Module: TH60123E – Air Route Planning
Assessment 2: Individual Written Report – Further Guidance
Assessment Title: European Short-haul Route Profitability
As part of this assignment, you are assuming the role of a revenue analyst working for easyJet airlines. 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 have been collecting airline ticket price data for each of your chosen routes on a daily basis. You now need to analyse the data you have collected. In addition, you need to analyse the 2019 easyJet airline financial report to estimate the operating cost.
In addition to the assessment brief, this document provides you with further guidance about how you could conduct the analysis.
Report Guidance
Step One:
From the data that you have collected or from the data collected by Anil Padhra, select 2 leisure routes and 2 business routes for which there is good quality data.
Step Two:
Using Microsoft Excel, produce a scatter graph (with lines) of the Ticket Price against the Price Collection Date. You should have four graphs for the four routes. Each graph should contain multiple lines for each of the airlines operating that route.
Step Three:
Annotate the graphs to highlight any interesting features, patterns or trends. You can do this by inserting a text box and adding an arrow.
Step Four:
Conduct an analysis of the data to identify patterns and trends in the data and to identify any observable revenue management strategies used by the airlines. For each of the routes you should try to answer the following questions:
What is the overall trend in ticket price? Are ticket prices cheaper in advance or cheaper close to the departure date?
When is the cheapest period to book tickets. (e.g. 1 week before departure, 30 days before departure etc.)
How do the price trends and fluctuations for leisure routes compare to the business routes?
Is there a difference in the price trends and fluctuations for low-cost carriers compared to full-service network carriers? If so, what are the differences?
Are there variations in average ticket prices by day of the week? If so, explain the patterns and trends.
Please remember that you must explain the price variations and not describe the variations.
Step Five:
For any one easyJet flight, 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.
To estimate the operating cost, a table of data from the 2019 easyJet Financial Report is available on Blackboard. You can find the operating cost table under:
[Assessments]
> [Assessment A2 Brief and Supporting Documents]
> [easyJet Operating Cost Data]
Note that the cost of fuel is not included in the report and you will need to estimate fuel costs based on flight time, using other methods.