BABS Contemporary Business Environment: EasyJet Report

This report provides a comprehensive analysis of EasyJet, a British low-cost airline, within the context of the contemporary business environment. It begins with an introduction to the business environment and then delves into a detailed discussion and analysis of EasyJet's market structure within the UK airline industry, identifying it as primarily oligopolistic. The report then examines various economic factors impacting EasyJet, including income levels, inflation rates, recession, and employment rates, assessing their effects on the airline's operations. Furthermore, the report explores the potential impacts of Brexit on EasyJet's business, considering changes in taxes and regulations. It also investigates the immediate and future impacts of the COVID-19 pandemic on EasyJet's financial performance and strategic decisions. The report concludes with recommendations on how EasyJet can navigate the challenges outlined and includes a comprehensive list of references.

CBE Report Template

Table of Contents
1. Introduction.......................................................................................................................................3
2 Discussion and Analysis......................................................................................................................3
2.1 Market structure.........................................................................................................................3
Explain the market structure of the UK’s Airline sector. Explain what structure it is and why is it
so......................................................................................................................................................4
2.2 Economic factors that affect business of the EasyJet.................................................................4
2.3 Explain the impact Brexit could have on the business of EasyJet...............................................7
2.4 Impact of Covid19 on EasyJet Should it Invest in UK.......................................................................8
2.4.1 Immediate impact ...................................................................................................................8
2.4.2 Future Impact..........................................................................................................................8
3. Conclusion.........................................................................................................................................9
4. Recommendations.............................................................................................................................9
5. References.......................................................................................................................................11

1. Introduction
The business environment is the sum and collection of the factors including internal
and external factors that affect the activities of the business. Internal factors like customers,
employees supply chain , suppliers owners etc. and external factors like economical, social,
technology etc. It is necessary for the organization to be aware of factors within the business
environment to take competitive advantages.
This report will cover study of the EasyJet which is a British multinational low cost
airline group and their schedule covers 1000 routes within 30 countries. In total 15000
employees are working for them and helping them to achieve success within the Airline
industry.
This report will discuss the negative impact of the COVID 19 on the UK airlines
financially and it will explain the market structure in the UK where EasyJet operates their
business. This report will help to identify the economic factors that affect the business of the
EasyJet, including the impact of the Brexit on the business operations of the EasyJet.
2 Discussion and Analysis
2.1 Market structure
There are various type of structure that any industry can adopt like oligopoly, perfect
competition, monopolistic competition, Monopoly. This all kind of structure also covered by
the airline industries.
Pure competition
Pure competition is the market structure that can be defined by the largest numbers of
small firs competing with each other (Badiani., 2019). A individual organization doers not
have significant power and as the outcomes that particulate industry produce the optimal
number of outputs as well because the companies do not have the ability and the power to
influence the market princess.
Monopolistic composition
It refers to the large numbers of small firms compete against each other. Companies
within Monopolistic sell the similar product and services but their products are different from
each other.
Oligopoly

An oligopoly is the dominated by the some of the organization within the industry.
Companies use the collaborative strategy and create power together by the collaboration ad
try to put pressure n each other.
Pure Monopoly
A monopoly exists when there’s a single firm that controls the entire market. The firm
and industry are synonymous (Benamraoui., 2021).
Explain the market structure of the UK’s Airline sector. Explain what structure it is and why
is it so.
According to the airlines' industry of the UK airline industry is characterized by the
Oligopolistic market but there are strong debate whether the airline industry is an
oligopolistic market- indeed, it does appear that it is. . However, they have only managed to
do so by differentiating their service substantially from well-established firms like British
Airways, who have a large market share
Airline industry of the UK collaborate with the government and mostly controlled by
the government, so they get the support from the financially (Bouoiyour and Selmi., 2018).
Almost all the airline within the Uk have their government shares but still companies give
competition to each and try to overcome. This is the reason the airline industry of the United
Kingdom are considerer as the Oligopolistic market. Uk Airline industry is the Third largest
aniline industry network in all over the work where EasyJet operating their business. Uk
airways industry is also a second largest aerospace manufacturing sector. According to the
data aviation sector of the UK create turnover around £60 billion and it contributes on the
UK's GDP around £22 billion (Fouquet and O'Garra., 2020). This sector is also creating e the
huge employment within the country and around 1 million people are working within the
airline industry of the United Kingdom It also employs over 100,000 highly skilled British
workers and provides technology and research that has significant catalytic spin off benefits
to the wider UK economy.
But recent pandemic COVID affect the whole industry including the EasyJet
financially because after the pandemic countries including the UK goes in the lock-down
state and airways industry face the losses. All the flights get cancelled but still companies
within this industry get order from the government to pay the salaries to their employees and
other charges like rent, taxes etc affect the company.

