Category: Qantas Airways

Introduction

Quantas Airline is an Australian aviation carrier operating the market for over 95 years. Currently, Quantas operates two large subsidiaries, Jetstar and Frequent Flyer (Morton, 2012). The company is one of the few airlines that managed to go through the global economic crisis of 2008 without considerable losses. It started as a modest domestic player working only within the Australian market.

Nowadays, Quantas controls over 65% of domestic market and over 25% of the international one. The company experienced the crisis during the recent fiscal years being unable to control the expenditures and keep the profits at the satisfactory level. The rising costs of operation are another factor that has its negative impact on the company profits.

Alan Joyce’s Strategy

Alan Joyce is Quantas Airline’s CEO since 2008. He headed the company at a quite turbulent moment in its history and managed to achieve considerable success improving its performance. Joyce is aware that the airline industry worldwide continues to be subject to multiple issues and endpoints and therefore, he continues to develop the new strategies and introduce new measures to keep the company performance at the desirable level.

In the twenty-fifteen fiscal year, the airline financial performance was relatively poor. The main cause of the profit margin decrease in the last fiscal year was the economic problems in Europe (Quantas, 2015).

At the international market, the situation was quite stable since the company operates the high-end business class and first class flights and this segment did not experience significant losses (Quantas, 2015).

In 2015, Joyce has expressed his concerns that poor company fleet management is the major company performance issue. Maintenance costs for the company in 2014 exceeded the point of $2.5 million (Quantas, 2015).

In response to this finding, the CEO resolved to reduce operational costs by $0.5 million in order to prevent the exceeding of gross gain. In addition, Joyce adopted the decision to purchase the newer models of planes to decrease the costs of maintenance because they have the new technologies enabling to optimize the repairing process. Besides, the new models allow carrying more passengers and use fuel more productively. This decision is justified from the point of view of the information learnt in class and the finding made by Heizer and Render (2011) who argue that the first step towards sustainability of business is cutting the unnecessary disbursements (Harvard Business Review Press, 2011).

Another decision adopted by Joyce after the year 2014 was to pay more attention to subsidiaries management. He focused on Jetstar performance and was able to achieve considerable results having better operational results both at the local and international levels than the main company Quantas itself. In 2015, Jetstar continued to be the leader subsidiary of Quantas because of the wise choices made by Joyce in the area of targeted customer segments and served lines.

Joyce also focused on the premium segment customers being the company loyal clients at the international market for decades. He considered that maintaining the company operations at the previous rates is crucial for the company reputation. The company had perfect reputation as the one offering the top quality services for travelers worldwide (Quantas, 2015). Joyce considered that such publicity was good, and it could support keeping the profit margin high both at the local and global markets.

Despite the fact that Quantas adopted the decision to reduce operational costs, it maintained the highest safety and quality standards as the essential component of the company business model, which is in the full accord with the findings made by Thompson and Martin (2010) and Wheelen, Hunger, Hoffman, & Bamford (2015). Moreover, the CEO resolved to increase punctuality with the purpose to ensure that all flights were adherent to the schedules, which is a good solution based on the theoretic support from Ananthram, Nankervis, and Chan (2013).

Joyce’s Vision of Current Competitive Advantages

Assessing the company strengths, Joyce has focused on the chosen business model and company structure. He concluded that having the two subsidiary airlines, the company can have a competitive advantage of providing more customer-specific services. Because the branch companies work in different customer segments and different economic environment, the probability to make gross is considerably less according to the findings made by Wheelen et al. (2015).

Next, Joyce has concluded that company size and abundant resources is another competitive advantage. The large resource capacity and bargaining power are the two characteristics enabling making considerable company structure changes without complex issues at any moment (Gurney, 2011). Considerable renovation of the air fleet is only possible for companies such as Quantas because they can make costly acquirements without unbalancing their financial position. Having a large fleet of high quality with the latest technological solutions and large carrying capacity is a yet another competitive advantage as far as Joyce believes because it allows operating in the large amount of lines and doing so with fewer disbursements on fuel.

Further, many terminals in the company flight routes worldwide and lounges in flight routes are owned by Quantas. As a result, the company can ensure higher punctuality rates and increased schedule efficacy compared with the competitors. This is the very feature that makes the company so popular and valued by the business class travelers who always suffer from the problem of time shortage and need advanced solutions to increase the effectiveness of their time usage. The decision to continue allocate funds for these operation costs in not an easy choice for the CEO. However, seeing its significance for being the leader in the VIP and business class customer segments he believes that it is justified.

Lastly, the ticket purchasing systems utilized by Quantas Airline are seen as some of the most customer-friendly, safe, and effective technological solutions for serving travelers worldwide (Gurney, 2011). Besides, the checking in procedure at the terminals features one of the highest in the world levels of convenience and promptness. This competitive advantage is central for the companies operating in the premium customer segment. Maintaining the leading position in the area of terminal technological solutions is crucial for keeping the position of the international leader in customer service, the position that the company is currently enjoying.

Joyce’s Strategy Results

By the year 2015, Quantas Airline managed to renovate its fleet to a considerable degree by purchasing the latest Boeing and Airbus models with the largest carrying capacity and the latest safety and security promotion technologies (Quantas, 2015). The outcome of this investment is the possibility to occupy the leading positions in the premium segment on international routes such as Los Angeles, China, Vancouver, and Berlin.

The quality of service offered to the premium segment customers has also improved with the introduction of flight plans commencement. This innovative approach offered the business-class clients fly from Australia to Asia during only one day. Moreover, the company managed to achieve the set goal in the area of improving customer service by establishing the new type of relations with the corporate clients. According to the new approach, customers who had the scheduled arrangements during a long period had the priority in the service provision over other customers.

Conclusion and Recommendations for the Future

Despite the fact that Quantas Airline has faced significant operational problems, timely and well-elaborated business optimization decisions will make it possible to restructure the company, decrease the gross loss rates, and increase the gross profits margin. The company CEO demonstrated excellent leadership skills and outstanding strategic thinking ability in making the right operational decisions and developing the new company policies that would lead to an improvement of the company performance (Hitt, Ireland, & Hoskisson, 2011). With the adopted decisions, Quantas is sure to step on the recovery path. Therefore, the prognosis for the company future is quite positive.

Still, being on the course for recovery is not the reason for the company leader to relax because there is still much work to do before the company improves its positions at the global market. Particularly, Quantas has to readdress its business strategy to expand to the new segments and offer the passengers the new lines and directions. The example of the Emirates Airline illustrates that the companies of Quantas size should do their best to spread to other regions in the world (Managing for competitive advantage, 2012). Geographic expansion along with the wise operational decisions, striving to continue to improve customer service, and employ the new technological solutions will help the company to increase profitability and optimize its performance.

References

Ananthram, S., Nankervis, A., & Chan, C. (2013). Strategic human asset management: Evidence from north America. Personnel Review, 42(3), 281-299. Web.

Gurney, R. (2011). Building stronger Quantas. Quantas Airways, 5 (3), 7-12. Web.

Harvard Business Review Press. (2011). HBR’s 10 must reads. Strategy. Boston, MA: Harvard Business Press. Web.

Heizer, J. & Render, B. (2011). Operations management (10th ed.). London: Pearson. Web.

Hitt, M., Ireland, R., & Hoskisson, R. (2011). Strategic management: competitiveness and globalization : concepts and cases. Mason, Ohio: Thomson South-Western. Web.

Managing for competitive advantage (2012). Harlow: Pearson Custom Publishing. Web.

Morton, T. (2012). Broadening the horizons. Quantas Group, 4(6), 33-45. Web.

Quantas. (2015). A strong, sustainable future. Web.

Thompson, J., & Martin, F. (2010). Strategic management awareness & change (6th ed.). London: Cengage Learning. Web.

Wheelen, T.L., Hunger, J.D., Hoffman, A.N., & Bamford, C.E. (2015). Strategic management and business policy (global edition), (14^th ed.). London: Pearson Education. Web.

The market environment largely defines a firm’s marketing approach to its products and its target customers. Therefore, understanding the nature of the product and its offerings, the target customers and packaging can be determined. This paper aims to analyze the marketing environment of Qantas Airline for their rout from Australia to Bali, Indonesia.

The marketing elements are segregated into two parts – microenvironment and macro environment elements (Cant, Strydom, Jooste, & Plessie 2006). Microenvironment elements are forces that are ingrained within the system of the firm that may affect the ability of the company to serve its target customers (Cant et al. 2006). The macro environment analysis relates to the larger market forces that have a strong impact on the microenvironment and consequently the firm’s ability to gain competitive advantage in the market (Cant et al. 2006).

The microenvironment can be analyzed based on the organization, market channels, competitors, and market for the customers, and public. The organization analyzed in this paper is Qantas Airlines. It is important to understand that the other departments are also responsible for success of the marketing department within the organization. For instance, the stations at Bali and Australia are responsible for handling the proper marketing of the Australia-Bali route of the airlines.

