EasyJet is an international example, The introduction of Airbus A319 aircraft, combined with the retirement of old generation Boeing 737 aircraft, will result in a two-type new technology fleet, which will commonality and lessen complexity and deliver high level of asset utilisation and reduce unit costs. In terms of analysis, EasyJets distribution activities are important in terms of e-commerce, as EasyJet like to consider itself as the webs favourite airline. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. No plagiarism, guaranteed! The threats are in terms of fines and rise in cost of raw materials. The federal government recently made cloud-adoption a central tenet of its IT modernization strategy.An organization that adopts cloud technologies and/or chooses cloud service providers (CSP)s and services or applications without Introduction Company Background, Financial Performance and Key Services EasyJet is an airline company based in Britain Effective use of digital and data tools to underpin growth and deepen customer relationships. But nothing has been normal for EasyJet since March 23, 2020. Strategic risk represents one type of risk that businesses face, along with risks like operational, financial, and regulatory, to name a few. It now owns just over half its fleet, down from 70% in 2019and six of every 10 planes it does own have been pledged as collateral against its loans. Founded in 1995, low-cost carrier EasyJet established itself among the largest airline based in the United Kingdom by passenger numbers. )Compared to some of its low-cost rivals, EasyJet also owned more of its planes outright. The airline couldnt simply abandon it without jeopardizing any chance of a quick recovery when the crisis ended.Lundgren also thought the contract made long-term strategic sense. He offered a $7 million reward to any whistleblower who could provide him useful information leading to the cancellation of the Airbus contract. Disappointing your customers. The Matrix outlines four possible avenues for growth, which vary in risk: Market Penetration. Hopes for an early summer 2020 recovery were dashed when the U.K. government decided that it would impose a mandatory two-week period of self-isolation on all those arriving in the country. Johan Lundgren, the chief executive officer of EasyJet, one of Europes largest budget airlines, is a fan of Flightradar24. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. After listing the risks and putting them in a risk matrix, the report will then aim to explain how the risk will affect easyJet and justify the position of it in the risk map. Improving CSAT across the whole customer journey. But EasyJets contract required itto paythe aircraft maker at least $6 billion through 2023a sumconsiderably greater than the airlines entire current market capitalization. easyJet seek to strengthen their position in key markets as the competitive landscape evolves. When EasyJets board did not accede to his demands, Haji-Ioannou carried through on his threatrequesting a special meeting to vote on the removal of board member Andreas Bierwirth, a former Austrian Airlines and Lufthansaexecutivewho Haji-Ioannou termed a friend of Airbus. When the board tossed out this request on a technicality, Haji-Ioannou resubmitted his call and asked for the removal of the chief financial officer, Andrew Findlay, too. WebSupport Risk Management by conducting risk awareness workshops and trainings. As funding from operations are clearly a major contributor to value creation. EasyJet cost efficiency is achieved in a variety of way as shown in the following diagram: The success of low-fare (cost) strategy is primarily dependent on the maintenance of a low cost base. Upgauging the fleet enables easyJet to improve competitiveness on costs. A PESTEL analysis of the industry will examine the local, national and global influences of political, economic, social and technological factors to understand opportunities and threats well. Every so often Easyjet has aligned to face some unusual risks, for example, IT security and fraud risk, brand ownership, dependence on technology, Industrial action, financing and interest rate risk; while the key risk management system of the company is very formal rather than deepest, Appendices 1. In an interview with LondonsEvening Standard newspaper in January, Lundgren sounded down, admitting he missed frequent trips to the Spanish island of Majorca, where he owns a house and where he and a friend also own a recording studio. The fourth force is the bargaining power of buyers. There are potential opportunities in terms of new routes and expansion of services offered, EasyJet has already launched a number of new European routes, how about expansion into the Asian Pacific? Front and center was the existential risk of the coronavirus. Table 1 shows that EasyJets sales has increase year on year since 1998, with profit and gross margins also experiencing a positive trends. This results in a very strong competitive rivalry in the industry. This report will provide a detailed analysis of EasyJets current corporate appraisal or SWOT analysis. But with new, more infectious variants of COVID-19 spreading rapidly in Europe, in October renewed lockdowns were imposed across many parts of the U.K. and from Helsinki to Tel Aviv. As hard as it has tried to inoculate itself against the pressures of the pandemic and to convince passengers it will be safe to fly, its fate remains up in the air, subject to unexpected and unwelcome turbulence. By the end ofJanuary 2021, about 1,400employees had been laid off or taken buyouts. Protecting and building brand awareness and consideration. EasyJet appears to have internal strengths in terms of brand awareness, cash flows, and operational efficiencies. The type of childcare had little impact on infection risks. With so much uncertainty, leisure travelers are holding off on booking summer flights, prolonging EasyJets pain. The globalization is also another factor influencing which build up the air traffic as lifelong. The third force is the threats from the bargaining power of buyers, is this strong for both EasyJet and the entire airline industry with a large number of alternative suppliers, hence, the aggressive pricing strategy. Hannibal HanschkePool/AFP via Getty Images, Christoph SoederPicture Alliance via Getty Images, Chris RatcliffeBloomberg via Getty Images, one of the biggest winners in the European air-travel dogfight, agreed in January 2020 to deferred prosecution agreements, began purchasing carbon offsets for the CO2 of all its flights, might not fully recover from the pandemic until 2024, LinkedIn has officially entered its cringe era, and its working. WebIt offers marketers a simple and effective way of weighing up the options and risks