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EasyJet plc
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== Operations == === How did the idea of the company come about? === EasyJet originated from its founder Stelios Haji-loannou who became interested in the idea of establishing an airline after initially being approached by Virgin Atlantic as a potential investor. Stelios particularly liked the business model of adapting prices to make air travel competitive with more traditional methods of transport such as buses. He believed this would welcome many more customers that usually didn't choose to fly.<ref name=":0">Rigby, Rhymer (1 August 1997). https://www.managementtoday.co.uk/uk-cheap-cheerful/article/410853</ref> Stelios then went to on to set up EasyJet in 1995, employing 70 people. Stelios also established the easyJet headquarters known as easyLand built at Luton airport who offered Stelios a 15,000 square feet building to help the new company. Initially easyJet flew just two routes from Luton to Edinburgh and to Glasgow, supported by the advertising campaign "Making flying as affordable as a pair of jeans - £29 one way".<ref name=":1">https://uk.marketscreener.com/quote/stock/EASYJET-PLC-10093880/company/</ref> The first international flight came in April 1996 when easyJet started the route to Amsterdam, competing with British Airways and KLM. These two competitors had different responses to the emergent company with BA sticking to their strategy whereas KLM allegedly responded with a "predatory pricing strategy" which led to the EU investigating.<ref name=":0" /> === What's the mission of the company? === EasyJet's strategy is to make low-cost travel easy. The mission is to build on easyJet's "structural advantages" in the European aviation market, helping easyJet move closer towards its destination of being Europe's most loved airline. <ref name=":4">https://corporate.easyjet.com/about/strategy</ref> Key elements of easyJet's mission include: # '''Building Europe's best network:''' easyJet's ambition is to build the best network in Europe. To do this, they will continue to lead in their core markets, building scale in Europe’s largest and most attractive travel markets. This will offer customers choice in terms of destination and schedule and will ensure highly efficient operations. In many cases, easyJet’s core markets are slot-constrained and we will continue to grow in these markets by building the slot portfolio as opportunities arise and through up-gauging as the average seats per aircraft increases in coming years. In addition easyJet will continue to build out their destination bases in top leisure locations. <ref name=":2">https://corporate.easyjet.com/~/media/Files/E/Easyjet/pdf/investors/results-centre/2022/annual-report-2022.pdf</ref> # '''Transforming revenue:''' easyJet has delivered exceptional revenue performance, especially in the ancillary revenue area. Continuing to develop and build in this area is a key priority in delivering the strategy, ensuring that they are able to maximise the revenue potential of the market. To deliver on this priority easyJet will continue to invest in its strong revenue management capability, ensuring that its market-leading position is maintained by developing new industry-leading capabilities which creatively leverage new sources of data and optimise ticket and ancillary revenue together. Additionally, they will continue to invest in diversifying our sources of revenue with an ongoing focus on easyJet holidays.<ref name=":2" /> # '''Delivering ease and reliability:''' To deliver ease and reliability, easyjet will continue to build on their areas of strength, in particular the digital booking and on-the-day experience and exceptional onboard service. This will be supported by investments in other key areas of the customer journey, in particular the airport experience, and continuing to improve On-Time Performance and reduce cancellation rates. They gauge this mission through KPIs such as Customer satisfaction (%) and On-Time Performance (%). Sustainability continues to be a priority for easyJet and its customers. The net zero roadmap recently launched demonstrates their commitment to leading in an area which is likely to be a key purchase driver in the future.<ref name=":2" /> Their KPI to measure sustainability is CO2 emissions per passenger kilometre (g). # '''Driving a low-cost model:''' a highly efficient point-to-point network to deliver simplicity in operations and scale within airports. Providing disaggregated products and relevant bundles of products, allowing customers to pay for what they value. Ensuring they have a fleet with exceptional fuel efficiency and low maintenance costs. And most importantly, it means always challenging cost, ensuring that where easyJet spends it delivers tangible value to our customers. <ref name=":2" /> === What are the main offerings of the company? === [[File:Easyjet network map.jpg|thumb|Easyjet's network map<ref name=":4" />]] The main service easyJet provides is flights all across Europe and North Africa. Easyjet provides a number of different fares to try and accomodate to everyone's needs and desires, these include: * '''Standard fares:''' includes the flight and an allowance for a small cabin bag. The customer can then decide if they would like anything else such as a seat reservation or more baggage but this comes with added fees. * '''FLEXI fares:''' includes a large cabin bag, a hold bag, a 'Up Front' seat, on board meal deal, fast track and speedy boarding. In addition this fare offers free flight and route changes within 1 day either side of the booked day, with some restrictions applied. FLEXI customers are also entitled to the Gateway lounge in Gatwick North Terminal. * '''EasyJet Plus:''' offers members Plus Bag Drop, no fee for choosing the seat, an additional cabin bag, fast track security and Speedy Boarding. * '''Flight club:''' this is an invite only club for easyJet's most frequent travellers. The benefits include fee-free changes, a price guarantee (compared to other airline's fees), a price promise (if price ever decreases after booking a voucher worth the difference will be issued) and a preview of schedule seat releases and sales to let the mmembers know early what's coming up. EasyJet also has a holiday business, called '''easyJet holidays''', aimed at shaking up the sector with flexible, great-value holidays to handpicked hotels across Europe. UK customers can book Europe’s most loved hotels, together with any easyJet flight, on one platform. This will help to reduce the seven hours holidaymakers spend on average searching for a holiday, according to research by the new holiday company. EasyJet holidays customers will benefit from ultimate flexibility and can choose exactly how many nights they wish to stay thanks to the strength of the easyJet fleet and its flying schedule. EasyJet holidays is directly contracting hotels for the first time, giving holidaymakers the choice of staying at handpicked hotels. The range of high-quality hotels has been carefully selected by experts, with bespoke collections carefully designed to suit every holiday type.