The Size and Objectives of the Qantas Airline - Case Study Example

QANTAS AIRLINE By and Qantas Airline Company Background The Qantas airline was established in 1920 in Queensland, Australia and is the second oldest airline in the world (QABR, 2015 p.1). The airline ranks eleventh in the world’s largest airlines. It was formerly owned by the government and lacked but privatized in 1995 to adopt better management that would grow its competitiveness in the domestic and international industry. Its main business is in the passenger flights, though, has integrated others, such as freight carriage, tourism e-commerce, and catering. This paper will analyse the factors in the business environment for the Qantas Airline to illustrate its performance in the industry. It will focus on the size and objectives of the company, growth activities, strategic group and main competitors, economic environment, industry competition, and international business environment. Size and Stated Corporate Objectives The Qantas Company is the Australian largest airline for both the domestic and international market. The Company operates under the Qantas Groups that has other businesses related to airline transportation. Qantas airline adopts the Group’s corporate objectives of whose main business is in transporting the customers using two brands, namely Qantas and Jetair (Qanats, 2015 p.1). Other businesses in the group include Catering and Freight businesses. The Qantas group hires more than thirty thousand employees with the majority being based in the country. The group’s main strategy is developing a leading airline group cutting the Asian and Pacific markets in order to attain a sustainable profit making business (Rothkopf, 2014 p. 63). In line with its objectives, the group operates 213 and is among the most profitable airline organization in the world. Growth The company has experienced strong growth over the years since its privatization in 1995. The company has been transformed into a competitive firm with side view in the management as well as profit maximization as opposed to its operations as the a government corporation. The airline has experienced growth in the fleet, market served, technology applied, and the number of services offered to the customers (Qantas, 2014 p.1). This has been necessitated by strong management that has provided continuous growth strategies for the company. The company serves more local and international destinations through expansion of the capacity of seats in the passenger transportation which is the main business. For instance, the company increased the number of seats by about seven million seats in a span of three years since 2011 (NLC, 2015 p.1). Strategic Group and Main Competitors The Qantas Airline operates through a strategic group providing various services related to Airline business. Besides the airline business, the Group has other subsidiaries with designated line of services and products to offer to the domestic and international market. This group has enabled the group to rein the market and boost performances through increased economies of scale. The main competitors in the Australian airline business include the Virgin Australia, Tigerair, and Jetstar companies that offer increasing competition to expand their market share in Australia as well as in the regional market (CAPA, 2015 p.1). Despite this, the Qantas Airline boasts over a lion’s market share in terms of the capacity operations. Economic Environment Australia has a strong economy and among the developed nations in the world and this has implications on the airline industry. It presents an opportunity for firms to thrive by exploiting the opportunities available. The government has also developed regulations in the economy to boost development and can act to encourage firms (DIRD, 2014p.1). The economy of the country has been on the rise after the economic crisis in 2008 and the more people could afford the airline products and services offered in the industry. The domestic market has grown and the customers increased usage of airlines for transport. In fact, the domestic market has provided increasing support and earned the airline firms’ profits during the 2008 crisis (CAPA, 2015 p.1). Profits in the industry from the domestic market hit 1 billion Australian dollars despite the effects of the crisis. Competitive/Industry Environment The Australian airline industry has experienced increased competition among the players due to liberalization (Forsyth, 2013 n.p). By the end of the twentieth century, the Qantas airline the only large airline company in Australia and others were smalls and offered little competition. However, the competition increased with the formation of the Virgin airlines at the start of the millennium. The virgin blue airline company has grown over the years and is the main competitor for the Qantas airline (Farabi, 2012 p. 3). Both firms have entered into strong growth objectives to out-compete the other and attain largest market share. This includes expansion of their fleet and the firms have increased 10 million seats in the domestic and international marketing between 2011 and 2014 (NLC, 2015 p.1). Other firms in the industry include the Tigerair and the Jetair that have also impacted the competition in the industry. The two firms have increased the fleet as well as the services offered and technologies applied and offer competition to the dominant two others. The Qantas and Virgin airlines have taken a break in their expansion earns the Tigerair and Jetair an opportunity to grow and offer increased competition. The airline has embarked on cutting costs and the other firms have played a role in this trend of decreasing the market share of the Qanats company. Internationalisation/International Business Environment Qantas is involved in international airline operations and serves most countries in the world and around the Far East region (Blee, 2007). The international business operations have earned the company significant share in the region besides exposing the company to increased development in the technology used and efficient business systems practiced in all over the world. There is notable growth in the economy of the Asian countries and more people have increased consumption of the airline services offered (Duavl, 2014 n.p). The regional flights have greatly increased between Australia and other emerging economies in Asia are enabling the company to register increased profits. Nevertheless, the environment has experienced increased firms that offer competition in the airline industry. The airline has also experienced favourable economic environment with other countries in the developed and emerging economies through increased flights. As a result the