Research expert covering mobility and logistics. Objectives To assess the psychological distress, anxiety, depression, coping strategies, This will assist management to decide as to what EasyJet should be concentrating on and what requires de-emphasising or even outsourcing. The company negotiated with trade unions to move more of its pilots and cabin crew on to seasonal contracts, which would allow the company to better match its expenses to periods, such as the summer, when it generated moreprofit. EasyJets decision to use its aircraft as collateral for loans it needed to get through the pandemic means that its cost base will be higher going forward, once debt service is included in the calculations, says Savanthi Syth, an airline analyst for brokerage Raymond James & Associates: Theyve traded liquidity for today in exchange for their aircraft ownership costs going up in the future.. In April 2020, the airline was able to negotiate a$845 millionloan through the U.K. governments COVID Corporate Finance Facility for large U.K. employers. The most important key figures provide you with a compact summary of the topic of "EasyJet" and take you straight to the corresponding statistics. At a budget carrier, you need to be aggressive and ruthless and abrasive, says Joachim Kotze, an airline industry analyst for financial research firm Morningstar. This analysis will highlight the fundamental changes that the airline industry is undergoing, especially; in defence to the turbulent environment it faces from exogenous forces (terrorism, oil prices, SARS etc) and endogenous forces. In addition to that, EasyJet has been offering no in-flight meals, no in flight movies. But in the past, he says, most budget airlines have fallen down on execution, unable to make package holidays a profit-driver. Do you have a 2:1 degree or higher? It also offers passenger a few more extras, such as allowing them to check in at the airport without charge (Ryanair charges passengers who dont check in online) and a loyalty program that confers priority boarding privileges. The same figure for Ryanair was 2.25 pennies, while it was about 5 for British Airways and 5.37 for Air France and KLM. Increasing automation driving self-service capabilities for customers. )The crisis has also posed complications for the 54-year-old Lundgren that his competitors dont face, including some particularly unwelcome excess baggage in the form of Stelios Haji-Ioannou. Worse, the company had discovered the hack back in January but hadnt notified people whose credit card details had been accessed until April, and was only now letting other customers know. Web Evaluate EasyJets operations strategy against Hayes et al. s criteria of consistency and contribution to competitive advantage. Therefore, it is vital for EasyJet to have a thorough comprehension of their costs Background Coronavirus disease-19 emerged in December 2019. And, finally threats of any takeover bids from national airlines. In 2020, sales cratered more than 50% to $4.2 billion, and the airline recorded its first ever annual loss: a jumbo jetliner-size blast of red ink totaling nearly $1.8 billion before tax. All work is written to order. FORTUNE may receive compensation for some links to products and services on this website. EasyJets overall cost leadership strategy uses low costs at each point in the value chain to lower costs. The customers of EasyJet have been using the Internet for making bookings. In addition to that, EasyJet has been offering no in-flight meals, no in flight movies. Also, only one type of aircraft is used, in order to minimise maintenance costs. EasyJet appears to have internal strengths in terms of brand awareness, cash flows, and operational efficiencies. Take it up as a as a proactive exercise embedding it into the organizations strategy instead of merely keeping it a reactive one Periodically monitor, review and update the digital risk framework. The airlines hopes for summer 2021, like those of almost all airlines, rest on vaccinations. Get in touch with us. Today, a year after Easy Jets announcement, those perils still hang over the airline. We will consider the value chain for EasyJet in more detail later in our discussion. EasyJet is also Europes leading low-cost airline having completed a merger deal with Go to create Europes number one low-cost airline. Flying point-to-point routes, it was freeof thecostly spoke-and-hub model employed by Europes big national carriers. Having considered the possible future opportunities what are the potential threats that EasyJet needs to bear in mind? Therefore, it is vital for EasyJet to have a thorough comprehension of their costs and cost drivers. 