Reviewing The Online Ticket Sales Of Easyjet Information Technology Essay

EasyJet was founded by Stelios Haji-loannou in 1994. EasyJet is budget, low-cost airline and adopted the concept of no-frills model of the US carrier Southwest [1] . Because EasyJet is low-cost airline, it needs to cut down the operational expenses. Phone is the only operational channel for EasyJet at the time the company was founded. Later Stelios plan to change the channel of operations to the internet. First a trial site was lunched and the booking phone number was put on the site. That phone number was dedicated for the online users and used to examine how many people used internet for information searching. The site got success and the booking operations were becoming big enough to handle with existing call centers. So, Stelios had to decide whether to build new call centers or transform the operations to online sales. By taking online as the sale channel, EasyJet could offer £1 off to each customer. That amount was small compared to not serving meal which saves £5 or £10 on board. But if EasyJet was to build a new call center, it would have to pay the reservation agent 80 pence for each ticket sold. That would cost more than £1 off given to the customer. So, the owner decided to choose online selling as operational channel. Why this transformation was not so difficult is that the operations had been running 100 percent direct phone sales operation before changing the sale channel to the online booking. In April 1998, the site was lunched.

The website reflects the EasyJet position of no tickets, no travel agents, no network tie-ups and no in-flight meals. Customers got a PIN number after booking online. That PIN number was used for the identification when they get to the airport. In the first week, only two tickets were sold. One thousand tickets were sold within the first month.

In August 1999, 38 percent of ticket sales or over 135,0000 seats are sold over the internet. In March 2000, the discount EasyJet offered reached to £2.50 for one way. That was the highest permanent discount that an airline offered at that time. By September 2000, 85% of ticket selling was online. By 2003, online selling became 90% of all ticket sales. Tableau operated the site operations before EasyJet took the operations in-house. EasyJet just got a profit of only £1.50 from each passenger.

What about the customers who cannot or do not use the internet? The owner said there would be that kind of people, but he didn’t need all 56 million people but only six million a year not to lose profit margin. In America, Virgin got success as the brand extension. easyJet had used ‘easy’ prefix in other services which are part of easyGroup. One service is easyEverything. easyEverything is internet cafes which has the capacity of 400 seats each. An hour of using internet costs £1 in easyEverything. Although easyEverything has ‘easy’ prefix, it is run as independent company and easyJet has to pay for banner ads, but internet users can spend time on the easyJet site for free. Another service is easyRentacar. A customer will cost £9 a day if he wants to rent a car. Cars are of same type to reduce maintenance costs and the renting process is operated only on the internet.

Conclusion

In this report, I have found out the eMarketing strategy that easyJet has adopted ,and described in Current strategy section, and propose new strategy in Proposed strategy section. Although easyJet is leading the Europe budget airline industry, competitors are also trying to improve their strategy. So, easyJet should research and adopt new strategies in order to lead in the airline industry market.

Nowadays people love advanced technology because technology makes everything simpler and easier than before. Customers will choose the airline which can make them more comfort and easier in bookings, comparing with other airlines if they offer the same facilities.

Moreover mobile users are increasing each day all over the world including Europe. Till now, no airline in Europe can offer mobile bookings. Smart phones which have internet access can make ticket booking from websites. But the problem is the mobile phone screen is not fit when browse the booking site because the website is not dedicated to the mobile users. That is why there is less chance for customers who do not have good smart phones to make ticket booking and access information.

Without changing the present propositions easyJet ,”No tickets, no travel agents, no network tie-ups and no in -flight meals”, we will implement our new strategy with our new extended value proposition ,”creatively delivering low-cost, easy and convenient air travel services for our value customers by adopting innovative technologies”.