company has increased its fleet to cover for increased demand. However, according to Nancarrow (2013 p.1) the international airlines have increased competition on Australia taking advantages of the liberalization by the government. Annotated Bibliography Forsyth, P. Liberalization in aviation: competition, cooperation and public policy. Farnham, Surrey, England, Ashgate Pub. 2013. Print. Foesyth has written his work aiming to explain the trends in the Aviation industry, focusing on the implications of the legal frameworks. The author has written about the liberalization in the Australian airline industry and their implications for the firms. The work has also explained the relationship of liberalization to the levels of competition and cooperation that is useful in characterizing the economic environment in Australia. This work has been useful in my work by providing understanding on the situation of Australian economy relating to the airline industry. The work has also enabled me account for the increased competition in the industry that was not observed in the long past. Rothkopf, M. Innovation in commoditized service industries - an empirical case study. Berlin, Lit. 2009. This book focused on innovations in the service industries with purposes of providing experimental and tangible findings. The book explores the innovations in the Airlines industry and presented information about firms in the Australian market. In particular, the book has discussed about the innovations in the Qantas Company while showing the strategy adopted by the company to ensure success in the business. The source has been instrumental in writing the present work by providing concrete information on the Qantas growth strategy especially with consciousness on innovations in management. The authors have obtained the information from company websites and hence are reliable for use in my work. The book targets the readers in corporate business to show how innovations have played role in thesuccess of businesses. CAPA. (2015). Outlook: Qantas Group reins in capacity as Virgin continues growth. CAPA Center for Aviation. http://centreforaviation.com/analysis/australia-domestic-airline-market-outlook-qantas-group-reins-in-capacity-as-virgin-continues-growth-218946 This website by the CAPA Centre for Aviation focusses on the growth of the Australian Airline Industry. It gives emphasis on the activities of the major players in the industry and implications on the marketing environment for the smaller firms. Precisely, the website shows the persistence, large market share for the Qantas Company over the rival Virgin Airlines in in terms of the capacity covered. This work has been of great significance in my work by providing up to date information the growth practices of the Qantas Company as well as statistics. The comparison with other firms has augmented the content for my work. In addition, the work has provided insight into the nature of market in the industry. The information presented is derived from researches and analyses by the CAPA body and hence more reliable for use in my work. Farabi, Y. Analysis of the marketing environment of the Virgin Australia. Grin Verlag. (2012). Farabi has focussed on the analysis of the business environment of the Virgin Australia Airlines. The author has discussed wide information of the micro and macro environmental factors for the Virgin Airlines. In addition, the author has written about the market competitors in the industry that includes the Qantas, Tigerair and the Jetair. He has discussed wide information about the Qantas Company, which is a major form in the industry. The information in this source is of great relevance to my work. The Virgin Company operates in the same industry as the virgin airlines and hence the information contained would apply to the Qantas Company. Therefore, the source has helped me present the environment in the Australian industry for the Qantas Company. The information contained was gathered through market research and hence more reliable for use in the present paper. Qantas. “Our company.” (2015). http://www.qantas.com.au/travel/airlines/company/global/en This source provides information about the Qantas Company and hence is rich source used in the development of my work. The source provides background information of the company and the various businesses under the Qantas group. In addition, the source has provided information on the main objectives of the company as well as information on the number of employees for the company. This source has been of great use in my work in developing, especially in analysing the company’s size based on the businesses operated, size of the objectives and employees hired. In addition, the source has helped my account for information used in my work. The information contained in this source is generated by the company and is hence primary information for use in my work. Reference List Blee, J. (2007). Aviation in Australia. Wollombi, N.S.W., Exisle Publishing. Print CAPA. (2015). Outlook: Qantas Group reins in capacity as Virgin continues growth. CAPA center for aviation. http://centreforaviation.com/analysis/australia-domestic-airline-market-outlook-qantas-group-reins-in-capacity-as-virgin-continues-growth-218946 DIRD. (2014). Economic Regulation of Major Australian Airports. Department of Infrastructure and Regional Development. http://www.infrastructure.gov.au/aviation/airport/airport_economic_regulation/index.aspx Duval, D. T. (2014). Air transport in the Asia Pacific. Farabi, Y. (2012). Analysis of the marketing environment of the Virgin Australia. Grin Verlag. Forsyth, P. (2013). Liberalization in aviation: competition, cooperation and public policy. Farnham, Surrey, England, Ashgate Pub. Nancarrow, D. (2013). Competition regulation in the Australian airline industry. Aviation Business. http://www.aviationbusiness.com.au/news/competition-regulation-in-the-australian-airline-industry NLC. (2015). Qantas and Virgin Australia battle for market share good for travelers. http://www.news.com.au/travel/travel-updates/qantas-and-virgin-australia-battle-for-market-share-good-for-travellers/story-e6frfq80-1226840662633 QABR. (2015). Qantas Airlines Business Report. http://www.123helpme.com/qantas-airlines-business-report-view.asp?id=162161 Qantas. (2015). Our Company. http://www.qantas.com.au/travel/airlines/company/global/en Qantas. (2014). Review of Operations. http://qantas2014.reportonline.com.au/annual-report/review-of-operations Rothkopf, M. (2009). Innovation in commoditized service industries - an empirical case study. Berlin, Lit. Webb, R. & Kain, J. (2003). Australian Airline Industry. Parliament of Australia. http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp0203/03RP10 Read More