EasyJet says the funds will give it the firepower to grab slots at premium airports like Paris Orly, Lisbon, Milan Linate and London's Gatwick. 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. Flying point-to-point routes, it was freeof thecostly spoke-and-hub model employed by Europes big national carriers. 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 appears to have internal strengths in terms of brand awareness, cash flows, and operational efficiencies. While it is often lumped into the same European budget airline category as Dublin-based Ryanair and upstart Hungarian carrier Wizz Air, there are some key differences between EasyJet and those other airlines. Due to varying update cycles, statistics can display more up-to-date These moves enabled EasyJet to reduce its operating costs, excluding fuel, by about 31% in the year through Sept. 30, 2020. A strong and visible brand to create a high level of awareness with consumers. We are seeing significant benefits already from operational resilience processes and predictive maintenance. 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. easyJet holidays will continually optimise yields on packages sold, whilst developing the cities proposition allowing easyJet holidays to reduce the cyclical disparity of a traditional tour operator. data than referenced in the text. In terms of strategy, many factors are outside the control of the company, such as use of high quality components and low defect rates for its aircrafts. EasyJet cost efficiency is achieved in a variety of way as shown in the following diagram: The success of low-fare (cost) strategy is primarily dependent on the maintenance of a low cost base. Whats more, it included maintenance and avionics support for EasyJets existing fleet. Normally there would have been close to 100. 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. Competitive pressure. Overview and forecasts on trending topics, Industry and market insights and forecasts, Key figures and rankings about companies and products, Consumer and brand insights and preferences in various industries, Detailed information about political and social topics, All key figures about countries and regions, Market forecast and expert KPIs for 600+ segments in 150+ countries, Insights on consumer attitudes and behavior worldwide, Business information on 60m+ public and private companies, Detailed information for 35,000+ online stores and marketplaces. EasyJet also has a strong cash flow position primarily from its policy to retain profits and reinvest it back to the business. When the risks are specific to a certain activity the risks will be managed, and maintained Powered and implemented by Interactive Data Managed Solutions. EasyJet appears to have developed competences in supporting much higher levels of business from the same asset base than other rival airlines. Also, suffers weakness in the area of hospitality in terms of on board offer of Free Lunch, the eliminating of free catering on board may result in loss of potential customers. 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. Bills will pile up, suppliers will need payments, and your employees will be expecting their salaries. And the company continued to insist it saw the opportunity for wins amid the travel industrys carnage: Europes legacy carriers were hurting even worse than EasyJet, which offered the discount airline a chance to gain new flight slots at key airports in Paris, Milan, London Gatwick, and Geneva. However the sustainability of competitive advantages may be problematic: as rivals copy successful strategies, EasyJet will loose its initial advantages. The web-based questionnaire was distributed to Egyptian healthcare workers from the 20th of April 2020 to the 20th of May 2020. In June, the airline found a deft way to simultaneously relieve the pressure from its cash burn and Haji-Ioannou: It raised more than$631 millionto help it weather the pandemic by issuing new shares equivalent to 15% of the companys outstanding share capital. But the surge in new, more transmissible and potentially vaccine-resistant strains of the virus has placed these forecasts in doubt. easyJet is delivering its strategy through four strategic priorities, which define the areas of focus to achieve their ambition. Opting for in-house initiatives provides several advantages that can potentially increase margins and overall efficiency, including: 1. With so much uncertainty, leisure travelers are holding off on booking summer flights, prolonging EasyJets pain. Most theories argue that strategic success and improved wealth generation stem from two strategies. Furthermore, a lifetime history of D The airline founders misgivings had only mounted after the aircraft maker agreed in January 2020 to deferred prosecution agreements with the U.S., France, and the U.K. and to pay billions of dollars in fines stemming from charges that it had for years routinely bribed airline executives to secure contracts.When the pandemic struck, the aggrieved founder saw an opportunity to force EasyJet to abandon the deal. The sales process is efficient, as EasyJet sells directly to customers, instead of using external sales teams. The findings in this We are happy to help. And finally, service, activities that ensure that customers enjoy their flight by providing friendly on board service and assisting traveller with any special needs requirements. (EasyJets fellow European budget carrier, Ryanair, announced this week that it had lost about $1 billion in the preceding 12 months. WebIt offers marketers a simple and effective way of weighing up the options and risks involved when taking new strategic decisions. Now, at the cusp of a summer season that normally would be the source of the majority of EasyJets profits, the airline and its CEO face what could be a make-or-break season. All office-based employees are encouraged to dress casually. Potential threats of economic recession, since air travel is effectively a commodity product, it is recession