Analysis of EasyJet's Business in a Changing Environment

This report provides a comprehensive analysis of EasyJet's business environment, focusing on the market structure within the UK airline industry, specifically highlighting its operation within an oligopoly market. It delves into various economic factors affecting EasyJet, including fuel prices, competition, and the impact of economic downturns and inflation, which directly influence its profitability and operational strategies. Furthermore, the report assesses the implications of Brexit on EasyJet's business operations, examining its impact on capital markets, labor costs, and flight regulations. Finally, it explores the significant consequences of the COVID-19 pandemic on the airline, analyzing the decrease in demand, operational restrictions, and the company's adaptation strategies. The report concludes by summarizing the key challenges and strategic responses of EasyJet in navigating a dynamic and competitive business landscape.

CONTEMPORARY
BUSINESS
ENVIRONMENT

Table of Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
1. Market structure of UK in which Easy jet operates.................................................................3
2.Economic factors affecting EasyJet..........................................................................................4
3. Impact of Brexit on business operations of company..............................................................7
4. Impact of covid 19 on the business of company......................................................................8
Conclusion.......................................................................................................................................9
REFERENCES..............................................................................................................................11

Introduction
Contemporary business environment is the environment which have more competition in
the market and these markets also changes fastly. Thus, owners of the business should be able to
adopt opportunities in the market. For that owners have to bring developments in the business in
order to survive in the highly competitive market (Barr and et.al., 2018). To cope with
contemporary business environment company comes with modern marketing techniques along
with producing innovative products and of good quality.
Easy jet is the multinational airline company which is having its headquarter at England.
Company offer low price flight tickets which is helpful in attracting large audience. Easy jet is
worldwide known for its innovation. As company believe that to beat the competition innovation
is must. This study will discuss market structure of UK under which easy jet is operating.
Economic factors will also be discussed within the UK which affects business of easy jet. Further
it will explain impacts of Brexit on the business operations of company. This report will also
discuss impact of covid 19 on the business of easy jet.
Main Body
1. Market structure of UK in which Easy jet operates.
Airline industry is going through massive changes in terms of structure and market
segmentation from past few years. Low cost carrier market has hurt established market. Easy jet
is operating in the oligopoly market structure. In the oligopoly market there are few firms which
dominates the industry. It is the kind of imperfect competition (Airlines and Oligopoly Theory.,
2021). Although airlines industry use oligopoly strategy but innovative company find out their
way to enter the market and the same is done by easy jet. In 1980 to control the competition open
skies legislation is implemented by government with the objective to liberal the air travel. In the
airline industry competition is growing day by day which results in low profit margin by the
company.

Airlines also went into bankruptcy because of massive competition and less profit margins. In
order to increase the profits easy jet constantly come up with innovative services. They give
good quality of services to their passengers which helps company in getting good sales. Internet
has also cut down ticket prices because it eliminates the agents. But through internet customers
can easily compare the price of tickets (Rudawska and Zhanna Belyaeva, 2018). Customer goes
for low pricing and does not remain loyal with the company. Easy jet is the successful airline
company and witnessing good profits. In this industry every firm decide the prices and the way
they want to carry advertisement. To enter this industry is not easy because it will require lots
capital to started airline. To beat the competition easy jet provide differentiated services and
overcome all hurdles.
This will help company in beating company's like British airways which have more market share
as compare to easy jet. To cut the prices company offer less cabin crew member in their airlines
(Boone, Kurtz and Berston, 2019). Those customers got attracted towards the company who
cannot pay more price for flight tickets. By adopting less pricing strategy easy jet are able to
increase their market share. Less prices attracted customers who have earns less. Nowadays
people wanted to travel by air because it saves time and company's like easy jet are making it
possible by providing low cost travelling. Market structure of UK is highly competitive when it
comes to airline by easy jet found out their way to survive in the market. Company operates in
oligopolistic market where few firms control complete industry. Actions of every company is
dependent on each other. Services which is offers by the company are almost same to changes in
the prices will only help them in getting more market share.
Easy jet is the example who has crossed high entry barrier of the industry and increased
competition in the industry (Matović, 2020). To offer cheap air tickets airline does not provide
food in the plane. This will help company in reducing the cost of the tickets. Those people also
got attracted who was thinking that for themselves travelling in plane was dream. Easy jet focus
on providing affordable travelling. Company also force airlines like British airline to reduce the
prices. As British airline knows that if they want to survive in the market than they have to
reduce the prices.
2.Economic factors affecting EasyJet
A British multinational airline group Easy Jet provides services in both domestic and
international areas being second largest budget airline in Europe. Today it has become a major

