Qantas Airways is one of the largest airlines of Australia and the flag carrier of the developed country. Qantas is the largest airways because of few features like international flights, international locations and the fleet size. Qantas is the third oldest airway that was founded after Avianca and KLM (Dwyer, et al, 2010). In May 1935, Qantas began its flights for the international passengers. Qantas stands for “Queensland and Northern Territory Aerial services”. Qantas is also one of the founding members of the “One world Airline Alliance” and has been nicknamed as “The flying kangaroo”. In Winton Queensland, Australia Qantas was founded in 1920 and started its commercial operations in 1921. Primary hubs of this airline are Melbourne, Sydney and the Brisbane airport. Perth airport and Adelaide airport are the secondary hubs of the Qantas airline. Major airports that are mainly focused on the Qantas airways are Los Angeles international airport, Darwin international airport, Singapore change airport and the cairns international airport. Total destinations that are served by the Qantas airways with its services are around 85. Fleet size of the Qantas airway is 128. Qantas’s tagline is “The spirit of Australia”. The headquarters of this airline is situated in Mascot, Sydney, Australia. Alan Joyce, AC is the CEO of the company and Leigh Clifford, AO is the chairperson. According to the 2017 estimates, there are around 26,150 employees are working in the Qantas airways. Another 2017 estimate shows that the net income of Qantas airways is $1.59 billion, revenue is $16.1 billion and total assets cost around $17.2 billion (Homsombat, Lei and Fu, 2014). In march 2014, around 65% share of the Australian domestic market were possessed by Qantas, also in the same year, Qantas also carried around 14.9% of passengers who left or came to Australia. There are other several subsidiary airlines, which operates under the banner of Qantas link. The major routes of those subsidiaries are mostly some trunk routes or regional centers only within the country. There is another subsidiary of Qantas, named as, jet connect which provides its services between Australia and New Zealand. The Qantas, which provides international, as well as domestic services in Australia, own a low cost airline named as a jet star. According to the current survey, there is a total of 285 aircrafts that are operated by Qantas and its subsidiaries. Qantas link operates around 84 aircrafts, jet star operates 71, express freighters operate five aircrafts and three are operated by the jet connect. In 2016 Qantas, revamped ad renovated its few aircrafts and a completely different but latest livery of the aircrafts along with introducing a new kind of streamlined logo of the aircraft and featured a new typeface for the aircrafts (Small, Harris and Wilson, 2008). Qantas serves their customers with the best services possible. They provide several kinds of in- flight entertainment system for the passengers, specially installed by keeping the needs of passengers in the mind. Different kind of cabins is there on the flights like first class, business class, business class for international passengers, economy class and even premium class as well. Considering the network of Qantas Airline, they are coming with many ranges of carriers such as Jetstar, Emirates, Fiji Airways, Solomon Airlines, and many more across the south west pacific and New Zealand with a combination of network to 11 destinations from multiple Australian gateways. In terms of the products, they are providing domestic economy and business flyer, international economy and premium economy flyer, international business and international first flyer. The distribution platform of Qantas improves the functionality of many indirect agent channels so that they can closely be aligned with the capabilities available at qantas.com. For the purpose of customer service, they are also providing various contact centers for any type of enquiries, customer service agents to solve issue personally so that they can build a long-term relationship with the customers. In addition, Qantas has a flight training system that works as a standard commitment to the customers and government and that is why Qantas is one of the finest safety records in the world. Training is done with the help of IT simulations, where the pilot is trained via simulation driving in many types of the situation. These training fields also include emergency procedures, which is a very important aspect of the aviation industry.
Qantas airways limited has a mission of accomplishing the position of best airlines in the world and gain the highest profit in the global market with the best strategies possible. The first priority of the Qantas airways is the safety of the passengers.
External environment analysis of the Qantas airways includes some factors, which affect the market performance of Qantas airways in several possible ways. Mainly three external environmental factor, which affects the Qantas airways – demographic factors, technological factors and legal factors.