prawn. The federal government recently made cloud-adoption a central tenet of its IT modernization strategy.An organization that adopts cloud technologies and/or chooses cloud service providers (CSP)s and services or applications without Advantages: A bigger market share New target market The barriers to enter are higher Predatory pricing Strategic Issues facing the airline Industry 8.2. easyJets future 9. However, if EasyJet could significantly differentiate its service over its competitors then it could obtain higher prices. Improving CSAT across the whole customer journey. Strategic risk is a category of risk; alongside operational, financial, regulatory and other business risks, it forms part of the umbrella of risks your organization faces. WebAs seen, both prioritizing an organization's needs and risks is an ongoing process especially during the planning, writing, and implementation stages in a strategic plan. Before a new business starts making profits, it needs to be kept afloat with money. EasyJet also operates a flat management structure, which may lack a formal discipline that is needed as the organisation grows. To accomplish that, Lundgren has taken drastic steps. 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. A prime example of this was the subsequent takeover of Go by EasyJet. Strategies are largely determined by the extent to which they deliver best value to both customers in terms of being competitiveness in the marketplace (leading low cost airline) and also to provide value to shareholders. Managing for value involves managing both value activities and cost drivers. easyJet aims to deliver a seamless and digitally enabled customer journey at every stage and is continuously working to enhance the customer experience. 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. This will require a mindset where innovation (in cost reduction) is regarded as essential to survival. 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. Given EasyJets cash burn, it needed to raise more moneyand quickly. When it comes to choosing between in-house and outsourcing, the organization must first analyze the associated risk and cost that comes along with each method. Therefore, the low cost strategy is the ideal strategic fit to its environment. Protect and build on easyJet's strong brand, Provide an easy and reliable customer experience. Of popular holiday destinations, only Portugal and Gibraltar were put on the initial green list, with no requirement to self-isolate upon return. These large airline groups are so big and so important for so many economies that the national governments will do whatever they can to keep them alive, saysDirk-Maarten Molenaar, atravel and tourismindustry consultant at Boston Consulting Group. Having considered the possible future opportunities what are the potential threats that EasyJet needs to bear in mind? EasyJet is also Europes leading low-cost airline having completed a merger deal with Go to create Europes number one low-cost airline. This involves EasyJet retaining funds from operations; hence, a healthy Balance sheet in terms of retained profits. easyJet has refined its strategy to drive our purpose of making low-cost travel easy. WebDeloitte's new survey report offers a clear view of how companies view and manage the risks that affect their business strategy, based on recent survey results. Lundgren has pulled every financial lever available to him to keep EasyJetaloft. EasyJets first generic strategy is to achieve an overall cost leadership in the low cost airline industry. An important part of easyJets strategy is to operate a modern fleet and based on the current business model, EasyJet announced it had lost more than $1 billion in the 12 months through September 2020. TECHNICAL Changes in retailing methods as such ticket sales via the Internet is now a common place in air travel, passengers receive an email containing their travel details and booking reference when they book online. In a vast hangar on the outskirts of Gatwick Airport, one of EasyJets big hubs, sit a row of five space-age pods, painted in EasyJets trademark orange-and-white colors. Clicking on the following button will update the content below. Its not clear what role Haji-Ioannous pressure played in this decision. Another major industry wide threat is the volatility in price of fuel Oil price record high of $53 a barrel. this was the headline in the business pages of all the newspapers last November. But at the same time, Haji-Ioannou and his family sold off a portion of their shares, bringing their total holdings to less than 27% of the company by May 2020. It renegotiated contracts with ground handling firms at several airports helping to lower costs. That move also diluted Haji-Ioannous stake in the companys stock from more than 34% at the beginning of 2019to just under 30%, making it easier for EasyJets board to ignore the demands of its querulous founder. easyJet holidays is on track to meet the medium-term target of 100m+ PBT. Capabilities to turn resources into advantages, Customers demand change to more flexible schedules, comfortable and relevantly cheap services, Extremely high competition for customers and resources. Balance your retirement plan with your other financial goals. In terms of analysis, EasyJets distribution activities are important in terms of e-commerce, as EasyJet like to consider itself as the webs favourite airline. Since the start of the pandemic, it has sold and leased back58aircraft, raising$2.1 billion. 