airline to work on net-zero carbon Air-planes. Airline industry plays an important role in
countries economy, they create feasible transportation network, helping in growth of economy.
Like most industries, economic factors have deep ascendancy on airline industry. The recent
pandemic and lock-downs have made travel industries to see its lowest point. Both economy and
premium class were shut down and now the airline also has to struggle with increasing fuel rates
and obviously not generating enough profits (Percoco, 2020). These economic factors have
resulted in many bankruptcy cases in the industry where Easy Jet work in. Economic factors can
affect airline business of Easy Jet in many way, let's go into the detail of this.
Due to Covid-19, entire fleet of plans have been restricted, the airline is planning to do its
comeback with a huge summer sale. Intense competition at Berlin Airport and rising oil prices,
grounding of fleets due to Covid-19 and not to mention accidents are all threat to company's
business. Fuel prices and foreign exchange they all come under macroeconomic factors. Demand
and supply, main feature affecting any business so, here demand of airlines is there but supply
due to covid is decreased, operations to many part of the country and outside are still restricted.
Leading to less customer attraction. Aviation based jobs have taken a major fall back after
Covid, due to airports and flights being shut down, a large set of employees from ground staff,
manufacturers and airport staff were fired from Easy Jet. Hiring the same skilled people with
dedication in their work is hard in airline sector (Fernandes, 2020). Uncertainty in visa
requirements, cross border supply chains and export success are all affecting the company
majorly, international travel being more inaccessible. Airlines also helped people who were stuck
in different parts of the country, to reach their homes. Easy Jet even helped in transporting cargo,
medical equipments and even food to vital areas at the time when pandemic was at its peak.
Then because of beating the competitors, seats are sold at sale prices where it should have
gone in a price higher. Economic activity and demand for airlines are being negatively affected
because of inflationary pressures. Airfares are insensitive to rise in common price levels.
Because of disputed passenger problems, expensive seats during departure are given to them.
Due to UK's decision on leaving European union and therefore Euro getting more expensive, has
lead customers confidence down. The impact of air traffic control strikes has also contributed in
affecting the operation of Easy Jet. Business reply on customers for it to work and earn profits.
Easy Jet stared using new improved technologies to make more money and attract more
customers. This actually worked, people started preferring air-planes over trains and buses. Now

when the demand increased, the prices to a get a seat on flight increased and people again
stopped using planes which resulted in many empty seats. Airline focused on filling the seats by
offering cheaper prices, profits turned to losses in this process (Fonseca, 2020). Employees and
income are one of the main reasons that affects business operations. Lack of staff results in bad
presentation and services making customers choose other airlines over Easy Jet.
Competition is also very high because the country is currently suffering from recession.
At such times Easy Jet prices are very high for an ordinary person who cannot afford vacations
and travelling and company needs money to be sustainable again. Customers tend to book flights
from their host country resulting in less sales in foreign cities. Airline's performance is associated
to its economic growth. Airline is required to decrease number of intra-EU routes because there
are several restrictions on these flights. Easy Jet have to make adjustments to it's plan of action as
experts have predicted the rise of oil will increase in coming years. Many Foreign exchange
movements will adversely affect the profit before tax, revenue made per seat is expected to
decrease (Migacz, Zou and Petrick, 2018). No matter how well company is performing and
growing, they face a dip during recession. Be it sales or profits or customer involvement,
everything undergoes a major loss. Similarly, complete market growth after covid is less,
everyone from stakeholders to employees of Easy Jet are effected by rising costs. Easy Jet have
long term contracts with the labour unions, unexpected inflation affects cost of fuel and labour
and even meals. Whereas contracts of pilots, flight attendants and engineers are temporary and
they expire, so need of renegotiation is there. Inflation, a rise in price, can serve a positive
context in helping encourage consumer demand and consumption but in cases like Easy Jet, it
drags the economy of the business to high extends (Forsyth, and Guiomard, 2019).
Low cost carriers offer huge competitive pressures as there is transparency of prices
because of internet, customers lose interests in air transportation affecting not only Easy Jet but
all the airlines. For forming huge company like Easy Jet, heavy amount of cash is required,
taking loans are next best thing after investors. The interests rates on these loans are also one
factor affecting the company economically. Similarly, government plays an important role, in
some cases government laws are in favour of supporting the company and helping them rise but
in exceptional cases when government itself is in a dilemma, laws can have negative effect on
company's profit (Navam and et.al., 2018). Economical factors are one in many external factors
affecting company's business. Easy Jet has been gone through worse of worse like epidemics,

