Corporate Governance and Performance: Comparative Discussion on Easy Jet Plc and Wizz Air

This article provides a comparative discussion on the corporate governance and performance of Easy Jet Plc and Wizz Air. It covers their products and services, financial performance, and more. The article also discusses the importance of customer communication and digital service in the aviation industry.

Corporate Governance and Performance
Comparative Discussion on Easy Jet Plc and Wizz Air

Table of Contents
Introduction......................................................................................................................................3
Comparison of Organisations based on performance and Corporate Governance..........................4
General Comparison....................................................................................................................4
Discussion on Performance..........................................................................................................5
Discussion on products and Services...........................................................................................7
Discussion on Corporate Governance..........................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

Introduction
The aviation industry is one of the leading sectors in the United Kingdom. This is one of the
sectors that contributes highly to the growth and development of the economy. Over the years
the traveling interest of people has increased significantly which has helped companies to grow
and develop steadily. It is important to note that the constant increase in traveling interests of
people has given birth to new and effective aviation business plans. When earlier British
Airways was one of the key passenger carriers in the UK then companies like Easy Jet and
Wizz Air have captured the market to a large extent. From the low cost airlines to the premium
airline services UK airline industry is one of the most active airlines industries in the world with a
total global market share of nearly 1% (Khan, Serafeim and Yoon, 2016). There are number of
different airlines companies like Ryanair which has already gained significant market share in
UK which shows that the definition of flying has also changed among the consumers. The UK
airline market is clearly highly competitive with different numbers and types of organisations
competing against each other. The biggest rivalry at this point of time being between Ryanair,
British Airways, and Easy Jet and Wizz Air has shown the importance of this market. Different
kinds of customers could be seen in the market presently where most of the people are traveling
for business and some for leisure but the recent trend that has taken over the airline industry is
the concept of low cost airline which has attracted a number of people to believe in companies
like Easy Jet and Wizz Air (Chang et al., 2015).

Comparison of Organisations based on performance and Corporate Governance
General Comparison
Organisations have different motives to operate in the market but most of them operate with
profit motive. It is extremely important for each and every organisation operating with profit
motive to achieve their financial goals which would help to ensure success in the long run. Most
of the organisations in the current market environment fail to understand the fluctuations which
really affect their business strategy and hence lead to their downfalls (Casado-Díaz et al.,
2014). Since, most of the industries are highly competitive nowadays it is important for the
organisations to keep a track of their operational activities and constantly assess what could be
done better. One of the effective tools to retrospect on the performance of an organisation is the
annual report that is developed keeping in mind the various fields of operation and putting the
right information for the stakeholders to learn (Tavassoli, Faramarzi and Saen, 2014). The
annual report acts as a mirror for the organisation as it highlights the key achievements in the
field of finance, stakeholder management, corporate governance et cetera. This also helps the
organisation to make its future strategies accordingly. The present comparison helps to analyse
two low cost and similar service providing organisations namely Easy Jet and Wizz Air.
Europe is not only important from political perspective but it is also extremely important in terms
of business. The European market is effective for a number of sectors and Airline is one of
them. Over the years companies like British Airways have dominated the European market but
with the new trend of low cost airline services British Airways have lost a part of its glory.
Emerging organisations like Ryanair, Easy Jet and Wizz Air have encashed on this situation of
changing interest. From the present market statistics Easy Jet and Wizz Air are at loggerheads
given the similar situation that they are in whereas Ryanair has grown to a bigger stature hence,
it could be said that the trend of low cost airline has already brought a new wave which is clearly
changing the course of the business. Apparently there might seem a number of similarities
between Easy Jet and Wizz Air but they differ in number of aspects (Chang et al., 2015).
There are number of key aspects which have to be discussed in this case and hence, the first
parameter of comparison that is taken is the time of existence of both these organisations. Easy
Jet came into being in the year 1995 whereas Wizz Air is comparatively younger as it started its
operation in the year 2003. Easy Jet since then has expanded to 136 destinations whereas
Wizz Air has already crossed that mark to send its fleets to 141 destinations. Hence, in this
segment the latter is already ahead. In terms of fleet size Easy Jet is a tad ahead with 319

fleets but given the lesser time Wizz Air has operated in the market it is likely to catch up with
easy jet.
The main aim of Easy Jet is to provide the consumers with reliable point to point air services
and create value for the consumers. The organisation has been able to create reliability through
its standardised and timely air services which clearly makes it one of the leading low cost airline
services across Europe. The organisation has so far acted on its mission and objective that is to
attract more and more people through its easy low cost business model and reliable services.
On the other hand Wizz Air’s aim is to focus on innovation mostly and to deal with the market
competition with the help of affordable flying service for the consumers. One of the major
differences between these two organisations so far is the aspect of reliability. Easy Jet has been
able to work this aspect properly with timely flight services whereas Wizz Air has had its
problems with flight timings in the recent past, but the organisation strives to focus on innovation
with its product offering and real low cost service system that helps it to enjoy upper hand in the
market (De Boer, 2018). Hence, it could be said that both the organisations are more or less in
the right track in terms of growth and development aspects. However it could be said that Wizz
Air is ahead in terms of providing services to different routes as it offers flights in around 500
routes where Easy Jet is still behind. The organisation Wizz Air offers some unique destinations
like Kazakhstan whereas Easy Jet is focused on Southern Europe mostly. Hence, Easy Jet
could expand its business in the Eastern Europe (Khan, Serafeim and Yoon, 2016).

