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Introduction
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In the past few months, the effect of the pandemic has been seen in different segments and across various industrial settings (Robinson, 2020). The travel and tourism industry has been intensely affected by a series of uncertain difficulties because of the severity of the virus breakout. It is evident that the aviation industry is one such sector that has gone through a severe threat as the free movement was restricted by governments across the globe. It was and continues to be a challenge for the industry to keep the revenue streaming consistently as the customers are limited. The measure of lockdown was adopted by the nations to limit the increase of virus spread which directly impacted the aviation industry by lowering their usual customer base (MELAS and MELASOVÁ, n.d). The entire strategic directions were also destabilized because of the unpredictability of the industry. The current report will discuss the company context of EasyJet Plc. and will evaluate their budget management, legal construct and human resource management to develop a concise idea of the concerned company.
Part 1: Sales, Budget and Revenue Management
1.1 Examination of the Core Principles of Revenue Management for the Travel and Tourism Industry
1.1.1 Critical Analysis of Principles of Revenue Management
I. Demand Forecasting: Demand forecasting has a prominent impact on the revenue of travel and tourism organisation (Alrawadieh, Alrawadieh and Cetin, 2021). Therefore, to potentially develop the organisational revenue of EasyJet, the organisation has implemented different strategies to appropriately forecast future demand.
II. Overbooking control: During the business operation of EasyJet, sometimes the circumstance of overbooking is made within the organisational culture. However, initially, the organisation was not able to take the load of overbooking (González-Serrano and Talón-Ballestero, 2020). Therefore, nowadays, the organisation has initiated to enhance its capability for controlling overbooking, which has a great impact on the organisational revenue.
III. Economies of Scale: Moreover, the economies of scale have also a great influence on the organisational revenue of EasyJet (Alrawadieh, Alrawadieh and Cetin, 2021). During the persuasion of this principle, the organisation has increased its production and developed its service system to enhance its profit margin.
IV. Market Segmentation: Within the organisational business operation of EasyJet, the organisational leadership and management team segments its consumer base and provide specific and distinct product and services to its specific segments of consumers (González-Serrano and Talón-Ballestero, 2020).
V. Price Elasticity: Generally, the principle price elasticity is a measurement of change that significantly impacts the organisational revenue (Alrawadieh, Alrawadieh and Cetin, 2021). In this way, EasyJet also utilises this principle to efficiently manage and enhance its organisational revenue during its business operation.
1.1.2 Investigation of the Application of Revenue Management Tools in the Travel and Tourism Organisation
By implementing the revenue management tools within the organisational culture of EasyJet, the organisation has got significant control over the entire organisational profitability. In this aspect, it is easy to say that by prominently maintaining all the core principles of revenue management, EasyJet has been able to proficiently maximise its organisational revenue and profitability (Guerrini et al., 2020). During the organisational business operation of EasyJet the organisation needs to efficiently forecast its future demand; through which, the organisation will be able to significantly manage its resources as per the future demand. Moreover, the organisation has segmented its consumer base according their capability and demographic, social lifestyle; through this, they have set their cost of package for maintaining the suitability of the consumers (González-Serrano and Talón-Ballestero, 2020). In the way of implementing revenue management tools, the organisation utilise different kinds of pricing strategies to extensively develop organisational profitability. Through this, it will be able to enhance the organisational business operating system in the market.
1.1.3 Implementation and Analysis of the Pricing Strategy
I. Perishable Pricing: During the business operation of EasyJet, the organisation sometimes prefers to utilise the perishable pricing strategy (Lu et al., 2020). Due to this, the organisation has been able to effectively compete with its rivalries in the market by mitigating its product and service cost.
II. Intangible Pricing: Throughout the business operation of EasyJet, the organisation gets impact by legal, social and political issues. Due to this, the pricing of its organisational product and services becomes uncertain (Battagello, Cricelli and Grimaldi, 2019). In this aspect, the organisation needs to implement the intangible pricing strategy to make the service cost certain.
