Qantas Airways Limited Is The Official Flag Management Essay
The Qantas Group has a long history in the Australian airline industry. It initially began its operations in 1920 as the second oldest airline in the world. In 1920 it started providing passenger and mail services. When the Australian Government bought the airline in the year 1947 to operate as the nation’s flag carrier, and it was restricted to fly only international while the domestic market was heavily regulated. After a brief moment, in 1990 after the deregulation of the industry Qantas was able to re-enter into the domestic market.
Qantas had a very stressful and difficult year in 2012 with the company suffering a massive loss up to $244 million Australian dollars. While in case of various other trends Qantas airline was able to show significant increase ranging from its Number of employees, number of passengers and as well as its number of aircrafts.
Qantas has re-designed it business portfolio regularly in order to ensure that its business portfolio best fit the company’s strength and weakness with regard to the opportunities emerging in the ever changing business environment. This strategy has helped it to survive and also prevent it from the cannibalization of the airline.
This report will consist of the introduction of the airline, the main report which will evaluate the strategic contingencies affecting the strategic choices that the airline has, co-relating with it affecting the Human resource planning. The main report will also consist of recommendations for the wellbeing of the airline and also the SWOT Analysis. Finally it will be rounded off with a conclusion which will include facts and figures.
Qantas Airways Limited is the official flag carrier of Australia. QANTAS stands for “Queensland and Northern Territory Aerial Services. The airline is based in Sydney, New South Wales with its hub at Sydney Airport. It is considered to be Australia’s largest airline and the oldest continuously operated airline in the world. Qantas approximately carries about 65%share of the Australian domestic market and carries about 18.7%of all the passengers who are travelling in and out of Australia. Qantas airlines has operated a number of various airline subsidiaries which include the Australian Asia Airline, Australian airline, Qantas airline and Jetstar airways which is currently the low cost carrier for Qantas. Qantas flies to around 20 destinations and 21 international destinations in 14 different countries across Africa, Americas, Asia, Europe and Oceania. The Qantas airways group nowadays has an outstanding commercial and ownership links with various regional carriers. The airline runs a series of alliance agreement with international carriers through which they have been able to proclaim its largest share of international airline market. Qantas is not only involved in passenger transporting but also diversified in several other business portfolio such as catering, engineering, freight and travel wholesale retailer.
Qantas strategic planning starts with the STP analysis. Qantas segments its products and services according to passengers who need comfort as well a reliable service. The airway aims to target a particular group of people which generally comprise of Corporates, Upper Middle Class and the Middle Class. Qantas positions its self in providing a premium service of international airlines which showcases the Australian hospitality. The airline needs to do such analysis so as to set particular objectives for them to start their production of goods and provide the best possible finished goods and services. Qantas airlines conduct such analysis on a yearly basis so as to provide new services and are able to improve and modify the current services.
Qantas has a number of fleets at its disposal around 146 in total, with its Boeing 737-400 being the most famous out of its other Boeing available. The in-flight services provided by the airlines include LCD screens with audio and video demand services along with its own range of flight magazines. The airline consists of several cabins including business class, first class, premium economy class and the regular economy class.
The airline is facing a tremendous problem from the unions with regard to certain demands with are mainly to pay higher wages and better working hours. On the other hand, Qantas wants to make changes and also wants the pilots to do the required transit checks rather than the licensed engineers. Qantas believes that it can and would be able to become more competitive and efficient at an international level but has emphasized regarding the cost of maintenance and repair which prevents it somewhat from the getting the desired goals and objectives. The 500 employees being fired are mostly engineer so as to save the cost for the maintenance facility. The demands can stop the progress that is somewhat a loss to the company which is performing really poorly in the last 5 years, by doing so the loss can be further plunge and cause problems. The pilot union has also emphasized for job security to its members which could lead to Jetstar the low cost airline pilots to be paid as close to its parent company that is Qantas which will make the airline unviable. However if the pilots of the subsidiary airline are fired then the Qantas group will be scattered and will destroy jobs. Other than that, Qantas has the problem of its staff not making changes according to the set standards recognized in the European countries. The new maintenance regulations require the staff to make the necessary changes to meet the requirement and standards of the country they are willing to work in and serve to. Qantas wants its pilot to do the required transit checks rather than engineer as it would save both time and money. However, the ALAEA doesn’t want to provide such provisions as proper transit checks can mean the difference between life and death.
