EasyJet Airlines: Market Analysis, Economic Factors, and Brexit Impact

This report provides a comprehensive analysis of EasyJet Airlines, examining its market structure within the UK, which is characterized as an oligopoly. It delves into the economic factors affecting the airline, including wages, inflation, fluctuating oil prices, employment, business cycles, exchange rates, and government expenditures. The report further explores the impacts of Brexit on EasyJet's business operations, including potential revenue drops and changes in industry access rules. Finally, it analyzes the significant impact of the COVID-19 pandemic on the company's business, covering challenges and adaptations. The report concludes by summarizing the key findings and providing relevant references.

Easy-Jet marketing

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK1.............................................................................................................................................3
Market structure of Easy Jet Airlines in the U.K........................................................................3
TASK2.............................................................................................................................................5
Economic factors affecting Easy-Jet airlines..............................................................................5
TASK3.............................................................................................................................................8
Impacts of Brexit on the business operations in the company....................................................8
TASK4.............................................................................................................................................9
Analysing the impact of COVID-19 on the business of the company........................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
BOOKS AND JOURNALS......................................................................................................11

INTRODUCTION
Market structure defines the structure of the firm and the market's characteristics which
affects the business competition and their pricing factors (Gascón, J. F. F. and Et.al., 2017).
Market structure is termed as how firms differentiates and characterized their products from
others whether it is homogeneous and heterogeneous products and how it is affected by external
factors. Generally, it involves these types of market structure; perfect competition, oligopoly,
monopoly, duopoly, natural monopoly and monopolistic competition. It is affected by these
elements size of sellers, pricing and selling costs, entry and exit in new market, product nature
and many more. In this report, the discussion is going on the Easy-jet airlines which was
established 26 years back in march, 1995. It is a British multinational and low cost pricing
airlines headquartered in London, Luton airport. It functions both international and national
organized services. This airlines is highly known for its budget friendly services and in 2014 it
became the second largest budget airlines which carried over 65 millions passengers. The airlines
market structure is not considered to be a perfect competition but as imperfect competition where
a minimum number of airlines are dominating in the airlines industry. As per the studies, there
are only nine other airlines recorded in the country. The airlines industry is featured as oligopoly
competition in which the pricing strategies may vary with pricing of other rivalries.
MAIN BODY
TASK1
Market structure of Easy Jet Airlines in the U.K.
Market is a place where products or services are being purchased and sold. In the
economics, a market is not considered as a single place but as whole where buyers and sellers
come together in order to meet their requirements. It is a wide term used in the economics.
Market structure is defined to the number of competitions and different categories of products
and services in the same market or industry (Chaffey, D. and Smith, P. R., 2017). It can be
determined as a nature of competition in the same type of market. Here, the deals of commodities
may be also through internet, phone calls, letters, telegrams and many more. In this report, the
airlines market taking as a base and this type of industry is a oligopoly competition where there
are small number or limited set of competitions which are interdependent with their service
policies and pricing policies.

Characteristics of the oligopoly market:
 Barriers to entry: There are only few barrier to the same market place because it is two
costly to enter and compete with potential rivalries.
 Interdependence: This feature says that firms who are controlled in oligopoly market
cannot make decisions independently, suppose one company changes their pricing
strategies can affect the other because the competition is very close this type of market
and interdependent with each other.
 Few sellers: There are only few sellers in the market who holds with same level of
competition as it is costly make an entry in the industry.
 Competition: Oligopoly market leads to competition with limited number of sellers,
single step or change in decision making or pricing policies of one seller affects the other
rivalries.
Market Structure are classified into different ways:
 Perfect competition: At this market, the competition among buyers and sellers are at
very large, they come with same intention and with homogeneous product for the
purpose of buying and selling with a perfect knowledge of market at a time.
 Monopoly market: There is no competition in this market (Morlotti, C. and Et.al.,
2017). A seller is entered with no substitutes of product with barriers to entry of others in
the market place.
 Duopoly: This is a special case in which two sellers are entered in the market with a
intention of selling homogeneous products and are interdependent of market, a little
change in the prices affects each competition.
 Oligopoly: It is a situation where few number of competitions are there with
homogeneous or heterogeneous products.
 Monopolistic Competition: This is a market where there are large number of products
sell by sellers which can be differentiated among others and there is no close substitutes
of products.
In this report, it can be considered the airlines industry as oligopoly competition with
limited number of rivalries or competitions. Airlines industry are taking a great investment to
enter in the market. There are only few number of competition in this type of market
competition, Easy-Jet airlines facing competition with American airlines, South-west airlines,