economic recessions, losses does to safety incidents and many more environmental factors,
Company has survived through this all and will also persevere losses due to this latest pandemic,
Covid.
3. Impact of Brexit on business operations of company.
Brexit will highly affect the operations of the business (Siriwardana and Dissanayake,
2018). Primarily Brexit will impact the capital market of the easy jet. There are probability that
share prices of company can be reduced. Company will also not get low cost labour from EU as
due to Brexit there has been restrictions on their free movement. This is also not good for EU
citizens because for employment they are coming to UK and after Brexit their movements got
restricted. Although easy jet is already prepared on how to deal with Brexit consequences.
According to the business survey it is said that the economy of Britain can get into danger and
can face financial crisis.
In order to make them prepare from Brexit easy jet has taken air operators certificate and
Austrian licence so that company's flying rights are protected within EU. But than also easy jet
can face some problems because easy jet flights are majorly of outside UK and within EU states.
This can contribute in the company's financial loss as the European market is low cost and highly
competitive (Jiang, D'Alfonso and Wan, 2017). Current scenario of company are very tough
because of increasing in the competition and also increase in the cost of fuel. Brexit facilitates on
disruption of sir service agreements. As the aviation system of UK is developed by EU laws.
This can affect trade and the movement of UK with other countries. Border control will be
increased.
Easy jet have to allot more resources to their passengers management and border operations.
Rules will become strict. Airline will experience delay because of increased regulations of visa
and passport. Company can face missed flight connections because of time consumed in such
requirements. Although free visa travel can control delays. Brexit can increase tariffs on
imported goods. Most of the company rely on EU for raw materials but after Brexit they have to
rely on their domestic suppliers. Brexit will affect the supply chain while slows down because of
increase tariffs and extra border checks. It will also increase administration demands. Easy jet
can experience decrease in revenue after Brexit got applied. Company have to face many
financial consequences because of Brexit. When passengers have to give more money for airline
ticket because of high tariff and time-consuming border procedures will discourage them to

travel by air. Before Brexit companies were getting benefit to operate anywhere in the EU they
want. Airline company will not get the benefit of multilateral agreements which was established
by European common aviation.
UK airline like easy jet will lose their right to fly from EU and their respective states. Brexit will
impact a lot on easy jet but it is the external factors which cannot be controlled (Cattaneo and
et.al., 2018). Company have to make strategies to fight from this. Although company is already
very active on this topic and decided what to do but still some negative impact will definitely
occur. As easy jet is known for providing low price tickets and it was the USP of company. But
to fight from Brexit company have to increase their ticket faire as they have to pay for certain
licences, agreements etc.
4. Impact of covid 19 on the business of company.
Covid 19 has negatively impacted the business specially airline business. Due to
coronavirus lock down happened which stopped movement of people. If the movement of people
have stopped then how will company get sale and if they will not get sales then how company
will get profits (Brezonakova, Badanik and Davies, 2021). For some of the months company has
not got any business. Covid 19 has put company in the depressing situations. Company was not
having any income, so they reduced the number of employees and due to that there are many
people who have lost employment. Airline plays vital role in the supply and due to covid 19 it
has disturbed supply chain worldwide.
Pandemic has also affected special cargo transport. Easy jet due to coronavirus are not able to
supply medical equipment with special cargo flights. Easy jet has witnessed its first annual loss
due to covid 19. Survival of the company has become difficult because of the pandemic. Easy jet
is taking help from company in order to get additional loans. In covid times company's sale gone
down to such extent that they were not having enough money to pay salaries of their employees.
Easy jet has raised funds by selling their equity and also through leasing their planes (Maneenop
and Kotcharin, 2020). It can be said that airline industry has suffered lot due to covid 19. When
government impose lock down in the whole country than how people will travel and if they will
not travel than how company will earn revenue. Easy jet has suffered major losses. Company has
stopped future plans and also stooped their future investments. To fight against this pandemic
loss easy jet has coming strategy to digitalize their services.

Company is planning to reduce physical services and start digital service. It will reduce
company's cost as less employees have to be hired by the company. After corona easy jet is more
focusing one advertising their new launched services. Company is working on their mobile
application which provide self-service booking option which include baggage booking, filling
passengers detail etc. company is also aiming to remove human interactions which was needed
while travelling from kerb to aircraft. This will helpful in reducing queue and the need for check
in. company's objective is to provide self-service options to their passengers which is possible
through digitalization. Easy jet is focusing on this in order to reduce workforce during pandemic.
When human interactions will be very less than more passengers will travel form easy jet
airlines.
As customers will think that if they will travel from easy jet than there will be less chances of
getting covid 19. Company wanted to have important employees only who are very important for
their survival, rest of the employees are reduced by company. To afford salaries of employees in
covid 19 is not easy. According to the statement given by the company, they said that they are
not earning enough of what they had expected than how they will give salary to their employees.
Although employees of the company are protesting because they had fired them but company is
saying that they have no option part from firing. Covid 19 has stopped growth of the company
and its future plans (Dube, Nhamo and Chikodzi, 2021). Pandemic crisis is the worst crisis which
is faced by the company. Company is saying that they are struggling hard for survival. Along
with covid 19 company said that most fearful was lock down. Due to lock down people stopped
travelling. They stopped going for vacation or business trips. Covid 19 was curse for every
industry specially for airline industry.
Conclusion
Through this report it can be discussed that easy jet is the company which has breaks all
entry barriers of the airline industry. Company has increased their market share with their
effective strategies. Report has discussed market structure in UK within which company is
operating. In the oligopoly market easy jet is operating where there are massive competition. It
has evaluated economic factors within the UK which affect business of easy jet. Brexit has
impacted easy jet a lot. As it stopped free movement of workers from EU. Report has also

analysed impact of covid 19 on business of easy jet. Covid 19 was negatively impact the
business. It has reduced sales of company. Easy jet has fired many employees in order to reduce
their expenses.

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Online

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