Qantas Report

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MGMT Team Report: Qantas
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Table of Contents
Executive summary1
Introduction to management issue2
Company’s industry and External environment2
The internal environment of Qantas4
Summary of management issue6
Analysis of management strategies and their effectiveness7
Recommendations9
Bibliography11

Executive summary

Qantas, Australia’s largest domestic and international airline service, has grown immensely since its formation in 1922 and has dominated the Australian domestic aviation industry for years. However, a recent dispute between the unions and management lead to the grounding of all Qantas flights causing the company to suffer both financially as well as in terms of their reputation and reliability for customers. This issue takes place in multiple industries, transport, labour and tourism to name a few. (The) This report focuses primarily on the labour industry, and the impact of the industrial relation issues on the airline and the strategies that Qantas put in place to resolve the issue. (In order to gain insight about this issue, we) This report describes (the explored) the internal, external, general and international environment that has affected Qantas. (in which it takes place.) The internal environment was greatly affected by this issue. Employees and shareholders (and the image of the company were all) affected by firstly by the company’s decision to outsource labour and then by Alan Joyce’s decision to ground the flights during the industrial action. After researching various external environmental factors that affected this issue, it appeared that the main factors were the competitors and government, both of which played a major role in the issue. (In regards to the general environment we looked mainly at the current state of the economy and that of the natural environment, both of which played a role in this issue.) The report also looks at the general environment with regards to the current state of the economy and the natural environment which both affected Qantas

Introduction to management issue

Qantas, a member of the strategic alliance One World, is Australia’s largest domestic and international airline and one of the world’s most recognised serving almost 80 destinations in 20 countries’ (One World 2012). Since the formation of Qantas in 1922, the company has continually progressed and produced marginal profits as seen by their 2008 yearly results with revenue reaching $16.2 billion and a net profit after tax of $970 million. However, due to a rise in industrial relation issues, in particular the disputes brought forward by pilots and engineers between 2008-2011, Qantas has been subject to significant decreases in revenue levels from $16.2 billion in 2007/08 to $13.8 billion in 2010, and a decrease in net profit from $970 million to under $300 million. These industrial relations disputes have hindered Qantas’s future management strategies due to a decrease in growth and profits, increased expenditure on employee demands and the need to increase the business’s image and satisfy the disputes brought forward. Company’s industry and External environment

The management issue takes place in the transport and aviation industry, the labour industry and the tourism industry. From a management perspective, the issue involved the company wanting to reduce the cost base of the services they provided, and the unions represented the workers whose jobs would be affected by their business decision. The labour dispute led to the eventual grounding of all Qantas flights and all of the industries were affected. The labour strikes were costing the company almost $20 million a day, and Alan Joyce’s decision to ground all flights left 70 000 passengers stranded (Morton, 2012). The issue arose in July 2011 when the pilot of an international flight made an inflight announcement and mentioned the argument that was going on between the employees and...
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