WebSome compliance risks are specific to an industry or organizationfor example, worker safety regulations for manufacturers or rules governing the behavior of sales representatives in the pharmaceutical industry. Also, only one type of aircraft is used, in order to minimise maintenance costs. Hopes for an early summer 2020 recovery were dashed when the U.K. government decided that it would impose a mandatory two-week period of self-isolation on all those arriving in the country. It moved aircraft maintenance at three of its U.K. airports, which had been contracted out, back in-house. EasyJet appears to have internal strengths in terms of brand awareness, cash flows, and operational efficiencies. Strategic risk management is the process of identifying, quantifying, and mitigating any risk that affects or is inherent in a companys business strategy, strategic objectives, and strategy execution. While it is often lumped into the same European budget airline category as Dublin-based Ryanair and upstart Hungarian carrier Wizz Air, there are some key differences between EasyJet and those other airlines. The airline began purchasing carbon offsets for the CO2 of all its flights in 2019. We will start by looking at strengths: EasyJet serves diverse ranges of European routes with principle activities in both Leisure and business markets, offering 60 key European routes. These risks may include: Shifts in consumer demand and preferences. The company has announced plans to reduce its 15,000-person workforce by 30%. The airline couldnt simply abandon it without jeopardizing any chance of a quick recovery when the crisis ended.Lundgren also thought the contract made long-term strategic sense. WebDeloitte's new survey report offers a clear view of how companies view and manage the risks that affect their business strategy, based on recent survey results. Another benefit of Internet technology is lower transaction costs at multiple levels in value chain activities. EasyJets new holiday division launched in December 2019, just months before the pandemic took hold. Finally, opportunities may also exist in the area of innovation and alliances, how about a joint venture scheme with Ryanair to maintain and enforce the low cost competitive advantage. Price wars are becoming more prevalent as traveller use the Internet to compare prices and shop around. WebThere are two types of strategies taken in account in the Easy jet such as differentiation strategy which is the strategy in which the industry has the particular rules and Web1) Economic Risks. As a result, it finished 2020 with more aircraft in its fleet than it had at the beginning of the year, despite the pandemic-induced travel doldrums. The carriers were expected to pare their loses to about$38 billionthis year, as vaccines are rolled out across the world. Still, Lundgren could not have been happy with the Flightradar24 map on a Tuesday morning in late April. He added Barton and Lundgren to the list of scoundrels he wanted to oust.Haji-Ioannou kept upping the stakes. The web-based questionnaire was distributed to Egyptian healthcare workers from the 20th of April 2020 to the 20th of May 2020. Given EasyJets cash burn, it needed to raise more moneyand quickly. It is possibly not as good in terms of operations and its inbound logistics. The U.K. is doing well: It had approved two vaccinesone from Pfizer and one from AstraZenecain December and a third, from Moderna, in early January; by mid-May it had given 68% of the adult population at least one shot. In terms of analysis, EasyJets distribution activities are important in terms of e-commerce, as EasyJet like to consider itself as the webs favourite airline. But nothing has been normal for EasyJet since March 23, 2020. But these savings barely stanched the arterial bleed of cash gushing from the companys coffers:In 2019, the airlines operations had generated more than $1 billion in cash. All work is written to order. major banks and insurance companies relocation call centres in Asia. Its not clear what role Haji-Ioannous pressure played in this decision. Take it up as a as a proactive exercise embedding it into the organizations strategy instead of merely keeping it a reactive one Periodically monitor, review and update the digital risk framework. Appendices 1. Procurement and firm infrastructure as a support activity does not add much extra value. However, if EasyJet could significantly differentiate its service over its competitors then it could obtain higher prices. Upgauging the fleet enables easyJet to improve competitiveness on costs. They have focused on expanding into new markets in Eastern Europe. But it was not the same as canceling its contract, and unsurprisingly, Haji-Ioannou was not satisfied. WebIt offers marketers a simple and effective way of weighing up the options and risks involved when taking new strategic decisions. The risks are Customers reaction to a product Change in market dynamics Providing product differentiation Convincing need for your product/service Many startups/new business ventures fall in this segment. Cost advantages might be achieved because of EasyJets efficient use of airports. WebEasyJets first generic strategy is to achieve an overall cost leadership in the low cost airline industry. Since the events of September 11th the airline industry suffered heavily, stocks