Discuss about the case study Airline for Qantas Airways Ltd.
Background of the Qantas Airways Limited:
Qantas Airways Ltd is a flag carrier airline of Australia. It was founded on 16th November 1920. The primary hubs of the airlines are Brisbane Airport, Melbourne Airport and Sydney Airport. The headquarters of the company are located in Mascot and New South Wales. The secondary hubs are Adelaide airport, Dubai International Airport and Perth Airport. As per the annual report of the company, Qantas Airways Ltd has accumulated the revenue of A$15.8 billion in 2015. The total operating income of the company was A$975 million in 2015 (Qantas.com 2016). The total number of employees in the business is 28,622. Qantas Airways Ltd had 65% share of the Australian domestic market. Moreover, it is carried out 14.9% of all passengers travelling in or out of the country (Morrell 2013). The Qantas airline has some subsidiaries including Australia Asia Airlines, Impulse Airlines, Australian Airlines, Qantas Link, Jetstar Airways, Network Aviation and Jetconnect. It also operates freight service called Qantas Freight. Moreover, it air freight and Logistics Company called Australian Air Express. Qantas Airways Ltd leases cargo aircraft from Atlas Air.
Qantas Airways Ltd. is a leader airline company in the Asia Pacific region. It is Australia’s number one domestic airline. Moreover, the Qantas Airways Ltd. is one of the top ten largest airlines in the world. The particular airline connects the Australia with 81 destinations in 40 other countries worldwide (Forsyth and Stewart 2012). However, it operates extensive domestic services in both New Zealand and Australia. The airline company operates several regional airlines in Australia. It has also made the partnership with a budget startup based airline in Singapore. As per the current report, Qantas Airways Ltd and its subsidiaries provide services to more than 30 million passengers in a year (Homsombat, Lei and Fu 2014). The airline company upholds some code share arrangements and alliances. Qantas Airways Ltd is a member of one world global airline alliance led by British Airways Plc and American Airlines Ltd.
By discussing the history of the airline, it can be identified that the first aircraft was an Avro 504K. The airline started its first flight from May 1935, when it inaugurated service with Darwin, Northern Territory to Singapore (Oum and Yu 2012). The organisation has also connected its services with the aboriginal community. It has some links with the Aboriginal and Torres Strait Islander program. As per the report business report, 1-2% of the employees of the Qantas Airways Ltd belong to the aboriginal community (Ashwini Nand, Singh and Power 2013).
SWOT analysis of Qantas Airways Limited:
By developing the SWOT analysis on Qantas Airways Limited, the external business investigation can be conducted in an effective manner. The analysis provided below:
ü Qantas Airways Ltd has the strong backup of the Australian government.
ü In the Australian market, the particular airline is one of the largest companies
ü Qantas Airways Ltd is monopoly in the Australian market
ü It has been one of the oldest airline operators in the world.
ü It has more than 20 international as well domestic destinations.
ü The growth rate of the business is quite high, which indicates the positive sign of the business expansion in the future.
ü The prime weakness of the company is that the airline has been concentrating around Australia.
ü In recent times, the airline faces issues due to their employee engagement.
ü The cost structure of the airline service is quite high, which often makes challenges for customers to avail the services.
ü The organisation invests huge amounts in the research and development
ü The growing demand in the industry indicates the high opportunities for the business expansion in the global platform.
ü Qantas Airways Ltd has huge financial resources that would facilitate them to enhance the business opportunities in an effective manner.
ü The organisation has the opportunities for expanding their business to the international destinations especially in Asia
ü Qantas Airways Ltd can tie-ups with the international airlines for combined services offering to the customers
ü In the recent years, the fuel pricing has been increasing. Consequently, it could affect the airline business.
ü On the other hand, the rising labour cost is another major factor that would create challenges for the airline industry.
ü There is huge competition in the market due to the new arrivals and SE airlines.
ü In the recent years, the organisation has been tough competition from both Singapore Airlines and Air New Zealand.
ü Technological problem and higher tax rates indicate the challenges for the management to execute the process in an effective manner.
