Sample Essay

  • The takeover will enable to leapfrog their main competitor Ryan air, as the combined airline will become the largest low-cost airline in Europe, flying more routes than the current (at the time of the acquisition – 2002) number one Ryan Air. It will have bases at Gatwick, Luton, Stanstead, East Midlands & Bristol airports. As “their understanding of what the customer wants has put clear blue water between EasyJet and the other leading low-cost operator and the competition and EasyJet significant investment in their business model means it will be hard for anyone to play catch up” said Lloyd- Williams in the Norton rose website.

  • Go is a profitable and established business with strong growth prospects. In the year to 31 March 2002, Go flew 4.3 million passengers generating revenue of £233.7 million and profits before tax of £17.0 million (excluding the impact of a share option expense of £2.96 million)
  • The Acquisition will transform EasyJet by substantially enhancing its scale and growth potential, as the acquisition of Go by EasyJet would come with EasyJet owning 56 Boeing 737’s compared to Ryanair’s fleet of 44. With another 100 on order over the next decade according the Easyjet Website at the time.
  • The addition of a number of mature routes not currently operated by EasyJet which will create additional opportunities for EasyJet to develop its network density by “joining the dots”, thereby reducing the cost and risk of network development which would otherwise be incurred were EasyJet to develop new routes from start-up; and the provision of EasyJet services to a larger customer base, particularly in the key target markets of London and south-east England, and increasing the potential market from which to draw demand for new destinations.
  • EasyJet carriers around 8.3 million passenger year(in 2002), while Go has carried around 4.1 million in the last year (2001), this compares to Ryan Air which in the last 12 months has carried are 11 million according to the London website.
  • The ability of the Enlarged Group to negotiate enhanced commercial terms for the purchase of goods or services, particularly in relation to the purchase of aircraft and fuel, the negotiation of maintenance arrangements, the provision of insurance and marketing and advertising expenditure; and
  • The reduction of market risk arising from the Enlarged Group’s ability to add capacity to a new route without adversely affecting its ability to maintain capacity on existing routes.
  • EasyJet is to offer multimillion pound incentive packages to key executive’s at Go in a bid to keep them on board after its £374 m takeover of the rival no-frills airline which include Go’s Chief operating officer Ed Winter and sales and Marketing director David Magliano, Director of customer services Dominic Paul.

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