The first aim of Qantas should be to align all their departments to gain customer focused marketing. Qantas has streamlined departments that operate in conjunction with one another. They operate seamlessly, providing assistance and coordination to each other. The suppliers are also important. Qantas has sufficient supply of food and other refreshments for their passengers on the route from Australia to Bali (Qantas 2014). However, Qantas has faced problems on the labor front when the company had to downsize due to the financial crisis.

The competition in the rout is intense as there is a lot of demand for the destination. There are other airlines like Cathy Pacific, China Southern, Virgin Australia, Garuda, China Eastern, and China Airlines who present a strong competition to Qantas (Farecompare 2014).

Qantas being a low cost airline, provides competitive prices to their customers. Further, regular flyers can exchange their points with fare and hence can pay with both, points and cash. However, the prices for a one-way ticket in Qantas would cost around $750, while that in Virgin Australia or Garuda, Indonesia will cost around $300 to $400 (Farecompare 2014). The stark difference in the prices of the flights may become an impediment for the company to operate competitively on the route. The price competitiveness is one area where Qantas is far behind competition, and hence may affect the operations in the route.

The third party online ticket sellers, like travel agents, always try to book the airline tickets at the lowest cost in order to bring down their overall cost and increase their sales.

The customers of Qantas are usually business flyers and individual customers. Bali is essentially a tourist destination. The individual customers may be affected due to higher prices of the tickets in the route compared to other airlines. However, the company provides frequent flyers with points and other facilities, but these are necessary conditions to retain competitive advantage in the field, but not sufficient condition enough.

The direct competitors of Qantas are other airlines that operate on the same route like Cathy Pacific, China Southern, Virgin Australia, Garuda, China Eastern, and China Airlines. In order to compete with the direct competitors Qantas provides complete trips on per person basis, which covers their travel and hotel stay at Bali. Such tours would cost customers $500 to $900. Other competitors for Qantas’s Bali-Australia route are cruises that operate from Australian ports to Bali. Bali being mostly a tourist destination has attracted many travelers to take a leisurely travel option, which provides stiff competition to the airlines.

Employees of Qantas also have a role to play in the operations of the airline in the route. The airline services have to be perfect in order to provide condition, which will make the holiday of the customers special. Employees, especially the flight attendant and the pilots, are important part in delivering good services to the customers, and affect the marketing plans of the company.

The forces of macro environment that influence the firm are demographic, economic, natural, technological, and political factors (Cant et al. 2006). Economic factors have been a strong impediment to the operations on the route, as the economic downturn reduced consumer spending and hence, reduced the number of people eager to travel abroad for vacation. Bali being primarily a tourist destination was hit due to the global recession.

Natural factors also affect the marketing and services provided to Bali for the island is prone to earthquakes and storms. The advent of the tsunami in 2009 affected the island’s infrastructure badly, and therefore, created a gulf in the tourist inflow in the island. Natural disasters and political upheaval have adversely influenced the tourism industry in Bali, which in turn reflected on the customers for Qantas on the route.

However, Bali is rich in culture and historical heritage that attracts lot of tourists. For instance, the island’s Buddhist-Hindu religion can be traced back to the ancient ages and the island houses many ancient monuments. Further, natural beauty is immense in the island, which can become an important area of marketing for Qantas. The island provides great opportunities for adventure sports that are strongly associated with Australian culture preferences.

The demographics of Australia has a strong impact on the marketing of the Qantas airlines. The population of the country has increased by 1.8 percent in 2013. Further, the population is constantly aging, with increase in life expectancy of the population. The average age for men is presently 65, which is expected to increase by 19 years and that for women by 22 years (Australian Bureau of Statistics 2013). This poses a strong problem for marketers of Australian products to the Australian markets. Marketing a destination like Bali to an aging population may become difficult, as leisure travelling becomes the last agenda of an aged person’s spending list.

The main marketing area that Qantas must concentrate on while marketing their Bali destination from Australia is their target customers. The travellers to Bali are usually young people, who want to explore a different culture and tradition. The older generation travels and very old ones prefer not to travel at all. In order to attract the younger generation, student discounts are to be provided. Further, Bali has to be marketed as an adventurous and exciting tourist destination to the young demographics. The prices have become an impediment in the marketing process with more airlines providing cheaper flight tariff for the same destination. Thus, the marketing of Bali route of Qantas must be targeted at the young, below 30 years of age. Further, the company has to provide more package deals or cheaper flights in order to compete with increasing competition from other airlines. Further, family travelers may be attracted with special offers for family vacations.

References

Australian Bureau of Statistics 2013, Australian Demographic Statistics. Web.

Cant, MC, Strydom, JW, Jooste, CJ & Plessis, PJD 2006, Marketing Management, Juta and Company Ltd., Cape Town, SA. Web.

Farecompare. 2014. Web.

Qantas 2014. Web.

Introduction

The economic situation in the world has been rather unfavorable lately, which has resulted in many leading airlines going through the state of crisis. Australian Qantas happens to have found itself among them. Therefore, the company’s CEO Alan Joyce is expected to work out an anti recessionary solution and take the necessary steps for its realization. The idea under consideration implies selling Qantas’ frequent flyer program which is designed to redeem not only free flights but also a range of goods from various partner companies. Although the program is acknowledged to be the company’s most precious resource and could help the airline to earn funds, the decision is most likely to have certain drawbacks which might entrain the opposite effect in the times to come.

Types of Decisions

To avoid tackling potential problems, it is necessary to choose an approach aimed to assist in making the right decision. However, before it is done, it is reasonable to define the type of decision to be made. The first opposition is strategic vs. operational. Moshal (2012) describes strategic decisions as crucial for the existence, the earning power, and the achievements of the enterprise. Such decisions appear, therefore, risky. Making these decisions tends to involve employing more assets, applying comprehension and knowledge as well as using outward opportunities, and minimizing outside threats. For the effect of strategic decisions proves to be durable and irreversible, they have a significant impact on the administration. Any strategic decision comprises a chain of operational decisions that are more particular, practical, and short run. Hence, based on the explanation, it is possible to conclude that the decision which Qantas’ CEO is supposed to make is a strategic one.

The second opposition is programmed vs. non-programmed. According to Moshal (2012), programmed decisions are the ones that are acknowledged to be triggered to solve typical problems that happen to occur systematically, for instance, employing new personnel, supplying materials and equipment, paying the rent and salaries. There happens to exist an algorithm to deal with this sort of issue, and once it is detected, the algorithm is applied to cope with it. Since programmed decisions are constantly made, the technique associated with their resolution proves to be rather understandable. (Moshal, 2012). By the above-said, it is possible to admit that the decision in question is not a programmed one.

As for non-programmed decisions, they are accepted to be made in very special cases. There appears to be neither background knowledge nor algorithm to cope with them. Apart from that, all data necessary for a solution elaboration is expected to be collected. These changeable matters may involve undertaking expansion abroad, entering a niche market, launching a pilot project. This type of decision proves to be the executive right of top-level management because they tend to imply having powerful administration skills and the ability to work out solutions using imagination, inventing new methods, and accounting for whatever effects the solution might have (Moshal, 2012). This description is in line with the situation, so a non-programmed decision is to be made.

Rational Approach: Steps

According to Moshal (2012) and Koudri (2011), the steps to take in the course of rational decision making are 1) detecting the problem and understanding it, 2) defining goals and gathering information, 3) outlining possible solutions and estimating them, 4) choosing the best decision, 4) accomplishing it, and 5) making necessary amendments.

The problem can be characterized as financial: “the airline posted a first-half net loss of $235 million” (Gilder, 2014, para. 14), and “the depreciation of the airline’s aging fleet, mass redundancies, and other write-downs are tipped to add $450 million to already heavy losses” (Ironside, 2014, para. 2). Therefore, the goal is to overcome the current crisis. The information available about the program is as follows: it “has hundreds of program partners including 38 partner airlines, all major banks” (“Australia”, 2014, para. 9), “the loyalty division reported a record underlying profit of $146 million” (Gilder, 2014, para. 14), the program “has been valued at up to $3.6 billion” (Gilder, 2014, para. 5).

In the considered case, possible decisions are, first, to sell the whole frequent flyer program, second, to “sell the rights to the program for about half the mooted price and retain the remainder in a joint venture” (Gilder, 2014, para. 17), and third, not to sell the program and “to find more ways to reduce their cost base which was higher than those of its competitors” (Ironside, 2014). To choose the decision, it is necessary to estimate internal strengths and weaknesses as well as to take into account possible external opportunities and threats of all three alternatives. The main advantage of selling the program is expected to be an immediate gain, whereas the major drawbacks are supposed to be “abandoning the most loyal clients” (Ironside, 2014, para. 10) and having further difficulties in “getting those seats” (Ironside, 2014, para. 11). This information provides an analytical basis for decision making. Once chosen, it is supposed to be implemented, and amendments are expected to be made if necessary.

