Pearson Edexcel Level 3 GCE Business Advanced PAPER 2: Business activities, decisions and strategy 9BS0/02

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Pearson Edexcel Level 3 GCE Business Advanced PAPER 2: Business activities, decisions and strategy 9BS0/02Answer ALL questions. SECTION A Read the following extracts (A to D) before answering Questi... on 1. Write your answers in the spaces provided. Extract A Extract from easyJet plc’s annual report 2020 2020 £m Non-current liabilities 2 748 Total equity 1 899 EasyJet plc’s gearing for 2019 was 45.67% (Source: adapted from https://corporate.easyjet.com/~/media/Files/E/Easyjet/pdf/investors/ agm/agm-dec-2020/annual-report-2020.pdf) Extract B Why is the budget airline industry struggling? In 2019, budget airline Flybmi and travel business Thomas Cook both collapsed. “The aviation industry is struggling with rising costs,” says Loizos Heracleous, Professor of Strategy at Warwick Business School. “Aeroplanes are expensive assets with few alternative uses, which limits the ability of airlines to reduce their capacity during lean periods. Airlines also have to deal with fluctuating expenses like fuel, which accounts for around a third of total costs.” Delayed flights, cramped seating, inconvenient flight times and poor service are common customer complaints, which have damaged the reputation of many budget airlines. Customers share their experiences on social media, resulting in widespread bad publicity. Alex Brummer, City Editor for the Daily Mail, argues that there is a far greater problem for budget airlines: “The rise of a new generation of budget airlines, challenging the dominance of easyJet and Ryanair, means that there is huge overcapacity in the industry. As the number of seats exceeds the number of travellers, prices have been pushed down”. (Source: adapted from https://www.theweek.co.uk/105222/flybe-saved-but-why-is-theairline-industr [Show More]

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