easyJet’s business model is well-positioned to compete with legacy carriers post-Covid

Legacy carrier networks focus on connecting traffic through hubs, serving long-haul routes and business passengers. Credit: Sorbis / Shutterstock.

As legacy carriers across Europe continue to pull back capacity and cancel routes, easyJet is in a strong position to capitalise on its ambitions and win market share on these lucrative routes. Its low-cost model is likely to pay dividends in the airline’s recovery.

Legacy carriers are likely to take longer to recover

Legacy carrier networks focus on connecting traffic through hubs, serving long-haul routes and business passengers. The Covid-19 virus has decimated this business model due to restrictions on transiting through certain countries, and also severely reducing the need for business travel. This has given easyJet a prime opportunity to steal market share from its competitors.

easyJet tends to serve short distance, point to point routes. Unlike other low-cost carriers, easyJet mostly serves primary airports, which will allow it to go head-to-head with legacy carriers, who often have a stronghold at these airports. In contrast to other low-cost carriers, easyJet is already an established brand in many of these markets, and this will serve it well as it looks to increase its market share off the back of its competitors struggle to survive.

The low-cost model is likely to excel due to rising financial worries

easyJet has long been regarded as a low-cost leader, and its ability to lower its prices will mean the airline can better capture the demand from financially conscious travellers. GlobalData’s latest COVID-19 Recovery Survey (2–6 December 2020) showed that globally, a staggering 87% of respondents were ‘extremely’, ‘quite’, or ‘slightly’ concerned about their personal financial position. The low fares offered by the airline will better cater to this need and easyJet is well equipped to lower its prices in comparison to legacy carriers.

The drastic action taken by the airline to reduce its costs as a result of the Covid-19 pandemic will benefit the carrier as it looks towards recovery. The lower cost base will mean the airline can competitively price its tickets, undercut competition and win a larger market share. Legacy carriers may have reduced their cost bases but not to the extent of low-cost carriers. The airline is well-positioned to respond to any pent up demand in the market and this is likely to pay off in the long-run.

If easyJet can win a greater market share in legacy-dominated markets, it will leave little room for the reintroduction of services by others. This could leave easyJet in a much stronger position going forward, and the airline could emerge as a winner from the pandemic.

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