He was 25 years old at the time. Stelios who enjoined people to use his easier first name instead of his confusing last name began thinking about aviation when Virgin Atlantic's Greek franchisee approached him to invest in a London-Athens route. Instead, Stelios decided to start his own airline. The search for successful business models led Stelios to the United States and Southwest Airlines and its principle of price elasticity.
Southwest lowered fares to the extent that it attracted people who would not have otherwise traveled by air. It competed as much with buses as it did with other airlines. At first, easyJet operated a paper airline. It contracted British World Airlines to fly and maintain its two leased Boeing s the model of choice of Southwest Airlines , which it packed with seats a plane. Other early providers of planes and pilots included Monarch Airlines and Air Foyle. EasyJet's base in London was low-rent Luton Airport, formerly used only by charter operations.
A large part of easyJet's strategy was the use of secondary airports, but not as out-of-the-way as those served by the Irish discount carrier Ryanair. EasyJet first linked London with Glasgow beginning November 10, and Edinburgh two weeks later via two leased planes.
Aberdeen was added in January EasyJet focused on short-haul routes, where European fares, mile per mile, were often twice those of their American counterparts, with the aim of halving its competitors' fares. The ideal market for easyJet was one that could support eight to ten flights a day and was operated by two state-owned carriers. Stelio capitalized on the Swiss connection by buying a 40 percent stake in TEA Switzerland, a failing charter airline that was renamed easyJet Switzerland.
Some have suggested the company spent all its revenues on advertising in the beginning. Television ads directed customers to call the company's reservations number 29 29 29; it was also painted on all their planes and book flights with their credit cards, bypassing travel agents. In fact, easyJet's own reservationists were paid by commission only 80p per seat. Our revenues have been benefitting from data projects in late yield initiatives and differential seat pricing.
Sign up to e-mail alerts. Changing the outputs requires altering the inputs. This situation implies that change is implemented on the input. It then transforms them through various processes into outputs via four essential components subsystems. According to Burke, these components entail the labour, persons, informal administration, and the official organisation 9.
The model considers an organisation an open system whose operations are determined by internal and external environments to the extent that inputs from them are changed into outputs.
These outputs comprise organisational manners and presentation. The model holds that an organisation converts efforts into yield via the connections of organisational subsystems. The subsystems of labour imply that all people in an organisation are responsible for every day performance People refer to all skills and abilities that are possessed by the organisational staff, which is necessary in ensuring that an organisation executes its purpose on a daily basis.
These organisational subsystems also focus on emotive backgrounds coupled with expectations of any organisation The informal aspect takes into consideration the moral, ethical, norms, power, and political behaviours that are utilised by organisations in running their businesses, particularly when addressing subjective issues, which potentially alter operations as time changes as Nadler and Tushman observe The model holds that the environment entails any factor that acts outside an organisation.
It incorporates markets, regulatory bodies, financial organisations, suppliers, competitors, and people who have shares in the conduct and the operations of an organisation This observation suggests that organisations do business by interacting with various elements that form part of the larger environment, namely individuals, groups of people, and other businesses.
The chief aim of organisational change entails deploying the appropriate strategies for ensuring that environmental forces become sources of competitive advantage as opposed to inducing troubles in the immediate and long-term operation. People who have stakes encompass the stakeholders and community within which the organisation does its business.
It also has an added responsibility of engaging in socially responsible conducts to foster harmonious interaction with the communities in which it does business. This goal requires the business to allocate its resources in CSR.
Unfortunately, easyJet faces the challenge of setting a specific amount to commit to CSR due to fluctuation in prices of inputs such as fuel among other elements, which eat into its profit margins. The organisation also encounters other challenges such as declining to offer food services free of charge in case of flights that take more than two hours.
Competitive forces influence the pricing policies that are adopted by easyJet so that operation routes that have the highest levels of competition yield minimal profit margins. Operating in any environment requires the adoption of effective strategies. EasyJet pursues low-cost strategies coupled with acquisitions to increase its economies of scale. For these strategies to help in yielding success, the company also invests heavily in building a positive public image through the development of different mechanisms of communicating with clients.
People need to discover that taking the easyJet flight is pocket-friendly, just like purchasing a cup of tea. The company also needs to request its customers to make regular trips with the airline since they will be on the saving side in relation to other airline companies. Indeed, this plan constitutes an effective change promotion strategy of the organisation.
