Qantas Airline Limited - Essay Example

Qantas Airline Limited Institution: Name: Date: Introduction Qantas Airways Limited is the flag carrier airline of Australia and its airline by fleet, international flights and international destinations. Significantly, it is the third oldest in the world having been founded in November 1920 (Qantas Airline Limited, 2015). It began its international passenger flights in May 1935. The name Qantas originates from the acronym of the long name Queensland and Northern Territory Aerial Services. Formerly, it was a government owned airline but after a bailout debate it became a non-governmental business. As a result, the company has been facing a variety of challenges until it had to seek for assistance from the federal government. Basing on the theories of the role of the state in pursuing the social and economic goals, the government’s stance in the bailout debate was justified to some extend even though other arguments from the company holds that the government’s stand was wrong. Consequently, this essay will discuss the government’s role in the pursuit of the social and economic role in relation to the Qantas Airline Limited and the challenges facing it. Prudently, both the government and the Qantas Airline had their basic fundamental arguments which they used in the ‘bailout debate’. The arguments were based on the role of the government in the development of the social and economic goals baring in mind the challenges that were being faced by the Qantas Company. Argument The government has a basic obligation in boosting any company that faces economical challenges so that it raises the social welfare of the company. Prudently, the government is a prime mover phase of the economic status and social welfare of any company in the country (Adelman, 2012). The government is assigned with a primary entrepreneurial role of ensuring the economic stability of any company. In effect, the Qantas Company argued that it was facing an acute financial constrains and it requested the federal government to aid in solving these problems. Boosting the financial status of the company meant that the tax payers were to dig deep in their pockets in order to facilitate the same. In regard to this the argument posed by the Qantas Company was valid but the government refused to chip in their financial assistance since it was a non-governmental company. Consequently, the bailout debate between the government and the Qantas Company concerning federal government assistance was not valid since it could lead to high tax rates on the citizens in order to help it recover its lost money and retain its competitive status. Importantly, no one claims that Qantas is destined to fail without the government intervention (The Guardian, 2014). The company has grown to very high levels and no one believes that it can fail when the government fails to intervene in its problems. Significantly, the opposite is true. The greatest tragedy of any bailout package is that it discourages companies from being competitive since they are rewarded inefficiently by loss-making tactics (The Guardian, 2014). However, the company wanted a bailout debate to help sensitize the government on the importance of supporting it so as it does not depend on the corporate welfare and just remain independently. In 2011 for instance, the Transport Workers Union (TWU) hijacked the enterprise bargaining of processes as one of the medium of preventing the Qantas Company from utilizing the employees of subsidiaries and even contractors in the aid to make other companies compete with the Qantas. This automatically, required government’s intervention and it forced the Qantas Company to hold a bailout debate so as to solve this problem and make it a competitive enterprise. Basing on this argument the Qantas Company was correct and this showed a valid argument in relation to the role of the government in the pursuit of the economic and economic goals since the Qantas Company wanted to remain a competitive enterprise. Basing on the theoretical traditions about the global approaches to the economic role of government, the state has a fundamental responsibility in ensuring the regulatory policy and economic stability (Aikins, 2014). In regard to the Qantas argument, the company was wanted to some extent regulate its economic stability and as a result it had to seek assistance from the federal government. Consequently, the federal government spelt out the importance of regulating the economic stability in relation to the theoretical traditions of the global market and it denied the argument of the Qantas Company. Significantly, given chance to regulate the economic stability of the company would not only affect the country’s economic status but would also but the company at a stable level to enable by companies to compete it. In regard to the public interest theory, regulation is instituted for the protection of the benefit of the public at large or some large subclass of the public. In effect, most economic analysis globally base on this theory in order to maintain economic stability and enforce business competition (Aikins, 2014). Prudently, the government’s argument not to support the Qantas Airline Limited was valid since it would lead to deterioration of business competition and this is against the public interests theory. In significance, the government based its arguments on the theoretical traditions about the global approaches to the economic role. The company also argued that it wanted financial services in order to help suit the interests of its workers. However, basing on the Private Interest Theory the government has an obligation of financing services and inefficiency in regulatory governance. In effect, the direct argument of the Qantas Airline Limited was not justified since it had pulled out from being a non-governmental organization and it was under private entity. This showed that the private company’s interests were to be achieved in the private sector without the help of the government. In regard to the bailout debate, the government’s argument not to support the Qantas Company was justified. The global business traditions and theories hold that a private company should fulfill its interests privately without affecting the general public. Therefore the argument of the federal government to decline assisting the Qantas Company was justified. The political, social and economic changes also played a role in the bailout debate between the Qantas Company and the government in relation to the national and global environmental changes. Consequently, lack of provision of stable political system in Australia would directly affect the Qantas Company and the Australian nation at large since most people would lose their jobs (Qantas Sales Amendment Bill, 2014). In addition lack of provision of proper social welfare