PQR LTD is one of the airways which are one of the most known flagships in the Airline industry. Being the third oldest airline and the third largest on account of fleet size and the collaboration with the international destinations, the company started its working in the month of March 1921. It mainly works at the Brisbane Airport, Melbourne Airport and Sydney Airport. The current income of the company is $17.1 billion the financial year 2017. The 65% holding in the share market of the Australia is PQR LTD and carried 14.88% passengers either on the same route or the different route. PQR LTD is the holding company of the Jet Airways and the operations of the Jet Star are scattered to domestic as well as the international stations. The company operates with the team of 30000 employees and carry around about 53 million passengers all around the world in the year 2017 (TCS consultancy, 2017).
The major business of the PQR LTD deals in carrying the passengers to their relevant destination however apart from this the company is also having linkages with the Aboriginal Australian Community. On 24th March 2018, Boeing 787 Dreamliner became the first non-stop flight between Australia and Europe. The purchase and donation of the Aboriginal art in the year 2007 was again the recreational activity. Apart from this the company is also having a subsidiary JetStar that operates for both the domestic as well as the international market. The pure advantage is given to the direct flights as they work on the regular basis and due to factorisation in the price the major players do have an edge yet the advantage is being taken out (Colloquy, 2015).
The pestle analysis of any organisation depicts the six major factors such as the political social, legal, environmental and technical. It is important to have the pestle analysis of the company in order to have a grip over the factors so that the company is able to achieve the targets on time keeping in mind the factors that are possibly going to affect the organisation (Prahalad, 2013).
The government of the Australia has 65% of the market share in the airline market and it also helps to support the organisation and also takes interest in its management. Few years before though there was the turmoil in the Bangkok and changed the entire scenario of the aviation industry. For the airline industry, the Civil Aviation Industry closed down all Ansett for the entire Easter Season (Stalk, 2012).
PQR LTD elevated the market via the financial crisis and with the increase in the cost of the fuel and the crude oil prices there is the economic instability across the globe and majorly the airline industry is affected the most. The government provide subsidies in order to reduce the cost of the carriers to mete the basic requirements. Also the passengers travelling from the business class as well as the first class there is a huge substitute available to them such as the Lufthansa and Qatar Airways. The fleets that have been taken on the lease, the company needs to pay the leasing amount annually or quarterly (Lambini, et al 2016).
The technology sector is always the most fluctuating sector for any organisation. In case of the airline industry the new technology is just like the new day. The technologies are developing day by day and the PQR LTD is not behind in adopting them. The PQR LTD has introduced a new technology platform to promote the airline retailing and to facilitate the serving of the partners and the customers. The PQR LTD Distribution platform is going to revamp the functionality of the indirect channels by closely aligning the current possibilities. The PQR LTD is also providing the facility of the WiFi which enables the customers to enjoy the live streaming and the online gaming (Francis, Humphreys and Aicken, 2017).
The growing trend of the Airlines is such that the trend has enhanced both the financial performance and the overall position of the company in the market. The airline is providing discounts on various tickets and particular destinations so that the number of passengers increases. The acceptance by the customers itself is a big thing for the company and the social factors play a vital role in
building the goodwill of the company. The choices and the preference of the customer also matters (Porter, 2016).
There are several rule sand regulations which are to be complied by each and every organisation. The government has introduced the Environmental Protection Act under which the PQR LTD is required to perform keeping in mind the policy of the environment and also shall operate the fleets with the aim of reduction in carbon emission. The airline has made a significant contribution in the reduction of the pollution to 50% by 2050 which is now 88% mainly due to operations of the flying (Grant, 2016).
Every organisation needs to abide by some rules and regulations and it is mandatory for the airline industry to comply with certain laws and regulations. The airline has made significant efforts in the maintenance of the aircrafts and keeping an insurance of the same. Moreover the safeties of the customers are also necessary and henceforth, the PQR LTD has to complete various legal formalities in order to run its operations smoothly (Wall Street, 2016).
The analysis of the industry environment is also important for the PQR LTD Airlines. The understanding of the industry environment will enable the company to make any changes or changes in the strategies of the company.
Buyers in the airline industry are mainly the passengers depending upon the context of the scenario. In the airline industry the suppliers are the dictators who run the aviation industry and on the contrary if the airlines have been described as the suppliers the public is having more power and the purchasing parity (Wang, 2017).