2.2 Economic factors that affect business of the EasyJet
2.2.2 Income Level
Income level is the factor that affect the EasyJet because after the COVID pandemic
income of the people decrease within the UK and people are not able to spend on the
travelling and start saving the money they are earning. On the other side EasyJet also
decrease the income of their employees because they have to pay salaries to the 15000
employees, so they decrease the salaries of the employees so company can survive the
pandemic. Spending of the people also decrease of the people because of the pandemic, many
people lost their jobs and because of that they are not able to take travelling from the Airlines
like EasyJet (Gössling., Scott and Hall., 2020). The house handhold savings ratio rose to the
29.1% in Quarter 2 which is between April to July in 2020, the advanced since records take
place. The rise in the savings' ratio in the current quarter was goaded by a huge lessening in
household final consumption outlay of £80.5 billion as family's stopped spending at a speedy
rate due lock down measures prevented households from spending on non-essential items.
EasyJet also effect that because during the COVID recession people are saving and
cancelling their flights because they are having fear about their future because they are not
sure about their job in the Pandemic. This makes people to save money, and they are also
started looking the cheaper way to travel ore place to the another place. EasyJet comes
within the Airline industry and Airline transportation is more expensive as come to the other
mode of travel so people after the pandemic stated giving more in preference to the other
mode of travels like Bus, cars, train etc. It is creating threat upon the EasyJet but EasyJet is
cost affective airline as compare to the other airline like British Airways etc. so in this sense
EasyJet was more prefer by the people as compare to the other airlines (Griffith., Levell and
Stroud., 2020). It creates possible impact on the company somewhere they create new
customers within their business and it will help them in future to take competitive advantages
within the market where EasyJet is operating their business.
2.2.3 Inflation Rate
According to the data available on the sites in year 2021 inflation rates have been
increased to the 2.24 % and last year it was 0.62 %. this huge difference has been seen after
the COVID pandemic. Still, EasyJet get the negative impact on their business because they
had to decrease their Ticket prices due to the fewer travels and company have to run their
business and earn profitability. Due to the inflation within the Uk the prices of the fuel also

increased by the 2.5P which also affect the profitability of the EasyJet. They have to cover
their fuel prices, and they have to pay more to refuel their aircraft, so they can travel all
around the world. EasyJet give strict orders to their pilots to use fuel saving approaches
within their aircraft so they can save some fuel and decrease the negative impact of the
Inflation (Lim., 2018). But recent pandemic COVID affect the whole industry including the
EasyJet financially because after the pandemic countries including the UK goes in the lock-
down state and airways industry face the losses. All the flights get cancelled but still
companies within this industry get order from the government to pay the salaries to their
employees and other charges like rent, taxes etc affect the company.
2.2.7 Recession
During the 2008 and 2010 recession , the demand for the EasyJet remains high, it is
because the EasyJet is an budget airline and people during the recession were more inclined
to choose the budget anilines for the travelling (Mitha., 2020). The EasyJet is being the
second largest no frills aniline that carried 38 million passengers in the last year and
according to the reports last year 19.5 % of the increase have been seen. An unprecedented
rise in the cost dues to an oil prices of more than 140 dollar a barrel which impact the
EasyJet as well. The rise in the prices of the crude old now threatens to the push the entire
sector into the losses in year 2018 and more than 6bn dollar losses have been noted. The
demand was still lower than the times of growth, as even thorough EasyJet feel that they
have good business, it is still not as strong or profitable as the times grow (Mohajan., 2020).
2.2.8 Employment Rates
Recent employment rate of the Uk is around 76.6 % which is 0.3 percent lower than
the last year. According to the data aviation sector of the UK create turnover around £60
billion and it contributes on the UK's GDP around £22 billion (Moschieri and Blake., 2019).
This sector is also creating e the huge employment within the country and around 1 million
people are working within the airline industry of the United Kingdom It also employs over
100,000 highly skilled British workers and provides technology and research that has
significant catalytic spin off benefits to the wider UK economy. On the other side Due to the
COVID19 EasyJet plans to cut 30 percent of their employees staff which is around 4500
employees. Airline industry of the UK collaborate with the government and mostly controlled
by the government, so they get the support from the financially. Almost all the airline within
the Uk have their government shares but still companies give competition to each and try to

