EASY JET
...a £50million investment raised by debt and equity in year two to speed expansion and buy 4 new planes. • The UK low-cost market is quite mature in comparison to the rest of Europe, and easyJet as the biggest operator has quite a comfortable position. However, expansion into new European markets might prove more difficult as established cash strong holiday firms like TUI are setting up their own low-cost operations. • The complexity in the airline network negates the threat of new entrants to a remarkable extent. The 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. • Airplane manufacturers are concentrated in the industry, with Boeing and Airbus providing the majority of commercial planes and with easyJet operating one type of aircraft until recently. Easy Jet’s deal with airbus however shows that favourable agreements can still be reached. The dependence on spare parts from one manufacturer could pose a risk. • The more easyJet expands the more power it will posses over its suppliers The power of buyers • Buyer power within the airline industry and especially the low-cost market is relatively strong, as customers will often shop around for the better price, particularly with the dependence that the low cost airline has on Internet sales. Price discrepancies can be easily found and exploited by the consumer, meaning that the operator must keep a regular check on prices. • Need for customer loyalty because of low switching costs • Customers have the Civil Aviation Authority (CAA) on their side which provides: 1. Protection against the consequence of travel organiser failure for people...