2. Introduction to easyJet
Factors affecting the airline industry
SWOT
Strategies of easyJet
Recommendations
Conclusion
3.
4. British budget airline, 2nd largest low cost
carrier in Europe
Founded by Sir Stelios Haji-Ioannou in 1995
Part of EasyGroup
easyHotel
easyBus
easyCar
5. Serves major airports in key markets
Targeted market segment
Business travelers due to high frequency of flights
and convenience
6.
7. Strategic priorities:
1. Safety
2. Building Europe’s No 1 AirTransport Network
3. Develop a winning customer proposition
4. Deliver low cost and maximise margins
8. Strategic priorities:
1. Safety
• Flight management data
• Safety management system
2. Building Europe’s No 1 AirTransport
Network
• Build frequency and stability to core routes
• Number of aircraft based in countries is
constantly being reviewed
9. 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
10.
11. General factors affecting strategies and
decisions within airline industry
Market demand
Competitors
Fluctuation in oil prices
Threat from terrorism
Natural disaster / epidemic
Government regulation
12. Market Demand
Increased demand for air travel due to:
▪ Reduction in air fares
▪ Increased in average incomes
14. Competitive Market
▪ Cannot influence on-going market price
Travelling considered as luxurious good.
▪ Demand is elastic
Big drop in
demand
Small increase
in price
15. Competitors
Presence of competitors offering similar products
Comparison of price can be done easily through
internet
16. Fluctuation in oil prices
Due to instability in middle east, influence of
cartel
Oil resource drying up
17. Increases in oil prices will increase
cost of production
Erode profit margin
Consumer have to pay more
18. 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
19. 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
20. 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
21. Dynamic Pricing
Adjust prices continually when flight date nearing
Promotional Pricing
Temporary reduction of price to create
excitement
24. Flies to primary airports
Convenience for business travellers on tight
schedules
Low cost offering
No frills airline – non essential features removed
Eg. Light freshments
Reverse Pricing System
The earlier you book, the cheaper the air ticket
25. 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
26. 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
27. 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
28. Weakening Pound against Euro
Increased demand in travel from
European countries to Britain
Cater more flights
Rising markets
Middle East
China
29. Brand names
Easy to copy
Confuses customers
Damage the brand name
30. 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
31. Alternative modes of transport
Eurorail - Trains
Comparable duration and price for
short distances
32.
33. 4 Ps
Place
Promotion
Product
Price
Other strategies
35. Promotion
Internet business model
▪ Slowly phasing out telephone sales operation
Aggressive branding
▪ Bright orange colour
▪ Catchy slogans
▪ Website livery on airplane
▪ Featured in AirlineTV Series
36. Product
Offers one-way tickets for passengers
▪ Flexibility of travelling
No frill experience
37. 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
38. 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
39. 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
40. 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
41.
42. 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
43. Increase emphasis on sustainable development
Green initiatives
▪ Reduce
▪ Reuse
▪ Recycle
44. 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
45. PotentialAdvantage 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”
46. Lower cost of operation
Possible free or extended advertising from green
groups
Fuel efficient engines allow greater savings
47. PotentialAdvantages for third parties
Companies’ whose staff travel with easyJet
▪ Improve image of companies
48. 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%.
51. 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
Government Regulations - http://www.theccc.org.uk/sectors/aviation/demand-for-air-travel
Government Regulations - http://news.bbc.co.uk/2/hi/8626505.stm
Government Regulations - http://www.theccc.org.uk/sectors/aviation/demand-for-air-travel
Government Regulations - http://news.bbc.co.uk/2/hi/8626505.stm
Government Regulations - http://www.theccc.org.uk/sectors/aviation/demand-for-air-travel
Government Regulations - http://news.bbc.co.uk/2/hi/8626505.stm