Approaches: Rational vs. Intuitive

Kourdi (2011) states that “how people make decisions depends on the individual experiences” (26). The rational approach is acknowledged to comprise a succession of actions that will bring about the necessary result. This approach is expected to arrange for a mere structure: estimating the case, identifying possible solutions, making a decision, accomplishing, overseeing the results, and making necessary amendments. If rationality is focused on, an inventive constituent tends to be missing. Yet, a decision making might call for imagination and intuition. (Kourdi, 2012). The experienced CEO is likely to choose rationality, as it is data-based and proves possible of estimation. As for a new CEO with no relevant background in the segment, it might find it difficult for him to take the rational approach, as it requires analyzing a substantial amount of new information and using skills and knowledge which have not been gained yet. However, a fresh glance at the situation and administrative experience in a different sphere might involve perceptiveness, so the approach to adopt for a new CEO is an intuitive one.

Conclusion

To sum up, it is necessary to underline the key outcomes of the above-said. First, the situation described in the case requires making a strategic non-programmed decision, since it is unique and there is not an algorithm for its implementation. Second, if the rational approach is chosen, the steps to take are as follows: detecting the problem and understanding it, defining the goals and gathering information, looking into possible decisions and estimating them, choosing the best decision, accomplishing it, and making necessary amendments. Finally, the experienced CEO is supposed to address the problem with a rational approach, whereas a new CEO with no background in the segment is expected to take an intuitive approach.

References

Australia: Qantas frequent flyer hits 10 million member mark. (2014). Mena Report. Web.

Gilder P. (2014). Loyalty faces cloudy. Weekend Gold Coast Bulletin. Web.

Ironside, R. (2014). Qantas warned to ground plans to sell frequent flyer program. The Gold Coast Bulletin. Web.

Kourdi, J. (2011). Effective Decision Making: 10 steps to better decision making and problem solving. Singapore: Marshall Cavendish.

Moshal, B. S. (2012). Principles of management. Cranbrook, Kent: Global Professional Publishing.

A general and task environmental analysis on Qantas

Political environment

To compound an already turbulent industry where volatility is ever-present through government deregulation and the difficulty of driving profits year in year out, 2001 witnessed terrorist attacks in the United States, the Iraq war in 2003, and SARS crises led to significant downturns at the Australian airline industry resulting in further change.

Economical environment

• Qantas had to build on the low-cost operating model it inherited in May 2001’s acquisition of Impulse Airlines.
• By retaining Impulse airlines, which has evolved into Jetstar, as a stand-alone unit, Qantas has been able to derive cost savings from utilizing Impulse’s low operating cost, all-economy class, and streamlined staffing/labor practice.
• The change in policy has enabled Qantas to implement some of its strategic learning’s from this low-cost model develop by Jetstar.

Social environment

• Qantas faces corporate social responsibility pressures to reduce noise pollution and other emissions even further as global warming and climate change are now very much a social and corporate issue.
• Preservation of the environment is paramount and the government may further introduce regulations that may require Qantas to refine its noise pollution and current emissions from fuel consumption.
• There will be cost involved in any policy change to comply with corporate social responsibility obligations.
• The Qantas Group has been branded under two major labels – Qantas and Jetstar, which domestically operate over 5,000 flights a week serving 62 city and regional destinations in all states and mainland routes. While internationally operating nearly 700 flights a week, offering services to 80 international destinations (including codeshare services) in nearly 40 countries.
• Despite recent turmoil in the aviation industry Qantas has remained surprisingly profitable and was recognized as ‘Airline of the Year 2004’ by Air Transport World magazine.
• Recently celebrating its 85-year anniversary Qantas has maintained its reputation for providing a premium aviation service that has grown to cater to all aspects of the market. Prior to Ansett’s liquidation, Qantas encompassed approximately 55 percent market share, however, it now has approximately 70 percent of the travel market on the domestic trunk route network

Technological environment

• Responding to the ever-changing Australian airline industry, Qantas implemented developmental policies in a proactive manner. The sudden upsurges in demand required rescheduling more flights and using smaller aircraft to cater for the increased demand at lower costs (Kain & Webb, 2003).
• When international terrorism impacted the global airline industry, Qantas diverted its international fleet to domestic routes to further capitalize on the domestic upsurge in demand.
• A key factor that further has galvanized the oligopoly in Australia is the small number of routes. While the United States is characterized by a population and geographic diversity that allows an entrant to capitalize on literally thousands of routes, Australia has only eight capital cities with a handful of other smaller centers. (Forsyth, 2003).
• To meet such competition in such a turbulent industry Qantas had to build on the low-cost operating model it inherited in May 2001’s acquisition of Impulse Airlines. By retaining Impulse airlines, which has evolved into Jetstar, as a stand-alone unit, Qantas has been able to derive cost savings from utilizing Impulse’s low operating cost, all-economy class, and streamlined staffing/labor practice.
• The policy change has enabled Qantas to implement some of its strategic learning’s from this low-cost model develop by Jetstar.

Problems significant to Qantas and their causes, and management

Competition

With the entry of Virgin Blue into the Australian domestic market, Qantas has had to respond to the growing popularity of discount air travel. Qantas had to competitively challenge Virgin Blue’s ‘low-far’ end of the market. This was in order to reduce the competition so as maximize client competition with the other competitors. In this highly competitive environment Qantas has to pursue policies and practices for organizational change and development to reposition itself as evidenced by the creation of their ‘low cost’ equivalent – Jetstar. this in return will foster more customers to use their varied.services and the low cost will attract more customers.

Since the deregulation, Qantas faced additional competition from regional carriers, especially Air New Zealand. Through the government reducing the entry barrier from a legislative point of view, it enabled smaller airline carriers to gain market share from major players like Qantas. To meet such competition in such a turbulent industry Qantas had to build on the low-cost operating model it inherited in May 2001’s acquisition of Impulse Airlines (Forsyth, 2003).

By retaining Impulse airlines, which has evolved into Jetstar, as a stand-alone unit, Qantas has been able to derive cost savings from utilizing Impulse’s low operating cost, all-economy class, and streamlined staffing/labor practice. The change in policy has enabled Qantas to implement some of its strategic learning’s from this low-cost model develop by Jetstar. As part of their strategy since 2004, the flying businesses of the Qantas Group have been branded fewer than two major labels – Qantas and Jetstar, which domestically operate over 5,000 flights a week serving 62 city and regional destinations in all states and mainland routes.

While internationally operating nearly 700 flights a week, offering services to 80 international destinations (including codeshare services) in nearly 40 countries. Despite recent turmoil in the aviation industry Qantas has remained surprisingly profitable and was recognized as ‘Airline of the Year 2004’ by Air Transport World magazine (atwonline.com). Recently celebrating its 85-year anniversary Qantas has maintained its reputation for providing a premium aviation service that has grown to cater to all aspects of the market. Before Ansett’s liquidation, Qantas encompassed approximately 55 percent market share, however, it now has approximately 70 percent of the travel market on the domestic trunk route network.

Politics

The Australian Government deregulated the domestic airline industry in 1990 with a stage termination of the two-airline agreement. The primary driving force for the deregulation initiative was to promote increased competition and pricing flexibility, aimed to lead to greater efficiency in the industry and benefits to the customer (Australia, House of Representatives, 1990, pp.650). Since the deregulation, Qantas faced additional competition from regional carriers, especially Air New Zealand. Through the government reducing the entry barrier from a legislative point of view, it enabled smaller airline carriers to gain market share from major players like Qantas.

The deregulation shifted the airline industry from guaranteeing exactly two airlines, with parallel schedules, identical planes, prices to major domestic routes to almost complete freedom of entry to the market, subject only to safety restrictions (Quiggin, 1995). The Prices Surveillance Authority (PSA) estimates that the real cost of air travel declined by 24 percent (PSA, 1994). However, further strategic analysis is required when investigating how deregulation impacted the competitive dynamics of the Australian airline industry.

A major problem identified with airline deregulation is the structure of the industry has not been modified as the government anticipated. Under the deregulation, two airlines still serve the same domestic routes without any divergence in the pricing, market share, and greater efficiency in scheduling.

Despite government deregulation attempting to lower the entry point for competitors into an industry, the entry barrier remains high as the market is mature and dominated by an oligopoly such as Qantas and Ansett in pre-2001 and Qantas and Virgin Blue in post-2001 periods.

Responding to the ever-changing Australian airline industry, Qantas implemented developmental policies in a proactive manner. The sudden upsurges in demand required rescheduling more flights and using smaller aircraft to cater for the increased demand at lower costs (Kain & Webb, 2003). When international terrorism impacted the global airline industry, Qantas diverted its international fleet to domestic routes to further capitalize on the domestic upsurge in demand. A key factor that further has galvanized the oligopoly in Australia is the small number of routes. While the United States is characterized by a population and geographic diversity that allows an entrant to capitalize on literally thousands of routes, Australia has only eight capital cities with a handful of other smaller centers.

Economic setup

Qantas adopted a market segmentation strategy. Qantas executed this broad differentiation strategy, which included “pincer-movement” tactics. Qantas’ strategic platforms have three principles. Establishment of a low-cost carrier, Jetstar, to compete with Virgin Blue, Growth in the leisure markets, through expanding Qantas Travel agent and inclusive holiday packaging with airfares and Maintenance of its quality as a full-service airline carrier.

