Easyjet And Low Cost Carriers

About two months ago, at 11 September 2006, American people have commemorated the 9/11 tragedy that happened exactly seven years ago, in 2001. The so-called terrorism attack does not only influence the macro environment in the United States but also the global airline industry due to the possible threat in the air (White House, 2002).

In airline business point of view, the 9/11 also caused major losses since skyjack discouraged air travellers to take a trip by airplanes. Currently, the number of air traveller start rising, suggesting that they start to feel comfortable to take a flight although it is still early in the recovery.

However, the airline industry continue facing new challenges as the price of fuel shows increasing trends, causing airline to force the costs of operation down to make air travelling business still profitable.

Despite many challenges that airlines face within the past decades from terrorism to increased fuel price, there is positive side since the situation spawn new type of airlines that operates in no frill services.

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The so-called low cost carriers (LCCs) or budget airlines continue rising in terms of the number of LCCs, implying the demands begin rising.

Concerning the competition in low costs carrier segment, this paper will elaborate the business analysis on Easy Jet, a UK-based low cost carrier. The analysis includes the business environmental analysis such as the determination of level of priority that may influence the future of easyJet, strategic options, and recommendation for easyJet to compete in airlines industry. Prior to the analysis, there will be short elaboration regarding the easyJet corporate background.

Stelios Haji-Ioannou historically founded the easyJet in 1995. EasyJet is among the Easy Companies family that Stelios family own and operate including easyInternetCafe, easyCar.com, easyMoney, and easyValue.

Nowadays, easyJet runs separately from the other easyGroup companies although there are some “cross-marketing” agreements in order to favour the development of the easyGroup lines of business (easyJet, 2008a).

The company headquarter is located next to main taxiway at Luton Airport, UK at Hangar 89. This building suitably embodies the easyJet’s mission “to provide customers with safe, good value, point-to-point air services [by offering] a consistent and reliable product and fares appealing to leisure and business markets on a range of European routes [through developing of the company’s] people and [instituting durable] relationships with […] suppliers.” (easyJet, 2008b).

The easyJet products consist of flights, hotels, car rental, and airport parking. In terms of flights, easyJet has extensive routes more than 217 routes across European airports. At the beginning of operation in 1995, easyJet started with 2 routes (London Luton – Glaslow and London Luton – Edinburgh) (easyJet, 2008a).