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AIRLINE
The airline business plan is a crucial document that outlines the
strategy and operations of an airline company. It typically includes
details on the target market, routes to be serviced, pricing strategies,
marketing plans, financial projections, and more.

BUSINESS PLAN
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Easy Jet

01. 02. 03.

Different Different Criterias
INTRODUCTION Criterias for for task 2
task 1
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INTRODUCTION
Easy Jet is a low cost airline founded by Stelio Haji-Louann Oui in
1995. with 157 Travel Destinations.
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Easyjet Airlines
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OUR COMPANY

WHO WE ARE? WHAT WE DO?

Make affordable flights

Low cost airline.
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success of
an
enterprise.
 P6:Internal HOME ABOUT SERVICE CONTACT

factors of
Easyjet
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P7:External factors which may negatively

affect the survival of an enterprise

EasyJet, like any other business, faces various external challenges that threaten its survival. One major factor is economic downturns, as recessions or financial
. increase operating costs, making it
crises reduce consumer spending, leading to lower demand for air travel. Additionally, fuel price fluctuations can significantly
harder for the airline to maintain low ticket prices.
Government regulations also play a critical role, with stricter environmental policies potentially increasing costs through carbon taxes and sustainability
requirements. Competition from other low-cost carriers, such as Ryanair and Wizz Air, forces EasyJet to constantly adjust pricing and strategies to remain
competitive. Geopolitical events, such as conflicts, terrorist threats, or Brexit-related trade barriers, can also disrupt flight operations and reduce travel demand.
Lastly, pandemics and natural disasters can severely impact the airline industry, as seen with COVID-19, which led to widespread travel restrictions and
financial losses. All these external factors pose significant risks to EasyJet's long-term sustainability and profitability.
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M3; Analysis of how the changes in market conditions can increase

the risk for an enterprise.

Changes in market conditions can significantly increase risks for EasyJet, affecting its profitability and long-term survival. One major factor is economic
downturns, which reduce consumer spending power, leading to lower demand for air travel. During a recession, people prioritize essential expenses over leisure
travel, forcing EasyJet to lower ticket prices, which reduces profit margins.

Fuel price fluctuations also present a significant risk. Since jet fuel is one of the airline’s largest expenses, sudden increases in fuel costs can drastically raise
operating expenses. If EasyJet is unable to pass these costs onto customers without losing them to competitors, its profitability will suffer.
Government policies and stricter environmental regulations further add financial pressure. If carbon taxes or emission reduction requirements become more
stringent, EasyJet may need to invest in costly eco-friendly technologies, increasing operational costs.
Competition from other low-cost airlines, such as Ryanair and Wizz Air, forces EasyJet to maintain aggressive pricing strategies. If market conditions
change—such as a new competitor offering lower fares or better service—EasyJet may struggle to retain its market share.
Lastly, geopolitical instability, pandemics, or travel restrictions can quickly disrupt flight operations. Events like Brexit, the COVID-19 pandemic, or regional
conflicts have previously led to grounded flights, border closures, and financial losses. These uncertainties make long-term planning difficult.
D3; Recommendations and
justification of actions to
address the risks of business
failure
To ensure long-term survival, EasyJet must adopt strategic measures to mitigate risks posed by changing
market conditions, competition, and external threats. Below are key recommendations and their justifications:
1. Diversifying Revenue Streams – EasyJet should continue expanding its easyJet Holidays segment,
offering customized vacation packages, including city breaks, adventure tourism, and exclusive
membership discounts. This would provide a more stable income, especially during off-peak travel seasons,
reducing reliance on ticket sales alone.
2. Fuel Hedging Strategies – To address the risk of fuel price fluctuations, EasyJet should adopt a fuel
hedging strategy, locking in prices in advance. This would protect the airline from sudden cost spikes,
allowing for more predictable financial planning and ticket pricing.
3. Sustainability Initiatives – With growing environmental regulations and eco-conscious travelers, EasyJet
should invest in sustainable aviation fuels (SAFs) and more fuel-efficient aircraft. Not only will this
reduce carbon emissions, but it will also enhance the airline’s reputation and attract environmentally
conscious customers.
4. Strengthening Digital Services & AI Integration – EasyJet can implement AI-driven pricing models to
optimize ticket pricing based on demand, ensuring competitive pricing while maintaining profitability.
Additionally, improving its mobile app and website with personalized travel recommendations could enhance
customer loyalty dependency on short-haul European routes, EasyJet could explore strategic
partnerships with long-haul airlines or expand into new markets in North Africa and the Middle East.
Growth and Exit of an enterprise
(Task 2)

