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). Study for free with our range of university lectures! 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. The carriers were expected to pare their loses to about$38 billionthis year, as vaccines are rolled out across the world. Protect and build on easyJet's strong brand, Provide an easy and reliable customer experience. An Internal and corporate analysis in terms of strength, weaknesses, opportunities and threats (SWOT) will assist in gaining an understanding of where EasyJet is currently in terms of strengths and where improvement is required within the business and what outside environmental threats it may face as well as what new opportunities are available to the company in the short and medium term. WebThe following operating risks are associated with pursuing sustainability initiatives as part of a marketing plan: Loss in profitability Loss of focus Just as sustainability would seem to be a rallying cry for consumers, some companies have jumped on sustainability as a It moved aircraft maintenance at three of its U.K. airports, which had been contracted out, back in-house. Ryanair had even tried to capitalize on this connection between vaccinations and travel in its marketing, rolling out at jab and go advertising slogan in January, which it had to withdraw after objections from Britains Advertising Standards Authority that it was not promoting responsible behavior. The attackers stole more than 9 million customers e-mail addresses and travel details and also accessed credit and debit card details of more than 2,200 customers. Potential threats in terms of changing social trends like holidays outside Europe (many now want to experience the eastern cultures and travel to holiday destinations like China and Japan) and also travelling via the EuroStar to Paris etc. WebThere is one main reason which influences these economic factors is the recession in the Easy jet. Meanwhile, the U.K. has announced international travelwill resume as of May 17, but willoperate according to a traffic light system, with arrivals from red-, yellow-, or green-designated countries subject to different requirements. The same figure for Ryanair was 2.25 pennies, while it was about 5 for British Airways and 5.37 for Air France and KLM. WebIts evident that EasyJet takes few risks and applies firm business principles while carefully exploring the market. 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. Combining perceived low price with perceived added value can be a highly successful strategy but one that requires innovative thinking. Each node of the supply chainsuppliers, plants, warehouses, and transport routesis then assessed in detail (Exhibit 1). A focus strategy can be implemented to resolve these issues as well. EasyJets revenues in 2019 were $8.9 billion, on which it made$600 millionin profit. Risk 2: Geopolitical instability. The development of the next generation aircraft will also lead to technological opportunities in term of fuel efficiencies. For an independent carrier like EasyJet, finding money was more complicated, especially since the U.K. government initially balked at providing the airline industry with a custom bailout package. This time, he succeeded in scheduling a showdown vote for May 22, 2020. 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. A lack of real-time reporting makes it easy to miss the signs of an approaching catastrophe. Ive always said the four core markets are where we want to put our focus on U.K., Germany, France and Italy, he told the World Travel Market conference in 2018, shortly after the Air Berlin deal concluded. Market Development. Given EasyJets cash burn, it needed to raise more moneyand quickly. EasyJets no frills strategy does not only mean a cut in Cabin crew and denial of food, but also allows for a faster pre-flight preparation, thereby reducing the time grounded as well maintaining fare. 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 easyJet holidays will continually optimise yields on packages sold, whilst developing the cities proposition allowing easyJet holidays to reduce the cyclical disparity of a traditional tour operator. e-commerce) and support activities such as fir infrastructure (e.g. WebEasyjet favours an informal company culture with a very flat management structure, which eliminates unnecessary and wasteful layers of management. Given that they were doing almost nothing before, there is a big opportunity to move from zero to something, he says of the holiday tours. 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. 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. Low price/low added Thats better, but still a big burden on, say, a family of four. As a budget airline focused exclusively on short-haul flights within Europe, it had more flexibility than long-haul carriers to adjust its flight schedule, canceling flights without worrying about losing connections or violating alliance agreements. Under pressure from airlines, it later lifted this policy for some European destinations, only to reimpose it as infection rates soared again in Spain and France. Continuing to drive product conversions by improving the way ancillaries are sold and product merchandising. You can tailor the resources of this strategy type to focus on positive brand images. quick order processing). EasyJet is also Europes leading low-cost airline having completed a merger deal with Go to create Europes number one low-cost airline. In terms of support activities, EasyJet takes advantage of technological developments in order to reduce costs. It is difficult to co-ordinate the individual employee because in principle they operate independently of each other. 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. The price of EasyJets tickets various as a function of the number of seats remaining, the time until the flight, and historical trends. Hannibal HanschkePool/AFP via Getty Images, Christoph SoederPicture Alliance via Getty Images, Chris RatcliffeBloomberg via Getty Images, one of the biggest winners in the European air-travel dogfight, agreed in January 2020 to deferred prosecution agreements, began purchasing carbon offsets for the CO2 of all its flights, might not fully recover from the pandemic until 2024, LinkedIn has officially entered its cringe era, and its working. FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. 