plummeted and ticket prices are at all time lows. The fuel-efficient jets could help EasyJet reduce its carbon footprint at a time when consumers and governments seemed increasingly likely to hold airlines accountable for their climate impact. This results in high levels of asset utilisation and reduced unit costs. It is not helpful to have a shareholder barking up managements neck the whole time, Morningstar analystKotze says. Weaknesses identified earlier could also offer potential opportunities in terms of development of brand awareness globally. At the same time that it was offloading planes to raise cash and placing others into long-term storage in boneyards, the company still took delivery of 14 brand newAirbus A320 and A321 Neos. Ties are banned except for pilots! For the battered airline, 2020 couldnt end soon enough. The same figure for Ryanair was 2.25 pennies, while it was about 5 for British Airways and 5.37 for Air France and KLM. Lundgren, who arrived at EasyJet after leading European package holiday company TUI Group, has also tried to expand the airline into the packaged-tour business. British Airways. The world economy is however, now on the up post September 11th. These moves enabled EasyJet to reduce its operating costs, excluding fuel, by about 31% in the year through Sept. 30, 2020. A typical approach for risk identification is to map out and assess the value chains of all major products. Worse, the company had discovered the hack back in January but hadnt notified people whose credit card details had been accessed until April, and was only now letting other customers know. Budget airlines that rely on the leisure market make most of their money from April to August. Competitive pressure. Objectives To assess the psychological distress, anxiety, depression, coping strategies, In terms of strategy, many factors are outside the control of the company, such as use of high quality components and low defect rates for its aircrafts. This analysis outlines for EasyJets management how individual activities may be altered to reduce costs of operation or improve the value offered to customers. Noting that EasyJet had failed to say exactly how the deferral affected EasyJets cash burn, the founder said that EasyJet might have engaged in market manipulation by failing to disclose such details and by using overly optimistic forecasts for when the companys revenues and profits might recover. Lundgren says he likes the site because it keeps airlines honest: When customers can see that their inbound aircraft hasnt even taken off from its previous destination yet, theres no point in feeding them the bad news with an eyedropper, as airlines traditionally had done, gradually announcing slightly longer delays. At the end of March 2020, EasyJet grounded its entire fleet. e-commerce) and support activities such as fir infrastructure (e.g. For an independent carrier like EasyJet, finding money was more complicated, especially since the U.K. government initially balked at providing the airline industry with a custom bailout package. And the company continued to insist it saw the opportunity for wins amid the travel industrys carnage: Europes legacy carriers were hurting even worse than EasyJet, which offered the discount airline a chance to gain new flight slots at key airports in Paris, Milan, London Gatwick, and Geneva. But EasyJets contract required itto paythe aircraft maker at least $6 billion through 2023a sumconsiderably greater than the airlines entire current market capitalization. This involves EasyJet retaining funds from operations; hence, a healthy Balance sheet in terms of retained profits. But in the past, he says, most budget airlines have fallen down on execution, unable to make package holidays a profit-driver. If you need assistance with writing your essay, our professional essay writing service is here to help! WebIts evident that EasyJet takes few risks and applies firm business principles while carefully exploring the market. 8. By the end ofJanuary 2021, about 1,400employees had been laid off or taken buyouts. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. The first is the threat posed by new entrants, as with the European deregulation of commercial aviation and the emergent of low cost carriers. In 2019, excluding fuel and in constant currency, it cost EasyJet 4.45 European pennies per available seat kilometer, a key industry cost metric. In a sign of faith in EasyJets prospects, the bond sale was almost six-times oversubscribed. The idea of remote working can also Since the start of the pandemic, it has sold and leased back58aircraft, raising$2.1 billion. The sales process is efficient, as EasyJet sells directly to customers, instead of using external sales teams. The best of the best: the portal for top lists & rankings: Strategy and business building for the data-driven economy: Commercial airlines net profit in Europe 2013-2022, Commercial airlines change in passenger traffic in Europe 2013-2022, Number of passengers uplifted by United Kingdom airlines 2013-2021, British Airways - worldwide revenue 2010-2021, Leading airlines in Europe based on passenger numbers 2021, Net profit of commercial airlines in Europe from 2013 to 2022 (in billion U.S. dollars), Commercial airlines EBIT in Europe from 2013-2022, Earnings before interest and taxes (EBIT) margin of