Easyjet cost strategy

Stelioss avowed intention in entering into the budget air lane industry was to take on any business that was potentially pro dressable. From the figures available, easyJet is victoryfully completing its founders ambition with turnover increase by 67% in 1997-1998, gross profit margin increasing from 15 -20% and with a 2.3M profit before taxation beingness achieved. Meeting these overall aims was made possible by a set of strategies and the achievement of a system that corresponded to key success factors in the budget sector of the air rake industry.

Cost advantage strategies

Among easyJets strategic choices in terms of reducing operating costs were the by-line:

·         No on-board catering except for snacks at additional cost

·         This allowed for less cabin crew

·         No business class seats, thus maximise the aircrafts capacity

·         Use of regional airports with lower airport charges.

·         Thus quicker turnaround and maximum use of assets made allowing an above medium n° flights per day

·         Young employees thus lower wage costs.

·         Outsourcing

·          charge marketing, use of the Internet, cutting out travel agents and thus thrift on commission.

Taking the list point by point, does this strategy accompany in cutting costs and providing service in line with what customers necessity?



To what extent does the cost cutting strategy fit with its environment?

·         Absence of catering: short hauls, catering not necessary. It allows for faster turnaround. It is linked to shaping customers expectations. Stelioss strategy is logical: he compares taking a plane to taking a bus. It is concordant that there should be no catering if the whole physical process is speeded up and if the event of taking a plane is to a greater extent banal.

·         Absence of business class: this gains seats and maximizes capacity, but the barrier is to attract business customers by some other means. Many...

If you want to get a full essay, order it on our website: Ordercustompaper.com



If you want to get a full essay, wisit our page: write my paper