Impact of Economic Factors and Brexit on EasyJet's Business Operations

This report provides a comprehensive analysis of EasyJet's contemporary business environment. It begins by explaining the market structure within which EasyJet operates in the UK, focusing on factors such as cost, market share, and customer turnover. The report then identifies and examines the key economic factors impacting EasyJet's business, including demand and supply, income levels, taxes, recession, and inflation. Furthermore, it explores the likely impacts of Brexit on the airline's operations, addressing potential challenges and changes in regulations. Finally, the report analyzes the significant impact of the COVID-19 pandemic on EasyJet's development and growth, considering its consequences on the airline industry. The report offers recommendations based on the analysis and concludes with a summary of the key findings.

Contemporary Business
Environment

ABSTRACT
As per this report is can be said that business environment affect the performance & and
productivity of the company whether it is internal or external business environment. It is
necessary to analyse the contemporary business environment which can help to manage each and
every operations and provide the smooth functioning of all the task and activities. The Main
motive of this report is to analyse the market structure which can help to analyse the nature of
cost, market share and market growth of the organisation. This report also identifies the impact
of economic factors on the business operation. Apart from this report discuss the impact of
Brexit on the business activities and performance of the organisation and lastly, impact of Covid
19 pandemic on the development and growth of the organisation and its consequences analyse.

Table of Contents
ABSTRACT.....................................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
DISCUSION AND ANALYSIS......................................................................................................4
1. Explain the market structure in the UK within which EasyJet operates............................4
2. What are the economic factors within the UK that affects the business of EasyJet?.........6
3. What are the likely impacts of Brexit on the business operations of the company?..........8
4. Analyse the impact COVID-19 is likely to have on the business of the company?...........9
Recommendations..........................................................................................................................10
Conclusion.....................................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Contemporary mainly belong to the same period of time & on the other hand business
environment generally define the massive level of competition in the market that constantly
change as per the current scenario. It is necessary for the business owner to understand the
requirement of the business so that they can easily develop the market and gain more positive
response. Business environment are two types that can influence the business directly like
internal business environment and external business environment. These business environments
are also known as micro business environment and macro business environment. This report
discuss about the aviation sector of the UK that is considered the most reputed industry and the
business environment provide the direct influence on it. For this report, EasyJet organisation is
considered that is one of the fastest growing companies comes under the airline industry. EasyJet
is British multinational airline group that provide their service at low cost. This organisation
established in 1995 and headquarter situated in Luton, UK. The main motive of this report is to
discuss about the market structure and identify the economic factors within the UK that affects
the business of EasyJet. This report also discuss about the impacts of Brexit and COVID-19 on
the business operations.
MAIN BODY
DISCUSION AND ANALYSIS
1. Explain the market structure in the UK within which EasyJet operates.
Market Structure defines the characteristic of the market and mainly focus on those
factors that mainly define the nature and trends of the market as per the current market situation.
It determines the various factors like competition, price strategy, market share and market
growth of the existing businesses organisation. Market structure of the EasyJet is big and it
operate their business domestic & internationally and provide their services over 1000 routes in
almost 30 countries through affiliate airlines. In this organisation more than 14000 employees are
working (Aarikka-Stenroos and Ritala, 2017 ).
The market structure of UK mainly focuses on the characteristic that can affect the nature of the
business activities. The description of various characteristic of market structure as per the
EasyJet are discussed below-

