Analysis of EasyJet's Business in the Contemporary UK Environment

This report provides a comprehensive analysis of EasyJet, a British multinational low-cost airline. It begins by explaining the oligopolistic market structure within which EasyJet operates in the UK, highlighting its impact on competition and growth. The report then delves into the economic factors within the UK that influence EasyJet's business, including inflation, interest rates, and foreign exchange rates, and their effects on revenue and costs. Furthermore, it examines the likely impacts of Brexit on EasyJet's operations, including the challenges and strategies employed to mitigate risks. Finally, the report assesses the impact of the COVID-19 pandemic on the airline, considering its effects on passenger demand, operational costs, and overall business performance. The analysis draws on various sources to provide a detailed understanding of the contemporary business environment faced by EasyJet.

Evaluating the
Contemporary business
environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Explain the market structure in the UK within which EasyJet operates.....................................1
What are the economic factors within the UK that affects the business of EasyJet...................2
What are the likely impacts of Brexit on the business operations of the company.....................5
Analyse the impact COVID-19 is likely to have on the business of the company.....................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Contemporary business environment refer to the business that has vast competitive
market that keeps changing at very fast pace, and the owner of the business have effective skills
that helps them to understand about the changing environment of the competition (Biloslavo,
Bagnoli, and Edgar, 2018). The concept of business environment refer to the analysis of internal
and external factors that have an impact on the business and its growth in the market. Business
environment is collection of internal and external factors that have an affect on the level of
effectiveness business have in the industry. This report is based on Easyjet, it is a British
multinational low cost airline group. Its headquarter is in London Luton Airport, company
operates international and domestic scheduled services on over 1000 routes. Approx 14,000
people work in Easyjet, based through Europe and mainly in the UK. This report include
information about market structure in the UK within which Easyjet operates. Also it include
various economic factors within the UK that affects the business of Easyjet. Further, it include
the impact of Brexit on the business operation of the company, also the impact of COVID – 19
on the business of the company.
MAIN BODY
Explain the market structure in the UK within which EasyJet operates.
The airline market of the UK follow oligopolistic structure, this concern with the few
firms that work interdependent. Oligopolistic market structure follow decrease prices market so
that they can increase sales at the expanse of other firms. It reflect perfect competitive market
(Cahen-Fourot, 2020). In the context of Easyjet, company also follow oligopolistic market
structure in the UK, that helps the business to deal with competitive market so that they can
increase the level of effectiveness and growth. Low cost airline market impact the level of
effectiveness and growth in the market. Oligopolistic market structure frame for the effectiveness
and growth in the industry, in this limited number of firms included that perform low cost
strategy in the business for the effective growth and advancement of the business in the
competitive market.
In the context of Easyjet, the airline follow low cost strategy that differentiate its services
from the other people and increase the level of customer base. This allow Easyjet to increase
market share and gain more profitability. In UK many airlines start to follow this strategy that
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have an impact on the growth and efficiency of the market. Also the British Airlines follow this
market structure so that they can provide effective outcome to the business and increase the
growth in market. This structure increase the level of effectiveness of business and its growth in
the market. In order to follow oligopolistic market many airlines gain benefits and growth in
their business so that business can achieve the level of effectiveness.
Oligopoly market structure increase the level of effectiveness in the market that involves
the growth of airlines and market structure (Fernandes, Crasta, and Hans, 2018). This increase
the level of competitive market for the Easyjet, however this strategy is effective for the market
growth and proficiency in the business. Easyjet follow this strategy so that effective outcome of
business can generate in UK. This oligopolistic market increase the level of market competition,
but this market structure help the business to grow and increase the level of effectiveness. Also
this helps to attract more customers so that business can achieve its goals and objectives.
Thus, Easyjet follow oligopolistic market structure in UK and this helps the business to
increase the level of effectiveness and growth in the market. It enhance the level of customer
base and market share so that business can achieve its goals and objectives. It assist the market
structure of UK towards the growth and development also it enhance the level of effectiveness.
Easyjet focus on the increasing number of customer base rather than the margins that assist its
business towards gain of more customer loyalty and growth in the market.
What are the economic factors within the UK that affects the business of EasyJet.
The economic factors assist to adequate level of uncertainty with this ability to manage
market instability and its fluctuation is managed which is resulted towards taxes, inflation rate,
interest rate, foreign exchange rate and many others as well (Fung, and Sergi, 2021). EasyJet is
a British airline company and have followed both national and international route and along with
this having market presence in about 30 countries. It affiliates with the different airline such as
EasyJet Switzerland, EasyJet Europe and EasyJet UK. As in September 2019 company
furthermore operates its business with about 10000 routes and have fleet with about 331 airbus
aircraft, 96 million customers with 159 airports at 3 countries (EasyJet - Factors Affecting Costs
Revenues and Profits, 2018). It is also being the second largest airline as by budgeting of
passenger count and 7th largest airline all across the world. In the year 2017, EasyJet have flown
with the passenger of 80.2 million and that was carried with 86.7 million seats. Due to the
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downtown of economic prospect that is processed during pandemic attack of COVID 19 through
which oil prices get increases and its strikes with entire aviation that induce larger impact over
EasyJet and its business processing. As per concern of economic impact susceptible changes
such as of macro-economic, legal vulnerability, imbalance about supply and demand ratio,
fluctuation in economic trends, enhanced price of fuel having direct impact over economical
pertinent that also affect financial performance and its credibility with adequateness. The EasyJet
is governed with support of technological advancement and improvisation and in reflect of
economic prospect(Fung, and Sergi, 2021). There is sustained return on the capital employed and
it assist to advance fast growth in order to achieve substantial revenue and adequate growth. In
order to attain cost efficiency airline industry suitable losses are measured through which
moderate changes are implemented to induce balanced working and better sustainability.
