Airlines in Australia - Strategic Analysis

Topics: Qantas, Airline, Jetstar Airways Pages: 15 (2194 words) Published: May 14, 2011
A STRATEGIC ANALYSIS REPORT

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Content

1. Executive Summary3

2. PESTEL Analysis4

Political4

Economic4

Social4

Technology4

Legal4

Environmental5

3. SWOT Analysis6

Strengths6

Weaknesses6

Opportunities6

Threats6

4. Competitive Analysis7

a. History and competition/joint ventures7

b. Industry size, routes, hubs and passenger numbers9

5. Financial data 200814

6. Jetstar15

New Mission Statement15

New Value Statement15

Strategic Objectives15

Key Strategies15

1. Executive Summary

In this strategic analysis report I as senior manager of Jetstar have developed PESTEL analysis, SWOT analysis, competitive analysis, created new mission and value statement for Jetstar and developed 3 strategic objectives and 2 key strategies for the next 3-5 years.

2. PESTEL Analysis

Political

• Australian government policy and legislation currently permits airlines that are 100% foreign-owned to operate domestic airline services within the country. Australian international airlines are still subject to ownership rules limiting foreign ownership to 49%.

Economic

• Recovering from economic crisis.

• The fuel price has been steadily increasing over the last years and therefore affects the profit of airline industry.

• High operating costs, including excessive government taxes and charges

• Rising costs for security.

• Low profit margins- airlines through the years have earned a net profit margin of between 1% and 2% compared to an average of 5%

• Aviation market in Australia continued to be volatile, characterized by relatively flat growth, low margins and financial pressure.

• High rivalty among competitors - Virgin Blue took about a third of the domestic market from Qantas, but Qantas fought back by launching Jetstar.

Social

• Population in Australia is a growing, but also aging. The Generation Y represents about 4.5 million of the 20 million people living in Australia. This group is reported to be setting and influencing spending pattern trends.

Technology

• Airlines own large fleets of expensive aircraft which depreciate in value over time and has to ne substituted

• Technology is continuously being used to improve various aircraft components and features. Jets are getting bigger, flying faster and for longer distances, thanks to more powerful and fuel-efficient engines.

• Digital technology is slowly but surely finding its application in the passenger cabin.

Legal

• Airline industry in Australia is highly regulated by government • High safety and increasing security requirements

Environmental

• engine emissions

• aircraft noise

• waste management

• new types of fuel

3. SWOT Analysis

|Strengths |Weaknesses | |Low cost operations |Service is limited by lower costs | |Low prices – fare leader |Baggage restrictions | |Excellent customer service – many awards |Wheelchair/Mobility Aids Dimension Restrictions | |Diversified – offers holidays, hotels, cars, insurance |Heavy reliance on outsourcing – fuel, airports | |Background of strong international company (Qantas) |Number of planes | |Quick growth - has grown to be almost four times its size |Number of destinations | |3rd largest domestic Australian airline | | |Focused on customers |...
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