Easy Jet Article

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1European Management Journal Vol 17 No 1 February 1999

PergamonEuropean Management JournalVol. 17, No. 1, pp. 2038, 1999

1999 Elsevier Science Ltd. All rights reservedPrinted in Great Britain

PII: S0263-2373(98)00059-0

Case Study

0263-2373/99 $19.00+0.00

easyJets $500 MillionGambleDON SULL,London Business School, andCommentators, Constantinos Markides,

Walter Kuemmerle, Luis Cabral.

This Case Study details the rapid growth of easyJetwhich started operations in November 1995 fromLondons Luton airport. In two years, it was widelyregarded as the model low-cost European airlineand a strong competitor to flag carriers. The com-pany has clearly identifiable operational and mar-keting characteristics, e.g. one type of aircraft,point-to-point short-haul travel, no in-flight meals,rapid turnaround time, very high aircraft utiliz-ation, direct sales, cost-conscious customer seg-ments and extensive sub-contracting.

easyJets managers identified three of its nearestlow-cost competitors and the strategy of each ofthese airlines is detailed in the Case Study. ButeasyJet also experienced directretaliation from large flag car-riers like KLM and BritishAir-ways (Go). These challengesfaced easyJets owner,Stelios

Haji-ioannou, as he signed a $500m contract withBoeing in July 1997 to purchase 12 brand new 737s.

The Case is followed by critical analysis from threeCommentators in the field.1999 Elsevier ScienceLtd. All rights reserved

It was July 1997, and Stelios Haji-ioannou ownerand chairman of easyJet glanced at his $500m con-tract with Boeing to purchase 12 brand new 737s. As

he signed the contract, Stelios steadied his shakinghand. The words of Richard Branson, chairman ofVirgin Atlantic airline, flashed through his mind: thesafest way to become a millionaire is to start as a

billionaire and invest in the airline industry.

With the Boeing contract, signed before easyJetreached its second anniversary, Stelios (as he wascalled by everyone) committed to triple the size ofeasyJets fully-owned fleet from six to 18 airplanes in


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EASYJETS $500 MILLION GAMBLE

the span of two years. When easyJet was launchedwith a party in Londons Planet Hollywood twoyears earlier, no one had predicted the companysrapid growth. In its second year of existence, easyJetwas widely regarded as the model low-cost Euro-pean airline and had helped shake-up the once cozy

European airline industry. With more than twomillion passengers, ten European destinationsserved, and sales of more than 60m in 1997 Stelioshad ample room for celebration. And yet severalchallenges loomed.

Turbulence in the Airline Industry

Historically, the European airline industry had beenheavily regulated by individual countries to protecttheir own national carriers, called flag-carriers. Theseflag-carriers, many of which were State-owned,

dominated domestic travel in their national markets.Despite significant government subsidies, most flag-carriers accumulated losses due to high-cost struc-

tures and operational inefficiencies. Even in 1996,after several years of buoyant demand, most flag car-riers provided disappointing returns (Table 1). Theflag carriers strong position had historically deterrednew entrants, and there existed very few inde-pendent scheduled airlines, apart from charter-flightoperators which catered to the needs of seasonal leis-ure travelers.

During the late 1980s the European Union (EU)initiated a liberalization program to increase compe-tition in the European skies, with major regulatorychanges beginning in 1992. By April 1997, any EUcarrier was allowed to provide a passenger servicewithout restriction in any domestic route of an EUmember-State. This liberalization was modeled afterindustry deregulation initiated in the US by the 1978Airline Deregulation Act. The US deregulation hadattracted several hundred start-up airlines, but onlytwo of the airlines founded in the 197892 period

were still flying in 1997. European deregulation alsoopened the door to new entrants, and approximately80 new airlines entered the market in 1995 and 1996

Table 1 Financial Performance of Major European Flag-carriers

Sales (million$) 1996 199 199! 199" 199

ritis% &ir'ays $1!!" $1""6 $1#7 $1*9 $9"+u,t%ansa 1#1 11*17 11"#1 167 1!

&ir Fran-e 766 71"# 119 917 n.a

/+M #! !6# !!6 !# "9

S&S !667 !6** !!6! !1 "1

&litalia !"7" !"# !1 "!# "1

S'issair "!97 """" ""#7 ""! "60beria "*1 #97 #*1 #7# #7

""

re2ta3 pro,it.(loss)

ritis% &ir'ays $17 $9*" $!9 $6 $"+u,t%ansa " !16 ## () (1

&ir Fran-e 6 (1!#) (7!9) (11"1) n.a

/+M 6 "#* #7" !* (#

S&S # """ 11 9 11

&litalia (16) (19) (9") (17) (#)

S'issair 1 " # 1!

0beria 1 !1 (#!#) ("6") (#

ro,it margin (4)

ritis% &ir'ays 757 7 ! ! "5+u,t%ansa "5 " 1 (15

&ir Fran-e 51 (#5) (65*) (1#5") n.a

/+M 151 7 6 1 (75

S&S !59 7 " # "5

&litalia ("5*) (!5!) (# (51) (5

S'issair 5 5

0beria "5* 1 (* (1"5") (95

ritis% &ir'ays /+M an &ir Fran-e -lose t%e ,inan-ial year in Mar-% so t%eir -alenar year ,igures are t%ose o, t%e ,ollo'ing

Mar-% (e5g5 Mar-% 1997 ,or 1996 ,igures)5

S&S &litalia an 0beria a--ounts are un-onsoliate '%ile all ot%ers are -onsoliate5

S'issair ,igures are ,or S'issair +t only not t%e parent -ompany S&ir roup58%e e3-%ange rates use 'ere t%ose appli-able on #7 Mar-% 199* (e5g5 .$ : 156* ;M.$ : 5)5


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alone. Of the 56 airlines launched in 1995, 17 wentbankrupt in their first year of operations.

Industry experts predicted that deregulation wouldspawn fewer new competitors in Europe than lib-

eralization had in the US. Potential low-cost entrantsfaced significant legal obstacles to gaining regulatoryapproval from the Civil Aviation Authority (CAA),and also incurred 40 per cent higher costs on averagethan their US counterparts, due to higher airportcharges and relatively inflexible labor conditions. Asa result, low-cost competitors were slower to makeinroads along European routes than they had beenin the US. A 1996 EU report examining the impact ofairline deregulation found that only 6 per cent of allroutes within the EU were served by more than twoairlines, with 30 per cent served just by two and 64per cent still in monopoly status. easyJet and otherlow cost start-ups, however, planned to introducecompetition along lucrative European routes.

Birth of an Airline

Stelios, 31, was the second son of Lukas Haji-ioannoua legendary Greek-Cypriot shipping tycoon. Lukas,who came from humble beginnings, began his careertrading raw materials in Saudi Arabia, beforemoving

to Athens to enter the shipping industry inthe late

1950s. During a world-wide shippingcrisis in the

1980s, Lukas accumulated a fleet of52 super-tank-

ers then the largest such fleetin the world

which he later sold at significantlyhigher prices. Ste-

lios, who grew up in Athens,

moved to London in

1984 to obtain a BachelorDegree from London School

of Economics and aMaster in Shipping from City

University BusinessSchool. Upon his return to

Athens, Stelios joinedthe family shipping business,

and at the age of 25,created his own specialized

tanker company,Stelmar, with a fleet of five tankers.

Stelios first interest in the airline industry wasalmost accidental. In May 1994, on board an Athens London flight of a Virgin Atlantic franchisee, he wasapproached by a shareholder in the franchise whotried to persuade him to invest in the company.Although Stelios decided not to invest in the com-pany (which soon after went bankrupt), he remained

intrigued by the idea of a European low-cost airline.

It was not until he flew on Southwest Airlines asuccessful low-cost competitor in the US thatStelios felt he had found the right concept for aEuropean airline. Stelios intensively researchedSouthwest, meeting with founder and CEO HerbKel-

leher and buying 250 copies ofNuts a bookdocu-

menting Southwests success fordistribution to

potential employees and customers.In the summer

of 1995, Stelios presented a businessplan for a low-

cost European airline to his father,who was won

over by the idea and invested 5m inthe venture. If I

didnt bring the concept to Europe, Steliosexplained,

someone else would.

easyJets operations clearly mirrored the model pion-eered by Herb Kelleher at Southwest Airlines: one

type of aircraft, point-to-point short-haul travel, noin-flight meals, rapid turnaround time and very highaircraft utilization. This concept promised significantcost savings relative to flag carriers (Table 2). How-ever, easyJets founder modified the model to benefitfrom Southwests experience:

The main reason for these modifications was that Southw-est had been in the business for 25 years whereas I wasstarting from a clean piece of paper. You have betteropportunities to do things differently if you start fromscratch.

For instance, Stelios completely avoided travelagents, and relied exclusively on direct sales, in con-

trast to Southwest which derives 60 per cent of itsrevenue through travel agents. Stelios also designedeasyJet to completely eliminate tickets. Stelios

Table 2 Cost Comparison Between a Flag-carrier

and a Low-cost irline in Europe !E"ample of Lon-

don # Paris $oute%

ais)5

75 Flag2-arrier leases ne' oeing 7!72! air-ra,t lo'2-ost air2

line leases ol oeing 7"72#5

*5 Estimation o, o>er%ea -osts is base (a) ,or t%e ,lag2-arrier

on allo-ating a proportion o, & o>er%eas to t%e European

region an (b) ,or t%e lo'2-ost airline on yanair@s total o>er2

%eas5

&eneral assumption

+oa ,a-tor (6* per -emt) an air-ra,t utiliGation is t%e same

,or bot% airlines5


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decided to fly easyJets 737s using their maximumseat capacity of 148 seats. While Southwest offersdrinks and its famous peanuts for free, Steliosreckoned that in-flight frills add very little to passen-gers satisfaction and therefore developed thenothing for free, all for sale idea. easyJet passengers

even paid for soft drinks and snacks only the in-flight magazine was free. Stelios summarized hisphilosophy: When someone is on a bus he doesntexpect any free lunch I couldnt see why we cannoteducate our customers to expect no frills on board.

Stelios and Managing Director Ray Webster also triedto recreate Southwests culture of teamwork andcooperation. Southwest pilots would often help cabincrew clean up an aircraft to ensure on-time takeoff.Stelios and Ray believed the easyJets operationalmodel could be copied, but that their corporate cul-ture could create a sustainable advantage that com-petitors would have difficulty emulating.

easyJet Takes Off

easyJet started operations in November 1995 fromLondons Luton Airport, with two leased aircraft, 16teenagers as reservation agentsand another companys

hired several young professionals who were enthusi-astic about the companys concept. Stelios and hisfamily invested an additional 50m in the followingtwo years to fuel expansion. At the end of 1996easyJet purchased four second-hand aircraft toreplace its fleet of leased aircraft.

easyJet in 1998

By early 1998, easyJet owned a fleet of six Boeing737-

300s, each of which was emblazoned witheasyJets

phone number 0900 292929 painted inbright orange,

and flew 12 routes in five countries(Table 3).

easyJets headquarters were ineasyLand a bright

orange airplane hangaradjacent to the runway of

Londons Luton airport.

easyJets management team occupied two Spartan

rooms opposite the reservation center. Ray Websterand Stelios sat in one corner of the first room dubbed commercial, which they shared with mar-keting, finance, business development and IT staff.The other room, called operations was occupied bythe flight and cabin crew managers, the chief pilot,the quality and service standards manager, flightoperations staff and two engineers. Fourteen easyJet

managers reported directly toRay Webster, who reported to

operating license. Steliosrecalled the companys start-up.

