EasyJet: Analysis of UK Market and Economic Factors Report

This report provides a comprehensive analysis of EasyJet's business environment in the UK. It begins by examining the various market structures and specifically focuses on the UK airline industry's oligopolistic structure, explaining its characteristics and implications for EasyJet. The report then delves into the economic factors influencing EasyJet, including demand and supply, income levels, interest rates, and employment rates, analyzing their effects on the airline's performance. Furthermore, it assesses the likely impacts of Brexit on EasyJet's operations, considering changes in regulations, trade agreements, and market access. Finally, the report evaluates the immediate and long-term impacts of COVID-19 on EasyJet, discussing the financial losses, operational challenges, and strategic adjustments required for the airline to navigate the crisis. The report concludes with recommendations on how EasyJet can overcome the challenges and capitalize on opportunities in the evolving business landscape.

EasyJet report

Table of Contents
INTRODUCTION...........................................................................................................................1
2. Discussion and Analysis .............................................................................................................1
The Various Market Structures ...................................................................................................1
Economic Factors of UK and How They Will Affect EasyJet....................................................3
Impact of Brexit...........................................................................................................................5
Impact of Covid19 on EasyJet Should it Invest in UK................................................................6
Conclusion...................................................................................................................................7
REFERENCE...................................................................................................................................9

INTRODUCTION
In business environment, various organization are established that provides range of
products and services such as retail, airline, sports, entertainment, food and beverage, fashion,
and others. All sectors running their business by following the effective marketing structure that
can help to operate the all functions and activities (Pereira, Vrontis, Christofi and Temouri,
2019). Market structure defined as layout which use by companies to differentiate and categorise
their products from others. The main object behind using structure is to analyse the competition
and make efforts to eliminate it by offering better products and services. The report is based on
Easyjet that is British airline industry providing low cost airline services and increasing the sales.
The organization understand needs of their customers and provide them quality of service which
increases productivity. The report covers discussion of various market structure, economical
factors that affects industry, impact of Brexit and future impact.
2. Discussion and Analysis
The Various Market Structures
Market structure depicts how companies are categorised on the basis of type of goods and
services which can help to attain the good productivity. This involves number of firms in market,
market share and other features of competition. This is important for any organization to use the
effective structure which can help to increase the business productivity by influencing number of
customers (Papageorgiou, and et.al., 2018). There are different types of market structure which
are explained below:
Perfect competition: This can be explained as condition where having many buyers and
sellers. These plays vital role as it provide range of products and services to customers at
different prices. This maintain the equal balance between demand and supply by providing the
products.
Monopoly: This can be considered as opposite from perfect competition market structure
in which only one producers can found and it charge different rates from different customers.
This can be opportunity for business organization to develop the profitability by charging high
prices (Nilsson, 2019).
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Oligopoly: This is same kind of monopoly but handful of producers are available that
makes dominant majority of production in market system. The producers does not having same
prices of their products.
Monopolistic: This can be explained as theoretical market condition that describes a
marketplace where only one company may offers similar products and services to public, but
not . This can restrict output, raise prices and enjoy super normal profits in long run (McMahon,
Watson and Lee, 2019).
The Market Structure of the UK’s Airline Industry
Market structure is adopted by all companies as it focuses on needs and wants of
customers then provides products and services accordingly. The marketing manager is
responsible for all activities who conduct market analysis and introduce the products by reaching
the target market. In relation to EasyJet that is UK's largest airline industry is being categorised
by an Oligopoly that is form of imperfect competition wherein limited number of firms can
dominate the industry. This is important for business concern to analysis the competition and
bring new services that can influence the number of passengers and attain the profitability. It has
seen that number of producers are available in market who produce different type of products
and services. This structure helps to interact with customers base by distributing product
effectively. The marketing management analysis the all functions and provide airline services at
lower cost than others which can help to face the competition easily. This also helps to earn extra
profits in research and development where better quality of services provides to passengers
(Matikiti, Mpinganjira and Roberts-Lombard, 2018).
The oligopoly also offers information about products and services to customers which
make decision to increase the business productivity and profitability. The management use
available information and manage the functions which can help attain the business goals by
increasing number of customers. Moreover, this organization set the prices on the bases of rivals.
The rivals are British Airways, Ryanair, Wizz Air, Jet2, and BH Air. There is tough competition
in airline industry where it is important for marketers to conduct analysis and introduce new
services that can attracts large number of customers. Herein, oligopoly structure is used by
Airline industry to operate business and dominate in market. This offers various routes to operate
business and increase the performance by increasing number of passengers.
