Situational Analysis of Jetstar Airways - Essay Example

?Situational Analysis Report about Jetstar Airways Situational Analysis Report about Jetstar Airways Introduction Jetstar Airways isa low-cost airline in Australia established in 2003. Its headquarters are located in Melbourne. Jetstar Airline is a subsidiary of Qantas Airways. Despite this, Jetstar’s management is independent of Qantas (Jetstar.com). It operates a wide network both domestically as well as internationally. Jetstar Airways is currently the leading low-cost airline which exceptionally provides a reserves seating option allowing its customers to choose their seats upon booking. It has continued to expand, opening new routes every now and then. Its dominance in Australia is apparent. Nonetheless, Jetstar Airways has on several instances been accused of discrimination against persons with disability and poor employee relations. However, Jetstar Airways is not immune to competition. It has faces stiff competition form other low-cost airlines such as Virgin Blue and Tiger Airways. This report therefore provides an extensive analysis of Jetstar Airlines with regards to its market situation, product situation, distribution situation and competitive situation. Also, using the SWOT analysis, the report gives a brief summary of Jetstar’s strengths, weaknesses, opportunities and threats, and finally an analysis of two main issues that the airline has created as a plan for market strategy. In this regards, the identified issues are: desire to expand and enhancing employee relations. Product overview Jetstar Airways specializes in providing a low-fares network of airlines that operate in the leisure as well as value based markets. In Australia, Jetstar operates across 17 domestic destinations. Its mission is to provide all day, every day low fares to enable more people to fly more often (Jetstar.com). Indeed, it is palpable that Jetstar Airways has been committed to its mission as it continues to offer the lowest air fares in Australia as compared to its major competitors. Due to its amazingly low-cost services, a Jetstar airway has been crowned a myriad of awards. For instance in 2009 and 2011, it was ranked the best low-cost airline in Australia by Skytrax. In 2007 and 2008, it was awarded the Low-cost Carrier of the Year (CAPA), among many others. It is credited for being the first Australian airline to allow its passengers an opportunity to select their seats when booking for a flight (Jestar.com). With specific reference to pricing, Jetstar offers exceptionally low prices for fights. The airline operates over fifty airbuses of various sizes, majority being Airbus A320. Currently for instance, the charges from Sydney to Brisbane is $ 79, Sydney to Cairns is $139, Sydney to Hobart is $ 99 whereas from Sydney to Adelaide is $ 100.Despite this amazingly low prices, Jetstar still affords incredible margins. For instance, as per the six month ended 31st, 2011, Jetstar Airways recorded an unaudited earnings of $1,565 Million in terms of total revenue and other incomes. This was an increased from the previous $1,346 million reported in the previous year (Jetstar.com). With regards to competition, Jetstar Airline veneers s stiff competition from two major airlines in Australia. The most eminent competitor is Virgin Blue Airways which commands about 31 percent of the domestic flights in Australia. It operates 2,100 flights in a week with 68 modern aircrafts. Virgin Blues Airline provides very competitive prices. For instance, whereas Jetstar charges about $100, for a flight form Sydney to Adelaide, Virgin Blue charged $120 for the same flight. As a fact, Jetstar was established as a response to the threat posed by Virgin Blue. The other major competitor is Tiger Airways. Based in Singapore, Tiger Airways was launched in 2007 to provide low cost airlines as well. It tends to charge lower prices compared to Jetstar. For instance, the price of a flight form Sydney to Adelaide is $49, to Melbourne is $29 whereas to Gold Coast is $39. SWOT analysis At this juncture, it is important to analyze Jetstar’s strengths, weakness, opportunities and weaknesses in what is commonly referred to as SWOT analysis. Strengths To commence with, it is apparent that Jetstar has a profusion of strengths. In this regards, Jetstar shares an incredible corporate culture with its parent airline, Qantas which has given it a leeway in the market. Also, Jetstar provides reserved seating option where customers are allowed to choose their seats upon booking. Weaknesses With regards to weaknesses, Jetstar has received a myriad of criticism for discriminating against the disabled persons (Bruce, 2011). Also, the working conditions provided by Jetstar to its employee in wanting. The mode of hiring its employees is also questionable. Opportunities With regards to opportunities, Jetstar has been able to expand and continues to introduce new fights and new routes every now and then. The airline is partnering with other renown airlines so as to and other companies so as to enhance better services. For instance, Jetstar partnered with Success Factors with ameliorating its experience with regard to employees and customer travel. Threats Finally, the most prevalent threat faced by Jetstar is that of competition from other low-cost airlines such as Tiger Airways and Virgin Blue airways. Issue identification The first issue identified is the desire need by Jetstar to expand its passenger size. This has to be facilitated by adding new aircrafts as well as taking on other new routes. A prominent step towards achieving this is through embracing technology with the aim of providing better and faster services to the customers. For instance, a while ago, Jetstar, in partnership with IBM introduced the next-generation self-service kiosk solution at its airports so as to quicken check-in services. This way, Jetstar has managed to develop an aggressive growth strategy which has been lucrative in many ways. The new self-service kiosk solution and a traffic flow design enables passengers to receive automated boarding services and baggage tags without necessarily having to wait in long queues at the counter checks (Jetstar.com). This strategy for example, led to a substantial increase in the number of passengers using self-service channels. This greatly facilitated a cut-down of overall cost, thus keeping the air fares as low as possible. This and other such new innovations are very important to Jetstar Airline. Besides cutting down operating costs, they may also escalate the level of customer satisfaction and customer loyalty as they are able to receive speeded and better services (Bruce, 2011). During the SWOT analysis, one threat that came out clearly was that of poor employee relations. This directly or indirectly affects the company’s marketing strategies. Therefore, in order to ensure a proper market strategy, there is need also, to address the employee problem (Ferrel & Hartlie, 2010). Thus, another issue observed in Jetstar is its efforts to embrace technology so as to improve efficiency and provide better services to its employees. In this regards, Jetstar Airways teamed up with SuccessFactors to adopt a Business Software suit which is aimed helping in understanding and improving both the employee experience as well as the customer travel experience (Jetstar.com). Currently, Jetstar Airways has over 7,000 employees (Jestar.com). Managing such a large pool of employees effectively is never a walk in the park. Thus, the software has been helpful and lucrative in the sense that it has perpetuated the provision of efficient and cost-effective way of managing employees’ performance. The software has also been helpful in enhancing processes such as recruitment, learning and development, as well as employee performance management. Consequently, the new innovation has perpetuated the ability of Jetstar to enhance efficiency and consistently offers lower flight charges, as well as providing more choice for the customer. This has boosted Jetstar’s rapport, and marketed it to new other customers, besides enhancing customer satisfaction and developing customer loyalty. References Porter, M. E. (1998). Competitive advantage: Creating and sustaining superior performance. (1 ed., pp. 64-65). New York: Free Press. Burrow, L. J., Everard, K. E., & Kleindl, B. (2007). Business principles and management. (12 ed., pp. 516-523). Boston: South-Western Educational Pub. Bruce, P. (2011). Understanding decision-making processes in airline operations control. (pp. 118-121). Farnham: Ashgate Publishing. Jetstar.com. (n.d.). Our company. Retrieved from http://www.jetstar.com/au/en/about-us/our-company Jestar.com. (n.d.). Customer guarantee. Retrieved from http://www.jetstar.com/au/en/what-we-offer/our-guarantees/customer-guarantee Ferrel, O. C., & Hartline, M. (2010). Marketing strategy . (5 ed., pp. 247-261). Boston: South- Western College Publishing Read More

 

Read More