I was trying to start an airline

without anybody who knew any-thing about airlines! On day one, it

Of the 56 airlines

launched in 1995, 17

went

bankrupt in their firstyear

Stelios (Figure 1). The easyJetstaff consisted of 45 managersand administrators, 90 cabincrew and pilots, and 133 reser-vation agents.

was me and my Finance director everybody else was asubcontractor! We were the ultimate virtual airline!

Stelios launched an extensive PR and advertisingcampaign with the slogan: Fly to Scotland for theprice of a pair of jeans! easyJets 29 one-way farefor the 50 minute flight from London to Glasgow costa fraction of the price charged by British Airways(BA) on the same route and was significantly cheaperthan the rail fare. Most industry experts initially dis-

missed easyJet: Europe is not ready for the peanutflight, one senior BA executive predicted. Despiteinitial skepticism, the first easyJet flight was full, andthe company soon added two more destinations inScotland Edinburgh and Aberdeen. The routes

between London and these three Scottish cities rep-resented almost 30 per cent of the 14 milliondomestic

UK passengers in 1995, allowing easyJetto rapidly

reach critical scale.

To support easyJets rapid growth, Stelios recruitedseveral seasoned airline executives, including RayWebster formerly General Manager Strategic Plan-ning in Air New Zealand who joined easyJet asManaging Director with full responsibility for the

day-to-day management of the airline. easyJet also

Until early 1998 Luton airport served as easyJetsexclusive hub. Stelios initially chose the United King-dom as easyJets base because it offered lower laborcosts and more sophisticated consumers than mostContinental European countries, and he selectedLuton airport as easyJets hub because it was close toLondon (30 minutes from central London by train)and charged lower airport fees than Londons majorairports Heathrow and Gatwick. Although

Lutons convenient location and low costs had con-tributed to easyJets initial success, the airlines

Table ' eas()et *estinations

+onon (+uton) toH lasgo'

Einburg%

0n>erness

&mster6am

ar-elona

Ni-e

alma

7ene>a

+i>erpool toH Ni-e

&msteram


5/42


24 European Management Journal Vol 17 No 1 February 1999

Figure1

eas()et+r

gani,ation

C-art!Feb.

1//0%


6/42


2European Management Journal Vol 17 No 1 February 1999

demand was beginning to outstrip Lutons capacity.In early 1998 easyJet opened a second hub in Liver-pool, and Business Development Manager LizSavage

noted we could not fly more than sevento eight

planes from Luton in the foreseeablefuture.

easyJet defined its target customers as people whopay for travel from their own pockets. In particular,easyJet targeted three cost-conscious customer seg-ments: travelers visiting relatives, leisure travelersmaking brief trips, as well as entrepreneurs andman-

agers working for small firms. While easyJetgener-

ally ignored the large market of businesstravelers, it

did serve companies such as Vauxhall,Tesco, and

ICL, which were located near the Lutonairport. In

addition, the company targeted route-specific cus-

tomer segments such as Englishteachers in Spain,

and the large British expatriatecommunity in south-

ern France.

Because easyJet completely eschewed travel agents,the company relied heavily on a variety of alternativemarketing channels to raise awareness among poten-tial customers. The company spent up to 8 per centof revenues on newspaper, magazine, and radioadvertising to reach customers directly. The companyalso sponsored special promotions, such asproviding

a dedicated phone line for fans ofLondons Totten-

ham Hotspur football (soccer)team. The company

also actively sought publicrelations opportunities.

Whenever there is anopportunity to make some

news, Marketing DirectorTony Anderson explained,

we do it. easyJetsmarketing focused on its low

fares andpunctuality, emphasizing both its low

prices and

impressive record of on-time departure.

steliossummarized easyJets marketing strategy, we

makelimited promises, but make sure we consist-

entlydeliver on them.

easyJets processes for buying tickets, checking in,and boarding were streamlined to minimize com-plexity for both customers and easyJet staff. To buya ticket, customers called a local call-rate number,and were connected to one of easyJets reservationagents located in a central call center in easyLand.Calls from non-UK customers were handled bySpanish-, French-, or Dutch-speaking reservationagents in Luton. Reservation agents were paid solelyon commission (0.80 per seat sold), and couldexpect

to sell 60 to 90 seats in an average eighthour shift.

All customers were required to pay bycredit card,

and received a six character bookingreference num-

ber. This booking reference was theonly information

the passengers needed to boardthe plane, and no

ticket was sent to them.

Passengers were requested to arrive at the airportone

hour before departure, versus the two hours rec-ommended by most other airlines. When a passengerarrived, easyJet ground agents simply confirmed thepassengers name and reference number, checkedtheir bags, and gave them a plastic boarding card,which numbered from 1 to 148. There were no preas-

signed seats, and passengers boarded in order oftheir card number.

Sub-Contracting Entrepreneurship

In a typical airport where easyJet operates, as manyas half a dozen sub-contractors would be involved indelivering the so-called easyJet product (Figure 2).easyJet confined its role in providing the planes, thepilots and cabin-crew and managing marketing andsales. Everything else from the check-in procedureto the on-site customer information desk washandled by sub-contractors. As a start-up with lim-ited resources, an uncertain future and serious dis-economies of scale, easyJet initially relied on sub-con-

tractors out of necessity. Even in early 1998,however,

after easyJet had acquired its ownoperating certifi-

cate and attained the size at whichmost airlines bring

operations in-house, Steliosinsisted as a matter of

principle on employing asmany sub-contractors as

possible:

We believe relationships with entrepreneurial companiesout there to make a profit, are more efficient than havinga bunch of employees yourself. By creating various profitcenters, large companies are just trying to emulate the sub-contracting system. But our sub-contractors are real profit-centers with real CEOs trying to make real money! If theyare not good enough they will be out of business. Marketforces eliminate any inefficiencies in the sub-contractingsystem!

easyJets ability to meet its operational targets, such

as ticketless check-in, the 20 minute turnaround, andthe safety and punctuality of the airline all criticallydepended on the performance of sub-contractors.easyJet managers accordingly devoted significanttime and energy to overseeing relationships withsubcontractors. Alan Marking, Chief Engineer,explained:

Our role really is to manage contracts and transportpeople. We do the cerebral activities, the sub-contractorsare the fingers, and the contract is the communication

Figure 2 eas()et ub-contracting (stem Te

Luton E"ample


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down to the fingers. We dont own the fingers, but we havesome control over them. Arrogantly speaking, we are thethinkers, they are the doers.

easyJet was generally satisfied with its suppliers, butsome periodic disappointments did arise. In one case

an aircraft was delivered late, at the very last hourfor

a scheduled takeoff and flight personnelconsistently

complained about their schedules,which were

arranged by an outside company.

easyJet had initiated a number of programs toimprove relationships with its suppliers. The com-pany led regular workshops, role-reversal exercises,and simulations with sub-contractors to clarifyeasyJets objectives and expectations. In addition,easyJet had designed an innovative system for evalu-ating suppliers performance. Sub-contractors wereevaluated not only on quantitative criteria (e.g. per-centage of on-time flights), but also on qualitativefac-

tors such as their understanding of the easyJetcon-

cept. The results of these evaluations wereincorporated into a rigorous rating matrix, whichwas

then used to determine the supplierscompensation.

Marking noted:

I am trying very hard to convert the contract with Mon-arch Engineering into a partnership agreement where theywant to work with us rather than just doing what the con-tract says. We want them to understand our point of view,

but we can only expect them to do that if we understandtheirs sometimes, however, you have to use the baseball

bat technique to achieve your objective.

The Competition

In 1997, easyJet managers identified Debonair, Ryan-air and Virgin Express as their three closest competi-tors. Although all of these airlines offered low faresfor short-haul flights, each pursued its own variationon the low-cost theme (Table 4). These four competi-tors generally avoided head-to-head competitionwith each other on routes, and most destinationswere served by only one low-cost airline (Table 5). Afew routes, such as London Barcelona, howeverwere apparently large enough to bear more than asingle low cost carrier. In deciding whether to enter anew route, the carriers estimated the routesexpected

profitability based on incumbentcompetitors

(including trains and charter flights)offerings and

load factor, demand patterns and

other information

on the possible destination. Asall four rivals were

aggressively increasing theiraircraft fleet (Figure 3),

they sought after toidentify profitable new routes

and to serve themfirst. In contrast to easyJet, its three

low-costcompetitors went public in 1997 and pub-

lisheddetailed financial accounts (see Table 6 for

eachcompetitors 1996 financial performance and

Figure4 for shareholder returns).

Debonair

Incorporated in England in October 1995, DebonairHoldings was easyJets most visible competitor. Deb-

onair used Luton airport as its main hub, and theirheadquarters were located only 500 m from easy-Land.

Debonair was founded by Franco Mancassola, a 58-

year-old American. Mancassola spent 25 years of hiscareer in the airline industry, rising through a seriesof senior management positions in Continental Air-lines, World Airways, Mid-Pacific Airlines and Dis-covery Airways. Debonair commenced operations in

June 1996 under the simple philosophy of lowerfares with minimal restrictions and no compromiseon comfort. Its first two leased aircraft served threeroutes; from London Luton to Dusseldorf, Munichand Barcelona. One month later, delivery of a thirdaircraft allowed the airline to add Madrid and Newc-astle to its network. During the following threemonths Debonair continued its rapid expansion byleasing two more aircraft to bring its fleet to five BAe146-200 aircraft. The larger fleet size enabled the air-line not only to fly to Copenhagen and Rome, butalso to take advantage of the EUs April 1997 deregu-lation and transport passengers within lucrativeforeign markets, such as Germany where Debonairflew between Munich Dusseldorf and Spain(Madrid Barcelona). Debonairs rapid expansionslowed in the first half of 1997, however, when man-agement discontinued two routes (Luton Newcastleand Barcelona Madrid) citing insufficient demand.

Debonair targeted business travelers, and attemptedto combine high levels of comfort and customer ser-vice with low fares. Our strategy differssubstantially

from easyJets, Mancassola explained,our approach

is low cost but definitely not no frills.In early 1998,

Debonairs fleet consisted of sevenBae 146-200s,

which were considered the quietestpassenger jets

made. The aircraft were configuredwith a single

class cabin, where all seats wereseparated by 33I,

versus the 29I seat pitch whichwas the industry stan-

dard in economy class.Inexpensive fares, more leg-

room, and quiet jetswere three of Debonairs key

selling points tobusiness travelers, who made up 58

per cent of thecompanys passengers.