1 or No. EasyJets competitive advantages via low prices are sustained in a number of ways. And at least one key holiday localeTurkeywound up on the red list, meaning those traveling there would have to quarantine in a hotel for 10 days. Legal and regulatory change. Since March 2020,European governmentshave provided more than$32.2 billion in bailouts to the airline industry,through a mix of grants, loans, and debt-for-equity deals, according to a report from HSBC. EasyJet also faces potential threats in terms of unprecedented tragic events like September 11th. And while optimism about leisure travel in Europe is slowly rekindlingthis week, the U.K. announced a resumption of international travel to a limited number of destinationsEasyJet still faces plenty of potential turbulence, as the likelihood of a robust summer season recedes. This results in high levels of asset utilisation and reduced unit costs. The management of the element of working capital. Investing in new generation fleet to replace older types drives economic value, lowering fuel and maintenance costs. These are set out below: easyJet has a strong network of leading number one and number two positions in primary airports, which has proven to be amongst the highest yielding in the market. Porter explains that there are five forces inherent in a market, which will jointly determine the intensity of competition and profitability of EasyJet and the airline industry. WebOften, this takes place in four major steps: Figure out how much money you need to retire. Lundgrencomplainsthat the British governments travel rules remain too onerous. Create a retirement strategy that diversifies your assets and manages risk. Strategic risk management is the process of identifying, quantifying, and mitigating any risk that affects or is inherent in a companys business strategy, strategic objectives, and strategy execution. Furthermore, a lifetime history of D When EasyJets board did not accede to his demands, Haji-Ioannou carried through on his threatrequesting a special meeting to vote on the removal of board member Andreas Bierwirth, a former Austrian Airlines and Lufthansaexecutivewho Haji-Ioannou termed a friend of Airbus. When the board tossed out this request on a technicality, Haji-Ioannou resubmitted his call and asked for the removal of the chief financial officer, Andrew Findlay, too. The linkages with the value chains of channels and customers which are the essence of EasyJets capability and which can protect its market leadership and maintain cost leadership competitive advantage from competitors. Analysis of financial resources in order to understand the strategic capability of EasyJet will need examination of financial capability and performance. Hes running the business to make it as lean as possible, and you cant be a nice guy and do that, Kotze says. Lundgren wasnt completely despondent: Where bookings were allowed and quarantine rules not restrictive, passengers were coming back. A lack of real-time reporting makes it easy to miss the signs of an approaching catastrophe. If easyJet were to raise money from shareholders, he risks falling below this figure a level at which he can no longer unilaterally block special resolutions. Balance your retirement plan with your other financial goals. The second is the threats from substitutes, rail travel v air travel, the growing demand in Eurostar and cruses. This eliminates the need to any commissions to external sales agency. And the government has said the second of these has to be a more accurate PCR test, which can cost as much as 219 ($302) per passenger. Investments in assets are also key consideration in value creation in that consideration of the extent to which assets and working capital are being utilised. The global, interconnected nature of the aviation industry means that airlines, lessors, MROs and suppliers are highly vulnerable to external factors out of their control. Prioritising slot-constrained airports as these are where customers want to fly to and from and as a result have superior demand and yield characteristics. Ryanair uncompromisingly fought its way into the market with an aggressive pricing strategy. There are potential opportunities in terms of new routes and expansion of services offered, EasyJet has already launched a number of new European routes, how about expansion into the Asian Pacific? Every so often Easyjet has aligned to face some unusual risks, for example, IT security and fraud risk, brand ownership, dependence on technology, Industrial action, financing and interest rate risk; while the key risk management system of the company is very formal rather than deepest, Under pressure from airlines, it later lifted this policy for some European destinations, only to reimpose it as infection rates soared again in Spain and France. The airline couldnt simply abandon it without jeopardizing any chance of a quick recovery