The providers of airplanes in the aircraft business have the most power. Considering there are just two noteworthy makers of air ships, carriers that buy the high requested specialties more often than not run with the terms of purchasing directed by the producers. Then again, if the carriers are portrayed as the providers and people in general as the purchasers of the administrations, the providers have less power. That is on account of the providers work in an exceptionally focused world with various aircrafts that offers similar administrations (White, 2018).
A huge investment of the capital is required in order to enter into the aviation industry an d understand how the market operates. There are many airlines in the market which fall under the category of national carriers to small regional carriers. The industry is operating under the very low margin and the jet fuel is of major concern. This situation makes the competition and the entrants find it hard to survive and sustain. Furthermore, due to the development of the brand the company will achieve more sales (Rothaermel, 2015).
The substitute are a mass in number for the customers and for the routes which are short in term of miles there are the options of the roadways, trains and even other modes of land. Here technology plays a core role as they have reduced the distance in the form of video conferencing and meetings. The other substitute is the airlines which are cheap and which do not offer the luxury but provides the basic opportunities for the customer. PQR LTD also integrated the cost leadership strategy to reduce the customers switch to different brands.
There is an immense rivalry in case of the airline industry as they play mainly on the foot front of the price. Similarly the level of the service has also revamped and therefore the operational costs are to be decreased so that it is easy to maintain the margin of operations. The pure advantage is given to the direct flights as they work on the regular basis and due to factorisation in the price the major players do have an edge yet the advantage is being taken out. Many airlines install the loyalty programs and since the cost of the substitute is also nominal they cannot dictate a lot (Shaffner, Mills and Helms Mills, 2017).
Capabilities of the firm
Talking about the capabilities of the firm there are several capabilities which are handled by the firma apart from taking the flights from the one destination to another.
PQR LTD Loyalty, the division that handles the PQR LTD and is known for the management of the frequent flyer program has purchased 51% share in the analytics consulting company in order to expand its foot in the area of the analytics capabilities.
Harnessing of the data is not new to the PQR LTD possess the knowledge from the PQR LTD frequent flyer and therefore the company is already having the knowledge of the analytics space and consider an area of the potential for the business (Gurufocus, 2018).
There has been an announcement made by the PQR LTD which showcased a five year strategic plan. The change in the strategy will help to cut the costs and the operating margin will be saved.
The next policy of the company is to shift its base closer to Asia to by introducing a new airline with altogether different features.
Changing its plan of fleet by buying lots of fuel efficient Airbus A320’s to assist the growth of the industry which will help to increase its gearing.
To attract the nearby strategic alliances the ACCC has already given the permission to the PQR LTD to have close relationship with the American Airlines.
The major opportunity for the PQR LTD is the lease sanctioned by the government for the new aircraft, and fleet which also caters more employment opportunities for extending the business of flying. A travel club has also been organised which takes care of the luxury and the priority check in certain business related and personal facilities.
Due to new fleet and new routes, the number of the passengers increased and frequency of travel via PQR LTD have increased.
The pries of the fuel are low and which resulted in financial benefit of almost $33 million which also helped to relive the operating costs positively. Moreover the depreciation cost is the also subsidized.
There is a high competition from the competitors such as Lufthansa Airlines and British Airways and the company faces a lot of tension.
The second most critical threat to the company is raising labour prices that can affect the operations of the business and the working of the company is also affected.
Due to accidental falls and hundreds of the injuries resulted into the federal investigations on the PQR LTD and thereby, leading to the some civil problems.
Also in month of January, there was a dispute between PQR LTD and British Airways which came to an end because of the disagreement over the employment and the jobless situation of more than 15oo employees. The profit of the PQR LTD also got affected by 80% due to the epidemic situation which spread across namely SARS.
The intangible analysis of the PQR LTD depicts the value of the intangible assets as on 31st March 2018 as 941 million. The intangible assets also follow the standard of the impairment and it includes the following assets in the table below (Gurufocus, 2018).
Goodwill is calculated at the cost minus any losses which are accumulated in the form of impairment. Secondly the airport landing slots which are also calculated as that of goodwill. Under the scenario of software both amortisation and the impairment is required. The PQR LTD group is also successful in controlling the future benefits arriving from economies of scale. Customer relationships and contracts are carried at their fair value at the date of acquisition less accumulated amortisation and impairment losses (Gurufocus, 2018).
(Source: TCS consultancy, 2017)
PQR LTD always gives the best and the premium level services to the customers with the upgrades fleets to make an alignment with the latest available market. The network created by the PQR LTD itself is a core competency of the firm and it falls under the category of the individual development plan. Moreover the firm has also upgraded the entertainment facility and now they have revamped the facility of the terminal (Luke, 2017).
