Easyjet was particularly successful because it identified a niche in the market for low price short haul flights that would suit leisure and business customers. It was based on the premise that airline flights were price elastic, if you reduce the price, more people would fly. This was certainly the case for the airline.
Easyjet made the choice in pursing a differentiation strategy. While, British Airways differentiated upwards during 1990’s – offering premium services (including lounges, best customer service, in-flight meals) which commanded premium prices. Easyjet differentiated downwards – taking out unnecessary services, just providing a basic A to B airline service with a smile, and thus offered flights at lower prices. Customers valued the lower prices, and the airline market expanded in the quantity of passengers as a result of this new product offering. Continue learning..