Evaluating EasyJet's Contemporary Business Environment in UK

This report provides a detailed analysis of the impact of COVID-19 and Brexit on EasyJet's business environment in the UK. It explores the airline's operations within an oligopoly market structure, examining economic factors such as demand and supply, income levels, taxes, and recession, and their effects on EasyJet's performance. The report also investigates the consequences of Brexit, including market share decline and trade barriers. Furthermore, it highlights the significant impact of COVID-19, including financial losses and operational challenges. The analysis includes a discussion of market structures, economic factors, and specific recommendations to overcome the challenges faced by the airline. The report concludes with a discussion of the aviation sector in the UK, which has been affected by the presence of Brexit leading to lesser area of interest to be served. EasyJet is one of the growing company in the airline industry. This report analyzes various economic factors affecting the performance which has affected the business of the company. Also, it includes the impact of Bexit and analysis of COVID 19 impact on the business of EasyJet.

Contemporary Business Environment

ABSTRACT
In this report it has demonstrated the impact of COVID 19 on the airline industry in
UK. Easy Jet is one the growing airline company which is operating in oligopoly market
structure. As being the consultant for the company to analyse the current market situation for
the company, it can be said that company has negatively affected due to the current pandemic
disease. It has been facing various economic factors which have led to affect the business
growth of the company. These factors include income level, demand and supply, recession
and unemployment issues etc. Also, with the emergence of Brexit in UK, company has faced
various impacts such as decreasing market share, import and export barriers, high trade value
tax and other restrictions leading to change in the policies and regulation system of UK.
Furthermore, COVID-19 has impact the industry hugely leading first financial year loss faced
by the company since its inception. It is due to the presence of virus which spreads too fast
with proximity between human beings. This has led to cancellation of fights and lockdowns
leading to no business during this period of COVID 19. The travel industry has suffered
badly due to restrictions in moving out and fear of disease spreading among them. Thus, Easy
Jet has been impacted negatively with the presence of various major issues. This can be
overcome with the help of various effective measures to attract passengers. It includes
protection wears, face mask, sanitisation and entry and exit medical check-up etc.

Table of Contents
ABSTRACT...............................................................................................................................2
INTRODUCTION......................................................................................................................4
DISCUSION AND ANALYSIS................................................................................................4
The various market structures................................................................................................4
Economic factors of UK affecting the performance of Easy Jet............................................5
Impact of Brexit on the EasyJet’s business in UK.................................................................7
Impact of Covid 19 on Easy jet..............................................................................................7
CONCLUSION..........................................................................................................................8
RECOMMENDATION.............................................................................................................8
REFERENCES...........................................................................................................................9

INTRODUCTION
The aviation sector in UK is one of the most reputed and elite industry in the world.
The operating environment of a business has major influence on the company leading to
changes in the operations and financial position of the company. It is due to the presence of
COVID 19 which has impacted the performance of the industry drastically. It has led to bring
various changes in the market which has affected the current situation of the aviation sector.
The aviation sector of UK has been affected by the presence of Brexit leading to lesser area
of interest to be served. Now UK civil aviation association is no more the part of European
union aviation. This has led to affect the performance of the industry. EasyJet is one of the
growing company in the airline industry (Belás, Čepel and Rózsa, 2019). Due to the impact
of covid 19, this sector has gone through various economic challenges which affect the
business of the EasyJet. This report includes the market structure of aviation sector in UK and
its operation in the country. It analyses various economic factors affecting the performance
which has affected the business of the company. Also, it includes the impact of Bexit and
analysis of COVID 19 impact on the business of EasyJet.
DISCUSION AND ANALYSIS
The various market structures
Market structures are the situations in which a sector operates with the help of
different characteristics and nature. It is the formation of market where goods and services
are purchased with respect to the intensity of competition and its nature. There are four types
of market structure which are as following:
 Perfect competition-
In this market structure there are large number of buyers and sellers present in the
market. It is the situation where all the market players sell identical products. This leads
to fewer restrictions on the entry and exit of competition in the market. There is perfect
knowledge of market conditions to all the players which helps in selling goods at same
price in different places. This leads to no transportation and selling cost in the market.
 Monopoly-

