INTRODUCTION
EasyJet is a British airline based at London Luton Airport. Sir Stelios Haji-loannou founded EasyJet in 1995 with the vision of creating a customer-focused brand that would revolutionize the concept of air travel. More than fifteen years on, EasyJet is the Europe’s leading airline and the largest airline in the United Kingdom carrying over 50 million passengers a year and flyting to over 600 routes across 30 countries. EasyJet flies to 44 out of 50 Europe’s largest airports and holds a strong position in key markets such as London Gatwick, Milan and Geneva. November 1995 EasyJet’s inaugural flight flew from London Luton to Glasgow and Edinburgh with the wet leased Boeing 737-200 aircraft. April 1996, they launched their first
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However, the increase in sales revenue was at a higher proportion compared to the total costs, so the profit after tax for 2014 was £450million, an increase by 13.1% from last year. The table below shows the financial overview for year 2014 and 2013.
2014 2013 £ million £ million
Total Revenue 4,527 4,258
Costs excluding fuel (2,695) (2,598)
Fuel (1,251) (1,182)
Profit before tax 581 478
Tax charge (131) (80)
Profit after tax 450 398
MANAGEMENT ACCOUNTING IN EASYJET PLC
Both financial and management accounting are important tools in a business but both have different purposes. Financial accounting is used to present the financial health of an organization to its external stakeholder. However, management accounting is the process of preparing management reports and accounts that provide accurate and timely financial and statistical information required by managers to make day-to-day and short-term decisions. In all common businesses, shareholders generally worry about the income and loss incurred by the company but in the flight industry customer’s safety is always top priority. Besides safety, the second most important concern would be providing the passenger with an exciting travel experience at a minimal cost while maintaining a respectable profit margin that would not concern the shareholders too much.
For a budget airline like EasyJet, they might use the ‘Cost Volume
operating profit reached $396.7 million in FY2012, an increase of 47.6% over FY2011. Also, the net
Sales increased by 1.34% to settle at £2.31billion in 2014. On the contrary, operating profits dropped from £155.4million to £128.6million hence resulting to a percentage decrease of 17.25%. This huge drop on overall operating profits is largely explained by Debenhams’ chairman report, where he explicitly states that the company struggled the first six months in maintaining profitable margins.
we saw increase in sales from 11070 to 12223.8, net earnings also boosted from 382.9 to 519.3. Similarly, cash flow from operating activities also increased by 136 million dollars. At the same time, net earnings rose up to 523 million dollars in 2015. On the other hand, total assets upgraded from 4817.4 to
There are notable items mentioned on the income statement as well. The first is the growth in revenues, which increased from $2,700,800 to $3,262,400. Once the cost of revenue was subtracted from the total, the gross profit was $2,819,400 for 2010. To distill the differences in before-tax profit, the firm’s cost structure must be analyzed. The gross
Revenue for 2015 was $1,692,292 versus to $89,803 for 2014 and operating expenses for 2015 was $11,639,430 versus $6,900,310 for 2014. 2015 Net loss for 2015 was $12,069,466 versus $17,576,576 for 2014.
This report illustrates an in-depth look of easyJet and will also discuss an analytic research that was made to demonstrate aspects of the history of the airline, along with the marketing strategy and brand strategy used and implemented by the low-budget airline. The strengths, weaknesses, opportunities and threats, known as SWOT analysis, will also be illustrated along with the external environment better known as PEST analysis which consists of the political, environmental, social/cultural and technology factors of easyJet. In addition an analysis of the competitive market environment of easyJet will be shown, which includes an overview of easyJet’s main competitors and the nature of business in which they operate
There is no significant increase or deduction in terms of financial performance. There is a slightly downturn showing in the franchising sales revenue from 5.19bn to 5.08bn contributed by almost the same amount of outlets. Basic earnings per share have increased from 21.78c to 23.75c whilst a decrease of 2c in dividend per share compared with 2010.