Revenue driver: It is an aspect that is related to the increasing demand of airline and its
size through which supply capacity and serving of passengers is enhanced along with this wider
number of routes also advanced in timely frame. There is a low cost airline and in prospect of
this EasyJet gain multiple level of benefits in terms of network economy and its scale. It
enhances the operational challenges under which substantial economic growth is achieved as by
measuring appropriate corporate strategy in this cost appropriateness and its efficiency both get
controlled for a longer period of instance (Hashim, Raza, and Minai, 2021)). To maintain high
load factor, it is required that ancillary revenue is generate and in this priority is measured with
relation to sustained seat choice, priority boarding, luggage check in as with this sales credibility
get advanced on regular basis. In recent time frame demand of airline industry dependent on
economic cycle and it is reflected in concern to downfall of GDP and unemployment.
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Illustration 1: Figure 1https://www.tutor2u.net/economics/reference/easyjet-factors-
affecting-costs-revenues-and-profits
Cost drivers: EasyJet worked on to emphasis to induce rapid growth with this flight get
turnaround through which higher rates of capacity utilisation that attempts towards cost cutting.
For instance, 24% of the customers make adequate usage of mobile boarding as with this ability
to negotiate towards favourable landing as well as take-off fees(Khalili, Abbadi, and Ismail,
2019). In order to control de-icing within colder winter and in this better operational scaling that
provides monopoly power under which bargaining power within airport is managed in ordinate
basis. The international price of fuel volatility as it protects the business as by hedging within
fuel market. During the Brexit deepen level of uncertainties is processed in regard of cost and
revenue. For this shareholder of EasyJet undoubtedly controlled and it is as per concern of
recruiting cost, hiring and firing of skilled workforce.
The leaving of customer union and single market leaves wider impact over working
competency of the business and in this effectiveness and efficiency to manage and control
sustainability is attained in timely frame. It also influence the airline industry and in terms of
adequate level of arrangement that seek towards mutual level of benefits for this business
services and level of discriminatory is established. In addition, rate of investment, cross culture
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provision of services and inappropriateness discrimination is affected and it revolve around visa
requirement and export success as well. The value of pound get decreases and in relation to this
enhanced rate of fuel is persist negative impact over business success. The risk capabilities also
reduce the transport connectivity as inflation rate also get reduced with 1.7% which is lowest as
per about previous 3 years. Market growth and its competency get decreases in which visa
accessibility and price of flight tickets increases which furthermore resulted into lesser passenger
(Khalili, Abbadi,and Ismail, 2019). Moreover, the foreign exchange movements have induced
adverse impact over the profit and tax generation and with this revenue at per seat is also be
expected to decreased on constant basis. The likelihood towards enhancement of increase fuel
cost and congestion along with environmental restriction has induce wider prospect with this
higher amount of security as well as insurance cost advanced reduced rate of terrorism in this
profit generation capability of EasyJet get reduced and affected on regular basis. During the
economic recession rate of investment of travellers get decreases and it usually has wider
integrated impact towards business growth and success. There is a competitive surround that is
faced by marketplace and with this strategic decision making is implemented through which
pricing and service both get combined and to service effective services EasyJet ensure to induce
strategic moves as by fulfilling market need as by maintaining and attaining quality standards as
with this long term sustainability and adequateness is processed on regular basis. In prospect of
economic relations aggregation of competitive advantage and operational efficiency is managed
and in this strength of EasyJet worked more to operate and advance brand awareness along with
reduction and elimination of low quality service and advancing sustained service along with
advancement of brand image.
What are the likely impacts of Brexit on the business operations of the company.
The significant uncertainty around the way which Brexit will affect the airline industry.
The change in the UK market would neither be in Europe nor global stakeholders best
interest(Moutinho and Vargas-Sanchez, 2018). This situation impact the level of business growth
and its functioning between UK and Europe, Brexit situation has an affect on the market and
cause loss of 275 billion. Also this impact the airline industry and decrease the level of profit
industry gain from this aspect. Te future passengers of the airline industry is reducing the level of
expenses due to the reason of Brexit situation in the country. In the context of Easyjet, after the
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impact of Brexit situation company starts taking all the matters and decision in their hands so
that effective outcome can be achieved after the impact. Easyjet has set up extensive operations
in Europe with bases in Vienna, Berlin, and Geneva as to hedge against a worst case scenario no
deal Brexit. However the effective strategy of the company helps to gain effective result and
growth of the business in the market.
