Impact of Brexit and Covid-19 on Easy Jet

This article explores the impact of Brexit and Covid-19 on Easy Jet, including the market structure, economic factors affecting the airline, and strategies to overcome losses. It discusses the market structure of Easy Jet as an oligopoly, the economic factors such as taxes, operating costs, market conditions, interest rates, wages, demand and supply, and exchange rates that affect the airline's operations in the UK. It also examines the impact of Brexit on Easy Jet, including the decline in share prices and changes in regulations and policies. Additionally, it discusses the impact of Covid-19 on Easy Jet, including the temporary shutdown of flights and the decrease in travel demand. The article concludes with strategies adopted by Easy Jet to overcome the losses incurred from Brexit and Covid-19.

CONTEMPORARY
BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Easy Jet Market structure.........................................................................................................3
2. Economic factors that affect Easy jet within UK.....................................................................4
3. Impact of Brexit on operation..................................................................................................7
4. Impact of Covid-19 on Easy jet...............................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Easy jet is operating in UK and British multinational and budgeted airline situated its
headquarter in London at Luton Airport. They operate in domestic flights and international with
over more than 30 countries around the world. Easy jet is listed on London stock exchange and
was established in 1995. Easy jet had other affiliated airlines which include Switzerland and
Easy jet Europe Easy jet UK, Easy jet (Fonseca, 2020). Whereas, easy jet has more than 15000
employees in European market that are working to provide better service to customer with
effective working. In this report, market structure of Easy jet, their economic factor which affect
business and Brexit effect business on operation is discussed with Covid-19 impact analysis that
affect the operation of business and country, while strategies to overcome the losses incurred
from Covid-19.
MAIN BODY
1. Easy Jet Market structure
There are various market structure like monopoly, monopolistic, oligopoly and perfect
competitor.
Monopoly In this market only one industry rule the whole market and implementing barrier to
entrance of new companies. There is no close substitute in market that offer same product and
having low cross elasticity of demand.
Duopoly: duopoly is a part of Oligopoly where only two firms are present and operate in market
selling same goods. Change in price by one seller may affect other seller and leads to change in
market price while both seller are independent (Wu, and et.al., 2020).
Perfect competitor: In this market large number of buyers and seller are available and selling
homogeneous products in market without any restrictions and barrier to firms. Other firms can
easily enter and high competition in the market.
Oligopoly: This market offers homogeneous product or differentiate products by few
organizations in same market and lead the market through there marketing techniques. There is
high competition among few firms which are dependent on each other on price stability.
Monopolistic competitor: Here large number of firm are selling differentiated product and
service in same market. It is not a perfectly competitive market. While, one competitor is not
able to influence other price in same market.

However, Easy jet is operating Oligopoly market where there are few organizations
working with same nature of business (Chung and et.al., 2020). There is barrier to enter into
market of airlines as it carries huge cost investment. As there are already establish business and
leading the market of airlines by few organizations, new entrance of firms is very hard to
establish in same and attract customer towards them. New firm need to offer more unique
product to customer to attract towed them. Easy jet was operating in UK market as key
competitor by offering international and domestic flights and working in oligopoly market. The
major two market which are operating in the UK's airlines industry are long haul and short haul
market (Ponomarev, 2020). European market is more demanding in short haul market and low
carrier airlines like easy jet is being adopted the strategies of low fair price ticket which is being
prominent factor to attract more passenger towards easy jet. One of the key opportunities that is
being taken by easy Jet is providing low fair ticket to passengers with attractive offers like free
meal and drinks from airline.
There major focus is to provide customer with high faculties within low budget in
European market and was operating as one of the most successful airline company in European
market. One of the key competitor of easy jet are Ryanair, AirAisa, Jet2.com which are also
operating in same market with same strategies followed by each airline company. Easy Jet major
focus is to meet customer demand in market they are looking for. Easy jet carries values like safe
and responsible, always effective, forward thinking, in it together and on customer's side. Also,
easy had followed various strategies like aircraft configuration makes higher number of seats in
every aircraft and point to pint model is being used in higher load factor and aircraft utilization.
2. Economic factors that affect Easy jet within UK.
The economic factors that affect business operation of easy jet which company need to be
analysed and make changes in strategies according to various factors. The economic factors that
affect business operations and there revenue generation program. Easy jet is one of the largest
airline in European market and operate second biggest in European market. Total seats of
passengers easy jet is having is 86.7 million and 80.2 million passengers (Zhang and Graham,
2020).The economic factors are impact directly towards working and efficiency of company to
get more market share. There are many factors that affect the economic factor which affect
business operation. These factors may me taxes applied by government or airports, change in

