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Easyjet operations management
Strategy of easyjet
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Introduction
The purpose of this essay is to analysis the easyJet plc about the company’s operation performance, financial status and the ability to control different risks. To achieve the aim, the investigation of the essay will include the following parts: the introduction of the company, the financial trends during the last 5 years, the method about how does the company do their globalization, and how does the company manage the risks that along with the globalization. Finally, the recommendation will be given to the company.
Descriptive easyJet plc(easyJet) is a company which headquartered in Luton and provides point to point air services in the UK as well as in the most countries of Europe. easyJet operates more than 600 routes serving 130 airports across 30 countries. The company was established in 1995 and by the end of 2013, it has over 8,446 employees.
The total turnover of the fiscal year 2013 of easyJet plc is £4,258,000, and this number is combined by the turnover of UK, which is £1,971,000 and the turnover of exports which is £2,287,000. easyJet plc is a successful company which the market valve is £6,796.39 million and it belongs to the travel& leisure sector on the London stock exchange market. Based on the chart that has been found on the internet, it is easy to notice that this industry performed well during 2013 to 2014 because the share price was on the rise.
Figure 1: Performance of travel and leisure sector for the last one year
(Source:shareprices.com)
Performance
To figure out how was the easyJet plc’s performance, some important financial trends should be gathered and noticed.
For the last 5 years, the asset turnover of easyJet has increased by 0.19, form 0.79 at 2009 to 0.98 at 2013. This shows th...
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...ate risks and the country and political risks during 2013 cannot be found. The improvement of annual report can help annalists be clearer with the company’s position and attract more investors.
Third, a comprehensive long-term risk management should be set-up. Airline industry is facing a lot of uncertainties; the easyJet plc should establish a department which focuses on dealing and preventing the long-term risks that could happen in the future.
Conclusion
As a company which listed on the London stock exchange market, easyJet has become a famous and successful company in the Europe, even in some non-EU countries. But even so, easyJet still have some weakness and risks to handle, especially in the area of exchange risks and political risks. As a company that operates in so many countries, some prevention action should be done by the company as soon as possible.
- 2011: AF-KLM operated more than 586 aircraft, 2500 daily flights to 230 destinations in 113 countries. 75,8 million passengers and 24,4 billion revenue ( exhibits 2a 2b and 3)
Mason, K. J. (2001). "Marketing low-cost airline services to business travellers." Journal of Air Transport Management 7(2): 103-109.
The Airline Industry is a fascinating market. It has been one of the few industries to reach astounding milestones. For example, over 200 airlines have gone out of business since deregulation occurred in 1978. Currently, more than 50% of the airlines in the industry are operating under Chapter 11 regulations. Since 9/11, four of the six large carriers have filed for and are currently under bankruptcy court protection. Since 9/11 the industry has lost over $30 billion dollars, and this loss continues to increase. Despite the fact that the airline industry is in a state of despair, JetBlue has become the golden example, a glimpse of what the industry could be.
The problem is when there is a terrorist attack, the airlines lose revenue. Bryant (2016) explained the recent terrorist attacks in Brussels had caused easyjet, a low-cost carrier (LCC), to have a loss of revenue in a six-month period of $34.6 million (para. 3).
Operating an air - express transportation industry requires large capital investments, and therefore it can impede the entry of new firms into the industry. For one, Airborne has already its own set of aircrafts and even operate its own airport, and it would be hard for a new firm to compete with this.
Due to the increased use of the internet, it is becoming more and more easier to book online. This allows customers to book flights easier and increase Jet2’s revenue. Revenue is increased through not having to deliver or post tickets out to its customers, in comparison with other non-internet based airlines. It is believed that over 97% of Jet2’s customers book online, which further highlights Jet2’s emphasis on online bookings.
Airline and travel industry profitability has been strapped by a series of events starting with a recession in business travel after the dotcom bust, followed by 9/11, the SARS epidemic, the Iraq wars, rising aviation turbine fuel prices, and the challenge from low-cost carriers. (Narayan Pandit, 2005) The fallout from rising fuel prices has been so extreme that any efficiency gains that airlines attempted to make could not make up for structural problems where labor costs remained high and low cost competition had continued to drive down yields or average fares at leading hub airports. In the last decade, US airlines alone had a yearly average of net losses of $9.1 billion (Coombs, 2011).
In conclusion, EasyJet has been doing exceptionally well since its establishment in 1995. However, EasyJet can no longer rely on its past success based on increasing number of competition and operating in a saturated market. Furthermore, with the continuation of the market evolving, globalization is needed in order for a company to be successful. Therefore, it is appropriate for EasyJet to implement the recommended strategy of internationalizing into an emerging country, Nigeria, especially when EasyJet’s main source of flying an airplane is a resource of the given market. This way, EasyJet will be able to maintain a competitive advantage over its competitors.
Every company in the market has to face the different challenges and try to cope with the challenges to come up with the strong idea to stay and survive in the market. Market is getting tougher and there are different factors which effect on the company policies and the strategies which the company is looking to apply. Some factors can be managed by the skills of the companies and can be tackled. These factors called internal factors but there are some factors which are very hard to tackle. They are out of control of the company but the alternative actions can be taken to avoid the consequences of the impacts. To analyze the external factors which are affecting the Air India airline, the pestle analysis can be used.
Identify the potential risks which affect the company and manage these risks within its risk appetite;
Air travel is a huge and tremendously flourishing industry. Globalization can be defined as the integration of national and local economics, culture and societies through a web of communication, transportation and trade. The current era considers globalization as the dominant driver of almost all business due to the influence or the international market. The emerging prosperity of the global aviation industry plays a substantial role in economic growth, tourism, global investment and world trade, which are the impacts of globalization. This essay portrays the negative and positive effects of this globalization on the airline industry.
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British Airways Plc (British Airways or BA) is a full service premium airline with a global route network flying to approximately 400 destinations worldwide. The company provides scheduled air services at both domestic and international level. Its services include flights for passengers and cargo. The company provides air transportation services for over 40 million customers a year and serves 35 million cups of tea, 36.5 million meals and 3.7 million bottles of wine for the passengers. The company operates extensive international scheduled airline route networks in association with its joint business agreement, code share and franchise partners.
The airline industry is very susceptible to changes in the political environment as it has a great bearing on the travel habits of its customers. An unstable political environment causes uncertainty in the minds of the air travellers, regarding travelling to a particular country.