Debonair achieved the apparent paradox of low faresand comfortable service by focusing on operationalefficiency. In particular, the airline concentrated onpoint-to-point markets, operated a uniform fleet oflow-cost aircraft to minimize maintenance costs, con-centrated service operations in the UK to minimizelabor and operating costs and sub-contracted func-tions, such as maintenance and the check-in process.Moreover, Debonair tried to achieve high levels ofaircraft utilization by operating its Bae 146s for10 hours and 15 minutes a day on average, while BAwas operating its own Boeing 737 for only 7 hoursper day.

Debonairs strategy emphasized rapid expansionover short-term profitability. In fiscal year 1997, Deb-onair, reported a pre-tax loss of 15.7m. Debonair


8/42

Table 3 Comparison of te Four Low-cost irlines !Februar( 1//0%

&irline SiGe o, ,leet an

type o,

erp

ool

S-otlan

(!)&mstera

mNi-e

ar-elona

alma

;ebonair 7 &e 1!62# 96 seats ;ire-t sales ("*4)

an8ra>el agents

(6#4)

Kes +uto

n

Mun

i-%

ar-elon

a

el &gents No ;ubl

in

Stans

te6

0relan

(")

lasgo'

Englan

(9)

russels

VirginE3press

1# oeing 7"72"s

! oeing 7"72!s

1!*seats

17seats

8ra>el agents No $russ

els

o

me

Ceat%r

o'

at'i-

=

ome

$ar-elo

na

Ni-e

;estinations in S-otlan areH lasgo' Einburg% &bereen an 0n>erness5

;estinations in 0relan areH /erry erpool Man-%ester irming%am +uton


9/42

Table 4 e5uence of Low-cost irlines6 Entr( into new *estinations

;estination ;aily ,lig%ts

,rom

ange o,

one2'ay

easyJet ;ebonair yanair

VirginE3press

+onon +uton # $*1D#! )an-

+i>erpool 1 $*1D#! Ma(-+onon Stanste 9D11 $*1D#! 8o9-

/no-= (0relan) 1 $1*D#7" Ma(-

296 ep-/7

+onon Ceat%ro' * $6D9* +ct-/7

0n>erness 1 $7!D#* 8o9-/7

aris eau>ais " $1*D#7" Ma(-

russels a 1 $99D#"! *ec-/:

alma 1 $99D#"! *ec-/:

;ates in bol ini-ate ,irst mo>e into t%e spe-i,i- estination5

Figure ' Low-cost irlines;


10/42

Table 7 Financial ummar( of eas()et6s Tree Main Competitors

P=L yanair

(year ene

".97)

;ebonair

(year ene

".97)

Virgin E3press

(year ene

1#.96)

Turno9er 1*69#7 #"* 1*"*Aperating e3penses 1*! 1

617*17#

+perating profit "1 (#6" 1*6

At%er in-ome (e3penses) 1#1

(1) (716)

Profit !loss% before ta" "## (#6" 11

8a3ation 11!""

66 *7!

Profit !loss% after ta" #* (#6! #76

Minority interest 1!!

Profit !loss% for te period #*

(#6!1*)

1"#

Balance seet yanair

(Mar-% "1

1997)

;ebonair

(Mar-% "1

1997)

Virgin

E3press

(;e- "1


11/42

Figure 3 areolder $eturns of Listed European Low-cost irlines


12/42

3 European Management Journal Vol 17 No 1 February 1999

Vienna and Rome. In April 1996, EBA was acquiredby Virgin Express Holdings, which re-branded thecarrier as Virgin Express, hired a new managementteam and emphasized scheduled service at theexpense of charter flights.

The new management team led by CEO JonathanOrnstein who joined Virgin Express after two yearsas a top executive in Continental Express activelypursued growth. As a result, Virgin Express grewfrom 338 scheduled flights per month in April 1996to 1628 flights in August 1997. Virgin Express earlysuccess was based on four core strengths: lowoperating costs, the Virgin brand name, a highlyexperienced management team and a steady revenuestream from its charter flights and its agreementswith Sabena. Under these agreements, Sabena pur-chased a certain number of seats on each VirginExpress flight (generally more than 50 per cent of theavailable seats) on routes between Brussels and Lon-dons Heathrow and Gatwick airports, Rome and

Barcelona. Based in Brussels National Airport, VirginExpress was flying, in early 1998, to 150 charter desti-nations and operated daily scheduled services

between seven major European cities: London(Gatwick), Rome, Barcelona, Milan, Madrid, Copen-hagen and Nice. It had a young fleet of 12 Boeing737-300s and four Boeing 737-400s and enjoyed animpressive passenger volume growth rate: duringthe

last quarter of 1997 Virgin Express reported510,905

passengers, nearly double the number ofpassengers

who flew Virgin Express in the lastquarter of 1996

(272,939).1

Like his counterparts at easyJet and Ryanair, Jona-than Ornstein sees the airline as a European version

of Southwest Airlines and admits that he imitated itsoperational model: We will emulate Southwestwhere we can and when we can why reinventthe wheel?

Sleeping Giants Awake

easyJet first encountered retaliation from a flag-car-rier during its initial foray into Continental Europein April 1996. When easyJet decided to fly to Amster-dam from its London hub, the route was alreadyserved by several airlines which together offered 50flights daily, and officials at the Amsterdam airport

bluntly suggested in their welcome fax that easyJetselect an alternative destination. Despite theobstacles, easyJet entered the route. The incumbentDutch flag-carrier KLM which had a 40 per centmarket share in the route immediately responded

by matching easyJets fares with a permanent pricepromotion called EasyChoice.

KLMs aggressive response nearly grounded easyJet.The flights on the London Amsterdam route wereoften almost empty, generating serious losses at thecritical start-up stage. Stelios publicly stated that

easyJet could not survive another six months on theroute unless KLM changed its tactics. easyJetresponded with a high-profile legal battle, andcharged KLM with anti-competitive practices beforethe European Commission. Stelios seized the legal

battle as a public relations opportunity: he flew toKLM headquarters, along with a television crew topersonally hand KLMs CEO 1000 letters fromeasyJet

customers complaining about the Dutchairlines

actions. The story received extensive presscoverage

for many months in both the UK andNetherlands,

boosting the fledgling airlines brandawareness.

easyJet persisted and graduallyestablished itself as

a key player in the London Amsterdam route, and

in 1998 was contemplating anew hub in Amsterdam.

British Airways Response: Go

In November 1997, British Airways (BA) announced

its intention to launch a new airline with a hub atLondons Stansted airport which would offerreduced in-flight service and much lower fares thanits regular BA flights. The project nicknamedOperation Blue Sky had commenced six monthsearlier when Barbara Cassani, Blue Skys would-bechief executive, conducted a feasibility study of thenew airlines potential. Cassanis study projected thatBlue Sky could turn profitable in its third year ofoperations in 2001. The new airline, named Go inearly 1998, planned flights to Italy, Spain, Scandina-via, France and Germany from Stansted Airport. Goadopted most elements of easyJets successful recipe:it planned to fly only Boeing 737-300s with 148 seats,

bypass travel agents and sell tickets directly to cus-

tomers, offer no frills on board and even use thesame

reservations software as easyJet. In its firstyear of

operations, Go would create 150 jobs andgrow from

two leased Boeing 737-300 aircraft toeight. Fares on

routes not covered by other low-costcarriers would

be at least 30 per cent belowstandard fares on reg-

ular BA flights. On routesthat were already served

by easyJet, Debonair,Ryanair or Virgin Express, Go

planned to match thelow-cost carriers price.

BAs announcement provoked an immediate reactionfrom the management of easyJet and Debonair, whoexpressed their concern that BA had formed the newairline to force the low-cost carriers out of the marketthrough predatory pricing. Stelios respondedaggressively in an attempt to turn public opinionagainst BAs move. easyJet placed a page-long adver-tisement in major UK newspapers expressing histhoughts about Go: Does the worlds favorite airlinereally need a low cost carrier? (Figure 5). A fewweeks later easyJet launched an advertising cam-paign with the slogan BA is a copycat, fly the realthing! Ryanair, on the other hand, welcomed BAsdecision, presumably because Gos decision to locateat Stansted airport Ryanairs existing hub would enhance the airports position in its fight withLuton for the title of Londons dominant low-cost air-port.


13/42

expansion of 16 additional aircraft to serve routesfrom non-hub cities in Germany to other Europeandestinations, e.g. Paris Leipzig. If pursued, thisplan

would result in a maximum fleet of 30aircraft, in

addition to the 150 aircraft that theparent company

was already flying on European

routes. To keep costs

low, the aircraft would haveextra seating, cabin ser-

vices would be cut, andlower salaried personnel

would be hired.Additionally, maintenance and

repair would becontracted out. Managers estimated

that these costsavings would allow Lufthansa Light

to price at 20per cent below current Lufthansa fares.

Although Lufthansas management board approvedthe proposal in early 1998, the companys ExecutiveBoard delayed implementation because it felt that theproposal did not yet offer adequate attainable busi-ness improvements, and further investigations arerequired to settle outstanding issues such as auto-mation and charges.2

Growing Pains

Figure 4 eas()et6s d9ertisement in $esponse to&o

Lufthansa Light

In 1997, the German flag-carrier Lufthansa facedhuge operating losses on its domestic flights, and feltthreatened by the entry of low-cost airlines, parti-cularly Debonair which offered flights between Ger-man cities. Lufthansas management board con-sidered and rejected the options of dropping its lossmaking domestic routes or contracting them out tolow-cost carriers. Instead the management board fav-ored the option of launching its own low-cost airline,known informally as Lufthansa Light.

Lufthansa Light was envisioned as an autonomouscarrier offering direct flights between smaller Ger-man cities thereby bypassing Lufthansas hubs inMunich and Frankfurt. The new carrier would oper-ate under its own brand, with its own managementand personnel, although Lufthansa would retain 100per cent ownership. A feasibility study of the newairline recommended an initial fleet of 614 aircraft.The study also recommended a subsequent fleet

All I need to do now, Stelios wrote in the December1997 edition of easyJets in-flight magazine, is findsix million people a year to fly on my new planes.some industry analysts believed that easyJets strong

brand recognition and momentum would allow it tocapture share in the growing market for low-costflight in Europe. Others wondered whether easyJetcould maintain its low costs and quick turn-aroundtimes as the carrier expanded to new hubs in Europe,such as Athens and Amsterdam, and also speculatedhow rapidly the low-cost airlines would exhaust thepool of lucrative potential routes. Other commen-tators questioned whether easyJet could succeed inthe face of competition from low cost airlines andincumbent flag-carriers. easyJet managers wereundaunted, however: As long as we keep the for-mula right, Ray Webster argued, we feel as a com-pany that we dont have to worry about the compe-tition.