Delta airlines, Monarch air group, Virgin Atlantic, Jet2.com and many more. Easy-Jet airlines
involves highly expenditures on labor and fuel costs (Maci, S., 2017). For the short term, the
labor costs are largely fixed but fuel cost changes according to the pricing of oil. Because of this
reason, the investigator pays more attention in the near future. The company affects if other
competition decreases their fair prices can increase the competition and customers or passengers
will shift to them or low fair prices attracts or gain customer attention which can disturb profits
as well. Goods exported in oligopolistic companies are standardized and differentiated.
TASK2
Economic factors affecting Easy-Jet airlines.
The airlines industry is not famous for facing challenges in maintaining budgets and
profits. From growing competition to consumer demands, to labor and fuel cost fluctuations,
union strikes and many more, the airline decision makers have to focus and manage strategies,
find new paths to increase revenue and balance costs and expenses in order to grow in the
market. Low budget airlines like Easy-Jet are facing unlike struggles to maintain profit margins
while facing several number of external factors that are causing disturbance. The airlines
industry plays a important role in the worldwide economy. It takes part in the contribution
towards employment, exports, productions, global business operations. Economic factors
influencing such as taxation, government expenditures, inflation, business cycle, interest rates,
exchange rates and many more. Only the government is accountable for the global economy.
This may not have a direct relation in the operations of business but can influences the future
investment.
 Wages inflation and Union strikes: The demand of labor in the airline industry
continues to grow, as a result workers demanding higher wages, salaries and other
benefits. Workers pressurize and airlines companies facing union strikes to increase wage
pressure (Ponomarev, D., 2020). The airline industry is leading a competition to the down
which hurts communities. This industry comes with a new ways to drive down wages,
increase workloads and cut costs. But the airline markets are so big at the globe, workers
fight for their injustice. A movement to win and get fair wages, union strikes all over
world.

 Fluctuating Oil prices: As with any commodity, bond or stock, the laws of demand and
supply cause prices of oil to fluctuate. Government exceeds prices of fuel/oil when the
demand increases supply. When oil prices are increases , the economic growth falls and
inflation increases. Lowering prices of fuel can cut the costs for airlines. Declines in fuel
prices can increase the traffic level. The increase in fuel is different from increase in oil.
Fuel is such a cost for airlines that is strengthening the effort in the industry to find
improvements in the efficiency, but the airport industry burns or waste the 5% fuel in the
whole year.
 Inflation: Prices are rising called Inflation, which impacts the cost of doing business,
cost of living, corporate, mortgage, government yield bonds, borrowing money. The
airlines department has three areas of concerns including cost of money, cost of goods
and services and rising wages (Alberto, M., 2019). These all have a negative impacts in
the airline industries. Increase in rising can attract and retain highly skilled crew members
which boosts income as well. Cost of goods and services are increasing continuously, it
includes healthcare products, technologies, energy, real estate and highly qualified
personnel. The airlines crack the new taxation laws which impacts the new cost of living.
 Employment and GDP: GDP(Gross Domestic Profit) enables a rise in living standards
and leads to a higher national income. It needs to grow to increase the average income of
the firms. Economic growth is measured by GDP means the increase of the growth rate
but each component is different which is determined. If GDP is raising, it can shape the
economy very well and the nation is moving forward. But in other hand if it goes down
then economy might be in problems and moving down. The airlines industry is one the
greatest sectors measured in respect of GDP per employee. The airline employees
individually makes a great contribution towards the welfare of economy at global level.
The employees of Easy-Jet airlines are highly trained, highly skilled and experienced, and
the industry takes an intensive research and development.
 Business Cycle: Business Cycle also known as Economic Cycle. Economies go through
regular pattern of ups and downs in the business activity which is measured by GDP. In
airline industries, the business or economic cycle is featured in four phases:

