EasyJet Business Model Analysis

This assignment delves into the successful business model of EasyJet, a low-cost carrier. It examines their strategies for cost efficiency, target market, and how they navigate global issues. The analysis highlights key factors contributing to EasyJet's profitability within its chosen market segment.

Running Head: Global Hospitality and Tourism Sector
Global Hospitality and Tourism Sector

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Contents
Introduction.................................................................................................................................................1
Task 1:.........................................................................................................................................................1
Task 2..........................................................................................................................................................3
Conclusion...................................................................................................................................................4
References...................................................................................................................................................5

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Introduction
The purpose of this task is to provide a brief overview about the company Easyjet Plc. The task
one of this report tells the business strategy which Easyjet used to occupy the maximum market
share and attain success. Further the second part of the report explains the global challenges
faced by the company in the external market and its impact on the business activities and growth
of Easyjet. Further details about the task are discussed below:
Easyjet is a British airline providing low cost carrier services in the international market. The
company is headquartered in Luton, London and as founded in the year 1995 by Stelios Haji
Ioannou. The company provides its airlines services in total 133 destinations within Europe from
17 UK department points (EasyJet Plc 2017). Being a LCC, Easyjet faced many issues in
developing their business practices in the international market; also the company faced many
competitions as well. Further the business approach used by Easyjet is discussed below:
Task 1:
Before defining any strategy for the business to achieve success, the business initially needs to
define the objectives on the basis of which they have to initiate and implement the activities
accordingly so as to achieve success. Thus, considering to that, the objectives of the Easyjet
Company is to provide low fares and high frequency between major airports of Europe. Also the
company aimed to provide safe traveling experience to the customer at low costs to establish a
long lasting relationship (de Grosbois 2016). With context to that the company originated their
business strategy to which focused on developing a strong position in the European market by
increasing the frequency of works.
The strategy of Easyjet included following attributes which helped the company to succeed in the
target market.
 Lean Cost Advantage: The Company strongly focused on the cost and took the decision
of becoming a low cost carrier company. This process helped the company to cut the
competition of luxurious services providing company. As the services provided by
EasyJet gave an ease to the customers present in the market to travel and low fare and
attain complimentary services as well; due to which the customer enjoyed making
repeated sales for Easyjet. The lean culture followed by Easyjet promises the customers
to provide substantial cost saving even in cost inflation as well. The company committed
to improve the cost per seat and provide more benefits to the customer by maintaining the
airport and ground handling costs as well. The existing lean initiative held in the
organization delivered 95 pounds saving to the company which shows increase of 106%
year on year (EasyJet Plc 2017).

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 Being digitalized: The Company aimed to widen the use of digital strategy in their day to
day activities so as to improve efficiency. The digital platform of Easyjet supported
operational excellence, customer focus, leveraging data and maintaining customer
relationship as well. The digital media platform helped the company to increase its sales
and build a loyal image in the eyes of them. Talking about the current data, in total 74%
of seats were booked online by making repeated sales. The online app of Easyjet is being
downloaded 18.3 billion times which show increase from the past data. So, digital
technology platform played a significant role in making company successful in
international market. In the year 2013, Easyjet partnered their business activity with
Amadeus to support their business level strategy. This alliance helped the company to
nook more corporate travelling using the Amadeus innovative Light Ticketing Flow
(Sentence 2016).
 Customer centric strategy: All the operation performed in the organization is to
maximize the level of satisfaction of the customers. The organization implemented all the
strategies to provide more benefits to customer at low cost. In accordance to which the
company employed people who gave the customer a positive and stress-free experience
while travelling. STEM (Science, Technology, Engineering and Math) is being promoted
by the organization so as to help the women pilots to enter in the competitive world and
gain success. So, the company believes that all people connected to the company are a
family, for the purposes of which they work too maximize their level of satisfaction
(EasyJet Plc. 2016).
 Building strong network strategy: Easyjet focused on key airports to serve to provide
maximum services to the customers. More than leisure, economic resilient network was
framed by the company to support the demand of the customer and maximize their
benefits at low costs. Due to which airlines services were provided by the company at
affordable fares. This effectiveness was achieved by the company by combining various
features in their business strategy. Like, aircraft configuration enabled more seats per
craft, Younger fleets and advantaged fleet deal helped the company to reduce thee
ownership and maintenance cost (Bastida, and Huan 2014).
The operational cost performance of Easyjet gave better level of satisfaction to
customers. Decrease in disruptive cost helped the company to provide services at
affordable prices as compared to other companies without bearing losses. The company
initiated a programme namely Gatwick North Terminal programme which drove
operational balance and customer benefits as well. This programme focused on reducing
the technical issues by using enhanced maintenance and improving the disruption
management by using efficient technology (Zolfagharifard 2013).
So, with the use of Budget price business strategy EasyJet targeted entered in the international
market and not only gained success in numeric figures but also maintained an identified goodwill
as well.

