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Qantas airways case study
How have internal and external influences impacted qantas
Qantas airways case study
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Strengths
• Recognised brand - Australia’s premium airline with the flying kangaroo on a red background is recognised the world over for excellent service and professional cabin crew. The Qantas cabin crew are the global ambassadors for the Qantas brand who communicate Qantas culture and values whenever they interact with passengers.
• Domestic market share - Qantas currently holds a 65% share of the domestic market, with 85% of the corporate travel market (Freed, 2014).
• Innovative - leading the way in the research and development of advanced technologies such as the Next Generation Check-In (NGCI) system and on-board wireless streaming for Ipads are two examples (AusIndustry, 2013) Strong government backing – The government have recently formed a committee to examine what initiatives “can be taken by the federal government” to ensure Qantas “remains a strong national carrier” (Klan, 2014)
• Emirates Partnership - The 2013 partnership with Emirates provides the opportunity to access highly lucrative international routes via flights based out of the Emirates’ Dubai hub, and enables Qantas to extend its product offering into Europe, the Middle East and North Africa (Q AR 2013)
• One of the world’s oldest airlines
• Great safety record – Fatality free and rated 7/7 on respected ‘Airlineratings.com’.
• Frequent flyer program – As cited in the Australian Business Traveller, Some analysts (O'Shea, 2014) believe that as a stand-alone business, Qantas Frequent Flyer would be valued at “somewhere in the $1.5 billion to $2.5 billion range”.
Weaknesses
• Dwindling International market share – A report published by the Australian government (BITRE, 2013) shows Qantas incurred nearly a 1% drop last year in non-domestic passenger ...
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BITRE. (2013). Australian Government. Retrieved from Bureau of Infrastructure, Transport and Regional Economics: www.bitre.gov.au/statistics/aviation/international.aspx
Datamonitor. (2013). Retrieved from Datamonitor: https://www.datamonitor.com/
Freed, J. (2014, March 12). Virgin increasing capacity faster than us, Qantas. The Sydney Morning Herald.
Klan, A. (2014, March 7). Senate committee formed to 'Keep Strong National Carrier'. The Australian.
O'Shea, J. (2014, January 16). Retrieved from Australian Business Traveller: http://www.ausbt.com.au/could-qantas-sell-off-its-frequent-flyer program
O'Sullivan, M. (2014, March 5). No overseas investors in line for Qantas even if government lifts cap, say analysts. The Sydney Morning Herald.
Qantas. (2014). Retrieved from http://www.qantas.com.au/travel/airlines/company/global/en
Established in 1920, Qantas is the world's 11th largest airline and the 2nd oldest. It was founded in the Queensland outback as the Queensland and Northern territory Aerial Service (QANTAS) Limited, by pioneer aviators Hudson Fysh, Paul McGinness and Fergus McMaster. Qantas was a former government owned business; it did not view profits or efficiency as its prime goal. In 1993 a 25% stake was sold to British Airways. Qantas was privatised in 1995 and has had to adopt management practices to overcome both internal and external influences and had to change its narrow-minded culture. Although Qantas is primarily a passenger airline, air freight is also an integral part of its core business. Other Qantas operations include catering, tourism and E-commerce devoted to transport and air travel.
American Airlines and US Airways are in the aviation industry. Both companies provide air transportation services for passengers and freight. Together they have formed American Airlines Group, Inc., the world’s largest airline, as measured by revenue passenger miles (RPMs) and available seat miles (ASMs). In 2012 the U.S. airline industry was worth approximately $195billion in operating revenue, up from $154billion in 2009, including an operating fleet of 3,451 aircraft.1
Geographic As the nature of air travel is largely logistical, it is hard to talk about the industry without addressing geography. Airlines don't just have to market to customers in terms of geographics, the airline industry is geographic; getting a customer from where they are to where they want to be. Internationally speaking, Australia is a slight disadvantage because of its location compared to other developed nations. The majority of global travellers do not typically pass through Australia on-route to another destination; Australia is the end of the line. Cities such as Singapore, Kuala Lumpur and Dubai are known as ‘hubs’ because they have large numbers of travellers who must pass through them in order to progress to another leg of their journey.
In 1978, deregulation removed government control over fares and domestic routes. A slew of new entrants entered the market, but within 10 years, all but one airline (America West), had failed and ceased to exist. With long-term growth estimates of 4 percent for air travel, it's attractive for new firms to service the demand. It was as simple as having enough capital to lease a plane and passengers willing to pay for a seat on the plane. In recent news, the story about an 18-yr British...
The industry for Qantas Airways Limited is a company that guides a long distance in airline, which is in international and domestic location. Qantas Airways Limited is a company that established as a world airline that comes from Australia.