Qantas used a market segmentation strategy, using two brands to target different markets, aimed to bridge the gap at the low-end of the domestic market, (a concept that occurred in the UK with British Airways and its low-cost carrier.

Qantas Airlines have been effective in using its core competencies to provide premium customer service across a variety of platforms to numerous customer types. Due to specialization, Qantas has the reputation to provide quality service to its customer. Additionally, their efforts on internal marketing within the organization were aimed at providing optimum levels of satisfaction to customers. The combined efforts acted as a key enabler to providing all streams of customers with a greater travel experience.

Explosion in quanta

The recent explosion of an oxygen cylinder that resulted in a gaping hole in a Qantas jet’s fuselage mid-flight might result in the management being focused upon. The accountability of the personnel responsible for ensuring that all the safety or the passengers in the plane will be at stake.this is an aspect that might be taken into serious account such that the person responsible might end up losing the job where it is most probable that the manager of that section.

This will impact quanta in two different perspectives that entail positive and negative aspects. Focusing on the positive aspect, the safety of the client and passengers will be the key issue and therefore new management will focus on ensuring that this is adhered to. On the other hand, the negative impact on this might result in a lack of understanding by the new management to the originally placed staff since they had a strong relationship with their previous manager. This in turn will impact the provision of the services that might end up to the staff downing their tools.

Secondly, this might not be a justifiable reason to relegate the manager of this issue since this was an unexplained error therefore by this act ethics will be violated. In the strategic management of quanta, they will have to focus on attracting more customers since by this time the fear of the safety of the same company brand might grip the users of the plane.

This will have to incorporate immense campaigns and the promotion of the company so as to retrieve its lost image after this incident occurred. The management has to focus on the improvement of the service delivery and therefore reshuffling of the cabin members has to be put on focus. In this case the more effective service providers will have an outstanding impact in ensuring that the safety of the passengers is adhered to.

The ability to perceive, interpret, and respond appropriately to the organisational environment is crucial for managerial success.”

Training organisational environment is an efficient method for altering an employee’s behaviour to prepare the employee for a job or upgrade the employee’s performance on the job. Development involves the preparation of a person for broader responsibilities and higher-level positions within the company. There exist variation of training of the recruits from firm to firm, as well as by type or size of service organization.The entails a significant aspect played by the management in the varied changes from one organization to the next.

Effecting organisational environment through employee motivation

The all inclusive interviews in evaluation of candidates are clearly essential to good recruitment. In a greater extent, the former entails: teaching the recruits on how to draw out the interviewee and the latter how to rate the candidates. For consistency (and as a help to checking that) rating often consists of scoring candidates for experience, knowledge, physical/mental capabilities, intellectual levels, motivation, prospective potential, leadership abilities etc. (according to the needs of the post). The judgments are always affected by the submission of the usual curve of distribution to scoring.

Utilizing involves arranging the employees work to make them both productive and motivated. The factors that determine the effectiveness of human resource utilization include: The structure of the work that provide an opportunity for “stretch” performance. Participation in decisions that have a direct effect on the person’s job, Open communications and equitable scheduling of assignments, Competent supervision and organizational flexibility, economic and non-economic rewards that recognize achievement and equity, Opportunity for growth and a culture that encourages caring for both customer and worker needs.

At small employee service firm’s employees may be encouraged to take initiative and be given a variety of tasks and responsibilities. The “shop” operates like a family, with workers participating in decisions and communicating freely with a manager who provides experienced support.

Non-economic rewards, such as flexibility in working hours, time off when needed, and an atmosphere of general caring about other people, are important. In the large service firms, the work may be organized so that small teams share responsibility for key tasks. Here, economic rewards and opportunity for growth are likely to be greater than in the small service firm.

The human resource manager is involved in gratifying since it helps them keep their employees, in turn keeping a small turnover and also making employees feel important and needed at the company. The management is able to develop a public image of the company such that employees have pride in carrying out the firms obligations, provide flextime working conditions so that people may fit their work to their personal needs and lifestyle, including working at their jobs, reward employees for participating in suggestions that can make their work more productive.

Responding to the political environment

The management also has to structure jobs so that employees have control over their work and responsibilities that challenge them, provide first-class facilities, such as private offices, lounges, cafeterias, and the like, reduce the cost of employment for the worker, compensate bye salary or commission and design the service so that the customer does more of the work. In a situation where there is policies amended by the government that are able to frustrate the management position, the organisation should try and react by offering employee discounts and even possible employee family discounts.

Though not being done by a human resource manager, they are kind of part of their job, because they need to make sure that the supervisors do one for each of their employees and then gets the finished form turned into them. The finished copy goes into the employee’s file as part of their portfolio. In the designing of a new dimension an apparent picture of the current appraisal is definitely required

Effecting technological changes

With the view of the technological responses, analysis in this case involves assessing the background factors current appraisal follow ups and satisfaction with them, work mean, and the goal-setting and prize organization practices that are being observed from the other competitors so as to come up with new and improved performances. The crucial purpose of an this system is to help the management accomplish better performance and attain substantial returns Managers and employees can have additional views of how this process ought to be used(Fleetwood, 2006).

The Potential purposes are capable of including the serving as a foundation for repayment, occupation planning and recital improvement or giving a performance feedback.The suitable building block of an this system can be established after all the laid down procedures are clearly followed and should be able to have options about who will be performing the appraisal, who will be involved in formative routine, how they performance is to be considered, and the frequency at which then various reaction will given. The criterion for manipulating an efficient recital system therefore include; appropriateness, exactness, recognition, indulgent, focal point on serious control points, and the economic probability

Social interpretation

Meditation to the mind of the environment around is normal in majority of organizations as ways of maintenance of high-quality staff and attracting others. This welfare can take many and varies, from loans to the deprived to counselling in value of the need of individual problem solving approach. The participation of the organisation in the community up bringing will facilitate the improvement the delivery of service and also learn of what the community perceives the company.

The human resource management has to consider motivation to employees which basically comes about when an employee has had an interesting job or project that really attracts and has control over what is to be performed and how the patterns are without worries of a fanatical boss interference or absence of the job security. The management ought to employ self-sufficiency which involves having the chance to take control over a complete project of work in which an employee is really interested.

Technology advancement

In order to counter the economic changes that night be perceived by the company strategy inflation mechanisms has to be set up with specialised and qualified personnel’s who are able to track the changes immediately. This wills greatly contribute to the management and prevent the occurrences of poor and expensive services that might result to the clients shifting to a less costly brand.

In order to finish the ineffective communication between the management and the employee, the following has to be employed. Communication will be achieved through honesty throughout interviews (Fleetwood, 2006).

When managers are serious about recital reviews the employee is highly motivated knowing that some aspects of him or her are considered employers should also engage in more career mapping and create a discussion to build up a greater force of involvement. The organization should encourage modernism and creativity amongst staff to boost each member’s morale to those who are willing to exploit the various fields at hand. The companies staff should feel a sense of personal responsibility for their work and be able to emphasis their works quality in all the specialized fields in the unit.

The organization structure should be able to encourage effective performance to instil faith to the employees. It should also be supple in the face of more and more varying hi-tech strain. The structure of the organization should not be considered complex so as to motivate the employees and in case so the areas should be addressed.

References

Fleetwood, S. (2006). Competent management- recitals research: underprovided instructive Power, International Journal of Human Resources Management, 17(12): 1979-1995.

Forsyth, P. (2003). ‘Low-cost carriers in Australia: experiences and impacts’, Journal of Air Transport Management, 9, 277-284.

Kain, J & Webb, R. (2003) Turbulent Times: Australian Airline Industry Issues.

Qantas popularity and success can be judged from the fact that it was declared the third-best airline in the world in 2008 by Skytrax, a research consultancy firm. The airline has always had ambitious programs for having an edge over its competitors in the aviation industry and it is for this reason that despite some controversies surrounding its operations it continues to be one of the best airlines in the world. The main terminal and hubs of Qantas are at Sydney and Melbourne airports and operates several international flights to the main commercial cities of the world. Since it was privatized in 1993, Qantas has been one of the most profitable airlines. It is constantly expanding its fleet of aircraft and gradually phasing out the old ones, unlike other airlines that keep depending on obsolete and aged aircraft that often leads to security and safety issues. Indeed it is a robust and disciplined company and continues to retain and enhance its status as Australia’s global airline, and primarily draws its strength, reputation and identity from its global reputation for safety, excellent customer service, engineering excellence and reliability. The Qantas management continues to invest proactively and believes in cost efficiencies and economies of scale, which have been the main reasons for its success in times of intense competition amongst airlines. Additionally, the business strategy encompasses to maintain by all means the confidence that customers have in the airline, which is indeed a national asset for Australia. Qantas enjoys credibility with the Australian government and hence is privileged to have all that it requires from the government. The unique geographical positioning of Australia has constantly added to the success of Qantas, and as the country progresses, the airline industry offers greater opportunities to Qantas to expand its business and profitability (Qantas Strengthens Domestic Strategy as market Intensifies). It envisages the replacement of all its old aircraft that are over 20 years of age and have already placed orders for the Airbus 380. One of these aircraft has already been delivered and international flights were commenced with great fanfare as a popularity measure.