overcome. This is the reason the airline industry of the United Kingdom are considerer as the
Oligopolistic market. Uk Airline industry is the Third largest aniline industry network in all
over the work where EasyJet operating their business. The low customers demand create
pressure on the EasyJet (Mukanjari and Sterner., 2020). EasyJet also expect that the
passenger demand will return slowly and with the times they will need the staff back ,
reaching only 30% of the capacity in the final quarter of the year compared with the final
quarter of the year 2019. they also expect that their demand will reach as it was before till
three year of times. EasyJet employs 15000 people and it will start a consultation process
with the staff in the upcoming days.
2.3 Explain the impact Brexit could have on the business of EasyJet.
Brexit has huge impact on the EasyJet business because they this airline was also
operating their business within the European country'. after the Brexit they are facing
problems arise due to the Brexit and which will impact on the air travel including the
customers etc. after Brexit take place between EU and UK, EasyJet affect the most because
the taxes are change and now the Eu countries will charge taxes and make new polices that
EasyJet company also have to follow and implement within their workplace (Russell and
et.al., 2021). Mostly their review will impact from the taxes. When UK and EU was having
the good relation between them that times companies like EasyJet have to pay lower taxes,
so they were able to generate higher potability within their business but after they Brexit it
affect the profitable ability of the EasyJet. Cost of the human resource management also
affect because after the Brexit company need to recruit new employees, so they can run their
business effectively.
In a recruitment process company have to provide training and development to the
new employees, so they can learn how company work, and they can let the activates that they
ave to perform within the EasyJet so thy can helps company to take competitive advantages.
Due to pandemic, the UK government has put travel ban on flights. Thus, no tourist or people
are allowed to travel as flight operations are been closed from long time. Moreover, there has
been huge downfall in sales of tickets (Shen and et.al., 2020). Therefore, it has led to rise in
loss of Easyjet. Alongside, due to closure of airport operations company have to lay off their
staff. Thus, there is negative impact on growth of company because of shut down of airport
and lock down in UK. In addition, there will be reduction in demand, fleets, etc. Besides, it is
evaluated that there will be loss of $400 billion on airline industry. This requires proper

training to be given to employees. Thus, the overall cost of operations will arise. Therefore,
Easyjet will have to take relevant measures to cut cost.
Immigration polices also change and now EU and UK immigration become more
difficult and people do not get visa for the UK and Eu with the difficulties and the tourism
from the Brexit also affect. EasyJet also be to make their emigration faculties stricter and it
takes time to clear. Another things that affect the operation of the EasyJet from the Brexit is
travelling experiences for the airlines' passenger. EasyJet have increased the prices of their
ticket after the Brexit because they have to cover all the losses from the tickets which create
negative impact on the customers mind, and they have to pay more and EasyJet is losing the
trust from their customers (Sirkeci., 2020). Labour cost- labour cost will also affect the
EasyJet because after the Brexit cost of the labour will increase within the Europe, and they
have to pay more salaries to the employees, so they have to recruit employees from the UK or
the other countries and their also they have to spend money to bring employees to the Europe
then they have to provide training to them and after these employees will able to work for the
EasyJet and help company to overcome from the challenges they are facing after the Brexit.
2.4 Impact of Covid19 on EasyJet Should it Invest in UK
2.4.1 Immediate impact
` Covid 19 has highly impacted on overall airline industry. Thus, it has also affected on
Easyjet and its sales and profits. Due to pandemic, the UK government has put travel ban on
flights. Thus, no tourist or people are allowed to travel as flight operations are been closed
from long time. Moreover, there has been huge downfall in sales of tickets. Therefore, it has
led to rise in loss of Easyjet. Alongside, due to closure of airport operations company have to
lay off their staff. Thus, there is negative impact on growth of company because of shut down
of airport and lock down in UK. In addition, there will be reduction in demand, fleets, etc.
Besides, it is evaluated that there will be loss of $400 billion on airline industry. Hence,
Easyjet will have to suffer to great extent, and they will require financial support from
government to overcome economic impact.

