Easyjet cost strategy

Stelios's avowed intention in entering into the budget airline industry was to take on any business that was potentially profitable. From the figures available, easyJet is successfully completing its founder's ambition with turnover increasing by 67% in 1997-1998, gross profit margin increasing from 15 -20% and with a 2.3M profit before taxation being achieved. Meeting these overall aims was made possible by a set of strategies and the achievement of a system that corresponded to key success …

…which would be reinforced by its distributors, travel agents. It was also able to keep costs very low. EasyJet would therefore need to look closely at controlling its costs and maintain a high profile. Vertical integration may have provided a route to more efficient cost control, and a means of maintaining quality, but Stelios's decision to continue outsourcing would require careful management of relationships with contractors, without increasing costs. This would be a major challenge.