You have been asked by the revenue manager to analyse the profitability of some leisure and business routes of your choice. To analyse the revenue management strategy of easyJet and the competitor airlines, you will need to collect airline ticket price data for each of your routes on a daily basis. You will then analyse the 2019 easyJet airline financial report to estimate the operating cost. It is important that you correctly chose the route and flights for the data you plan to collect. Poor planning will result in poor data making it difficult for you to get a high mark.
The following is the specification for the data you need to collect:
• Select Four European short-haul routes operating in the winter season.
• Two of your routes must be a leisure route departing anytime between 16th December 2020 and 6th January 2021.
• Two of your routes must be a business route departing anytime between 22nd November 2020 and 12th December 2020.
• Select one-way, direct flights only for 1 adult passenger.
• Record the lowest available ticket price for a minimum of two airlines per route.
• At least one of the flights, in any of the routes, must be operated by easyJet.
• Aim to record prices daily for a minimum of 6 weeks before the departure date.
• Identify the aircraft types operating the route to estimate the seat capacity.
To be able to compare the competition between airlines, you should:
• Select flights departing and arriving at the same airport.
• Select similar departure times if possible.
• Record ticket prices at a similar time of day.
• Only use the airlines own websites to obtain prices. While price comparison sites such as Skyscanner, Expedia, Ebookers etc. can be used to plan the data you intend to collect, do not use these sites for collecting the daily ticket prices.
• Delete internet cookies before requesting prices.
• Be careful not to choose two airlines operating a codeshare.
Typical European leisure destinations are:
– Spanish coast and islands; Greek islands; Cyprus; Turkish coastal resorts; Southern France; Malta; Italy
Typical European business routes are major financial cities such as:
– London; Brussels; Paris; Madrid; Frankfurt; Berlin; Munich; Copenhagen; Lisbon; Stockholm; Oslo; Milan; Geneva; Zurich; Amsterdam; Athens; Rome
A data collection template spreadsheet is available in the module on Blackboard. You are strongly advised to check the flights you have selected with the module tutor, before embarking on the daily collection of prices.
Once you have collected all the data, you need to write up a 1500 to 2000-word report of your findings. Your report should:
(i) A brief description of the flights operated in each route including the aircraft types/capacity, flight duration, departure times etc.
(ii) Analyse the revenue management strategies used by the various airlines on the route by presenting the ticket price data using clear and appropriate graphical methods. Price fluctuations with time should be clear and you should explain the price trends. Compare the price fluctuations between airlines and routes and suggest possible reasons for the differences. Can you identify the optimum time to buy a ticket? Is there a day of the week when prices are the cheapest?
(iii) For one easyJet flight, for which you will have collected ticket price data, estimate the total revenue from the flight and the total operational cost. Estimate the total profit/loss for the route. Your estimate of operational cost should be as accurate as possible and the method clearly explained. Explain how easyJet can make the route more profitable.
