Our latest EasyJet PESTLE Analysis looks at the business in a macro-economic view to see how its prospects truly are in the airline industry.
If you are from the UK then you already know what we are talking about. In case you aren’t familiar with the brand, today you will be. EasyJet which is branded as “easyJet” hails from Luton, England and it is a multinational low-cost airline. It is now a part of easyGroup conglomerate because it has subsidiaries in Switzerland and Europe as well, giving the world EasyJet Europe, EasyJet Switzerland and EasyJet England in total.
The company was founded by Stelios Haji-Ioannou, back in 1995 when it only had 79 employees and as of 2021, they have an impressive 14,000 employees all over Europe! The owner got the inspiration to start this venture from Southwest Airlines, hence his business model being very similar. The conglomerate as a whole has about 300 aircrafts and 29 bases scattered across Europe, the largest of which is Gatwick.
They also have the honor of being named as the second-largest budget airline to carry passengers; a total of 65 million. It all sounds very impressive no doubt. They have a good thing going on for themselves, but is it all smiles in reality? Here we have an EasyJet PESTLE Analysis to look at the business in a macro-economic view to see how its prospects truly are.
Political
There is no secret that a country’s politics has a huge impact on its business environment. Whether a country is business “positive” or the opposite becomes a matter of how stable and strong the politics are. Let’s take a look at some of the political factors which have an impact on EasyJet’s business.
As we all know, the UK decided to depart from the European Union for quite some time now, naturally, this move had an effect on many UK-based businesses including EasyJet. The Brexit transition period was over on December 31st, 2020 meaning that from now on, every UK national is not considered an EU national. Fair enough, no?
EU-based businesses such as this one because they have a significant portion in Europe as well need to have a majority shareholding belonging to the EU. In the case of EasyJet, the majority shareholding belongs to the UK which has to be fixed; the major chunk of it has to be in the EU to keep it viable as a business. They have a contingency plan for this situation.
Back in 2019, French President Emmanuel Macron in an attempt to streamline the pension policy throughout the country led people to understand that many of them would not be earning as much as they expected thereby leading to strikes affecting some airlines including EasyJet.
Economic
Many businesses have suffered at the hands of the cruel and long-lasting global pandemic of covid-19. EasyJet was no exception, unfortunately. As we understand that many people restricted their traveling plans in light of the SOP’s for the virus, airlines probably suffered the worst business out of them all. EasyJet had to ground its entire fleet on 30th March of 2020 and later on even had to permanently shut 3 bases.
The company, unfortunately, lost a huge sum of money back in the first half of 2019 due to extremely high fuel prices; fuel is an absolutely essential component for an aircraft. They lost a good £275m.
However, after the recent announcement of a much less restrictive policy of traveling internationally to or from the UK, EasyJet has reported a sudden surge in the amount of tickets being sold. Some countries which have been declared safe for travelling include France, Germany, Austria and Norway; all of which happen to be in Europe.
This isn’t entirely good news because as long as the pandemic lasts, there is no telling of the policies that will arise from governments all around the globe; even if the UK government does not hinder the flight schedule anytime soon, other countries in Europe might thereby require EasyJet more restrictions.
The British pound is not doing so well in this economy, which is not the best news for EasyJet because of their low-revenue model of business; each seat brings less profit for the airline as the pound is subjected to devaluation.
Socio-cultural
Whereas getting into aviation is a very promising and fruitful career choice for people especially in developed countries such as the UK, however what remains to be an age old problem in this field is the associated sexism; it is a heavily male-dominated field. EasyJet has been working on this matter for quite a few years at this point.
Their recent efforts include hosting online lectures for students in the UK, where they have their female pilots leading the cause to give children a realistic portrayal of what to expect in this career choice as well as to inspire more young girls to get into aviation.
Back in 2018, the airline came under a bit of heat for their flawed customer service because they did not refund their customers on a cancelled flight in due time. Most of the passengers were waiting for over a period of 6 months to get their entire amount back. People travel budget friendly when they don’t have a lot of cash to spare, so naturally this was a huge inconvenience.
They are however working very hard on their digital presence especially in the context of the customer service because of the flight limitation. They spent a lot of resources on sending prompt messages and updates to potential customers when the lockdown restrictions began to ease in 2020 which gave them a very positive response and positive sales figures.
They also have worked a lot on improving the entire experience digitally; before, during as well as after the flight. Before the flight customers get timely updates about any changes, offers, discounts and newer payment options. They are also working on a virtual check in process to limit human interaction. They also have been trying to improve their feedback channels by making them more streamlined and easy to access at all times.
