‘The Importance of Operation Management at EasyJet’s Airlines’
- Bilal Saddik
- Apr 22, 2019
- 11 min read
Abstract:
Organizations ability to recognize the power of operation management can enable them to utilize its operations strengths in a way to get more tasks and objectives done quicker with less efforts and using fewer resources, consequently, allowing them to reduce the risk of operational failure, decrease wastes, and cut down on the costs without affecting the quality of the product or service, this in turn increases productivity, provide a foundation for future innovation and eventually improve both customer satisfaction and competitive advantage (Slack, et al, 2016.p.69). This report will discuss EasyJet’s operations and describe its transformation process model in more depth by identifying its transformed resources, transforming resources and outputs. Furthermore, it will evaluate the relative significance of EasyJet’s main performance objectives and will create or form an idea of the strategic importance of its operations using Hayes and Wheelwright’s four stage model. This report will continue by describing graphically the characteristics of EasyJet’s processes and products/services in terms of the type, volume and variety using Product-Process Matrix, later on it will assess how this mixture of characteristics affects the organisation’s flexibility and costs. Moving on, this report will give detailed information about how the process technology for material, information and customers contribute to EasyJet’s design of operations and evaluate its effectiveness in meeting quality for the customer and potential enhancement that might be made. Conclusively, this report will share how operations contribute to quality improvement at EasyJet’s.
Introduction
A great example of a successful company with extraordinary operation management is EasyJet’s, a low-cost Airline, focussed on offering the best budget flights to its customers by reducing/eliminating some of the unnecessary products/services such as; free meals catering on board, issuing, printing, processing and delivering tickets, without compromising its final service quality and most importantly safety, according to Corporate.easyjet (n.d.) the Airline puts safety first, in 2017, their new airplanes that began operating were all equipped with the best and latest technology to improve safety. This report will illustrate below how EasyJet’s Transformation process model works.
EasyJet’s Transformation Process Model:
Figure 1: Transformation process model of easyJet based on the model in Slack, et al, 2016.p.191-192 (Saddik,2019)
The Airline implement a lean transformation process model which emphasizes on improving and delivering high levels of customer satisfactions using less resources and less efforts. The objectives of this model are to eliminate wastes in order to reduce costs and create/improve value for customers.
EasyJet’s transformation process model is aligned with the its core strategies which are:
· To be the number one or two in primarily airports
· Win its Customers loyalty in order decrease customers turnover
· Create value by efficiency
· Choose the right people and decrease employee
Inputs: Transformed resources are the customers or travellers. The airline chooses reliable suppliers that can provide them with consistent raw materials, they were able to do that by treating their suppliers the same way they treats or manages their people, emphasizing on building long and sustainable relationships with their suppliers as well as ensuring these factors are met; quality assurance, health and safety, environmental practices, sub-contracting arrangements and legal, regulatory and tax compliance (Corporate.easyjet, n.d.) In terms of Transforming resources, the cabin crews, pilots, staff, ground crews are all well selected and trained. The airlines have a system put in place to reduce the costs of operations while making it highly efficient, for example; when receiving booking from passengers, they only offer digital tickets and enforcing booking by mobile application and website. Furthermore, the Airplanes and technologies are always up to date in terms of innovation, maintenance.
Transformation process: is the process of serving travellers before and after their flight gate at the airport opens, such as scanning and weighing luggage and transporting travellers all around the world at low cost with care, convenience and extremely high level of safety.
Outputs: Transport the travellers safely to their final destination. On time Satisfied customers with undamaged or lost luggage.
Five Performance Objectives of EasyJet
Introduction available in the Appendix
Quality: It is ability to provide and deliver convenient and comfort flights which meets their customers expectation.
· EasyJet employs only the right people who can fit to the company’s culture and are able to perform more than one task with few errors. They do that by providing extensive training for their employees, which in turn empower them and allow the Airline to provide good service for the customers and decrease employees turn over.
