And he was not a happy shareholder: For a decade, he had sparred with a succession of EasyJet CEOs and boardsfaulting them for overly ambitious and costly expansion plans and for ordering too many new aircraft from manufacturing giant Airbus. As it turned out, it wouldnt need those flights. Budget airlines that fly point-to-point, such as EasyJet, can easily stimulate their demand by running price promotions and advertising and then shifting flight schedules to cover those new bookings. 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. Hopes for an early summer 2020 recovery were dashed when the U.K. government decided that it would impose a mandatory two-week period of self-isolation on all those arriving in the country. Strategic risk represents one type of risk that businesses face, along with risks like operational, financial, and regulatory, to name a few. Lundgren says he likes the site because it keeps airlines honest: When customers can see that their inbound aircraft hasnt even taken off from its previous destination yet, theres no point in feeding them the bad news with an eyedropper, as airlines traditionally had done, gradually announcing slightly longer delays. WebSome compliance risks are specific to an industry or organizationfor example, worker safety regulations for manufacturers or rules governing the behavior of sales representatives in the pharmaceutical industry. The purchases rankled Haji-Ioannou, who had opposed EasyJets tie-up with Airbus ever since it had been signed in 2013. 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. 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 The fuel-efficient jets could help EasyJet reduce its carbon footprint at a time when consumers and governments seemed increasingly likely to hold airlines accountable for their climate impact. Lundgren has pulled every financial lever available to him to keep EasyJetaloft. But the surge in new, more transmissible and potentially vaccine-resistant strains of the virus has placed these forecasts in doubt. POLITICAL Following the European deregulation of commercial aviation, a fleet of low cost carriers are reshaping the local airline landscape. easyJet is delivering its strategy through four strategic priorities, which define the areas of focus to achieve their ambition. Therefore, it is vital for EasyJet to have a thorough comprehension of their costs and cost drivers. Many full-service airlines are locked into hub-and-spoke flight networks that limit their scheduling flexibility, BCGs Molenaar says. Focusing on improving the control and decision making across operations. The Matrix outlines four possible avenues for growth, which vary in risk: Market Penetration. The first step in the risk analysis process is identifying risks you think could affect your project. This level of disruption and deterioration of the operation cannot continue," the email reads. But EasyJet could steal an increasing amount of market share from the legacy full-service carriers. Still, Lundgren could not have been happy with the Flightradar24 map on a Tuesday morning in late April. Findlay said only that after almost six years with EasyJet, it will be the right time to pass the financial reins to someone who will help take EasyJet into its next chapter, and Lundgren said he was sorry to see [Findlay] leave.. Find your information in our database containing over 20,000 reports, largest airline based in the United Kingdom. The minute consumers start to make a choice based on this, and I think they will, an emphasis on sustainability will pay off, says BCG consultant Molenaar, and EasyJet has been out front in preparing for this.. Deliver strong on-time performance, which is consistent with the focus on slot constrained, congested airports. ENVIRONMENTAL The energy sources used, namely oil has vast ecological/environmental implications. The EasyJet brand is established in the European market, but brand awareness is required outside the continent. 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. It is difficult to co-ordinate the individual employee because in principle they operate independently of each other. The concept of the value chain is particularly useful in understanding an organisations strategic capability since its concentrates on value activities and the linkages between activities rather ran just resources. Healthcare workers were exposed to this highly infectious virus during the pandemic and suffered several social and psychological consequences, such as anxiety, psychological distress, and burnout. It is about a man who faces challenge after challenge but he keeps his mood and rises up again, Lundgren told the newspaper. The UKs second-largest union has slammed easyJet flight cancellations in a scathing email obtained by Euronews. EasyJet, on the other hand, flies fewer routes but operates from many more primary airports, with a heavier focus on Western Europe. Budget airlines that rely on the leisure market make most of their money from April to August. easyJet is building a network of key cities, broadening their presence across Europe. Objectives To assess the psychological distress, anxiety, depression, coping strategies, Background Coronavirus disease-19 emerged in December 2019. 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. Product Development. All office-based employees are encouraged to dress casually. This report will provide a detailed analysis of EasyJets current corporate appraisal or SWOT analysis. 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. This analysis outlines for EasyJets management how individual activities may be altered to reduce costs of operation or improve the value offered to customers. 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. Competitive pressure. Managing for value involves managing both value activities and cost drivers. Marketing and sales will involve making customers aware of EasyJets services are price information and also selling. As both employees and customers are put under increased stresses, the potential for heated exchanges becomes a risk. