EASYJET AIRLINES

Easy Jet Airlines



Task 1

Corporate Description

Easyjet is a low cost airline based at Luton Airport and is considered to be one of the largest low-fare airlines in Europe operating domestic and international schedules. The airline was established on 18th October 1995 by entrepreneur Stelios Haji- Ioannou and started operations on 10 November 1995. The aircraft was operated by GB Airways initially because the company had not received its Air Operation's Certificate (Easyjet, 2008) Easyjet have followed the example of Southwest Airlines, an American company which favours a flat structure for its business model and also which implements cost- cutting stratgies such as not selling connecting flights and favours quick turnaround times as well as high aircraft utilisation. (Datamonitor, 2008). Taking on board such a strategy has enabled Easyjet to be competitive in the aviation market and it is now considered as one of the leading companies providing cheap air travel. (See Apendices for diagram of Easyjet's Buiness Model) The company places a special emphasis on brand loyalty and it is reflected in its mission statement:

There are many other businesses which operate under the Easygroup such as the easycruise, holiday packages, car rentals, etc. During June 2007, Easyjet announced it would expand its relationship with Hotelopia, Easyjet holidays which offers protected package holidays made up of Easyjet flights and accommodation products. (Easyjet, 2008)

Major Competitors

The major competitor of Easyjet is Ryanair, which is the largest European low cost airline. During 2006 Ryanair carried 40.5 million passengers while in comparison Easyjet carried 33.7 million passengers. The other competitors of Easyjet include Flybe, BMI, Monarch, BMI Baby, Virgin Atlantic and British Airways. (Mintel, 2007)

Customers

Despite the budget connotations, the no-frills market is actually driven by the wealthier socio-economic groups splashing out on multiple trips. The 25-44 year olds are currently the core customers followed by 55-64 year olds.

Easyjet is popular among:

Business & leisure travellers

25-44 year olds

Couples

Upper socio-economic groups

EasyJet and Environment

Easyjet's goal is to ensure that its existing business is as efficient as possible, both in the air and on the ground, and to find ways to reduce its environmental impact in the future. (Easyjet, 2008)

Safety Standards

They have established themselves as a successful and growing low cost airline with its innovative approach to operating aircrafts in an efficient and cost effective way. This expands to all aspects of their operations: from the boardroom to the cockpit. The benefit for its customers is a safe, efficient and friendly airline with very low fares. (Neil & Keane, 2001)

Task 2

The capital structure reveals the composition of different long term financing arrangements of the company. The balance sheet of the EasyJrt shows that the company is financed by 60% by shareholders equity in 2011. The various composition of equity of british petroleum as presented in its latest annual report comprise of share capital, share premium, capital redemption reserves, merger reserves, own shares, treasury shares, foreign currency shares, cash flow hedges, etc.

On the debt side, debt is contributing approx 39% of the total ...