EasyJet 2012 Annual Report Download - page 32

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Strategic
impact Risk description and potential impact Current mitigation
EXTERNAL RISKS
Competition and industry consolidation
easyJet operates in competitive marketplaces against both flag
carriers and other low-cost airlines.
One of easyJet’s key competitive advantages is its strong cost
base.If we lost sight of this or relaxed our stance over cost
controlthis could significantly reduce any competitive
advantageand impactprofitability.
Industry consolidation will also affect the competitive environment
in a number of markets. This could cause a loss of market share
anderosion of revenue.
Regular monitoring of competitor activity and potential
impact of any consolidation activity.
Rapid response in anticipation of and to changes.
Strong cost control across the company. “easyJet Lean”
drives cost reduction and efficiency into targeted areas.
Regulator intervention
The airline industry is currently heavily regulated, with expected
increased regulator intervention. This includes environmental,
security and airport regulation which have charges levied by
regulatory decision rather than by commercial negotiation.
easyJet is exposed to various regulators across our network,
whichwill increase as the Company grows geographically.
Thiscould have an adverse impact to our reputation, cost base
andmarket share. An inadequate knowledge or misinterpretation
oflocal regulations could result in fines or enforcement orders.
easyJet has a key role in influencing the future state
ofregulations.
A Regulatory Affairs Group coordinates the work and effort
in this area.
Chris Kennedy
Chief Financial Officer
Performance and risk
Financial review
continued
easyJet plc
Annual report and accounts 2012
30