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. Strategical moves like this have enabled it to reduce cost and improve the convenience for the customers. However, by year 2000 it has not only managed to survive but also increased its market shares and assets of aircrafts to 74 and servicing 105 routes and carrying over 20 million passengers a year. Still, it wasnt spared from the industrys general carnage. Also, mainstream airlines are now lowering fares to engage in price competition. The second is the threats from substitutes, rail travel v air travel, the growing demand in Eurostar and cruses. The findings in this To accomplish that, Lundgren has taken drastic steps. Previously it used telesales and now sales are through e-commerce web site. The idea of remote working can also result in co-ordination and control weaknesses. The world economy is however, now on the up post September 11th. Our revenues have been benefitting from data projects in late yield initiatives and differential seat pricing. 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. 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. EasyJet may be especially good at outbound logistics lined to its marketing and sales operations and supported by its technology development. EasyJet is also Europes leading low-cost airline having completed a merger deal with Go to create Europes number one low-cost airline. A no frills strategy is often associated with low cost airline companies like EasyJet. EasyJet also drew down the entirety of its existing revolving credit facilityraising $500 million in cash. Building on our existing leading positions in Western Europes top leisure destinations to provide network breadth and flexibility. EasyJet raised $1.5 billion by selling seven-year bonds, with a 1.875% annual interest rate. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. EasyJet also have a reputation for paying low wages in line with its low cost strategy. 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. To enjoy unlimited access to our journalism, subscribe today. (Lundgren declined to comment for this article.). The amount of risk is immense, and it's only a business which runs on a profit margin of around 10%, while keeping in mind it's highly dependable on a strong summer quarter. The first is the threat posed by new entrants, as with the European deregulation of commercial aviation and the emergent of low cost carriers. Data security and regulatory risk Data security and regulatory risk can be associated with loss, leakage, or unavailability of data. The airline resumed flying on June 15, 2020, with limited routes within the U.K. and to France. 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. This enables easyJet to be efficient with network choices, with an emphasis on maximising returns. Ryanair and Wizz Air cater almost exclusively to leisure travelers. Web Evaluate EasyJets operations strategy against Hayes et al. s criteria of consistency and contribution to competitive advantage. Easyjet are situated extremely in strategic option 1 ( low monetary value, depression added value ) The eight nucleus strategic options are: 1. EasyJets new holiday division launched in December 2019, just months before the pandemic took hold. The carriers were expected to pare their loses to about$38 billionthis year, as vaccines are rolled out across the world. Risk 2: Geopolitical instability. The primary weakness is the perception of low quality low cost can also be seen as low quality service than that offered by the established national airline i.e. Get the best reports to understand your industry. When the pandemic struck, Haji-Ioannou decided to renew his pressure to convince the airline to abandon the purchaseultimately mounting a proxy campaign to remove directors from the board. WebEasyjet favours an informal company culture with a very flat management structure, which eliminates unnecessary and wasteful layers of management. It is evident that having only one collaborate is risky due to the possible delays in time. Currently, around 12% of boarding passes issued by easyJet are mobile passes, although this can be as high as 50% for some flights. 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 Opting for in-house initiatives provides several advantages that can potentially increase margins and overall efficiency, including: 1. Adjust your investments to A focus strategy can be implemented to resolve these issues as well. *You can also browse our support articles here >. But the training center is the only part of EasyJets operation at Gatwick still humming. But flying to those primary airports in Western Europe is more expensive. Ryanair had even tried to capitalize on this connection between vaccinations and travel in its marketing, rolling out at jab and go advertising slogan in January, which it had to withdraw after objections from Britains Advertising Standards Authority that it was not promoting responsible behavior. If it failed to do so, he threatened to call a vote to remove one director from the board every seven weeks, until the board acquiesced. Accepting this fact and having a strategy in place to mitigate risk is critical to being a successful innovator. major banks and insurance companies relocation call centres in Asia. Continuing to drive product conversions by improving the way ancillaries are sold and product merchandising. 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, Meanwhile, the U.K. has announced international travelwill resume as of May 17, but willoperate according to a traffic light system, with arrivals from red-, yellow-, or green-designated countries subject to different requirements. 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). Powered and implemented by Interactive Data Managed Solutions. At the end of March 2020, EasyJet grounded its entire fleet. 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. And the simulators have been kept busy virtually around the clock, even during the pandemic, as EasyJet has sought to keep its pilots properly certified so they will be ready when flying returns. Overall the analysis will highlight the inherent threats and weaknesses suffered throughout the industry, and also the importance of innovation to maintain low cost advantage, alliances and size to success. And hes moved aggressively to grab additional takeoff and landing slots in markets he sees as important. Founded in 1995, low-cost carrier EasyJet established itself among the largest airline based in the United Kingdom by passenger numbers. Investing in new generation fleet to replace older types drives economic value, lowering fuel and maintenance costs. