The threats are in terms of alternative holidays Disneyland Paris via Eurostar (Euro tunnel) and P&O cruise. In addition to that, EasyJet has been offering no in-flight meals, no in flight movies. Continuing to deliver strong productivity, easyJet Airline Company Limited Registered in England with Registered number 3034606; subsidiary of easyJet plc Registered in England with registered number 3959649 Registered Office: Hangar 89, London Luton Airport, Luton, Bedfordshire LU2 9PF, Additional ESG information - Financial Year 2021, Directors' interests and substantial interests. Web Evaluate EasyJets operations strategy against Hayes et al. s criteria of consistency and contribution to competitive advantage. LEGAL The European deregulation of the commercial aviation provided both major strategic threats and opportunities, the national mainstream airlines faced severe price competition from discount carriers. Enterprise risk management does not create the organisations strategy, but it helps in understanding the risks associated with alternative strategies being considered and, ultimately, with the adopted strategy. easyJet continues to optimise its network to ensure capacity is deployed in the markets where the strongest demand and returns are seen. Disappointing your customers. (Lundgren declined to comment for this article.). This report will provide a detailed analysis of EasyJets current corporate appraisal or SWOT analysis. The way the report has classified the risk is whether the risk is a generic risk that will affect the whole industry of whether the risk is specific to the company. The minute consumers start to make a choice based on this, and I think they will, an emphasis on sustainability will pay off, says BCG consultant Molenaar, and EasyJet has been out front in preparing for this.. The next quarter was not much better: A U.K.-wide national lockdown was imposed in November and, after a brief easing of restrictions in the run-up to Christmas, again in late December. Lundgren says he likes the site because it keeps airlines honest: When customers can see that their inbound aircraft hasnt even taken off from its previous destination yet, theres no point in feeding them the bad news with an eyedropper, as airlines traditionally had done, gradually announcing slightly longer delays. But the surge in new, more transmissible and potentially vaccine-resistant strains of the virus has placed these forecasts in doubt. Many of EasyJets competitors in Europe are national flag carriers: Air France, KLM, Lufthansa, SAS, Iberia, TAP Air Portugal, Swiss Air, and British Airways. easyJet has a cost advantage over its major competitors on the primary network that it operates. When the risks are specific to a certain activity the risks will be managed, and maintained If easyJet were to raise money from shareholders, he risks falling below this figure a level at which he can no longer unilaterally block special resolutions. Some wondered if Lundgren, who has a reputation for being a nice guy, had the stomach for the kind of aggressive cost cutting thatrunning a budget airline, especially during a pandemic, demanded. All work is written to order. Each stands elevated on hydraulically controlled legs, with doors reached by a short metal staircase. Firstly, threats in terms of new & existing competition. Those planes are Airbuss most fuel-efficient models, offering operational savings for EasyJet in the long run. data than referenced in the text. The CEO told theFinancial Timesthat Haji-Ioannous campaign was highly undesirable, unhelpful, and a distraction. EasyJet pointed out that the contract contained noforce majeureclause. EasyJet currently has two suppliers, Boeing and Airbus. Therefore, it is vital for EasyJet to have a thorough comprehension of their costs and cost drivers. Since March 2020,European governmentshave provided more than$32.2 billion in bailouts to the airline industry,through a mix of grants, loans, and debt-for-equity deals, according to a report from HSBC. Terms & Conditions. Please do not hesitate to contact me. (EasyJets fellow European budget carrier, Ryanair, announced this week that it had lost about $1 billion in the preceding 12 months. Being low cost, driving efficiency and investing only where it matters most to our customers and our people. Investing in new generation fleet to replace older types drives economic value, lowering fuel and maintenance costs. Since the start of the pandemic, it has sold and leased back58aircraft, raising$2.1 billion. Dynamic fares with a simple structure and also ensuring that it are the cheapest fare on the route. This section we will investigate EasyJets resources as a means of assessing the organisations strategic capability. But these savings barely stanched the arterial bleed of cash gushing from the companys coffers:In 2019, the airlines operations had generated more than $1 billion in cash. Lundgren wasnt completely despondent: Where bookings were allowed and quarantine rules not restrictive, passengers were coming back. EasyJet cost efficiency is achieved in a variety of way as shown in the following diagram: The success of low-fare (cost) strategy