Our new strategy is to develop a mobile site for easy bookings , targeting to mobile users Europe which has over 100% mobile penetration in most regions. Besides, we will develop gadgets, screenlets and widgets for various Operation Systems for computer users making booking easier, convenient and offering access to up to date information of easyJet. Thus, we assure easyJet that Ticket sales of easyJet will definitely increase at least 10% and the net profit will increase 11%.

eMarketing Strategic Plan

Introduction

EasyJet was founded by Stelios Haji-loannou in 1994. EasyJet is budget, low-cost airline and adopted the concept of no-frills model of the US carrier Southwest [2] . Because EasyJet is low-cost airline, it needs to cut down the operational expenses. Phone is the only operational channel for EasyJet at the time the company was founded. Later Stelios plan to change the channel of operations to the internet. First a trial site was lunched and the booking phone number was put on the site. That phone number was dedicated for the online users and used to examine how many people used internet for information searching. The site got success and the booking operations were becoming big enough to handle with existing call centers. So, Stelios had to decide whether to build new call centers or transform the operations to online sales. By taking online as the sale channel, EasyJet could offer £1 off to each customer. That amount was small compared to not serving meal which saves £5 or £10 on board. But if EasyJet was to build a new call center, it would have to pay the reservation agent 80 pence for each ticket sold. That would cost more than £1 off given to the customer. So, the owner decided to choose online selling as operational channel. Why this transformation was not so difficult is that the operations had been running 100 percent direct phone sales operation before changing the sale channel to the online booking. In April 1998, the site was lunched.

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The website reflects the EasyJet position of no tickets, no travel agents, no network tie-ups and no in-flight meals. Customers got a PIN number after booking online. That PIN number was used for the identification when they get to the airport. In the first week, only two tickets were sold. One thousand tickets were sold within the first month.

In August 1999, 38 percent of ticket sales or over 135,0000 seats are sold over the internet. In March 2000, the discount EasyJet offered reached to £2.50 for one way. That was the highest permanent discount that an airline offered at that time. By September 2000, 85% of ticket selling was online. By 2003, online selling became 90% of all ticket sales. Tableau operated the site operations before EasyJet took the operations in-house. EasyJet just got a profit of only £1.50 from each passenger.

What about the customers who cannot or do not use the internet? The owner said there would be that kind of people, but he didn’t need all 56 million people but only six million a year not to lose profit margin. In America, Virgin got success as the brand extension. easyJet had used ‘easy’ prefix in other services which are part of easyGroup. One service is easyEverything. easyEverything is internet cafes which has the capacity of 400 seats each. An hour of using internet costs £1 in easyEverything. Although easyEverything has ‘easy’ prefix, it is run as independent company and easyJet has to pay for banner ads, but internet users can spend time on the easyJet site for free. Another service is easyRentacar. A customer will cost £9 a day if he wants to rent a car. Cars are of same type to reduce maintenance costs and the renting process is operated only on the internet.

Situation Analysis

Present Situation Analysis

Strength

Low Budget, no frills airline

Most people look for cheap air tickets and that is why low-cost air tickets are sold more than normal air tickets.

easyJet runs very simple, easy to use and user friendly website, running seven languages

People like simplicity. eayJet website is very easy to use and high ranting website.

easyJet has Highly distinctive livery<image>.

Orange makes easyJet easily recognizable.

easyJet promise less carbon emission and Green Environment.

The promise attracts environment conscious customers

Weakness

No seat selection on booking.

Customers who have health problems may feel inconvenient.

Lack of airports in major cities

Customers cannot depart from any airport they want.

Opportunity

Untouched market(absence of business travelers)

Mobile commerce has not been started.

If mobile commerce starts, more people can access the sites.

Smart phones provide more functions.

Because smart phones provide more functions, people carry smart phones instead of notebooks. That is a good opportunity if easyJet can provide mobile commerce.

Threat

Economic downturn

Because of economic depression, less people will fly.

Competitors such as Ryan air.

If competitors reduce their cost more than easyJet, that is definitely a threat.

The operations of easyJet are solely dependent on the www.easyjet.com.

If the www.easyjet.com is break down, attacked or suffer from natural disaster the whole operations will stop.

Industry Analysis

Political

EU open sky policy

Free trade between all EU members people

This can increase the ticket sales because travelling becomes easier.

EU political situation is unstable

(France Strike)

Routes running to and from France may have bad impact.

Economic

Economic downturn

This may lead to less ticket selling.

Bankrupt in Greece

Routes running to and from Greece may be affected.

Social

Businessman does not have much time to surf internet to get bargain on the air ticket.

If budget Business class can be offered, this can be a good opportunity for easyJet.

People who access internet with mobile are increasing

If mobile commerce can be started, it can be a big market.

Growth of environment conscious customers.

This can increase ticket sales because easyJet promise less carbon emission and green environment.