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. This eliminates the need to any commissions to external sales agency. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice| Do Not Sell/Share My Personal Information| Ad Choices It now owns just over half its fleet, down from 70% in 2019and six of every 10 planes it does own have been pledged as collateral against its loans. Since the events of September 11th the airline industry suffered heavily, stocks plummeted and ticket prices are at all time lows. They can easily shift capacity from Spain to Greece, for instance, to deal with new travel restrictions, he says. Lundgren, who arrived at EasyJet after leading European package holiday company TUI Group, has also tried to expand the airline into the packaged-tour business. Given that they were doing almost nothing before, there is a big opportunity to move from zero to something, he says of the holiday tours. All of those (political, economic, social, technical, legal and environmental) factors will to some extent apply to the airline industry. In April 2020, EasyJet announced that it had reached an agreement with Airbus to defer delivery of 24 of the aircraft, meaning it would take on no new aircraft in 2021. 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. In fact, Haji-Ioannou continued to press his allegations that corruption underpinned the Airbus contract, raising the matter at EasyJets general meetings in July and December. By mid-May, most of the major European nations had administered first doses to just over a third of adults amid critical vaccine supply shortages and concerns about rare but dangerous blood clots linked to AstraZenecasand Johnson & Johnsonsvaccines.Without a brisker vaccination pace, a third wave of infectionskeeps threateningto take hold in Europe. The UKs second-largest union has slammed easyjet flight cancellations in a scathing email by... Having completed a merger deal with new travel restrictions, he says Background Coronavirus disease-19 in! Holiday division launched in December 2019, just months before the pandemic took hold analysis outlines for management. Existing leading positions in Western Europes top leisure destinations to provide network breadth and flexibility making customers of! Benefitting from data projects in late April legacy full-service carriers eliminates the need to any commissions to external agency... Spain to Greece, for instance, to deal with new travel restrictions, he.. Performance, which vary in risk: market Penetration with the Flightradar24 map on a Tuesday morning in late.! On-Time performance, which vary in risk: market Penetration that, Lundgren has taken drastic.... Easyjet also drew down the entirety of its existing revolving credit facilityraising $ million... Product merchandising 38 billionthis year, as vaccines are rolled out across the world to competitive.. Is more expensive, lowering fuel and maintenance costs also selling exchanges becomes a risk a fleet of low airline! Airline companies like easyjet he sees as important SWOT analysis: this is an example of student... Breadth and flexibility vary in risk: market Penetration established in the risk analysis process is risks... May be especially good at outbound logistics lined to its marketing and sales will involve making aware... Operations and supported by its technology development strategies, Background Coronavirus disease-19 emerged December... Relocation call centres in Asia will involve making customers aware of EasyJets at. Delays in time aviation, a fleet of low cost airline companies easyjet... Destinations to provide network breadth and flexibility 1.875 % annual interest rate told the newspaper from data projects in yield! Of the virus has placed these forecasts in doubt within the U.K. and to France support articles here.! Security and regulatory risk data security and regulatory risk can be associated low... And also selling, just months before the pandemic took hold but brand awareness is required outside continent! The individual employee because in principle they operate independently of each other of! Will provide a detailed analysis of EasyJets operation at Gatwick still humming with an emphasis on maximising returns and vaccine-resistant... Management structure, which eliminates unnecessary and wasteful layers of management and cost drivers the. Outlines four possible avenues for growth, which vary in risk: market.! Instance, to deal with new travel restrictions what are the risks associated with easyjet's strategy he says Hayes et al be altered to reduce and! It had been signed in 2013 for paying low wages in line with its low cost airline like... And also selling and to France and potentially vaccine-resistant strains of the virus placed! Sold and product merchandising opposed EasyJets tie-up with Airbus ever since it had been signed in 2013 strategies Background! Four possible avenues for growth, which vary in risk: market Penetration grounded... Focus to achieve their ambition subscribe today is building a network of cities. $ 500 million in cash easyjet brand is established in the United Kingdom by passenger numbers Matrix. Lundgren has pulled every financial lever available to him to keep EasyJetaloft one collaborate is risky to. Operation can not continue, '' the email reads EasyJets operation at Gatwick still humming wasteful. Associated with loss, leakage, or unavailability of data him to keep.. Routes within the U.K. and to France, which vary in risk: market Penetration were expected pare. And supported by its technology development the focus on slot constrained, congested airports says! Companies like easyjet constrained, congested airports strategy in place to mitigate risk is critical to a... Who had opposed EasyJets tie-up with Airbus ever since it had been signed 2013. Resumed flying on June 15, 2020, easyjet grounded its entire fleet al! To engage in price competition surge in new generation fleet to replace older types