The author Triant Flouris is the professor of San Jose State University, Thomas Walker is the professor of Concordia University. They collect accounting data from companies’ annual report and daily stock price from Toronto Stock Exchange, in order to examine the accounting and stock price performance of WestJet and Air Canada, two Canadian airline companies, how they deal with the series problems after 911. Their study focus on the ability of airlines react to the sudden disaster. They find out that low-cost airline such as WestJet can respond to the industry disaster faster than conventional-cost airline such as Air-Canada due to their flexible variable cost structure. This journal provide one of the important success factors of WestJet,
With the BCG Matric analysis, we can argue that Easy Jet enjoys a viable competitive position because of its actual market growth. However, its prices have been compared with those of rival firms. This has clarified that Easy Jet emphasizes on being a low-cost carrier with no surplus in-flight services. Writers such as Quelch & Deshpande (2004, p. 71) argue that the Boston Consulting Group growth/share matrix has offered an opportunity to establish the market share of Easy Jet and the company's growth rate. In the context of the company's low cost market, it is clear that the market is still are still increasing. In addition, with the current fleet volume of 80 aircrafts, Easy Jet can serve 160 routes across Europe. Industry experts have associated such massive penetration with the rise in numbers of passengers and a relative rise in market share. Consequently, it is clear that the company has become a star. Nevertheless, Easy Jet must expand its market share for it to transform into a source of income after the decline of the market's growth rate. With respect to the company's Boston Consulting Group growth/share matrix analysis, we can claim that the cash flow of Easy Jet from operating activities have declined as well as the annual finances. Nevertheless, the acquiring firm's cash flow statement is the main area of focus (Butler &
Southwest Airlines is a company that is known for its low ticket prices and profitability despite the highly risky industry in which it operates. This essay examines the cost behavior, cost volume profit (CVP), activity based costing (ABC), budgeting process, costing and decision making policies of the firm. The essay will discuss how the airline integrates these concepts in its daily operations.
IntroductionThis report has been written in order to provide an environmental and competitive analysis of the low-cost airline industry sector from the position of Easyjet. It will give a brief history into Easyjet and the low-cost airline industry. It will analyse the internal strengths and weaknesses as well as the external threats and opportunities. Competitors will be analysed through the use of porters 5 forces model. Recommendations will be made for easyJet's marketing strategies for the next three years.
The essay will firstly introduce the organisation easyJet. Secondly the essay will explain about how easyJet uses its operation strategies and its competitive priorities. Finally the essay will discuss the most important operation decision and explain it further in detail. easyJet is a well known low-cost airline which operates in several European countries and has been founded by serial entrepreneur Sir Stelios Haji-Ioannou in 1995. easyJet undertook intensive research of a United States owned low-cost airline ‘Southwest Airline’. Most of the concepts for easyJet were adopted from Southwest airline; however easyJet added its own touch which reduced operating costs even further. EasyJet was strategically located at London's Luton airport.
The Net Profit Margin in 2012 was 10.5% while in 2013 it was 66.6%. This increase in the Net Profit Margin can be attributed to the increase in net profits after taxes despite the fact that there was a slight decrease in revenues.
Building on the success of easyJet and to extend the ‘easy’ brand further, he formed the holding company easyGroup in 1998. easyInternetcafe was his first venture under the umbrella of the easyGroup. Other companies in the group included easyJet, easyCar, easyCinema, easy.com, easyMoney and easyValue, easyBus, easyPizza, easyCruise, and easyDorm. Low price and no-frill is the key elements of the ‘easy’ brand.
The report, which details final results for the year to 30th June, shows that their profit before taxation was a very healthy £85.5 million, which is a notable increase on the £74.5 million posted the year prior. Revenue for Rank Group also increased by 2% to £753 million. The figures show that, generally speaking, Rank Group had a great year, but there was a negative to note amidst the report, as there was 2% dip in the group’s operating profits, as it came in at £82.4 million before “exceptional items”.