Impact of Brexit and Covid-19 on Easy Jet

CONTEMPORARY
BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
2.1 Various Market structure.......................................................................................................3
Market Structure of UK's Airlines industry.................................................................................4
2.2 Economic factors of UK and how they will affect Easy Jet..................................................4
2.3 Impact of Brexit on Easy jet..................................................................................................7
2.4 Impact of Covid-19 for investment........................................................................................8
2.4.1 Immediate impact................................................................................................................8
2.4.2 Future impact......................................................................................................................8
CONCLUSION................................................................................................................................9
RECOMMENDATION...................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Easy jet is a British multinational budgeted airline having their headquarter in London,
Luton Airport. It operates in international and domestic flights over more than 30 countries. Easy
jet also listed in London stock exchange and established in 1995. Easy jet had affiliated airlines
like Easy jet UK, Easy jet Switzerland and Easy jet Europe (Akinola, 2020).Whereas, easy jet
employed more than 15000 employees in European market for the smooth work flow and better
service to their customers.
This report will show various market structure in airlines industry, economic factors of
UK and how they affect the easy jet by influence with factors like demand and supply, income
level of consumers, inflation rate, taxes, Forex rate, recession and employment rate. How Brexit
affects the market of airlines and also the Covid -19 impact for the investment and their future
impact on market. Lastly conclusion and recommendation is being added for better
understanding.
MAIN BODY
2.1 Various Market structure.
Market structure refers to degree and nature of competition in a market that offers goods
and services. Market offers different kind of goods and service by different producers to
consumers looking for particular goods and service.
Perfect competitor: This market has large number of buyers and seller who sell and
purchase homogeneous products without any restrictions. Easy entrance of rivalry exists in the
market and they offer the product on market price (Acosta, Ihle and von Cramon-Taubadel,
2019).
Monopoly: It is the market where only one producer sell product in market and barrier to
entrance of competitor. The product had no close substitute in market and having low cross
elasticity of demand.
Duopoly: It is a form of Oligopoly where only two sellers are present in market selling
the same goods. Change in price and output may affect the other seller. However, both the seller
are independent.
Monopolistic competitor: It is a market where large number of firm selling differentiated
products in a same market. This market is not perfectly competitive. However, one competitor
cannot influence the price of other seller in same market.

Oligopoly: It is a market where few firms offer the same homogeneous product or
differentiate products. The competition is among the few firms which are dependent on each
other.
Market Structure of UK's Airlines industry.
Easy jet is one of the key competitor with international and domestic flights which
operate in oligopoly market. The imperfect competitor in market having limited number of
airlines companies dominated the industry (Albers, and Rundshagen, 2020). High investment in
industry lead to barrier to entrance in market. All individual airlines have power to change the
fair of ticket at different level of output. The two market which are dealing in the UK's airlines
are from short haul and long haul market. Companies are adapting the low-cost carrier strategies
that is being prominent factor in creating the demand for short haul places in European market.
Low prices are offered to consumers by the airline companies to increase the demand in
European sector. UK's airlines companies uses the Scenario planning to develop their business
strategy for future uncertainty. Airlines are more customer oriented to offer with low price and
rapid change in technology and education make firms to use scenario analysis to evolve the new
strategies. It also helps in sustainable growth of companies.
After recognizing Global leading airlines in world, UK's airlines industry has changed
their strategy and vision for longer term. High technology is being used by the industry to cut
their cost and to earn more of profits by developing the airports and terminals. However, UK
government integrates with the airlines to reduce the carbon emission and pollution release from
the aircraft (Akbar and Kisilowski, 2020). Hence, UK market is an oligopoly market due to few
numbers of airlines in market and barrier to entrance as all industry is working prices are set
according to their services offering from each airline company. The market is already well-
established offering through short hauls to long hauls and rule the market.
2.2 Economic factors of UK and how they will affect Easy Jet
Demand and Supply in UK
The aviation sector in UK Economy has been a major contributor speaking of the previous
decades. High quality infrastructure has created better transportation linkages which have
increased the number of people travelling through air. The increase of world trade has also led to