ü The particular organisation is unable to improvise its pricing model due to the rising cost of the raw materials.
ü Sometimes, the financial capacity of the organisation does not allow them to implement enhanced technology in the business.
Suggestions regarding the SWOT analysis:
In the recent years, Qantas Airways Ltd. enhance their business opportunities in the global market in an effective manner. The Australian government has been providing strong backup for enhancing the infrastructure of the particular airline (Chandra et al.2014). In the Australian market, the particular organisation is one of the largest companies. Due to the huge financial resources, the organisation has been operating their services different countries including Africa, Europe and America. It is the oldest airline in the Europe. Consequently, it has huge experiences in the airline business. By discussing the strengths of the airlines, it can be assessed that the organisation has engaged more than 20 international and domestic destinations. However, the management of the Qantas Airways needs to enhance their international destinations for expanding their business opportunities in an efficient manner (Pearson and Merkert 2014). The key aspects of the marketing functions are related to the pricing and price elasticity, revenue management, sales and distribution. The key responsibility of the management is to deliver high-class services to the clients worldwide. On the other hand, the management has been trying to shape up their pricing policy for enhancing the customer’s base in the business (Lück and Gross 2013). However, as per the annual report of the organisation, the growth rate of the business is impressive, and it indicates the adequate opportunities for expanding the business on the global platform.
There are various internal and external factors affecting the business of Qantas Airways Ltd. By discussing the external analysis of the business; it can be assessed that the Particular airline has been improving their technology over the past few decades. However, the competition has been increased after the merger of Boeing with McDonnell Douglas (Sarina and Lansbury 2013). They have been investing a huge amount of money for developing the technology. On the other hand, the organisation has faced economic challenges due to increased price of crude oil. Moreover, the economic instability in the airline industry has affected the Qantas airline Ltd. has been focusing on the domestic market (Belobaba, Odoni and Barnhart 2015). Hence, the particular airline needs to improve their financial resources to expand their international destinations. In the recent years, Qantas Airline Company has invested a huge amount of money in the research and development. In a business report, it has been published that the cost structure of the company is quite high. Consequently, they are losing the domestic and international customers in the business. Sometimes, the long route flights are delayed due to the environmental constraints. Despite being one of the oldest airlines in the Europe, Qantas Airways had faced air accident in every decade (Morrell 2013). Consequently, it indicates the inefficiency in the technicality.
The growing demands of the business indicate the high opportunities for the company. Qantas Airway Ltd has huge financial resources and backup of Australian government (Qantas.com 2016). Hence, it suggests the adequate opportunities for the business expansion in the international market. However, they can engage external financial resources for the improvement of the business. On the other hand, the organisation has the opportunity for including their services to the Asia. Qantas Airways can tie up with the international airlines for offering the combined services to the clients (Morrell 2013). The organisation has announced the leases for new aircraft fleet to cater extra passengers and enhancing the adequate employment opportunities. Hence, it can be assessed that the organisation had several financial resources and enhanced infrastructure, which would allow them to expand their business in the global platform (Forsyth and Stewart 2012).
The prime threat to the business is that the increased fuel price in the global market. With the increased price rate of fuel, the airline business has been facing serious challenges in providing flawless services at reasonable cost. On the other hand, the rising labour cost has also created challenges for the business, as the company is unable to engage enhanced workforce in the business (Homsombat, Lei and Fu 2014). In the competitive market, the organisation has been facing tough competition from the new arrivals and the SE airlines. For competing with the new competitors, the organisation needs to analysis their pricing policy along with their existing technicality. Singapore airline and Air New Zealand have created challenges for the Qantas Airways Ltd (Oum and Yu 2012). In a recent business report, it has been published that the higher tax rates and technological issues of the particular airline organisation have made problems in executing the business in an appropriate manner (Ashwini Nand, Singh and Power 2013).
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Sarina, T. and Lansbury, R.D., 2013. Flying high and low? Strategic choice and employment relations in Qantas and Jetstar. Asia Pacific Journal of Human Resources, 51(4), pp.437-453.