Seminar paper from the year 2015 in the subject Business economics — Accounting and Taxes, grade: 1, 0, University of Newcastle, language: English, abstract: Luton-based Easy Jet is UK’s largest low-cost airline, employing 8, 945 people and carrying 61m passengers annually. Easy Jet follows Porter’s low-cost strategy, effectively distinguishing itself from other LCCs by competing against established flag-carriers at primary European airports. The company streamlines its operations to cost-reduction, facilitated by a strong capital structure.
Europe’s airline industry has experienced a structural change since the recession in 2009, with major legacy-carrier continuously reducing their short-haul-capacity. Simultaneously, a KPMG study revealed that the cost gap between traditional and budget airlines has recently shrunk by 30%.
Easy Jet’s business model distinctly differs from LCC-pioneer Ryanair as the Irish have strategically built a route network focused on serving secondary airports and thereby managed to keep the cost per seat 50% below Easy Jet. However the Britons cost-control strategy resulted in a 48% favourable cost base compared to competing legacycarrier such as IAG.
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