“An eMarketing Consultation Document for Easy Jet"

Introduction:

EasyJet Airline Company Limited is a British airline which is headquartered at London

Luton Airport. It operates domestic and international scheduled services on 500 routes
between 118 European, North African, and West Asian airports. Easyjet airlines parent
company EasyJet plc is listed on the London Stock Exchange and is a constituent of the
FTSE 250 Index. As at 30 September 2009, it employed 8,000 people, based throughout
Europe but mainly in the UK.

EasyJet Airline Company Limited was established in 1995. It was launched by Greek-
Cypriot businessman Stelios Haji-Ioannou with two wet leased Boeing 737-200 aircraft,
initially operating two routes one is London Luton to Glasgow and another is Edinburgh. In
April 1996, the first wholly-owned aircraft was delivered to Easyjet, enabling its first
international route, to Amsterdam. Until October 1997, the aircraft were operated by GB
Airways, and subsequently by Air Foyle as EasyJet had not yet received its Air Operator's
Certificate. The company has been in progress since 2005 and made many major acquisitions
and base openings fuelled by consumer demand for low-cost air travel. it is the second largest
low- cost carrier in Europe.

Financial performance:

On the 5th November 2000 EasyJet was floated on the London Stock Exchange. In October
2004, the FL Group, purchased an 8.4% stake in EasyJet. Over the course of 2005, FL
increased its share in the company periodically to 16.9%, fuelling speculation that it would
mount a takeover bid for the UK carrier.

In April 2006 the threat of takeover receded as FL sold its stake for €325 million, securing a
profit of €140m on its investment. In November 2005, Ray Webster stood down after 10
years as EasyJet's chief executive officer (CEO) and was replaced by former RAC plc CEO,
Andrew Harrison. Resilient performance; increased yields, profits impacted by higher fuel
costs.

Results at a glance

  2009 2008 Change

Total revenue (£ million) 2,667 2,363 12.9%
Profit before tax – underlying (£ million) 1 43.7 123.1 (64.5)%
Profit before tax – reported (£ million) 54.7 110.2 (50.4)%
Pre tax margin – underlying (%) 1 1.6% 5.2% (3.6)ppt
Return on equity (%) 5.5% 6.8% (1.3)ppt
  2009 2008 Change
Basic EPS - reported (pence) 16.9 19.8 (14.6)%

Key Products And Services:

Booking

 initially telephonic booking was carried out which now transferred to online
booking.

Cabin and onboard services

 EasyJet's aircraft cabins are configured in a single class, high density layout

EasyJetHotels and easyJetHolidays

 On 14 December 2004, EasyJet and Hotelopia, a subsidiary of First Choice

Holidays, launched the co-branded EasyJetHotels accommodation booking
service.

Present Position and Industry Analysis:

A low-cost carrier or low-cost airline which is also known as a no-frills, discount or budget
carrier or airline) is an airline that generally has lower fares. Mainly done to make up for
revenue lost in decreased ticket prices, the airline may charge for extras like food, priority
boarding, seat allocating, and baggage etc.

The term has been originated within the airline industry referring to airlines with a lower
operating cost structure than their competitors. While now the term is often applied to any
carrier with low ticket prices and limited services, regardless of their operating model. Low-
cost carriers does not confine to regional airlines that operate short flights without service, or
with full-service airlines offering some reduced fares.

In the past decade, air travel has grown up to 7% per year. Travel for both business and
leisure purposes grew strongly worldwide. Last year scheduled airlines carried 1.5 billion
passengers. In the leisure market, the availability of large aircraft such as the Boeing 747
made it convenient and affordable for people to travel further to new and exotic destination
sand take up more holiday trips. Governments in developing countries realized the benefits of
tourism to their national economies and spurred the development of resorts and infrastructure
to lure tourists from the prosperous countries in Western Europe and North America which
helped the industry lot during the past years. As the economies of developing countries grow,
their own citizens are already becoming the new international tourists of the future.
Recently, business travel has also grown as companies become increasingly international in
terms of their investments, their supply and production chains and their customers. growth in
business travel has been contributed through the rapid growth of world trade in goods and
services and international direct investment.

