M5-Strategy-S1 - Summary EasyJet Case

Full article:

EasyJet case

Founder: Stelios Haji-Ioannou Founded in 1995 with family money Start capital: 5 Mln Pound First flight: 29 Pound, slogan "Fly to Scotland for the price of a pair of jeans" Modelled after South-West Airlines:

• One type of aircraft
• No in flight meals
• Rapid turnaround time
• High Air craft Utilsation

But added new concepts:

• Avoided travel agents
• No tickets
• Flew a brand new Boeing maximizing seat capacity
• No free drinks of peanuts: everything for sale
• One free item: in-flight magazine 'easyRider'

Everything was low costs:

• No secretary
• Paperless office

Savings:

• 14 pound per passenger for a meal
• 10 pounds for using Luton in stead of Gatwick airport
• No business class allowing for more seats
• Internet sales (60% of revenue)
• Discount for internet bookings
• No computer reservation systems
• Increasing flight time from average 6 to 11.5 hours per day (needed 2 in stead of 3 airplanes)
• No imbursements for missed flights (only 4% of customers failed to show up for their flight)

Earnings:

• Profitable in 1999, though small. 1.5 pound per passenger

Stelios never compromised safety. Personel:

• Reservation agents were paid on commission bases (per seat sold)

Marketing:

• No market research: made sure he got direct customer feedback himself.
• Any opportunity to get in the news was taken