involved when taking new strategic decisions. EasyJet announced it had lost more than $1 billion in the 12 months through September 2020. The airline founders misgivings had only mounted after the aircraft maker agreed in January 2020 to deferred prosecution agreements with the U.S., France, and the U.K. and to pay billions of dollars in fines stemming from charges that it had for years routinely bribed airline executives to secure contracts.When the pandemic struck, the aggrieved founder saw an opportunity to force EasyJet to abandon the deal. Its not clear what role Haji-Ioannous pressure played in this decision. The reason for EasyJet to put so much emphasis on the human factor as one of the primary risk sources is quite understandable. EasyJet also operates a flat management structure, which may lack a formal discipline that is needed as the organisation grows. Porter comments on cost leadership as the low-cost producer in its industry must find and exploit all sources of cost advantage (Porter M.E (1980)). With Ryanair maintaining high margins despite reducing yields through strict cost management. The airline also managed to reduce itsfuel cost per seat flown by 2.9% through a series of small changes: instructing pilots to use only one engine when taxiing, for example, and to climb to cruising altitude as fast as possible, since level, higher-altitude flying is more fuel-efficient. All work is written to order. All office-based employees are encouraged to dress casually. But flying to those primary airports in Western Europe is more expensive. Finally the report will examine the extent to which EasyJets current no frills strategy is the appropriate strategic fit to its organisation both in terms of resource capability and business environment. The company has also grown in terms of its acquisitions of GO and also increase in purchases of its own aircrafts. easyJet aims to deliver a seamless and digitally enabled customer journey at every stage and is continuously working to enhance the customer experience. In many instances, strategic risks and the other kinds of risk will impact one another as they are interconnected. Opting for in-house initiatives provides several advantages that can potentially increase margins and overall efficiency, including: 1. Normally there would have been close to 100. The strategy has four strategic priorities that will build on easyJets structural advantages in the European aviation market, helping easyJet move closer towards its destination of being Europes most loved airline, winning for customers, shareholders and our people. Barton, EasyJets chairman, tried to put the episode behind the company, saying publicly that he hoped EasyJet could reengage constructively with its founder, but that the negative headlines and publicity has placed unnecessary pressure on a dedicated management team and negatively impacted the reputation of this great British and European brand. Indeed,though Lundgrens management team had won the showdown, there were signs of damage. The threemost prominent firms that advise shareholders onhow to cast ballotsin proxy votesISS, Glass Lewis, and Pircall recommended against backing his proposals. In 2019, excluding fuel and in constant currency, it cost EasyJet 4.45 European pennies per available seat kilometer, a key industry cost metric. Statista assumes no EasyJet manages its sales process extremely efficiently, its sells its tickets directly. We will start by looking at strengths: EasyJet serves diverse ranges of European routes with principle activities in both Leisure and business markets, offering 60 key European routes. Under pressure from airlines, it later lifted this policy for some European destinations, only to reimpose it as infection rates soared again in Spain and France. Create a retirement strategy that diversifies your assets and manages risk. EasyJet also has a strong cash flow position primarily from its policy to retain profits and reinvest it back to the business. EasyJet came into the pandemic in better shape than many airlines: It was profitable and had a strong balance sheet, with relatively low levels of debt. In April 2020, EasyJet announced that it had reached an agreement with Airbus to defer delivery of 24 of the aircraft, meaning it would take on no new aircraft in 2021. Before the pandemic, EasyJet was looking like it could emerge as one of the biggest winners in the European air-travel dogfight. Lundgren had been an industry leader in trying to position EasyJet for this new world. We need to focus on the things we can control. There is national pride, not to mention jobs and pension payments, resting on their wings. Lower costs are the only competitive advantage in the short-haul economy sector as air travel is effectively a commodity product. Savings made from e-commerce is another source of value creation. In addition to that, EasyJet has been offering no in-flight meals, no in flight movies. A focus strategy can be implemented to resolve these issues as well. WebEasyJets first generic strategy is to achieve an overall cost leadership in the low cost airline industry. Due to a recession, fewer business tourists are travelling to downfall the quantity of sending amount. Haji-Ioannou insinuated that this was evidence of the corruption hed long alleged. To accomplish that, Lundgren has taken drastic steps. When it comes to choosing between in-house and outsourcing, the organization must first analyze the associated risk and cost that comes along with each method. All of those (political, economic, social, technical, legal and environmental) factors will to some extent apply to the airline industry. Like all airlines, it instituted new procedures: increased cleaning, mandatory masks for passengers and crew, and no meal service. EasyJet raised $1.5 billion by selling seven-year bonds, with a 1.875% annual interest rate. A classically trained trombone player who has said he went into business only because he failed to get into Londons Royal Academy of Music, he said he hadnt been playing his instrument lately because I dont have the inspiration for it. He said hed been trying to draw lessons in resilience by rereading HemingwaysThe Old Man and the Sea, finding perhaps parallels between the Job-like fate of its protagonist and his own plight. Given the fact that the company offers Therefore, it is vital for EasyJet to have a thorough comprehension of their costs and cost drivers. As a result, EasyJet occupies a kind of middle groundin both pricing and costsamong European carriers. Accomplish that, EasyJet occupies a kind of middle groundin both pricing and costsamong European carriers pricing costsamong... European carriers we need to focus on the human factor as one the! 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