Market Structure of EasyJet in UK

Business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Discuss the market structure of UK in which the EasyJet operates.......................................1
TASK 2............................................................................................................................................3
Discuss the economic factors within the UK hat affects the business of the EasyJet............3
TASK 3............................................................................................................................................6
Discuss the likely impacts of Brexit on the business of EasyJet............................................6
TASK 4............................................................................................................................................7
Analyse the impact COVID-19 is likely to have on business of EasyJet...............................7
CONCLUSION................................................................................................................................8
References:.......................................................................................................................................9

INTRODUCTION
A business is term used for the enterprise that performs commercial activities to gain
profitability and productivity. In today’s era the businesses have shifted themselves towards the
technology to run their enterprise on the online platforms (Procacci, Phelan and Aste, 2020).
These businesses are termed as digital business. In this competitive world every organisation in
the economics is differentiated on the basis of number of buyers and sellers, price power,
competitions etc. And this is known as market structure. Market structure is a term used to define
the nature of the degree of competition prevailing in the particular market of goods and services.
It is also essential for the organisation to consistently analyse the economic environment of the
country in which it operates. The present report is on the EasyJet a low cost British airline.
EasyJet was started under the leadership of Greek- Cypriot entrepreneur Stelios Haji- loannou in
1995. The company flies both domestic and international routes the headquarter of easyjet is at
the London Luton airport, UK. The company operates its business in almost 30 countries across
the world. Easyjet is currently the second largest low cost airline in UK based on the number of
passengers. form is the seventh largest airline across the world. Easyjet has approx 15000
employees working in its organisation. Easyjet also trade and lease its aircrafts. The report
describes the oligopoly market structure in the UK within in which the EasyJet operates its
business activities. Oligopoly market structure contains few numbers of businesses and each of
them has no significant influence on each other and these few forms have the dominance in the
market. In the report economic factors such as currency fluctuations, foreign exchange rates,
unemployment, inflation etc. are briefly discussed with their affects on the business of EasyJet
UK. Brexit a crucial factor among the UK and it affects on the business operation of the EasyJet
in UK are also explained. Report also describes the impact of global Pandemic covid-19 on the
business operations and sales of the EasyJet in UK.
TASK 1
Discuss the market structure of UK in which the EasyJet operates
In the competitive markets, it is very important to analyse that in which market structure a firm
operates because market structure has great implications for the profits, prices, products and
suppliers of the firm (Indounas, 2018). Market structure helps us to depict how the organisations
are differentiated on the basis of types of products and services they offer and how their business
1

activities are affected by the external environmental factors. The market structure of the
organisation includes various determinants such as factors of production, numbers of buyers and
sellers, nature of product, entry barriers, government interventions etc. to understand the
operations of the firm. There are various forms of the market structure such as perfect
competition, Monopoly market structure, oligopoly market structure, monopolistic competition
market structure etc. in which the various firms of the UK operates their business activities.
EasyJet is a leading Airline company that operates in the oligopoly market structure of UK, a
market structure where there are few firms that offer such products or services to the large
number of buyers with dominance in the market (Thisse and Ushchev, 2018). It is market with
few businesses and higher dominance as companies collude together to set the price which are
non- negotiable and uncompetitive. Easyjet deals with the same service of transporation via air
through various aircrafts which have rare or no substitute therefore comes under homogenous
market structure. The services offered by the EasyJet have limited substitutes in the airline
industry with the same low cost. The firm believes that lower the cost of airline tickets, more the
people will fly.
Characteristics of the oligopoly market structure of easy jet, UK are discussed below:
 Interdependence
The firm's operating within the oligopoly market structure are independent as
there is influence of other firms operating in same industry. Major airline companies of the UK
operate under the oligopoly market structure. Easyjet operates in this market structure with the
few competitors like Ryanair, British Airways etc. The decrease of the prices of the easyjet has
made the company top most low cost flight airline thereby increasing its sales compared to other
companies.
 High entry Barriers
The barriers to entry in the oligopoly market structure are high the low barriers can bring
abnormal profits and which might reduce the market share of the dominant firms. But Easyjet
with its low cost airline has increased the competition and overcome the high entry barriers. The
reason for the high barriers to entry in airline industry in which Easyjet operates is due to the
government also as it may not grant the legal rights to the company's to land and fly the aircrafts
on the airports.
 Small number of firms
2