commercial airlines in Europe from 2013 to 2022, Year-on-year passenger traffic change of commercial airlines in Europe from 2013 to 2022*, Turnover of the air transport industry in the United Kingdom 2008-2018, Annual turnover of the air transport industry in the United Kingdom (UK) from 2008 to 2018 (in million euros), Total number of passengers uplifted by airlines based in the United Kingdom (UK) from 2013 to 2021 (in millions), Worldwide employment by registered airlines in the United Kingdom 2002-2020, Number of people employed worldwide by UK-based airlines between 2002 and 2020, Volume of turbine fuel consumed in aviation in the United Kingdom (UK) 2000-2020, Amount of aviation turbine fuel consumed annually in the operation of aircraft in the United Kingdom (UK) between 2000 and 2020 (in million metric tons), Annual revenue of easyJet plc from 2009 to 2021 (in million GBP), EasyJet plc: annual revenue by region 2018-2021, Annual revenue of easyJet plc from 2018 to 2021, by region (in million GBP), Annual operating expenses of easyJet plc from 2009 to 2021 (in million GBP)*, Annual earnings before interest, taxes, depreciation, amortization and rentals (EBITDAR) of easyJet plc from 2009 to 2021 (in million GBP), Annual operating profit of easyJet plc from 2009 to 2021 (in million GBP), Annual net profit of easyJet plc from 2009 to 2021 (in million GBP), Number of passengers carried by easyJet 2009-2021, Number of passengers traveling with easyJet from 2009 to 2021 (in millions), Passengers uplifted by EasyJet in UK 2008-2020, Number of passengers uplifted by EasyJet Airline Company Ltd in the UK from 2008 to 2020 (in millions)*, Number of seats flown on easyJet flights between 2011 and 2021 (in millions), Easyjet passenger transport volume 2013-2021, Passenger transport volume of Easyjet from 2013 to 2021 (in million revenue passenger-kilometers), EasyJet's passenger load factor 2009-2021, Passenger load factor of EasyJet between 2009 and 2021, Distance flown by EasyJet's passenger aircraft worldwide 2008-2020, EasyJet Airline Company Ltd's passenger aircraft kilometers flown worldwide from 2008 to 2020 (in million kilometers), Leading airlines in Europe in 2021, based on passenger traffic (in millions), Leading European airlines based on revenue 2021, Leading airline groups in Europe in 2021, based on revenue (in billion U.S. dollars)*, Liquidity balances of leading European airline groups 2019, European airlines with best liquidity as a share of 2019 revenue*, Liquidity equivalent days of revenue of the leading European airline groups 2020, Liquidity equivalent days of revenue of the leading European airline groups in 2020*, Number of passengers uplifted by United Kingdom airlines 2021, Leading airlines in the United Kingdom in 2021, by number of passengers uplifted (in millions), British Airways Plc's worldwide revenue from FY 2010 to FY 2021 (in million GBP), British Airways and subsidiaries: number of passengers carried 2011-2021, Number of passengers traveling with British Airways and its subsidiaries from 2011 to 2021 (in 1,000), Annual revenue of Ryanair from 2010 to 2022 (in million euros), Number of passengers carried by Ryanair 2011-2022, Number of passengers traveling with Ryanair from 2011 to 2022 (in millions). easyJet has refined its strategy to drive our purpose of making low-cost travel easy. The airline has differentiated itself from other budget carriers by serving top-tier European airports. The54-year-old Greek-Cypriot entrepreneur hasnt had a formal management role in the airline since he stepped down as chairman in 2002, but he remained a major shareholder, owning more than a third of the company before the pandemic hit. Our mission to make business better is fueled by readers like you. When the risks are specific to a certain activity the risks will be managed, and maintained A no frills strategy is often associated with low cost airline companies like EasyJet. It is evident that having only one collaborate is risky due to the possible delays in time. Standardisation in its activities as an airline leads to both economies of scale and a simpler product, which is cheaper and easier to distribute. In the long term, this is concerned with the extent to which the organisation is operating profitably. EasyJet raised $1.5 billion by selling seven-year bonds, with a 1.875% annual interest rate. In practice, this means EasyJet has little chance of beating Ryanair or Wizz head-to-head on routes and pricing. Such lower costs benefit EasyJet initially as innovation is rewarded. Therefore, it is vital for EasyJet to have a thorough comprehension of their costs and cost drivers. To what extent does EasyJets concentration on Those planes are Airbuss most fuel-efficient models, offering operational savings for EasyJet in the long run. The minute consumers start to make a choice based on this, and I think they will, an emphasis on sustainability will pay off, says BCG consultant Molenaar, and EasyJet has been out front in preparing for this.. Under pressure from airlines, it later lifted this policy for some European destinations, only to reimpose it as infection rates soared again in Spain and France. 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Easyjets efficient use of airports and cost drivers role Haji-Ioannous pressure played in this decision on reviews.co.uk offer...