1) Technological factors- Technology is the key ingredient in the recipe of success. Technology can help any industry with the proper marketing and innovating new ideas. With the help of innovation and the proper strategies for marketing, any industry can achieve the high level of performance and earn a high profit. Qantas has installed several in- flight entertainment system for passengers. Almost all the mainline aircraft of Qantas has audio video entertainment. Many features are included with these systems like touch screens, Wi-Fi and other related functions and also the use of mobile phone and its functions (Franke, 2007). All these features are highly required by the passengers. Other technology related features are also included for the passenger’s comfort like a different kind of support for the gadgets or electronics, USB support, connectivity for iPod etcetera.
2) Demographic and locations- Qantas main focus is towards the enhanced power of the brand, therefore, Qantas is one of the premium transporter as well as the main airline and flag carrier of Australia. Therefore, it is the main responsibility of Qantas to choose the international destinations accordingly. There are many times in which the destinations are decided, for instance, there are total 21 international and 20 domestic destination to where Qantas flies except the subsidiaries. All those 21 destinations are in 14 countries in total like Asia, America, Europe, Oceania, Africa etcetera (Stewart and Mueller, 2008). The whole group of Qantas including the subsidiaries serves in around 31 international location and 65 domestic location, which is he thing for any type of airlines. Considering the market share, Qantas has an average of around 28% passenger sharing the international markets but in spite of the continuous growth and development, they are steadily losing the domestic market. Qantas has achieved a record of operating the “world’s longest passenger flight” on the largest passenger aircraft in the world. Due to high demands, Qantas also launched nonstop flights between two destinations that is Australia and the United Kingdom recently. All these strategies of organizing and starting the flights on the most demanded route have helped Qantas in so many ways. Competitive advantage is one of the plus factors and therefore made Qantas the top airline in complete Australia. This has helped the Qantas to enhance its performance. The current operations of the Qantas airways have taken a positive turn and achieved lots of success because of some special strategy introduced by the company. The main objective of all these current operations is to achieve a greater profit and competitive advantage over other airlines.
3) Legal or Regulatory Factors – Qantas is a key enabler of the economy as it is leading to growth in the national economy. It is also actively contributing to the development of the public policy. Qantas Airlines belongs to the aviation industry, which is one of the highly regulated industries in the world. The Qantas groups continuously support the liberalization policy and thus they are moving towards the open aviation markets and competition, which will benefit all the customers and the industry participants (Qantas 2018).
Qantas leads the Australian economy in a way. However, in the past few years or the last decade, the level of competition has increased in the airline industry. Competition is high in this market but there are very few risks involved in this business. Since of their high costs and rate of returns, the airline industry can easily handle any kind of economy crisis. In addition, a significant result has been seen by the Qantas due to their solid profitability as the international division reported those pretax earnings of $512 million, 95 per cent rise on last year and a $1 billion improvement on its 2014 loss. Qantas has so many rivals in this industry, especially in the international airline market. There are many competitors of Qantas, which are providing the services at a very low cost as compared to Qantas. Another threat to Qantas can be the new entrants (Jiang, 2013). Because of the deregulations, many potential entrants can easily attract the customers and replace the pre- existing brands in a very short time period. Another economic threat to the industry is “substitutes”. Most of the persons prefer taking cars or buses instead of paying high money to the domestic airlines. This causes a lot of loss to the airways company. Substitutes may be used highly or only a few times, it all depends upon the choice of the customers/ passengers. If the passengers want to go abroad then they do not have another choice and they have to choose the airway no matter what. That is why substitutes are always a determining factor in this industry.
