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Report on easyJet and the no frills airline market
Report To: Partners, Expensive Opinions Partnership
From: Richard Cordle, Expensive Opinions Partnership
Section 1
Introduction to the low-cost – no frills airline industry
Since the unprecedented, tragic events, of September 11th some of its profound consequences are coming to light. ...
"Europes low cost start-ups, such as easyJet, Ryanair and Go, are also flying high. On October 29th, easyJet announced an 82% rise in pre-tax profits in the year to the end of September…After a brief post-September 11th dip the airline, based at Luton, now says that seat sales are back to normal. ... easyJet and their main rival RyanAir are taking away much of the business from the big airlines in Europe. ... The PEST analysis will focus heavily on the technological aspects, since these represent some of the most important issues that easyJet can have an immediate impact upon. ... Aerlingus, for example, is a full service airline that charges premium prices for the high levels of service they provide; by comparison easyJet positions itself at the other end of the scale. ... Some may argue that this should not be so in the case of easyJet, since it is a ‘no frills – low cost’ airline. ... easyJet follows the later alternative by providing very cheap flights that are billed as ‘no frills’ , but ensuring that its basic logistics work very well. ...
What easyJet does is relationship marketing; they are concerned with customer retention as much as finding new customers. ... 1993,98)
easyJet provides ‘sound reasons’ for a customer relationship: a cost effective and good quality service. As such, easyJet is able to obtain customer feedback about the service they provide, and go on improving it. The marketing communication techniques that easyJet uses, appear to operate in a very personable and candid manner. ... For example, easyJet is aware that customers would dearly like to be able to fly the Geneva to Barcelona route, with someone other than SwissAir, i. ...
· In times of economic depression (slump) then customers have a tendency to opt for cheaper ticket flights – this can go some way to explaining the success of easyJet in the current economic climate. ...
Bargaining Power of Suppliers
· The price of aviation fuel is directly related to the cost of oil, as an individual company easyJet does not have the power to alter this. ...
· The more easyJet expands the more power it will possess over its suppliers
The threat of Substitute Products or Services
· Other modes of transport – no tenable threats, distances too great except from London to Paris, which can be reached by Euro Star.
The industry jockeying for position among current competitors
As was suggested earlier easyJet operates cost leadership and differentiation strategies. ... It does not maintain close links to its market, after all 50% of its customers are business customers who are not even in easyJet’s target market.
easyJet sustains a cost leadership advantage over all other operators, as it doesn’t use travel agents. ... easyJet bookings are taken directly either through the Internet site or through their call centre.
Approximate Word count = 2535
Approximate Pages = 10.1
(250 words per page double spaced)
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