2.4.2 Future Impact
Here, another future impact will be that company need to follow more health and
safety related practices. They will have to ensure safety of customers and for that more
precautions are taken. Furthermore, for that they will have to incur more expenses. So, it put
more burden on Easyjet revenue and capital (Zwanka and Buff., 2021). Besides, the overall
operations of firm will be impacted as they will have to adopt new way of performing tasks.
This requires proper training to be given to employees. Thus, the overall cost of operations
will arise. Therefore, Easyjet will have to take relevant measures to cut cost.
3. Conclusion
As per the report has been covered case study of EasyJet and explain how Covid 19
impact on the EasyJet financially. This report has been disused about the various structure of
the market like Pure competition, Monopolistic composition, Oligopoly, Pure Monopoly and
also has been explained the UK airline industry structure which comes understand the
Monopolistic competition and explain why this industry come under the Monopolistic
structure with the reason. It has been identify the four factors which was income level,
inflation within the country, recession an employment rates. Explained that how this factors
affect the business of the EasyJet both positively and negativity.
This report has been conclude the impact of COVID-19 on the EasyJet business
negativity and it has been include discussion that EasyJet that company should still invest in
the UK industry and at the last report has been discussed the future impact of the of COVID
19 on the business how much time Airline industry can take to recover the effect of the
COVID 19 and where company will able to take competitive advantages within the UK
market. In the end of this report has been provided recommendations to over the challenges
EasyJet is facing so company can use those strategies to achieve success within the Airways
industry and face the challenges from the COVID and Brexit memorandum (Zwanka and
Buff., 2021).
4. Recommendations
Airways is the main sector that got affected the most from Covid-19 as well as Brexit.
For protecting travellers or providing safe journey to people it can be suggested that it should
focus on wearing face masks, shield, gloves, sanitizer for its travellers. By making it
compulsory for travellers it can provide them safe journey and can continue its operations. It
can also implement proper resources for checking temperature and should also check report
of Covid-19 before giving entry to people. There are some guidelines developed by WHO

specific for staff, travellers and people. So, by implementing all policies, it can continue its
operations and provide valuable services.
To overcome the challenges of the Brexit and COVID effect, EasyJet can collaborate
with the other airlines, so they can make their base strong and in this strategy both the
organization invest equally so EasyJet will be financially string, and they can strongly face
the challenges and overcome the challenges of the Brexit and COVID.

5. References
Books and journal
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risks. International Economics and Economic Policy. 16(1). pp.5-16.
Benamraoui, A., 2021. The World Economy and Islamic Economics in the Time of COVID-
19. Journal of King Abdulaziz University: Islamic Economics. 34(1). pp.67-78.
Bouoiyour, J. and Selmi, R., 2018. Are UK industries resilient in dealing with uncertainty?
The case of Brexit. The European journal of comparative economics. 15(2). pp.277-
292.
Fouquet, R. and O'Garra, T., 2020. The behavioural, welfare and environmental impacts of
air travel reductions during and beyond COVID-19. Grantham Research Institute on
Climate Change and the Environment.
Gössling, S., Scott, D. and Hall, C.M., 2020. Pandemics, tourism and global change: a rapid
assessment of COVID-19. Journal of Sustainable Tourism. 29(1). pp.1-20.
Griffith, R., Levell, P. and Stroud, R., 2020. The Impact of COVID‐19 on Share Prices in the
UK. Fiscal Studies. 41(2). pp.363-369.
Lim, W. M., 2018. Exiting supranational unions and the corresponding impact on tourism:
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Mitha, S., 2020. UK COVID-19 Diary: Policy and Impacts. National Tax Journal, 73(3),
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Mohajan, H. K., 2020. Covid-19–The Most Fatal Pandemic Outbreak: An Analysis Of
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Moschieri, C. and Blake, D. J., 2019. The organizational implications of Brexit. Journal of
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Mukanjari, S. and Sterner, T., 2020. Charting a “green path” for recovery from COVID-
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Russell, T. W., and et.al., 2021. Effect of internationally imported cases on internal spread of
COVID-19: a mathematical modelling study. The Lancet Public Health. 6(1).
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Sirkeci, I., 2020. Marketing and Consumers in an Era of Disruption Caused by Covid-19
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