Discussion on Performance
The financial performance of an organisation clearly shows the positive or negative movement
of an organisation in the market hence, it is extremely important to analyse how both Wizz Air
and Easy Jet work on their financial performance. The financial performance of Easy Jet and
Wizz Air are given below:
Easy Jet Revenue 2018 Wizz Air Revenue 2018
According to the above figures it is clear that Easy Jet has been able to generate more revenue
as compared to Wizz Air. To be precise Easy Jet has been able to generate an amount of £
5,898 M on the other hand Wizz Air has managed a total revenue of £1948 M in the year 2018.
It is extremely important to note that since the organisation Easy Jet has more flights operating
with a strong capital as compared to Wizz Air the level of total revenue is higher. It is important
to remember that Wizz Air is comparatively a younger organisation starting its operation after 8
years to that of Easy Jet. It cannot be denied that in order to compete in this highly competitive
market environment it is important for a low cost carrier to constantly analyse its loopholes
which would help the organisation to make effective strategy at the end. The fares are cheap to
a large extent which could be another reason for lower gross profit of the organisation Wizz Air.
As compared to Easy Jet or Ryanair Wizz Air cut their prices that effectively put them in the
front seat for long term competition (De Boer, 2018).
The share prices are largely attached with the financial performance and it also shows the faith
and belief of the investors on each of the organisations.

Fig 3: Share Price Fluctuations (De Boer, 2018)
As per the above picture it is showed the present situation of the share price of both Wizz Air
and the Easy Jet. The picture shows that since the floatation of the organisation Wizz Air the
organisation has been able to up its share price significantly due to rapid expansion of the
organisation and effective service as well. As per the result of 2016 the organisation Wizz Air
has grown by around 135% in terms of share price whereas Easy Jet has just gained 42%. This
is clearly the case of maturity versus introduction. Easy Jet is comparatively an older business
which makes the sluggishness of the share price an inevitable case but the organisation should
not be in a spot of bother as it has passed the introduction stage whereas Wizz Air was in the
introduction stage for a long time and hence its rapid growth was expected and paired to with
excellent service it has been extremely effective for the organisation (Dai, 2018). There are
number of issues which should be considered in this regards and one of the major issues being
Brexit. The organisation Easy Jet is directly affected by the referendum because it is a UK
business whereas Wizz Air is likely to get less affected because it is comparatively a new
organisation and given its lower costs and less legal implications would be positive for the
organisation (De Boer, 2018).
In terms of performance it is also important to note that one of the major differences that Wizz
Air has with Easy Jet is that the latter focuses on bigger and major destinations like Paris or

Madrid whereas the former has also focused on smaller cities yet important places like Zagreb,
Tel Aviv, Riga et cetera. This clearly fetches the income as well as develops the market
awareness for a new organisation like Wizz Air (Walulik, 2016).
Discussion on products and Services
The product and services of both the organisations are more or less similar in nature. Both the
organisations provide low cost air service which includes effective on time flights and better
luggage treatment. In this case to compare it could be said that Easy Jet is ahead of Wizz Air in
terms of on time flights because it has an excellent networking and infrastructural support
whereas Wizz Air has failed in some cases to provide on time flights. For this reason Wizz Air
also has on time guarantee flight which would help the organisation to focus on providing on
time services to the consumers. The 10 EUR ticket of Wizz Air guarantees to compensate back
if the flight gets delayed which is not there in Easy Jet because it focuses on doing the job in the
best possible manner. Unreliability is one of the major issues in air service sector hence, at the
present moment it could be said that Easy Jet is comparatively ahead of Wizz Air in this
segment (Eriksson and Steenhuis, 2015). The luggage scheme of Easy Jet is also effective as it
provides free luggage based on certain calculations whereas Wizz Air is yet to come up with
something like that which is another area of improvement for the organisation. In flight services
includes food and drinks services which are served by both the organisations. The prices for
food or drink range from 2 euro to 6 euro which clearly shows there are hardly any difference
between their approach in terms of food and drinks, but to scrutinise the services it could be
said that Wizz Air is slightly ahead of Easy Jet as a can of beer could be bought for around 5
EUR whereas its 6 EUR in Easy Jet. Among the European Airlines Wizz Air has the second
lowest cost per seat available which is likely to provide higher competitive advantage for the
organisation (Van de Voorde 2015).
In terms of Employees Wizz Air have around 3700 employees working around the globe. As of
2017 total number of employees carried by Easy Jet is around 12,800 that is way bigger than
the former organisation. It is important to note that Wizz Air is comparatively smaller and hence
the strength. It cannot be denied that Wizz Air is one of the fastest growing organisations in the
Europe and so they shouldn’t be concerned about the number of staffs. What stands to be
important is to analyse the stakeholders who are directly related to these organisations. Both
these organisations receive consumers from business fields and leisure which clearly but
people looking to enjoy tourism are looking for Wizz Air to get the travel done at an affordable
rate which clearly justifies the increase in number of passengers for the organisation. Both these

