Risk Management Essay: Identifying And Addressing Risks For Qantas Airline.

Risks Facing Qantas Airline Group

Discuss about the Risk Management Plan Qantas Airline for Risks.

The risks facing Qantas Airline can be identified as illustrated in the SWOT diagram below;

SWOT Analysis Diagram

Other Tools and Techniques Tool Identification Techniques

• Probability and Impact Matrix
• Risk Data Quality Management
• Expected Monetary Value Analysis
• Simulation Technique (Monte Carlo Analysis)
• Root Cause Analysis
• Checklist Analysis
• Assumption Analysis
• Information Gathering Techniques

There is a large likelihood of the risks facing Qantas Airline to occur. The increase of cost fuel is evident from the fact oil prices a prone to fluctuation all over the world (Sky News. Com, 2016). Secondly, the increasing the cost of maintaining the company employees may increase because of the trade unions and employment agencies that call for the protection of the workers' rights (The Conversation, 2015). Third, any lucrative business will attract new competitors. Likewise, the existing competitors are likely to intensify their competition to either increase their market share or to maintain their competitive advantage. Therefore, there is a risk for the reduction of the Qantas' Airline domestic market. Finally, the global financial and economic crisis affects all companies undertaking the international business (Robertson, 2016). Similarly, Qantas Airline is likely to suffer from the consequences of the economic recession.

The occurrence of the risks mentioned above will have the following consequences in the event of their occurrence;

The unmanageable increase in fuel prices may force the company to reduce its business operations (Thomas, 2014). For example, the Qantas Airline may end reducing its business international operations. This will have negative impacts on the company profits and may also be an opportunity for the competitors to thrive.

The costs of maintaining staff will contribute to negative impacts on the company profits. The costs being used for normal business operations may exceed the capital expenditure making it difficult for the company to progress. Additionally, the attempts to lay off or retrench some workers may result into litigations that will cost the company heavily.

The entry of the new players in the industry will increase the competition, and this negatively affects the Qantas Airline profit. 

The global financial crisis will affect the international business operations of Qantas Airline. This may lead to the closure of some of its international business segments.

Risk Matrix

The likelihood of the new entrant threat is low. However, its impacts are high. This call the company to call for the additional competitive advantage to overcome the threat of the competitors. This risk suits to be position three in the matrix.

There is a high probability of this risk occurring. However, its impact is moderate. Therefore, the company can operate with its existence. This ranks the staffing cost risk at position four.

Risk Analysis

The probability of this risk occurring is medium, and its impact is extreme. This is the risk that can hamper company operations in the international market. Based on the likelihood and severity of this risk it is ranked at position two. 

This is major risk facing the Qantas Company. Its probability to occur it high as well as its consequences. Fuel increase is the critical concern that the company should adopt an appropriate mechanism to switch to another alternative in case it occurs. Based on the matrix mix evaluation, this risk qualifies to be in the first position.

The most appropriate strategy to overcome the risk of oil prices is by having an alternative. This means that the company will continue to operate even when the oil prices go up. The global crisis problem appears to be challenging for the company to overcome it. However, in case this risk occurs the company can reduce its international business operations and concentrate more on the domestic business.

Action plan for implementing risk treatments

The communication plan will include all the content pertaining the risks treatment plans. The concerned parties will be notified about the risk treatment plans through emails, telephone calls and memo circulations to their departments both in the company parent business and subsidiary businesses.

The action plan options and treatments strategies will be documented both in the hard copy and in the soft copy. The soft copy will be stored in the company’s data base while the hard copy will be under the custody of the company secretary.

Steps to Implement Risk Management Plan

There four key steps are (Crain, 2014);

• Identifying the risk
• Analyzing the risk
• Treating the risk
• Monitoring and assurance to the concerned parties

The company should evaluate the risk management plans after every three months to determine whether the identified risks are being addressed as well as check for the emergence of the new risks.

The evaluation of the risk management plan will be based on the risk assessment tools and techniques identified earlier in this paper. These techniques will include checklist analysis and SWOT analysis.

References

Crain, J., 2014. Four Key Steps to a Risk Management Plan. [Online]
Available at: https://gibraltarrisk.com/content/4-key-steps-risk-management-plan
[Accessed 29 August 2017].

Robertson, A., 2016. Airline capacity cuts an early warning of Australian economic malaise. [Online]
Available at: https://www.abc.net.au/news/2016-04-19/airline-capacity-cuts-an-early-warning-of-economic-malaise/7339562
[Accessed 29 August 2017].

Sky News. Com, 2016. Qantas warns of industry challenges. [Online]
Available at: https://www.skynews.com.au/business/business/company/2016/10/21/qantas-warns-of-industry-challenges.html
[Accessed 29 August 2017].

The Conversation, 2015. What the Qantas shakeup means: expert analysis. [Online]
Available at: https://theconversation.com/what-the-qantas-shakeup-means-expert-analysis-2882
[Accessed 29 August 2017].

Thomas, G., 2014. WHAT IS WRONG WITH QANTAS – AND AUSTRALIA?. [Online]
Available at: https://www.airlineratings.com/news/what-is-wrong-with-qantas-and-australia/
[Accessed 29 August 2017].