SWOT analysis:

Strengths:

In leading city destinations in the UK and across Europe, EasyJet is a leading provider
of low budget, no frills air travel service, including Berlin, Amsterdam,
Barcelona, and Prague.

Ticketless travel, internet booking and assisted travel services are some of the offered
to give a high quality service at competitive prices.

They have a highly distinctive livery on their fleet of aircraft making them easily
recognisable and distinguishing them from their competitors.

They have a user friendly website which fully discloses the price breakdown of the
passengers planned travel. Offering a full breakdown of the price plan prevents any
hidden charges when the customer confirms there booking. also provide package
travel trips.

 Online promotion alert which is e-mailed to existing customers and contact on the
company’s database.

Recognised as a leading brand name in the UK travel industry.

As a market leader in an industry widely seen as a leading contributor to the green
house effect and global warming, EasyJet actively embrace there environmental
responsibilities and continue to keep these factors as a keep priority when
developing their future strategies.

EasyJet operate a fast and efficient service with an average turnaround time of 30
minutes or below. This enables them to maintain a reliable and hassle free service
to their passengers.

Weaknesses:

Domestic air travel are extremely competitive industry with EasyJet’s main
competitors being Jet2, BMI Baby, Ryan Air plus a host of smaller independent
competitors. These external competitive forces can restrict and shape pricing policy
 on some of EasyJet’s less profitable routes as they seek to compete with their
competitors. Low cost airlines market is huge.

They do not offer a free food service on longer flights of 2 hours plus because of no
frill airline policy.

Opportunities:

Possible opening of alternative routes to major cities in Europe. A key route could be
from Dublin to the UK, as this has a large potential for travellers going to soccer
matches in the UK.

Offering of free refreshments on flights with a travel time of over two and a half
hours. This would offer an extra perk and comfort to passengers making their
experience with EasyJet all the more comfortable and enjoyable.

Updated versions of the fly on the wall documentaries would provide the brand with
more coverage and publicity, which makes customer satisfaction more.

Threats:

Competitors flying the same routes compete very competitively on price forcing
pressure on margin on more popular flights and time slots, which can cause low
passengers on board.

External market forces can have a significant impact on EasyJet’s business, e.g. the
rising cost of oil can affect the profitability directly.

Employee relationship and trade unions may cause problems in day to day business.

Economic downturn may lead to a decrease in casual flyers and corporate travel as
they avoid unnecessary expenditure and in turn make less business trips.
PEST analysis for EasyJet airlines:

The following factors are likely to have an influence on the airline industry and should
therefore be taken into account when formulating a Marketing Plan for EasyJet.

Politico-legal factors

 Threat of war in the Middle East, which lead to damage the main routes and safety
problems.
  An EU east-enlargement may provide access to viable, new markets, which in turn
add on the passenger numbers.

Economic factors

 Likelihood of increasing fuel costs, congestion and other environmental restrictions,

as well as the prospect of higher security and insurance costs to reflect the risk of
terrorism is a larger issue.
 As the recession is likely to last for some more time, business travellers will keep an
eye on their travel expenses and cut down unwanted costs.
 Globalisation should continue to boost traffic in the long-term leads to keep the
business in growth.
 The introduction of the single currency in Europe as Euro is likely to bring more
business to easyJet as Europe becomes more integrated.

Socio-cultural factors

 As there appears still to be a general reluctance to use credit cards over the phone and
Internet, to win over the French and German publics might cause problems
 The public are general quite friendly to the prospect of cheap flights.