An entrepreneurial audit refers to a comprehensive examination of a company’s innovation and entrepreneurial characteristics. It concerns with evaluating the abilities of the company in responding to opportunities and in maintaining an environment that is conducive to optimum utilization of available resources and in bringing about maximum profitability. This results in improved financial performance (Robert M Peterson). In its efforts to combat the negativities surrounding the airline industry, especially after the September 11 attacks in New York, Qantas has demonstrated immense tolerance and patience in sticking to its excellent customer service that it is well known for, and several surveys carried out by research agencies have conclusively proved that customers continue to impose the trust in Qantas’ reliability in meeting to their expectations. Its entrepreneurial instincts have proved that Qantas is a pioneer in bringing new products for the air traveler. It has started offering in flight internet services on its new fleet of Airbus 380s and has always been involved with pioneering promotional activities such as running advertisement campaigns that feature renditions of children issues set in the footage of Australian landscapes. The entrepreneurial skills of Qantas management is evident from the fact that it is continuously discarding old aircraft and obtaining new ones to make it’s fleet one of the most modern in the world (Qantas Annual Report, 2007).

Qantas remains one of the largest employers in Australia and follows innovative HR policies that are aimed at uplifting its employees. Corporate objectives of Qantas include improving industrial relations, management, organizational development and organizational effectiveness, which are achieved by designating teams for each of these functions. These teams are responsible for framing HR strategies and initiatives to achieve corporate goals. There are also teams that participate with each business segment to help achieve segment strategies by way of day-to-day HR practices. There is a central support team that performs back-office functions in answering HR queries, facilitating remuneration management, workmen’s compensation and staff travel schemes. The company has a constant flow of training programs directed at improving employee competency levels so that each one has the opportunity to enhance his skills and grow within the organization. The company believes in developing a community with access to all the tools to add to one’s talents so as to enable employees to emerge as leaders and senior executives. The Qantas group is diverse in nature and the size of the HR functions ensures that there are virtually unlimited options to prove one’s expertise and dedication to the goals of the organization.

Just as any other major organization of the world, Qantas too has its own share of criticisms on various issues. It has been in the news for having caused injuries to passengers while on an international flight due to turbulence in mid-air and made to have a forced landing at a remote Australian airport. In 2005 allegations were made against the airline for adopting discriminatory policies on the basis of sex whereby adult male passengers were not allotted to sit next to unaccompanied children thereby indicating that it considered all adult males to be potential paedophiles. The airline has also been accused of adopting unfair practices by way of introducing a cut price strategy on some of its routes that involves charging customers lesser than the cost of a ticket to the airline, much to the detriment of other airlines (Qantas expands cut-price strategy). There have also been instances when the airline has announced a cut in its employee strength as it did during the Iraq war due to signs of impending decline in business, which is not considered a healthy sign at the instance of an industry leader(Qantas in War Strategy).

Bibliography

Qantas, 2008. Web.

Qantas Annual Report, 2007. Web.

Qantas expands cut-price strategy, Australasian Business Intelligence, 2005.

Qantas in War Strategy, Australasian Business Intelligence, 2003.

Qantas Strengthens Domestic Strategy as market Intensifies, World Airline News, 2007.

Robert M Peterson, The Entrepreneurial Audit: Innovation Efficiency in the 21^st Century, University of Portland, 2008. Web.

The Australian Accounting Standard AASB 8 relates to reporting about operating segments. It has superseded AASB 114 and is applicable to companies whose debts and/ or equities are publicly traded or to the companies that are required to file financial statements with a security commission. However non-listed entities may also adopt AASB 8. The effective date of its applicability is January 1, 2009.

The basic objective of this standard is to provide information to financial statements users about how an entity conducts its operating segments, particularly classifying those segments primarily as production or service rendering segments. There are also requirements under the standard of secondary classifications based on geographical areas, major customers, revenue, profits earned, and total assets under each reporting operational segment. This standard is akin to the international accounting standard ‘IFRS 8- Operating Segments’.

The important feature to note is with regard to consolidated accounts reporting. Where financial statements are comprised of consolidated as well as parent companies statements, in that case, the segment reporting as per this standard is required only in respect of consolidated financial statements, as consolidation statements are comprised of both parent and subsidiaries’ statements information.

The reporting segment has been defined by this standard as a segment that is involved in the business activities of the entity and earns revenue for the entity and incurs expenditure for earning such revenue. The operating segment is important as its operating results are regularly reviewed by the entity’s decision-makers. Further financial information of such a segment should be discretely available with the entity.

The standard also requires that ‘Notes to the financial statements’ must carry information about an operating segment only if the following conditions are complied with:

• When 10% or more of the revenue from all segments is contributed by such operating segments, or
• When 10% or more of total profit or loss from all operating segments is contributed such operating segment, or
• Such segment has more than 10% of the total assets of all operating segments.

The other conditions of applicability of AASB 8 are that all operating segments combined together must contribute at least 75% of the total revenue of the entity. Also, two or more operating segments may be aggregated if they have common characteristics like the nature of products and services, the nature of production services, customers, distribution methods, and the nature of regulatory environments.

The following segment information along total figure of the entity is required to be disclosed in respect of each reportable segment:

• Factors determining reportable segments,
• Type of products and services
• Profit or loss
• Total assets
• Interest revenue and interest expenses.
• Other items like liabilities

The basic advantage of such segment disclosure is that there will be a substantial increase in entities reporting under AASB 8 as compared to ‘non-reporting entities’. The unlisted companies have also been provided a relaxation in the sense that those companies that have already been providing segment information may continue to do so on the applicability of AASB 8 to listed companies, but ‘the options include voluntary reporting of segment information in accordance with AASB 8, or in accordance with AASB 114, which will be superseded for annual reporting periods commencing January 2009. The comparative information must be presented on a consistent basis, with the disclosure requirements adopted for the current reporting period.'(John Ngiam, September 2007)¹

AASB 8 will effectively put an impact on the identification of segments as well as over the measurement and disclosure of information relating to that segment. A detailed and systematized information will be presented about segments. Notes to the financial statements will look more illustrative and informational decorative.

Segmental information sought by AASB 8 can be termed as a ‘management approach’, as it will help the management of entities itself in bringing the required improvements when comparative data about segments will reflect limitations and weaknesses of individual segments.

It is felt that ‘AASB 8 will apply to a narrower range of entities than are presently required to comply with AASB 114′(Regulation Impact Statement AASB 8)². The standard is not applicable to the subsidiaries of listed companies. This is a drawback in the sense that one constituent of the group will be reporting differently than the other, thus providing the same users of financial statements non-comparative information.

One of the major weaknesses is that AASB 8 has not defined the concepts like segment revenue, segment expense, segment assets, segment liabilities, segment result, and others that are going to be disclosed under segment reporting. That means the financial statement users will have to look elsewhere to have illustrative knowledge about these concepts. The standard is not exhaustive from the point of view of illustrative to users of financial statement information.

Apparently, it may look like changes to bring in convergence with IFRSs, like the introduction of AASB 8, is to going to bring in drastic environmental changes in financial information distribution. But it is not like that. The information required by AASB 8 was already being disseminated among financial statement users by earlier standards and regulations. There is more hype that has been created about the applicability of AASB 8 but content-wise the information is the same and not very exhaustive as it is believed.

Also ‘these new and revised accounting standards do not contain any significant changes to the existing accounting requirements for local Governments, departments and the whole of Government’ (Inform, Issue2, April 2008)³; and this is a matter of great concern as governments are the largest users of financial information published in the financial statements by the entities.

It is also believed that the scope of AASB is very narrow in its applicability. Unlisted companies are completely exempted from their application. That does not mean that unlisted entities do not work under segments or users of financial statements of unlisted entities do not require segmental information. The standard possesses a lackluster approach in improving the illustrative contents of financial statements.

The apparent reason of Qantas for not adopting early the new segment reporting accounting standard reflects from the statement in its annual report 2007, which states that ‘The segmentation of Qantas Group is progressively being implemented to deliver a broad range of benefits to the business.’ (Qantas Annual Report 2007, page 125)⁴ The reason provided does not contain logic because of the following reasons:

• The information required under SSAB 8 is already with the Qantas at the time of preparation of the financial statement.
• Secondly, the main beneficiaries from such information into the note of financial statements of the company are financial statement users and not the business of the company.

According there is no relevance to the reasons provided by the company for not early adopting the requirements of the standard AASB 8.

The primary format of segment reporting of Qantas is not based on the different types of operational activities of the airline. Instead, the segments are designed under the nomenclature of Qantas, Jetstar, Qantas Holidays, and Qantas Flights (that is further segmented into types of services rendered as Catering, Eliminations and Consolidated sections) under which the business is being carried on.