Ryanair has several options to finance its growth. One key method is retained earnings, where profits are reinvested instead of being distributed as dividends.
This is low-risk but limits rapid expansion. Bank loans and bonds provide large sums upfront for purchasing aircraft or expanding routes, with repayment periods
ranging from 5 to 20 years. Leasing aircraft reduces upfront costs and offers flexibility, with contracts lasting 5 to 15 years, though it may be more expensive
long-term. Issuing new shares raises funds without requiring repayment but dilutes ownership. Lastly, government grants and subsidies can support sustainability
initiatives but come with strict regulations. By using a mix of these methods, Ryanair can finance its growth effectively.
P8; Exit routes available to the owners of the
selected business

Ryanair may exit a market due to financial losses, increased competition, or regulatory
challenges. Possible exit routes include mergers or acquisitions, where Ryanair merges
with or is acquired by another airline. Another option is selling the business to investors or
competitors, ensuring a financial return. Divestment allows Ryanair to sell specific routes
or assets while reducing operations. In extreme cases, liquidation could occur, where
assets are sold, and operations cease. The chosen exit strategy depends on market
conditions and financial stability.
M5; Analysis of exit
routes in different
contexts.

Exit routes depend on the business

context. A merger or acquisition is ideal
if a company seeks growth under new
ownership, as seen when British
Airways acquired BMI. Selling the
business works when owners want a
financial return, like Virgin America
selling to Alaska Airlines. Divestment is
useful for reducing operations without a
full exit, such as Ryanair withdrawing
from certain airports. In financial
distress, liquidation is the last option, as
seen with Thomas Cook’s collapse. The
best exit strategy depends on financial
health, market conditions, and
long-term goals.
D4; Evaluation of
the growth options

Ryanair’s growth strategy includes route expansion, fleet investment, and digital innovation. Expanding routes increases market reach and revenue. Investing in
fuel-efficient aircraft lowers costs and improves sustainability. Enhancing digital services, like AI-driven pricing and mobile app improvements, boosts customer
experience and loyalty.

Pros: Growth increases revenue, brand recognition, and competitive advantage. New aircraft improve efficiency, and digital upgrades enhance customer
satisfaction.
Cons: High costs, market risks, and regulatory challenges. Expansion requires significant investment, and economic downturns may reduce demand.
Factors to Consider: Financial stability, market demand, competition, and regulatory policies must be analyzed before expansion to ensure long-term
success.
D4; Evaluation of the exit
options
Ryanair’s exit options include mergers or acquisitions, selling the business, divestment, and liquidation. Merging with
another airline allows continued operations under new ownership, while selling provides financial returns. Divestment helps
reduce market presence without a full exit, and liquidation is a last resort when the business is no longer viable.
Pros: A merger ensures brand survival, selling provides capital, and divestment allows strategic downsizing.
Cons: Mergers may lead to loss of control, selling can undervalue the business, and liquidation results in financial losses
and job cuts.
Factors to Consider: Financial health, market conditions, regulatory requirements, and long-term business goals determine
the best exit strategy.
Conclusion
In my opinion, Ryanair is well-positioned for growth due to its cost-effective
business model, strong brand, and continuous expansion into new markets.
However, economic downturns, fuel price volatility, and increased competition
pose risks. Entrepreneurs should only exit their business if financial instability
or better opportunities arise. The perfect time to exit is when the business has
maximized its value and a strategic buyer is available. Legally, exiting the
market requires notifying stakeholders, settling debts, filing necessary legal
documents, and complying with aviation regulations to ensure a smooth
transition.