A typical approach for risk identification is to map out and assess the value chains of all major products. This enables easyJet to be efficient with network choices, with an emphasis on maximising returns. 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. At the end of January, EasyJet announced that it had secured another $1.9 billion through a five-year loan, secured against its aircraft. They have focused on expanding into new markets in Eastern Europe. All work is written to order. 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. 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. 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 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 EasyJet also operates a flat management structure, which may lack a formal discipline that is needed as the organisation grows. Table below provides an analysis of EasyJets sales revenue and profitability ratio since 1998. As Internet transactions have a lower cost associated with it EasyJet encourages its customers to book on-line by offering them a discount for on-line ticket reservations. Clicking on the following button will update the content below. As both employees and customers are put under increased stresses, the potential for heated exchanges becomes a risk. 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. The development of the next generation aircraft will also lead to technological opportunities in term of fuel efficiencies. As the holidays business grows in scale, easyJet plans to make targeted investments to strengthen the business. 2023 Fortune Media IP Limited. Having considered the possible future opportunities what are the potential threats that EasyJet needs to bear in mind? EasyJet is an international example, The introduction of Airbus A319 aircraft, combined with the retirement of old generation Boeing 737 aircraft, will result in a two-type new technology fleet, which will commonality and lessen complexity and deliver high level of asset utilisation and reduce unit costs. 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. 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 The idea of remote working can also result in co-ordination and control weaknesses. Continuing to drive product conversions by improving the way ancillaries are sold and product merchandising. 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. Most of Europe was in the yellow category, requiring 10 days of self-isolation when coming back, and with the U.K. government still advising against leisure travel. Our academic experts are ready and waiting to assist with any writing project you may have. Implications from the strategy chosen. 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. Finally, the key to sustaining high levels of growth is the scalability of the operations. The company benefits from being one of just four airlines globally thatcurrentlyhave an investment-gradecreditrating, according to Gerald Khoo,a transportation analystwith brokerage firm Liberum. But the training center is the only part of EasyJets operation at Gatwick still humming. Still, the connection was critical for airlines. The first is the threat posed by new entrants, as with the European deregulation of commercial aviation and the emergent of low cost carriers. British Airways. Combining perceived low price with perceived added value can be a highly successful strategy but one that requires innovative thinking. All airline companies within the industry will have similar value chain, which will include activities such as obtaining fuel, designing fare structures, airport facilities, developing co-operative agreements, and providing customer service. Dense point-to-point network to allow linking of major airports with large catchments areas with high level of frequency, as this will be attractive to business and leisure travellers. This will help the companies decision makers understand where the organisation is now. It was enough to make any airline CEO play the blues. The first is to reduce the bottom line costs of operation (low cost strategy) and the second is to increase the value of the organisation and its reputation to customers, so that they will demand more or pay more for what they receive (differentiation strategy) (ACCA Paper 3.5 (2001)). Potential negative outcomes include bad publicity and a Improving CSAT across the whole customer journey. Therefore, it is vital for EasyJet to have a thorough comprehension of their costs All office-based employees are encouraged to dress casually. Appendices 1. As previously mentioned manual processes can increase the chances of fraud, but they can also result in other unnecessary risks. 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). Opportunities in terms of worldwide destinations are now popular with holidaymakers and also the growing trend in international business ventures, e.g. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. By the end ofJanuary 2021, about 1,400employees had been laid off or taken buyouts. 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. At the same time, it was wooing at least some business travelers by differentiating itself from no-frills rivals like Ryanair and Wizz, offering some perks and serving first-tier airports. 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. Objectives To assess the psychological distress, anxiety, depression, coping strategies, With the modern aircraft fleet that it possesses, the fuel cost and aircraft maintenance cost is also reduced. Front and center was the existential risk of the coronavirus. Effective use of digital and data tools to underpin growth and deepen customer relationships. Lower costs are the only competitive advantage in the short-haul economy sector as air travel is effectively a commodity product. The airline has differentiated itself from other budget carriers by serving top-tier European airports. Directly accessible data for 170 industries from 50 countries and over 1 million facts: Get quick analyses with our professional research service. Just two EasyJet aircraft were in the air, one en route from Londons Gatwick Airport to Lyon in France; another from Belfast to the English Channel island of Jersey. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! What happens to EasyJet, which had been one of the strongest players in the airline industry before COVID-19, could presage the entire sectors fate: If EasyJet cant come back strong, what airline can? It hoped these measures allow the public to feel confident flying again. EasyJets first generic strategy is to achieve an overall cost leadership in the low cost airline industry. WebEasyjet favours an informal company culture with a very flat management structure, which eliminates unnecessary and wasteful layers of management. easyJet is building a network of key cities, broadening their presence across Europe. 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. This has resulted in a strong Balance Sheet the companies net assets reaching the record level of 724 million (aided by retained profit mainly). EasyJet currently has two suppliers, Boeing and Airbus. The strategy risks serious disruptions to their customer service processes as employee morale drops at the same time that wait times for customers increase. As it turned out, it wouldnt need those flights. 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. Currently, around 12% of boarding passes issued by easyJet are mobile passes, although this can be as high as 50% for some flights. But what are the internal weaknesses suffered by EasyJet? Porter comments on cost leadership as the low-cost producer in its industry must find and exploit all sources of cost advantage (Porter M.E (1980)). 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. The CEO told theFinancial Timesthat Haji-Ioannous campaign was highly undesirable, unhelpful, and a distraction. EasyJet pointed out that the contract contained noforce majeureclause. 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. 8. 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 can restore the reputation of a brand. We will start by looking at strengths: EasyJet serves diverse ranges of European routes with principle activities in both Leisure and business markets, offering 60 key European routes. Over time, a brand may experience enough negative interactions that its reputation is placed into a vulnerable position. Many full-service airlines are locked into hub-and-spoke flight networks that limit their scheduling flexibility, BCGs Molenaar says. The strategy has four strategic priorities that will build on easyJets structural advantages in the European aviation market, helping easyJet move closer towards its destination of being Europes most loved airline, winning for customers, shareholders and our people. The carriers were expected to pare their loses to about$38 billionthis year, as vaccines are rolled out across the world. (Lundgren declined to comment for this article.). It is not helpful to have a shareholder barking up managements neck the whole time, Morningstar analystKotze says. So the strategy has been very successful for EasyJet and appears to have been the correct strategic decision. These moves enabled EasyJet to reduce its operating costs, excluding fuel, by about 31% in the year through Sept. 30, 2020. Focus on seasonality improvements such as season contracts and bases. EasyJet appears to have internal strengths in terms of brand awareness, cash flows, and operational efficiencies. Ryanair uncompromisingly fought its way into the market with an aggressive pricing strategy. Enabling risk management through a Locked into hub-and-spoke flight networks that limit their scheduling flexibility, BCGs Molenaar says facts: Get analyses. 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