Basically, it has not segmented reporting format under the type of operational services being rendered by the airline. Segmenting under such nomenclature is a confusing classification. The format does not adhere to the requirements of AASB 8. As per the standard, the reporting segments are the operating segment of the entity that has more than 75% of shares in total revenue or profits or total assets under different segments of the entity. Further AASB 8 requires operational reporting segments to be involved in business activities. Segmenting under the titles of ‘Qantas’ and ‘Jetstar’ etc does not state or reflect in any way the business activities conducted by the airline.

‘Qantas’ is the name of the airline and the complete financial statements are showing the financial activities of ‘Qantas’ for the fiscal period. Then what information exactly ‘Qantas’ segment is carrying in the notes to the financial statement of ‘Qantas’? It only provides the impression that the nomenclature of the segment has not been done by the type of business or services rendered under that segment. The classification of segments is certainly not as per AASB 8.

Secondary reporting format of Qantas comprises of reporting of different primary segments, as stated earlier, on basis of revenue earned, profits declared, total assets, and total liabilities by each primary segment. Total segment-wise revenue has been further classified as external segment and inter-segment revenue. AASB 8 requires revenue-wise classification if the segment earns 10% or more of revenue, whereas Qantas has even classified segments even when it is less than 10%.

For example, the inter-segment revenue of Jetstar is less than 10% of even total segmental revenue. Similarly, classifications on the basis of profits, total assets, and total liabilities do not adhere to the requirement of a standard that require reporting when the absolute amount of profit or loss is 10% or greater of the total profits of all profit-making operational segments or total loss of all loss-making segments. When primary classification is faulty and is not on the basis of business activity involved, how can the secondary classification be as per norms? The same is the case of secondary classification on basis of liabilities and assets.

Even the classification of property, plant, and equipment is separately reported than the classification as per total assets. Such detailed secondary classification has not been envisaged by the standards as extra and unnecessary details only add to the confusion for the users of financial statements. Notes are required to clarify the information provided in the main financial statements, and the standard demands the secondary information to be provided in the notes to financial statements. Qantas has not taken care of such basics during segmental reporting.

Analysis of segmental information in the notes to Qantas financial statements suggests that Qantas has tried to provide a very exhaustive detail and in the process lost the track to be followed as per AASB 8. However, the segmental information, both primary as well secondary, provide by Qantas will be useful for investors in a number of ways. First, the information about the revenue contribution of each segment will highlight the segments that are important in resulting in profits available for shareholders.

Investors will come to know the strategic segments of the company. Secondly, information about segment-wise assets holdings will enlighten the investors about the source of future profitability that is so important for the return on investments to be made in Qantas. Thirdly, through the information about segmental liabilities, the investors will be able to have an idea about the fixed nature of payment required for servicing the debts.

Finally, the total segment revenue chart carries the information about finance income and cost to be borne by the company. This will show the effect of existing indebtedness on the profits of Qantas. Though the classification of geographical data is not as per operating segments it certainly conveys the idea as to areas where the company is extending its future operations and making the investments accordingly.

Addition information required to be provided by Qantas on the adoption of AASB 8 will be as under:

• Segment reclassification is required as per operations. It must be noted that identified all reportable operating segments must contribute 75% of the Qantas total revenue. In other words, AASB 8 requires only selective segment-wise information.
• Also, segment-wise information is required only of those operating segments whose internal and external revenue or, absolute profit or loss or, total assets should be in excess of 10% or more of total revenue, 10% or more of greater of all profit/ loss-making segments, and 10% or more of total assets of operating segments respectively.
• Segment-wise information is also required with regard to the nature of products and services being rendered, methods used to provide products and services to customers, type and class of customers being served under each segment, and the nature of regulatory environments of each segment.

As Qantas has not yet fully adopted the requirements of the standard AASB 8, it is hoped that all information shall be provided as per the format envisaged by AASB 8 on Qantas full adoption of the standard after the effective date of January 2009.

1. John Ngiam, CPA Australia Knowledge Bank, 2007. Web.
2. Regulation Impact Statement AASB 8 Operating Segments, Para 4.3, 2007. Web.
3. Inform, News & Views, Issue 2, 2008, page 3. Web.
4. Qantas Annual Report 2007, Notes to financial statement, page 125. Web.

Introduction

Qantas Airline is the oldest Airline in Australia and comes in second in the world. It was started in the year 1920 by some pilots from Australia; these were Paul McGinness and Hudson Fysh. The Company was registered as Queensland and Northern Territory Services Limited. This was on the sixth day of the month of November. Initially, the Company started by giving joyrides and two years it began scheduling its passengers. (Davies, 1964)

More than eighty years later, the Company has gone global and operates more than fifty flights daily to various destinations throughout the world. It has a total of five hundred and sixty flights daily. (Jackson 2000) the Airline has about fifty five destinations regionally. And in the year 2000, the Company transported thirteen million passengers on routes based regionally and about seven million passengers for its international routes.

Internal and external triggers that led Qantas Airline to develop markets internationally at various stages of their development

There are four stages that the Airline Company had to undergo before and during entry into international markets. These stages are as follows;

1. Before the World War
2. jet age in 70’s
3. September attacks
4. present day (Robert & Minnow, 1995)

Before the World War

This stage is characterized y introduction of services to a new international market. During market entry stage, there were a number of factors that prompted the Company to enter into some countries. This stage occurred before the Second World War. These shall be examined below

Competitors in the Industry

The Company had to consider who were the competitors in the respective countries of choice and what advantages did this potential competitors have over them. For example in entry in the American market, Qantas had to consider other Airline Companies that offered low budget tickets and in this regard, charges in the country of entry had to be readjusted to deal with that competition in the market. 4C’s company description-(Smith, 2002)

Economic climate

One major reason that prompted the Airline to enter into other countries was because of the introduction of the General agreement on trade and tariffs by the World Trade Organization. This agreement ensured that the Airline was protected against barriers to trade. Before Qantas could enter certain countries, it had to examine the economic conditions prevailing in those respective countries. It scrutinized the stability of their currency in relation to the Australian dollar. Besides this, Qantas had to make sure that the countries it targeted were feasible for trade. PEST analysis-(University College Cork, 2007)

Political/legal factors

Some countries had passed rules and regulations that encouraged foreign investment. There was the war that deterred airline transport a great deal. These countries prompted Qantas to consider them first. The Airline had to choose politically stable countries like the USA and Japan. Besides, it also examined employment regulations in those countries and realized that they were conducive for the operation of business. PEST analysis-(University College Cork, 2007)

Geographical factors

Initially, the Company had to choose destinations that were frequently visited most air passengers. Examples of such destinations include Britain and the USA. This was because operation in countries of choice had to make business sense and they had to ensure that those countries were geographically accessible. PEST analysis-(University College Cork, 2007)

Cultural factors

The brand image presented by the Airline in those respective countries had to coincide with the culture of the country of choice. This was the reason why Qantas first started with areas that were similar in culture to Australia in order to ease its entry. This was enforced when the Airline chose most of its European destinations. Marketing strategies did not have to differ to large extent. But when it entered Asian countries like Japan, it had to adjust its marketing approach because the Japanese are generally known as a conservative lot. PEST analysis-(University College Cork, 2007)

Jet age in 70’s

This stage was characterized by focusing products in locations that are most favorable to the Company. This means that a Company should not spread its services equally in all the areas it has invested in. Instead, it should put most of its activities in areas that are favorable for business.

Focusing international flights in certain regions

This was the main reason why the Airline has majority of its international flights located in the USA, UK and Japan. (4 C’s description of Qantas-Jackson, 2000) The decision to concentrate most flights on these areas was because there were larger market segments in these areas and it was easier to conduct airline business in these areas than other countries in the world. (Morrison and Winston, 1997)

Economic factors

The Company was faced with the challenge of dealing with increased use of jets rather than other modes of air transport. This was an aspect that the Company did not provide and it therefore had to increase the quality of service provision in line with this new competition. PEST analysis-(University College Cork, 2007)

September attacks

This stage of development involved changing strategies in service or product processes to suit a given market because international market present different challenges from mother Companies.

Political factors

After the September 11 attacks, the Airline industry faced a serious challenge because the credibility of the industry was undermined. The Company had reduced bookings during that period. It dealt with the blow by increasing advertisements and also by reduced ticket costs to boost revenues. PEST analysis-(University College Cork, 2007)

Partnerships

At this stage of its development, the Company started engaging in partnerships and had to consider going into other parts of the world that it had not previously entered. An example was in the year 1995; Qantas formed an alliance with British Airways called One World. This was to synchronize flights between the three continents of Europe, Asia and Australia. The Alliance prompted Qantas to expand its market into other countries to facilitate services between the two Companies. (Doganis, 2002)

Fleet development

The airline has been constantly growing since its inception as a result of increasing fleets. Qantas has been purchasing Boeing aircraft makes like the 747-400. The availability of more aircrafts meant that the company can maintain schedules and meet maintenance needs of the old aircrafts. This implies that it had the capability of expanding its operations into other countries and still maintains service delivery. (Directory, 2007)

Present day

This stage was characterized by new strategies that expand the current market of the Airline in a given international market segment. (United Nations, 2001)

Improving operating procedures

For example purchase of engines in case they need modification, upgrades in interior parts of aircrafts and also in purchase of the actual product.