when the crisis ended.Lundgren also thought the contract made long-term strategic sense. As previously mentioned manual processes can increase the chances of fraud, but they can also result in other unnecessary risks. There is national pride, not to mention jobs and pension payments, resting on their wings. Back in 1995 when EasyJet was lunched it was tipped by most to fail with its no frills strategy. In March 2020, he wrote to EasyJets chairman, John Barton, and demanded the company terminate the contract, citingforce majeure. From June 15, when EasyJet resumed flying, through September 2020, it carried 9.5 million passengers, compared to 37.1 million in the same period the year before. Thats the day the U.K. government first advised Britons abroad to return home as soon as possible in advance of impending travel restrictions because of the growing coronavirus pandemic. Each stands elevated on hydraulically controlled legs, with doors reached by a short metal staircase. Transfer the risk. Create a retirement strategy that diversifies your assets and manages risk. A classically trained trombone player who has said he went into business only because he failed to get into Londons Royal Academy of Music, he said he hadnt been playing his instrument lately because I dont have the inspiration for it. He said hed been trying to draw lessons in resilience by rereading HemingwaysThe Old Man and the Sea, finding perhaps parallels between the Job-like fate of its protagonist and his own plight. The company has announced plans to reduce its 15,000-person workforce by 30%. Before a new business starts making profits, it needs to be kept afloat with money. Where normally there would be the roar of engines and the trundling rumble of buses and baggage carts, the whistling wind is often the only sound. Our mission to make business better is fueled by readers like you. Advantages of Choosing In-House. But with new, more infectious variants of COVID-19 spreading rapidly in Europe, in October renewed lockdowns were imposed across many parts of the U.K. and from Helsinki to Tel Aviv. This will require a mindset where innovation (in cost reduction) is regarded as essential to survival. EasyJet is known for its low-cost competitive pricing. This will show how its critically important for EasyJet that strategic alliance, size and technological innovation have on its profitability. EasyJet came into the pandemic in better shape than many airlines: It was profitable and had a strong balance sheet, with relatively low levels of debt. It is about a man who faces challenge after challenge but he keeps his mood and rises up again, Lundgren told the newspaper. EasyJet may be prepared and has to a large extend engaged in price war with competitors via its lower cost structure (economies of scales due to its larger operations) and also has the financial resource capability to fund short to medium-term losses with the aim of driving out competitors in the longer terms. Continuing to deliver strong productivity, easyJet Airline Company Limited Registered in England with Registered number 3034606; subsidiary of easyJet plc Registered in England with registered number 3959649 Registered Office: Hangar 89, London Luton Airport, Luton, Bedfordshire LU2 9PF, Additional ESG information - Financial Year 2021, Directors' interests and substantial interests. Additionally, various firms pursuing focus strategies may be able to achieve even greater differentiation in their market segments. Easy Jet: Company Operation Strategy : Historical-Hall-2840 The airline cut a deal with a health care company to provide the test at half the normal cost, or 60 per test. But EasyJet could steal an increasing amount of market share from the legacy full-service carriers. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. Potential threats in terms of changing social trends like holidays outside Europe (many now want to experience the eastern cultures and travel to holiday destinations like China and Japan) and also travelling via the EuroStar to Paris etc. EasyJet airplanes parked on the tarmac during the official opening of Berlin Brandenburg Airport on Oct. 31, 2020. The pace of recovery will be determined by vaccination rates, Alton Aviations Ryan says.The problem for EasyJet is that almost all the routes it flies involve Europe, and the continent was lagging far behind on vaccinations. Noting that EasyJet had failed to say exactly how the deferral affected EasyJets cash burn, the founder said that EasyJet might have engaged in market manipulation by failing to disclose such details and by using overly optimistic forecasts for when the companys revenues and profits might recover. 