Case study

Easy Jet: Low cost air travel

1. List all the ways in which Easy Jet achieves low cost operations.

There are some ways in EasyJet that achieves low cost operations such as the EasyJet is
recognized as No-frills airlines and where airlines which may have offer low fares which are the
main attraction, and also EasyJet achieved low cost operations by
 Taking decision of ticketless travelling,
 by taking decision of paperless operations
 by taking decision of no free on-board catering which will reduce the operation cost per
each trip, by taking decision of efficient use of airports,
 By landing on airports which are less crowded in small cities and secondary airports in
major cities.
As the airports are less crowded EasyJet gets extra rotations and can carry more passengers in
short span of next trip, more trips more passengers and more profits. To eliminate all unneeded
services that the EasyJet offers a no frills service at low fares. This means EasyJet can achieve
extra rotations on the high frequency routes, maximizing the utilization of aircraft and ability to
offer point-to-point travel means that it does not have to worry about onward connections for
passengers and their baggage, further simplifying its operations. Since, EasyJet generic strategy
is an average cost leadership strategy. The business of enterprise in EasyJet is that the money can
be produced on any routein which a carrier can journey three times each day to a low-cost
airport, based on a minimum market size.

2 Evaluate Easy Jet’s operations strategy and its contribution to competitive advantage

Yes, Easyjet’s operations strategic decisions were a competitive advantage. EasyJet is to help
increase online revenue, and get more customers thus making EasyJet flights price cheaper using
the internet to reduce distribution cost. Online booking system is the good example to
competitive advantage and making possible to give its customers reliable, As EasyJet is
operating its ticket sale through internet it’s a competitive idea for other airlines to follow. The
new technological changes, it also lessen the firm’s costs. It is evident that the passenger
numbers incredibly rose to 21% and seats were filled at about 85.2%, also reflecting the airline’s
popularity. Additionally, EasyJet is benefiting with online idea because it gains competitive
benefits by performing strategically. Competitive advantage not only from
great products or services, but from anywhere along the worthiness chain. The common
strategies are help because they characterize the strategic positions at the simplest and broadest
level. So, The porter keeps that company reaching competitive advantage to require and make a
selection about the sort and opportunity of its competitive advantage, because having a cost
advantage is merely a facilitator to differentiate usually on price', adding that low-cost form
seeks to eliminate bases for differentiation is to be able to offer a general service to the complete
market that EasyJet airways is to attract the passengers with their consistent low fares and
passenger satisfaction and convenience through ticketless travel, is toOnboard catering which
will be a competitive advantage to other airlines.
3. To what extent does Easy Jet’s concentration on low costs limit its ability to perform well
against the other operations performance objectives?

 City airports
EasyJet's low-cost concentrations on low costs have some drawbacks which limit to perform
other operations performance objectives. Initially, EasyJet flies to the less crowded airports of
smaller European cities and prefers the secondary airports in the major cities. The airline
company is not operating in most of the cities which customers have in their travelling list and
therefore they may refuse to use the airline company. Furthermore, low-cost airlines generally
choose second airports which may be far away from the major cities, it could be stressful and
costly for customers to catch up their flights. Moreover, by the company’s side, countries and
cities which are out of targets which EasyJet must give up entering and competing there? As a
result of the cost reduction target, the company loses the potential market power and limits its
operational performance.
 Aircraft selection
EasyJet aims to minimize the costs in operations and are known to work with smaller aircraft that
look like airborne buses that take passengers to their destinations. The luxurious characteristics
of the major flyers are mostly lacking and make it a bit restrained for travellersover the average
size or those with medical conditions. Therefore, aircraft selection may exclude those segments.
Moreover, small, and uncomfortable aircraft discourage the customers to fly longer places.
Eventually, those factors set boundaries against performing well on the company’s operational.

4 What are the risks associated with Easy Jet’s strategy?

1. Variable price system

EasyJet's major focus on strategies is aimed to minimize the costs. There are some means the
company uses to decrease the cost. Firstly, by using "internet” EasyJet successfully manages to
reduce distribution costs. According to the statistics, the airline sells around 95 per cent of all
seats over the Internet. Its online booking system uses a variable pricing system to try to
maximize load factors. The working process of the pricing systems is simple. The prices start at
very low even may be free and it rises as seats are filled. This strategy may be referred to as price
discrimination that charges different prices for the same service. In this scenario, some of the
consumers end up paying the higher prices and others pay less which can be perceived as unfair
pricing by the consumers. Similarly, this pricing strategy may be inefficiently allocated so as a
result consumer surplus may be decreased.

2. Low cost = low quality

EasyJet's is doing business by using the cost leadership strategy in operations. First, the company
does not have a free-on-board catering service for travelers. As a financial target, it has a
significant advantage of cost reduction. By eliminating free catering on-board reduces cost and
unnecessary bureaucracy. Passengers can purchase food and refreshments on-board. Secondly,
EasyJet uses special low-cost aeroplanes which are small, and seats are not as comfortable as
other planes. These successful cost-saving operations have drawbacks on consumers. The even
though the airline charges lower prices as a result of those cost leadership strategies, it creates
misperception on people so that lower price the consumer pays the lower quality that he or she
gets in return. The customer dissatisfaction may be problematic in long term strategy planning.
Therefore, the prestige factor plays a significant role in which the airline company should take
into considerations while defining the strategies.
3. Competitor’s power
The airline industry is costly and therefore requires huge investment to do business. Therefore,
the airline companies should carefully analysis one another's behavior in advance while setting
the strategies. EasyJet's main strategy is to minimize the costs and there are some low-cost
airlines in the market such as Ryan air are competing on price and service. By lowering the price
in the market, EasyJet may get the advantage over competitors. The competitors also reduce
prices, therefore nullifying this advantage.