In this market structure there is only one seller and large number of buyers in the
market. It has large number of entry barriers to other players in the market. Monopoly has
all the powers in influencing the market conditions such as price of the product. This
condition mostly prevails in the government sectors or doses not prevail in the real world.
 Monopolistic competition-
In this market structure there are large number of sellers for differentiated products.
They produce substitute products which has different features than their competitive
products. This leads to similar products in the market with few differences. In this there is
freedom in the entry and exit of players in the market.
 Oligopoly-
It is one of the new emerging market condition in which there are few sellers which
provide similar or differentiated products in an industry. Oligopoly market has few sellers
which has high influence in the change caused by one of the competitive player in the
market. This leads to interdependence on each other to sustain in the market with profits.
There are high entry and exit barriers in the market due to presence of high standards
between the existing players.
The market structure of UK’s airline industry is imperfect competition due to presence of
fewer market players present in the industry. They have high dominance on the functioning
of the market leading to presence of oligopoly market condition. The major impact of any
industry is the power to change the prices of the product which leads to success and failure of
a product. It is important aspect in the industry to have control on the decision making for the
proper functioning in the oligopoly or imperfect market conditions. The aviation industry in
the UK has fewer competitive players in the market with British airways. Easy Jet is one of
the emerging market player which has wide market capitalisation and share in the domestic
and international market. The industry has fewer market players which has power to
dominate the market conditions and influence it (Cepel, Belas Rozsa and Strnad, 2019) . The
company faces all the changes played by other dominating companies such as British
airways. This leads to the formation of group of players interdependent on each other for the
stabilisation in the market. The leader of the industry affects the operations of others by
influencing demand in the market. Thus, it can be said that company operates in the oligopoly
market structure with fewer players selling homogenous or differentiated services to its target
market audience. This leads to presence of imperfect competition market where players faces
high exit and entry barriers from the industry.
Economic factors of UK affecting the performance of Easy Jet
Economic factor has major impact on the performance of the company due to the
presence of uncertainty in the market of UK. This has been concerned due to fluctuations

present with various challenges in the airline industry. Following are the major factors which
has impacted the business of the EasyJet.
 Demand and Supply-
It is one of the fundamental economic factor which affects the operations of the
company. Demand and supply is measured by the market forces which has direct influence
on the performance of the company. It is one of the important source which has direct impact
on the profitability of the company. Change in demand is caused by change in the other
factors such as price of the product and price of the substitute product has major impact. This
leads to fluctuations in the demand of the product due to changes occurred in other factors.
Similarly, supply of the product gets impacted with the change in the supply of raw material
such as price, quality, availability and other factors. This has a direct influence on the supply
of the product in the market. In terms of airline industry of UK it can be said that demand and
supply of the flights has major impact on the number of flights flew which led to impact the
revenue generated. The major source of factors affecting the demand and supply of flights are
price of the raw material, change in the climate and income of the passengers etc. This leads
to majorly affect the performance of the Easy Jet.
 Income level-
Income level is another major factor affecting the performance of the company.
Income of passengers has direct influence on the level of profitability earned by the aviation
sector. It has direct relation with the change in the performance of the company. It affects the
company with number of people opting for flights for their travelling. This leads to number of
people travel in a row or in a route. Thus, level of income has direct influence on the
performance of the company affecting the business in the country. This has led to affect the
business performance of Easy Jet due to change in the income level of the people in the
country. This factor can be analysed with the help of GDP and fluctuations in the demand and
supply of company’s product. It is affecting the overall business of the company as income
level is one of the major and critical factors for the airline industry. With the presence of
various fluctuations due to two major outbreaks such as Brexit and Covid 19, it has led to
decrease the income level of the people in UK. It is directly impacting the number of flights
flew and passengers checked in. Thus, these outbreaks have led to decrease the income of
people in the country affecting the business of the company.
 Taxes-
It is another source of factor which has indirect influence on the performance of
airline industry. Increase in the number of taxes paid by the customers and company leads to
increase in the price paid by the passengers for travelling. Taxes are direct source of income
for the government of a country. This leads to increase in the expenditure for company. It is
sourced by various different factors such as impact of Brexit leads to change in the regulation
of the industry. This can be seen due to presence of various changes impacting policies and
regulation. Taxes are one of the major source of increase in the price of the flights. This
impacts the number of people travelling in the flights leading to change in the performance of

