For this assignment I will be producing a report on the business, Easyjet, which was originally founded by Stelios Haji-Ioannou but has since retired as chairman and director in November of 2002. In this report I will be analysing the: Business Objectives, Type of business, Organizational functions, Organizational Structures, Communication, Production and Quality. Introduction Easyjet is a no frills airline that aim to: To provide their customers with safe, good value, point to point air services.
To effect and to offer a consistent and reliable product and fares appealing to leisure and business markets on a range of European routes. To achieve this we will develop their people and establish lasting relationships with their suppliers. EasyJet is Europe’s leading low-cost airline. Since its first flight in November 1995, the airline has grown from a Luton base offering two routes from Luton to Glasgow and Edinburgh, served by two Boeing 737 aircraft, to one that offers 125 routes from 39 European airports, operating 72 aircraft ( as of November 2003).
The phenomenal growth of EasyJet was boosted by its merger with Go-fly in August of 2002, making the combined company Europe’s Number 1 low cost airline. In October 2002, the airline signed a deal to purchase 120 Airbus which will facilitate the airline’s ongoing growth strategy. During the financial year to 30 September 2002, the company reported pre-tax profits of i?? 71. 6 million on a turnover of i?? 552 million and carried 11. 4 million passengers.
The airline’s shares were formally admitted to the London Stock Exchange on 22 November 2000 at a price of 310 pence per ordinary share. The Company The airline was founded by Stelios Haji-Ioannou, and the family remains the major shareholder. He controls other separate Easy Group companies such as EasyInternetCafe, EasyCar. com, EasyMoney, and EasyValue. There are no “cross-shareholdings” between EasyJet and these other EasyGroup companies.
EasyJet operates independently from the other companies, although some “cross-marketing” agreements do exist. The airline is based at EasyLand, a bright orange building adjacent to the main taxiway at Luton Airport. In an industry where corporate HQs are generally considered to be the ultimate status symbol, it is the very embodiment of the EasyJet low-cost ethos. The Concept EasyJet keeps costs low by eliminating the unnecessary costs and ‘frills’ which characterise ‘traditional’ airlines. This is done in a number of ways:
Use of the Internet to reduce distribution costs EasyJet was one of the first airlines to embrace the opportunity of the Internet when it sold its first seat online in April 1998. Now approximately 90% of all seats are sold over the Internet, making EasyJet one of Europe’s biggest Internet retailers. Maximise the utilisation of the substantial assets Each Boeing new 737 aircraft has a list price in the region of $35 million. Therefore maximising utilisation of each aircraft reduces the unit cost.
Ticket less travel Passengers instead receives an email containing their travel details and confirmation number when they book online. This helps to reduce significantly the cost of issuing, distributing, processing and reconciling millions of tickets each year. No free lunch everybody always jokes about airline food – so why provide it if people don’t want it? Eliminating free catering on-board reduces cost and unnecessary beauracracy and management. It is also an important differentiator between EasyJet and other airlines and a potent reflection of our low-cost approach.
Passengers can purchase food on-board and, ironically, we have won awards for our catering service! The concept of a ‘simple service model’ also reflects a more general point about eliminating other unnecessary, complex-to-manage and costly services, such as pre-assigned seats; interline connections with other airlines and cargo/freight carriage. Efficient use of airports EasyJet flies to main destination airports throughout Europe, but gains efficiencies through rapid turnaround times, and progressive landing charges agreements with the airports.
By reducing turnarounds to 30 minutes and below, EasyJet can achieve extra rotations on the high-frequency routes, thereby maximising utilisation rates of its aircraft. A paperless operation since its launch EasyJet has simplified its working practices by embracing the concept of the paperless office. The management and administration of the company is undertaken entirely on IT systems which can be accessed through secure servers from anywhere in the world enabling huge flexibility in the running of the airline.