EASY JET COST MANAGEMENT

Easy Jet Cost Management



EASY JET COST MANAGEMENT

The cost for easy Jet can be divided into 3 main categories.

Labour Cost

Land or Material costs

Capital expenditures

Labour Cost

The Labour costs of easy jet include all the costs that they are incurring on the employees in their airline, like salaries, benefits, etc. The labour cost for easy jet has the salaries of the pilots, the cabin crew like flight stewards. These are the fixed costs for easy jet. There are no variable labour related costs for Easy Jet. (Jones 2007 Pp. 100)

Material costs

The material costs for easy jet includes all the costs incurred by easy jet in the management of the materials, acquisition of materials, and the other costs that are incurred for the management of airport slots, etc. These costs are further divided into variable costs and fixed costs. The variable costs of easy jet include, Food items, fuel costs, the insurance costs. The fixed costs include the cost for reservation of time slots, the different airport costs, office rent, and the Civil Aviation Governance costs.

sCapital expenditure Costs

The capital expenditure costs are huge cots that are not incurred at regular intervals of time. These are big expenditures, the management of easy jet pays special attention to these costs to make sure that these costs are managed in an efficient manner. The fixed costs are the expenditure on employees; who are working in the administration department, then the costs incurred on purchasing a new aircraft, the maintenance of the Aircraft, the marketing aspects of easy jet. Then the variable costs are the costs incurred on the processing of the payments, the management of the baggage of the passengers.

COST MANAGEMENT BY EASY JET

The management of the Easy Jet realizes that they are operating in a market, where is a lot of competition, and they have manage their costs in the short run as well as the long run for blossoming in the industry. The management is managing the three different costs in a very professional manner; they have designed different strategies for managing the different types of cost. (Griffiths & Wall, 2008 Pp. 54)

Labour Cost Management

Easy jet is focusing on the factors such as high productivity from their employees, maximum utilization of staff to reach the economies of scale, etc.

To ensure optimum level of output from each employee, they have entered into contracts with their employees that they will work for more than the normal industry work hours at the industry average pay. Easy Jet does not impose the traditional restrictions on their employees for working, and they have developed a very co-operative culture in their employees, and they are also offering incentives for their best employees. All these steps ensure that the employees are giving their best output at an optimal cost.

Then they are making the maximum utilization of their available staff. They have designed a superb procedure for forecasting demand in the industry, and then demand forecast is linked with the scheduling of the ...