(Source: TCS consultancy, 2017).
The information system is the key need of the PQR LTD as it is spread across all over the world and to maintain such large volume of business the automation and the input from the information technology is required. The major benefit of the automation is the recording of the transactions at once and keeping a track of the flights. The notification to the customers has also become easy. Nowadays in the digital media scenario the notifications are showcased online and this saves the time and energy of the customer, thereby fulfilling the policy of the customer satisfaction. PQR LTD has built a reputation from the excellence in the customer service and the reliability of the customers over the services of the PQR LTD (Roy, Dostaler and Fiset, 2015).
To maintain the competitive advantage the company has made the stronger alignment with the IT systems and more efficient processes are carried on. PQR LTD has initiated a freight future program and migrate their critical vision in the direction of the legacy of maintenance, repair, and shift from the overhaul system to the Web based program.
In alignment with TCS, the Qpilot app was constructed or the IPads to empower the easy operation and booking of flights by the customers. The company enabled the revamping as well as the internalisation of the PQR LTD portal (Lee, 2016).
References
Capling, A., (2014) Bargaining for competitive advantage: Government purchasing and the changing relationship between the state and multinational enterprises in Australia. Journal of Industry Studies, 1(2), pp.1-22.
Colloquy, (2015) PQR LTD loyalty boosts data, analytics capabilities. [Online] Available from https://www.colloquy.com/latest-news/PQR LTD-loyalty-boosts-data-analytics-capabilities/ [Accessed on 25th August 2018].
Francis, G., Humphreys, I. and Aicken, M., (2017) Where next for low cost airlines? A spatial and temporal comparative study. In Low Cost Carriers (pp. 113-124). California: Routledge.
Franke, M., (2017) Innovation: The winning formula to regain profitability in aviation?. Journal of Air Transport Management, 13(1), pp.23-30.
Grant, R.M., (2016) Contemporary strategy analysis: Text and cases edition. United States: John Wiley & Sons.
Gurufocus, (2018) PQR LTD Ltd (OTC)PK:QUBSF) Intangible Assets: $834 Mil (As of Jun. 2018) [Online] Available from https://www.gurufocus.com/term/Intangibles/QUBSF/Intangible-Assets/PQR LTD-Airways-Ltd [Accessed on 20th August 2018]
Lambini, C.K., Rawlins, M., Baral, H., Zähringer, J. and Carter-Silk, E., (2016) Strengths, Weaknesses, Opportunities and Threats: A SWOT analysis of the ecosystem services framework. Ecosystem Services, 17, pp.99-111.
Lee, S.Y., (2016) How can companies succeed in forming CSR reputation?. Corporate Communications: An International Journal, 21(4), pp.435-449.
Luke, B., (2017) Statement of social performance: Opportunities and barriers to adoption. Social and Environmental Accountability Journal, 37(2), pp.118-136.
Porter, M.E. (2016) What is Strategy? Harvard Business Review, 74(6), pp. 57-76
Prahalad, C.K. (2013) The Core Competence of the Corporation, Harvard Business Review, 68(3), pp. 79-91
Rothaermel, F.T., (2015) Strategic management. United States: McGraw-Hill Education.
Roy, M.J., Dostaler, I. and Fiset, J., (2015) 11 Governance and environmental performance. The Global Commercial Aviation Industry, 11(2) pp.344.
Shaffner, E., Mills, A.J. and Helms Mills, J.C., (2017) Reading PQR LTD History: Discourses of Intersectionality and the Early Years of PQR LTD. In Insights and Research on the Study of Gender and Intersectionality in International Airline Cultures (pp. 445-469). Emerald Publishing Limited.
Stalk, G. 2002, Competing on Capabilities: The New Rules of Corporate Strategy, Harvard Business Review,70(2), pp. 57-70
TCS consultancy, (2017) [Online] Available from https://www.tcs.com/PQR LTD-enhances-productivity-improves-alignment-of-it-with-business [Accessed on 24th August 2018]
Wall Street, (2016) What are accounting polices? [Online] Available from https://www.wallstreetmojo.com/accounting-policies/ [Accessed on 20th August 2018]
Wang, H., Wang, H., Guo, G., Tang, Y. and Zhang, J., (2017) Measuring similarity of users with qualitative preferences for service selection. Knowledge and Information Systems, 51(2), pp.561-594.
White, L., (2018) PQR LTD still calls Australia home: The spirit of Australia and the flying kangaroo. Tourist Studies, 10(2) pp.146.
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