EasyJet Analysis

 Introduction to easyJet
 Factors affecting the airline industry
 SWOT
 Strategies of easyJet
 Recommendations
 Conclusion

 British budget airline, 2nd largest low cost
carrier in Europe
 Founded by Sir Stelios Haji-Ioannou in 1995
 Part of EasyGroup
 easyHotel
 easyBus
 easyCar

 Serves major airports in key markets
 Targeted market segment
 Business travelers due to high frequency of flights
and convenience

 Strategic priorities:
1. Safety
2. Building Europe’s No 1 AirTransport Network
3. Develop a winning customer proposition
4. Deliver low cost and maximise margins

 Strategic priorities:
1. Safety
• Flight management data
• Safety management system
2. Building Europe’s No 1 AirTransport
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 15min of scheduled time
• Tailored marketing email offer according to
preference of individual customer
 Strategic priorities:
4. Deliver low cost and maximise margins
• Focus on fuel conservation
• Own family of air craft which is cheaper to
operate

 General factors affecting strategies and
decisions within airline industry
 Market demand
 Competitors
 Fluctuation in oil prices
 Threat from terrorism
 Natural disaster / epidemic
 Government regulation

 Market Demand
 Increased demand for air travel due to:
▪ Reduction in air fares
▪ Increased in average incomes

 Significant increase in short haul travels.
Increase to
187million

 Competitive Market
▪ Cannot influence on-going market price
 Travelling considered as luxurious good.
▪ Demand is elastic
Big drop in
demand
Small increase
in price

 Competitors
 Presence of competitors offering similar products
 Comparison of price can be done easily through
internet

 Fluctuation in oil prices
 Due to instability in middle east, influence of
cartel
 Oil resource drying up

 Increases in oil prices will increase
cost of production
 Erode profit margin
 Consumer have to pay more

 Threat from terrorism
 Fear of flying
 May avoid air travel until psychological shock is
overcome
 E.g.
▪ Bombing in London on 7th July 2005
▪ US recently issued a travel alert to travel in Europe

 Epidemic / Natural Disaster
 SARS (November 2002)
▪ Fear of being contracted
 Volcanic ash cloud over Europe (April 2010)
▪ Halting of aircraft
▪ Loss of $200 million in a day

 Government regulation
 Environmental degradation becoming a major
issue
 Increase in emphasis on sustainable development
▪ Sustainable marketing – invest in modern fuel efficient
aircraft operating at high capacity

 Dynamic Pricing
 Adjust prices continually when flight date nearing
 Promotional Pricing
 Temporary reduction of price to create
excitement

Strengths Weaknesses
Opportunities Threats
easyJet

 Flies to primary airports
 Convenience for business travellers on tight
schedules
 Low cost offering
 No frills airline – non essential features removed
Eg. Light freshments
 Reverse Pricing System
The earlier you book, the cheaper the air ticket

 Ease of booking flights
 24/7 Internet booking
 Phone booking(slowly phasing out)
 Fast turnaround time of aircrafts
 Planes ready to take off within 30 minutes
from landing
 Efficient
 Increase frequency of flights

 Highly distinctive branding
 Featured on Airline TV series, spread name in UK
 Bright orange colours
 Catchy slogans
Eg : “The web’s favourite airline”
“Come on, let’s fly”
 Website livery painted on plane

 High-density seating
 Discomfort for passengers during long
distance flights
 Hassle in changing bookings
 Top up difference in price depending on
current price level
 Relying solely on price is not a good
strategy
 Competitors may draw customers away
by offering lower prices

 Weakening Pound against Euro
 Increased demand in travel from
European countries to Britain
 Cater more flights
 Rising markets
 Middle East
 China

 Brand names
 Easy to copy
 Confuses customers
 Damage the brand name

 Competitors
 Ryanair
•Europe largest low-cost carrier
in terms of market share
•Fly to secondary airport
 Air Berlin
•Germany’s 2nd largest airline
•Offer free snack and drinks
•Fly out of Europe

 Alternative modes of transport
 Eurorail - Trains
 Comparable duration and price for
short distances

 4 Ps
 Place
 Promotion
 Product
 Price
 Other strategies

 Place
 Online booking website
 Telephone booking

 Promotion
 Internet business model
▪ Slowly phasing out telephone sales operation
 Aggressive branding
▪ Bright orange colour
▪ Catchy slogans
▪ Website livery on airplane
▪ Featured in AirlineTV Series

 Product
 Offers one-way tickets for passengers
▪ Flexibility of travelling
 No frill experience

 Price
 Good-value pricing – right combination of quality
and price
▪ Everyday low pricing
 Due to cost advantage strategies
▪ Does not provide free on board snacks and beverages
▪ No business class seats
▪ Direct marketing – use of internet

 Optional-Product Pricing – Pricing of
complementary products
▪ Food & Beverages
▪ Priority Boarding Pass
 Dynamic Pricing - prices vary according to
demand and date of booking
▪ Charges low prices for early bookings

 Diversification
 Unable to rely on low-cost approach
 EasyGroup provides complementary services
▪ Offer a bundled deal which increases convenience for
customer.
▪ Ryanair also use similar approach but tie up with
partners to earn commissions
▪ easyJet will have more control over promotion package

 Environmental Strategy
 To be efficient in air
▪ Efficient use of aircraft
▪ Fly short haul only
 To be efficient on the ground
▪ Using less ground equipment
▪ Keep waste to minimum

 Current Situation /Trend
 Global warming
 Increased air pollution
▪ Various sources such as factories, power plants, motor
vehicles and aircrafts
▪ Aircrafts are a major contributor of carbon dioxide gases
to the atmosphere

 Increase emphasis on sustainable development
 Green initiatives
▪ Reduce
▪ Reuse
▪ Recycle

What we propose easyJet should do
 In view of the current situation
 Actively market easyJet as a Green Airline
 Allow consumers to see easyJet as intrinsically
associated with green issues

 PotentialAdvantage for easyJet
 Improve branding of easyJet (Societal Marketing)
▪ Concerned with making a positive impact on the
environment
▪ Customers will associate easyJet with being green
“Consumers not just buying an air ticket,
they are buying into something bigger, and
that is reduced air pollution”

 Lower cost of operation
 Possible free or extended advertising from green
groups
 Fuel efficient engines allow greater savings

 PotentialAdvantages for third parties
 Companies’ whose staff travel with easyJet
▪ Improve image of companies

 How to do it
 Seek constant improvements into greener
technology
 Jet engines that reduce fuel consumption and
emit less harmful gases
▪ NASA is developing technology that would permit
Boeing 737 and Airbus A320 jets, in 2018, to burn 25%
less fuel and reduce nitrogen oxide emissions by 80%.

 Catchy slogan
its easyJet being green…

 Cannot rely solely on low pricing
 Only one element of company’s broader
marketing strategy
 Does not retain customer’s loyalty
 Seek to differentiate from competitors
 Green Initiatives
 Cost savings due to fuel efficiency
 Carry on providing low cost

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