Technology
In 2019 EasyJet launched a feature on their mobile app particularly for visually impaired people to book flights easily. It was a voice feature on the app to which all the user had to do to activate and to use was to speak. In fact on their website they claim to have won an award for their application because of how user friendly and convenient it is.
They also have mobile boarding options for passengers which reduce the time down to a matter of a few seconds. It is compatible with both Apple and Android.
To make sure that their fleet is up to the mark, they have come up with special drones to inspect the aircrafts in exquisite detail. The process takes up to a day or two if done manually but the drones reduce this time down to a couple of hours and not to mention it is far more accurate.
They are also in the works of developing cutting edge virtual reality technology particularly for their remote locations where often skilled or the required engineers might not always be present for bigger complex issues. Right now they have to email pictures of the innards of the aircraft to the respective engineers, this takes up a lot of time. VR glasses will allow the data to be transmitted in real time.
Legal
Have you ever heard of a big time company which hasn’t been a part of some legal loophole or scandal? It seems to be second nature to a big business to have legal complications and entanglements.
In 2020, EasyJet became notorious for a huge cyber-attack which compromised data and sensitive information of at least 9 million people in their database. Approximately 2000 of these people had their credit card numbers compromised along with intimate details such as their contact information, addresses as well as departure and landing times.
In 2020 the owner of the company accused some members, particularly the top management of EasyJet, of accepting bribes from AirBus, one of their suppliers, to only acquire aircrafts from them. This put a negative light on the business having the owner find corruption in his top most employees.
Some time back the company wanted to sue EasyFly, which is a transportation airline in Bangladesh for seafood within the bounds of the country for choosing to put “easy” in their brand name. The look of the logo was also similar however the courts dismissed this case because the other business had nothing to do with Europe or the UK thereby not being a threat.
Environmental
EasyJet was one of the first aircraft companies to actually work on making their planes “paperless”; they had Panasonic Toughpads installed which served as a replacement for laptops and printers thereby allowing for the usage and communication. Moreover they are also very keen on implementing the “e-paper” technology created by Sony to reduce their paper consumption down to a zero.
They are fully committed to reducing their carbon emissions down by 50% than what they are now as part of the new sustainability policy of the EU and the UK. At the moment the Airbus aircraft they use is more fuel efficient compared to an average plane.
In October of 2020, EasyJet announced its collaboration with Wright Electric to come up with an electric aircraft to fulfill their vision of becoming the world’s first carbon free aircraft. The grand idea is to play their due role in the “de-carbonization” of aviation.
If we go beyond carbon, they are also trying to reduce the consumption of plastic and other wastes in their supply chain.
On CSR Hub, the company has a rating of 53% for its overall CSR activities out of a total of 22,318 companies. It is not the best possible rating but it is not very bad especially when compared to so many other companies.
EasyJet PESTLE Analysis: Final Thoughts
EasyJet is not the first name to pop in your mind when you think of flying and travel, in fact it probably isn’t even the second or third name. The biggest reason is that the airline primarily belongs to the UK and Europe, so the localization takes away from extensive popularity but also because it isn’t branded as a luxurious airline.
Despite being a budget-airline, one has to admire just how far the business has come in less than three decades. It is affordable and it covers many areas. The airline has managed to garner a cult following and appreciation during this time.
If you have read this far, chances are that you have a much better understanding of what this business is and where it currently stands. In the PESTLE analysis above, we have seen that whereas the brand has enjoyed many successes, it also has very significant misses too, especially the cyber breach. Its scandals like this which strip away a loyal customer base in minutes even if it was built over a period of years.
The bribery scandal also does not put the brand under any good impression because there seem to be disputes between the owner and the top management of the company. However their environmental policies and efforts for achieving sustainability by reducing their carbon footprint is nothing short of commendable. It is not easy in this day and age to implement these changes which are important for our future.
Their customer service despite facing some turbulence (get it? they are an airline) in the past has improved a lot primarily due to digitalization and their impressive grip on technology. Needless to say that EasyJet is a thriving brand with an exciting future ahead as long as they keep the weaknesses and threats in check. This isn’t the last we will hear about the brand.
A PESTLE analysis is essentially a tool that is used for the macro-economic view of a business, industry or even a country so as to have a better understanding of where it stands realistically. It is an excellent tool to assess whether the said business is viable to start or to invest in.
If you are someone who is new to the concept, we always encourage you to learn how to conduct a PESTLE analysis by yourself. Even if you are not a newbie to the idea, it is understandable that it might be a bit overwhelming to start; templates come in handy for such situations. If you feel that you have a decent grip on the concept then you might be ready to learn the PESTLE framework in detail. Whatever you are looking for we hope you find it!