III. Penetrating Pricing: With the utilisation of a penetrating pricing strategy, the organisation got the direction for setting the cost of its product and service at a low range in the initial stage (Lu et al., 2020). And then with getting the influence of different situation, the organisation needs to increase its price of service gradually.
IV. Skimming Pricing: During the utilisation of the skimming pricing strategy, EasyJet has launched a new service for its consumer by setting a high price point for this service (Cather, 2018). In this way, due to the high cost of its service, it potentially grabs the premium consumer segment of the organisation.
V. Dynamic Pricing: Dynamic pricing general depends on the supply and demands of the products and services. Therefore, the utilisation of a dynamic pricing strategy can help EasyJet prominently by maintaining price flexibility (Battagello, Cricelli and Grimaldi, 2019)). In this aspect, the organisation also will be able to maintain the service cost when the supply is high and demand is low; and supply is low but demand is high.
VI. Yielding Pricing: Moreover, the yielding pricing strategy generally depends on manufacturing and invention or introduction of new products and service cost (Cather, 2018). Through this, EasyJet will be able to significantly maintain its increasing profitability during its business operation in the market.
1.2 Explanation of the Budget Management and the Maintenance of Statistical and Financial Records
1.2.1 Exploration of Various Financial Statements and Reporting Mechanism for Organisation
Operating Cash Flow (OCF)
It is a calculation of the cash provided by the daily activities of a firm. Operating cash flow shows that an organisation is able to produce enough positive cash to sustain and expand its activities; otherwise, additional capital growth funding is needed (Powley and Beioley, 2020). According to the financial report of EasyJet Plc. the net income of the company 899.00 million in 2020 and the net change in cash is 999.00 million (Yahoo Finance, 2021).
Income statement
The declaration of revenue is often referred to as the “Profit and Loss (P&L) Report,” which indicates whether the corporation has been able to make any profit (Secinaro, Calandra and Biancone, 2020). Since certain costs are non-financial (accruals & amortization) they rarely correspond with the balance of cash flow. It is important that all corporate lines have their own income statement. In order to see what market fields, lead to success and which are affecting the revenue flow through this degree of information is important. EasyJet’s total revenue is 3,009.00 million, gross profit 1,143.00, net income before taxes is 1,273.00, net income after taxes is 1,079.00 and net income 1,079.00 in the financial year 2020 (Yahoo Finance, 2021).
Balance sheet
Administrations often ignore the importance of managing the monthly balance sheet and focus on an annual and quarterly balance sheet evaluation. Balance sheets should indicate the available cash and the probable upcoming dues and loans. The total asset of EasyJet is 8,473.00, total equity 1,899.00 and total debt 3,441.00 (Yahoo Finance, 2021).
1.2.2 Explanation of the Significance and Value of Budget for Controlling Business Performance and Identification of the Variances
A corporate budget is a dynamic accounting schedule used to measure the projected income and spending of an organisation over a period of time. It's basically a financial plan for the month, quarter or year that a company produces. It must be versatile and agile to respond to evolving business strategies and the consumer environment (Rimmer, 2020). One of the most valuable tools to guide the company is a comprehensive and practical budget. A budget offers valuable knowledge to tackle unpredictable problems and make a profit. An adequate budget identifies the resources available; estimates spending and anticipates income. Company owners have to look to a budget continuously for the measurement of forecasted budget estimates against current financial reports to find out if changes should be made. Long-term needs should be addressed even in planning. The underlying cost efficiency of EasyJet was up to standards for the year.
Different headline costs except fuel have been cut in constant currency by 52 per cent, as cuts in materials have been made in many industry sectors including airport charges, ground handling, crew and repair costs (Dedoussi, 2021). The strategic cost-out plan, which was launched last year and which is EasyJet's biggest ever, provides and is on track to reach the expected in-year savings and is expected to improve margins. This puts the company in an even more sustainable place over the long term to recover from the pandemic.