Acknowledgement

Donald N. Sull wrote this version of the easyJet case basedon a teaching case study by Panagiotis Lekkas and DimitrisVareltzidis, which was intended to be used as a basis for classdiscussion rather than to illustrate either effective or ineffec-tive handling of a management situation.

Notes

1.Virgin Express website.2.Flight International (1988).

Reference

Flight International (1988) 25 February 3 March, p. 15.

Traduccin automtica


14/42

.O1OPrgamo.1Oral.

!sta "aso !studiar detalles las rpido

crecimiento de eas56et ?ue comen@operaciones en noviem>re 1 de #ondres#uton aeropuerto. !n dos a*os, ello eraampliamente considerado como el modelo

>aAo costo !uropea la compa*Ba aCrea 5 laDuerte competidor a >andera transportistas.los compa*Ba posee claramente identiDica>leoperacional 5 mr;eting caracterBsticas, poreAemplo uno escri>e de aeronave, de punto a

punto corto recorrido viaAar, no durante elvuelo comidas, rpida (iro de vuelta %ora,mu5 alto aeronave utili@acin, directo ventas,consciente de los costos cliente segmentos 5e'tenso su>contratacin.

eas56et de administradores identiDicado $resde su competidores de >aAo costo ms

cercanas 5 la estrategia de cada de estasaerolBneas es detallado en las "aso!studiar.+ero eas56et adems e'perimentadodirecto


15/42

represalias de gran >andera automvil-

portadores como =# 5 >ritnico Eire-

Dormas /&r. !stas desaDBos

enDrentado eas56et de propietario,

telios

FaAi-&oannou, como Cl Dirmado la 00contrato con )oeing en Aulio 17 a compra12 marca nuevo 737.

los "aso es seguido por crBtico anlisis detres comentaristas en las campo. 1!lsevier cience #td. $odas derec%osreservado

!llo era Aulio 17, 5 telios FaAi-&oannou -

propietario 5 presidente de eas56et - %ec%un vista@o a su 00 contrato con )oeing acompra 12 marca nuevo 737. "omo ClDirmado las contrato, telios esta>ili@ado su

mano tem>lorosa. los pala>ras de Ricardo)ranson, presidente de la Virgen atlnticoaerolBnea, >rill mediante su mente G#o msseguro camino a %acerse la millonario es a!mpe@ar como un multimillonario 5 invertir

en las aerolBnea industria.G

"on las )oeing contrato, Dirmado antes deeas56et alcan@ sus segundo aniversario,telios /como Cl Due llamado por todoscomprometido a triple las !l $ama*o deeas56et de plena propiedad Dlota de seis a 18aviones en

las a>arcar de dos a*os. "uando eas56et eralan@ado con la Diesta en #ondres +lanetaFoll5Hood dos a*os ms temprano, no unotenBa previsto las de rpida empresacrecimiento. !n sus segundo a*o de


16/42

e'istencia, eas56et era e'tensamenteconsiderado como las modelo >aAo costo!uropeo aerolBnea 5 tenBa a5udado agitar lasuna ve@ acogedora !uropea aerolBneaindustria. "on s ?ue dos millones

pasaAeros, die@ europeo destinos servidos, 5ventas de s ?ue 0m I en 17 teliostenBa amplio cuarto para cele>racin. JtodavBa varios desaDBos asoma>a.

$ur>ulencia en las EerolBnea &ndustria

Fistricamente, las europeo aerolBneaindustria tenBa sido Duertemente regulado

por individual los paises a proteger supropia los transportistas nacionales, llamada>andera portadores. !stos >andera-

portadores, muc%os de cual Dueron epropiedad del !stado, dominado nacionalviaAar en su nacional mercados.E pesar designiDicativo go>ierno su>sidios, la ma5orBa

portadores K#E(- acumulado pCrdidasde>ido a Elto costo estructura

turas 5 operacional ineDiciencias. &ncluso en1, despuCs de Varios a*os de dinamismo

de la demanda, la ma5orBa >anderaportadores car- siempre ?ue decepcionantedevoluciones /esa 1. #a >andera

portadores G Duerte posicin tenBa%istricamente nueva disuadido

participantes, 5 allB e'istido mu5 pocosindependiente programada aerolBneas, apartede operadores c%rter de vuelo cualatendidos a las necesariamente detemporada ocio viaAeros.

urante las tarde 180 las europeo :nin/:! iniciaron la li>erali@acin programa aaumentar competencia en las europeo cielo,con ma5or cam>ios regulatorios comen@andoen 12. +or a>ril 17, alguna +ortadora de

la :! era permitido a proporcionar lapasaAero servicio sin restriccin en algunanacional ruta de un iem>ro-!stado de la:!. !sta li>erali@acin era modelada despuCsde la industria desregulacin iniciado en las

N9 por las 178 Eirline esregulacinEcto. los N9 desregulacin %a>Ba atraBdovarios cien puesta en marc%a aerolBneas, peroslo dos de las aerolBneas Dundado en las178-2 perBodo Dueron ?uieto vuelo en

17. europeo desregulacin tam>iCn a>rilas puerta a nuevo participantes, 5apro'imadamente 80 nuevo aerolBneas entrlas mercado en 1 5 1

esa 1 Kinanciero Ectuacin de a5oreuropeo )andera portadores

Ventas /millonesde

1

1

1L

13

12


17/42

>ritnicoEirHa5s

1L.0L3

13.03

12.07

10.8

.30

#uDt%ansa 12 111817 11321 1070 10L3

Eire Krancia 7 7132 110 170 n E

=# 02L L2 LL L20 388

E L7 L88 LLL L10 3181

Elitalia L373 L32 L01 3L2 31L

Hissair 3L7 3333 3327 33L 30L

&>eria 3081 207 2801 2720 2733

Entes deimpuestos

pCrdida de>eneDicios/millones de

>ritnicoEirHa5s

1.07

83

L

0

311

#uDt%ansa 377 L1 220 / /171

Eire Krancia /1L2 /7L/1131

n E

=# 328 273 L8 /282

E 22 333 11 0 110

Elitalia /1 /10 /3 /17 /2

Hissair 1 3 2 1L

&>eria 11 L1 /2L2 /33 /22

)eneDiciomargen /M

>ritnicoEirHa5s

7.7

7.

L.

L.8

3.3

#uDt%ansa 3.0 3. 1. 0.0 /1

Eire Krancia 0.1 /2,0 /,8 /12.3 n E

=# 1.1 7.1 .1 1.1 /7,1

E L. 7.1 3.L 2.2 3.

Elitalia /3.8 /L.L /2,3 /,1 /0,8

Hissair 0.0 0.1 0.1 0.1 0.L

&>eria 3.8 1.L /8. /13.3 /.2

>ritnico EirHa5s, =# 5 Eire Krancia cercalas Dinanciero a*o en ar@o, asi ?ue sucalendario a*o ciDras estn a?uellas de lassiguiente de mar@o /por eAemplo mar@o 17

para 1 Diguras.


18/42

E, Elitalia 5 &>eria cuentas estn noconsolidado, mientras todas otros estnconsolidado.Hissair ciDras estn paraHissair #imitado slo, no las padrecompa*Ba Eir (rupo.

los intercam>iar tasas utili@ado Duerona?uellas aplica>le en 27 mar@o 18 /poreAemplo I 1,8, 0,.

solo. e las aerolBneas lan@ado en 1,17 se declar en ?uie>ra en su primero a*ode operaciones.

&ndustria e'pertos previsto esodesregulacin serBa desovar menos nuevocompetidores en !uropa ?ue li>erali@acintenBa en las N9. +otencial >aAo costo los

participantes se enDrentaron signiDicativa

legal o>stculos a o>tener la apro>acinreglamentaria de las "ivil Eviacin Eutoridad/"EE, 5 adems incurrido L0 por centavoma5or cuesta en promedio ?ue su N9contrapartes, de>ido a ma5or las tasas

aeroportuarias 5 relativamente inDle'i>letra>aAo condiciones. "omo un resultado, >aAocosto competidores Dueron s lento aincursionar a lo largo europeo rutas ?ue ellostenBa estado en las N9. #E 1 :!inDorme e'aminar las impacto de la compa*BaaCrea desregulacin encontrado eso slo

por centavo de todas las rutas dentro las :!Dueron servido por s ?ue dos lBneas aCreas,con 30 por centavo servido Eca>o e por dos

5 L por centavo ?uieto en monopolio estado.eas56et 5 otra >aAa costo la creacin deempresas, sin em>argo, previsto a introducirla competencia a lo largo lucrativo europeorutas.

Nacimiento de un EerolBnea

telios, 31, era las segundo %iAo de #u;asFaAi-&oannou un legendario (reco-c%ipriota!nvBo magnate. #u;as, ?uien lleg de%umilde principios, comen@ su comercio de

la carrera crudo materiales en Era>ia Era>ia,antes de trasladarse a Etenas a entrar las!nvBo industria en las Dinales de 10.urante la en todo el mundo !nvBo crisis enla dCcada de 180, #u;as acumulado la Dlotade 2 res super-cisterna - en ese caso las msgrande tal Dlota en las mundo - cual Cl mastarde vendido a de modo signiDicativo ma5or

precios. #ios te-, ?uien creci arri>a en

Etenas, emocionado a #ondres en 18L ao>tener la oltero (rado de #ondres !scuelade "iencias econmicas 5 la ominar en!nvBo de :niversidad de la "iudad Negocio"olegio. o>re su regreso a Etenas, telios


19/42

unido las Damilia !nvBo negocios, 5 en ela*os de 2, creado su propio cisternaespeciali@ada compa*Ba, telmar, con laDlota de cinco petroleros.

telios G primero interesar en las aerolBneaindustria !ra casi accidental. !n a5o1L, en ta>la un Etenas - #ondres vuelo dela Virgen atlntico Dran?uiciado, Cl Duea>ordado por la accionista en las Dran?uicia?ue intent a persuadir Cl a invertir en lascompa*Ba.+ese E telios decidido no ainvertir en las compa*Ba /cual !n +oco

$iempo despuCs se Due arruinado, Clmantenido intrigados por las idea de laeuropeo >aAo costo aerolBnea.