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Economic Factors of UK and How They Will Affect EasyJet
Economic factor refers to the fundamental data which is related with market and economy of a
country. The main role of economic factor is to consider about an investment and business value
to calculate about investor and organisation return. Economic factor include demand and supply,
income level, interest rate, employment rates and many more. Easyjet operate business in airline
industry and it helps to improve economic of country. Some economic factors that impact on
business of Easyjet are mention as follow:
Demand and supply- In the present scenario, organisation are operating their business
according to decided marketing strategy (Biliri and et. al., 2019). According to present market
conditions it is identified travel industry is performing their work at a large level. Easyjet
perform an important role and it define demand of airlines perform an important role to increase
organisation profits. EasyJet is largest airline among all over the world and they are the second
biggest in Europe. Approximately there are £5 billion for first time is earned by organisation
within the year 2018. But due to current pandemic conditions this is identified EasyJet suffer a
high loss due to sudden reduction in demand of passenger. Along with this to minimise the
challenges related with supply and demand. Clear corporate strategy is formulated by
management and this aids to perform all work in an appropriate manner such as to enhance
organisation value in order to premium prices from customers. This results profits are improved
by management through completing work in a sustainable manner.
Revenue drivers or growth come from enhancement of size that is related with airline's
supply capacity. It is also used to serve more passenger and also to increase number of routes.
But due to covid-19 situation this is difficult to implement solution that are new and risky So
with develop of spoke system it is easy to improve number of passenger by identify solution of
reducing cost such as to offer seat choice is a method to earn revenue and attract customers
towards services of EasyJet (Ojekunle, 2016).
Income level- Median household disposal income of UK residents at the end of financial
year was £29400. With compare of overall growth within recent years this is identified it is
complex for individual to purchase high cost tickets. This refers persons are not purchasing
tickets to travel from one place to another through air medium because they are costly. With rise
in median income of individuals this is identified that during the period of employment there is
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an increase that results average of 1.0% is improved through offering employment to individuals.
But the current scenario that is related with period of Covid-19 results overall business factor is
reduced. Their are different sources of data that is related with income define statistics results
towards improvement of growth. Growth in median income define that individuals observe there
are different factors exists due to which movements are restricted at end of quarter (Hill, Korczak
and Korczak, 2019). Due to this business of EasyJet is reflected and this results financial and
non-financial account of government, private and household is impacted. To overcome from
challenges related with income level gross fixed capital formation fell due to its lowest supply
chain. Moreover, with formulate of reserve this is easy to manage work with understand of
household values. The impact of income level on organisation define that this is complex to
manage work because now individuals are not able to purchase travel tickets.
Interest rate- All factors that is related with information undertake all factors which is
related with future and current value. Along with this all essential aspects such as Interest rates
are analysed to save cost by providing right value. Interest rate of UK is high and this results a
lot of investor are attracted towards market. When interest rate is high than EasyJet is also
focused towards development of investment that aids to earn more revenue. Management face
challenges because it create problems to response towards laws, tax, policies for perform
organisation work within decided countries. Easyjet manage main office in different states within
country and this results management operate business within different state of origin that aids to
perform work with decided regulations and interest rate of a particular country. This results
EasyJet is already aware about rules that is related with training, regular innovation and
schooling which aids individuals to perform work with decided interest rate. Today's world is
evolve about different results that related with people. By analyse of business it is pursue that
interest rate is easily managed by EasyJet through providing desired earning to individuals. From
perspective of interest rate this is identified bank provide less earning and this results individuals
face challenges to earn high returns (Yao and Memon, 2019).
Employment rates- An individual analyse different factors and this include wage and
employment aspect that is related with workforce. All factors that is related with employment
define all information which is gathered aids to examine all valuable aspect through which
income of persons is increased. EasyJet is a well recognised airline and this is second largest
airline of Europe so a large number of persons are engaged in company. Moreover, organisation
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also provide fair wages to individuals and also working conditions of foreign country relate with
travel services. The impact of Covid-19 on EasyJet business results that large number of job
contract with individuals are breached by organisation in order to avoid financial crisis
(https://diginomica.com/covid-19-leads-first-easyjet-loss-25-years-digital-customer-experience-
top-priority). The Covid-19 impact on pandemic conditions and it define subsequent national
lockdown and quarantine restrictions generate cause due to which a lot of damage is identified
that impacts on industry growth.
With understand of above economic factors this is identified Coronavirus impact on overall
airline industry (Gupta, 2018). It started to emerge about European budget airline EasyJet reveal
that for first time in 25 years organisation suffered against significant losses. So it is important
for organisation to formulate strategy that not impacts on economic value and aids management
to manage work in an organised manner.
Impact of Brexit
The trade agreement agree between UK and EU on the 24 december 2020 came into
force on 31-December-2020. It happen after four years after the UK voted for Brexit. This runs
or signed about 1449 pages that consists with 26 deal aviation. Brexit was not focused towards
improving European aviation system but there are major concern define existing conditions
would be seriously eroded. A lot of changes such as change in interest rate, high transportation
tax etc. are the actions that impacts on company. With compare of situation among which UK
was the member of European single market is different from present market conditions.
According to new agreements it is identified that organisation represent an unprecedented
reversal of liberalisation in aviation system.
