Qantas Airways Limited - Strategic Analysis



Qantas Airways Limited - Strategic Analysis

Introduction

Qantas Airways Limited is a Sydney based Australian Airline. The flag carrier airline is the second oldest exercise. Its headquarters is at Mascot. The airline reported $14.9 billion for the fiscal year 2011 (Zacks Research, 2011). The airline covers both domestic and international destinations and has a major share of the domestic market. The airline is known for its in-flight entertainment, premium quality cabin and other valued apps. Over the years, the airline has bagged many Design, Wine, Entertainment and Service awards.

Airline Industry Analysis - Major changes occurring in the industry

The global financial crisis has hit almost all the countries in the world. This holds true for developing as well as developed nations and the Australian airline industry was no different. The slump in the economy led to a decline in purchasing power and hence, there was a decline in the overall demand for the airline industry. The changes that have been made in the airline industry are discussed hereunder.

Direct Attacks from Virgin

More recently, Virgin Australia has changes its market positioning and has become a potential threat for Qantas. This started off with Virgin launching its business class which is in direct competition with the premium airline market positioning of Qantas. The premium airline positioning up till now was reserved for Qantas only. This new change means that Qantas will have to devise particular strategies to meet and exceed the demand of its business class loyal customers. In one of the promotional campaigns of Virgin, the frequent flyers of Qantas can switch to Virgin maintaining their frequent flyer status with the new company.

In addition, Virgin Australia will be launching an airport lounge in Sydney in collaboration with Etihad (Flynn, 2012, p. 13).

Crisis Management

The risk management departments need to be doing a great job. The industry this past year has faced many challenges in the form of national disasters, economic troughs and political instability. The crisis management should be very good. The portfolio management of the company is very good in that the airlines must diversify their risk to cover various destinations.

Qantas Airways' Resposnse to changes in the airline industry

The company realized that the changing market dynamics and the uncertainty of the external environment call for strategy renewal. The primary objective in these tough times was to maintain the profitability and earnings of the organization. Competitiveness maintenance is a key for this. Hence, four priorities were laid down to help the company achieve its strategic mission. These are described hereunder (Smitton, 2008).

Qantas will open its network of destinations to cover both domestic as well as international routes while maintaining an excellent frequent flyer program. The competitiveness at Qantas is a function of its ability to choose the right aircraft for the right routes.

Growing in the Asian region. The strategic alliances maintained by the airline in the Asian market will help it offset the impact of losses in the other non profitable markets with high fixed ...