This extensive set up helps the business to deal with this situation in effective manner and
increase the level of growth in the market (Pop, 2020,). Currently 30% of Easyjet's flights are
outside the UK but within EU members states.
After the Brexit situation business of Easyjet remain optimistic, because company noted
that they have strongest balance sheet in aviation so that business can achieve its goals and
objectives and growth in the market. Operational resilience and meeting passengers expectation,
that meet the future requirement to meet Easyjet” 2019 full year of profit expectation of the
company and its growth in the market place . They expected the profit of 440 million in the
business. Despite the financial loss business of Easyjet and its owners are confident about its
future growth and ability to manage the challenge of Brexit in effective manner. Managers of
Easyjet ensure that this situation does not have any impact on the business and its growth in the
future. Also they ensure that services of the business does not have any impact of the situation in
the market (Sadler, Bilal, and Furr-Holden, 2021). Many airlines of the Europe face the
challenges and has an impact on the growth and effectiveness of the business. Low cost carries
of the business has loss and impact on the level of effectiveness of business and its growth in the
market.
The business of the Easyjet has huge impact on the growth and effectiveness in the
market also this affect the market share of the airline. The airline ensure that they provide
effective services to the customers after the Brexit situation and its effectiveness in the market.
Business has its growth and effectiveness in the market by the growth and ability to learn in
effective manner (Rosenbach, 2018). Being a low cost leader in the airline industry company
increase the level of customer base and also they are able to retain customers for the long time.
This helps the business of Easyjet to increase the level of effectiveness and growth in the market
and deal with these uncertainties. Easyjet focus on providing effective quality to the customers
and increase the level of customer base and it help the business to gain effective growth in the
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market. The business of Easyjet has impact and loss form the Brexit situation but the company
make effective strategy that help tits business to deal with competition and growth in the market.
Thus from the above information it can be understand that Brexit uncertainty has huge
impact on the business of Easyjet and affect its profitability in airline industry. However the
business of Easyjet use effective strategy that provide effective growth and success in the
market. Easyjet focus on providing effective services to the customers and that helps its business
and growth in the market. Loyal customer base of the company helps to enhance the level of
effectiveness and growth in the market.
Analyse the impact COVID-19 is likely to have on the business of the company.
COVID – 19 situation has huge impact on the many industries across the globe, and this
situation has impact on the growth and profitability of the business. Lock down and quarantine
situation has impact on the growth and success of the companies(Tabachnikova, and
Vinokurova, 2019). However the COVID has huge impact on the tours and travel industry
because of travel restriction in the market. This situation has an impact on various airline and
cause huge loss in their profitability. There is full impact of COVID – 19 on the airline industry
is starting to emerge. This make impact on the passengers and their travelling habits. In the
context of Easyjet, airline face huge impact of pandemic situation in overall world. Company
suffer from the huge losses that impact its market position in the industry. Also the restriction of
government on the tours and travel industry make it more difficult for the business of Easyjet to
deal with situation and losses eventually. Business of Easyjet face loss and also the loyal
customer also get affected from the business and its growth in the market.
Restriction of government on the international and domestic flights has an impact on the
growth and proficiency level of many airline companies. However the business of Easyjet get
affected but the low cost strategy in the industry assist business to gain more customer base and
profitability in the market(Tomljanović, Jakovac,and Bodul,2019). To deal with this situation
company start to invest in digitalization so that it can help the customers to deal with this
pandemic situation by the use of digital first customer experience. This could help the business
of Easyjet to increase its market share after the pandemic situation and gain more profitability in
the market. also Easyjet wants to use time reduce demand to invest in various technological
advancement for the better customer experience and safety in the airlines. This could help the
customers to travel and effectively use the services and increase the level of customer base in the
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market. Pandemic situation also impact the travelling habits of the passengers and this could be
an threat for the business of Easyjet(Vokić, Obadić, and Ćorić, 2019). Also people prefer
private connivance rather than going for public transportation and this has an impact on the
growth and proficiency level of the business of Easyjet.
Thus, from the above information it can be understand that pandemic situation has huge
impact on the growth and proficiency level of the business also this impact the level of
effectiveness in the market. Easyjet should use effective strategies that can assist its business for
better growth and effective proficiency.
CONCLUSION
From the above information it can be conclude that contemporary business environment
helps the businesses to gain insight about the competitive environment in the market and also
helps businesses to use various strategies that can help in the better growth and effective
profitability. Market structure of the airline industry of UK has an impact on the level of business
growth and proficiency in the market. Also oligopolistic market increase the market share and
growth in the customer base in the industry. Economical factors of the UK has huge impact on
the growth and profitability of the business in the airline industry. The Brexit also has an impact
on the business of airline industry and impact the level of effectiveness of business and its
growth in the market. COVID- 19 has impact on the tours and travel industry and impact the
level of business growth and impact the level of profitability.
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