In general, the paper "EasyJet’ s Management Decisions and Separation of the Company’ s Operations" is a good example of a management case study. The United Kingdom voted to leave the European Union. This phenomenon, now commonly referred to as Brexit, will have far-reaching effects on the aviation industry. In the recent past, EasyJet, one of the leading low-cost airlines based in the United Kingdom, announced that it is planning to create a separate entity to operate at the continental level and retain its current operations in the United Kingdom (BBC News, 2016). This essay examines the impact of Brexit on the aviation industry in general and the management decisions that are made in the case of EasyJet in particular.
The impact of Brexit on the aviation industry is examined in terms of the possible changes that are likely to occur in the regulatory, economic and other external factors of the environment of the industry. The impact of Brexit on the management decisions of EasyJet is evaluated in terms of how the decision by EasyJet’ s management to split the company’ s operations will help the company address new challenges and take advantage of new opportunities. The Impact of Brexit on Airline Industry The decision made by the United Kingdom to leave the European Union is likely to affect the airline industry in several ways.
In the first place, the departure of the United Kingdom from the European Union will affect the aviation agreements that the UK is currently a party to (Little 2016, p. 2). For example, the UK is part of the longstanding ‘ open skies’ aviation agreement among the members of the EU (Gillespie 2001, p.
17). Under the ‘ open skies’ aviation agreement, airlines from different countries that are members of the EU have rights to move across the member countries freely. Therefore, the EU aviation agreements grant airlines access to all the member countries without stringent regulations. As a result of Brexit, the UK will lose its rights as a member of the EU and, by effect, a party to the agreements. Therefore, the UK will have to negotiate for new aviation agreements with the remaining EU countries (Little 2016, p. 3). Developing new EU-UK aviation agreements will be necessary to help the local EU airline industry.
Furthermore, the need to enter into new negotiations with the remaining member states of the EU will present new challenges (HFW 2016, p. 1). Essentially, the UK will be economically weaker as a non-member of the EU (Deloitte 2016, p. 3). Hence, the country may be in a weak position when negotiating for aviation agreements with the remainder of the EU. The second impact of Brexit on the aviation industry will be seen in the form of regulatory changes involving the United States.
Currently, the United States and the entire EU are parties to the EU-US aviation agreement. The EU-US agreement grants US and EU flights access to the EU countries and the US respectively (Abeyratne 2012, p. 338). Given that the United Kingdom will now not be a member of the EU, it will be necessary for the UK to develop new aviation agreements with the US. The US is an important partner to the EU as well as the UK as a non-member of the EU for various reasons.
At the most basic level, the US is one of the most important trading partners of the United Kingdom. Therefore, for the United Kingdom to counter the possible negative effect that may arise from the implementation of its decision to leave the EU, it will have to negotiate for a new UK-US open skies agreement (Clyde & Co 2016, p. 2).