Qantas Airline: A Market Study And Analysis

Background of Qantas

This report offers a study and appraisal of the existing market situation of Qantas and the airline business. By assessment of the company both within and outwardly by application of the PESTLE and Porter’s Five Force outlines, this report will evaluate Qantas’ opportunities and strong points inside the aviation business. Besides this, the report will concentrate on the detailed resources and capacities that facilitate Qantas to get hold of a competitive advantage above its competitors by the application of the VRIO structure (Qantas.com.au, 2014). A concluding assessment will be carried out to make out problems faced by Qantas and suggestions of the way they can resolve these problems.

Qantas started in the Queensland business venture amid 1920. It was initially enrolled as the Queensland and Northern Territory Aerial Services (QANTAS) and from that time, it has become Australia’s biggest local and universal airline, and one of the most grounded brands in Australia, utilizing near 35,000 workforces around the world.

at present Its head office is situated in Sydney, and Qantas works with nearly 5000 week after week flights crosswise over Australia, Europe, North America, Africa, New Zealand, South America, and Asia, flying near 50 worldwide sites (Rosenberg and Czepiel, 2012).

There are four noteworthy local airways that have most of the market partake in Australia; Tiger Airways, Qantas, Virgin Blue, and Jetstar. Designated as ‘The flying Kangaroo’, Qantas is the biggest Australian worldwide airways and is a licenses entity as of the “One world Alliance”. Qantas works locally beneath ‘Qantas Link’, which involves the 2000 territorial flights week by week. They likewise work their low toll/ economic airline ‘Jetstar’, and Qantas Freight. Qantas is experiencing exceptionally hard stage as the organization is particularly having hardships to continue in the present aggressive situation. A portion of the real marketing’s instruments, for example, PESTLE and SWOT are especially useful breaking down the ambiguity clauses and the prospects where the business has been deficient with regards to the global operations (Payne and Pennie, 2015). Organization has not possessed the capacity to accumulate the expansive client base in Asia pacific and Middle East countries in view of pricing problems.

Source: Freed, 2016

The study of strengths, weakness, opportunities and threats for the assessment of Qantas is given as below:

Strengths: The real quality accessible with Qantas is its profoundly apparent brand because it is recognized as the leader airline organization situated in Australia. Likewise, it is pioneer in the airways business in Australia having a market share of approximately 65% (Palmer, 2012). The quality purpose of Qantas is its goodwill in the business as the supplier of prompt quality air voyage facilities for its travellers.

Market Segmentation of the Airline Industry

Weakness: as per the shortcoming of Qantas, the significant shortcoming is essentially with regards to the decreasing execution level of the organization notwithstanding it has been the leader in the industry (Schultz, 2011). The study of the shortcoming of Qantas further demonstrates that the administration of the airways is not that proficient which has led to unsuccessful technique of the organization.

Opportunities: The key prospects accessible to Qantas are basically the capacities of the airline to knock the development areas which are there in the airways industry. The main real activity required with respect to Qantas is principally as to the modification to its systems/ policies in accomplishing the development opportunities.

Threats: Regarding the threats faced by Qantas, the key risk is the huge rivalry faced particularly from Virgin Australia in the regional market (Möller, 2012).

The economic components furthermore have a huge level of influence over the operational efficiency of Qantas since the declining financial implementation of the Australian economy has to influenced its operations. Concerning case, Australian market has been confronting recession which has led to adverse effects as the per capita earnings of folks has lowered extremely which has led to the decreasing demands for air facilities. Qantas has been badly affected by the lesser demands and it is noticeable in its decreasing profits all over the years and immense loss as dealt by the airways operational activities.

In the past eight years there has been higher and better facilities in terms of the rural flights by Qantas. These rural flights have gradually been extra renowned and utilised by clients. This service has high prospects and business looks forward to its expansion as this service gets popularity and the demand rises.

An examination of the market segmentation in terms of the airline industry shows that it is primarily segmented as per the per capita earnings of the explorers (Market Segmentation,2010). Like, the general population with higher pay can choose the top notch class air voyaging facilities as offered by Qantas, while individuals can likewise choose minimal cost of air facilities with Qantas. This recommends the operations for airline are segmented in view of first-class class air voyaging facilities and minimal cost models of operation (Matusik and Fitza, 2012).