In order to tackle the above mentioned problems, Qantas is willing to let go certain crew member in order to kick start its international operations which would provide profitability due to the grounding of the Singapore based Tiger airways. These overhauling will pave a new road which will focus mostly on future investments, cost cutting and most importantly creating partnerships in order to operate in Asia. International operations can be carried forward when the problems of fuel disputes as well as the disputes of negotiations with the unions are solved. Qantas has decided to cut about 150 of its own workers and 250 contractor positions due to problem of overstaffing at its line maintenance.
The choices made by the airline to tackle such problems are correct in some ways as in order to move forward the airlines have to make certain cuts so as to lighten the burden of the cost. Human resource planning plays a major role in the strategic overhaul which is necessarily needed by the airlines. The airlines have to keep and maintain only those staff and members who are required on regular basis and are committed to the cause of development and progress of the airline. The process of HR planning starts:-
â€¢ Analyzing of the objectives of the organizations which in this case is to get international recognition and development in that sector. Also, the company needs to make sure that the demands are not all in favor of the unions but some in the hands of the company.
â€¢Estimating the requirement of manpower with regard to the operations size. Since the size of operations is very big in this case, the company needs as much help as possible. However, the company also have to keep in mind the demands and negotiations of the union.
â€¢Estimating the supply of manpower. The airline has to see the number of employees and then has to estimate the manpower supply. Therefore, they will find out as to how many managers and employers are needed and compare to how many are needed.
â€¢Motivate the employees. The company has to motivate its employee so that they can give their 100% for the company. In return the company can provide monetary and non-monetary benefits to its workers in the form of bonus, paid holidays, gift voucher etc.
â€¢Evaluate the results. The company after performing all the checks and values has to see that the output is same as which was predicted in the form of the final objectives. If met the company can continue to go ahead with plans and make subtle changes but if the output diverts from the original plan then the company has to make major changes which could include laying off of personnel.
The company needs to make the changes as the demand made by the union is far off from the plan and it can destroy the plan altogether. Job cuts are one way of creating a new path for the company so that the cost incurred on those personnel can be used in other areas where it is necessary. The company can hire new people and train them according to the new standards which is based on the lines of European rules and regulations. The companies need to create an understanding with the unions so as to work together which will result in the company to prosper as well save a lot of people jobs and prevent them from getting fired. Theoretically, the company can let go some its staff members who are not up to the task of progress and development. This will led to fewer burdens on cost with regard to wages and salaries which could be used in other areas of development such as relationship building, training, advertising and promotion. However, when seen from a practical way the company has to follow the footsteps with regard to the HR planning process so as to prevent the company from coming into the limelight of negative publicity and unusual panic among the various shareholders and the board members. The job cuts are being conducted so as to propose funds for its maintenance facility and face problems of rising fuel costs and the European economic crisis.
Qantas has strengths to it which it uses for competing in the airline industry. Qantas has the following strengths:-
â€•Backing of Australian governmentâ€•Qantas airline has a very strong and solid backing of the Australian government which allows it to have certain provisions and subsidies. The government provides it with various tax benefits which help the airline to get the required materials at reasonable prices.
â€•Good marketing Skillsâ€•Qantas has a very good brand building exercises through the medium of advertising and promotions in order to spread the word of its airways through the world and make it a very prominent airline service provider. It is famous for its sponsoring of Formula One in Australia and also a long term partner for the Australian cricket Team.
â€•Excellent Safety Recordâ€•Qantas has a very impressive safety record which is popular among its passenger. Passenger prepare to travel in the airlines as it provides them with a safety assurance which calms them to travel domestic and international places.
â€•Monopoly in the domestic marketâ€•Since Qantas is the only airline in the Australian territory; it provides it with a strong hold in the market which can make it a profitable and successful airline. No other airline is nowhere near Qantas and cannot compete with it on any platform.
â€•Union Disputesâ€•The Australian based airline faces union disputes on a regular base. The Union can ask demand from anyway from the wages to the working hours of its supporting members which indirectly puts pressure on the airline to work out the demands and provide them.
â€•High Labour and Operating Costâ€•The cost of labour and operating is very high for the airline which is very difficult for the airline to handle. Above all, Qantas has a large number of subsidiaries to its name which makes it even more difficult to overcome such cost related problems.