· They offer personalized products and offers for sale on board as well as EasyJet flight club and EasyJet plus membership cards.
· They use new technologies such as; new digital entertainment platform on board.
Speed: It is how quick can easyJet respond to customers demands when they make the booking, time they spend at the airport and the duration of their flight.
· To deliver faster service, easyJet introduced fully automated bag drop machines.
· They launched a mobile application to allow customers to check in using their smartphones.
· Booking through their website is also available which speed up the booking process.
Flexibility: It is how well can easyJet change operations, this can give the business the ability to reduce costs and time, find new ways to innovate and respond rapidly to the market and customer needs.
· They offer point to point flights.
· Constantly adding new airplanes.
· EasyJet added new routes and began operating in Austria and Germany to overcome Brexit challenge.
· The new airplanes they have introduced are environmentally friendly and are able to carry 26 to 32% more passengers, therefore the organization is able to change volume comfortably.
· Constant innovation which create new services. Wide variety of services, customers are now able to fly to places such as; Singapore and New York.
Dependability: it is the ability of easyJet to provide consistent flights without any delays or failure as well as it is ability to overcome and recover from any damaging events.
· They provide welfare support incase of any damaged caused to the customers
· Overnight accommodation in case of any delay
· They cover all reasonable out of pocket expenses for extended delay situations and additional EU 261 payments
· Corporate EasyJet (2017, p.12) stated “easyJet has introduced breaks to its schedule and increased block times (reducing asset utilization) to ensure it can deliver a more robust schedule for its customers”.
· Introduced new airplanes, provided maintenance engineers with new technologies, training and enough spare parts to increase the repairing process and the availability of the airplane.
Cost: Its ability to provide competitive low-cost flights. EasyJet offers low cost flights for its customers by cutting down on products and services that are not important without compromising safety and in order to deliver sustainable reduction, according to Corporate EasyJet (2017, p.9) easyJet managed to save £480 million from 2009 to 2017
· The Airline reduced man power by using both mobile application and online website for booking as well as check in, as a result they have reduced costs.
· They no longer offer free frills and free catering on board. Food and products can only be purchased.
· They use one type of airplane which makes the costs of maintenance lower.
· They fly to less crowded and less costly airports.
· They hire local employees to reduce costs.
· The airline implements a paperless system, where all process and procedures are done digitally.
This report has established that the airline company was able to meet all its five performance objectives, however, the airlines flexibility, speed level of operations is medium, while the quality is slightly lower, and the cost and dependability is high. They are more focused on cost and dependability as those two objectives are directly aligned with their core strategy in terms being the best low-cost and most reliable airline company, see figure 2 below.
📷Figure 2: Five Performance Objectives of easyJet (Saddik,2019)
Hayes and Wheelwrights Four Stages Model:
Introduction available in the Appendix
This report will now evaluate below the strategic importance of operations to easyJet’s based on Hayes and Wheelwrights model.
Stage one – Internally Neutral: This is where operations are mainly inward looking, meaning that they are more focused on the organisation’s internal environment and neglecting the outside business world in terms of competition and customers. They compare their performance with their own performances of previous years instead competitors and pay little attention to their customers, competitors. Consequently, this is the stage where operations contribute so little to organisation success. According to Corporate.easyjet.com (2019) the airlines strategy is focused on being the number one or two in primary airports and winning their customers loyalty by being a head of their competitions in terms of offering the best affordable fares, therefore easyJet is not under this stage.
Stage two - Externally Neutral: In this stage, the organisation will try to mimic its competitor’s operation function to be as good as their competition. They are more likely to benchmark its operations against their competitors and implement the best practices their competitors are using in order to avoid any risks. Those implemented practices might not be aligned with the organisation’s core strategies, therefore this type of organisations is less likely to be innovative and have a strong competitive advantage. According to Lundgren and Findlay (2018, p.24) easyJet is the most chosen Airline in the UK and Europe’s best value airline of Short haul and it has cost advantage which puts it a head of its competition, consequently, easyJet is cannot be classified under this stage.
