EasyJet: The 'Easy' Way to Succeed


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Case Details:

Case Code : BSTR057
Case Length : 16 Pages
Period : 1995 - 2003
Organization : EasyJet
Pub Date : 2003
Teaching Note : Available
Countries : Europe
Industry : Aviation

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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EXCERPTS Contd...

Not Always Easy

EasyJet had become a successful airline within a very short time. After the merger with Go, it was able to overtake long time low-cost leader Ryanair to the top position. However, analysts wondered how long this model of success could sustain itself.

For one thing, easyJet's prices were around 60 to 70 percent higher than those of Ryanair. Ryanair constantly exploited this fact in its marketing, calling itself the only truly low-cost airline. Ryanair CEO O'Leary even declared that Ryanair would reclaim the number one spot in the low-cost airline market before long. Secondly, the earnings of easyJet were susceptible to price swings, as the airline did not hedge fuel costs. This could be a major problem in case of a fuel crisis. Thirdly, easyJet's break-even load factor (the percentage of total available seats to be sold each month to break even) was 71 percent compared to competitor Ryanair's 53 percent. This meant that easyJet needed more passengers than Ryanair to break even...

Exhibits

Exhibit I: The Easygroup
Exhibit II: Income Statements
Exhibit III: Growth in Passenger Numbers
Exhibit IV: Awards and Accolades Received by Easyjet
Exhibit V: Comparative Chart

  

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