On the other side, with compare to the old-style bilateral agreements it is certainly
compare that the threat of 'no-deal'- this is still liberal agreement that preserves about regulatory
status quo by not keeping UK in Europe aviation market. It impacts that indirect changes that is
related with Brexit is identified that generate crisis related with Covid-19. Traffic rights within
UK and EU are preserved and it generate some practical difference such as Cabotage rights are
removed due to which this is complex to perform work in an organised manner (Woo, 2019). On
the other side, ownership restrictions are mainly as expected and it allow UK airlines to be EU-
owned. Option for reciprocal liberalisation also consider about develop of facilities through
which all task are performed in a systematic manner.
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Traffic rights perform an important role in the aviation industry and this define UK and
EU rights are preserved with no limits. Similarly, third and fourth freedom rights to fly within
other territory are preserved. It also ensure that majority of traffic engage and involved UK and
EU destination so majority of airlines fly in each other territory. Further, the traffic rights
introduce and come with no limits, capacity and other are the pre-liberalisation features of
bilateral agreements. Moreover, (air fares) is constant and free to set by the market within
different competitive conditions. It determines that Brexit impacts on price of ticket booking due
to which this is complex to select appropriate fare (Hwang and Lyu, 2020). Further, Codeshare
and block space agreement also allow routes where airline match with relevant traffic lights.
One of the most obvious change that is related with market access is modification in rules
that is related with UK airlines. This also define airlines not enjoy traffic rights within inside
European Union aviation area. One of the member state define EU airlines will not enjoy about
domestic UK traffic rights that is also known as cabotage rights. Brexit impact on Easyjet
because change in practice not match with operations that already exists in organisation. With
understand of UK airline significant intra-EU capacity change system and it results this become
as a well-known EU owned airline to manage respective organisation operations according to
European guidelines.
Impact of Covid19 on EasyJet Should it Invest in UK
Now a day whole world is facing with serious problem that is Pandemic (Covid-19) in
which people are dying day by day. This problem caused by spreading of virus that affects
human being life. As all businesses are closed for specific time period that affected the
productivity and profitability. According to government regulation airline and other
transportation service also stopped due to spreading of virus. This became critical time period for
companies as they cannot operate their business properly. The selling and marketing functions
not running that created the challenge to operation. The impact of airline industry on the
countries share would be very small but still it will make an strong impact due to impact of
Covid-19. Airline industry is based on the two several sector which are related to upstream and
downstream concept (Franco Valdez and Valdez Cervantes, 2018). The impact on the airlines
industry due to covid-19 is it will cut down the cost and profits of industry. Aviation industry
will be become the witness of drastic change and reduction in their profits which are relatable for
closure of airline industry. It will make a strong economic impact hat will actually travel and
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predicate to be become more enormous performance. Due to Covid-19 Air transport represents a
small share of GDP where it is linked with activities of other sector that impacts negatively on
business operation of Easyjet. It crisis precipitated new regulation of loans, wages subsidies, loan
guarantees, and equity injections that reduced the productivity (Hartley, Routon and Torres,
2019).
Future impact
As Covid-19 is the serious pandemic due to which death cases are increasing day by day
where WHO has declared that no proper vaccination are available in market. People should be
aware from this virus and use protecting equipments. In future the negative impacts will be
reduce as research and development people will find a better solution and vaccine to provide
safety. The management of EasyJet will offer safe airline service in which it allowed minimum
5-10 passengers by doing proper sanitization. This will build the confidence level of passengers
that organization provides safe journey to their customers. This will increase the sales and
performance by increasing customers (Kholod, and et.al., 2019). Moreover, by using new
technology in services will be beneficial for company to decide the goals and attain them
effectively. Airline industry will also adopt new health procedure and protocols, travel restriction
and requirements and influencing market structure that will help to operate the all functions and
activities effectively. This will develop the organizational performance by arranging funds and
resources which use to run the business functions. Moreover, management will measure
innovative operational activities by optimising cost that can would help to mitigate the risks of
business (Huang and Rust, 2018).
Conclusion
From the report it can be concluded that there are different types of market structure such
as oligopoly monopoly, perfect competition, and monopolistic. Such structure are used to
develop the organizational performance and profitability by managing all functions. The
monopoly structure is used to generate higher profits as only single producer provides the
products and services at different prices. In perfect competition, large number of buyer and
sellers perform their function by buying and selling the products. In monopolistic, not perfect
substitutes but kind of similar products are sold by business concern that helps to increase sales.
The last, oligopoly is uses in marketplace where less number of firms with high market share,
running their business by charging prices as per their wants or rivals. EasyJet is applying the
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oligopoly market structure that can help to increase the performance and profitability by
managing all functions.
Recommendation
The management of EasyJet has recommended to use effective market structure and set
the reasonable prices of their products and services which they offers that can help to attracts the
large number of customers. The management should have effective planning or strategies which
can help to deal with sudden Pandemic that might be arise while running business. The
management should have proper knowledge and skills that helps to bring new technology and
solution of problems. This influence the number of passengers and attain the higher productivity
in market place. To deal with Brexit situation, government regulation and trade laws should be
followed that can help to enhance the business activities and functions. The management should
also understand demand and provide the products and services accordingly which provides
higher satisfaction.
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