Content

Introduction to easyJetFactors affecting the airline industrySWOTStrategies of easyJetRecommendationsConclusion

easyJet

INTRODUCING EASYJET

Introduction

British budget airline, 2nd largest low cost carrier in Europe

Founded by Sir Stelios Haji-Ioannou in 1995

Part of EasyGroup easyHotel easyBus easyCar

Introduction

Serves major airports in key marketsTargeted market segment

Business travelers due to high frequency of flights and convenience

Introduction

“MAKING FLYING AS AFFORDABLE

AS A PAIR OF JEANS”

Vision: To Be The Best Low Fares

Airline In The World

Introduction

Strategic priorities:1. Safety2. Building Europe’s No 1 Air Transport

Network3. Develop a winning customer proposition4. Deliver low cost and maximise margins

Introduction

Strategic priorities:1. Safety• Flight management data• Safety management system

2. Building Europe’s No 1 Air Transport Network• Build frequency and stability to core

routes• Number of aircraft based in countries is

constantly being reviewed

Introduction

3. Develop a winning customer proposition

• Arrive at destination within 15min of scheduled time

• Tailored marketing email offer according to preference of individual customer

Strategic priorities:

4. Deliver low cost and maximise margins

• Focus on fuel conservation• Own family of air craft which is cheaper

to operate

easyJet

FACTORS AFFECTING THE AIRLINE INDUSTRY

Factors

General factors affecting strategies and decisions within airline industry Market demand Competitors Fluctuation in oil prices Threat from terrorism Natural disaster / epidemic Government regulation

Factors – Market Demand

Market Demand Increased demand for air travel due to:▪ Reduction in air fares▪ Increased in average incomes

Factors – Market Demand

Significant increase in short haul travels.

Increase to 187million

Factors – Market Demand

Competitive Market▪ Cannot influence on-going market price

Travelling considered as luxurious good.▪ Demand is elastic

Big drop in demand

Small increase in price

Factors – Competitors

Competitors Presence of competitors offering similar

products Comparison of price can be done easily

through internet

Factors – Oil prices

Fluctuation in oil prices Due to instability in middle east,

influence of cartel Oil resource drying up

Factors – Oil prices

Increases in oil prices will increase cost of production

Erode profit margin Consumer have to pay more

Factors – Terrorism

Threat from terrorism Fear of flying May avoid air travel until psychological

shock is overcome E.g. ▪ Bombing in London on 7th July 2005▪ US recently issued a travel alert to travel in

Europe

Factors – Epidemic / Natural Disaster

Epidemic / Natural Disaster SARS (November 2002)▪ Fear of being contracted

Volcanic ash cloud over Europe (April 2010)▪ Halting of aircraft▪ Loss of $200 million in a day

Factors – Government Legislation

Government regulation Environmental degradation becoming a

major issue Increase in emphasis on sustainable

development▪ Sustainable marketing – invest in modern fuel

efficient aircraft operating at high capacity

General Pricing Strategy

Dynamic Pricing Adjust prices continually when flight

date nearingPromotional Pricing

Temporary reduction of price to create excitement

easyJet

SWOT ANALYSIS

SWOT

StrengthsWeaknesse

s

Opportunities

Threats

easyJet

SSWOT - Strengths

Flies to primary airports Convenience for business travellers on

tight schedules

Low cost offering No frills airline – non essential features

removedEg. Light freshments

Reverse Pricing System The earlier you book, the

cheaper the air ticket

SSWOT - Strengths

Ease of booking flights 24/7 Internet booking Phone booking(slowly phasing out)

Fast turnaround time of aircrafts Planes ready to take off within 30

minutes from landing Efficient Increase frequency of flights

SSWOT - Strengths

Highly distinctive branding Featured on Airline TV series, spread name in UK Bright orange colours Catchy slogans

Eg : “The web’s favourite airline”“Come on, let’s fly”

