Essay About Airline Business And Unnecessary Costs

Software EngEssay Preview: Software EngReport this essayExecutive SummaryIts in airline business, providing the cheapest source to travel around all European countries; its passenger growth has been steady over the past years with around 20% for the past 3 to 4 years. This airline has a concept that keeps costs low by eliminating the unnecessary costs and frills which characterise traditional airlines. This is done in a number of ways such as ,Use of the Internet to reduce distribution costs,Maximise the utilisation of the substantial assets,Ticketless travel,No free lunch,Efficient use of airports,Paperless operations etc…

The airline was founded by Stelios Haji-Ioannou, and the family remains the major shareholder. In March 1995 easyJet incorporated to offer low-cost scheduled air services within Europe.The chairman of Easyjet Stelios is voted London Entrepreneur of the Year at the London Electricity Londoner of the Year Awards.The company was also voted “Best Low Cost Airline” by readers of Business Traveller magazine.

In short tis is a profit making making company with cheap air travel business aroung the europe.AbstractCompany Profile/ overviewThe Companys mission statement“To provide our customers with safe, good value, point-to-point air services. To effect and to offer a consistent and reliable product and fares appealing to leisure and business markets on a range of European routes. To achieve this we will develop our people and establish lasting relationships with our suppliers”.

The airline was founded by Stelios Haji-Ioannou, and the family remains the major shareholder. He controls other separate easyGroup companies such as easyInternetCafe, easyCar.com, easyMoney, and easyValue. There are no “cross-shareholdings” between easyJet and these other easyGroup companies. easyJet operates independently from the other companies, although some “cross-marketing” agreements do exist. The airline is based at easyLand, a bright orange building adjacent to the main taxiway at Luton Airport. In an industry where corporate HQs are generally considered to be the ultimate status symbol, it is the very embodiment of the easyJet low-cost ethos.

The concept is easyJet keeps costs low by eliminating the unnecessary costs and frills which characterise traditional airlines. This is done in a number of ways such as ,Use of the Internet to reduce distribution costs,Maximise the utilisation of the substantial assets,Ticketless travel,No free lunch,Efficient use of airports,Paperless operations,

The airline was established on 18 October 1995 and started operations on 10 November 1995. It was launched by Stelios Haji-Ioannou with two Boeing 737-200 aircraft wet leased from GB Airways and operating two routes: London Luton to Glasgow and Edinburgh. Its early marketing strategy was based on making flying as affordable as a pair of jeans and urged travellers to cut out the travel agent. This caused much outrage among travel agents. In March 1998 it purchased a 40% stake in TEA Switzerland, renamed EasyJet Switzerland. easyJet was floated on the London stock exchange in October 2000. Operations were boosted in 2002 with the acquisition of rival airline, London Stansted based Go Fly. In December 2003 easyJet announced it would open a new hub in Berlin, at Schцnefeld Airport, from which it started flying on 11 routes from May 2004. easyJets main shareholder is Stelios Haji-Ioannou whose family owns 17%. It also holds a 49% stake in easyJet Switzerland.

In October 2004 the FL GROUP, the owner of airlines Icelandair and Sterling, purchased an 8.4% stake in easyJet. Over the course of 2005, FL increased its share in the company periodically to 16.9%, fuelling speculation that it would mount a takeover bid for the UK carrier. However, in April 2006 the threat of takeover receded as FL sold its stake for Ђ325m, securing a profit of Ђ140m on its investment.

In November 2005 chief executive Ray Webster stood down after 10 years at the helm. He was replaced by ex RAC/Lexx Group chief, Andy Harrison.It has been prevented from launching its Milan Malpensa-Olbia route in April 2006 by the Italian aviation authorities. The route has been assigned to Meridiana as a public service obligation route. The Italian authorities have granted exclusivity in return for fixed low fares for Sardinian residents on routes from Milan and Rome to the Sardinian airports of Alghero, Cagliari and Olbia

Chapter1Introduction and literature reviewJohn Sloman says in economics terms, deregulation is where the government removes official barriers to competition. One of the first industries concerned by regulation have been the transport and telecommunications sectors.Taking on this advantage at a very early stage was easyjet.Borrowing their business model from American air carrier Southwest, easyJet and its Republic of Ireland-based rival Ryanair are by far the largest low cost airlines in Europe, and the rivalry between them is intense, especially on Ryanairs side from its high profile chief executive Michael OLeary. The two companies have slightly different strategies. easyJet flies mainly to leading airports while Ryanair uses far more secondary airports to reduce costs. easyJet places more focus on attracting business travellers as well as leisure travellers, although all its aircraft have single-class cabinsComparisons with Ryanair

Use of the Internet to reduce distribution costs easyJet was one of the first airlines to embrace the opportunity of the Internet when it sold its first seat online in April 1998. Now approximately 95 % of all seats are sold over the Internet, making easyJet one of Europes biggest Internet retailers. Maximise the utilisation of the substantial assets Maximising utilisation of each aircraft significantly reduces the unit cost. Ticketless travel Passengers instead receive an email containing their travel details and booking reference when they book online. This helps to reduce significantly the cost of issuing, distributing, processing and reconciling millions of tickets each year. No free lunch Everybody always jokes about airline food – so why provide it if people dont want it? Eliminating free catering on-board reduces cost and unnecessary bureaucracy and management. It is also an important