easyJet’s new strategic directions: lower-profile doesn’t mean less dangerous
Not so long ago, I was writing about in-depth changes in easyJet’s business model. It seems as if the company has been validating my predictions recently, albeit it did add a few new elements here and there. If you remember well, I predicted that easyJet would, one day, be able to overtake Ryanair. The way things are going nowadays, it could very well be possible soon. However, it might not happen the way we expect it.
As stated earlier, easyJet has been following a route development very different from that of Ryanair’s. Though the company may not always perfectly abide by national laws, it is far less reliant than Ryanair on airport subsidies. On the contrary, easyJet has been creating more and more routes to large, central airports. Meanwhile, it has also intensified daily and weekly flights, in an obvious bid to attract business travelers.
Yet, it appears that business travellers are not easyJet’s only targets. Recent developements, such as the – widely appraised – deployment of the brand on social networks are obviously aimed at catching the attention of non-business customers. Here, easyJet is taking an approach (which might be explained by Sir Stelios’s removal at its head) very different from Ryanair’s in its communication. Instead of talking from the top, as Ryanair’s does, by trying to catch media attention with controversial statements, the orange airline is propagating its message at the bottom, by reaching directly to customers through large scale ad-campaigns and heavy web 2.0 marketing.
Recently, the company took a new step in that direction by announcing it was launching an “holiday” brand. The brand is the result of a joint-venture with travel company the Lowcostravelgroup and aims at offering fully packaged holiday solutions while maintaining date and route flexibility over easyJet’s network. The result is obviously an offer opposite to what business travelers are attracted to, but spot-on when it comes to casual travellers.
In the same direction, this week, easyJet announced it had joined the Nectar rewards scheme. The scheme, a British loyalty program originately created by Sainsbury’s, will let customers exchange points for rebates on easyJet flights. This is a rather interesting move, as by mutualizing the effort, the company spares itself part of the cost of a fully-fledged loyalty program while widely broadening its audience reach.
While the airline’s efforts to secure the business traveller’s market put it clearly out of Ryanair’s way, its recent strategic inflexions clearly hint at an effort towards casual travellers as well. And that would put easyJet right back against Ryanair in the competition to secure customers. Still, the way things appear to develop at the orange low-cost, it is much more likely that with averagely-higher fares than its Irish rival, it will have much more impact on traditional European carrier’s customer pool. And that would make easyJet way more dangerous than Ryanair for European carriers.
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