Free Marketing Dissertations - Contemporary Brand Management Report For Easyjet Background Overall, The
Contemporary brand management report for EasyJet
Background
Overall, the travel market has performed well since 2001, with revenue growth accelerating from 3% in 2002 to 11% in 2004, with total sales for that year being estimated at US$ 549.4 billion. However, some sectors performed better than others, and the share of air transport fell gradually between 1999 and 2003, partly as a result of falling fares due to industry liberalisation and the growth of low-cost airlines. However, sales rose strongly in 2004 as the travel industry recovered and economic conditions were stronger. Indeed, over the period from 1999 to 2004, online sales grew by a spectacular 403%, to reach US$85.2 billion, and the online share of total travel retail sales increased from just 4% in 1999 to almost 16% in 2004. Air transport is by far the largest transportation sector in terms of overall sales, due to its high prices and convenience, with a value share of 58% in 2004. (Global Market Information Database, 2005)
As of 2004, no-frills airlines were continuing to expand, although there were signs of a shake-out in the industry as several smaller businesses went bankrupt in 2004, and intense competition has also brought some major US carriers to the brink of bankruptcy. In 2004, Air France Group became the leading airline in the world in terms of value market share, after the merger of Air France with Dutch national carrier KLM. The combined airline now operates a fleet of 550 aircraft, serving 189 destinations in 84 countries, through more than 1,800 flights per day. Air France Group had an estimated market share of 6% in 2004, overtaking the previous market leader, Japan Airlines Co Ltd (JAL), and is thus one of the strongest brands in the market, due to its new European identity, and high level of coverage. (Global Market Information Database, 2005)
JAL Group itself was also the result of a merger in 2002 between Japan Airlines and Japan Air System, and its share fell in 2004 to 5%, due to the group’s poor financial performance in that year. Although domestic routes were reported to have performed well in 2004, the slump in the international segment gave rise to a ¥72.1 billion (US$687 million) operating loss, due to the adverse effects of very low travel confidence in Japan, which prevailed in the first half of fiscal 2004. Nevertheless, JAL continued to increase its leading share in the domestic Japanese market to 43%, well ahead of the number two company, All Nippon Airways, with 34%, due to its strong connections with its country of origin. (Global Market Information Database, 2005)
The largest US carrier, AMR, was virtually on a par with JAL in both 2003 and 2004 in terms of value market share, and also saw its share fall slightly, to 5% in 2004. The American airlines all suffered from the events of 11 September 2001 and from the economic downturn, and have continued to perform badly.