Website livery painted on plane

WSWOT - Weakness

High-density seating Discomfort for passengers during long

distance flights

Hassle in changing bookings Top up difference in price depending on

current price level

Relying solely on price is not a good strategy Competitors may draw customers away

by offering lower prices

OSWOT - Opportunities

Weakening Pound against Euro Increased demand in travel from

European countries to Britain Cater more flights

Rising markets Middle East China

SWOT - Threats

T Brand names

Easy to copy Confuses customers Damage the brand name

SWOT - Threats

T Competitors

Ryanair•Europe largest low-cost carrier in terms of market share•Fly to secondary airport

Air Berlin•Germany’s 2nd largest airline•Offer free snack and drinks•Fly out of Europe

SWOT - Threats

T Alternative modes of transport

Eurorail - Trains Comparable duration and price for

short distances

easyJet

easyJet’s Strategies

easyJet’s Strategies

4 Ps Place Promotion Product Price

Other strategies

4Ps - Places

Place Online booking website Telephone booking

4Ps - Promotion

Promotion Internet business model▪ Slowly phasing out telephone sales operation

Aggressive branding▪ Bright orange colour▪ Catchy slogans▪ Website livery on airplane▪ Featured in Airline TV Series

4Ps - Product

Product Offers one-way tickets for passengers▪ Flexibility of travelling

No frill experience

4Ps - Price

Price Good-value pricing – right combination

of quality and price▪ Everyday low pricing

Due to cost advantage strategies▪ Does not provide free on board snacks and

beverages▪ No business class seats▪ Direct marketing – use of internet

4Ps - Price

Optional-Product Pricing – Pricing of complementary products▪ Food & Beverages▪ Priority Boarding Pass

Dynamic Pricing - prices vary according to demand and date of booking▪ Charges low prices for early bookings

Other Strategy

Diversification Unable to rely on low-cost approach EasyGroup provides complementary

services▪ Offer a bundled deal which increases

convenience for customer.▪ Ryanair also use similar approach but tie up

with partners to earn commissions▪ easyJet will have more control over promotion

package

Other Strategy

Environmental Strategy To be efficient in air▪ Efficient use of aircraft▪ Fly short haul only

To be efficient on the ground▪ Using less ground equipment▪ Keep waste to minimum

easyJet

Recommendation

Recommendation

Current Situation / Trend Global warming Increased air pollution▪ Various sources such as factories, power

plants, motor vehicles and aircrafts▪ Aircrafts are a major contributor of carbon

dioxide gases to the atmosphere

Recommendation

Increase emphasis on sustainable development

Green initiatives ▪ Reduce▪ Reuse▪ Recycle

Recommendation

What we propose easyJet should do

In view of the current situation Actively market easyJet as a Green

Airline Allow consumers to see easyJet as

intrinsically associated with green issues

Recommendation

Potential Advantage for easyJet Improve branding of easyJet (Societal

Marketing)▪ Concerned with making a positive impact on

the environment▪ Customers will associate easyJet with being

green

“Consumers not just buying an air ticket, they are buying into something bigger, and that is reduced air pollution”

Recommendation

Lower cost of operation Possible free or extended advertising

from green groups Fuel efficient engines allow greater

savings

Recommendation

Potential Advantages for third parties Companies’ whose staff travel with

easyJet▪ Improve image of companies

Recommendation

How to do it Seek constant improvements into

greener technology Jet engines that reduce fuel consumption

and emit less harmful gases▪ NASA is developing technology that would

permit Boeing 737 and Airbus A320 jets, in 2018, to burn 25% less fuel and reduce nitrogen oxide emissions by 80%.

Recommendation

Catchy slogan

its easyJet being green…

easyJet

Conclusion

Conclusion

Cannot rely solely on low pricing Only one element of company’s broader

marketing strategy Does not retain customer’s loyalty Seek to differentiate from competitors

Green Initiatives Cost savings due to fuel efficiency Carry on providing low cost

Q & A