Technological

Mobile commerce is becoming popular these days.

That can be a good opportunity for easyJet.

Now the chair which enables the flyers comfort and takes less space is invented.

If those chairs are used, air craft can carry more people.

Now more efficient airbuses are invented.

If those airbuses are used, fuel will be consumed less.

eMarketing Strategy

Current Strategy

Product

The main product of easyJet is air tickets. There are also another additional ‘easy’ prefix services including easyEverything which is internet cafe , having the capacity of 400-seat. Another service is easyRentacar which is low-cost car rental business.

Price

The price of easyJet air ticket is cheap. How can air ticket be cheaper than other airlines? Because easyJet cut down expenses by serving no food on board. Then changing to the online selling model is another main point of reducing cost.

Place

Online direct channel of ticketing. Although at first operations are running with phone channels, by 2003, over 90% of all sales were online. [3] 

Promotion

easyJet put the company URL alongside its Boeing 737s. It also mixed the marking by running Internet-only promotions in newspapers. The first Internet-only promotion is in a newspaper in The Times in February 1999. How did easyJet know how much the promotion strike the customers? easyJet built a child site www.times.easyjet.com and put the url in the magazine. This let easyJet know how many customers from the magazine booked and avoid putting a strain on easyJet’s main site. Moreover easyJet ran competition concerning with the competitors and then choose the winners among 65,000 people.

Proposed Strategy

Product

The product is air tickets as usual but selling channel will be extended. We will extend our sale channel to the mobile. Because mobile commerce has not been started and mobile users are growing each day, mobile commerce is definitely a good opportunity. Moreover, people like ease of access. So new child products are planned to offer. They will be gadgets developed for different Operation System. We will develop sidebar gadget for vista and windows seven, screenlets for Unix-Like Operation Systems and dashboard widgets for Mac OSX and mobile apps for phone and mobile devices. Why we develop those gadgets? It’s because of the convenience that is offered and the amount or productivity that customers are able to achieve [4] . The idea behind gadgets is to make bookings much easier so that we can improve our customer relationship. Why screenlets? Sceenlets are small applications which can be described as

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the virtual representation of things lying/standing around on your desk”. [5] Screenlets are easy to use and easy to develop and embedded drag & drop support. We develop screenlets to target customers who use Linux and Unix-Like Operation Systems.

It is like people would prefer to look at the clock and calendar on the sidebar to those from the System icons.

Price

We set the price of the air ticket still low as usual. There is no pricing strategy change.

For gadget, screenlets and dashboard widgets, they are offered free download for computers.

Mobile apps will be offered free download for phone and mobile devices.

Place

Ticket sales will be on the online and from the mobile. Online sales will also be from www.easyjet.com accessed the computers and can also be from gadgets, screenlets and dashboard widgets.

Promotion

First we are going to promote our mobile site by offering discount of £10 if customer buys the ticket from mobile. The advertisement will be put on travel and technology related magazines and websites and www.easyjet.com. The promotion will be for two month.

Free download of gadgets will be offered from www. easymobile.com , www.easyjet.com and other free download websites.

Value Proposition

Customers

easyJet mobile targets to the customers who use mobiles.

Needs

Although there are many online booking websites, there is no mobile website from any airline in Europe. easyJet mobile will make booking more convenient for customers.

Price

Price of the air ticket is low cost as usual.

The value proposition of new strategy is “creatively delivering low-cost, easy and convenient air travel services for our value customers by adopting innovative technologies”.

New strategic position will be increase the quality without increasing cost and will be above other budget airline in quality.

Differential advantage

Booking air ticket from www.mobile.easyJet.com will be very easy and convenient for customers who have mobiles. No other budget or traditional airline offers booking air ticket from mobile internet access in Europe.

Moreover, gadgets make bookings simple and convenient for customers in simple one click and offer a wealth of up to date information.

Besides, Europe is the most development region in open source platform. Screenlets attract open source users in Europe and Dashboard widgets attract Mac users while other airlines cannot focus on users centric technologies through categorizing various operation systems.

Implementation

Product features

www.mobile.easyJet.com

easyJet mobile will have the same capability of www.easyjet.com but it is designed to suit for mobile devices fitting to their screen sizes.

