Market Share: The low-cost airline industry is dominated by a few large companies. (See appendix 1). Jet2.com’s main competitors are Easyjet, Ryanair and British Airways. However it is very difficult to determine all the competitors due the company’s diversified presence in more than 10 countries. In the UK there are 7 other low-cost airlines which shape the market creating more competition.…
There is considerable rivalry in the airline industry between new and more established businesses. Competition is strong between the budget providers, but is also an important force between easyJet and larger “flag carriers” such as Air France and Lufthansa on short haul routes (where price may be more critical)…
As the UK airline industry is an oligopoly which typically prefer non price competition in order to avoid price wars. In an oligopoly the firms are interdependent and take into account likely reactions of their rivals to any change in price, output or forms of non-price competition. In perfect competition and monopoly, the producers did not have to consider a rival’s response when choosing output and price.…
With the demand on transportation and advancements on technologies, airline industry became one of the fastest developing industries on the world. These developments, high leveled competitive market and the never-ending demand on faster transportation reduced the plane ticket prices. As a result the low-cost airlines (LCA) are flourished. Undoubtedly one of the key players in this progression was easyJet. They are widely known with their cheaper tickets however their marketing strategy had never been that simple. Their market segmentation, different researches on customer habits, satisfaction and their diversified services depending on these factors leaded easyJet’s marketing activities.…
This report illustrates an in-depth look of easyJet and will also discuss an analytic research that was made to demonstrate aspects of the history of the airline, along with the marketing strategy and brand strategy used and implemented by the low-budget airline. The strengths, weaknesses, opportunities and threats, known as SWOT analysis, will also be illustrated along with the external environment better known as PEST analysis which consists of the political, environmental, social/cultural and technology factors of easyJet. In addition an analysis of the competitive market environment of easyJet will be shown, which includes an overview of easyJet’s main competitors and the nature of business in which they operate by illustrating it through the Porters-Five Force model. The advantages and risks associated with their low-price strategies will also be discussed with an illustration of how easyJet achieved success using these low-price strategies. Finally there will be a conclusion by giving recommendations along with a critique for future ways to enhance and develop their strategies, which in turn will increase their profits.…
According to a study generated by IBISWorld on the Annual Global Airline industry revenue for 2014, figures were indicated at $745bn with over 9,000 businesses worldwide. From such figures we can infer that global competition in this industry is inevitably high. Such competition is present and can be seen in examples like existing Airline companies such as Etihad and Emirates which offer similar services, packages and prices to its customers. What can be noticed however with the Airline industry is that the threat of new entrants is quite low - this is in large part due to the fact that the Airline business involves a billion dollar investment and high capital (Porter, 2008). It is also a service which although used frequently, in one customer’s life-time; the extent of use may vary depending on many situational factors such as seasonality, business or leisure purposes and so forth. In Australia, the same notion holds in terms of new entrants to the marketplace. Major players in the Australian Airline network include Qantas, Virgin and Jetstar.…
1. What are the main sources of equity for the brand? Brand equity helps the customers to recognize the brand among other brands quickly and to simplify the buying decision process. It is the differential effect of brand knowledge on consumer responses to the marketing of a brand. The two components of Brand equity are Brand awareness and Brand image. The main goal is to make sure that the way the consumer perceives the brand and the way the brand owner defines what the brand stands for overlap as much as possible. EasyJet derives the most from the perceived quality. “The perceived quality refers to; A customer’ opinion of a product’ value to him or her. It may have little or nothing to do with the product’s market price and depends on the product’s availability to satisfy his or her needs or requirements”1 Easyjet is really focusing on this aspect because they are expanding and they are already flying to 129 destinations mainly in Europe. The second source is loyalty, they try to exceed or meet the passengers expectations to make sure they will fly with EasyJet. They control whether the passengers enjoyed their flights by sending a questionnaire to the passenger several days after they have flown with EasyJet.…