 Nature of Cost - Market structure of the UK mainly concerned about the cost and this is
also comes under the important characteristic of the business. Every business needs to
maintain their cost structure so that they can easily attract the customers and make more
profit. EasyJet is most famous airline that also considers the nature of cost. EasyJet
market focus on the price rage and set price which people easily afford. To analyse the
market, this airline mainly offer and discount to their customers so that they can earn
more revenue (Awa, Ojiab and Orokor, 2017). Market share of large business - Market share also considered the most prominent factor
of the market structure that always take more attention of the business. EasyJet is the
large firm that always pay more concern to increase their market share.
 Turnover of Customers – Market structure help to analyse the turnover rate of the
customers so that it make easily for the business to improve their market strategy.
Turnover of the customers mainly switch the power of the suppliers from the one firm to
another as per the given time period when market condition is about to change. In context
of EasyJet, this organisation focus on their marketing strategy so that their customers not
even think about to switch the brand. EasyJet provide the satisfactory services to their
customers (Bansal, et. a., 2018).
EasyJet require to more concentrating on the customer comfort zone and their demand
which can help to maintain the market structure of the company. Entries of the new firms are
totally depending upon the economical situation and the demand of the market (Belyaeva, 2018).
Market Structure of UK’s Airline Industry
There is imperfect competition because of there is fewer firms in the airline industry so
firms have high dominance power that influence the whole market structure of the airlines
industry. The main impact of this industry affect the whole market situation and it also generalise
the power of change the cost of their products and services. On the basis of fewer firms, there is
lots of competition in this industry and industry have power to set the price and do some
modification in the pricing strategies that can lead both success or failure (Black, 2019). The
main importance of this industry is to monitor the decision making and maintain the functioning
of the imperfect market or oligopoly market condition. Aviation industry in UK contains lower
level of competitive players in market with the British airways. Easy Jet is containing the most

emerging market player that consider wide market capitalisation & share in domestic &
international market. This industry considers fewer market players that power to dominate the
whole market conditions & influence the whole market. This company experience all changes
that played by the dominating firms like British airways. This mainly leads to formation of the
group of businesses that dependent on each other for stabilisation in market. Industry leader
affects all the operations of another by directly influence the demand in market. Moreover, it can
be analysed that this mainly company operates in oligopoly market structure with the few market
players that selling various homogeneous or differentiated services to target market population.
This leads to presence of imperfect competition market where business firms faces high exit &
entry barriers from the industry (Boone, Kurtz and Berston , 2019).
2. What are the economic factors within the UK that affects the business of EasyJet?
Economic factor provide direct and major impact on the productivity of the the firm due to to
some uncertainty of the market and market situation. As for the current scenario airlines industry
facing many challenges that effect their business adversely. There are some factors giving which
impact the performance of the EasyJet business operations are discussed below-
 Demand & Supply - Demand and supply considered as the one of the most appropriate
fundamental factor that affects the operations of the firm's. Demand and supply basically
analyze and measured why the specific market forces that directly influence the
performance and productivity of the firm’s. It is a fact that changes in demand is the reason
of change in other factors like price and product. If change cans occur in the product then it
leads the fluctuations of the demand. Products Supply also affected by the change in supply
of the raw material like quality, price, resources and other factors. In context of airline
industry of the United Kingdom, it can be analysed that demand & supply of this firms
contain massive impact on the flights flew that also affected their revenue (Caren, Andrews
and Lu, 2020). The main source of factors affecting the basic Demand & supply of these
firms’ flights are raw material, price, climate changes and the earning of the passengers that
can affect the performance of EasyJet.
 Income Level - it is major factor that affect the performance and productivity of the firm.
Earning of the passengers directly impact on the profitability of the aviation industry firms
and it directly engaged with the changes in performance of the firm. Income level of the
customers directly e affect the market of the airlines because Jay market totally depend