market condition, change in operating cost, wages of employees or interest rate. These are
further elaborate in detail:
 Change in Taxes rate: With the changing in market condition of UK, government
changes the tax rate on airlines industries. These taxes are being charged from passengers
ultimately by Easy jet. Taxes are collected with many forms but major taxes are being
collected with the name of Air passenger duty (APD) which include the overall taxes that
is charged with one time per passengers. Change in tax rate by government increase the
cost of operation and ultimately increase in price of fair ticket. There are several more
taxes which are paid by company to airports for landing and take-off, taxes by other
authorities (Kim, Lee, and Roh, 2020). Some more taxes are being also charged from
airline companies in name of environment tax which is collected by government in order
to maintain the environment that is damage from aircraft which release carbon emission
and Co2 in nature. These charges are fulfilled by easy jet on every flight that is operating
in UK. Airport maintain charges are also a type of tax that need to be paid by easy jet to
operate in different airports within UK country.
 Operating cost: The major cost of arise in company is cost of Fuel that is being rising
with time to time. Easy jet face major problems on tax charged by government which
increase the cost of company to operate in market and results in reduction in profit
margin. Easy jet is a low cost budgeted aircraft that already have low margins in market,
taxes on fuel makes high cost. Other operating cost maintenance cost of aircraft, services
and passengers boarding are some of the cost that may affect business of Easy Jet. The
operation management cost that are changed according to time and technology used by
easy jet. It reduces my smart working and effective working through training ad
development of employees to increase their work efficiency.
 Market condition: the UK market condition is quite highly fluctuated which affect the
business industry adversely. The change in economy affect the company by increase or
decrease in cost or working in market. It changes the employment rate in country where
at a time of inflation there is high rate of employment in country and easy jet is operating
in its full ability, whereas, if there is recession in country, Easy jet may reduce there
employment due to low revenue generation and reduction in overall performance of
company in market (Pagliari, and Graham, 2020).

 Interest rate: It is a rate which is paid on funds raised by easy jet from public and other
investors. This rate in high at a time of inflation or stable market condition that impact
directly on working ability of easy jet. It reduces the profit margin of company and
ultimately easy jet will increase its prices of fair in market to meet cost and gain some
profit margin. On the other hand interest are also charged by airport authorities which
company is connected to. It affects company to raise fund and from market due to high
interest rate increase in overall cost of company. FDI leads to decrease in country and
ultimately reduces in easy jet investment to get funds from outside country.
 Wages: The wage and salary that is given to employees of easy jet may also affect the
business working in UK. The government and labour unions are being fixed certain
amount of wages and salaries to every person on the basis of per day wage weekly wages.
These wages are changed according to market condition and working of easy jet in
market (Efthymiou and et.al., 2021). It sometimes increases cost of company when
employees are more demanding according to work. It needs to be balanced that make
employee effective working and maintain smooth flow of work within organization.
 Demand and supply: With the changing time period, company need to maintain
balanced between demand of flights by consumers a supply of aircraft for consumer to
meet the demand. As, easy jet is low budget airlines, its demand is quite high in most of
the time which need to be met by easy jet with proper planning and strategies to offer
with same motive of low cost fairs to all passengers that ignore the working operation
adverse impact. It allows company to gain competitor advantage in market as they are
offering low budget fairs and a quality service to customers. Easy jet demand can
increase the revenue generation and high market share within UK sector.
 Exchange rate: UK has a strong exchange rate of currency around world. This changes
with internationally with time to time that impact the business operation of easy jet. The
increase in currency rate of UK country help company to get higher funds and low cost of
operations around the world. While if currency rate reduces in market, it makes suffer to
company and increase the cost within country. However, within UK, it might little affect
but in international market it highly impacts the company. As they are directly affect the
cost of operation and reduces the profit margin and high competition faced around the
world which may reduce demand of easy jet (Ngo and Tsui, 2020).