But easyJet mobile will have additional module as listed below in addition to that of www.easyjet.com .

Additional Mobile Modules

Type of phone identification

Carrier’s network detection

Mobile content renderer customize according to phone type thus easyJet mobile website will detect the type of customer’s mobile and the information of their network provider.

Following phone manufacturers will be supported: Nokia, Sony Ericsson, Siemens, LG, Motorola, Apple (iPhone), Palm (Treo), RIM (BlackBerry),Google (HTC) and many Windows CE devices and android os.

easyJet mobile website can render output in: WAP (WLM), XHTML mobile profile, XHTML basic, cHTML and standard HTML.

easyJet mobile website will be able to read data from various sources including RSS and other platforms like Facebook.

Technology intended for the development and implementation of the mobile site:

Redhat Linux will be used as Server

We use Redhat Linux as Server because Security Enhanced Linux(SE linux) delivers a strong and flexible MAC framework to enforce role-based access control and multi-level security.

Smart Management Add-On: Offers Red Hat Network management and provisioningcapabilities

As the database server, we will use PostgreSQL

A HTTP server, Apache will be used

Java 6

Java 6 includes the latest technology which is generic , auto boxing and unboxing.

As J2EE container, Apache Tomcat will be used.

I choose Apache Tomcat as J2EE container because it implement all of J2EE specification and improve performance.

Hibernate as a database framework

I choose Hibernate as database framework because it is object relational mapping architecture and thus easy to map with database. Mapping files are saved as XML format and easy to maintain.

Struts for page flow

I choose struts for page flow because it is based on MVC architecture and makes clear UI and Business logic layer.

DWR, Prototype, script.aculo.us, YUI for AJAX [6] 

DWR translates java to java script in client side. Prototype contains a rich library. YUI will make our mobile site attractive and fresh and make the mobile site dynamic.

easyJet gadget,screenlet,widget

By using easyJet gadgets, customers will be able to

Book or purchase air ticket in one click

Access real time update information

Reschedule as necessary

Access hotels information

Access car hiring information

Access restaurants information in the destinations

Search the information they want to know

Manage their account and personal information.

easyJet gadget , screenlet and widget will make customers feel more personal and more convenient to use than easyJet website.

Technology for developing the above mentioned gadget, screenlet and widgets:

JavaScript

JavaScript will function the desired work flow.

HTML

HTML is used for appearance of gadgets.

XML

XML is extensible market language and thus it can operate as many data formats.

Python

I choose python to develop screenlets because it is a scripting language and makes development fast and easy.

New core and extended value

The proposed strategy creates no new core value but do create “easy, simple and convenience” as extended value. By accessing easyJet information from mobiles and gadgets, customers will surely feel easy and convenient.

Online and offline Promotion methods

Because easyJet mobiles focus for mobile users who have internet access, promoting online is better than promoting offline. The ratio of online and offline promotions will be 80:20.

Online promotion

Put a banner ads which says “Get £10 off .Book from our new service www.mobile.easyJet.com . Access anywhere. Valid until Feb 2011” on www.easyJet.com which has the internet user population of 4 million per month.

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Offer free download of newly developed mobile apps for different phone types on www.easymobile.com which is a new e-commerce website founded by Stelio and easyGroup.

This will be a hit, because www.easymobile.com is a website which sells mobile phone online.

Upload mobile apps on mobile section of CNET.com which has the internet user population of over 74 millions uniqe users every month.

Upload gadgets, widgets and screenlets on CNET.com.

Become active member in “free opensource magazine” which says itself “Magazine by the opensource writers for the opensource readers” [7] and other magazine and forums dedicated to opensource platform. Write article about screenlet and its special features and offer downloads to attract open source users. But we will have to offer our source. Because our source is open, there will be better idea and our screenlets will improve performance.Open source develop will surely add more features to our screenlets.Therefore, offering source code will give a lot of benefits to easyJet.

Upload mobile apps on www.getjar.com which has more than 25 million consumers. The website offers free upload service but will be paid for each download. More over Getjar will create launcher apps for many platforms, enabling users to open our mobile site with just one click from their phone’s menu.

Offline Promotion

Put advertisement which says “Get £10 off .Book from our new service www.mobile.easyJet.com . Access anywhere. Offer valids until Feb 2011” in Times magazine.