Currently, Qantas has made a lot of progress. Mostly in the domestic region, Qantas is doing one heck of a job. Qantas along with the jet star has made a record and reached $865 million underlying EBIT in the domestic market. Right now Qantas and jet star are the two airlines in Australia with a greater share of the profit. Around 90% of the total profit made by the domestic airways are owned by these two airlines (De Roos, Mills and Whelan, 2010). All the business strategies have helped Qantas to become one of the most profitable airlines in the world. Qantas is doing their best for the passengers and providing them with all the best kind of services. Despite a great amount of competition, Qantas has succeeded in achieving their goals and targets in the market and has secured a top position in the airline industry along with a competitive advantage over other airlines. Because of the increasing demands, there has been made an announcement by the Qantas group regarding the direct flights, flying from east coast part of Australia directly to New York and London and this is supposed to be achieved by the end of 2022. Due to some economic crisis, the airline market got affected and there was some adverse effect on the performance of the airline industry. Due to the economic crisis, many problems have arisen like increased fuel prices, etcetera. Competitors of Qantas like air Asia are trying to provide the low fare rate in order to gain more customers but it will not affect the performance of the company in long run terms.
SWOT analysis can be used to evaluate the market strategy of Qantas airways. SWOT analysis stands for strengths, weaknesses, opportunities and threats. SWOT analysis gives the opportunity to analyses both the internal as well as the external environment of the Qantas airways limited in a proper way (Helms and Nixon, 2010). Internal environment can be analyzed by carefully examining the weaknesses and strength of the organization. On the other hand, threats and opportunity, which are present outside the industry analysis, give the brief description of the external environment.
Strengths- The business strategy of Qantas airways is very powerful that consist of premiums and first class full service. Jetstar, on the other hand, focuses mainly on the low fare charges. Qantas is one of the very old and popular brands, therefore, the brand name has a very strong reputation along with a high recognition power. The main priority of the company is the safety of the customers therefore many people choose Qantas because of their strong safety measures. One world alliance includes many strong airline brands like british airways, cathay pacific, American airlines and Canadian airlines etcetera and among all these big airlines, Qantas is also a member of the one world airlines (Knibb, 2007).
Weaknesses- The headquarters manages all the tasks regarding the maintenance and the engineering from the overseas. Sometimes it becomes very tough to find the highly skilled and qualified staff to handle the job. If the staff or employees are not qualified, enough then it might damage the image of the brand and many people will try to change their airline and leave the Qantas because of this issue. On the other hand, Qantas provide an inadequate amount of training for their staff and employees and they cannot even control their employees. Qantas focus more on the safety of the passengers no matter how long the flight takes. Also, they do not provide holidays for that reason many engineers from Qantas has a strike which delays further work (Chang, et al, 2014). Due to this, many issues occurred and put the passengers in an uncomfortable situation.
Opportunities- Qantas is trying to use the latest technology that is available in the market, in order to attract the customers at a larger rate. Many new features were introduced for the comfort of the customers. They are also using an ecofriendly technique in which customers are provided with a barcode instead of paper boarding passes. This service is only available in the domestic flights yet. On the other hand, Qantas has the membership of the one world alliance and many other bigger brands related to the airline industry are the member of one world alliance (Douglas, 2010). It gives a huge opportunity to Qantas to be connected to major airlines. Qantas has launched many promotional strategies along with frequent flyers. It can be a huge opportunity for Qantas airways limited.
Threats- Qantas’s current situation is slightly on the verge of getting affected by the economic crisis of the country. Many economic crises like, environmental problems, rising prices of fuels, deregulations and constantly changing legal framework etcetera. All these factors really put a damper over the performance of the airlines. Increasing fuel prices are the biggest challenge for the Qantas airways limited (Leggat, Zwar and Hudson, 2009). Due to increased prices of fuel, the airline’s industry has to increase their prices. The high cost of tickets really affect the customer population and people prefer substitutes instead. However environmental problems like sudden weather change, natural calamities etcetera affects the working of airways as well and can even cause delay or cancellation of the flights.
