Qantas Airline Analysis

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QANTAS CASE ANALYSIS

* Introduction

Qantas or as it is nicknamed “The Flying Kangaroo” is the largest airline service that runs continuously and the second oldest in the world. It was established in 1920 as Queensland and Northern Territory Aerial Services Limited and first flew internationally in 1935 (Hanson, 2011). The growth of Qantas has been substantial with the most significant progression being the Australian government selling its domestic carrier Australian Airlines to Qantas in 1992 and the announcement of privatisation soon after (Hanson,2011). Throughout this journey of growth there has been extensive changes including flight costs, pay disputes, strikes and shutdowns, industrial action by pilots and technical staff. It has also had an impact on other airline companies, most notably the big competitor Ansett Australia. In the last quarter century there has been the launch of other competitors in particular Virgin Blue in 2001 and under the Qantas banner the primarily domestic low-priced Jetstar in 2004. This dropped the market share of Qantas to approximately 60 per cent and it is continually trying to sustain success. An analysis of Qantas and various strategies will be explored through this study. * External Analysis

Industry
Qantas is in the airline industry but in addition to this core business of transporting passengers and airfreight, it operates various subsidiaries. Qantas Link and Jetstar are airline companies under the same banner and Qantas also has association with inflight catering, holiday and travel and defence services. After the privatisation in 1992 and foundation of Virgin in 2001 the Australian Airline Industry competiveness increased dramatically. Tiger Airways and Strategic and Alliance Airways are now established which is added pressure on Qantas and its profitability success. Civil Aviation Authority governs the industry and it has had problems with Qantas for example the shut down in Easter season 2000 (Hanson, 2011). * General Environment Analysis

Demographic

The Airline Industry has been a thriving industry with substantial growth opportunities and Qantas will benefit a great deal. Over 90 years of experience, including setting successful routes and profitable destinations such as the state capitals has helped sustained success. Qantas has developed strong links around the world through the strategic alliance with One World (Hanson,2011). The maintenance of the aircrafts and infrastructure has been improved and sharpened to lower costs also.

The substantial growth in the Asia-Pacific region especially China and India with population increases to over one billion people and income growth rising quickly has helped the Aviation Industry and especially Qantas. More people and income creates more flights, which creates more profit.

Political and Legal
The International Airline Industry chief supervision body is the International Air Transport Association, which contains 230 airlines. Its main role is regulating the industry. In Australia, the commanding Civil Aviation Authority regulates the airline industry. This authority has the power to stop any of the airlines from flying within Australia if they are not following the correct practices and procedures. Qantas also has to obey other regulators and authorities for example the current employment laws, trade agreements, taxation laws and come under the ACCC.

Economic
Economically the airline industry is a serious concern. Since the global financial crisis, the industry has had some substantial losses and the Asia-Pacific region been knocked the hardest. The International Air Transport Association said in 2009 it was going to lose $9 billion from the global financial crisis and in 2008 lost $10 billion (Hanson, 2011). A major factor that has caused substantial losses include decrease in business class sales which causes loss in revenue.

Technological
Airplanes are becoming more technologically...
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