Market Structure and Economic Factors Affecting Easyjet's Business Operations in the UK

REPORT

TABLE OF CONTENTS
MAIN BODY...................................................................................................................................1
1. Market structure in UK within which Easyjet operates...........................................................1
2. Economic factors within UK that affects the business of Easyjet...........................................2
3. Impact of Brexit on the business operations of Easyjet...........................................................4
4. Impact of COVID 19 over business of company.....................................................................5
REFERENCES................................................................................................................................7

MAIN BODY
1. Market structure in UK within which Easyjet operates
The market structure in any country signifies the level of competition, differentiation and
categorization of the firms in the market where the buy and sell the products and services. It
comprises of the external environment with which the operations of the business are affected. It
can be majorly of four types which includes perfect competition, monopolistic competition,
oligopoly and monopoly having different characteristics and impacts on the business.
The market structure in which the airline industry operates in UK is the oligopoly market
structure. Easyjet an airline company in UK is conducting its business operations within the
oligopolistic market structure (Siegert and Ulbricht, 2020). All its policies are designed to meet
the competition that it faces in the market and captures the market share by developing unique
selling point in the industry. Through this it achieves customer satisfaction and is able to
maximize its profits.
In the airline industry in UK there are few big players in the market who have assumed
all the market share of the industry. The competition in the market is high as there is
interdependency among all the firms in the air transport business (Koopmans and Lieshout,
2016). The market is handled by few big companies who have ensured that high barriers to the
entry of new companies are established. Since new companies are not able to enter the market so
the proportion of the market stays distributed among these airline businesses. In order to assume
more control in the market price wars are the way to capture the market. If the price is low it
shall attract more visitors to the company, on the contrary with high prices are to cater the
specific niche market. The prices are high in oligopoly as compared to the perfect competition in
the market.
Easyjet was established at the time of deregulation of the European airline industry when
they sought to take the benefit of the imperfect competition and gain dominance in the market.
Easyjet generates competitive edge among its competitors and gain the market share by
establishing the low cost carriers with no-frills to differentiate its product from that of the
competitors (Lawton, 2017). Since there is interdependency in the market, so as they offer the
short-haul and medium haul flights at low fares then the travellers prefer them over the other
high priced flights. In that case they are able to maximize their market share as well as generate
1