is primarily dependent on the maintenance of a low cost base. Transfer the risk. Strategic risk management is the process of identifying, quantifying, and mitigating any risk that affects or is inherent in a companys business strategy, strategic objectives, and strategy execution. Dense point-to-point network to allow linking of major airports with large catchments areas with high level of frequency, as this will be attractive to business and leisure travellers. Overall the analysis will highlight the inherent threats and weaknesses suffered throughout the industry, and also the importance of innovation to maintain low cost advantage, alliances and size to success. This will provide an evaluation of the external business environment in which the company operates. Technological Factors. EasyJet is faced with balancing technological advancements, for example, the use of the internet on distribution and cost synergies from industry consolidation, and the risk of rising costs and competitive pricing. Given EasyJets cash burn, it needed to raise more moneyand quickly. However the sustainability of competitive advantages may be problematic: as rivals copy successful strategies, EasyJet will loose its initial advantages. In terms of support activities, EasyJet takes advantage of technological developments in order to reduce costs. This results in high levels of asset utilisation and reduced unit costs. And it secured two different term loans totaling$563 million, due for repayment in February 2022. In March 2020, he wrote to EasyJets chairman, John Barton, and demanded the company terminate the contract, citingforce majeure. This strategy is focused on keeping costs down and EasyJets policy of no free lunch and efficient use of airports by limiting turnaround to 30 minutes. The idea of remote working can also result in co-ordination and control weaknesses. WebThere are two types of strategies taken in account in the Easy jet such as differentiation strategy which is the strategy in which the industry has the particular rules and To understand EasyJets prospects, its important to understand its strategic positioning. It moved aircraft maintenance at three of its U.K. airports, which had been contracted out, back in-house. The U.K. is doing well: It had approved two vaccinesone from Pfizer and one from AstraZenecain December and a third, from Moderna, in early January; by mid-May it had given 68% of the adult population at least one shot. The primary outcomes were anxiety (GAD-7), depression (PHQ-9), risk perception towards COVID-19, interprofessional teamwork attitude, and coping strategies during the Coronavirus disease-19 pandemic. Airlines in general are already coming off their worst year on record: Thanks to the coronavirus pandemic, the industry collectively lost $118 billion in 2020, according to the International Air Transport Association (IATA). Diversification. Making it easy, enjoyable and affordable to travel again and again for business and holidays. In mid-May 2020, the company revealed it had been hacked. Opportunities in terms of worldwide destinations are now popular with holidaymakers and also the growing trend in international business ventures, e.g. Marketing and sales will involve making customers aware of EasyJets services are price information and also selling. Haji-Ioannou insinuated that this was evidence of the corruption hed long alleged. However, by year 2000 it has not only managed to survive but also increased its market shares and assets of aircrafts to 74 and servicing 105 routes and carrying over 20 million passengers a year. The UKs second-largest union has slammed easyJet flight cancellations in a scathing email obtained by Euronews. We will consider the value chain for EasyJet in more detail later in our discussion. When EasyJets board did not accede to his demands, Haji-Ioannou carried through on his threatrequesting a special meeting to vote on the removal of board member Andreas Bierwirth, a former Austrian Airlines and Lufthansaexecutivewho Haji-Ioannou termed a friend of Airbus. When the board tossed out this request on a technicality, Haji-Ioannou resubmitted his call and asked for the removal of the chief financial officer, Andrew Findlay, too. WebPersons with epilepsy (PWE) have a higher risk of developing depressive disorders (DDs), and people with primary DD have an increased risk of developing epilepsy. Also, mainstream airlines are now lowering fares to engage in price competition. WebThere is one main reason which influences these economic factors is the recession in the Easy jet. The carriers were expected to pare their loses to about$38 billionthis year, as vaccines are rolled out across the world. Funding strategies developments is clearly important in that the nature of funding must be appropriate and compliments the low cost strategy of EasyJet, by ensuring that interest costs are low. This affects value creation as follows: Table 1: Sales and Trading Profit of EasyJet. EasyJet also drew down the entirety of its existing revolving credit facilityraising $500 million in cash. Potential threats of economic recession, since air travel is effectively a commodity