3. Impact of Brexit on operation
Brexit is an agreement that is being withdrawal of UK from European Union. This
agreement of withdrawal had directly impact UK economic condition. This agreement brings
recession in UK's government reduce the economy power due to Brexit. It affects many business
industry in UK and one of the major industry is aviation industry. The impact of Brexit on
airlines' industry is all companies suffer losses. On of those companies include Easy jet, is a low
cost budgeted airlines operating in European market suffered losses by declining price of share
by almost 10% after the implement of Brexit (Harley, Timmis, and Budd, 2020). It reduces the
demand of airline flights at that time and Passengers are unwilling to book a trip for holiday as
prices are increased in market. The increase in prices are results from increase in cost of
operation in that market after the Brexit. Before Implementing Brexit in UK, Europe carries is
maintained by low cost carriers by storing high fuel stock lead which give low cost and reduce in
price of fair ticket and ultimately increased in capacity. The cost of easy jet had increase due to
high investment industry working, their spares parts and expensive aircraft to maintain at that
situation, increase in price of fuel is major cost that impact the cost of operation. Further
management is also impact to maintain the company operation like crew member to maintain
airline schedule, routines schedule of all aircraft easy jet are being interrupted after the Brexit
implement because all this factors needs rescheduling by company that include high cost and
time-consuming process.
New strategies are being created by easy jet after the Brexit implement which increase
cost of company overall and also suffer losses at some point of time. After Brexit, new
agreements are being created by UK government which include all new rules and regulation
policies that are implied on aviation industry. UK's government and other authorities of airports
restructured policies for aviation industry that took time and cost and until the final policies are
made, it impacts directly or indirectly to Easy jet until routines are set. Easy Jet had adopted new
technology after Brexit in order to reduce the cost of aircraft, quality of technical spare parts and
new air crafted are used to cover losses (Brezonakova, Badanik and Davies, 2021). Recreation
of pricing strategy by easy jet to attract more passenger towards company by charging low price
on fair ticket for getting high demand and generate revenue. Easy Jet offers their customers to
increase demand by offering free meal and drinks in long hauls and low price in short hauls.

While, impact of Brexit also brings reduction in the employment that create
unemployment in country, Foreign direct investment is deceases due Brexit and impact on UK's
economy. Easy jet faced loss and raise funds from UK government and from international
investor to sustain in market. Hence, it impacts easy jet operation due to Brexit by increase in
cost of fuel and reduce the profit margin of company.
4. Impact of Covid-19 on Easy jet
Covid-19 had huge impact on UK country and its economy. Lock down brings huge loss
to companies working. It affects all business industry adversely, while one of the business In
airline industry of UK. The travel improperly shut down for 8-10 months that suffers a huge loss
to airline industry. On of the company is Easy jet which effect Covid-19 (Egan, 2020). It directly
impacts on easy jet and reduce travel passengers from aircraft. After the shut down of all
countries, almost all flights has being temporary closed for few months. It Reduces demand of
airlines in the market when lock down remove from some countries and while companies start
working back to recover losses occurred from pandemic and to recover the basic cost of easy jet.
Around the world, aviations industry and travel industries is being closed for public use
temporarily. Travel companies had faced high losses during the pandemic as there is no public
transport usage. Easy jet reduces the total number of employee from company working at
different levels or by reducing salary structure for temporarily basis. Easy is unable to maintain
the aircraft and their Maintaining cost of aircraft affect company financial budgets and huge
loses are suffered by company.
However, some of the aircraft are sell out by company during pandemic due to high cost
of maintenance, giving low return previously and giving low profits. UK's economy had
previously faced many challenges and unbalanced economy of country (Hiney, Efthymiou, and
Morgenroth, 2021). Pandemic adversely affect UK and again deflation and recession in county
which reduces the employment rate, foreign direct investment and exchange rate. Easy jet reduce
their investment program that is planning to invest in before Covid and increases the price of fair
ticket to cover future loss during the lock down period. The cost of aircraft are unable to
maintain by easy jet and not having enough space to get park all aircraft at airports and other
parking spots. Easy jet is already working in low price of fair tickets and their margins are quite
low when it compares to other airlines. Lock-down shows affect the profit margin of company
which cover in quite long run due to low price wages.

In order To recover all the losses by easy jet, they need to attract the customer by
offering quite effective prices and services to gain high passenger volume after the working of
flights. Easy jet need to be customer-centricity, cost efficiency, sustainability and agility to
recover the losses. Restructure of strategies to provide customer service through technology used
and aircraft used to gain more competitive advantage. Maintenance of aircraft should be more
effective to save cost in and avoid unnecessary cost incurred on travelling. Proper safety and
precaution being taken by company to attract more customers by seeing that proper safety is
being made by company (Akbar and Kisilowski, 2020). Targeting customers like traveller to
promote the company into new market and services that given by easy jet to their passengers are
offers to customers.
CONCLUSION
The above report conclude that, easy jet is operating in oligopoly market where only few
organization like Ryanair, AirAisa, Jet2.com etc. are operating in market. But easy jet have a
competitive advantage of being low budgets fair ticket that are offered to customers. The
economic factor that affect the business operation are due to change in tax rate by government,
operation cost of easy jet, exchange rate, interest rate, demand and supply are maintained by easy
jet, market condition and wages are some factors that affect the operation of business. This
increase the cost of company and analyses before it adversely affect business. Further, Brexit
impact the aviation industry and easy too. It increases the prices are fair and strategies, policies
are being recreated by company and authorities. Also, analysed impact of Covid-19 also affect
the business operation of easy Jet in UK and strategies are recreated by company in order to
recover the losses.

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Online
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