XFDS.2.1 Political Factors

In 1990 the European deregulation of commercial aviation coincided with the expansion of the low cost airline industry. The LCC in the industry were able to take advantage of the relaxed laws and expand their operations. On the other hand, threat of war in the East Euro and EU east enlargement may provide access to viable the new markets were also the political factors of EasyJet.

3.2.2 Economical Factors

Mercer Management Consulting (2002) reported that the low cost airline market conforms to the criteria of three components. Firstly, it provides a simple product consisting of no seat reservation, free seating, and adequate in flight service. They are a genuine no frills airline with a simple product offered to the market. Webster (2004) noted EasyJet’s ability to maintain a high degree of customer focus through a new, user friendly website with an improved booking process.

Figure 2: “Impact of Low Cost Airline” Mercer Management Consultancy 2002

Secondly, mergers and acquisitions is also the low cost airline market’s characteristic; the expansion of existing low cost airlines and finally, market exits as a result of bankruptcy.

Furthermore, the low cost carriers operate short haul, point to point traffic with short frequencies, pursue aggressive marketing campaigns and deal with secondary airports. EasyJet, however, has differentiated in this respect by dealing with major hub airports e.g. Gatwick.

Finally, the industry operates a low cost ethos, which is maintained by lean sales, high productivity of resources, low maintenance costs and low wages.

3.3.3 Social Factors

The low cost carriers position their product to leisure travellers and non business travellers, however EasyJet has differentiated by targeting the business and leisure segments. This behavioural segmentation creates a more dynamic edge in comparison to their competitors who solely focus on leisure travel. Thus, EasyJet must ensure that its...

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