to boost aviation technologies which in turn created new possibilities for the airline business. The introduction of pressurized cabins and jet propulsion allowed to carry more passengers per flight over longer distances in shorter time. Additionally, increasing standardization in terms of aircraft and the airports’ ground equipment were a vital premise for the birth of an airline concept that is today known as the LCC-approach (Low Cost Carrier). Originally developed in the US, this new business model soon claimed its stake in the European airline market, especially after the deregulation of the European market, where “a three-step airline liberalisation process awarded carriers the flexibility to operate along every route of economic interest and connect any city pair within the Union’s boundaries.” (Jarach, 2005, p. 33)

Today easyJet leads the European LCC-market together with Ryanair. This paper now wants to take a closer look at the LCC-approach itself, its differences to the traditional airlines and in particular at the question how easyJet uses this approach to position itself advantageously in the LCC-market. Risks and opportunities will be assessed and suggestions will me made how to plan easyJet’s future business model with special regard to the possible extension of its European activities to a more global scale.

I/ EasyJet: A general Overview

EasyJet is a young low cost airline company. It was founded in 1995 by Sir Stelios Haji-Ioannou[1]. This entrepreneur, originally from Athens, continued his studies at the London school of economics. Stelios started his career very young helping his father with his shipping company. Nowadays, he is a prominent business man in the UK and his net worth is evaluated at 1.29 billion pounds[2]. Sir Stelios Haji-Ioannou’s best business’ strategy was to start up an airline company with a precise different concept. He created easyJet Airline Company Limited.

EasyJet based at London Luton Airport is one of the first and largest low-fare airlines in Europe. It operates with domestic and international flights over eighty European cities. The company is licensed to transports passengers, cargo and mails.

The company mission statement as cited in their website is the following: “To provide our customers with safe, good value, point-to-point air...

References: EUbusiness :http://216.239.59.104/search?q=cache:jgu5i0L48K4J:www.eubusiness.com/Transport/050220023221.3t9pnitf/+easyjet+not+with+IATA&hl=en&ct=clnk&cd=1&gl=ca
DSL-News (2007): Europa: 84 Millionen Haushalte haben Breitband
easyJet 2005 Interim Results (2005): Available from www.easyjet.com, direct link: http://www.easyjet.com/EN/Investor/investorrelations_presentations.html (10/02/2007)
Goliath (2007): EasyJet puts gadget onto Vista Desktops
Grant, R.M. (2005): Contemporary Strategy Analysis. Fifth Edition. Malden, MA, US: Blackwell Publishing
ICFAI (author unknown) (2003): The easy way to succeed
Ryanair Annual Report & Financial Statements (2006): Available from www.ryanair.com, direct link: http://www.ryanair.com/site/DE/about.php?page=Invest&sec=download&ref=2006 (10/02/2007)
Spiegel Online (2005): EasyJet-Kunden können Flughafen-Lounge buchen
Strategic Direction (author unknown) (2006): Easyjet and Ryanair flying high on the Southwest model: Charting the ups and downs of low-cost carriers. Strategic Direction. Volume 22 Issue 6, pp. 18-21
Swot Analysis of easyJet (2007): Air Scoop
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