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Easy Jet_ Low cost carrier
EasyJet, founded by Stelios Haji-Ioannou in 1995, is a low-cost airline headquartered in Luton, UK, initially operating with two leased aircraft and growing to 217 by 2013. The airline focuses on point-to-point short-haul travel, avoiding frills to keep costs low, employs a yield management strategy, and has built a strong brand presence with high customer satisfaction through efficient services. Additionally, EasyJet explores other ventures like cyber cafés and rental cars while facing challenges of maintaining its corporate culture amidst growth and outsourcing.
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Easy Jet_ Low cost carrier
- 1. Easy Jet THE WEB’SFAVOURITE AIRLINE
- 2. Easy Jet: Profile •Founder : Stelios Haji-Ioannou • CEO: Carolyn McCall • Started operations in Novemeber 1995, with a capital of £50 million. • Headquarters: Luton, Bedfordshire, United Kingdom. • Started with 2 leased aircrafts and now has 217 aircrafts(A319 and A320) as of September 2013.
- 5. European Market • Deregulationin 1992, more new airlines were created. • 1999, only 3% - 5% flew on low-cost carrier in Europe whereas it was 24% in U.S. • Competition from High speed rail service • Cost of running an airline was 40% higher than in U.S. • 60 out of 80 had gone bankruptcy by 1996.
- 6. • One typeof aircraft • Point-to-point short haul travel • No in-flight meals • Rapid turn around time • Very high aircraft utilization South west airlines • Avoided travel agents • No tickets • Direct sales over internet • New Boeing 737s with max seat capacity 149 • No frills • Paperless office Easy Jet
- 7. Emphasized on • Safety •New Boeing 737s • Experienced pilots “ If you create right expectations and you meet or exceed those expectations, then you will have happy customers”
- 8. Competing on cost •£14 per passenger by not offering meals • £10 per passenger by flying into London’s Luton Airport instead of Gatwick. • No business class- more overall seating capacity • Internet sales • Avoided computer reservation systems and travel agents (added 25% of total operating costs) • Increased the flying hours from 6 hours per day to 11.5 hours.
- 10. SERVICE COMPETENCIES • Approachto customer satisfaction • Internet and on telephone sales and no reimbursement for missed flights. • Credit card payments and acknowledgement through six character booking reference number. • No pre-assigned seating, first come first serve basis. • Target group: travelers, entrepreneurs and managers of small firms. • Ignored business travelers on some routes who accounted for 50% of passengers.
- 11. • Yield management– fill as many seats as possible • Lottery system % of seats sold Price of the seat • Drew potential customers who were in search of cheap fares. • Punctuality
- 12. Outsourcing • Lowered costsand increased efficiency • Airline provided only Planes, Pilots, Cabin crew, marketing and sales people. • All other responsibilities from check-in to the on-site customer information desk were handled by Subcontractors. • Early 1998, owned operating certificate. • Workshops, role-reversal exercises and simulations • Not only quantitative criteria(on-time flights) but also qualitative criteria (understanding of easy-jet concept).
- 13. Brand Awareness • 10%of revenue were spent on newspaper, magazine and radio advertising. • By 1998, recognition rate was 88% in London and 82% in Geneva. • “Say no to Swissair monopoly”
- 14. Corporate Culture • Strong,inclusive employee-culture – EasyJet Culture Committee • Company-sponsored barbecue • Complete transparency in the data (excluding payroll information) • “The fight with Go” • Acquiring ofTEA, a Swiss charter airline.
- 15. Competition RYANAIR GO VIRGIN EXPRESS BUZZ Established1985 1998 1996 1999 Headquarters Ireland London’s Stansted Airport Belgium London’s Stansted Airport
- 16. Challenges • Privately heldcompany to public • Subcontractors- outsourcing of vital functions • Becoming more corporate • Relative youth and inexperience of employees • Stabilizing internally
- 17. Other ventures • Creationof a cyber café business called easyEverything Café in 1999. “ to offer the Internet to the masses” and “to be the cheapest way to access web” • First debuted in London on June 21, 1999 nearVictoria station. • First café – 400 terminals and fibre optic communication lines that offered faster connections. • Rental car business and Internet based bank.
- 18.