!llo era no Fasta ?ue Cl vol en uroesteaerolBneas - un C'ito >aAo costo competidoren las N9 - ?ue telios sinti G?ue tenBaencontrado las correcto conceptoG para un

europeo aerolBnea. telios intensivamente&nvestigado suroeste, cita con Dundador 5"!9 %ier>a =el le%er 5 compra 20 copiasde Nueces - la li>ro documento entinguroeste de C'ito - para distri>ucin a

potencial empleados 5 clientes. !n lasverano de 1, telios presentado lanegocio plan para la >aAo costo europeoaerolBnea a su padre, ?uien era ganado porlas idea 5 invertido m I en las riesgo. Gi5o

no lo %i@o traer las concepto a !uropa,Gtelios e'plic, Oalguien ms %arBa.G

operaciones de eas56et claramente reDleAadolas modelo pion- eered por %ier>a =elle%er auroeste EerolBneas un tipo de aeronave,

punto a punto corto recorrido viaAar, no envuelo comidas, rpida (iro de vuelta %ora 5mu5 alta aviones utili@acin. !sta concepto

prometido costo signiDicativo a%orrospariente a >andera transportistas /esa 2.E%ora >ien, eas56et de Dundador modiDicadoel modelo a >eneDicio de uroeste dee'periencia

G#os los principales ra@n para CstosmodiDicaciones era eso uroeste tenBa estadoen las negocio para 2 a*os mientras 5oesta>a comen@ando de la limpiar pie@a de

papel. usted tener meAores oportunidades a%acer cosas diDerentemente si usted !mpe@ardesde cero.G

por eAemplo, telios completamente evitadoagentes de viaAes, 5 conDiado e'clusivamenteen directo ventas, en contraste a uroeste cualderiva 0 por centavo de sus ingresosmediante viaAar agentes. telios ademsdise*ada eas56et a completamente eliminar

>oletos. telios

esa 2 "osto "omparacin !ntre la)andera-portador 5 la )aAo costo EerolBneaen !uropa /!Aemplo de #ondres - +arBs Ruta

"osto Btem /I)andera-

portador

)aAocosto

aerolBnea

1. )illete ventas costos

3.0 I

0.80 I

2. !n vuelo ervicio costos 1.30 I 0.00 I


20/42

3. +ilotos 5 ca>ina tripulacincostos

L.00 I 1.0 I

L. "om>usti>le,mantenimiento, seguro

.00 I I 7.0

. G!n rutaG cargos 1.00 I 1.00 I

. Eeropuerto cargos .0 I 7.00 I

7. Eeronave El?uileres 7.80 I 3.00 I

8. Erri>a costos 17,00 I I .00

$otal costos

0,10 I

2,80 I

"osto supuestos

1. &ncluir viaAar agente comisiones,reserva agentes comisiones 5 ocomputadora reserva sistemas. )andera-

portador vende 80 por centavo de entradasmediante agentes de viaAes, >aAo costoaerolBnea 0 por centavo.

2. &ncluir costo de comida 5 otro duranteel vuelo comodidades.

3. &ncluir salarios 5 >eneDicios de pilotos 5aire a@aDatas.

L. )andera transportistas disDrutareconomBas de escala 5 usar su comprassuperiores energBa.

. &ncluir costos de navegacin etcCtera cualon identicos para todas aire-

lBneas.

. E>anderado moscas los principalesaeropuertos /Feat%roH - 9rl5P aerolBnea de

>aAo costo moscas secundario aeropuertos/tansted - )eauvais.

7. E>anderado arrendamientos nuevo)oeing 7L7-L00 aeronaveP >aAo costoaerolBnea arrendamientos antiguo )oeing737-200.

8. !stimacin de arri>a costos es >asado/la para las a>anderado

en asignacin la proporcin de licenciado en#etras gastos generales a las Regin europea5 /segundo para las >aAo costo aerolBnea enR5anair total gastos generales.

(eneral suposicin

"arga Dactor /8 por "!$ 5 aeronaveutili@acin es las mismo para am>as cosasaerolBneas.


21/42

decidido a mosca eas56et de 737 usando suasiento m'imo capacidad de 1L8asientos.ientras out%Hest oDrece >e>idas5 sus Damoso miseria para gratis, telioscontados eso durante el vuelo volantesa*adir mu5 pe?ue*a a pasaAeros GsatisDaccin 5 por lo tanto desarrollado #anada para gratis, todas para ventaG idea.

eas56et pasaAeros aun pagado para suave>e>idas 5 aperitivos - slo las vuelo in-revista era gratis. telios resumido suDilosoDBa G"uando alguien es en la auto>QsCl no espera alguna gratis almuer@o 5o no

podBa ver por ?uC nosotros no se puedeeducar Nuestros clientes a esperar novolantes en ta>la.G

telios 5 (erente irector Ra5o steradems intentado recrear uroeste de culturade tra>aAo en e?uipo 5 la cooperacin.uroeste pilotos %arBa a menudo a5udatripulacin de ca>ina limpiar arri>a unaeronave a asegurar a tiempodespegar.telios 5 Ra5o creBdo las eas56etde modelo operativo podrBa ser copiado,

pero eso su corporativo cultura podrBa crearla sosteni>le ventaAa eso competidores %arBatener diDicultad emulando.

eas56et $oma Epagado

eas56et comen@ operaciones en noviem>re1 de #ondres #uton Eeropuerto, con dosarrendado aeronave, 1 adolescentes comoreserva agentes

5 otro #a compa*Ba de

contratado varios Aoven proDesionales ?uienDueron entusiasta acerca de las #a compa*Bade concepto. telios 5 u Damilia invertido unadicional I 0m en las dos siguientes a*os acom>usti>le e'pansin. E las Din de 1eas56et comprado cuatro segunda mano

aeronave para reempla@ar sus Dlota dearrendado aeronave.

eas56et en 18

+or temprano 18, eas56et oHned la Dlota deseis )oeing 737- 300s, cada de cual era

>lasonado con !l telCDono de eas56et nQmero000 22.2 pintado en >rillante naranAa, 5vol 12 rutas en cinco los paises /esa 3.eas56et de sede Dueron en Geas5#andG lanaranAa >rillante avin %angar ad5acente a las

pista de #ondres #uton aeropuerto.

eas56et de administracin e?uipo ocupadodos Fa>itaciones espartanas opuesto lasreserva centrar. Ra5o ster 5 telioss>ado en uno es?uina de las primero%a>itacin - apodado Gcomercial,G cual elloscompartido con mr;eting, Dinanciar, negociodesarrollo 5 !##9 personal.los otro cuarto,

llamado SoperacionesT era ocupado por elvuelo 5 ca>ina tripulacin gerentes, las AeDepiloto, el calidad 5 ervicio normas gerente,las operaciones de vuelo personal 5 dosingenieros. "atorce eas56et


22/42

administradores reportado directamente a

Ra5o ster, ?uien reportado a

operante licencia. telios record las #acompa*Ba de puesta en marc%a.

GJ9 era molesto a !mpe@ar un lBnea aCreasin nadie ?uien a>Ba cual?uier cosa acerca

de UaerolBneas !n dBa uno, ello

e las aerolBneas

lan@ado en 1, 17 se declar en

?uie>ra en su primero a*o

telios /"iDra 1. los personal de eas56et"onsisti de L gerentes 5 administradores,0 tripulacin de ca>ina 5 pilotos, 5 133reserva agentes.

era 5o 5 mi Kinanciar director - todos ms eraun su>contratista Nosotros Dueron las Qltimovirtual UaerolBneaG

telios lan@ado un e'tenso +R 5 campa*a depu>licidad con las eslogan Gosca a !scociapara el precio de la par de UAeansG eas56et de2 I de una sola mano tariDa para las 0

minuto vuelo de #ondres a (lasgoH costo deun Draccin de las precio cargado por

>ritnico EirHa5s /)E en las mismo ruta 5era de modo signiDicativo ms >arato ?ue lascarril tariDa. #a ma5orBa industria e'pertosinicialmente despedido eas56et G!uropa es nolisto para las vuelo de manB, G uno ma5orlicenciado en #etras eAecutivo previsto. E

pesar inicial escepticismo, las primero

eas56et vuelo era completo, 5 el compa*Ba !n+oco $iempo adicional dos s destinos en!scocia - !dim>urgo 5 E>erdeen. los rutasentre #ondres 5 estas $res escocCs ciudadesrepre- sentada casi 30 por centavo de las 1Lmilln Reino :nido domCstica pasaAeros en1, permitiendo eas56et a alcan@arrpidamente crBtico escala.

E apo5o eas56et de rpido crecimiento,telios reclutado varios sa@onado aerolBneaeAecutivos, incluso Ra5 ster - antes(eneral (erente !stratCgico +laniDicacin enEire Nuevo Welandia - ?uien unido eas56etcomo anaging irector con completoResponsa>ilidad para el dia a diaadministracin de las aerolBnea. eas56etadems

Fasta ?ue temprano 18 #uton aeropuertoservido como eas56et de


23/42


24/42

2L !uropeo administracin Revista Vol 17No 1 De>rero 1

pedir era comen@ando a superar #uton decapacidad.!n temprano 18 eas56et a>iertola segundo cu>o en #iverpool, 5 Negocio


25/42

esarrollo (erente #i@ alvaAe o>servGnosotros podrBa no mosca s ?ue siete aoc%o aviones de #uton en las previsi>leDuturo.G

eas56et deDinida sus o>Aetivo clientes comoGgente ?ue pagar para viaAar de su propio

>olsillos. G !n en particular, eas56et dirigido$res consciente de los costos clientesegmentos viaAeros visitando parientes, ociotoma de los viaAeros >reve viaAes, como >iencomo empresarios 5 gerentes enDuncionamiento para pe?ue*a empresas.

ientras eas56et en general ignorado lasgran mercado de negocio viaAeros, %i@oservir empresas tal como Vau'%all, $esco, e&"#, cual Dueron situado cerca las #utonaeropuerto. Edems, la compa*Ba dirigido$omer "ustoms-ruta especBDica segmentostal como &nglCs proDesores en !spa*a, 5 lasgran >ritnico e'patriado comunidad enure*o Krancia.

+or?ue eas56et completamente evitadoviaAar agentes, la compa*Ba conDiadoDuertemente en la variedad de mar;etingalternativo canales a crear conciencia entre

potencial clientes. los compa*Ba gastadoarri>a a 8 por ciento de ingresos en

peridico, revista, 5 la pu>licidad por radioa alcan@ar clientes directamente. loscompa*Ba tam>iCn patrocinado especial

promociones, tal como proporcionando unadedicado telCDono lBnea para aDicionados de#ondres 6amn $otten- Fotspur DQt>ol/DQt>ol e?uipo. los compa*Ba tam>iCnactivamente >uscado pQ>lico relacionesoportunidades.G"uando allB es unoportunidad a %acer algunas noticias,Gr;eting irector $on5 Enderson e'plic,

Onosotros %acer ello.G eas56et de mr;etingcentrado en sus tariDas >aAas 5 puntualidad,enDati@ando am>as cosas sus precios >aAos 5impresionante gra>ar de a tiempo salida.stelios resumido eas56et de mr;eting

estrategia, G%acemos limitado promesas, pero%acer +or supuesto nosotrosconsecuentemente entregar en ellos.G

eas56et de procesos para compra >oletos, dec%e?ues en, 5 el em>ar?ue Dueronracionali@ado para minimi@ar la compleAidad

para am>as cosas clientes 5 eas56et personal.E comprar una >illete, clientes llamado lalocal llamar a tanto nQmero, 5 Dueronconectado a uno de eas56et de agentes dereservas situado en la central llamada centraren eas5#and.#lamadas de Duera del Reino

:nido clientes Dueron maneAado por espa*ol,KrancCs-, o e %a>la %olandesa agentes dereservas en #uton. Reserva agentes Dueron

pagado Qnicamente en comisin /0.80 I porasiento vendido, 5 podrBa esperar vender 0a 0 asientos en un promedio oc%o %oracam>io. $odas clientes Dueron necesario a

paga por crCdito tarAeta, 5 reci>ido la seispersonaAe reserva reDerencia nQmero. !stareserva reDerencia era las slo inDormacin de

la pasaAeros necesario a ta>la las avin, 5 sin>illete era e'pedido a ellos.

