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Qantas Case Study

2349 words - 10 pages


QANTAS is operating mainly domestically and internationally in air transportation company for various types of travelling, such as leisure and business, cargo and logistics facilities as well as support operations which includes: information technology, catering, ground handling, engineering and maintenance (Qantas Annual Report, 2013). Qantas Group also has dual brand strategy. It operates under Jetstar Airline, as a subsidiary. Jetstar is operating under a low-cost business model and it competes with local market airlines, such as Virgin Australia and Tiger. As for the Qantas airlines, it is positioned as a premium full-service carrier, providing ...view middle of the document...

Moreover, increasing fuel prices and continuing risk of terrorism has added some costs for the operating of the whole airline industry.

Business environment, in which organization operates, has a significant impact on a company as well as on its business strategy. Below in next section some factors will be discussed that affects negatively or positively on Qantas airways and overall airline industry.

PESTLE analysis of QANTAS

PESTLE analysis looks on the external analysis, when it is used for a strategic analysis and provides an overlook of the various macro-environmental aspects that the organization has to pay attention to. Moreover, this strategic tool helps to better understanding growth or decline of the market, perspectives, current position of the company, and further directions and opportunities for the business.

Political and Legal factors

Australian airline industry deregulations of domestic airlines in 1990 and foreign ownership restrictions in 1999 has also affected the development of the national airline business by permitting autonomy to Australian firms to set their own rates and plan their own routes. However, the Australian government did not approve the “open skies” policy, but in its place accepted a request by Qantas, that foreign companies should not be allowed to compete with local companies for passengers and freight transportation inside Australia (Potterton, 2012). Also, according to Potterton (2012), Australian airline business used to be heavily controlled and has gone through significant changes during the last 10 years, therefore it can be seen that there is a tendency of deregulation.
In addition, many of the Asian region nations have signed arrangements between them and with some countries in Asia-Pacific, Europe, and the USA. These agreements simplify and improve administrative cooperation and business opportunities among countries, which also includes the development airline industry globally (Nataraja et al., 2011). Also, according to Nataraja (2011), some governments support national carries, as an example: Dubai government supports Emirates. However, recently Australian government refused Qantas to be a company’s debt guarantee, in its place planning changes to the Qantas Sale Act to lift foreign ownership law restrictions.

Qantas management had an industrial issues that forced them to freeze services and ground aircraft during the second half of 2011(Whyte et al., 2012). As a result of these industrial issues with worker unions, company rivals got most of the Qantas customers and therefore improved their financial results during fleet grounding period.

Economic factors

According to Alan Joyce, CEO of Qantas, in the three following years massive layoffs are planned, about 5,000 Qantas employees...

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