the company. Increase in the taxes due to Brexit has led to affect the profitability of the Easy
Jet airline. Company is facing challenges after Brexit and changes in the regulation of the
aviation sector by the government.
 Recession-
It is one of the substantial source of economic factor affecting the performance of the
company. Recession is one of the situation where income of the people is affected due to
stagnation occurs in an economy. It can be occurred due to various reasons such as increase
in the unemployment, lower level of production in the country and poor financial policies etc.
This influences the overall performance of the company majorly leading to lower business. In
the aviation sector of UK it can be seen due to presence of Covid 19 which has led to various
challenges. It has become one of the major source of recession in the country (Hrechyshkina
and Samakhavets, 2019). This can be observed due to shutting of shops and lock down
present in the country as well as across the world. This has resulted in recession and change
in the expenditure behaviour of company. Covid 19 has affected the businesses leading to
losses. Easy Jet has faced this problem majorly leading to losses in the financial position of
the company.
Impact of Brexit on the EasyJet’s business in UK
Post Brexit, UK has faced impact on various sectors in which aviation is one of them.
Due to this sector has to plan new policies and regulation in which fundamentals are same as
before. It has decrease the number of passengers in the country leading to decrease in the
profitability and business of the company. The company is headquartered in London leading
to various changes due to exit of Britian from UK. This has impacted the performance of the
company majorly with less number of market capitalisations. It has led to various changes in
the policies which has impacted the business of the company. Brexit has major impact on the
aviation sector as well as other sectors in the country. This can be seen from the changes in
the number of people travelling through flights and demand for the tickets. Company has
observed decrease in the share of profits due to exit of Britain from UK (Ištvanić, Crnjac
Milić and Krpić, 2017).
Impact of Covid 19 on Easy jet
Covid 19 has impacted the business of Easy Jet majorly due to presence of lockdown
and shut down in the sector. It has stopped the travelling industry majorly impacting huge
losses for the aviation industry. This can be seen from the financial losses faced by the Easy
Jet due to this pandemic occurred across the world. This has major effects on the financial
position of the company facing financial loss first time from its inception. Covid 19 has major
impact on the performance of the company due to increase in the number of patients affecting
from the disease. It has led to various losses as travelling industry is brutally impacted with
the presence of this pandemic and disease. It has both long and short term effect on the
performance of the company negatively (Belás, Čepel and Rózsa, 2019).
The long term impact of Covid 19 on the company is lower business profitability due
to change in the interest of passengers to travel and more precautions, safety equipment used
in the flights. This change can impact the number of passengers opting for flights in travelling

and their least interest in the travelling to other countries. It has led to increase the number of
flights fly in a day and traffic faced between the routes. Covid has long term impact on the
industry due to presence of disease and there is no permanent vaccination has released.
Though the company is facing this problem optimally and strategically with the use of all the
major precautions. Thus, this disease has major impact on the long term as well which can be
faced with increase in number of safety measures for close contacts of passengers. It has
increase probability of spreading among the people leading to affect the health of passengers
majorly. This can be solved with effective measures taken by the company and using more
safety and health measures required to combat this disease in an effective manner(Cepel,
Belas Rozsa and Strnad, 2019).
CONCLUSION
From the above report it can be concluded that aviation industry is facing major
challenges due to change in the business environment of the country. It has led to impact the
financial performance of company majorly leading to losses. Due to outbreaks of Covid 19
and Brexit, it can be observed that Airline Company is facing huge losses due to less number
of flights and passengers traveling in the country. Economic factors have major impact on the
performance of the company which has negative impact. These factors are damaging the
financial position of the company majorly. Also, Brexit has impacted the performance of the
airline sector majorly. This can be observed with changes in the number of passengers and
decrease in the market to be served. Thus, aviation sector has major impact on the
performance of the company due to various economic factors leading to failure in the
stabilisation of the company. Aviation sector is one of the critical sector which has got
severely impacted due to the two major outbreaks leading to various fluctuation in the market
of the company.
RECOMMENDATION
It is recommended to the company to utilise various safety measure for the health
concerns of the passengers travelling in the flights. Covid 19 has major impact on the health
of the people which cannot be taken less effectively. Major actions should be taken for the
benefit of people to maintain their health concerns and facing this challenge more effectively.
Also, for dealing with other challenges it is recommended to undertake various disciplinary
actions for the survival of the company. It should promote its services more for increasing the
awareness and benefits of travelling across the world. This will help the company in
attracting more people and boost travelling. It is recommended to take all the health measures
to ensure the safety of passengers from this major havoc disease. It can be spread at much
faster rate with close contact between people in the flight. For this testing should be
compulsory for the benefit of people and analyse number of people with symptoms of corona
virus. It will help the company in facing this problem majorly and providing safe travel
experiences.

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