upon people income that's why they are providing various type of offers and discount to
attract them. It can be analysed by the GDP & fluctuations of the demand & supply of the
firms products & services. Due to uncertainty of Covid and Brexit, the whole marketing of
the airlines industry affected adversely and that mainly lead to low market of the airlines
form because that time the income level of the people decrease. During covid 19 , all the
international flights stopped and the number of flight flew declined. This outbreak leads the
low level of income of the people that affect the business of EasyJet (Chong and et. al.,
2019).
 Taxes- This source provides indirect affect in the performance of the airlines industry. It is
analysed that increase in the taxes paid by customers & firms leads to boost the price paid
by passengers for the traveling. Taxes- considered as direct source of income for the UK
government and its mandatory to pay tax that lead to increased the expenditure of the firm's.
it is measured that impact of Brexit leads to mainly changes in the trade and other regulation
of the airlines industry (Hawryszkiewycz, 2019). Taxes considered the major source that
increases the price of the flights which impact of the travelling rate of the people so that the
performance of the airlines influenced. Due to Brexit , increase in the tax affect the
performance of the EasyJet airlines and also affect the profitability of the firm. After Brexit,
firms faced various challenges which lead the changes in regulations on aviation industry by
Government. Recession - In context of economic, recession is like a business cycle construction which
leads the decline in the economic activities. It mainly occur when widespread drops
generally spending. It is also considered the one of the most substantial factor that affects
the performance of the firm's. During recession, the income of people mainly impact by the
stagnation occur in economy of the country. This situation can be happen due to different
reasons like more unemployment, lower production, poor financial policies and procedures
etc. In context of aviation sector, Covid 19 affect the whole market and aviation industry
faced various challenges that affect their performance so this situation become the main
recession in country. It is analysed that due to lockdown period, the entire market affected
negatively across the whole world. Covid and Brexit situation lead the recession and affect
the expenditure behavior of the firm's. In context of EasyJet, Covid 19 and Brexit become

the main source of recession and thus airlines faced many problems and losses situation in
term of finance (Ivančić, et. al., 2017).
 Inflation - This factor sustain the upward movement as per the price level of the products
and services. It can lead the effect of the devaluation a currency. This factor leads the
undergoing enhancement in the average price of the economy. As per the UK Economy, it
is analysed by the consumer price index. Increase in the demand of the products and
services leads to increased in the price and the outcome is inflation. In this situation, money
supply increased and it provides the outcome in higher rate of gross profit and increased
revenue at the constant gross margin that provide benefits of the business (Lin, et. al.,
2018).
3. What are the likely impacts of Brexit on the business operations of the company?
On December 24, UK & EU both government settled a specific trade deal that known as
TCA ( Trade & Cooperation Agreement that can help to maintain the future trade relations
between these two market and after the agreement UK left EU on 31 January ,2020. Each and
every industry affected by the Brexit and it affect in various forms like it reduce the investment
& recession m and also create the manpower issues and shortage of migrated workforce &
skilled workers. Financial Services Company also affected most by the adverse impact of the
Brexit (Mikalef, et. al., 2019). Aviation industry is the one who also affected the most from the
uncertainty of the Brexit. There are various key issues that also faced by the country's like supply
chain, customs / border tariffs, workforce, economic issues and regulations. Brexit affect the
aviation industry and affect the whole market of all the airlines and UK airlines and firms no
longer enjoys traffic rights inside EU. It affect the one member State or between another member
states. EU airlines also no more enjoy all the domestic YK traffic rights (Nieri and Giuliani,
2018). Brexit provide adverse impact on the economy of the UK and it also affects the whole
market. Post Brexit, UK experienced Impact on the different sectors and in all of them aviation
sector is affected the most. This sector plan new policies, procedure and regulations but the
entire fundamental considered as per the before guidelines. Due to the uncertainty of the Brexit ,
passengers rate decreased and that lead the lower level in profitability and business of the airline.
The whole market of UK affected by this uncertainty and it directly affect the airlines sector
because Brexit lead to the changes in the trade and regulations so the whole market or the UK

