Table of Contents

0. Introduction...................................3

Question A..Considering the business and competitive environment up to 1999, evaluate the overall attractiveness of the budget airline sector.4

1.1 Introduction.....................................................................................................................4

1.2 Industry trend for Airlines up to 1999......................................................................4

1.3 The competitive Environment in the Airline Industry up to 1999................................5

1.4 Understanding the overall attractiveness in the Airline Industry................................7

1.5 Possible Strategies for Further Success..........................................................................8

Question B Critically upraise the strategies pursued by Stelios

Haji-Ioannou over the period of the case, and assess to what extent they allow EasyJet to compete successfully in the airline industry.

.....9

2.1 Introduction ..................................................................................................................9

2.2 Understanding the Mission of EasyJet..........................................................................9

2.3.a Where are we now? ...............................................................................................10

2.3.b Where do we want to be? ......................................................................................11

2.3.c How are we going to get there? ............................................................................11

2.4 Identifying Key Success Factors..........................................................................11

2.5 Key Success Factors through Modelling Profitability........................ ........................13

Bibliography .......................................................................................................................14

Introduction

Stelios Haji-Ioannou, began operating EasyJet in November 1995 with only 2 airlines. Stelios' strategy to model EasyJet after Sothwest airlines, together with the addition of his own spice to the theory, made the perfect combination for EasyJet, 'The webs favorite airline' to own and/or lease 18 Boeing 737-300's and to fly 27 routes in Europe, by 1999.

This report aims to fulfil the following objectives:

1-Evaluate the overall attractiveness of the budget airline sector.

2-Assess the strategies used by Stelios Haji-Ioannou to compete successfully in the airline industry.

The main findings of this report were generally positive for EasyJet, some suggestions were made as future changes in order to 'ensure long-term profitability and stability of the organisation.' (Slater,1990)

Question Considering the business and competitive environment up to 1999, evaluate the overall attractiveness of the budget airline sector.

a)

1.1 Introduction

This section will examine the overall attractiveness of the budget airline sector taking into consideration the business and its competitive environment up to the year 1999. EasyJets' competitors will be compared in this section and they are: Ryanair, Go and Virgin Express .

1.2 Industry trend for the airlines up to 1999

In order to analyse the industry's trends in the environment up to 1999, the analysis of the macro-environment (STEP) model was made as per the figure and this helps analyse how each factor is related to and effects each other, showing us possible guidelines in which the industry can progress:

Figure 1. The Model of the Macro environment (Fahey and Narayanan, 1986)

Taking a look at the competitive environment at the time between EasyJet, GO, Ryanair, Virgin Express, South West, Virgin Express, British Airways and Swiss airlines the STEP analysis looks as follows:

Sociological factors

*Flying has become a trend in the UK as it has become more affordable, therefore allowing people who had never travelled before to travel and Germans are also travelling more.

*There is increased use of the internet which leads to less reliance on travel agents.

*Stable growth of the charter market.

Technological factors

*Internet in the home enables direct access to EasyJet

*OnlineTicketing allowing for less time to board the planes

*Aircraft increasing in sizes and ranges.

Economic factors

*Pressure on businesses to reduce costs

*Increase in Global trade

Political factors

*Deregulation - European airli...

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