â€•Relatively complex fleetâ€•The fleet currently being used is of complex nature which makes it difficult to operate and need properly trained pilots to fly and operate them. Therefore needs additional costs to meet the training requirements.
â€•Creating a new airline in Asiaâ€•Qantas needs to capitalize its tactics and strategies in the Asian market to taste the same success as it has in the Australian environment. The airline needs to establish a fundamental relationship with the countries government as well as its people.
â€•Less interest by the other airlines on domestic territoryâ€•The Australian territory is less tampered by other well established airlines which allow Qantas to form itself a well-established ground to mark and gain a major market share.
â€•Further E-commerce operationsâ€•In the technological era, where everything is performed via computers and phones the airlines has to extend its operations to such areas and provide more options to its customer and able to get a higher customer base.
â€•Rising fuel costsâ€•The rise in fuel prices has a direct effect on the operations of the airlines as the airline has to change its focal plans in order to tackle and make changes with regard to problems on hand.
â€•Increase in government regulation to save small time rivalsâ€•The government of certain countries present a strict rule against well-established airlines in order to help and make the small airline survive against such strong competitions. The government may provide quotas, increase in tax or reduce the overall production of the stronger airline.
â€•Rising Labour Costsâ€•The rise in labour costs also affects the airlines to face long term as well as short term problems. Upon that there is the pressure of unions which force the companies to provide high wages to its member but at very less working hours which leads to long discussion between both the parties which can affect the operations to a certain extent.
Qantas has to try to reduce its weakness and try to work with its employees to get the best out of them and have to implement the HR planning
Qantas has to grasp certain opportunities in order to reach where they are willing to aspire. As Australian is turning into an international tourist destination and business centre for the Oceanic, Qantas being operated from here will be strategically positioned and they stand to gain a potential share of the action. Hence upholding the ‘respect of Australia’ is very crucial for their marketing strategy. They should continue to provide the excellent quality of service and make sure they work on their weakness and make them a force to reckon with. Qantas needs create a new airline which is based in Asia as the market in Asia is very big and has a number of countries which can provide huge amounts of profits and glamour including China, Japan, India, Singapore and Korea. And by providing special schemes and conditions, the airline can sweep the customers in their favour from their rivals who are more expensive and less reliable. Qantas has to take over the entire monopoly of Australia so as to remain the one main brand in Australia for flight services. Lastly, Qantas has to develop and further its operations in the e-commerce sector so as to reach to each and every person through various medium as possible. Qantas has to tackle the problems of fuel and labour costs to achieve its major objectives. The airlines has to look and beware of the government regulations that is protecting the small time rivals and see to that the government do not try to intimidate the airline. By grasping all the opportunities and preventing the weakness and taking care of the threats will able to make Qantas a well-renowned name in the world. Alan Joyce has to create a feeling of understanding among his employees and help them understand the importance of going global so that they will give him their 100% to get the desired results. He can provide a number of benefits and bonus to its employee as a form of motivation to excite them to perform at their optimal level.
Qantas has shown and proved time and again that with its unique and innovative approaches, backed by the Australian government it has been able to earn a place in the customers mind. Customers who have experienced this service would agree and vouch for the standards provided by the airline. The constant up gradation employed by Qantas in providing services by acquiring new aircrafts, ensuring that their plane will be in the air rather than sit on the ground for maintenance. The services of first class and business class provided by Etihad ,has made the bond between the customer and the airline more strong as the customer do not fell that they have separated into business and economy class but they fell the same as the services provided to both the classes is same and is of excellent quality. Qantas has also gained a lot of recognition by venturing into sponsoring of various sports associated with Australia which is profitable as well as lucrative .By doing so, the airline can prove itself to be a dominant player in the aviation industry. It can also be said that Qantas has done so much as it being the oldest airline in the world and being the foreground for other airlines in the world today. Qantas has and always employ the strategy of following a limited amount of destination as by having fewer destinations it is able to provide the services which are considered to be the best in the world by far. Overall Qantas has done a lot over its long and illustrious history in the aviation services. If it continues to play the cards right the airline can reach new heights altogether .Alan Joyce has to form and maintain a progressive relationship with union so as to create a new beginning in the history of the airline which could be difficult but not impossible. The airline has to consider the SWOT analysis before making any hasty decisions as the analysis gives a detailed image of the work needed to be done by the airline both at the board level as well as at the service aspect of the airline.