Technological factors

 A key issue will be the extent to which technological advancements – such as the use
of the Internet on distribution and cost synergies from industry consolidation – can
offset upward pressures on prices and costs. Also internet penetration is highly
effected the model.
 easyJet has to keep track of technological developments in the field of e-commerce
and aircraft manufacture in order to gain a competitive advantage as the business
model readily depends on it.
Segmental analysis:

The geographical analysis of turnover is as follows:

Area 2001 2000

Within United Kingdom 86,545 73,008

Between United Kingdom & rest of Europe 244,764 177,141

Within rest of Europe 25,550 13,545

356,859 263,694

Financial analysis:

Stock Data: Recent Stock Performance:

1 Week 0.7%  13 Weeks 24.0% 
  Current Price (10/29/2010): 456.20p
(Figures in Pounds Sterling) 4 Weeks 14.1%  52 Weeks 26.7% 

fig source: http://www.corporateinformation.com/Company-Snapshot.aspx?

cusip=C826BZ340

e -Marketing Strategy:

EasyJet, like Ryanair, borrows its business model from United States carrier Southwest
Airlines. Both airlines have adapted this model for the European market through further cost-
cutting measures such as not selling connecting flights or providing complimentary snacks on
board. The key points of this business model are high aircraft utilisation, quick turnaround
times, charging for extras (such as priority boarding, hold baggage and food) and keeping
operating costs low.

Easyjet’s strategy and business model is based on 6 key strength which focus on the
competitiveness, scalability and sustainable growth.

 Commitment to safety and customer service.

 Simple fare structure: book early for low prices.

 Low unit cost.

 Strong branding.

 Mulit base network – dense point – to – point services, mainly between European
airports and;

 Strong corporate culture.

Marketing mix:

Price

 Low-cost pricing is a key element of the brand.

 Uses differential pricing strategy; off-peak travelling and booking in advance makes a
ticket less expensive.
 Discounts are provided for tickets booked online.

Product

 “no-frills”, point-to-point air services

 also car hire on its website and links to other easyGroup and online services.

Place/distribution

 Internet booking system (over 90% of bookings).

 Telephone reservation system and telephonic enquiry.

Promotion

 Highlights its number one position among Europe’s low-cost airlines. Advocates
internal marketing, creative work done in-house.
  “No Bullshit” approach (Stelios), humorous, attention-catching campaigns.

Internet business model:

1. On the Web

easyJet airlines has based its ticket sales on the Web. At present, over 75 per cent of
its sales are sold directly through the website. This shows the customer has no
hesitation to this model.

When booking a flight, the passenger is not only offered a choice of flights, but also
the best fare available on each flight. Moreover, not only are the offered fares lower
than those of the competition, but they can sometimes seem ridiculously lower. There
is different price for one way and two way prices offered to customers.

2. Online Experience

The passenger's online experience reinforces confidence in the booking process. A

five-step approach is taken, allowing the passenger to exit at any time. The booking
form remembers essential passenger information, so irritating re-entering of basic
details is not necessary if passengers want to experiment with dates and times.

Once a passenger has booked their ticket for the first time, they can directly influence
the ticket price, and choices are offered to them that are not available elsewhere. As a
result, there seems little doubt that easyJet's customers enjoy their online experience,
so ensuring that they come back regularly and often.

3. Web Strategy

The company is so confident in its Web strategy, that it is now seems ready to take
the next step in this process and become the first 'Web-only' airline, completely doing
away with telesales. Its aircraft no longer carry the telephone booking reservation
number, but only its website address. easyJet maintains its confidence in this
approach, based on the real and dramatic growth in Web sales. The fact that this Web-
only approach is possible is a reflection of the way that consumer attitudes have
developed over the last decade, and the fact that the Internet and mobile
telecommunications technology have increasingly become integrated into everyday
life.

Source:

 http://en.wikipedia.org/wiki/EasyJet
 http://www.businessteacher.org.uk/business-resources/swot-analysis-
database/easyjet-swot-analysis/
 www.bestessays.com/Essays/Marketing_Essay.doc
 www.easyJet.com