Capital expenditure is also required for incorporation of other services that come with the airline industry. This mostly refers to hospitality services like Porsche seats, video watching and recruitment of members of staff like pilots, aeronautical engineers, cabin crew members and others. All these are issues that have to be re examined by Qantas so that the Company can expand its market base by attracting new clients (Doganis, 2001)

Keeping up with technological advancements

The Company has appealed to some customers through introduction of compartments where laptops can be placed in its business class section thus appealing to a new IT- conscious clientele. The Company has also kept up with technological advancement through introduction of the Qantas Telstra visa card. Besides this, the Company has provisions for online booking and has conducted a number of marketing activities online. All these are geared towards attracting new consumers to the market. (Travel and Tourism home page, 2007)

Benefits of internationalization to Qantas in various stages of development

Internalization has mostly been beneficial to the Airline. These are the reasons why;

Utilization of capital

Qantas as an airline company is in serious need of capital for its products. The main resource in the aviation industry is aircrafts. Entry o the Airline into certain countries have helped the Company to minimize costs on capital due to the fact that the Company can be able to acquire fleets locally I those countries it has entered. This mean expenditure is greatly reduced and consequently profits are consequently increased. (Butler and Keller, 2000)

Increased sales

Changes in strategies during the value chain engineering stage have brought about increased sales. This was especially witnessed in the year 2000 when the Company saw an increase in international sales by twenty six percent. It gained revenues of 374.8 million Australian dollars in the international flights sector as compared to the local flights that generation income of 272 million Australian dollars. These increased sales were due to improves safety measures, adequate maintenance of aircrafts and reliability from the Airline

Cheap labor costs

Operation of the Companies services in some countries is cost effective because the Company has recruited staff members from those respective countries and these members require low amounts during their enumeration. This has been applicable in some Asian countries like India, where the Australian economy is stronger and is therefore at an advantage compared to the Indian economies. (Online Media Matrix, 2007)

Key limitations of internalization to Qantas at every stage of development

Some limitations have arisen from this business endeavor mostly because internationalization is a business risk in itself and might not always bring favorable results.

International disasters

The Airline industry is susceptible to disasters and these can generate negative publicity for he affected Company in other countries that may be utilizing services offered by the Company. (University College Cork, 2007)This scenario was observed in the year 1999 when a Qantas Airplane was involved in an accident at Bangkok and serious doubts arose as to the credibility of the Airline Company in other parts of the world especially in its core business area-Australia. (Jackson, 2000) The Company had to spend numerous resources to investigate the cause of the accidents and to remold its image.

Capital costs

Qantas had to set aside numerous amounts of capital because the purchase of aircrafts is no easy task. This meant that initially all the profits generated form those markets that had just been penetrated were used to offset initial capital costs. (Robert & Minnow, 1995)-benefits of globalisation

Conclusion

Qantas has undergone numerous changes during its development into the international market. The Company has had to study foreign environments before it could enter them. While it has been trying to establish itself in these new environments, it has had to come up with different strategies that will ensure survival in those markets. Overly, the Company has benefited from the venture despite minor limitations here and there. (Richard, 1995).

Reference

Jackson, M. (2000): Qantas Airways Limited: narration section of Chairman’s Address; Report on the Annual General Meeting of 2000-(4 C’s Company Description).

Travel and Tourism home page (2007): Qantas Airways Ltd. Web.

Butler, G.F., Keller, M.R. (2000): Handbook of Airline Operations. Aviation Week; McGraw-Hill Companies.

Davies, R.E.G. (1964): A history of the world’s airlines, Oxford U.P.

Directory: (2007): World Airlines”, Flight International. p. 77.

Doganis, R. (2002): Flying off Course: The Economics of International Airlines, 3rd edition. Routledge, New York.

Doganis, R. (2001): The Airline Business in the 21st Century. Routledge, New York.

Morrison S. and Winston C. (1997): The fare skies: air transportation and Middle America, Brookings Fall, 1997.

Smith, M. J. (2002): The airline encyclopedia, 1909-2000. Scarecrow Press.

Richard T. (1995): International Business Ethics and culture, New Jersey: Prentice-Hall, Inc.

Robert A.G. & Minnow, N (1995): Emerging Global Business marketing Oxford: Blackwell Business.

United Nations (2001); Global impact: corporate leadership in the world economy. United Nations office, New York.

University College Cork (2007): PEST analysis. Web.

Online Media Matrix (2007): Porter analysis Airline Industry. Web.

The actions taken by Qantas in reducing their costs can be said to be influenced by the global financial crisis, where the decline of the number of passengers in September 2009 was 0.2 percent, in comparison with the previous year. Additionally, the third decline of such indicator as Revenue Seat Factor (RSF), as well as the rising fuels costs marked the beginning of Qantas actions to reduce the costs.

Analyzing the timeline of Qantas’ cost reduction, the first decision made was to discharge a third of its senior executive positions. The aforementioned action was estimated to save the company about A$24 million a year. The effect of such measure was estimated to influence between 60 and 80 executive positions when announced, while the final result affected 90 positions. As of April of this year, the company forecasted missing the 2008-2009 profit by 60-80 percent, where the first half already indicated that the company will report losses for the second half as well. Accordingly, a second wave of cutting jobs was announced, where the company stated that it intends to cut 1750 more positions, among which 500 are managerial, while 1250 are of other staff. Considering the company’s 34,000 employees, the numbers were considerable.

The company followed job cuts with a cancellation of some of their flight destinations and services. The cancellation started from the domestic flights, where 260 domestic flights were canceled, half of which were for the Melbourne-Sydney service. It should be noted that the cancelation of such destinations was not restricted to Qantas’ flights, where other group brands such as Jetstar and QantasLink canceled 200 services as well. Following the drops in demands for the first and business class, as a result of which the traffic declined by 20 to 30 percent, the company started canceling several first-class services on a number of its international Boeing 747 services.This action will mainly affect three routes, which are “Sydney-Buenos Aires, Sydney-San Francisco and Melbourne-Hong Kong-London”.

By August of the current year, Qantas plans took more of formal approach, where cutting the costs took the form of a program titled “Q Future”. In the plans of this program was cutting the costs by “A$1.5 billion over the next three years, starting with a target of A$500 million in the current financial year ending June next year”. The approaches of the program to cut the costs imply increasing the efficiency in areas such as sales, fuel conservation, aircraft utilization and schedule and procurement. In terms of fuel prices, Qantas stated that they are one of its main considerations, where the company keeps monitoring the price level for fuel and oil, and for 2010 already hedged 80 percent of fuel costs. Additionally, Qantas seeks the faster introduction of Required Navigation Performance (RNP), a new navigation system that already saved the company “215,000 kilograms (474,000 pounds) of fuel and 4,200 flying minutes in a two-and-half-year”. With the introduction of the system in wide usage, the company estimated the savings in fuel to be A$20 million a year.

References

Fenner, R. (2009). Qantas Seeks Faster Introduction of Fuel-Saving Route System. Bloomberg.com Web.

Qantas Cancelled. Bernama. 2009.

Qantas Drops First-Class on Long-Haul Routes. Bernama. 2009.

Qantas Passenger Numbers Declining. Bernama. 2009.

Qantas to Axe up to 1,750 Jobs. Bernama. 2009.

Qantas to Cut Costs by A$1.5 Billion. Bernama. 2009.

Qantas to Slash Senior Executive Jobs. Bernama. 2009.

Qantas Airways Limited is the world’s third oldest carrier. Incorporated in 1920, the airline is Australia’s biggest local and global carrier and is considered to be one of the world’s main long-distance airlines, having initiated travel routes from Australia to Europe. The airline currently engages roughly 31,400 people and provides services across an arrangement ranging from 183 destinations in 42 nations in Australia, Europe and Africa (Qantas: the spirit of Australia n.d.).

Efficiency measures are utilised with a view of analysing how well companies use their assets and liabilities locally. Based on the ratio examination, Qantas Airways was fairly efficient in using its assets to create revenue. In general, the greater an organisation’s asset turnover, the more efficient its asset has been utilised, hence the airline turnover duration decreased from 2009 to 2011 after an increase in the year 2008, which shows that Qantas experienced low turnover in using its resources to generate income. The return on assets (ROA) ratios in addition gradually decrease from the year 2009 to 2011, this shows the airline’s efficiency in utilising the investment in fixed assets to generate returns decreases at these periods (Atrill et al. 2012).

The net profit margin measure shows a firm’s financial status; this shows shareholders how much net income every dollar of income an organisation is receiving. Compared with the industry ratio, there was an insignificant decline in the year 2009, then a critical fall in the net income in 2010 though it attempted to increase in 2011. The fall that commenced in 2008 can be attributed to a decline in income which was caused by higher fuel costs, escalating prices and declining demand as the worldwide economy falls. Yet, Qantas was still capable of realising profit (Qantas: spirit of Australia n.d.).