<ref>https://www.easyjet.com/en/holidays/media-centre/press-releases/easyjet-launches-new-holiday-business</ref> === Impact of COVID-19 and Recovery Process === During the COVID-19 pandemic, EasyJet, like many other airlines, faced significant challenges. The company reported a full-year loss of £1.3 billion, marking the first annual loss in its 25-year history. The pandemic led to a sharp decline in air travel demand, and the airline was forced to cut back on its flights. However, the announcement of positive news on COVID-19 vaccines, particularly from Pfizer and BioNTech, had a notable impact on the company's bookings. Sales surged by 50% in a week following the vaccine news. The airline responded to the reduced demand and travel restrictions by cutting around 20% of its planned winter schedule. Despite the challenges, EasyJet's CEO, Johan Lundgren, remained optimistic about the future, citing that the longer travel restrictions were in place, the more pent-up demand was building. The positive outlook was further bolstered by holiday bookings for summer 2021, which were significantly ahead of previous years, albeit driven partly by customers who had rebooked using vouchers from cancelled flights in 2020. Lundgren also acknowledged that short-haul and leisure routes, which formed the core of EasyJet's network, were expected to recover more quickly compared to long-haul and business travel. The airline aimed to open seasonal bases in Málaga and Faro for the upcoming summer season, indicating confidence in the recovery potential. While the company faced financial losses, it took measures to improve its liquidity. EasyJet raised £3.1 billion in cash between April and November 2020 through various means, including the sale and leaseback of aircraft and deferring the delivery of new planes. However, cost-cutting measures also resulted in a significant number of redundancies, affecting up to 4,500 employees.<ref>https://www.theguardian.com/business/2020/nov/17/easyjet-loss-covid-cut-flights-vaccine-bookings</ref> More recently, EasyJet indicated signs of recovery as bookings for peak periods, such as Christmas, the ski season, and other holidays, returned to pre-pandemic levels. The airline dramatically reduced its full-year loss to £178 million, showing a significant improvement from the previous year. EasyJet's CEO, Johan Lundgren, noted strong demand during peak periods and cited a survey indicating that three-quarters of people were interested in traveling next year, despite the cost-of-living crisis. The company also implemented measures to cope with rising costs, including increasing ticket prices as jet fuel and other expenses rose. Despite these increases, half of all tickets sold until the following September were expected to cost less than £50, aligning with EasyJet's reputation for offering value to customers. Destinations in the eastern Mediterranean, such as Turkey, Egypt, and Greece, were particularly popular among travellers. While the airline witnessed strong demand during peak periods, it acknowledged that stimulating demand during quieter times remained a challenge. However, EasyJet expected to fully return to 2019 capacity levels by the summer of 2023, indicating a positive outlook for the recovery. To address staff shortages and avoid travel disruptions, EasyJet began early recruitment for the next summer season and received a remarkable response with 19,000 applications for 2,000 jobs. The company also engaged in conversations with contractors and the government to ensure labour availability for the aviation sector. In summary, EasyJet faced substantial losses due to the COVID-19 pandemic, but the news of effective vaccines resulted in a surge in bookings. The airline implemented various measures to manage its finances, including raising cash and reducing costs. With bookings for peak periods returning to pre-pandemic levels and an optimistic outlook for the next summer season, EasyJet appears to be on a path of recovery, although challenges related to stimulating demand during quieter times and managing rising costs persist.<ref>https://www.theguardian.com/business/2022/nov/29/easyjet-bookings-covid-losses-tickets</ref> '''Sustainability''' Aviation accounts for 2.5% of global CO2 emissions according to a report by 'Our World In Data' (2020). Planes emit CO2 from burning fuels. On top of CO2, aircraft engines emit other gases – nitrous oxides (NOx), sulfur dioxide (SO2) and water (H2O) – and particulate matter (soot). When emitted at high altitudes, these emissions affect atmospheric physical and chemical properties (source-Transport and Environment). If looked at distance/consumption, the most fuel is consumed during take-off and climbing. Also the higher the flight range, the higher the share of fuel consumed while cruising. EasyJet's main focus is on short-haul flights (low range), which might lead to lower fuel consumption while cruising. However, due to frequent takeoffs and landings on short-haul routes, the distance/consumption ratio is affected as these phases significantly contribute to fuel usage. Sustainability in aviation could be achieved through improvements in aircraft and engine efficiency, the use of sustainable aviation fuels, more efficient operations and airspace, the use of robust carbon offsets and investment in innovative carbon removal solutions could address the residual, according to a report by Sustainable Aviation. easyJet plans to achieve sustainability through the combination of six drivers: fleet renewal, operational efficiencies, airspace modernisation, sustainable aviation fuel (SAF), zero carbon emission aircraft and carbon removal technology. easyJet has 168 A320neo family aircraft in its orderbook. This more efficient Airbus NEO aircraft will reduce fuel burn, carbon emissions and related operating costs. They will also use Sustainable Aviation Fuel (SAF) in line with their net zero roadmap and have signed a long-term agreement with their main fuel supplier: Q8Aviation for the next 5 years. Currently SAFs are known to be more expensive than traditional jet fuel, so it carries the burden of affecting operating profits. Nonetheless these sustainability initiatives carries the potential of becoming key differentiator in the long term.
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