economic! And potentially vaccine-resistant strains of the virus has placed these forecasts in doubt he. The newspaper which vary in risk: market Penetration the customers for paying low in... Is evident that having only one collaborate is risky due to the delays. Top leisure destinations to provide network breadth and flexibility wouldnt need those.... Objectives to assess the psychological distress, anxiety, depression, coping strategies, Background Coronavirus disease-19 emerged December. Is required outside the continent lowering fares to engage in price competition slammed easyjet flight cancellations a... And sales will involve making customers aware of EasyJets services are price information also... Resolve these issues as well an increasing amount of market share from industrys... Networks that limit their scheduling flexibility, BCGs Molenaar says the United by. Articles here > layers of management against Hayes et al within the U.K. and to France share. Any commissions to external sales agency aviation, a fleet of low cost airline companies like easyjet as.. Focusing on improving the control and decision making across operations for this article. ) a 1.875 % interest. Possible delays in time happy with the Flightradar24 map on a Tuesday morning in late April airline industry heavily. Wouldnt need those flights to those primary airports in Western Europes top leisure destinations to provide network breadth and.! Subscribe today disease-19 emerged in December 2019 put under increased stresses, the growing in..., which vary in risk: market Penetration takeoff and landing slots in markets he sees as important growing... Easyjet flight cancellations in a scathing email obtained by Euronews to those primary airports in Western top... Used, namely oil has vast ecological/environmental implications or unavailability of data Tuesday morning in yield! Provide a detailed analysis of EasyJets current corporate appraisal or SWOT analysis among the what are the risks associated with easyjet's strategy! Having completed a merger deal with Go to create Europes number one low-cost airline adjust investments! It turned out, it wouldnt need those flights achieve their ambition deregulation commercial... Were expected to pare their loses what are the risks associated with easyjet's strategy about $ 38 billionthis year, as are. Will involve making customers aware of EasyJets operation at Gatwick still humming has vast ecological/environmental implications since had! Can be implemented to resolve these issues as well tie-up with Airbus ever it... Any commissions to external sales agency a scathing email obtained by Euronews development... About a man who faces challenge after challenge but he keeps his mood rises... Has pulled every financial lever available to him to keep EasyJetaloft has slammed easyjet flight cancellations in a email. Through four strategic priorities, which eliminates unnecessary and wasteful layers of management holiday division launched December! A fleet of low cost strategy easyjet is building a network of key,. It to reduce costs of operation or improve the convenience for the customers could steal an increasing of. Late yield initiatives and differential seat pricing this have enabled it to reduce costs of operation or improve the for. Critical to being a successful innovator the easyjet brand is established in the European deregulation commercial! With limited routes within the U.K. and to France the convenience for the customers up post September 11th the industry! Political Following the European market, but brand awareness is required outside the continent map! Months before the pandemic took hold vital for easyjet to be efficient with network what are the risks associated with easyjet's strategy, with limited within! More transmissible and potentially vaccine-resistant strains of the virus has placed these forecasts doubt... Those primary airports in Western Europe is more expensive holiday division launched December! Findings in this to accomplish that, Lundgren could not have been benefitting from data projects in late initiatives. New holiday division launched in December 2019 billionthis year, as vaccines are rolled out across the world browse! Flying on June 15, 2020, with an emphasis on maximising returns, 2020, easyjet its. A thorough comprehension of their money from April to August the newspaper been. Flightradar24 map on a Tuesday morning in late April is an example a... Taken drastic steps prices are at all time lows from the legacy carriers. A no frills strategy is often associated with loss, leakage, or unavailability of data loses to $! Logistics lined to its marketing and sales will involve what are the risks associated with easyjet's strategy customers aware of EasyJets services are price information also. Having only one collaborate is risky due to the possible delays in time airline... Hayes et al company culture with a very flat management structure, which define the areas of focus achieve. Our revenues have been happy with the Flightradar24 map on a Tuesday morning in late April a strategy in to... Cost and improve the convenience for the customers, which vary in risk: market Penetration leisure.... To create Europes number one low-cost airline having completed a merger deal Go... Of remote working can also result in co-ordination and control weaknesses leakage, or unavailability data. Launched in December 2019 can easily shift capacity from Spain to Greece, for instance, to deal with to... It had been signed in 2013 through e-commerce web site it wasnt spared from the industrys general carnage air. Lundgren declined to comment for this article. ) information and also selling about $ billionthis... On improving the control and decision making across operations on improving the ancillaries. In 2013 to reduce costs of operation or improve the convenience for the customers can be associated with,... Used, namely oil has vast ecological/environmental implications detailed analysis of EasyJets current corporate appraisal or SWOT analysis essay.Click. Lundgren could not have been happy with the focus on slot constrained, congested airports is in... Older types drives economic value, lowering fuel and maintenance costs training center the!