1(a)
Under AASB 8[5] (2012), Qantas as a for-profit entity whose shares are traded on the ASX (Qantas 2013, p. 104) and who engages in aviation services, is required to report operating segments for which discrete financial information that is reviewed regularly by the chief operating decision maker (CODM) in deciding resource allocations and assessing performance is available. Shanahan (2011) contends Qantas has breached AASB 8 by not making international operations (IO) a separate operating segment because information on IO’s loss would have been reported internally and periodically reviewed by CODM as it largely instigated Qantas’s transformation initiatives. This internal information should be disclosed ‘to shareholders at an appropriate level of aggregation’ (Shanahan 2011) to ‘give real insight about a company’s performance’ (Shanahan 2011) and enable users to view Qantas ‘through the eyes of management’ (Parker 2007, p. 72).
Geographic segment disclosures enables users to observe risks, resource concentrations and ‘whether the performance of one business subsidised the performance or lack of performance of another’ (Harmer 2007). Relevantly, Australian Aviation (2011) claimed that Qantas was subsidising Jetstar while hurting its mainline operations through asset movements, EBIT for Qantas Frequent Flyer was 30% but under full brand (including international and domestic) only produced 0.6% return compared to Jetstar’s 6% and IO’s loss may have consumed some of the corporate/unallocated segment’s $123m (Creedy 2011), yet Qantas mainline had disproportionately higher staff (27,000 people) compared to Jetstar’s 3100 and Frequent Flyer’s 82 (O’Sullivan 2011).
Qantas merely stated IO’s $200m+ loss was an ‘unacceptable return’ ...
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...n 2014) added to increased political protest for disclosure. Further following a forensic accounting report from PPB Advisory, Australian and International Pilots Association questioned the vast discrepancies between redundancies and margins between Qantas’s segments (O’Sullivan 2011) and how corporate segment’s $123m loss was allocated, contending they incurred some of it (Creedy 2011), emphasising requests for greater visibility by interest groups and accounting advisory bodies. Similarly, taxpayers, Transport Workers Union and employees (Age 2014) demanded reviews of Qantas’s books and explanations of IO strategic priorities, redundancies and failed Jetstar Asia strategy (Pauka 2014), while Virgin threatens market share with improved performance (Grimson 2014) and consistent disclosure of both international and domestic segments (Virgin Australia 2013, p. 99).
One of the many influences that affect Qantas is the presence of globalisation, which has heavily affected the airline both positively and negatively. Globalisation is a process which refers to the increased integration between different countries and economies as well as the increased impact of international influences on all aspects of life and economic activity. Globalisation is responsible for the removal of many trade barriers and the increased level of competition that Qantas has been exposed to. The increased levels of competition has increased consumer sovereignty and forced Qantas to implement strategies to gain a competitive advantage in order to redirect consumers towards their business. Qantas has implemented a cost leadership strategy as a response to globalisation and the influence of cost based competition. One way that Qantas achieved this was by using Globalisation itself to the business’ advantage. Globalisation ha...
Overall Qantas effectively utilises the marketing process to ensure for maximised profits to ensure for future financial stability. Enabling Qantas to maintain an effective competitive advantage over competitors maintaining its image as Australia’s number one aviation company.
The Australian Stock Exchange’s (ASX) Corporate Governance Council (2014) defines corporate governance as “A framework of rules, relationships, systems and processes within and by which authority is exercised and controlled within corporations”. One goal of corporate governance is for the board members to increase shareholder value (Tricker 2015). In order to achieve this, it is important that the board act appropriately and justly so that the best interest of investors are protected. This report will explore the effectiveness of JB Hi-Fi’s corporate governance. JB Hi-Fi is Australia’s largest home entertainment retailer, selling a variety of products at discounted prices. Over the years, they have maintained a substantial
Despite the growth in the market, Qantas International’s market share has been falling over the past 10years, from 34% in FY02 to 16% in FY13. The entry of Virgin Australia in 2000 in part explains this, however Virgin’s growth also coincided with the demise of Ansett in 2001 “… Virgin Blue will initially increase capacity on existing routes while evaluating what c...
No matter how a business operates, change is inevitable and affects all businesses. CAMERON SMITH investigates the changes Qantas have had to undergo in order to keep up with their competitors, whilst navigating the challenges of low cost of fares.
