Essay on easyJet report external assessment fi

Submitted By annie1247
Words: 4687
Pages: 19

Comparison of EasyJet with the entire industry

An external assessment of the entire airline industry is needed to compare and analyse easyJet’s position with regard to the overall industry.

Constant technical improvements present opportunities for airlines and the aviation industry is growing as financial investors are getting more interested by its overall growth; on the longer-run, the emerging markets and new technological improvements will lead to the increase of the number of fleets and their improvements (Oliver Wyman, 2014). The fuel-efficient aircrafts are becoming a trend nowadays, as the fuel costs represent a significant amount 40 percent of the airline companies’ budget (Murray, G. Nelsen, E., 2014). These aircrafts are called the “narrowbody planes” which are built for the long routes and distances. The specific models available are the A320 aircrafts and the 737-NG (Oliver Wyman, 2014) EasyJet will buy 27 of at A320 aircrafts and are expected to be delivered between 2015 and 2018 (CAPA, 2014).
Nevertheless, travel costs decreased significantly due to the modern aircrafts’ efficiency, improved usage of the airplanes and enhanced performance in the airlines’ operations (IATA, 2011). This has been reflected in EasyJet’s stronger financial performance and the significant amount of costs saved, by purchasing the fuel-efficient aircrafts. Changes in costs will be more visible on the financial statements in the coming period.

Technology improvements are not limited to the aircrafts. It will also play another role in the near future, with regard to information searching. Information is nowadays expected to be easily accessible and travellers expect to find personalised information. It is forecasted that by the year 2020, with the up scaling rate of travels, customers will require instant and customised information and choices, especially with the increased “complexity of the travel chains” (D’Incà, Carlucci and Tregoubov, 2014, p.21). The supply of information will also be boosted by the advancement in the technology of the mobile devices and the Internet, which allow the instant accessibility of information (D’Incà, Carlucci and Tregoubov, 2014). Such an opportunity will lead to an enhancement of the customer satisfaction, as they will find their needed information available, which will improve their travel experience and from the company’s side, strong relationships should be built with the customers to provide them with the right information (D’Incà, Carlucci and Tregoubov, 2014; PwC, 2014). Consequently, the chain will be shortened allowing more room for instant feedback to the management and the customer can easily negotiate and reach the other end of the chain. More so, airlines will be able to build a modified business model that focuses not only on the transportation service but also on the supply of information to the customer, which will be part of the core activities; this will allow them to build deep downright relations with the customers which will benefit the airlines as they will build a loyal customer base (D’Incà, Carlucci and Tregoubov, 2014; PwC, 2014a). PwC conducted a survey with the CEOs of several airlines and concluded that 71% of them are building strategies to modify the way they are managing their data and 67% are focusing on the formation of strategies and plans for R&D and innovation. The technological progress in analysing data will also have an effect on the pricing, as there will be a shift from prices dictated by the capacity to prices decided upon the customers’ customised and chosen “mix of products and services” (PwC, 2014a, p.3).

EasyJet is taking advantage of the opportunities presented by the technology, as it believes that it is an effective way to build a stronger and an uninterrupted relationship with the customers in addition to that they will not have to pay fees for travel agencies, unlike legacy airlines (Jarach, Zerbini and Miniero, 2009). Innovation is an