+asaAeros Dueron pedido a llegar a lasaeropuerto una %ora antes de salida, versuslas dos %oras recomendado por la ma5orBaotro aerolBneas. "uando la pasaAeros lleg,eas56et suelo agentes simplementeconDirmado los pasaAeros nom>re 5 reDerencianQmero, compro>ar su pantaln, 5 dio ellos lael plastico em>ar?ue tarAeta, ?ue numeradoe 1 a 1L8. Fa>Ba no preas-

Dirmado asientos, 5 pasaAeros a>ordado enorden de ellos tarAeta nQmero.


26/42

u>-"ontratacin !mprendimiento

!n la tBpico aeropuerto donde eas56et opera,como muc%os como un medio docena desu>contratistas %arBa ser involucrado en laentrega las asB llamado Geas56et productoG/"iDra 2. eas56et conDinado sus papel ensiempre ?ue las aviones, los pilotos 5tripulacin de ca>ina 5 gerente mr;eting 5ventas. $odo ms - de las registrarse

procedimiento para las en el sitio clienteinDormacin escritorio - Due maneAado porsu>contratistas. "omo la puesta en marc%a

con limitado recursos, un incierto Duturo 5grave deseconomBas de escala, eas56etinicialmente conDiado en tractores su>-con-Duera de necesidad. &ncluso en temprano18, sin em>argo, despuCs de eas56et tenBaad?uirido sus propio operante certiDicado 5alcan@ado las !l $ama*o a cual la ma5orBaaerolBneas traer operaciones en la casa,telios insistido como la materia del

principio en empleando como muc%os

su>contratistas como sea posi>le

GNosotros creer relaciones con deemprendedor compa*Bas de Duera allB a%acer la >eneDicio, estn s eDiciente ?ueteniendo un manoAo de empleados tQ mismo.+or la creacin de varios centros de

>eneDicio, gran empresas estn pro>ando aemular las su>contratacin sistema. +ero

Nuestros su>contratistas estn real centrosde renta>ilidad con real "!9s molesto a%acer real Udinero i ellos son no >iensuDiciente ellos ser ser Duera de negocio.#as Duer@as del mercado eliminar algunaineDiciencias en las sistema desu>contratacin G

eas56et de capacidad a reunirse susoperacional o>Aetivos, como sin >oletoregistrarse, las 20 minuto (iro de vuelta, 5

el la seguridad 5 puntualidad de las aerolBneatodas dependBa crBticamente en las actuacinde su>contratistas. eas56et administradores enconsecuencia dedicado tiempo signiDicativo 5energBa a supervisar relaciones con los

su>contratistas. Elan "aliDicacin, 6eDe&ngeniero, e'plic

GNuestros papel e Verdad es a administrarcontratos 5 transporte de personas. Nosotros

%acer las cere>ral ocupaciones, lassu>contratistas son las dedos, 5 las contratoes las comunicacin


27/42

"iDra 2 eas56et u>contratacin istema - !l#uton !Aemplo

a>aAo a las los dedos. Nosotros Yno propiolas dedos, pero nosotros tener algQncontrolar encima ellos. Errogante Fa>lando,nosotros estn los pensadores, ellos estn las

%acedores O.

eas56et era en general satisDec%o con susproveedores, pero algunos peridicadecepciones %i@o surgir. !n uno un casoaeronave era entregado tarde, a las mu5Qltimo %ora para programada despegar 5

vuelo personal ?ueAado constantementeacerca de su %orarios, cual se dispusieron porun aDuera compa*Ba.

eas56et tenBa iniciado la nQmero deprogramas meAorar relaciones con susproveedores. los compa*Ba #! regulartalleres, cam>io de roles eAercicios, 5

simulaciones con su>contratistas a aclarareas56et de o>Aetivos 5 esperan@as de %eredar.!n Edems, eas56et tenBa dise*ado uninnovador sistema para "&9N! evaluacin

proveedores G actuacin. #os su>contratistasDueron evaluados no slo en cuantitativocriterios /por eAemplo porcentaAe de a tiempovuelos, pero adems en cualitativo Dactorestal como su comprensin de las eas56etconcepto. los resultados de estas evaluaciones

se incorporaron dentro la rigurosoclasiDicacin matri@, cual era entoncesutili@ado a determinar las proveedores Gcompensacin."aliDicacin cCle>re

GJ9 a.m molesto mu5 diDBcil a convertir lascontrato con onarca &ngenierBa dentro laasociacin acuerdo donde ellos ?uieren atra>aAo con nos ms >ien ?ue Eca>o e o>ra?uC las contrato dice. Nosotros desear ellos acomprender Nuestros punto de vista, peronosotros posi>le slo esperar ellos a %acereso si nosotros comprender el su5o ... aveces, a%ora >ien, usted tener a usar las >atede >Cis>ol tCcnica a lograr tu o>Aetivo.G

los "ompetencia


28/42

!n 17, eas56et administradoresidentiDicado !legante, Eire R5an- 5 Virgen!'primir como su $res ms cercano los

competidores. +ese E todas de estasaerolBneas oDrecido >aAo tariDas de los vuelosde corta distancia, cada perseguido sus

propio variacin de las >aAo costo tema/esa L. !stas cuatro competidores engeneral evitado ca>e@a a ca>e@acompetencia con cada otro en rutas, 5 lama5orBa destinos Dueron servido por slouno >aAo costo aerolBnea /esa . Elgunosrutas, como #ondres - )arcelona, in

em>argo Dueron aparentemente gransuDiciente a oso s ?ue un solo >aAo costo

portador.!n decidir si entrar de nuevo ruta,las transportistas estimado las la ruta derenta>ilidad esperada >asado en titularcompetidores /inclu5endo trenes 5 cartavuelos las oDertas 5 la carga Dactor, pedir

patrones 5 otro inDormacin so>re lasposi>le destino. "omo todas cuatro rivalesDueron agresivamente creciente su aeronaveDlota /"iDra 3, se >uscado despuCs aidentiDicar renta>le nuevo rutas 5 a servirellos primero. !n contraste a eas56et, sus detres >aAo costo competidores Dui pQ>lico en17 5 pu>licado detallado Dinancierocuentas /ver esa para cada competidorde 1 Dinanciero actuacin 5 la Digura L

para accionista devoluciones.

!legante

&ncorporado en &nglaterra en octu>re 1,e>onair Foldings Due eas56et de lama5orBa visi>le competidor. e>utante-

en el aire utili@ado #uton aeropuerto como

sus los principales cu>o, 5 sus sedes Dueronsituado slo 00 metro de $ierra de Dcil.

!legante era Dundado por Kranco ancassola,la 8 a*os Emericano. ancassola gastado2 a*os de su carrera en las aerolBneaindustria, creciente mediante la serie dema5or administracin posiciones en

"ontinental EerolBneas, undo EirHa5s,ediados de-+acBDico aerolBneas 5escu>rimiento EirHa5s. !legantecomen@ado operaciones en Aunio 1 de>aAolas sencillo DilosoDBa de StariDas ms >aAas conmBnimo restricciones 5 no renunciar a lacomodidad.G us primero dos arrendadoaeronave servido tres rutasP de #ondres #utona ZsseldorD, unic% 5 )arcelona. :no mesmas tarde, entrega de la tercer avin

permitido la aerolBnea a*adir adrid 5 EstleNeHc- a sus la red. urante las siguiendo tresmeses !legante continuado sus rpidoe'pansin mediante el arrendamiento de doss aeronave traer sus Dlota para cinco por)Ee 1L-200 aeronave. los grande Dlota !l$ama*o %a>ilitado las aerolBnea no slo amosca a "open%ague 5 Roma, pero tam>iCntomar ventaAa de las e la :! a>ril 17desregulacin 5 transporte pasaAeros dentroe'tranAera lucrativo mercados, tal comoElemania donde e>onair vol !ntre unic%- usseldorD 5 !spa*a /adrid - )arcelona.!legante de rpido e'pansin se desaceleren las primero mitad de 17, a%ora >ien,cuando administracin interrumpido dos rutas/#uton - NeHcastle 5 )arcelona - adridcitando insuDiciente pedir.

!legante dirigido negocio viaAeros, 5intentado com>inar alto niveles decomodidad 5 cliente ervicio con >aAo tariDas.GNuestros estrategia diDiere sustancialmentede eas56et de Gancassola e'plic, GNuestrosenDo?ue es >aAo costo pero seguro no novolantes.G !n temprano 18, e>onair deDlota "onsisti de siete )ae 1L-200s, ?ue

Dueron considerado las ms silenciosopasaAero %icieron c%orros. los aeronaveDueron conDigurado con la clase Qnica ca>ina,donde todas asientos Dueron apartado por 3 3


29/42

O, Drente las 2 O asiento terreno de Auegocual era las industria estndar en economBaclase. )arato tariDas, s %a>itacin lacin,5 tran?uilo c%orros Dueron $res de !legantede clave de venta puntos a negocio viaAeros,

?uien %ec%o arri>a 8 por centavo de las #acompa*Ba de pasaAeros.

!legante logrado el aparente paradoAa de>aAo tariDas 5 cmodo ervicio por enDo?ueen eDiciencia operacional. !n particular, lasaerolBnea concentrado on-punto a puntomercados, operado la uniDorme Dlota de >aAo

costo aeronave minimi@ar el mantenimientocostos, se concentr ervicio operaciones enlas Reino :nido a minimi@ar el tra>aAo 5operante costos 5 su>contratar Dunciones,tal como mantenimiento 5 las registrarse

proceso.Edems, !legante intentado alograr alto niveles de aeronaves utili@acin

por operante sus )ae 1L para 10 %oras 51 minutos la dBa en promedio, mientras )Eera operante sus propio )oeing 737 para

slo 7 por %ora dBa.