and a stable economic system meant the downfall of the Qantas Company. In effect, many people in Australia would become unemployed and even the aviation sector will begin going down. Given that the aviation sector; mainly the Qantas is one of the leading economic sector in Australia, the arguments presented by the Qantas Airline Limited were valid since the government was charged with the obligation of ensuring both political and economic stability and provide good social welfare for both the workers of the Qantas and other citizens (Qantas Sales Amendment Bill, 2014). The Qantas Company will be able to compete effectively in the business market especially after the 2012 greatest loss of $245 million (Cairns, 2013). This will be achieved when the government stabilizes the political, social and economical aspects in Australia and also globally. The most competitive Airline Company in Australia is the Virgin but through the governments support basing on the bailout debate, the company can achieve relative much interest. For instance in the year 2013 the company report a net profit of around $ 6 billion. Prudently, this is a great improvement as far as profit is concerned. The attainment of this great profit will also sell the name of the company globally and a business environment full of completion. The competition will aid in selling the company globally and most people will be interested to be associated with it. Basing on this the argument of ensuring stability of political systems, economic and social welfare both globally and in the local environment was valid. Qantas is an international company hence serves very many countries. As far as the dynamics of globalization are concerned the world economy globalizes as nations integrate into international economies through trade, foreign direct investment (FDI), short term capital flows and technological flows (Najam et al 2014). This implies that the company is supposed to be stable at all times to enable it participate in the global economic dynamics so as to achieve the fundamental goal of business. In effect, the government had top directly support the company’s interests so as to enable it remain an international company and fit in the global market serving as one of the key business entities (Najam et al 2014). The bailout debate in relation of maintenance of the status quo of the Qantas Company was vital since the point argued in relation to the global business dynamics was valid. The government had to support the company so as to ensure that it remains serving internationally and remain a stronghold of the global business. Technological forces which involves the transport revolution and the information and communication information is also one of the global dynamics that affect business (Brooks et al, 2015). In relation to the Qantas case as one of the best Airlines in the world, the company had to come up with ways of solving technological advancement in regard to globalization. Comparatively, the government had a pivotal role in helping the financing of the technological advancement in the Qantas Company. This would ensure that the company fits the global status and could compete effectively. Therefore, the bailout debate between the Qantas and the government was just in order since it was calling upon the support of the government in dealing with technological advancement which was one of the global dynamic challenges. The withdrawal of the government support would mean stagnating of the technological growth of the company. The company had to come up with the effective procedural way based on the analysis of matters of communication. Given that was an international airline communication was a fundamental aspect in the daily operations of the company (June et al 2011). The company was to come up with modern information and communication system that would see to it that communication was effectively. In effect it was just necessary for the company to hold a bailout debate with the government since through this the company would be able to get assistance to help it come up with technological systems of communication. The government however refused to give support to this issue since the government had the tax payers or rather public interests at heart. It feared involving in the assistance of the Qantas Company since it meant that the citizens could pay more tax in order to facilitate this. Conclusion Conclusively, Qantas, a formerly government-owned airline was to some extend right to ask for assistance from the federal government that resulted in a bailout debate. The government refused some of the suggestions put forward by the Qantas and took a stance stand. In effect, some of the arguments put forward by the government are justified while others are not. Basing on the justified arguments the main focal point is placed on the public interests in that the government has the public interests at heart and cannot allow its citizens to be exploited in terms tax payment. Similarly, on the side of the Qantas Airline Limited, there are other arguments that truly require governments’ assistance and interpretation. Arguments on both sides are as discussed above. Reference list Lennie, J., Tacchi, J., Koirala, B., Wilmore, M., & Skuse, A. (2011). Equal access participatory monitoring and evaluation toolkit. Retrieved from [on 7th May, 2015] The Qantas Airline Limited (2015). Retrieved from [on 7th May 2015] Adelman, I. (2012) The Role of Government in Economic Development. Retrieved from [on 7th May 2015] Adelman, I. (2012). The role of government in economic development. Foreign Aid and Development. Lessons learnt and directions for the future, 48-79. Retrieved from [on 7th may 2015] Lane, A. (2014). Qantas Needs to Grow up- A Bailout won’t solve its problems. The Guardian. Retrieved from< http://www.theguardian.com/commentisfree/2014/feb/28/qantas-needs-to-grow-up-a-bailout-wont-solve-its-problems> [on 7th May 2015] Woodburn, A., Allen, J., Browne, M., & Leonardi, J. (2008). The Impacts of Globalization on International Road and Rail Freight Transport Activity–Past Trends and Future Perspectives. Transport Studies Department, University of Westminster, London, UK. Retrieved from [on 7th May 2015] Cairns, G. (2013). Aussie Airline Feel the Pressure as International Competition Strengthens. Retrieved from< http://theconversation.com/aussie-airlines-feel-the-pressure-as-international-competition-strengthens-17504> [on 7th May 2015] Najam, A., Runnalls, D., & Halle, M. (2015). Environment and globalization: five propositions. International Institute for Sustainable Development= Institut international du développement durable. Retrieved from http://www.eoearth.org/view/article/152575/ [on 7th May 2015] Brooks, I., Weatherston, J., & Wilkinson, G. Globalisation, challenges and changes. Retrived from [on 7th May 2015] Read More