product, it is recession prawn. Feeling powerless is one of the worst feelings, not just in business.. Lundgrens recovery plans hinge on infection rates throughout Europe, which have remained stubbornly high in many places, and vaccination rateswhich, in most of Europe, have badly lagged places like the U.S., U.K., and Israel. This analysis outlines for EasyJets management how individual activities may be altered to reduce costs of operation or improve the value offered to customers. In a vast hangar on the outskirts of Gatwick Airport, one of EasyJets big hubs, sit a row of five space-age pods, painted in EasyJets trademark orange-and-white colors. EasyJet says the funds will give it the firepower to grab slots at premium airports like Paris Orly, Lisbon, Milan Linate and London's Gatwick. These large airline groups are so big and so important for so many economies that the national governments will do whatever they can to keep them alive, saysDirk-Maarten Molenaar, atravel and tourismindustry consultant at Boston Consulting Group. An Internal and corporate analysis in terms of strength, weaknesses, opportunities and threats (SWOT) will assist in gaining an understanding of where EasyJet is currently in terms of strengths and where improvement is required within the business and what outside environmental threats it may face as well as what new opportunities are available to the company in the short and medium term. The company carries out Product Development. EasyJet is also Europes leading low-cost airline having completed a merger deal with Go to create Europes number one low-cost airline. In the long term, this is concerned with the extent to which the organisation is operating profitably. Study for free with our range of university lectures! Haji-Ioannou also alleged three large minority EasyJet shareholdersthe asset management companies Invesco, Phoenix Asset Management, and Ninety Onewere straw men, secretly controlled by Airbus, since all three companies manage some of the aerospace giants employee pension assets.But, in the end, Haji-Ioannous campaign failed to catch fire with other investors. Finally the report will examine the extent to which EasyJets current no frills strategy is the appropriate strategic fit to its organisation both in terms of resource capability and business environment. Market Development. Potential threats in terms of changing social trends like holidays outside Europe (many now want to experience the eastern cultures and travel to holiday destinations like China and Japan) and also travelling via the EuroStar to Paris etc. This has the highest risk, but It was enough to make any airline CEO play the blues. It also offers passenger a few more extras, such as allowing them to check in at the airport without charge (Ryanair charges passengers who dont check in online) and a loyalty program that confers priority boarding privileges. In 2020, it hemorrhaged the same amount. Organizations continue to develop new applications in or migrate existing applications to cloud-based services. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. Noting that EasyJet had failed to say exactly how the deferral affected EasyJets cash burn, the founder said that EasyJet might have engaged in market manipulation by failing to disclose such details and by using overly optimistic forecasts for when the companys revenues and profits might recover. FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! A strong and visible brand to create a high level of awareness with consumers. The pace of recovery will be determined by vaccination rates, Alton Aviations Ryan says.The problem for EasyJet is that almost all the routes it flies involve Europe, and the continent was lagging far behind on vaccinations. It is not helpful to have a shareholder barking up managements neck the whole time, Morningstar analystKotze says. Lundgren had been an industry leader in trying to position EasyJet for this new world. And the company continued to insist it saw the opportunity for wins amid the travel industrys carnage: Europes legacy carriers were hurting even worse than EasyJet, which offered the discount airline a chance to gain new flight slots at key airports in Paris, Milan, London Gatwick, and Geneva. Take it up as a as a proactive exercise embedding it into the organizations strategy instead of merely keeping it a reactive one Periodically monitor, review and update the digital risk framework. WebSome compliance risks are specific to an industry or organizationfor example, worker safety regulations for manufacturers or rules governing the behavior of sales representatives in the pharmaceutical industry. We need to focus on the things we can control. Statista assumes no Porter explains that there are five forces inherent in a market, which will jointly determine the intensity of competition and profitability of EasyJet and the airline industry. On the other hand, risks which produce POLITICAL Following the European deregulation of commercial aviation, a fleet of low cost carriers are reshaping the local airline landscape. Hannibal HanschkePool/AFP via Getty Images, Christoph SoederPicture Alliance via Getty Images, Chris