This happened in 1995-1996, when the European airline market just started its liberalisation (Debbage, 1994) and the rivalry in the low-cost market was technically inexistent. EasyJet was created in the right place, at the right time. EasyJet is in a quite comfortable position now, even if companies like Ryanair and other operators are present on the market today, the important battles are now for the new markets. Another great issues for new entrants on the UK market is the lack of landing and take-off slots due to the overcrowded airports. 5.3 The power of suppliers The price of aviation fuel is essential and directly linked to the cost of oil, which cannot be controlled by any airline companies, including EasyJet, giving a higher amount of power to the supplier. However, due to the un-speculated movements on the market, oil prices has fallen, giving a breath to the airline industry. EasyJet operates a fleet of 300 Airbus aircrafts. With Airbus as the only aircraft and spare parts supplier for EasyJet, it can be considered that this supplier has a strong power over the company. 5.4 The power of buyers The power of buyers in the airline industry is relatively strong, especially in the low-cost segment. The main reason is that costumers are searching and purchasing tickets online, making it easy to find a better deal. Today’s low-cost market is quite mature and competitive, if the customer is not satisfied with the services offered by EasyJet, they can choose a competitor instead of EasyJet. 5
5.5 Rivalry among existing firms As it was stated before, the low-cost airline segment is quite mature in Europe now, rivalry being strong. EasyJet’s main competitors are: Ryanair, Wizz Air, Thomas Cook, Flybe, Monarch, Jet2 – low cost operators on one hand and British Airways, Air France, KLM, Lufthansa and other national airline companies on the other hand. With the national airline carriers EasyJet is competing on the short and medium distance travels (Europe and UK), but there are signs that they will soon compete on the transatlantic routes too (Powley, 2016). However, Ryanair is EasyJet’s main competitor (BBC, 2013) 6. Market Growth Strategy – Ansoff Matrix (Slide 6) 6.1 Market Penetration EasyJet is the UK market leader in the low-cost airline industry, and one of the largest in Europe. How could EasyJet grow by applying this strategy? The first option could be the competitive pricing strategy, offering even cheaper tickets to the customers or sales promotion, a strategy frequently applied by EasyJet. Another option, again, already exploited by EasyJet, is the loyalty schemes, travellers being encouraged to use the services offered by the company (EasyJet, 2016). 6.2 Market Development EasyJet went a long way, expanding its operations from the UK to other countries in Europe, offering a wide range of destinations (EasyJet, 2013). However, there World is big and there will be always opportunity for expansion. A good strategy to start operating transatlantic flights could be a very good opportunity, an opportunity already taken in account by both EasyJet and Ryanair, the launching of the new routes is expected (Powley, 2016).
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- Summer '19
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