!legante de estrategia enDati@ado rpidoe'pansin durante tCrmino cortorenta>ilidad.!n Discal a*o 17, !legante,reportado la antes de impuestos pCrdida de I1,7. !legante

esa L "omparacin de las "uatro )aAocosto aerolBneas /Ke>rero 18

EerolBnea

!l$ama*o deDlota 5escri>edeaeronaves

"apacidad poraeronave

eventamCtodo

!nvuelo de

>aAocoste

Fu>s estinos

eas56et

)oeing737-300

1L8asientos

irectoventas

No#uton#iverpool

!scocia/L [Xmsterdam Ni@a)arcelona, +almade(ine>ra

!legante

7 )Ee1L-200

asientos

irectoventas/38M5viaAaragentes/2M

B

#utonQnic%Roma

)arcelona,"open%agueusseldorD adrid

R5anair

20)oeing737-200E

130asientos

viaAarEgentes

No

u>lBntansted

&rlanda/3 [[(lasgoH&nglaterra/ [[[)ruselas

+arBs!stocolmo


30/42

Virgen!'primir

12)oeing737-300

L)oeing737-L00

1L8asientos

170asientos

viaAaragentes

No

)ruselasRoma

Feat%roH(atHic;

Roma)arcelona Niceadrid

"open%ague

iln

[ estinos en !scocia estn (lasgoH,!dim>urgo, E>erdeen 5 &nverness.

[[ estinos en &rlanda estn =err5, corc%o5 (olpe.

[[[ estinos en &nglaterra estn #eeds,#iverpool, anc%ester, )irming%am, #uton,"ardiDD, )ristol, )ournemout% 5 (atHic;.

#os eAecutivos de e>onair atri>u5eron las

perdidas a los costos de inicio necesariopara entrar en los mercados antes de losrivales,5 previeron un >eneDicio de 3m I en18 5 1m I en 1,. \ Nos %emosmovido adelante de la desregulacin para

reclamar nuestro territorio en !uropa,Gancassola e'plic, G#as ganancias vendrn

pronto.G #os resultados de medio a*o de18,sin em>argo, Dallaron en AustiDicar optimismode ancassola a comien@os de 18

e>onair anunci la perdida de impuestospor .m I para esta perBodo,atri>uidaprincipalmente a la Duer@a de #i>ra esterlina5 gastos en pu>licidad por encima de loesperado

R5anair

9perando una Dlota propia de 1 aviones)oeing 737-200], la aerolBnea &rlandesaR5anair Due considerada por muc%os analistasde la industria las meAor aerolBnea de >aAocosto en !uropa. )asado en el aeropuerto enu>lBn 5 tansted de #ondres, R5anairoDrecia mas de 100 vuelos cortos por dia aDinales de 17, 5 servia nueve u>icaciones

en &nglaterra, cuatro en &rlanda 5 (las- goH,"ardiDD, +arBs, )ruselas 5 !stocolmo.

!n 18 R5anair comen@ operacionesoDreciendo vuelos de tariDa completa entre&rlanda e &nglaterra. #a compa*Ba

rpidamente e'pandi sus rutas en lossiguientes seis a*os 5 disDrut crecimientosustancial en volumen de pasaAeros entre18 5 1.1. E pesar de sus rpidocrecimiento, R5anair suDri pCrdidasconsistentes resultante de un control po>re decostos 5 un inadecuado sistemas deinDormacin. !n 1.1 el nuevo e?uipo deadministracin reestructur la compa*Ba paracompetir como la aerolBnea de tariDas >aAas,sin luAos. #a administracin centr lasoperaciones en pocas rutas clave,recortandotariDas a niveles de modo signiDicativo porde>aAo de las de competidores Eer #ingus 5


31/42

>ritnico idland, e introduA el pago>asado en la productividad para todo elpersonal, inclu5endo pilotos 5 asistentes devuelo. !n 1L, R5anair- comen@ anormali@ar su Dlota ad?uiriendo aviones

usados )oeing 737-200E para reempla@ar suDlota de aviones arrendada.

!l servicio de >aAo costo de Re5nair generun aumento signiDicativo en la demanda encada ruta ello entr despuCs 1.1, los

analistas de la industria apod este aumentoen la demanda como el O !Decto R5anair.G"onDorme a la 9rgani@acin de Eviacin"ivil &nternacional, el nQmero de pasaAeros

programados de viaAe !ntre u>lBn 5#ondres, por eAemplo, aument de 1.7milln de pasaAeros en 1.1 a ms de 3.3milln pasaAeros en 1.!l volumen de

pasaAeros programados de R5anairanualmente %a aumentado de L000 en

12 a

esa ecuencia !ntrada de >aAo costoEirlines dentro nuevo estinos

estino E Elcaneas56et !lega R5an Virgen

diariovuelosde la

>ase

ce dedeunasolamano

tariDas

nte air !'primir

#ondres#uton

2.L 81-2L

!ne-8

#iverpool03.01

81-2L

a5-88

#ondrestansted

-11 81-2L

Nov-88

(olpe/&rlanda

1 108a 273

a5-1

corc%o/&rlanda

3 -273

9ct-1

)irming%am

3. 81-2L

Nov-3

anc%ester

L. 81-2L

a5-L

(lasgoH 8-12 -200 Nov- a5-L

#ondres(atHic;

-8

Nov-L

ar-7

)arcelona7.10 -23L

6un-6un-

Nov-L

adrid L -217

6ul- a5-


32/42

!dim>urgo

L. -200

Nov-

iln 1 -

13

iciem

>re-

E>erdeen 1 7L-208

!ne-

Xmsterdam

3.L -200

E>r-

agrada>le -7 -23L

6un- E>r-

#eeds 1-2 81-2L

a5-

)ournemout%

1-2 81-2L

a5-

"ardiDD 1 81a 2L7

a5-

usseldorD

1 n E 6ul-

unic% 1 n E 6ul-

"open%ague

3 -13

9ct-

ep-

Roma10-12

-137

Nov-

ep-

#ondres

Feat%roH 8

-

8 9ct-

&nverness 1 7L- Nov-

208

+arBs)eauvais

3 108a 273

a5-7

)ruselas"%arleroi

2 108a 273

a5-7

)ristol 2 81-2L

a5-7

!stocolm

o 2

13

a 3L1

6un-

7

=err5/&rlanda

1 108a 273

6un-7

(ine>ra 1-2 -23L

iciem>re-7

+alma 1-2 -23L

iciem>re-7

Kec%as en auda@ indicar primero movimientodentro las especBDico destino.


33/42

"iDra 3 )aAo costo EerolBneas Eumentar deEeronave Klota

esa Resumen Dinanciero de eas56et de$res +rincipal "ompetidores

+ ^ #

R5anair

/a*osterminado37

000

!legante

/a*osterminado37

000

Virgen!'press

/a*osterminado12

000

Volumen denegocios

18.27 2380 180.038

9perantegastos

1.8L 01 178.172

9perante>eneDicio

31073

/2.31

18

9tro ingresos/gastos 1210 /1 /71


34/42

)eneDicio/pCrdidaantes de

impuesto

32283/2.32

110

&mpuestos 11L33 87L

)eneDicio/pCrdidadespuCs

impuesto

2080

/2.L18

27

inorBainteresar

0 0 1LL

)eneDicio/pCrdida

para lasperBodo

2080

/2.L18

132

!?uili>rar%oAa

R5anair/mar@o 31,17

000

e>onair/mar@o 31,17

000

Virgen!'press/diciem>re31, 1

000

!Dectivo a>anco 5 enmano

3280

171L

1330L

9trocorriente>ienes

1872 1108L 03

$otalcorriente

>ienes18 1278 L27

KiAo >ienes/red

872 302 18

$otal >ienes

120.30

1L00

132

"orrientepasivo

2L8

123

0L

E largo pla@odeuda

L203 1711 0L21

9tro pasivo 17278 n E 2221

Eccionistase?uidad

L231

/13.712

/.L

inorBaintereses

/12

$otal pasivo 5losaccionistas Ge?uidad

120.30

1L00

132

&ntercam>iar tasas utili@ado a convertir

Dinanciero datos a !# _#ERE!R&"EN9, como de mar@o 27, estncomo sigue &R I : 1,37P I : 1,8P )!K 3.Virgen !'primirG negativo


35/42

accionista e?uidad es principalmente de>idoa la 2m >uena voluntad pedir por escrito.

3.1 milln en 17 /a*o Dinal ar@o de17.

)aAo el lidera@go de su "!9 ic%ael

9G#ear5 de 3 a*os, R5anair aspir aesta>lecerse como la aerolBnea lBder !uropeade >aAo costo a*adiendo rutas a !uropa"ontinental, incrementando la Drecuencia devuelos a lo largo de las rutas e'istentes, 5 envista de posi>les ad?uisiciones. !n mar@o18, la aerolBnea &rlandesa ordeno Lnuevos )oeing 737-800 por valor 2 milmillones.R5anair 2 Dirma pedidos valor 1.1>n para el nuevo 18 asientos aeronave 5

tomaron 9pciones valor 00 millones enla promover 20 737-800. los compa*Badestinado a tomar entrega de cinco aeronave

por a*o comen@ando en mar@o 1,.9G#ear5 creBdo eso las nuevo aeronave

%arBa permitir R5anair a aumentar capacidad2 por por ciento a*o 5 golpear alguna >aAocosto competencia de e ope !:R- ma5oraerolBneas. !llo %arBa adems permitir lassustitucin gradual de las antiguo 737-200,cual se acerca>an las Din de su Qtil vidas.

