Easy Jet

• Oxford Brookes University

MSc Marketing

Module Title : Strategic Management

Easyjet Case Study

James Richmond

No. 04073431

Assignment Submitted Monday 20th December 2004
1.   The Key Environmental Drivers in the Airline Industry

(appendix ,   PESTEL / Porters Five forces)
The airline industry is a turbulent and competitive sector, influenced by multiple environmental variables/driving forces. How these key drivers influence individual sectors within the industry differ.

Political issues, such as the threat of ongoing war in the Middle East, and more recently issues in Sth. America have driven oil prices up. This is intrinsically linked to the cost of aviation fuel.   Whilst these political factors have direct economical ramifications such as increasing fuel costs, increased congestion, environmental restrictions, higher security, and insurance, they also have potentially indirect devastating socio-cultural effects for the airline industry, upon the attitudes towards air travel. The result of these shifts in attitudes cause a snowball effect throughout the industry. Where by, a decrease in air travelers, impacts upon airline profits, whilst the requirements for increased airport security, result in a slower turn-around for operators, increasing costs for the airlines, and in turn raising the cost of air tickets.   Large numbers of network carriers have resulted in a substantial overcapacity in the market, which was exacerbated by the events stemming from September 11th.   These all reflect the increased perceived risk of terrorism.

Surprisingly these key drivers have proven to be potentially advantageous for the ‘no frills’ airlines.   An increase in low-cost airline passengers reflects, or more so suggests, a general consensus that these airlines are less likely to be targeted by terrorists.   Whilst major airlines suffered immensely post 911, the European low-cost airlines entered a period of unprecedented growth.   We could also ascertain...