In lights of the PESTLE model, the political factors bring both opportunities and threats to Jetstar’s new proposal. Since this proposal focus on the Australia-India low price airline market, the analysis conducts involving Australia and India political environments. There are two potential opportunities in this political environment. Firstly, the Australian government has the incentive to boost the development of tourism between the two countries (Tourism Australia 2012). With the support of government, the start of the new route could be easier. For example, American government erects legislation to increase competition of the airport ‘by forcing these airports to increase the availability of scarce facilities’ (Williams 2015). Such legislations and regulations as well as financing investment or subsidies from government could directly help the airline company cut the cost. Similarly, Australian government could also have powerful intervention to influence aviation market. Thus, it is a big opportunity for Jetstar to the new route expansion if it acquires the
...onclude, the strategies used by Qantas in dealing with these influences have all been relatively effective. The use of technology has been the most effective in providing the business with a competitive advantage and has very little downsides when compared to other strategies. Operations management has dealt with globalisation effectively and greatly reduced costs and provided the business with a competitive advantage at the expense of the business reputation and individuality. Strategies which involve product differentiation have been used very effectively and are beneficial to Qantas. However the more cost leadership strategies that Qantas uses, the more likely that the business will lose it’s own individuality as the “Red Kangaroo”. In general, Qantas has been able to keep it’s business running relatively successfully and has dealt with it’s influences very well.
Since Qantas and Virgin are the only two airlines supplying domestically in Australia, they account for all of the profits in the market and consequently they are in direct competition with each other. Because only two firms are competing, each firm must carefully consider how its actions will affect the other, and how its rival is likely to react. Thus, strategic considerations regarding the behaviour of competitors in this duopoly are essential in order for Qantas and Virgin to set prices. "Game theory is often used as a model to analyse the strategies of individuals or organisations with conflicting goals" (Waud and Hocking 1992, pp.-334).... ...
Airline and travel industry profitability has been strapped by a series of events starting with a recession in business travel after the dotcom bust, followed by 9/11, the SARS epidemic, the Iraq wars, rising aviation turbine fuel prices, and the challenge from low-cost carriers. (Narayan Pandit, 2005) The fallout from rising fuel prices has been so extreme that any efficiency gains that airlines attempted to make could not make up for structural problems where labor costs remained high and low cost competition had continued to drive down yields or average fares at leading hub airports. In the last decade, US airlines alone had a yearly average of net losses of $9.1 billion (Coombs, 2011).
The company made $970 million profit in the year 2008, $123 million in 2009 followed by $116 million in 2010. The number of passengers travelling in Qantas in 2008 was 33670 million, 33,969 million in 2009 followed by 32,489 million.
Technology Innovation: - Boeing should carefully analyze the market to evaluate the trends in the airline industry and aggressively invest in a new product line (top dog strategy) that could counter Airbus’s A380.
Air Canada is Canada's biggest aircraft and the biggest supplier of booked traveler benefits in the Canadian market, the Canada-U.S. Trans outskirt showcase and in the worldwide market to and from Canada. In 2015, Air Canada together with its Air Canada Express provincial accomplices conveyed more than 41 million travelers, offering direct traveler administration to more than 200 goals on six landmasses. Air Canada is an establishing individual from Star
Lufthansa, one of the world’s biggest airliners, has divisions handing maintenance, catering and air cargo. Since the World War II the airline industry has never earned its cost of capital over the business cycle (Hitt, 2010). Most of the airline companies have either filed for bankruptcy or are being bailed out by their government. Lufthansa had also gone through these tough times, but had resurfaced to become one of the worlds most profitable airline company. The company adapted a transnational strategy, seeking to achieve both global efficiency and local responsiveness. Lufthansa’s monopoly in Germany came to a halt with the creating of the European Union. All the EU member countries become one regional and therefore the European competition became, an increasingly a local competition. Lufthansa created its regional Hubs, to cater for its domestic market. But the availability of substitutes such as bullet trains and the Euro tunnel, made is necessary for Lufthansa to create short traveling time, customizations and quality standards in the region to achieve a competitive advantage. But outside the EU there are no substitute to air travels as such all the flag carriers are competing in the market, the international airline industry is a highly competitive environment. A new force has also emerged in the world of air travel, in the form of three Gulf airlines with jumbo ambitions. Within a decade Dubai’s Emirates, Qatar Airways and Eithad from Abu Dhabi have between them carried the capacity of two hundred million passengers (Micheal, 2010). The company had to go global and therefore adopted the international corporate-level strategy, where Lufthansa will ope...
DuBois, S. (2012, February 17). The real threat facing the airlines - Fortune Management. Fortune Management Career Blog RSS. Retrieved April 29, 2014, from http://management.fortune.cnn.com/2012/02/17/the-real-threat-facing-the-airlines/. Tom, Y. (2009). The 'Standard' of the 'Standard'.
The International Air Transport Association (IATA). 2014. Airline Cost Performance. IATA Economics Briefing. [report] IATA, p. 31.