The Concept
EasyJet keeps costs low by eliminating the unnecessary costs and 'frills' which characterise 'traditional' airlines. This is done in a number of ways:
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 90% of all seats are sold over the Internet, making EasyJet one of Europe's biggest Internet retailers.
Maximise the utilisation of the substantial assets Each Boeing new 737 aircraft has a list price in the region of $35 million. Therefore maximising utilisation of each aircraft reduces the unit cost.
Ticket less travel Passengers instead receives an email containing their travel details and confirmation number when they book online. This helps to reduce significantly the cost of issuing, distributing, processing and reconciling millions of tickets each year.
No free lunch everybody always jokes about airline food - so why provide it if people don't want it? Eliminating free catering on-board reduces cost and unnecessary beauracracy and management. It is also an important differentiator between EasyJet and other airlines and a potent reflection of our low-cost approach. Passengers can purchase food on-board and, ironically, we have won awards for our catering service! The concept of a 'simple service model' also reflects a more general point about eliminating other unnecessary, complex-to-manage and costly services, such as pre-assigned seats; interline connections with other airlines and cargo/freight carriage.
Efficient use of airports EasyJet flies to main destination airports throughout Europe, but gains efficiencies through rapid turnaround times, and progressive landing charges agreements with the airports. By reducing turnarounds to 30 minutes and below, EasyJet can achieve extra rotations on the high-frequency routes, thereby maximising utilisation rates of its aircraft.
A paperless operation since its launch EasyJet has simplified its working practices by embracing the concept of the paperless office. The management and administration of the company is undertaken entirely on IT systems which can be accessed through secure servers from anywhere in the world enabling huge flexibility in the running of the airline.
The Operation
EasyJet currently has operating bases throughout the UK and mainland Europe. It is a truly European operation and was one of the few airlines to take advantage of the reforms offered by the single European aviation market.
EasyJet, combined with Go, employs 2,870 people, currently has 45 Boeing 737-300 aircraft and 19 Boeing Next Generation 737-700s, with an additional 24 Boeing 737-300 aircraft in the Go fleet (October 2002).
Here is a table showing the growth of Easyjet from a mere 30,000 passengers in a year for 1995 to 2.3 million in 2003.
Airline TV show
Easyjet has become so popular that LWT produced a 'fly-on-the-wall' documentary series called 'Airline' shown on ITV is based around the passengers and staff at EasyJet. The airline was first approached about the possibility of filming during mid-1998 after a first series with Britannia Airways was discontinued. The first EasyJet series was broadcast in January 1999.
The cameras have been with EasyJet almost constantly ever since. The second series was broadcast in summer 1999 and followed by a Christmas 1999 special.
The third series was broadcast in the peak 9pm slot on Friday evenings. On average some 7.5 million, or 37% of the viewing public, tuned-in making it twice as popular as the new series of Friends, and the most popular ITV programme in that slot since 'Who Wants To Be A Millionaire?'
The fifth and sixth series attracted up to an incredible 10 million viewers each episode.
In December 2002, the cameras were back at EasyJet to film the seventh series, to document EasyJet and Go merging to become Europe's largest low cost airline.
Stelios Haji-Ioannou, Founder
Stelios founded EasyJet in 1995. Prior to that, he founded Stelmar Tankers, a shipping company which listed on the New York Stock Exchange in 2001 and in which he retains a significant shareholding, but no longer sits on the board.
In 1998, he established the easy group of companies, with the objective of exploiting the ''easy'' brand for ventures other than EasyJet. Such ventures launched thus far include EasyInternetCafe, a chain of internet cafes, easy Car, a budget car rental business, EasyValue, an internet price comparison service, EasyMoney, a personal finance service and easy.com, an internet portal and e-mail service.
Stelios retired as Chairman and as a director of EasyJet plc in November 2002. He is a national of the UK and Cyprus.
Objectives
Easyjet aims to provide its customers with a safe, efficient airline that is not as expensive as company such as British Airways.
“To provide our customers with safe, good value, point to point air services. To effect and to offer a consistent and reliable product and fares appealing to leisure and business markets on a range of European routes. To achieve this we will develop our people and establish lasting relationships with our suppliers.” EasyJet mission statement
Organizational Structure
Easyjet operates a very flat organizational structure as to eliminate wasteful layers of management this is a good idea as it takes a lot less time to make decisions within the company as a worker may ask his boss if he can do something and his boss then asks his boss and so on but operating this structure obviously works!
The Culture
EasyJet favours an informal company culture with a very flat management structure, which eliminates unnecessary and wasteful layers of management. All office-based employees are encouraged to dress casually. Ties are banned - except for pilots! Remote working and 'hot-desking' have been characteristics of EasyJet since the beginning.
Communication
Easyjet uses Email and the Internet to communicate with both its customers and when communicating both upwards and downwards in the management structure. Customers or people seeking information about Easyjet can contact the company by mail, email, telephone or fax further details can be found on their website.
The communication channels that operate within this company, the culture and the organizational structure allow it to achieve its objectives by: The culture and organizational structure motivate the staff therefore making its customers happy and helping them to enjoy their flights and then they recommend the company to friends and family who then also choose to fly Easyjet therefore boosting its number of passengers, which in turn means that it can continue to research many new types of safety for their planes.
Quality Assurance
Easyjet must make sure that each and everyone of its planes is operating perfectly to allow its planes to fly correctly and avoid a disaster such as a crash this has proved successful for them and so why change it also this is the only way to make sure that they are operating perfectly , Easyjet has built up a reputation of a safe and in-expensive airline therefore this could add value to its service however Easyjet do not want to change a system that has as yet proved so successful for them and if they did increase their prices they would probably lose a lot of customers as people would go elsewhere for their flights.
Easyjet is meeting all of its objectives and making profit therefore it is a very successful business.
The Influence of ICT and the Internet
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:
- Passengers booking online receive a discount of £5.00 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.
Since EasyJet started selling seats via the Internet in April 1998, the airline has enjoyed dramatic growth in its online sales. The airline reached the one million seat mark in October 1999, and celebrated this important landmark by giving that lucky passenger unlimited free flights for a whole year. Five months later in March 2000, EasyJet reached two million seats, and it only took another three months after that to reach the three million seat mark, indicating a huge acceleration in the growth of online sales. EasyJet has now sold many millions of seats online.
The proportion of all sales made online has also shown impressive growth. EasyJet now sells around 90% of its seats online every week which is a higher percentage than any other airline, reinforcing its position as the "web's favourite airline".
In March 2002, EasyJet was awarded the prestigious "Best Online Retailer" accolade at the annual Revolution New Media Awards.
Easyjet is a Public Limited Company this is a good choice as it allows its