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Task 2
Being a low cost carrier company with no frills was not easy for Easyjet to survive in the
international market. As it is one of the busiest airlines in Europe, the company needs to maintain
its pace in initiating business activities. But one of the biggest issues faced by the company was
the problem of increasing oil prices in the international market. The supply reached to $ 130 per
barrel, only the companies working large scale were efficient to survive, other companies
suffered heavy losses (Harrington, et. al., 2014). EasyJet being holding their business on large
scale effectively survived in the market, but somehow the company faced decrease in their
profits. Increase in fuel price is one of the most essential issues for a LCC company, as
customers use their services because it is affordable and convenient for them. But if the company
will increase the price to be in profit making zone then it will lose its effectiveness in the market
and customer will not make repetition in sales. This problem affected the growth of the coming
making it slow (Economic Environment and Business 2017).
Another global issue faced b Easyjet is environmental issues. As it is noticed that there is no
predicting of the environmental calamities, it can happen anywhere anytime. Concerning to that
issue, the company faced the danger many time due to which they cancelled many flights
resulting in bearing a huge loss in the revenue. During the recession period a huge volcanic ash
cloud occurred due to which EasyJet cancelled its flights and suffered from losses. With regards
to that the company used thee forecasting method to analyze the calamities and it working safety
in the external environment so as to protect the lives of customers and employees working with
them (Button 2008).
Consumer confidence is also one of the global issues faced by the company EasyJet. The
company needs to ensure that the services provided by them hold good values and standards with
them. People e a LCC company as a cheap company which does not provide adequate services in
the target market, due to this assumption, the brand image of the company destroys. Resulting to
which the company needs to change the mindset of the customers present in the target market by
showing their business values in the services which they provide then only the customers will
make repeated sales (Aragon-Correa, Martin-Tapia, and de la Torre-Ruiz 2015).
In the 2016, the company faces the major issue due to which they attracted a huge loss for the
company. Gatwick Airport was shut down after a tyre was busted during takeoff. This resulted in
a huge chaos between the customers and airlines companies as well. Easyjet was forced to shut
down their current flights due to which the company faced heavy losses. The company cancelled
3,268 flights in total due to which resulted in decreasing the efficiency of the company.
Comparing from 2015, the company delivered 77% on time services to the customers which was
3% less than that of 2015. Resulting o which the company faced heavy losses and the customers
also feared to travel with company. But they gained focused on improving the figures for which
Easyjet used innovative technology to reduce technical issues and improve disruptive innovation
(Altinay, Paraskevas, and Jang 2015).

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Conclusion
Thus, in the limelight of above mentioned events, the fact that shall be noted is that the business
model of Easyjet adequately supported them to work as a no-frills low cost carrier company.
Further the company faced many global issues as well which they properly taken care of by the
efficient management team. Thus, in this way the company aced their current target market and
earned profits.

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References
Altinay, L., Paraskevas, A. and Jang, S.S., 2015. Planning research in hospitality and tourism.
Routledge.
Aragon-Correa, J.A., Martin-Tapia, I. and de la Torre-Ruiz, J., 2015. Sustainability issues and
hospitality and tourism firms’ strategies: Analytical review and future directions. International
Journal of Contemporary Hospitality Management, 27(3), pp.498-522.
Aragon-Correa, J.A., Martin-Tapia, I. and de la Torre-Ruiz, J., 2015. Sustainability issues and
hospitality and tourism firms’ strategies: Analytical review and future directions. International
Journal of Contemporary Hospitality Management, 27(3), pp.498-522.
Bastida, U. and Huan, T.C., 2014. Performance evaluation of tourism websites' information
quality of four global destination brands: Beijing, Hong Kong, Shanghai, and Taipei. Journal of
Business Research, 67(2), pp.167-170.
Button, K., 2008. The Impacts of Globalization on International Air Transport Activity. OECD.
Pp: 5-31.
de Grosbois, D., 2016. Corporate social responsibility reporting in the cruise tourism industry: A
performance evaluation using a new institutional theory based model. Journal of Sustainable
Tourism, 24(2), pp.245-269.
EasyJet Plc, 2017. Strategy. Viewed on November 29, 2017 from
<http://corporate.easyjet.com/about/strategy>
EasyJet Plc. 2016. Investing in our strengths. Viewed on November 29, 2017 from <
http://corporate.easyjet.com/~/media/Files/E/Easyjet/pdf/investors/result-center-investor/annual-
report-2016.pdf>
Economic Environment and Business, 2017. The Challenges Faced by EasyJet. Viewed on
November 29, 2017 from <https://sites.google.com/site/economicenvironmentandbusiness/the-
challenges-faced-by-easyjet>
Harrington, R., K. Chathoth, P., Ottenbacher, M. and Altinay, L., 2014. Strategic management
research in hospitality and tourism: past, present and future. International Journal of
Contemporary Hospitality Management, 26(5), pp.778-808.
Sentence, A., 2016. Connectivity and growth The Brexit issue. PWC. Pp 1-44

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Zolfagharifard, E., 2013. Finally, a sensor that can detect ash clouds! Easyjet tests 'AVOID'
system that will allow pilots to fly during volcanic eruptions. Viewed on November 29, 2017
from < http://www.dailymail.co.uk/sciencetech/article-2505453/Easyjet-tests-AVOID-ash-cloud-
allow-pilots-fly-volcanic-eruptions.html>