1 Based on share price of 6.62 at 30 September 2021 Difficulties associated with a specific risk are transferred to another party, often insurance companies for coverage like cybersecurity liability insurance.Examples of risk transfer include: buying business interruption insurance to handle unplanned expenses in the aftermath of a cyber attack; reducing the likelihood of project The threemost prominent firms that advise shareholders onhow to cast ballotsin proxy votesISS, Glass Lewis, and Pircall recommended against backing his proposals. Highly utilised fleet of aircrafts that are large, modern, efficient and relatively environmentally friendly. To accomplish that, Lundgren has taken drastic steps. WebPersons with epilepsy (PWE) have a higher risk of developing depressive disorders (DDs), and people with primary DD have an increased risk of developing epilepsy. But the surge in new, more transmissible and potentially vaccine-resistant strains of the virus has placed these forecasts in doubt. If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. Therefore, capability is strongly related to the way that resources are used and controlled. LEGAL The European deregulation of the commercial aviation provided both major strategic threats and opportunities, the national mainstream airlines faced severe price competition from discount carriers. Organizations continue to develop new applications in or migrate existing applications to cloud-based services. Free resources to assist you with your university studies! After listing the risks and putting them in a risk matrix, the report will then aim to explain how the risk will affect easyJet and justify the position of it in the risk map. This section we will investigate EasyJets resources as a means of assessing the organisations strategic capability. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. The U.K. is doing well: It had approved two vaccinesone from Pfizer and one from AstraZenecain December and a third, from Moderna, in early January; by mid-May it had given 68% of the adult population at least one shot. easyJet is delivering its strategy through four strategic priorities, which define the areas of focus to achieve their ambition. data than referenced in the text. WebEasyJets first generic strategy is to achieve an overall cost leadership in the low cost airline industry. Potential negative outcomes include bad publicity and a The greatest dangers, however, may be the market leaders need to manage its evolving Still, the connection was critical for airlines. easyJet has refined its strategy to drive our purpose of making low-cost travel easy. In 2020, those months were grim. Johan Lundgren, the chief executive officer of EasyJet, one of Europes largest budget airlines, is a fan of Flightradar24. The value chain analysis will show the total value added by the airline industry and EasyJet. Founded in 1995, low-cost carrier EasyJet established itself among the largest airline based in the United Kingdom by passenger numbers. Currently, around 12% of boarding passes issued by easyJet are mobile passes, although this can be as high as 50% for some flights. The world economy is however, now on the up post September 11th. Each node of the supply chainsuppliers, plants, warehouses, and transport routesis then assessed in detail (Exhibit 1). So the strategy has been very successful for EasyJet and appears to have been the correct strategic decision. The existing competition also have strong brand image globally, EasyJet is recognised nationally and within the European markets, however, national airlines like British Airways is recognised worldwide and has stronger brand awareness. This level of disruption and deterioration of the operation cannot continue," the email reads. Disappointing your customers. As it turned out, it wouldnt need those flights. Procurement and firm infrastructure as a support activity does not add much extra value. EasyJets new holiday division launched in December 2019, just months before the pandemic took hold. Taken together, those restrictions mean that summer 2021 is looking increasingly in doubt. And hes moved aggressively to grab additional takeoff and landing slots in markets he sees as important. But nothing has been normal for EasyJet since March 23, 2020. This strategy is focused on keeping costs down and EasyJets policy of no free lunch and efficient use of airports by limiting turnaround to 30 minutes. Many of those airlines are limping along on government funding they might never be able to repay, says Leah Ryan, managing director of Alton Aviation, a leading industry consultant. FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. Haji-Ioannou founded EasyJet in 1995, eventually using it as a springboard to create of an Easy-branded empire that extended from car rentals and pizza delivery to a hemp business. Of popular holiday destinations, only Portugal and Gibraltar were put on the initial green list, with no requirement to self-isolate upon return. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. Most theories argue that strategic success and improved wealth generation stem from two strategies. The best of the best: the portal for top lists & rankings: Strategy and business building for the data-driven economy: Commercial airlines net profit in Europe 2013-2022, Commercial airlines change in passenger traffic in Europe 2013-2022, Number of passengers uplifted by United Kingdom airlines 2013-2021, British Airways - worldwide revenue 2010-2021, Leading airlines in Europe based on passenger numbers 2021, Net profit of commercial airlines in Europe from 2013 to 2022 (in billion U.S. dollars), Commercial airlines EBIT in Europe from 2013-2022, Earnings before interest and taxes (EBIT) margin of commercial airlines in Europe from 2013 to 2022, Year-on-year passenger traffic change of commercial airlines in Europe from 2013 to 2022*, Turnover of the air transport industry in the United Kingdom 2008-2018, Annual turnover of the air transport industry in the United Kingdom (UK) from 2008 to 2018 (in million euros), Total number of passengers uplifted by airlines based in the United Kingdom (UK) from 2013 to 2021 (in millions), Worldwide employment by registered airlines in the United Kingdom 2002-2020, Number of people employed worldwide by UK-based airlines between 2002 and 2020, Volume of turbine fuel consumed in aviation in the United Kingdom (UK) 2000-2020, Amount of aviation turbine fuel consumed annually in the operation of aircraft in the United Kingdom (UK) between 2000 and 2020 (in million metric tons), Annual revenue of easyJet plc from 2009 to 2021 (in million GBP), EasyJet plc: annual revenue by region 2018-2021, Annual revenue of easyJet plc from 2018 to 2021, by region (in million GBP), Annual operating expenses of easyJet plc from 2009 to 2021 (in million GBP)*, Annual earnings before interest, taxes, depreciation, amortization and rentals (EBITDAR) of easyJet plc from 2009 to 2021 (in million GBP), Annual operating profit of easyJet plc from 2009 to 2021 (in million GBP), Annual net profit of easyJet plc from 2009 to 2021 (in million GBP), Number of passengers carried by easyJet 2009-2021, Number of passengers traveling with easyJet from 2009 to 2021 (in millions), Passengers uplifted by EasyJet in UK 2008-2020, Number of passengers uplifted by EasyJet Airline Company Ltd in the UK from 2008 to 2020 (in millions)*, Number of seats flown on easyJet flights between 2011 and 2021 (in millions), Easyjet passenger transport volume 2013-2021, Passenger transport volume of Easyjet from 2013 to 2021 (in million revenue passenger-kilometers), EasyJet's passenger load factor 2009-2021, Passenger load factor of EasyJet between 2009 and 2021, Distance flown by EasyJet's passenger aircraft worldwide 2008-2020, EasyJet Airline Company Ltd's passenger aircraft kilometers flown worldwide from 2008 to 2020 (in million kilometers), Leading airlines in Europe in 2021, based on passenger traffic (in millions), Leading European airlines based on revenue 2021, Leading airline groups in Europe in 2021, based on revenue (in billion U.S. dollars)*, Liquidity balances of leading European airline groups 2019, European airlines with best liquidity as a share of 2019 revenue*, Liquidity equivalent days of revenue of the leading European airline groups 2020, Liquidity equivalent days of revenue of the leading European airline groups in 2020*, Number of passengers uplifted by United Kingdom airlines 2021, Leading airlines in the United Kingdom in 2021, by number of passengers uplifted (in millions), British Airways Plc's worldwide revenue from FY 2010 to FY 2021 (in million GBP), British Airways and subsidiaries: number of passengers carried 2011-2021, Number of passengers traveling with British Airways and its subsidiaries from 2011 to 2021 (in 1,000), Annual revenue of Ryanair from 2010 to 2022 (in million euros), Number of passengers carried by Ryanair 2011-2022, Number of passengers traveling with Ryanair from 2011 to 2022 (in millions). 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Turned out, it needs to bear in mind warehouses, and transport routesis then assessed in (... And, finally threats of any takeover bids from national airlines fleet of that. Easyjet could steal an increasing amount of market share from the legacy full-service carriers the. Thorough comprehension of their costs and cost drivers to retire costs at each point in the value chain for to! Airways and 5.37 for Air France and KLM slot-constrained airports as these where... Strengths in terms of unprecedented tragic events like September 11th the way that resources are used and.!
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