Any airline company requires developing some strategic objectives in order to achieve the required business growth or goals of the company along with providing the better services to the customers (Liu and Ko, 2011). Strategic objectives for the Qantas over the next 3 years are as explained below:
In this industry, the passengers play the most important role. If the passengers are satisfied then the airline industry can earn a huge profit. To make the customers happy, Qantas need to enhance their services and the products. It can be achieved by increasing the alliances both at domestic as well as international level (Wensveen and Leick, 2009). This will help the airline industry to great competitive advantage as well as satisfied customers. For instance, if the Qantas airways collaborate with hotels, banks, grocery stores, ATM’s and restrauts nearby the airports then it will be easy for the customers to use the services in the most efficient way. This collaboration will make it easy for the customers to make the stay. On the other hand, customers will get an extra discount for using the collaborated place. Qantas also should do the surveys in order to know their current position according to the customers (Park, 2007).
Although Qantas always gives the first priority to the safety of the people the employees of the Qantas are not that well trained and can use some new techniques and strategies to prevent any kind of damage. Qantas can introduce some special kind of safety management system so that the Qantas airline can achieve an amazing yet exceptional safety management along with regular superior level inspections. The vision of Qantas should be, to achieve the safest airline system along with the maximum security in aircrafts as well as on airports by the end of 2021 (Vespermann, Wald and Gleich, 2008). There should be no incursion and breaches. Another objective under this strategy can be including the implementation of highest standard cyber security on an international level. Qantas can encourage a healthy relationship between the airline and the federal regulators for the security purpose.
The airline industry is under no control of government directly, which causes deregulation. Therefore, they have the freedom to set the fare charges. Many airline industries in order to increase the level of competition set the prices low and even provide the low quality service as well (Dunn, 2008). However, customers are not aware of that so they go for the low priced airlines unaware of the further consequences. To prevent this from happening, the aim of Qantas should be to provide exceptional services to the passengers. Qantas should aim at increasing the per passenger spending rate for the food items as well as beverages that too duty free and retail in Australia. Qantas should focus on minimizing the environment pollution to a zero level before 2021 (Nair and Paulose, 2014). Reducing the Greenhouse gas emission and reducing the amount of carbon can be a powerful step.
There are few key commercial value drivers, which can help to achieve the objectives of the Qantas airways, and they are mentioned below.
Price of the products and thus earned revenues from the sale of products and services is one of the most significant value drivers for Qantas. If the sale and cash flow of the business are not reliable then it can be said that the organization is not performing well.
Product or service offered by the business organization is one of the most empirical factor that contributes largely in the success and growth and hence it is also considered as one of the biggest value driver for the firm. Moreover, products are the factors that are considered as the elements that are driving strength to the business entity by focusing in niche fields. But this may also become a reason for the creation of risks from lack of diversification and overdependence on limited markets.
To maintain the current viability of the business, it is very important to maintain the strong customer base and network. A diversified and large customer base and network can really help the company in many different ways possible to achieve their strategic objectives. Improving the customer experience will help the company to increase their core value (Gentile, Spiller and Noci, 2007). Qantas can achieve the superior amount of margin by the huge customer base with customer loyalty and other ways in which customers are happy because that is the whole point of the strategy developed. However, the resources should be carefully allocated for the customer services in order to prevent the risk of losing a great number of revenues while doing so. Otherwise, it is a great value driver.
The distribution channels are the mediums through which the business entity makes the availability of the products and services offered. An appropriate and timely availability of the desired products and services will be aiding points in the success and growth of Qantas and hence distribution is one of the crucial value driver for the corporation.
Customers are considered as the king of the market and hence the products and services offered to them should be up-to their expectations and post purchase services are also required to be given for their complete satisfaction. A full and complete package of services is required to be offered to the customers in order to gain value for the organization and hence this is the reason customer service is one of the significant element as a value driver.