1.2.3 Interpretation of Financial Statement Report to Evaluate the Business Performance
The selling and leaseback operations of EasyJet produced a total gross cash income of $1,026 million in the first quarter (approximately £779 million). Transactions of 32 aircraft raised the gross leasing liabilities by nearly £492 million. EasyJet joined these transactions along with many other parties such as SMBC Aviation Money (Dedoussi, 2021). The company holds 55% of the overall fleet after these sales, 38% of it not being paid. There are no more large-scale sales and leaseback deals presently under review. Recently EasyJet has announced their intention of strengthening their liquidity position through the signature of a five-year term loan facility of $1.87 billion (c.£1.4 billion) countersigned by a syndicate of banks and assisted by a partial guarantee from the UK Export Finance under their “Export Development Guarantee scheme” (Secinaro, Calandra and Biancone, 2020).
Competing UK businesses have access to the Export Development Guarantee system on commercial loans, do not hold any special rates and include acceptance of State assistance and has some restrictive agreements including dividend payments, but they are consistent with the current EasyJet's policy on the dividend. This 5-year aircraft facility has substantially increased and reinforced the maturity profile of EasyJet's debt and enhanced its balance sheet by increasing the available liquidity ratio. EasyJet has adopted fast and resolute steps to boost the liquidity of over £4.5 billion, including various sources since the start of the pandemic (Robinson, 2020).
Part 2: HR Life Cycle and Human Resource Strategy
2.1 Assessing how to Manage the Human Resource Life Cycle within the Context of Human Resource Strategy
2.1.1 Review of Different Stages of HR Life Cycle that Applied to a cabin crew staff
I. Attraction, Recruitment, Selection: At first, EasyJet needs to attract the candidate within the organisational culture (Huijbregts et al., 2017). In this way, after attracting them the organisational human resource management team needs to implement an efficient recruitment and selection process to hire talented staffs for the cabin crew post.
II. Introduction, Orientation, On-Boarding: After recruiting the talented candidates within the organisational culture, EasyJet needs to provide a brief introduction regarding their job practices and ethical guidelines of the organisational culture, which they have to maintain during their organisational job practices (Airapetova, Korelin and Karabekova, 2017).
III. Career Planning and Development: Moreover, EasyJet needs to demonstrate its newly recruited employees for cabin crew post regarding their career planning and professional development (Huijbregts et al., 2017). Through this, the organisation will be able to sufficiently engage a vast group of employee base with the organisational culture.
IV. Retention: Also, the human resource manager and the leadership team of EasyJet needs to provide different career facilities like rewards, incentives, promotions, health safety and security to its newly recruited cabin crew members (Airapetova, Korelin and Karabekova, 2017)). Through this, the organisation will be able to significantly retain its talented employees.
V. Separation and Termination Phase: However, during the employee job practices, in case there are any kinds of unethical activities done by any employees; then the leadership team of EasyJet needs to take some prominent action like separation or termination (Huijbregts et al., 2017).
2.1.2 Development of Performance Management Plan to the Chosen Job Role
|
Objective Areas |
S |
M |
A |
R |
T |
|
|
Specific |
Measurable |
Attainable |
Realistic |
Time-Bound |
|
Performance Management Plan |
Reduce the negative attitude of the cabin crew staffs to develop the organisational culture of EasyJet. |
Therefore, to reduce those negative attitudes, the leadership and the management team needs to analyse different strategies to implement the appropriate one. |
In this way, EasyJet will be able to significantly get expected outcome by utilising effective performance development strategy. |
Development of the employee performance will be enhanced compare to their earlier confliction and negative attitudes. |
It will be done within next six month. |
Moreover, an effective performance management plan has been discussed below, which can help EasyJet to develop the workability of newly recruited cabin crew staff and develop the organisational culture.