organisations have the right mix of skills, experience and talents hence, they are able to face
challenging times (Burghouwt and de Wit, 2015).
Another major point that needs to be discussed in this case is customer communication and
digital service. Easy Jet has become one of the leading low cost airlines because the
organisation has been able to communicate with the consumers through the various online
mediums which are extremely important in the modern day scheme of things. Easy Jet has
excellent online presence. The website is an extremely effective way of communicating and
selling products and services. Easy Jet has succeeded in developing a strong online
infrastructure that helps consumers to make online bookings and communicate with the
customer service associates whenever required to get essential information. On the other hand
Wizz Air has a long way to go to develop a strong online infrastructure. Consumers have faced
issues to access Wizz Air website from different browsers and glitches have worsened their
experience which has been a problem for the organisation (Akgüç, Beblavý and Simonelli,
2018).
Apart from that communication is not that frequent with consumers through social media which
is also extremely important in the present day market (Van de Voorde 2015). Apart from that
Wizz Air needs to reduce its flurry of complaints that have created negative brand image for the
organisation where Easy Jet has encashed on its excellent consumer relations. Another major
issue that one faces at Wizz Air is their up-selling process. The organisation has a bad strategy
for upsell which clearly disinterests the consumer. Easy Jet is extremely transparent in this case
which clearly helps the organisation to get better footfalls (Van de Voorde 2015).
Wizz Air is still expanding its market and mostly flies into the smaller airports which most of the
time is extremely tough to get to hence, when a customer is interested to buy products or
services from the organisation he or she has to cross check the system or else it is really
difficult to get to the airport. Easy jet even though comparatively older to the former organisation
has better services and access for the consumers which provides upper hand to the consumers
(Akgüç, Beblavý and Simonelli, 2018).
Discussion on Corporate Governance
Finally it is important to compare corporate governance issues of both these organisations.
Corporate governance could be defined as the regulations which help an organisation to
perform their duties and maintaining a perfect balance between the organisation interest and the
interest of stakeholders. Corporate Governance is an extremely important aspect for a business

that works all across the globe and especially those who deal with stakeholders. Corporate
governance includes effective control over the social, environmental and financial aspects
associated with the business. Both the organisations strive to improve their corporate
governance through effective communication and execution of strategy for better relationship.
When Wizz Air strives to execute their corporate culture in the governance then Easy Jet is
focused on developing effective culture for each of its separate departments (Akgüç, Beblavý
and Simonelli, 2018). Here it could be argued that having an overall corporate culture operating
in the organisation and among the internal and external stakeholders helps the organisation to
operate effectively because of its universal considerations then developing cultures for
individual departments are not without negatives because it is not only time taking but it also
becomes tough for the employees to imbibe the values and morals faster. Hence, it is extremely
important that Easy Jet looks for better and flexible culture and approach to corporate
governance. Easy Jet’s positive is after an excellent last financial year and a significant growth
the organisation has announced an increase of 43% in the dividends which is likely to
strengthen the bond between the investors and the organisation. On the other hand Wizz Air
has also succeeded in increasing its business in the last five years or so but it doesn’t believe in
announcing rapid increase in dividends and rather sticks to slow and steady movements of
increase which is a “wait and watch” approach which also has its negatives as the investors
might make reckless decisions to leave the organisations (Zhang and Gimeno, 2016). Both the
organisations believe in a clean and transparent reporting approach which has helped the
organisations to communicate with the stakeholders. The quarterly and annual meetings with
the stakeholders especially with the investors help to largely make amendments. Easy Jet has
also tried to be ethical in its operations by reducing carbon emission and contributing to
environmental developments. Wizz Air is not that active in CSR practices but it is playing its part
to contribute to the environment. Easy Jet performs really well in consumer health, wellness and
safety but performs poorly in water conservation and pollution prevention but it is rated highly in
terms of corporate governance practice due to its clean and transparent reporting practices. On
the other hand Wizz Air has been effective in maintaining consumer health and safety but has
failed to reduce carbon emission and has fared well in workplace safety and pollution prevention
through effective disposal of waste and proper treatment of waste (Burns and Cowlishaw,
2014).

Conclusion
To conclude it is to be stated that both the organisations possess positives and negatives as
well. Even though the organisations are moving in the right direction in terms of business it is
important for them to develop a strong strategy to improve corporate governance and financial
performance. First of all it is extremely important for Wizz Air to develop strong strategic plan
which involves extensive promotional campaigns which would help to compete with Easy Jet
especially in the southern and western regions of Europe. On the other hand Easy Jet should
expand its destinations effectively in Eastern Europe to generate higher revenue and to improve
the financial performance. Both the organisations need to emphasise more on a strong
Corporate Social Responsibility plan which would help to take into account all the key aspects of
corporate governance and ethical practice.
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