Stage three – Internally Supportive: In this stage, the operations considered one best in the market and their activities play a very supportive role in the organisation, its performance objectives are directly linked and originated from the organisations core strategies. This type operations looks to provide the organisation strategies with reliable support in order to create an environment that provides competitive advantage. Looking at easyJet’s lean program that has been implemented and all the airline’s achievement, this report suggests that the easyJet passed this stage.
Stage four - Externally Supportive: This is where the operational excellence is merged with the business core strategies and act as the backbone of its success. This type of organisation uses its operation excellence to gain and retain competitive advantages and always looking for new ways to innovate and differentiate itself from other competitors. According to Capital markets day (2017, p.13) easyJet has a competitive cost advantage as well as innovate ancillary offerings, leverage for digital/innovation to minimise impact on travellers and are customer focus, always on look for new ways to increase customer loyalty. Furthermore, the airline was awarded number one and two in 47 airports in 2017 thanks to its performance objectives such as cost and dependability which had a great impact on its cost advantage, superior product and operational advantage (Capital markets day, 2017, p.16). As result of that, easyJet can be classified under this stage.
Service-Process Matrix and Its Impact on EasyJet’s Flexibility and Cost:
Figure 3: based on the model of the Service-Process Matrix in Slack, et al, 2016.p.191-192 (Saddik,2019)
As shown in figure 3, easyJet airline has a continuous service process type with low variety and high volume. The airline has standardised service, they offer low-cost flights to airports where it less crowed and cheap to hire. They have over 1000 routes; their young fleet of airplanes allow it to increase volume comfortably and keep costs down. Furthermore, easyJet has a low number of employees who are highly skilled and can do more one task. It focuses on increasing automation to reduce costs and increase efficiency, a great example is the automated drop bag machines, mobile application, digital ticket. Consequently, this reduces flexibility and costs.
Process Technology and Its Contribution to The Design of EasyJet:
The devices, machines and equipment that assist operations to create or deliver a product/service are called process technology. It consists of three different types and they are Material-Processing Technologies, Information-Processing Technologies, Customer-Processing Technologies. This report will describe one of them below:
Customer-Processing Technologies
EasyJet is no longer is offering booking through phones calls, instead they are using their mobile application and their website for booking as well as check-in, the tickets are no longer being printed, vendor machine and high-quality entertainment system on board. They invested in airplanes to increase life cycle as well as efficiency. Those type of technologies reduced labour interaction with customers and lowered errors. The customer processing technologies improved quality, reduced costs, increased process speed and enhanced dependability/reliability, consequently improved their competitive advantage and enhanced customers loyalty.
Operations Contribution to Quality improvement at EasyJet:
EasyJet operation is the backbone of the company and plays a vital role in their quality improvement, where 75% of easyJet seats in 2017 were rebooked by returning customers (Purposeful and Disciplined Growth, 2017.p.15). This report will discuss below how operations contributes to quality improvement:
· Safety, all airplanes are equipped with the latest technologies to improve safety.
· Decreasing customer disruption, their operations has a system put in place to prevent disruption and stay on schedule, for example; they have two recovery aircrafts, additional spare parts.
· In case of any disruption, travelers are given timely updates about their flight through text messages, emails and live updates on easyJet’s Flight Tracker tool
· Continues investment in digital and data, they have introduced digital devices for both employees and customers to increase efficiency as well as customers satisfaction.
· Automation- since the introduction of the automated drop bag at the airport, the queue times have reduced by half (Easyjet.com, n.d.)
· Operations made booking simpler and more convenient by introducing the mobile application. As a result, 27% of EasyJet ecommerce booking are done through mobile platform. Consequently, this has allowed customers to reduce checking in timing (Corporate EasyJet, 2017, p.11-15).