Distribute mobile apps to mobile service centers in UK and offer free installation.

Put promotional signage about easyJet mobile site on easyJet counters in airports.

Impact Analysis

Before implementing new proposed strategy, easyjet cannot target to mobile users and has less attraction to open source crazies.

After implementing new proposed strategy, easyJet can extend to huge mobile market. Over 90% of Europe has mobile penetration of above 100%. easyJet can offer easy and convenient booking to customers through mobile site, up to date information and one click booking through gadgets, screenlets and dashboard widgets.

Current easyJet customers can also download these apps for repeat convenient ordering.

easyJet ticket sales will surely increase after implementing new proposed strategy.

Financial Performance

During 2010, 48.75 millions passengers flew with easyJet. Thus easyJet Loadfactor

Reach to 87 % .easyJet got the turnover of 2.9 billion. easyJet got £ 154 million profit before paying tax and £121.3 million as net profit. [8] 

Detail expense for new strategy

Because developing mobile site is a new technology for easyJet. Wire Node technology will develop our easyJet mobile site. The estimate mobile site development cost is £1 million excluding hardware and servers. The estimate cost of purchasing hardware and installation is £1 million. Moreover, gadgets and screenlets and widgets development will be cost £20000. We will use £1 million in promotion .This include both online and offline. Mobile site development will be useful at least next 8 years. So we will allocate a tangible asset cost of £ 55000 to each year until next four years.

The net profit for easyJet will be £135 millions in 2011.

Below graph shows the comparison of before implementing our new strategy (i.e. financial performance of easyJet in 2010) and after implementing our new strategy (i.e. estimate financial performance of easyJet in 2011).

Passengers flown(m)↓

Load factor↓

Turnover (£b)↓

Profit/loss before tax (£m)↓

Net profit/loss (£m)↓

2010(before

Implementing new strategy)

48.75

87.0%

2.9

154

121.3

2009(after implementing new strategy)

52

92%

3.1

165

135

Legal and Ethical Issues

easyJet is registered under the 1998 UK Data Protection Act [9] .

Information Gathering

According to”Fair Information Practices for PII-EU Model”

The company must collect the information only for legitimate purposes.

The information must be relevant.

The information must be accurate.

The collected information must be kept in a form that permits identification of data subject for no longer than necessary of the purpose collected. [10] 

More over Sensitive data which are PII of customer s such as race, ethnic origin, political opinions, religious or philosophical beliefs, trade union membership, health or sexlife must not be gathered according to easyJet business flow. [11] Besides for easyJet, DOB of the customers will not be necessary but age will be.

Information Processing

When processing information, easyJet must follow UK Data Protection Acts of 1984 and 1998 strictly especially in the storage and disclosure of information the customer had given, and to prevent unauthorized access. Sensitive data should be encrypted when transmitting to the third parties and must tell the customers how long the information will be retained.

easyJet should not use cookies to get customers private information from the computer such as credit card information and other private information. But cookies may use for improving customer relations.

easyJet should not install others spyware to the customers computer in order to get unauthorized access.

Information Distribution

In the section of information Distribution, easyJet should consider spamming.

2002 EU E-Commerce Directive requires Member Countries (25) to pass consistent national laws to regulate SPAM by October,2003.

It is unlawful to send unsolicited email to an EU consumer unless the consumer has given explicit consent in advance (“opt-in”):

Consumers also have the opportunity to “opt-out” via “opt-out registers” that is available in each Member State.

easyJet can communicate and send promotions details to the customers if it offers “opt-in” and “opt-out” choices to the customers. But there should be a feature for the customers to cancel receiving no more messages from easyJet if they don’t want the messages any more.

Information Usage

According to the ICO- Data Protection Good Practice Note – Buying and selling customer databases

“Normally personal information in a database should not be sold if the individuals have not

been told originally that their information could be passed on to other organisations.” [12] 

easyJet should not sell customers information to the other company.

“Fletcher(2001) provides an alternative perspective, raising ethical issues of concern for both the individual and the marketer:

-Transparency

-Security

-Liability ” [13] 

As Fletcher said above, easyJet should clearly state who will use customer’s information after collecting and who will be responsible if data is abused for example if the payment information is hacked when transferring to third parties payment companies.

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