1. Boom: Creating new jobs in the economy leads in the increment of employments,
includes business confidence, profits, high levels of consumer spending. Prices and costs
are frequently rises.
2. Recession: It can be termed as falling of consumer spending and confidence which tends
to lower the profit margins which start to bring down on investment.
3. Depression: This refers to highly down towards in business investment and involves very
weak consumer. Many business fails and the results leads raise in unemployment.
4. Recovery: This phase of business cycle states that things get better and involvement of
consumer begins again and business feels little confident and start investing again.
The airline stocks are cyclical and uncertain, travellers and businesses bring down the
plans of travel when the uncertainty occurs in the economy and are more likely to make travel
plans when the economy at its confidence (Gibson, R. and Hanson, G., 2018). In good economic
times, travellers make more plans for vacations and enjoying air trips with comfort.
 Exchange rates: Exchange rates impacts the performance of investments, inflation,
interest rates. Changes in exchange rates influences the supply decisions of airlines. To
rebalance supply and demand, the Easy-Jet airlines adjust pricing scheduling rather than
capacities. When exchange rate changes, the prices of imported goods will change its
value it does not excludes domestic products and depends on vital parts and raw
materials. It also influences spending on a vacation. The visitor-weighted rate of
exchange may vary as the distribution of traveller arrival to a country changes, but at last
the measurement creates more relevant results.
 Government expenditures: This includes government transfers payments, investments,
consumptions. It creates future benefits such as research investments, infrastructure
investments for the acquisition of goods and services. Some examples of government
expenditures includes social securities like retirement benefits, national defence, interest
rates, health and medical insurance , other spending on transportation, education and
many more. This facilitates international trade and tourism, create jobs, economic
growth. Overall airline industries creates jobs of 62.7 million jobs world-widely.

TASK3
Impacts of Brexit on the business operations in the company.
Brexit is a term refers British exit that means the withdrawal of the United Kingdom from
the European Union and the European Atomic Energy Community at the end of January31,
2020. The UK is the first and only country which separates from EU after being a member of
state. EU grew as to be of significant importance to the United Kingdom (HOŘEJŠÍ, K., 2020).
The airlines industry can expect the further risk of dropping the revenue once Brexit come into
force. The worst change of industry access rules that the airlines won't enjoy traffic rights inside
the European Union whether it is in different member state or one member state, EU airlines do
not enjoy traffic rights domestically.
Impact of Brexit on the business operations:
 Disruption of service agreements: The UK's existing system and regulatory framework
was developed according to the EU laws that impacts trade and movement between UK
and other countries. Agreements like Air Service Agreements come into question and
must be now concluded with Brexit (Ashraff, N. A. M., Salleh, A. S. S. and Latif, A.,
2017). As a results, 'No Deal' outcome would leave to no establishments in the Air
Service Agreements. Rather than this UK would come limited number of agreements
which covers only basic connectivity until deals could affected with every nation of the
world.
 Restricted movement of goods: Brexit also results the existence of tariffs on imported
goods. The special checks in borders and tariffs also slow down the process of supply
chain operations but an increase in infrastructure demands and also an increase in
administration. Air freight is very important for healthy economy but also for healthy
aviation market. The competitiveness of air freight is very speedy and predictable in
which goods are import across the borders.
 Decline in air revenues: Airlines can be challenging if revenue is decreasing, once
Brexit come into force. When passengers are required to spend more money on their
travelling tickets, visas and all as well as more time taking through inconvenient
boarding procedures this will decline the profits for the business.
Whatever the airlines company facing challenges, always ready to recreate strategies to
come back or to recover with negotiations. The company must ready to mitigate the

consequences. British airways also made the announcements after post Brexit with the regular
scheduled airways that customers would fly to their destinations whether the deal is agreed or
not. As further movement, also answer the questions of their fears and also published a visa and
passports guideline for UK residents (Le Meunier-FitzHugh, K., 2021). The dedication of Brexit
is always ready to implement the set and contingency plans.
TASK4
Analysing the impact of COVID-19 on the business of the company.
COVID-19 or coronavirus disease is a contagious disease. Most of the people
experienced this disease mild to moderate respiratory sickness and they recover without taking
special treatments. People who are older and having serious medical problems like cancer,
diabetes, cardiovascular disease, respiratory disease having more chances to connect with this
disease. The best and effective way to protect and slow down the process of transmission of this
disease oneself must be aware about all the necessary information of coronavirus. One can
protect and others as well by regular washing of hands or sanitizing hands by alcohol based
sanitizers. This virus can be spread through discharge from nose or by droplets of saliva or by
shaking hands when an infected person comes in contact, sneezes, coughs.
The COVID-19 crises is remarkably the most impactful crises any industry can ever
faced before (Urbano, F., 2017). The Easy-Jet airlines has been observing drastic reduction in
fleets, number of people has been suspended, major decline in demand, further closure of
airlines. The airlines witnessing the six times decline in available seats and seventeen times in
passengers loading factor when it is compared to previous global financial crises.
Impacts of COVID-19 on the business:
 The economic impact: A clear decline in the travelling demand results a loss about USD
900 billion in economic output. The airlines industry will also have to adapt the new
normal in the travelling lines that will result of the crises. The industry have to adapt new
healthcare procedures and new protocols, new travel requirements and restrictions and
develops new mind set of travellers. This has totally reshaped the travelling experience
without any doubt or question.
 Adapt and emerge: The airlines industry and aviation has various approaches which will
adapt and emerge out of the crises. This will fundamentally depend on regulatory,