The return on investment (ROI) utilising both return on equity and return on asset it is evident that the earnings declined significantly in 2010 from net income of 7.5 million of the previous years to 1.5 million against 5.8 billion of money invested expected the return on equity to increase by 2.5% at 2011 which indicates improved performance since greater the ratio indicated in the year 2011, the more efficient Qantas is at cost control. Compared with industry control in 2008, 2009 and 2010, it shows investors how well the management of the company is working to increase their income and return on investment (Brewster 2003).

From the analysis, it is evident that the company sales have started to increase from the 2009 fiscal year and development has been seen in the gross income and net income in the 2009 and 2010 fiscal period. Based on the new five years action plans launched by the company in 2011, the approaches are based on reducing cost in certain areas with a view of cutting the company costs and growing its sales, more development in sales and returns is going to be realised in the future which would certainly increase ROI and decreases more of the short-term liabilities. Return on equity is anticipated to increase. The market share price is anticipated to increase as well.

In conclusion, based on the future forecast, the recent action plan by the company, and the new growth and development witnessed in the previous four years, the current investors are recommended to hold on to their shares since returns are anticipated to increase in the future fiscal periods. Prospective investors are advised to invest in the company shares now that the prices are comparatively low as more return on investment is anticipated.

References

Atrill, P, Harvey, D, Jenner, M, & McLaney, E. 2012. Accounting: an Introduction, 5th edn, Pearson Education Australia, Sydney.

Brewster, M 2003, Unaccountable: how the accounting profession forfeited a public trust, Wiley, New York.

Qantas: spirit of Australia, n.d. Web.

Synopsis

• Knowledge and skills assessment used to implement and justify the training program proposed (Sleezer & Russ, 2014);
• Key learning objectives;
• Instructional plan;
• Materials used for training;
• Adult learning principles;
• Methods and techniques implemented for training;
• Training evaluations – Kirkpatrick’s Model of Evaluation (1979);
• Other relevant training components;
• Conclusion.

Knowledge and skills assessment implemented for Qantas

Qantas Airways Ltd.

• Statement of the Problem: Qantas Airways Ltd. as an airline needs to prioritise communication and teamwork of all staff within the organisation to ensure that the safety of all stakeholders are to their utmost standard. The main priority of this airline are their customers and service from all patrons. To ensure this is occurring, all aspects of communication and teamwork must be their utmost importance. The importance of unity within a company like Qantas can be shown through sales and performance.
• Situation Analysis:
• Goals:
• Approach:
• Preliminary Findings:

Two major approaches to learning are…

Pedagogy

• Teacher-centered;
• Learner depends entirely on the teacher;
• Learner begins the process with little to no experience (Hägg and Kurczewska, 2018).

Andragogy

• Student-centered;
• Learner usually demonstrates relevant experience;
• Promotes learner’s individuality;
• More suitable for adult learning (Mukhalalati and Taylor, 2019).

Generally speaking, there are two major principles that have shaped learning throughout a person’s life. First of all, there is pedagogy, which is used in the majority of cases. This principle is teacher-oriented, meaning that the learner depends entirely on the teacher. It concerns the subjects, materials, and other relevant aspects of the learning process. Pedagogy usually implies that the learner begins the process with little to no experience. Therefore, he or she is expected to rely on the teacher, whose role is to provide guidance in the new area. On the other hand, andragogy puts the learner in the center of the process. This approach requires some relevant life experience and promotes learner’s individuality, which is why it is the primary method of adult education.

Heutagogy is the third approach to learning

Heutagogy

• Self-determined learning;
• Promotes learner’s autonomy;
• Adult-oriented approach;
• Suitable for life-long learning;
• Teacher = coach.

Nevertheless, it is possible to say that pedagogy and andragogy form a false dichotomy. In other words, there is another principle that can be used in learning. This approach is called heutagogy, and, in a way, its principles derive from andragogy. Heutagogy is also called self-determined learning, as, in this scenario, the learner demonstrates complete autonomy in terms of choosing what, when, and how to study. Heutagogy is an adult-oriented approach, as it focuses on making learning efficient and enjoyable outside of educational establishments. Accordingly, heutagogy promotes life-long learning in a variety of settings. Naturally, in this case, the role of the teacher is different, as well, and seems similar to coaching. Overall, this is a developing concept, which is currently gaining popularity in adult learning.

Nowadays, the process of learning is characterized by several factors…

• Diversity is the reality of the 21st century;
• Every individual has their particular background;
• All people are different in terms of age, gender, and culture;
• Other variables become important in the corresponding contexts;
• Ethics should be the driving force when devising learning programs (Al Mahmoud et al., 2017).

At the same time, the 21st century has made it obvious that diversity has become a universal reality. This tendency encompasses all spheres of human activity, and learning is not an exception. Nowadays, it is important to take into account an array of variables demonstrated by people. In general, the range of differences includes those, which are related to one’s age, sex, and background. Nevertheless, the full comprises other variables, which can gain additional importance depending on the circumstances. In other words, it is vital to consider all aspects of the learner’s personality, when determining the program of learning. Additionally, teaching and coaching is an area, where ethics play a role of paramount importance, which is why all learning should remain ethical in all cases.

There are several universally accepted techniques for adult learning

• Learning should be relevant;
• Learning should take into account the individual’s background;
• Emotions make learning more efficient;
• Learner’s desire to explore should be encouraged;
• Assignments should remain as convenient as possible for the learner;
• Learner must receive adequate and relevant feedback (6 Effective Strategies, 2016).

Overall, adult teaching and learning techniques vary depending on the particularities of each situation, but there are several points which can be applied in the majority of cases. First of all, as adults value their time and experience, learning must be relevant to their goal. Secondly, as mentioned earlier, each person has a different background, which must be taken into account by teachers and coaches. Third, adult learning benefits from incorporating emotional aspects into it, as learners tend to remain motivated through emotions. Fourth, it is important to encourage the learners’ desire to explore, as it promotes a more in-depth understanding of the subject. Fifth, assignments and other aspects of learning should remain convenient, as adults tend to avoid unnecessary discomfort in their lives. Finally, it is crucial to ensure quality feedback to let the learners know where they excel and which aspects require additional attention.

Level 1- Reaction

This is instant feedback from the trainees.

According to the survey, it’s generally to evaluate:

• How participants react to the training;
• The level of enjoyment;
• Relevant to their roles;
• How effective the overall training was.

Ideally, the outcome:

• positive feedback;
• training program is helpful and effective;

For example, based on the survey that we provide , we received 75% positive responses to our organisation.

If the outcome were not in accordance with what we expected, we can improve based on the suggestions of the participants.

Level 2 – Learning

Based on the survey we made is to:

• Measure how well participants in learning based on knowledge, skills and attitude.
• Measure of the learning in terms of content being absorbed by participants.
• Other methods such as quizzes and tests.
• The ideal outcome from the survey should be positive.
• E.g 90% of the participants feel that the course of the training is useful in order to develop teamwork.

Level 3- Behavior

The practical sides of training evaluation.

Based on the survey, to understand the participant’s behavior post-training:

• How much of the learning is applicable to the day to day work
• How well participants can apply what they learned
• Have a professional manner to serve customers
• How does training affect performance

Moreover, conducting reviews with the trainees (for instance, in-depth discussion between trainees and the trainers).

Level 4- Results

The overall results the trainees give to Qantas Airways Limited:

• Reached the goals through training;
• Making fewer errors and getting project/tasks more quickly and efficiently.

Could identified based on post-training 2 days checkpoint.

The ideal outcome we expected such as:

• Meet the overall key objectives of the training program;
• The sales and customers increased;
• Took better care of customers –work as a team;
• Cabin crew kept ground staff informed (customers requiring special assistance);
• Satisfied customers and more loyal to Qantas.

Training Design Components

Planning

• Operates and build facilities;
• High level practice and theoretical training;
• Qantas Increase the speed;
• The goal is to create new principles, framework and processes.

Design

• Design identification and outcomes;
• Helps design appropriate assessment and evaluation tools;
• Reviewing the needs assessment.

Evaluation

• Determine what needs to change in their training plans and delivery;
• Evaluating team progress and process;
• Make sure provide a successful training operations;
• Every step needs to be evaluated.

References

Hägg, G., and Kurczewska, A. (2018) ‘Who is the student entrepreneur? Understanding the emergent adult through the pedagogy and andragogy interplay’, Journal of Small Business Management, 57(1), pp. 130– 147.

Mukhalalati, B. A., and Taylor, A. (2019) ‘Adult learning theories in context: A quick guide for healthcare professional educators’, Journal of Medical Education and Curricular Development, 6.

Abraham, R. R., and Komattil, R. (2016) ‘Heutagogic approach to developing capable learners’, Medical Teacher, 39, pp. 295-299.

Al Mahmoud, T., Hashim, M. J., Elzubeir, M. A., and Branicki, F. (2017) ‘Ethics teaching in a medical education environment: preferences for diversity of learning and assessment methods’, Medical Education Online, 22(1).

6 Effective Strategies for Teaching Adults (2016) Web.