According to the conceptual framework, the potential users of financial statements are investors, creditors, suppliers, employees, customers, governments and agencies, and the general public (Financial Accounting Standards Board, 2006). The primary users are investors, creditors, and those who advise them. It goes on to define the criteria that make up each potential user, as well as, the limitations of financial reporting. The FASB explicitly states that financial reporting is “but one source of information needed by those who make investment, credit, and similar resource allocation decisions. Users also need to consider pertinent information from other sources, and be aware of the characteristics and limitations of the information in them” (Financial Accounting Standards Board, 2006). With this in mind, it is still particularly difficult to determine whom the financials should be catered towards and what level of prudence is necessary for quality judgment.
However, poor industrial relations and crisis management imply that there is a greater need to focus on building strong relations with employees, enabling them to internalise the vision of the company. Given intense competition in the industry and continuous changes in regulations from the EU and international regulatory bodies, British Airways needs to introduce cost-effective methods of complying with regulatory standards. The firm should also avoid illegal practices that can harm its corporate image.
Albers, S. B. (2009, March 13). crisis of Qantas. Retrieved May 14, 2014, from Qantas crisis: http://wenku.baidu.com/view/31572f48cf84b9d528ea7a56
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).
• Qantas had to make an increased profit and pay a dividend to its shareholders which increased over the years of management
Sociocultural factors embody the various culture aspects in which a business functions. It is of great significance that a firm has the ability to appeal to the culture that they are working within as it reflects their customer knowledge, determining their performance (David & Fahey 2000, pg. 113). One central issue in regards to sociocultural factors playing an important role in a business’ marketing mix is firm’s ability to adapt marketing strategies in regards to demographics. The universal aging population is a clear indicator of marketing strategies for airlines companies to evolve so that it caters to the needs of the population as a whole. In addition, with Qantas operating as a global company and multiculturalism as a universal force, it is crucial to cultivate innovative marketing plans to accommodate the diverse preferences and needs of other cultures (Teo 1994). As cultures differ in their forms of attitudes and behaviours, consumers coming from these diverse cultures, backgrounds and countries are susceptible to dissimilar intensities of service anticipations (Donthu & Yoo 1998).
In order to get a comprehensive analysis on SIA's financial statement analysis , we compared SIA's 5 financial year ending(FYE) results with the industry's average and 2 of its main competitors Cathay Pacific Airways and Qantas Airways . Cathay has been trailing closely to SIA in terms of first class cabin service and profitability for years. Qantas has long been dominating the highly profitable Kangaroo route and is ranked 5th in the world by Skytrax's survey . Please refer to appendix for the actual figures for every analysis below.
The New Zealand (NZ) Framework for Financial Reporting is in the process of changing since 2009, as a result of the review of the statutory reporting requirements in New Zealand by Ministry of Economic Development (MED) and the Accounting Standard Review Board (ASRB). The mainly recommendation was to remove small and medium sized companies from the statutory reporting framework (Ernst & Young, 2013, p.11). This New Zealand Framework for Financial Reporting 2010 (NZ Framework) was issued by the New Zealand Accounting Standards Board of the External Reporting Board (XRB) in 2011. The changes of framework pull open the NZ financial reporting standards that comprise NZ Generally Accepted Accounting Practice (GAAP) setting movement from ‘rule-based’ approach to ‘principle-based’ approach. Then comes to the question: Whether the application of NZ GAAP is supported positively by the NZ Framework with the appropriate underlying principles, or it preserved a largely ‘rule-driven’ approach? From my perspective, NZ Framework provides parts of applicable underlying principles in guidance of NZ GAAP but there are rooms for improvement.
Topic A (oligopoly) - "The ' An oligopoly is defined as "a market structure in which only a few sellers offer similar or identical products" (Gans, King and Mankiw 1999, pp.-334). Since there are only a few sellers, the actions of any one firm in an oligopolistic market can have a large impact on the profits of all the other firms. Due to this, all the firms in an oligopolistic market are interdependent on one another. This relationship between the few sellers is what differentiates oligopolies from perfect competition and monopolies.
The Singapore Airlines needs to thoroughly understand the plans being pursued by the British Airways, Cathay Pacific, and Virign Atlantic in improving the comfort and quality of service it provides to its customers. The Singapore Airlines needs to continue differentiate itself by examining the strengths/weaknesses, and key points of these and other competitive airlines.