Constructive Performance Management Plan for Resolving Negative Behaviour
I. Planning: Firstly, EasyJet needs to significantly plan to define and implement all the stages for training and coaching the employees (Audenaert et al., 2019). Through this, the organisation will be able to significantly provide sufficient knowledge and efficiency to the newly recruited employees.
II. Coaching: In this way, after planning for the provisioning of training and coaching to the new members of cabin crew in EasyJet, the organisational leadership and the management team needs to provide developed and advance training module to the employees (Aguinis, 2019).
III. Reviewing: Thus, during the continuation of the training process, the management team needs to review the progress of newly recruited employees for the post of cabin crew (Audenaert et al., 2019). And also, needs to analyse their efficiency and ability to complete duties.
IV. Action: After this, the leadership and the management team of EasyJet need to provide several facilities like rewards, incentives, etc. Through this, the organisation will be able to enhance the employee retention rate within the organisational culture (Aguinis, 2019).
2.1.3 Application of Different Techniques to Resolve the Negative Behaviour of Staffs and Issues during Staff Retention
During organisational employee management system, sometimes employee’s negative behaviour significantly hampers the organisational culture. The negative behaviour like pessimistic, cynical, unenthusiastic, arrogance, etc. needs to be taking under control by the management system of EasyJet. Therefore, the leadership and management team of EasyJet has initiated to implement some techniques to resolve the negative behaviour and other issues during the retention process of cabin crew in EasyJet.
I. Mentorship Program: Through finding out the fundamental issues, EasyJet needs to arrange a mentorship program; through this, the organisation will provide appropriate instruction to them.
II. Employee Compensation: Moreover, EasyJet needs to provide some compensation to its organisational employees to reduce their negative behaviour and to effectively retain them with the organisational culture.
III. Wellness Offering: Furthermore, EasyJet should provide health safety and security facilities to its employees (Butt, Lodhi and Shahzad, 2020). Through this, they will be able to get prominent encouragement to do their job.
IV. Communication and Feedback: Also, the leadership and management team of EasyJet have to efficiently communicate to the newly recruited cabin crew staff for getting their feedback regarding their job practices (Butt, Lodhi and Shahzad, 2020).
V. Training and Development: Through discovering the factual issue of the employees, EasyJet needs to provide sufficient training to develop their job practices.
VI. Work-Life Balance: Moreover, EasyJet needs to provide flexibilities to the newly recruited cabin crew staff to potentially balance their professional and personal life. Through getting this satisfaction, the effectiveness of negativity from the organisational culture will be reduced.
2.1.4 Evaluation of the Significance of HR Life Cycle in Retention Talented Employees
The HR life cycle is mostly significant for effectively retaining talented employees within the organisational culture. Therefore, in order to leverage the implementation of an advanced recruitment process for hiring the most talented and efficient staff for the post of cabin crew in EasyJet, the organisation has taken numerous potential initiatives (Singh, 2019). Moreover, after involving and retaining the talented staff within the organisational culture of EasyJet, the organisation has initiated to provide numerous rewards and significant facilities to its employees for efficiently encouraging them for the organisational job practices.
2.1.5 Formation of Valid Judgement and Recommendation on how HR Processes and Documents can be developed for Effective Talent Management Planning
Throughout the evaluation, it becomes evident that the utilisation of the organisational HR process of EasyJet, the organisation nowadays has got the most talented staff within its organisational culture for the post of the cabin crew. In this aspect, to significantly retain them with the organisational business activities, the organisational leadership and the management team has initiated to provide sufficient guidance and encouraging environment to them. Through this, they have been able to get retained with the organisational activities of EasyJet (Mupepi, 2017). Moreover, the human resource management team of EasyJet has set short-term and long-term goals and provides some effective and encouraging rewards with achieving them for the employees. Due to this, the newly recruited cabin crew staffs in EasyJet get sufficient satisfaction with doing their job in the organisation.