6. Each node of the supply chainsuppliers, plants, warehouses, and transport routesis then assessed in detail (Exhibit 1). And hes moved aggressively to grab additional takeoff and landing slots in markets he sees as important. Those airlines are more dependent on business travel, which many analysts forecast might not fully recover from the pandemic until 2024if it ever recovers at all. EasyJet currently has two suppliers, Boeing and Airbus. But EasyJets contract required it to pay the aircraft maker at least $6 billion through 2023a sum considerably greater than the airlines entire current market This has lead to EasyJet customers enjoying Ticketless travel this reduces the cost of issuing, distribution, processing and reconciling tickets. Disappointing your customers. The primary outcomes were anxiety (GAD-7), depression (PHQ-9), risk perception towards COVID-19, interprofessional teamwork attitude, and coping strategies during the Coronavirus disease-19 pandemic. WebEasyjet favours an informal company culture with a very flat management structure, which eliminates unnecessary and wasteful layers of management. Front and center was the existential risk of the coronavirus. on its competitive advantages - an unparalleled network and market positions, efficient low cost model, well-known brand and strong balance sheet - positioning easyJet to deliver sustainable and disciplined growth and returns for shareholders. He also likes the site because it allows EasyJet to easily gather competitive intelligence about the performance of rival airlines. The type of childcare had little impact on infection risks. Those changes will ensure that EasyJet sustains its current market share and position and also increase margin. Many of EasyJets competitors in Europe are national flag carriers: Air France, KLM, Lufthansa, SAS, Iberia, TAP Air Portugal, Swiss Air, and British Airways. EasyJet, on the other hand, flies fewer routes but operates from many more primary airports, with a heavier focus on Western Europe. The business has also enjoyed an increase turnover and trading profits resulting in continuous substantial growth in underlying profitability over the last 7 years (see table 1). 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. We mentioned the seven most common risk events above, but other project risks could include contractor failure, unexpected life events, data transfer issues, shifting priorities, legal risk, market risk, and project deferral. If you need assistance with writing your essay, our professional essay writing service is here to help! The first step in the risk analysis process is identifying risks you think could affect your project. Also, only one type of aircraft is used, in order to minimise maintenance costs. As opposed to cost leadership, in which businesses rely on reducing costs to gain a significant market share, a differentiation strategy is typically The price of EasyJets tickets various as a function of the number of seats remaining, the time until the flight, and historical trends. The customers of EasyJet have been using the Internet for making bookings. In this way, it has positioned itself as a more direct competitor to Europes traditional airlines.Lundgren says he wants EasyJet to be the No. Adjust your investments to This results in a very strong competitive rivalry in the industry. 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. Deliver strong on-time performance, which is consistent with the focus on slot constrained, congested airports. The value chain analysis will show the total value added by the airline industry and EasyJet. )Compared to some of its low-cost rivals, EasyJet also owned more of its planes outright. The company carries out We're here to answer any questions you have about our services. The reason for EasyJet to put so much emphasis on the human factor as one of the primary risk sources is quite understandable. liability for the information given being complete or correct. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. The U.K. requireseven those returning from green countriestake COVID-19 tests before boarding a plane to return to the U.K. as well as within two days of returning. Within weeks of the vote, Findlay, EasyJets CFO, announced his intention to step down, and analysts speculated that the stress of Haji-Ioannous campaign, on top of that caused by the pandemic, had taken a toll. WebThe following operating risks are associated with pursuing sustainability initiatives as part of a marketing plan: Loss in profitability Loss of focus Just as sustainability would seem to be a rallying cry for consumers, some companies have jumped on sustainability as a 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. Feeling powerless is one of the worst feelings, not just in business.. 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. A focus strategy can be implemented to resolve these issues as well. In a sign of faith in EasyJets prospects, the bond sale was almost six-times oversubscribed. This analysis outlines for EasyJets management how individual activities may be altered to reduce costs of operation or improve the value offered to customers. EasyJet airplanes parked on the tarmac during the official opening of Berlin Brandenburg Airport on Oct. 31, 2020. Upgauging the fleet enables easyJet to improve competitiveness on costs. Web1) Economic Risks. Ties are banned except for pilots! The airline had become Europes equivalent of Southwest in the U.S. 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. Finally, the key to sustaining high levels of growth is the scalability of the operations. Its current cash flow position is also strong, with cash flow from operating activities increased by 61 percent between the six months ended 31st March 2003 to six months ended 31 March 2004. The pandemic, of course, wiped out business and leisure travel alike. The globalization is also another factor influencing which build up the air traffic as lifelong. 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. This will assist management to decide as to what EasyJet should be concentrating on and what requires de-emphasising or even outsourcing. In 2020, it hemorrhaged the same amount. This will show how its critically important for EasyJet that strategic alliance, size and technological innovation have on its profitability. 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. FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. 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