Qantas Case Study

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Case Study – QANTAS Restructuring
Lachlan Sorby

This report was commissioned to examine QANTAS’ management processes and other business strategies. QANTAS’ decision to move some operations offshore was influenced by a number of factors; firstly, QANTAS reported a $215million profit loss for the half year ending December 31st 2011, compared to the same time the previous year. QANTAS also plans to reimage its heavy maintenance on its A380 Jumbo Jets and other large aircraft; by sending this maintenance offshore they can save millions.

Qantas is one of the most recognised and longest running Australian companies. It is the world’s second oldest airline, and has a successful history to uphold. Over the next 5 years Qantas aims to hedge fuel prices and use more efficient aircraft to limit further fuel costs improve employee/employer relationships by reducing the number of employment relations disputes and retain corporate market share by enhancing facilities and lounges to appeal to corporate travellers.   Change management is viewed by QANTAS CEO Alan Joyce as a critical component in QANTAS’ success; compared to Anset who is said to have “analysis paralysis”, while QANTAS has change management as “part of its DNA”. (http://www.aim.com.au/DisplayStory.asp?ID=741) QANTAS is regarded as, not only a leading airline in Australia, but globally recognised as one of the safest and most reliable airlines to travel long distances. “Qantas continues to provide outstanding service to its customers and is at the forefront of the international civil aviation industry. The future holds many challenges for Qantas - maintaining safe operations and world class product standards while building a viable and competitive position long term for the airline.” (http://www.qantas.com.au/travel/airlines/history/global/en)

Table Of Contents

1. Reasons for current business planning - What were the critical factors that led to Qantas’ decision to move some of their operations off shore?3

2. What then happened once the decision was made4
– What change management processes needed to have taken place?4
- Were the change management processes well managed?4
- What could they have done better to counteract the disgruntled union and workers?4

3. Where is Qantas now in its competitive positioning both locally and internationally?6

4. How could Qantas plan to change its business strategies, to rebrand and recover its position in the local and global marketplace?6
Bibliography7

1. Reasons for current business planning - What were the critical factors that led to Qantas’ decision to move some of their operations off shore?

It is clear that the most important factor in QANTAS’ decision to move some of their operations offshore was profit related. QANTAS saw a massive slump in profits (83%) in first half yearly net profit in the six months leading to December 31st 2011. “Qantas, which has been reviewing its offshore operations to cut costs and unprofitable routes, said it would launch a new, premium Asian airline as well as a Japanese low-cost carrier, the latter jointly with Japan Airlines and Mitsubishi.” (http://www.theage.com.au/business/new-qantas-to-slash-about-1000-jobs-20110816-1ivcn.html#ixzz29IyZaM7r)

The airline lost $245 million due to higher fuel costs and last year's industrial action that saw Qantas ground its entire fleet. QANTAS’ current aim is to reduce costs and maximize profits, which are achieved through a number of means, which include announcing During May 2012 that 500 jobs will be lost, “QANTAS is poised to announce it is shedding more than 500 engineering jobs and closing its heavy maintenance base at Melbourne's Tullamarine Airport as it continues to rationalise operations.” (http://www.theaustralian.com.au/business/aviation/qantas-to-close-tullamarine-airport-base-axe-500-engineers/story-e6frg95x-1226361621249)...
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