MARKETING

Qantas Airlines Report for Senior Management

Table of Contents

Part A - Jetstar's Effect on Qantas Airlines1

Part B - Qantas Report for Senior Management3

Introduction3

Mission3

Marketing strategies used by Qantas3

The Qantas agility in cost cutting4

Re-configuration of the cabin5

Leveraging on Jetstar5

Frequent flyer program5

Re-structuring6

Direct impact of marketing strategy on customer and business base6

Level of customer service7

Promotion and distribution of services8

Marketing strategies8

Success of the strategies9

Return on Investment, Potential Competitors, and Cost Benefit Analysis10

Resource management11

References13

Part A - Jetstar's Effect on Qantas Airlines

Jetstar is the subsidiary of Qantas Airlines and is the low cost airline with headquarters in Melbourne, Australia. The effect of the airline on Qantas Airlines will be very positive. The airline is faced by two major competitors. These are Virgin Blue Airline, Tiger Airways Singapore and Tiger Airways Australia. The strongest competitor of the three is Virgin Blue which was launched in the year 2000 in Australia and already has a significant share of the market. The new name for Virgin Blue is Virgin Australia.

These three airlines excel in the low cost market. Hence, there was a need for Qantas Airlines to come up with a new airline. There were two major reasons for this. To begin with, Qantas Airlines cannot beat Virgin Australia on the basis of price. This would have been possible if Qantas had the cost advantage that is enjoyed by Virgin Australia. Since, the cost for the company is higher than the cost for Virgin Australia; it cannot pass the advantage of lower fares to the final customers. Compromising on the quality is not an option for Qantas Airlines in that the quality of the service is what the airline stands for. Hence, Jetstar will help Qantas Airlines in targeting the lower side of the market that is price sensitive and need a low fare airline for its commuting needs. These people are price sensitive and need the lower fare airline for their commuting needs.

Another major reason for this is that the market positioning of Qantas Airlines would have been hurt if Qantas tried to market itself as a low cost airline. This is because it has established itself as a premium quality airline that provides value added services. Association of a low cost image with the same airline would have been jeopardizing for the airline. The need of time is to capitalize on the opportunity while maintaining the previous image of quality service provider. This means that Qantas Airlines will not only be targeting the upper end of the market but they will be able to target the lower end of the market too with a subsidiary airline. In addition, if the market penetration efforts for Jetstar fail, the company will not get a hit on the parent company that is Qantas Airlines. Hence, it is a good initiative and certainly a safe play.

Part B - Qantas Report for Senior Management

Introduction

Jetstar was established by Qantas Airlines back in the year 2003. This was established as a subsidiary airline to target the lower cost ...