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SWOT Analysis of Easyjet Airline Company

SWOT Analysis of Easyjet Airline Company

EasyJet Airline Company

Company: EasyJet
CEO: Johan Lundgren
Year founded: March 1995, London, United Kingdom
Headquarter: Luton, United Kingdom
Number of Employees (2018): 14,000
Public or Private: Public
Ticker Symbol: EZJ
Market Cap (March 2019): $ 7.409 B (Average)
Annual Revenue (Dec 2018): £ 5.8 B
Profit |Net income (Dec 2018): $ 460 M

EasyJet Airline Company Overview

The company EasyJet is a reputed Airline. It is one of the British low-cost airliners which has to headquarter at Luton Airport, London. It operates in both domestic and international routes and possesses scheduled services covering over 1,000 routes that cover more than thirty countries located globally. This Airline Company is listed on the stock exchange of London and is considered as a major performer of the FTSE 250. Casestudyhelp.com can assist EasyJet in carrying out SWOT analysis if requested by EasyJet.

SWOT analysis of EasyJet reveals the following criteria:

Strengths of EasyJet

Pricing: Great advantage of EasyJet is its low-cost price structure compared to legacy carriers. Its price list is about 50% lower than the major carriers in the short-haul routes and cost is lower by 20% to 40% below most other lower-cost Airliners. Additionally, using its fare advantage, EasyJet’s remarkable revenue management system can adjust fares to the level of demand for maximising its revenues.

Unit cost: Sustained unit cost can only way to avail continual price advantage. EasyJet’s cost per seat advantage compared to the major flagship carriers got a similarity to average price differential indicated above. This unit cost advantage is rooted in multiple numbers of factors comprising high seat density as well as high load factors.

Network and market share: EasyJet has a presence in 49 of the top 100 market pairs in Europe, which is higher than any other Airlines. The critical issue is, 46 of these involve primary class airports, compared to 24 primaries own by Ryanair and 34 by IAG. This advantage is enjoyed by EasyJet due to availability from a large proportion of the European passengers and its primary category of airports benefit the company to its higher yields.

Status in Europe: Since its last two Boeing 737s eliminated from the fleet in early 2012, EasyJet’s fleet has added to its Aircraft family, the Airbus A320, providing advantages in terms of certification of the crew, their training and maintenance of remarkable quality while playing in European countries.

EasyJet fleet: Although EasyJet is still considered as a low-cost carrier offering profit to its passengers, EasyJet has improved its client and brand perception very recent years. It has already owned a superior brand name, primarily in the UK, and this trend is presently spreading to other countries and has acquired good customer satisfaction.

Financial parameters: Under its new management headed by CEO Carolyn McCall and CFO Chris Kennedy, it has improved its financial performance continually during the past couple of years. Its strong balance sheet and cash generation and returns on Investment overflow the capital cost make its superior financial advantage which is very rare in the airline industries.

Weaknesses of EasyJet

It is a significant issue that the Airfare of EasyJet not lowers than Ryan air Airlines. As indicated above, EasyJet enjoys a unit cost advantage against most of its competitors, excluding Ryanair. EasyJet tagged its cost per seat at about 50% more than Ryanair’s, so it is vulnerable to direct competition on airport basis or city to city basis.

Seasonal character of earnings: Industrially speaking, EasyJet is dependent on its seasonal earning, with its profits generating more in summer which continues from April to September to neutralise the loss-making winter.

Opportunities of EasyJet

Market growth: In spite of its cyclical and ongoing sluggish phase, this aviation sector continues growth in the medium to long term. EasyJet, as a reputed Airliner brand and market value, enjoys a good growth. Moreover, given its cost and price advantages and current capacity cuts from most of its competitors has an added advantage.

Fleet: EasyJet is presently assessing its options for a major new order of Aircraft to expand its drive for fleet growth from 2017 and a further increase in its future fleet addition plans. Based on these trends, it can be predicted that the market growth of EasyJet shall be in the order of 3% to 5% per year till 2020.

Passengers strength: It was reported In 2011 that about 18% of EasyJet’s passengers were travelling for business purposes and its Airlines has a target to increase this strength to 20%-24% over five years. This initiative if becomes viable shall benefit its yields.

Seat allocation: After the trials run on 4-5% of its capacity that commenced on April 2012, EasyJet declared that it would roll out all allocated seats through its website. Although management is not so confident about its impact on its revenues.

The Threats of EasyJet

Govt policies and strict aviation regulations may go against the interest of EasyJetIn low-cost carrier, segment customer enjoys a high bargaining power that may go against EasyJet
Participation of Major players in the low-cost carrier segment may be a probable threat.