disturbed and suffer various losses. EasyJet business also affected adversely and their
performance declined. Company considers the various changes in the company policies so that
company can overcome with the losses that occur due to Brexit. This situation leads the changes
in the number of passengers and travelers and the demand of the flights and airlines become low.
EasyJet analysed that there profit decreased due to exit Britain from the UK. Aviation & travel
industry consider as the global industry that are influenced by the international trade & politics.
Major changes in the trade regulations, trade politics and politics impact the whole dynamic of
this airline (Pazun and Langovic, 2019).
4. Analyse the impact COVID-19 is likely to have on the business of the company?
Covid 19 pandemic provide the adverse impact on the business and it affect the whole
market in each and every sector but aviation industry is the one which affected the most because
of this pandemic. Due to lockdown, people maintained social distancing and stop travelling and
stay their home to prevent themselves from the worst impact of this pandemic. EasyJet also
affected by this pandemic during lockdown period and company faced various challenges and
negative circumstances and the market growth declined. People avoided travelling and that
provided the huge loss in the aviation industry (Petkova-Gourbalova, 2020). EasyJet also seen
many financial losses and it's hard to survive in the market because all the national and
international flights cancelled. The whole market of aviation industry became low across the
whole world. This pandemic affects all the business operations and faced many financial crises
for the first time. Covid 19 provided the major impact on the business activities of EasyJet and
company performance rate become low. This pandemic lead the high rate of patients that
affected their living and life style and people used to stay their home so that they can easily save
via social distancing and the market of the airline decreased (Rezaee, 2020). Covid situation lead
the various losses in the brutally affect the business of the EasyJet and now company continually
trying to cover up the losses and gain more profit advantages so that company can easily sustain
in the market. This pandemic provided many long and short term effects on the Operations and
performance of the EasyJet (Rosenbach, 2018). Long term affect of the Covid 19 on EasyJet lead
the low level of profitability and the rate of customer decreased because people consider the
more precautions and ignore travelling. To overcome the losses of this pandemic, company
prepared Strategic strategies so that company can provide the best service and take care about

their convince level and follow all the guidelines of the Covid and also precautions so that people
can feel safe and secure in the flight. This change affects the number of passengers. People
mainly opting flight for travelling and avoided to visit the other foreign countries (Šegota,
Tomljanović and Huđek, 2017). Company addressed the requirements of the passengers and
feels them safe so now people mainly use flights for travelling so that can increase the rate of
flight. This pandemic also provides longer term impact on the living of the people so permanent
vaccination is mandatory on the airport has released (Simanungkalit and ANDRIANI,
2020).Company experienced various issues strategically to deal with the passengers and follow
the precautions. This pandemic increased the whole scenario of the society and now people
become more alert about their health. Company considers more safety and requirement of the
passengers so that they can feel safe (Slavković, and Slavković, 2019).
Recommendations
There are few recommendations are considered by going through this study and analyse
some facts which can help to maintain the business and operation of the aviation industry. The
market structure in the UK in which the EasyJet operates their business analysed various factors
and make working strategies so that company easily understand the nature of the firm's and its
significance. There are various economic factors which affect the market of EasyJet like demand
and supply of the firms and interest rate are mainly affecting the performance of the firms. The
outcome of the Brexit impact on the UK and EU aviation sector and now both are facing
difficulty like how UK & EU both continue to operate & collaborate. After UK leave EU so it is
necessary for the UK to make some changes in the aviation operations. Airlines sector need to
adopt some sensible approach and make strategic planning that help to cope up with risk and
provide many more opportunities. EasyJet should consider some range of various aspect like
economic & financial, corporate governance & strategies, regulations, customers relationship etc.
Uncertainty of the Covid19 affect the whole market of EasyJet so now company should provide
the suitable and high quality hygiene service to the passengers so that they can feel safe and
secure from this pandemic and trust airlines for travel.
Conclusion
As per this report it can be conducted that it is essential to understand the contemporary
business environment and also use all the consideration that are necessary to maintain the

environmental factors. This report discussed about the market structure and also identified
various features and characteristics that need to analyze to each and every industry and firms.
This report also determined the economic factors that affect the performance of the firm's and
help to analysis whole current market situation. With the help of this report, impact of Brexit and
Covid 19 analysed and also evaluated few recommendations which can help in the business
operations. Brexit affect the whole market of the UK and the flights system and route also
affected by the uncertainty of this. Due to Covid 19, the whole transportation domestic and
international experienced difficulty and the whole market of the aviation faced losses.

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