Part 3: Legislation and Ethics in Travel and Tourism
3.1 Illustration of the Potential Effect of Legal and Ethical Considerations on the Organisation
3.1.1 Explanation of the Impact of Legal Issues in the Travel and Tourism Industry 200
EasyJet Plc. carries out businesses and periodically examines strategies and activities, in line with best practices in corporate governance, in order to ensure that quality standards are maintained. A number of standards, including an ethical code, have been adopted by the Board, establishing the basis for the functioning of the company. It is established in an inclusive and transparent way to assure values that are essential (Dedoussi, 2021). The aviation industry is guided by multiple legal assertions which are crucial and companies have to maintain those regulatory barriers to appropriately execute the business operations. Passenger safety regulations, data protection regulations, service quality standards etc. must be strictly followed to provide premium services to the customers without getting into any legal issues. In 2020, EasyJet had to face a legal challenge as the confidential data of almost 9 million customers was breached by a cyber-attack. About 10,000 customers stood against the company and brought a legal claim. The case got sufficient importance as the law firm PGMBM declared that the credit card details of nearly 2200 people were stolen (Powley and Beioley, 2020). It was considered a terrible failure to maintain responsibility regarding customer safety.
3.1.2 Exploration of Specific Legislation that the Organisation needs to Adhere
Companies are bound to follow the legal regulation introduced to them. The aviation industry has the access to the personal data of the customers; therefore, it is expected to maintain the data safety and security of its customers while following the essential legal frameworks by the government (Powley and Beioley, 2020). The UK has The Data Protection Act 2018 which controls the usage of personal data of the customers by businesses. EasyJet Plc. needs to follow the principles under the act to properly cater to the requirements of the customers by assuring them proper security standards.
3.1.3 Illustration of how Company, Employment and Contract Law have Potential Impact on Business Decision-Making Process
Due to the existence of employment law, the travel and tourism organisation gets sufficient direction to provide the pressure and wages to an employee during the organisational business practices. In this aspect, it is easy to say that, the employment law has reduced the unethical activity of overtime work without any payment (Benuyenah, 2021). Moreover, on the other hand, the prominent persuasion of contract law, EasyJet and the other travel and tourism organisation in the industry potentially maintain the deal for packages and cannot extend or reduce the package validity during the provision of service to the consumers.
3.1.4 Examination of the Potential Implication of Regulations, Legislations and Standards on Decision-Making
Health security and safety rules and regulation fundamentally concentrate on the possible hindrance that can be occurred during travelling. Therefore, to make more secure the travelling for the consumers, the travel and tourism industry has implemented numerous potential rules and legislative standards that efficiently pursued by EasyJet during its business operation (Kluetz, O'Connor and Soltys, 2018). Through this, the organisation has been able to provide prominent and comfortable service to the organisational consumers by considering all the rules and legislation. This proficiently helps the organisation to enhance its profitability.
3.1.5 Critical Reflection on the Potential Impacts of the Ethical Principles, Regulations and Legislations on Decision-Making
Throughout the evaluation of the utilisation of all the rules, legislations and laws during the organisational business operation of EasyJet, I have realised that the organisation grow efficiently by maintaining and doing all the industrial ethical activities. Moreover, I think that the other travel and tour agencies also need to efficiently pursue these ethical activities and maintain an adequate cost for their service packages during their business operation in the same market.
Conclusion
It is evident that the threat of Covid-19 has impacted the tourism and travel industries terribly. Being associated with the tourism sector aviation industry has also been sufficiently affected by the pandemic. Lowered Customer base, employee retention and revenue management are some of the fundamental causes of concerns for the airline industry. The entire report has been developed to address the key areas of concerns and how these factors require significant attention for a better company management approach. In this report, the company context of EasyJet is examined and evaluated to understand the notions related to the finance human resource and legislative principles. The critical evaluation of these aspects helps to establish the knowledge on the specific areas of a corporate strategic rationale.
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