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. It helps to remember that while you cant control what happens to you, you can always control your response. The primary outcomes were anxiety (GAD-7), depression (PHQ-9), risk perception towards COVID-19, interprofessional teamwork attitude, and coping strategies during the Coronavirus disease-19 pandemic. 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). EasyJet also have a reputation for paying low wages in line with its low cost strategy. The second is the threats from substitutes, rail travel v air travel, the growing demand in Eurostar and cruses. Healthcare workers were exposed to this highly infectious virus during the pandemic and suffered several social and psychological consequences, such as anxiety, psychological distress, and burnout. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. Also, mainstream airlines are now lowering fares to engage in price competition. Strategies are largely determined by the extent to which they deliver best value to both customers in terms of being competitiveness in the marketplace (leading low cost airline) and also to provide value to shareholders. Some wondered if Lundgren, who has a reputation for being a nice guy, had the stomach for the kind of aggressive cost cutting thatrunning a budget airline, especially during a pandemic, demanded. Cost advantages might be achieved because of EasyJets efficient use of airports. This will assist management to decide as to what EasyJet should be concentrating on and what requires de-emphasising or even outsourcing. The strategy risks serious disruptions to their customer service processes as employee morale drops at the same time that wait times for customers increase. easyJet's updated framework continues to build on its competitive advantages - an unparalleled network and market positions, efficient low cost model, well-known brand and strong balance sheet - positioning easyJet to deliver sustainable and disciplined growth and returns for shareholders. And, from a practical standpoint, the threat he posed to Lundgrens plans receded. These are flight simulators that recreate the exact cockpit of an Airbus A320 aircraft. A prime example of this was the subsequent takeover of Go by EasyJet. It renegotiated contracts with ground handling firms at several airports helping to lower costs. 2023 Fortune Media IP Limited. Many of EasyJets competitors in Europe are national flag carriers: Air France, KLM, Lufthansa, SAS, Iberia, TAP Air Portugal, Swiss Air, and British Airways. Strategical moves like this have enabled it to reduce cost and improve the convenience for the customers. All rights reserved. The primary weakness is the perception of low quality low cost can also be seen as low quality service than that offered by the established national airline i.e. Most of Europe was in the yellow category, requiring 10 days of self-isolation when coming back, and with the U.K. government still advising against leisure travel. Normally there would have been close to 100. In an interview with LondonsEvening Standard newspaper in January, Lundgren sounded down, admitting he missed frequent trips to the Spanish island of Majorca, where he owns a house and where he and a friend also own a recording studio. Lundgren had been an industry leader in trying to position EasyJet for this new world. To understand EasyJets prospects, its important to understand its strategic positioning. Lundgren says he likes the site because it keeps airlines honest: When customers can see that their inbound aircraft hasnt even taken off from its previous destination yet, theres no point in feeding them the bad news with an eyedropper, as airlines traditionally had done, gradually announcing slightly longer delays. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. This enables easyJet to be efficient with network choices, with an emphasis on maximising returns. Those changes will ensure that EasyJet sustains its current market share and position and also increase margin. Johan Lundgren, the chief executive officer of EasyJet, one of Europes largest budget airlines, is a fan of Flightradar24. 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. Many of those airlines are limping along on government funding they might never be able to repay, says Leah Ryan, managing director of Alton Aviation, a leading industry consultant. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. This form of strategy combines a low price, low perceived service benefits (no free lunch) and a focus on a price-sensitive highly competitive market segment. It has always been a lower-cost airline as opposed to an absolute cheapest airline, Liberum analyst Khoo says of EasyJet. The value chain analysis will show the total value added by the airline industry and EasyJet. Since March 2020,European governmentshave provided more than$32.2 billion in bailouts to the airline industry,through a mix of grants, loans, and debt-for-equity deals, according to a report from HSBC. At the end of January, EasyJet announced that it had secured another $1.9 billion through a five-year loan, secured against its aircraft. Since the events of September 11th the airline industry suffered heavily, stocks plummeted and ticket prices are at all time lows. Figure 2: Five Forces Model ACCA Paper 3.5 (2001). 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. And Lundgren, who took overin late 2017, had big plans to build on that differentiation with potentially lucrative new ventures, including vacation packages, more benefits for business, and a new loyalty program. Easy Jet: Company Operation Strategy : Historical-Hall-2840 As previously mentioned manual processes can increase the chances of fraud, but they can also result in other unnecessary risks. 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