economic and social environments. The Easy-Jet airlines will have to go through business
models again and create new cost savings strategies in every area of the business
functions, and the key area of airlines will be crew management. Focusing on crew base
management in particular outstations is an innovative functional measure and the cost
optimizer will contribute directly to transforming the cost of airlines efforts, risk
mitigation, stability of operations and key benefits as well (Fill, C. and Turnbull, S.,
2019). The airlines industry facing worldwide competition and extremely changing.
 A return to normalcy: A return of normalcy means recovery. The airlines industry is on
track to recover and bring back the flying capacities and levels required to return to the
profitability. Due to COVID-19 pandemic, it is very challenging and crucial to recover
the passengers confidence and loyalty again. OSM Aviation benefits the support and
taking compulsory part with the transformation efforts towards optimized, leaner,
sustainable and resilient business.
Moving to the challenges is not a new thing to the airlines industries (Camilleri, M. A.,
2018). The industry has also overcome the past economic recessions, health epidemics,
unfortunate safety incidents, it will to overcome the situation of COVID-19 crises. Individual
airlines, individual leaders, government take actions during this crises and pandemic situation,
they understand the long last effects of this disease, how rapidly it airlines can recover.
CONCLUSION
In this report, the discussion is over the market structure for the airline company Easy-Jet.
The report describes the different market competitions like perfect competition, monopoly,
duopoly, oligopoly and monopolistic competition. The airlines companies comes under oligopoly
market competition with a few number of competitions, but engages with high investment. Later
the report explains various economic factors like GDP, inflation, exchange rates, government
expenditures and many more in the airline industry which affects business operations. The above
studies also discuss the impacts of Brexit in the functions of business. Brexit affects the traffic
system in airlines, EU no longer enjoy the traffic rights in domestic area. It affects the decline in
booking tickets in airways. Overall Brexit is always ready to answer the questions of fear after
post Brexit that is the guidelines about visas and passports. The airline company also get affected
due to COVID-19, during that pandemic the routes were blocked for traveller and they cannot

travel to their destinations which affect this industry too. Many crew members lost their jobs due
to loss and reduction in the profits.
REFERENCES
BOOKS AND JOURNALS
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Chaffey, D. and Smith, P. R., 2017. Digital marketing excellence: planning, optimizing and
integrating online marketing. Taylor & Francis.
Morlotti, C. and Et.al., 2017. Multi-dimensional price elasticity for leisure and business
destinations in the low-cost air transport market: Evidence from easyJet. Tourism
Management, 61, pp.23-34.
Maci, S., 2017. Meaning-making in Web 2.0 tourism discourse. Ways of seeing, ways of being.
Representing the Voices of Tourism, Peter Lang, Bern, pp.131-154.
Ponomarev, D., 2020. Consolidation of airlines in Europe: potential acquisition of Norwegian
by EasyJet (Doctoral dissertation).
Alberto, M., 2019. Easyjet Plc Airlines (Doctoral dissertation).
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countries. World Englishes, 38(3), pp.366-386.
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Ryanair (Doctoral dissertation, Vysoká škola ekonomická v Praze).
Ashraff, N. A. M., Salleh, A. S. S. and Latif, A., 2017. THE USE OF FACEBOOK BY
AIRASIA AND EASYJET TO MANAGE CORPORATE BRANDING. Journal of
Global Business and Social Entrepreneurship (GBSE), 3(8).

Le Meunier-FitzHugh, K., 2021. Marketing: a Very Short Introduction. Oxford University Press,
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Urbano, F., 2017. Easyjet Plc (Doctoral dissertation).
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Disruption. Pearson UK.
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and the airline product (pp. 51-68). Springer, Cham.