IntroductionThis report has been written in order to provide an environmental and competitive analysis of the low-cost airline industry sector from the position of Easyjet. It will give a brief history into Easyjet and the low-cost airline industry. It will analyse the internal strengths and weaknesses as well as the external threats and opportunities. Competitors will be analysed through the use of porters 5 forces model. Recommendations will be made for easyJet's marketing strategies for the next three years.…
The European Airline industry’s growth dramatically changed after deregulation phased into the European market. Prior to deregulation, bilateral agreements between host countries in Europe existed, and typically each country had a national airline (Airline Operations & Management, 2014). The industry stagnated and costs were very high for air travel. Deregulation in Europe was phased in beginning in 1987, and concluded in 1993 (Airline Operations &Management, 2014). After deregulation, airlines were able to operate routes without restrictions, and pricing for tickets was not controlled. Similar to the U.S., a proliferation of failures and bankruptcies occurred.…
One of the reasons the airline industry is an oligopoly is due to the demand of travel and the basic needs of a typical passenger. Business travel does seem to be more of where the competitive side comes in though. Regardless of where the airline is currently ranked it is one of the major players in the market. The market structure was chosen because there are many barriers to enter the market.…
RyanAir stands out as it is the only low-cost carrier among the airlines examined. The strengths of this LCC compared to the “legacy carriers” such as Delta, United, and American is that the company serves only relatively short-haul routes throughout Europe which cost cheaper to operate and generally are not a huge loss in case of non-full flights. This allows for flight cost structure to be controlled easily and RyanAir has perfected the formula for offering cheaper flights to value-conscious consumers while realizing high margins for their flights. The disadvantages of RyanAir involve its network that is controlled in growth which only allows it to compete in the European market as opposed to the international market. The advantage of the legacy carriers compared to LCCs such as RyanAir involves the global network serviced by these airlines. American, United, and Delta are very strong not only domestically in the United States but internationally with service among 6 continents. The disadvantage of operating as many routes as a legacy carrier would is that profit margins would be lower as long-distance flights are less cost-effective than short-distance routes. On an investment standpoint, RyanAir should be a strong competitor in the market due to its business structure that allows it to maximize profits while maintaining a busy network…
Ryan Air’s launch strategy of only having one route from Waterford to Gatwick Airport was a smart move because they didn’t enter into a route that was competed for by other established companies. It was a close flight and it was within the financial capabilities of the company to operate the flight for a profit. It also created brand awareness for the company which is very important when a small company like RyanAir is entering a market where Aer Lingus and BA pretty much own the market.…
1. Which kind of customers was Ryanair trying to attract when, in 1999, Michael O’Leary took charge of the firm? Those with a low price elasticity of demand or those with a high price elasticity of demand? Explain.…
Leadership and management style have proven to be important factors in the effectiveness and development of an organization. (Blake, 1991) argues that leadership and management style influences levels of motivation, performance and commitment within a business. This essay using Richard Branson and Michael O’Leary as case study examples, aims to discuss how the state of affairs within an organization can be attributed to different leadership styles and behavior.…
The managers of the Ryanair chose discovering the opportunities in the market. Evaluating all the facts, Ryanair chose low cost strategy which was quite successful decision. By using cost advantage strategy, the firm tries to maintaining lower cost (C) at the same time achieving willingness to purchase for customers (B) that is comparable to their competitors. The Ryanair had low costs compared to the competitors due to some reasons. To begin with, they were late movers which mean that they benefited from the experiences of the other competitors which in turn decreased their R&D costs. Ryanair evaluated their operations and saw that there is an opportunity to schedule the flight from Dublin to London. This line was quite profitable due to some reasons. First of all, there was stable demand on this line for 10 years. Secondly, the fact that only 60-70 % of the flights of the other two companies was full most probably due to high ticket prices. Thirdly, three quarters of a million of people, who can be called as potential customers, were not using the airline industry for that road because the prices were high. Instead, they were using the railway or sea ferries.…