In a decade ago, it mainly promoted itself via painting a booking telephone number on the body of its planes. EasyJet plc ensures that it scans its environment to ensure that the process of making decisions and their implementation replicates the dynamics of the environment. For example, between and , easyJet experienced high problems in its operation akin to the effects of the global financial crisis.
However, its low-cost strategy made it possible to survive through the trying recession time. The strategy ensured that the organisation retained its customers who were also not spared by the crisis. Their household incomes were constrained so that the only option was easyJet plc whenever they needed a low-cost air travel partner. In the performance of this task, the company pays critical attention on any underlying challenges in operation. This performance requires the input of people groups and individuals.
Individuals comprise one of the most crucial facets of any organisation The traits of people and their nature affect organisational performance. While selecting cabin crew, easyJet plc considers the traits of people in terms of their knowledge coupled with skill in handling them people from diverse cultural, ethnic, age, gender, racial, and social class backgrounds.
This claim implies that workers in all organisational departments must possess amicable skills in dealing with people from all diversities. This plan eliminates the probability of conflicts of mandates. A major issue of concern involves training and developing people from mixed cultures.
The formal structure is also bureaucratic in nature to enhance conformity to new strategic directions.
Apart from the prescribed arrangement, organisations also have informal structures. While doing business in a changing operational environment, easyJet is forced to adopt new regulations and the best practices of operation such as CSR.
Indeed, easyJet plc pays charges that are levied when planes land in different nations. While it is the biggest intra-UK airline, it is also the 5 th biggest airline operating within Europe. Therefore, it is highly competitive while compared with rival companies. The traditional low-cost airlines target different market segments in comparison with easyJet. This makes them non-competitors to the company.
In terms of low-cost business strategy, Ryan is the only company ahead of easyJet plc. In terms of effectiveness in delivery of comfortable services, the company provides in-flight entertainment on some planes in the form of drop-down screens. For easyJet plc to capitalise on low fare as a growth and source of competitive advantage strategy, focusing on reduction of the operation cost is an incredible strategy. In earlier years of its establishment, easyJet plc only provided booking services through telephone.
Incentives in the form of a commission are not provided for sales of easyJet tickets. EasyJet plc embraces technology in cutting the human resource expenses. It deploys the internet to accomplish tasks such as booking and checking services.
By utilising the weapon of low fares, the company is able to prevent its clients from seeking alternative service providers. In the economic sense, the lower the prices, the higher the demand.
This effect is more effective for the case of easyJet plc since the company creates price awareness through the internet.
Hence, whenever service consumers think of switching from one airline to another based on fare, the alternative is always easyJet plc. EasyJet plc is also able to align its strategies of success through the selection of the types of aircraft it uses to deliver services to its clients.
In the effort to comply with the inexpensive company idea, easyJet plc has a history of using only one category of planes. Before , when an order for units of Airbus A was placed, the company used Boeing After the delivery of the units, the company has been operating A series.
The A planes operated by the company are unique compared to the standard A planes. Through acquisitions, the company has been able to add more high-capacity couriers into its fleets.
For instance, following the attainment of GB planes, easyJet plc acquired several A and A aircrafts. For an organisation seeking to exploit the low-cost operational strategy, it must align its strategic objectives to mechanisms of enhancing its economies of scale One of such strategies deployed by easyJet plc is the use of couriers with higher carriage capacity such as A, A, and A Acquiring other local airlines to minimise the degree of competition for routes is yet another strategy of operation of easyJet plc.
Since its establishment in , the company has been acquiring various local airlines. The acquired company was rebranded as easyJet Switzerland. The head office for the company was relocated to Geneva IA international airport.
This acquisition made the company acquire an operation base located outside the UK. Apart from increasing the number of planes available to the company, this acquisition also increased the number of operation routes and bases. In , easyJet plc acquired GB Airways. Through acquisitions, the company has been able to acquire large economies of scale, thus making it develop the capacity to exploit the low-cost strategy optimally in comparison with some other airlines in the UK.
The company continues to utilise past-success operational models. The business is derived from the southwest airlines. This model has proved effective in the US airline market. In the European market, the model has made both Ryan and the easyJet plc incredibly cut on their operation costs. Additionally, the model also provides the advantages of higher utilisation of the aircrafts.
The company has also experienced incidences of labour conflicts instigated by the criticism of denial of freedom and the rights to unionise. This posed a major challenge to the company in terms of delivering its outputs driven by the objective of moving people conveniently and immediately. Through the model, the company changed its employment strategy focusing on minimal involvements of unions to accommodation of unions.
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