Virgen !'primir

Virgen !'primir comen@ ervicio como lacarta aerolBnea en De>rero 1 2, operantede>aAo las nom>re !uro>elg- ian aerolBneasE /!)E. !n noviem>re 1L,respondiendo a las desregulacin de lasmercado para transporte aCreo dentro laseuropeo :nin, !)E iniciada programada

servicios !ntre )ruselas 5 )arcelona,


36/42


37/42

"iDra L Eccionista evoluciones de #istadoeuropeo )aAo costo aerolBneas


38/42

Viena 5 Roma. !n a>ril 1 , !)E eraad?uirida por Virgen !'primir Valores encartera, cual re>auti@ado el portador comoVirgen !'primir, contratado la nuevo e?uipode gestin 5 enDati@ado servicio programadoa !l gasto de carta vuelos.

los nuevo administracin e?uipo - #! por"!9 6onat%an 9rnstein ?uien unido Virgen!'primir despuCs dos a*os como la cimaeAecutivo en "ontinental !'primir -

perseguido activamente crecimiento. "omola resultado, Virgen !'primir creci de 338

programada vuelos por mes en a>ril 1 a128 vuelos en agosto 17. Virgen!'primirG C'ito temprano era >asado encuatro nQcleo Dortale@as >aAa operativocostos, las Virgen marca nom>re, la

directivo con muc%a e'periencia e?uipo 5un DluAo de ingresos constante de su cartavuelos 5 sus acuerdos con a>ena. e>aAoestas acuerdos, a>ena propsito perseguidola cierto nQmero de asientos en cada Virgin

!'press vuelo /generalmente mas ?ue 0 perciento de la disponi>les asientos en rutas!ntre )ruselas 5 #on- don de Feat%roH 5(atHic; aeropuertos, Roma 5 )arcelona.)asado en )ruselas Nacional Eeropuerto,

Virgin !'press era vuelo, en temprano 18,a 10 carta destinos a 5 operado a diarioprogramada servicios entre siete ma5oreuropeo ciudades #ondres /(atHic;, Roma,)arcelona, iln, adrid, "open%ague 5Egrada>le. !llo tenBa la Aoven Dlota de 12)oeing 737-300 5 cuatro )oeing 737-L00 5disDrutado una impresionante pasaAerovolumen crecimiento la tasa durante elQltimo cuarta parte de 17 Virgen !'primir

reportado 10,0 pasaAeros, casi do>le lasnQmero de pasaAeros ?ue vol Virgen!'primir en las Qltimo cuarta parte de 1/2723. 1

"omo su contrapartes a eas56et 5 R5anair,6onatn ?ue 9rnstein ve las aerolBnea como laeuropeo versin de uroeste aerolBneas 5

admite eso Cl imitado su operativa modeloGNosotros ser emular uroeste, dondenosotros posi>le 5 cuando nosotros posi>le -

por ?uC reinventar la Yrueda`G

espertar del gigante dormido

!as56et primero encontr represalias dela>anderado durante su incursin inicialdentro de !uropa "ontinental en a>ril 1."uando eas56et decidi volar a Emsterdamde su #ondres cu>o, las ruta era 5a cumplida

por varias aerolBneas las cuales AuntasoDrecBan 0 vuelos a diarios, 5 Duncionariosdel aeropuerto de Xmsterdam sin rodeossugirieron en su G>ienvenidaG Da' ?ue eas56etseleccione un alternativa destino. E pesar delos o>stculos, eas56et entr la ruta. #a


39/42

%olandesa a>anderada =# la cual tenBael L0M del mercado en la ruta -inmediatamente respondi igualando lastariDas de eas56et con la promocin

permanente del precio llamado

G!as5"%oice.G

#a agresiva respuesta de =# casiconectado a tierra eas56et. #os vuelos en laruta de #ondres - Xmsterdam eran a menudocasi vacBos, generando graves pCrdidas alescenario crBtico de puesta en marc%a.

telios pQ>licamente DiAo ?ue !as56et nopodrBa so>revivir otros seis meses en la rutaa menos ?ue =# cam>iara sus tcticas.!as56et respondi con una >atalla de alto

perDil legal, 5 acuso a =# con prcticasanticompetitivas ante la "omisin !uropea.telios incauto la >atalla legal como unaoportunidad de relaciones pQ>licas Cl vol ala sede de =#, con un e?uipo de televisina estrec%ar personalmente la mano del "!9

de =# con 1000 letras de clientes deeas56et ?ueAndose acerca de la acciones dela aerolBnea Folandesa. #a %istoria reci>ie'tensa co>ertura de los medios pormuc%os meses en el Reino :nido 5 +aBses)aAos, aumentando la conciencia de marcade las aerolBneas.!as56et persisti 5gradualmente se esta>leci como un Augadorclave en la ruta #ondres - Xmsterdam, 5 en18 contemplo un nuevo centro enEmsterdam.

La respuesta del britnico Airways ':

Vamos

!n noviem>re 17, el >ritnico EirHa5s/)E anunci su intencin de lan@ar lanueva aerolBnea con un centro en elaeropuerto tansted de #ondres donde

podrBa oDrecer reducciones durante elervicio de vuelo 5 tariDas inDeriores ?uesus vuelos )E. !l pro5ecto - apodado9peracin E@ul "ielo - %a>ia comen@adoseis meses antes cuando )r>ara "assani,

aspirante a AeDe eAecutivo de )lue ;5, reali@oun estudio de Dacti>ilidad de nuevasaerolineas potenciales. !l estudio de "assani

pro5ecto ?ue )lue ;5 podrBa volverserenta>le en su tercer aPo de operaciones en

2.001. #os nuevo aerolBnea, llamado &r acomien@os de 18, planiDicado vuelos a&talia, !spa*a, !scandinavia, Krancia 5Elemania de tansted Eeropuerto. &radoptada la ma5orBa elementos de eas56et dee'itoso receta se planiDicado a mosca lo)oeing 737-300 con 1L8 asientos, el >5passviaAar agentes 5 vender entradas directamentea los clientes, oDerta no volantes en ta>la 5incluso usar las mismas reservas soDtHare

como eas56et. !n sus primero a*o de lasoperaciones, &r %arBa crear 10 $ra>aAos 5crecer a partir de dos arrendado )oeing 737-300 aeronave a oc%o. Kares en las rutas nocu>ierto por otro >aAo costo transportistasserBa a menos 30 por centavo a>aAo estndartariDas en regular licenciado en #etras vuelos.!n rutas eso Dueron 5a servido por eas56et,!legante, R5anair o Virgen !'primir, &r

planeado a Auego las >aAo costo portadores Gprecio.

e )E anuncio provocado un inmediatoreaccin de las administracin de eas56et 5!legante, ?uien e'pres su preocupacin esolicenciado en #etras tenBa Dormado las nuevaaerolBnea para Dor@ar las >aAo costo

portadores Duera de el mercado a travCsdepredador la DiAacin de precios. teliosrespondido agresivamente en un intento avuelta pQ>lico opinin en contra e )Emovimiento. eas56et metido la +gina delargo anuncio en ma5or Reino :nido

peridicos e'presando sus pensamientosacerca de &r GFace las el mundo de DavoritolBnea aCrea realmente necesita un >aAo costoYportador`G /"iDra . #E pocas semanas mas

tarde eas56et lan@ado un pu>licidad campa*acon las eslogan G#&"!N"&E9 !N #!$REes la imitador, mosca las U"osa realG R5anair,en las otro mano, >ienvenida #a decisin de


40/42

)E, presumi>lemente por?ue (o decisin alocali@ar en tansted aeropuerto - R5anaire'istente cu>o - %arBa meAorar las aeropuertode posicin en sus pelea con #uton para lastBtulo de #ondres dominante >aAo costo

aeropuerto.

e'pansin de 1 adicional aeronave a servirrutas desde no %u> ciudades en Elemania aotro estinos europeos, por eAemplo +arBs -#eip@ig. i perseguido, esta plan resultado en

la m'imo Dlota de 30 aeronave,Edicionalmente a las 10 aeronave eso laspadre compa*Ba era 5a vuelo en europeorutas. E guardar >aAos costos, las aeronave%arBa tener e'tra asientos, ca>ina servicios%arBa ser "orte, 5 inDerior asalariado personal%arBa ser contratado. Edems, mantenimiento5 reparacin %arBa ser contratado Duera.(erentes estimado ?ue estas costo a%orros%arBa permitir #uDt%ansa #u@ precio a 20 por

centavo a>aAo corriente #uDt%ansa tariDas.


41/42

+ese E #uDt%ansa administracin ta>laapro> la propuesta en temprano 18, las#a compa*Ba de "onseAo !Aecutivo retrasadoimplementacin por?ue ello sinti eso la

propuesta %i@o Gno todavBa oDerta adecuado

alcan@a>le negocio ness meAoras, 5 ademse re?uieren investigaciones a resolvere'cepcional cuestiones tal comoautomati@acin 5 cargos T.2

"reciente !sDuer@os

"iDra eas56et de Enuncio en Respuesta a &r

G#uDt%ansa #u@G

!n 17, las alemn a>anderado #uDt%ansaenDrentado enormes pCrdidas operativas en sudomCstica vuelos, 5 se sentBan amena@ados

por las entrada de >aAo costo aerolBneas,particularmente !legante cual oDrecido vuelos!ntre Elemn las ciudades. #uDt%ansaadministracin ta>la considerado 5 rec%a@adolas 9pciones de goteante sus deDicitarianacional rutas o contratacin ellos Duera a

>aAo costo transportistas. !n lugar lasadministracin ta>la KEV- ored la opcin delan@ar sus propio >aAo costo lBnea aCrea,conocida inDormalmente como G#uDt%ansa#[email protected]

G#uDt%ansa #u@G era previsto como untransportista autnomo oDrenda directo vuelos!ntre menor Elemn ciudades - de este mododerivacin #uDt%ansa %u>s en unic% 5Kran;Durt. los nuevo portador %arBa Duncionarde>aAo sus propio marca, con sus propiogestin 5 personal, +ese E #uDt%ansa %arBaconservar 100 per centavo propiedad. #E

Dacti>ilidad estudiar de las nueva aerolBnearecomendado un inicial Dlota de -1Laeronave. los estudiar adems recomendadola su>secuente Dlota


42/42

G$odas 5o necesitar a %acer E%ora, Gteliosescri>i en las e diciem>re de de 17edicin de eas56et de durante el vuelorevista, Ges encontrar las seis milln gente la

a*o a mosca en mi nuevo planos. G algunosindustria analistas creBdo eso eas56et demarca Duerte reconocimiento 5 impulso%arBa permitir ello para capturar la cuota enlas creciente mercado para vuelo de >aAocoste en !uropa. 9tros preguntado si eas56et

podrBa mantener sus >aAo costos 5 rpidotiempos vuelco como las soporte ampliado ala nueva %u>s en !uropa, tales como Etenas5 Emsterdam, 5 adems especulado cmo

rpidamente las >aAo costo aerolBneas %arBaescape la piscina de lucrativo potencialrutas. 9tro comentaristas cuestionado sieas56et podrBa tener C'ito en el cara decompetencia de >aAo costo aerolBneas 5 elactual >andera-portadores. eas56etadministradores eran impvido, a%ora >ienG"omo largo como nosotros guardar lasDrmula correcto,G Ra5o sterargumentado, Gnosotros sensacin como lacompa*Ba eso nosotros Yno tener a

preocupacin acerca de las competencia.G

Reconocimiento

onald N9R$!. ull escri>i esta versinde las eas56et caso Residencia en laense*an@a caso estudiar por +anagiotis

#e;;as 5 imitris Varelt@idis, cual eradestinado a a ser utili@ado como la >ase parala discusin en clase ms >ien ?ue a ilustrar5a sea eDica@ o ineDica@ maneAo de laadministracin situacin.

Notas

1. Virgen !'primir sitio He>.

2. Vuelo &nternacional /188.

ReDerencia

Vuelo &nternacional /1.88 2 De>rero - 3ar@o, p. 1.

TEXTO OCULTO!sta seccin contiene inDormacin so>re %erramientas, tBtulos

5 otros te'tos ?ue se encuentran ocultos en el cuerpo de lapgina F$#. !ste te'to de>e ser traducido para ?ue toda lapgina estC en tu idioma.ELEE!TO" #TL

+&& 023-2373 /8 000-0

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