Easjet Casestudy

EasyJet is Europe's leading low-cost airline. The airline was founded by Stelios Haji-Ioannou, and the family remains the major shareholder. He controls other separate EasyGroup companies such as EasyInternetCafe, easyCar.com, EasyMoney, and EasyValue.There are no "cross-shareholdings" between EasyJet and these other EasyGroup companies. EasyJet operates independently from the other companies, although some "cross-marketing" agreements do exist.

EasyJet is a low cost airline officially known as EasyJet Airline Company PLC. The company is based at London Luton Airport. It operates frequent scheduled services for leisure and business passengers and serves more than 200 routes between more than 60 European airports. The company listed on the London Stock Exchange and easyGroup owns only a minority stake.

EasyJet and its Republic of Ireland based rival Ryanair are by far the largest low cost airlines in Europe, and the rivalry between them is intense and sometimes vituperative (especially on Ryanair's side from its high profile chief executive Michael O'Leary). The two companies have slightly different strategies. EasyJet flies mainly to leading airports while Ryanair uses far more secondary airports to reduce costs. EasyJet places more focus on attracting business travellers as well as leisure travellers, although all its aircraft have single-class cabins.

Ryanair makes much of the fact that EasyJet's average fares are higher and its average punctuality is consistently lower. This is mainly due to the different range of airports used and Ryanair routinely scheduling flights to take thirty minutes longer than required. As of September 2005, Ryanair flies more passengers, but EasyJet has a higher turnover, leading both of them to claim to be "Europe's number one low cost airline".

EasyJet's vision of the future is built on developing its strength as the largest low cost airline in Europe. Total revenue in 2002 was more than Ј500 million, an increase over the previous year of nearly Ј200 million.

EasyJet's main competitor is Ryanair, which was the largest European low cost airline before EasyJet acquired Go Fly. In early 2003, though, Ryanair bought one of the smaller firms in the market, Buzz. There is now some debate about which firm is now the largest. They both have a similar number of routes; EasyJet carries more passengers (20 million); Ryanair is worth three times the stock market value of EasyJet.

Techology is plays a key part in the success of any business, and EasyJet are always improving the technological network.

• Use of the Internet to reduce distribution costs EasyJet was one of the first airlines to embrace the opportunity of the Internet when it sold its first seat online in April 1998. Now approximately 95 % of all seats are sold over the Internet, making EasyJet one of Europe's biggest Internet retailers.

• Ticketless travel Passengers instead receive an email containing their travel details and booking reference when they book online. This helps to reduce significantly the cost of issuing, distributing, processing and reconciling millions of tickets each year.

The Internet plays a vital part in the EasyJet business plan, and is critical to its ongoing success. As a low-cost operation, controlling the cost of doing business is crucial to the airline's ability to offer low fares. Because the Internet provides the most cost-effective distribution channel, EasyJet has aggressively pursued its strategy of encouraging passengers to book their seats online.

Here are some examples of the ways in which EasyJet incentivises people to book via the Internet:

• EasyJet is the first low-cost airline to offer customer the opportunity to view their bookings online, make flight transfers and name changes online for a transfer fee discounted by Ј5.00, and request duplicate confirmation emails via the Internet.

• Passengers booking online receive a discount of Ј5.00 for each leg of a journey. EasyJet first pioneered the concept of offering a discount to Internet customers, an initiative that has been widely copied by competitors.

• Any EasyJet promotions are exclusive to the Internet, so that customers must get online if they wish to take advantage of discounted fares.

• If customers wish to book seats more than two weeks in advance of the departure date of the flight, they can only do so by booking online. As fares generally increase as the departure dates gets closer, this means that the best fares are first available to those who book via the Internet.

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