Enablers in an organization can be referred to some of the functions or departments such as IT and training departments. IT team deals with the functions and operations related to software, systems, mechanizations and applications used within the organizational structure, whereas the training department offers various forms of training and development sessions to the employees and other staff within the entity. These both the departments increases efficiency and productivity of the workforce and thus contributes in the generation of value for Qantas.
Employees are the key essential aspects of any organization. Employees can also be called as the heart of the organization since they are one of the main value drivers of the strategic objective (Jain, 2014). Employees with their high skills, knowledge, training and experience have the ability to enhance the business of any organization. To fulfil the business strategic objective, employees are required to be provided with the proper training so that they can use the proper skills and the training in the necessary forte. Employees are essential because they are the key part of any organization, therefore, Qantas should focus more on their employees also and train them well in the upcoming years and before 2021 to stay in the competition.
Customers respond to the services of the company and its products if the marketing is done right (Selby, Jones and Kagawa, 2009). To do the marketing in a proper manner, Qantas should use different promotion technique because it will help them to enhance their strategic objective’s growth and help them to accomplish the objective sooner. Since Qantas is already a major brand therefore that can be an advantage for the company and help to enhance the company sales due to its popularity and a large amount of recognition. Branding with proper strategies for marketing can really be helpful for Qantas in the long run, because then people will get to know more about their services and the products. It can be great key commercial value driver to achieve the strategic objective of the Qantas airways.
An action plan is very necessary in order to achieve the value drivers for any company and an action plan for Qantas is as follows:
Goal choosing will allow the company to make their objective clear and help Qantas to just focus on the important things rather than focusing on other useless things. This will allow Qantas to analyses their goal and then will help to decide the reachability of the goal along with the timeframe and resources required for the goal (Sarina and Lansbury, 2013). To enhance or achieve the value drivers, it is very important to first analyses the situation and then lay out the objectives to achieve those value drivers. A proper planning and strategies are required for the completion of the whole project. A strong team is required to lay these plans out and to allocate the resources and the capital.
The next step is to create a strong team in order to achieve those goals. Different members, when involved in this project, can present their different ideas about the project and help the team to create a stronger plan and strategies about completing the task before the timeline with maximum profit possible (Jansen, et al, 2008). They will also help with choosing the action steps to complete the objective and achieve the value drivers for the strategic objectives.
Developing a proper schedule for the completion of tasks can be beneficial and help the organization to achieve their goals within a pre- decided period (Tambe and Kulkarni, 2015). First, the identification step is necessary which identifies the responsibility of each member of the organization and his or her role in the action plan. Then the next step is to provide them with a proper schedule, which consists of different steps regarding the completion of the action plan.
During the ongoing task, the head of the task or any leader should evaluate and observe the progress of the task. He or she also determines whether the task is profitable or not. If not then the plans should be changed and other goals should be chosen in order to achieve the value drivers of the organization (Kontogiannis, 2010). The action plan can be carried out effectively if each member of the organization is dedicated completely towards the project.
The main target of the Qantas airways is to enhance their customer base and for that, they should focus on those who prefer airways to any other transport ways and those who are going abroad for any purpose. Qantas should focus on their target audience in order to achieve the strategic objective. Competition is also increasing so for that the company is required to come up with better human resources strategy, which can help the company to get a competitive advance and achieve the goal of the company in an efficient manner (Hazledine, 2010).
Conclusion
In conclusion, “strategy is winning”. In this competitive strategy, the business enterprise needs efficient strategies with successful timely implementation. As per the market analysis in the airline industry, Qantas had successfully undertaken various changes to adapt to the dynamic environment.
From the perspective of future, Qantas has to redefine its goals and strategy, creating a strong and united team, and scheduling and diverging their teams to the appropriate goals. In addition, they also need to make a continuous review of the progress of the airline so that at the time necessary changes can be made effectively.
In the future, Qantas can face corporate social responsibility pressure but if the management comes with the disruptive technology in the market, no one can stop Qantas to become the leader in the airline industry.
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