· The right people, easyJet focuses on hiring the right people that fits to their culture and can do more than one task. Operations offer them extensive training to empower staff, improve service and reduce errors.
Conclusion:
The ability for the organisation to sustain its competitive advantage as well as its survival in the airline industry depends entirely on the success of their operations in meeting their five performance objectives. This report has shined the light on the importance of costs and dependability objectives at easyJet and how those two objectives play a vital role in assisting the airline to achieve its strategies. By looking at the Hayes and Wheelwrights model, the report has revealed that easyJet can be classified under the final stage in this model due its operation excellence and its contribution to both customer loyalty and competitive advantage. Furthermore, easyJet process type was identified as a continuous service process type with low variety and high volume in the service-process matrix and revealed how the process technology such as the customer processing technologies contributed to easyJet design by making it more efficient and less costly. Finally, this report has established that operation management acts as the backbone of easyJet airline and without it the airline could find it extremely difficult to survive in the airline industry.
References:
Capital markets day. (2017). [ebook] London: easyJet, p.13. Available at: https://corporate.easyjet.com/~/media/Files/E/Easyjet/pdf/investors/presentations/cmd-presentation-27-09-2017.pdf [Accessed 11 Mar. 2019].
Corporate.easyjet.com. (n.d.). Safety first. [online] Available at: http://corporate.easyjet.com/corporate-responsibility/safety-first [Accessed 8 Mar. 2019].
Corporate.easyjet.com. (n.d.). Our customers. [online] Available at: http://corporate.easyjet.com/corporate-responsibility/our-customers [Accessed 8 Mar. 2019].
Corporate.easyjet.com. (2017), ANNUAL REPORT AND ACCOUNTS 2017. [ebook] London: Corporate Easyjet, p.11-15. Available at: http://corporate.easyjet.com/~/media/Files/E/Easyjet/pdf/investors/results-centre/2017/2017-annualreport-and-accounts-v1.pdf [Accessed 8 Mar. 2019].
Corporate.easyjet.com. (2019). Strategy. [online] Available at: http://corporate.easyjet.com/about/strategy [Accessed 11 Mar. 2019].
Easyjet.com. (n.d.). Innovation | Innovating the travel experience | easyJet. [online] Available at: https://www.easyjet.com/en/orange-spirit/innovation [Accessed 9 Mar. 2019].
Lundgren, J. and Findlay, A. (2018). EasyJet H1 2018 Analyst and Invester Presentation. [ebook] EasyJet, Available at: http://corporate.easyjet.com/~/media/Files/E/Easyjet/pdf/investors/results-centre/2018/easyjet-h1-2018-results-presentation-v3.pdf [Accessed 8 Mar. 2019].
PURPOSEFUL AND DISCIPLINED GROWTH. (2017). [ebook] London: easyJet, p.15. Available at: http://www.annualreports.com/HostedData/AnnualReports/PDF/LSE_EZJ_2017.pdf [Accessed 11 Mar. 2019].
SlackNigelBrandon-JonesAlistairJohnston and Robert ,2016.p69 Operations Management, 8th Edition, Edinburgh Gate. Available from: VitalSource.
Appendix:
Five performance objectives introduction:
For organisations to survive, compete and perform well in their market long term, they need to have a strategy put in place to enforce efficiency and effectivity. According to Slack, et al, 2016.p.49, the decisions taken, and activities implemented within their day to day operations could have a direct impact on achieving efficiency and effectivity which directly reflect on how well those organisations can focus on their core strategies. Consequently, Slack, et al, 2016.p.49 suggested that organisations require clear and well-defined objectives for them to align their activities and decisions with their strategy, those objectives are called the Five performance objectives
Hayes and Wheelwrights model introduction:
This model was developed by professor Hayes and Wheelwrights explain that operations can provide organisations with competitive advantage, however they must consistently improve their performance in order to move from stage one in to their final stage which is operation excellence (Slack, et al, 2016.p.77-78).
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