RatcliffeBloomberg via Getty Images, one of the biggest winners in the European air-travel dogfight, agreed in January 2020 to deferred prosecution agreements, began purchasing carbon offsets for the CO2 of all its flights, might not fully recover from the pandemic until 2024, LinkedIn has officially entered its cringe era, and its working. Previously it used telesales and now sales are through e-commerce web site. The airline had become Europes equivalent of Southwest in the U.S. But flying to those primary airports in Western Europe is more expensive. The business has also enjoyed an increase turnover and trading profits resulting in continuous substantial growth in underlying profitability over the last 7 years (see table 1). WebOften, this takes place in four major steps: Figure out how much money you need to retire. EasyJets overall cost leadership strategy uses low costs at each point in the value chain to lower costs. The customers of EasyJet have been using the Internet for making bookings. In addition to that, EasyJet has been offering no in-flight meals, no in flight movies. Also, only one type of aircraft is used, in order to minimise maintenance costs. easyJet aims to deliver a seamless and digitally enabled customer journey at every stage and is continuously working to enhance the customer experience. The primary weakness is the perception of low quality low cost can also be seen as low quality service than that offered by the established national airline i.e. The airline resumed flying on June 15, 2020, with limited routes within the U.K. and to France. WebEasyjet favours an informal company culture with a very flat management structure, which eliminates unnecessary and wasteful layers of management. EasyJet, on the other hand, flies fewer routes but operates from many more primary airports, with a heavier focus on Western Europe. This also reduces the marginal cost of incremental growth; increasing scale brings valuable economies (Johnson, G., Scholes, K., Whittington, R., (2005). To what extent does EasyJets concentration on But EasyJet could steal an increasing amount of market share from the legacy full-service carriers. It helps to remember that while you cant control what happens to you, you can always control your response. Webcomputing risks Let us look at five different types of risks and how they apply or vary by cloud deployment models. But what are the internal weaknesses suffered by EasyJet? Implications from the strategy chosen. easyJet seek to strengthen their position in key markets as the competitive landscape evolves. The value chain analysis will show the total value added by the airline industry and EasyJet. The federal government recently made cloud-adoption a central tenet of its IT modernization strategy.An organization that adopts cloud technologies and/or chooses cloud service providers (CSP)s and services or applications without Data security and regulatory risk Data security and regulatory risk can be associated with loss, leakage, or unavailability of data. In essence, Lundgren told the BBC, thismeansonly the rich can go on holidays: The expense of these tests would be way over and above what the cost is of an average EasyJet fare, he said. EasyJets overall cost leadership strategy uses low costs at each point in the value chain to lower costs. But EasyJets contract required it to pay the aircraft maker at least $6 billion through 2023a sum considerably greater than the airlines entire current market The focused network strategy can be summarised as follows: easyJet recognises that the continued evolution of our product portfolio represents a significant opportunity to build on spend per customer, delivering enhanced sustainable returns. And at least one key holiday localeTurkeywound up on the red list, meaning those traveling there would have to quarantine in a hotel for 10 days. Free resources to assist you with your university studies! WebWhere risks produce outcomes that adversely affect EasyJet, it is crucial that these risks are either eliminated (if possible) or minimised. EasyJet appears to have developed competences in supporting much higher levels of business from the same asset base than other rival airlines. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice| Do Not Sell/Share My Personal Information| Ad Choices Healthcare workers were exposed to this highly infectious virus during the pandemic and suffered several social and psychological consequences, such as anxiety, psychological distress, and burnout. Of alternative holidays Disneyland Paris via Eurostar ( Euro tunnel ) and P & cruise. One main reason which influences these economic factors is the recession in long. Uks second-largest union has slammed EasyJet flight cancellations in a scathing email by... Optimise its network to ensure capacity is deployed in the U.S surge in new generation fleet replace. Long term, this is concerned with the extent to which the organisation is operating profitably the business... Go to create Europes number one low-cost airline having completed a merger deal with Go to create Europes number low-cost... 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