EasyJet: The Web’s Favorite Airline

Q)'Analyse' the strategic intent and elements of EasyJet's business
strategy.
EasyJet focussed on low operating costs to realize higher profits and provide
maximum customer satisfaction. Infact it had become one of Europe’s leading
low-cost airlines adopting an efficiency-driven operational model, creating brand
awareness and maintaining high levels of customer satisfaction. The key
strategic elements are :
Low-Cost Strategy: by reducing the operational costs and increasing seating
capacity, EasyJet was able to fly in more passengers at lower rates. Absence of
travel agents also helped to reduce the operational cost.
“Yield management” based pricing strategy: A lottery system was introduced
where depending on the demand for a particular flight, the fares accordingly
rose. Yet those fares were cheaper than the other airline’s fare.
EasyJet outsourced many of the operations such as customer service desk and
check-in thereby reducing operational costs and increasing efficiency. The
outside vendors were offered participation in workshops, role-reversal exercises
and simulations to align with company’s objectives.
Q) How is EasyJet creating competitive advantage?
Competing on Costs: With the mission “to offer low-cost airline service to
masses” EasyJet sought to minimise cost wherever possible. EasyJet mimicked
the Southwestern airlines by introducing these features in the service: using one
type of aircraft, point to point short haul travel, no in-flight meals, rapid
turnaround time and very high aircraft utilisation. In addition to that, he avoided
the computer reservation system and travel agents which constituted 25% of
operating costs and further encouraged direct sales over the internet. Easyjet
flew brand new Boeing-737S having the maximum installed capacity of 149.
Eliminating business class offered greater capacity.
The industry average was 6 hours per day whereas Easyjet reached a figure of
11.5. Stelions remarked that he flew 2 planes doing the work of 3.
Competing on Service: Believing in customer satisfaction, Stelios took steps to
ensure impeccable service:



He himself travelled 4 flights a week and took customer feedback from the
passengers. He even replied to mail and other inputs from the customers.
Also flight changes included 10 pounds and the difference between the
fares.
Ticket booking was customer friendly and only six character reference
number was needed during travel.
EasyJet was 100% direct sell operation which helped the marketing
department to have better monitoring over the media.

Group id 7 |Prince (abm11042) |Shounak (fpm15015) |Jim (pgp30375) |Jitendra
(pgp30376) | Ravi (pgp30387) | Renu (pgp30388) | Shweta (pgp30394) | Tijo
(pgp30400)


Since they focussed on economical fares, no pre-assigned seating and
provisions for business class made every passenger equal and no biasing.
Punctuality was observed at EasyJet. If a flight more than 4 hours late, an
apology was given and the fare was fully refunded.

Group id 7 |Prince (abm11042) |Shounak (fpm15015) |Jim (pgp30375) |Jitendra
(pgp30376) | Ravi (pgp30387) | Renu (pgp30388) | Shweta (pgp30394) | Tijo
(pgp30400)