Source: Solberg, 2012

This is an influential instrument in examination of the outer conditions affecting a firm, and it reviews the techniques in which a firm is impacted by outer surroundings as it faces them. The PESTLE investigation for Qantas is as under:

Analysis of Qantas

Political: The political constituents predominantly show the power of government on the business’ operations and in regard to Qantas; its investigation shows that the airline gets the impact of all the government deeds all over different districts. Taking an illustration, the airways gets affected by the political precariousness in the Middle East, and besides the political agitation in Bangkok has led to ways so that the country can produce adequate income from it.

Economic: The economic components highly affect the execution level of Qantas. This can be stated, because with decline of the Australian economy the performance of Qantas also fell due to less people using facilities.

Social: The social situations and blueprints as predominant within the airways business have hit the Qantas’ performances in a huge way. An investigation of the airline business exclusively proves that it has influence of social trending as pervasive inside it which recommends that clients give more approval to the minimal cost air voyaging facilities. This has changed the ways of working at the airways, such as, Qantas offers provision of first-class air voyaging facilities.

Technological: The mechanical and innovative elements have impact on the airways business since there have been drastic changes to the whole of booking methods. For the airline tickets, there is a dependency on web-based reservations. Qantas Airline also turned into the foremost group that has landed by means of satellite innovation which is dependent on universal landing outline.

Environmental: The ecological variables affect the airline sector because in the airlines, the managerial committees and experts have important controls for managing the environment- linked insufficiency in airline administrators. An audit of Qantas states that the airline has been aspiring to get the lessening in its pollutants and contaminated releases by half by 2050. Presently, 95% of the carbon traces via Qantas is principally as of its flying segment.

Legal: The legal component influences Qantas as in there is carbon charge caused by business operations, and this carbon charge (Taxation) infers the legalized procedure that should be followed and completed by the firm in successfully carrying out its tasks.

Qantas globally targets the clients in Asian area and South America areas. With an ambition for positioning the brand inside the client mind, the firm has worldwide goodwill branding representative John Travolta together with Miranda Kerr to ensure that the items become further unmistakable (Patel, 2011). Aside from that, Qantas has put extra efforts towards online networking by the social media such as Face book and the Twitter as the significant requirements for getting more and more travellers.

SWOT Analysis of Qantas

The business has been positioning itself through the focus on advantages of flying with Qantas and by providing better levels of Customer Service with clean and luxurious Airport Lounges. The business also offers the Frequent Flyer Program to its loyal clients. There have been various taglines used to attract the visitors like:

• “I Still Call Australia Home”
• “Seems impossible but it isn’t”

The use of Qantas webpage, social media, and advertisements on the televisions, printed media and other Medias lead to spread of information to people regarding the offerings by Qantas. It has been working in collaboration with the UNICEF, Australian Ballet, Opera Australia, Royal institute for blind and deaf children etc. Qantas have applied a lot of different marketing ways in the past 8 decades to make certain its high market share remains strong (Kalyanam and McIntyre, 2012).

Targeted income group for global client base

With the stated figures, it has been seen that, significant target market for the Qantas is average salaried people instead of low salaried ones. Other than that, organization is additionally focusing on the families and experts by means of utilizing different promotions and utilizing loyalty-based card for lifetime, for the benefits of regular fliers.

Qantas has high piece of the overall industry in the local airlines with 2nd ranking yet organization stands at the 11th rank in global areas. The number of worldwide travellers for big airlines in more yet organization is not ready to contest with the current airlines organizations.

Porter’s five forces model is particularly appropriate for the bigger firm and has globalized business which would supportive to examine the modern contenders and the current contenders alongside odds of penetrating into the airline market of Australia (Gummesson, 2014). As per this model, the competitive positioning of Qantas can be stated in terms of different countries. Yet the Porter’s five forces model does not focus on the factors which are apart from the competing aspects. It also ignores the non market influencers and this model is not suitable for complex market forms.

Talking about the openings and opportunities in markets in regard to airline industry, the present marketing strategies are not that effective as in there has been a fall being seen in the quantity of travellers in the course of the most recent years. This decline has unfavourably influenced the execution of airline businesses. In any case, the future hope regarding airline shows that it has great development prospects if the airline, for example, Qantas has great and well-built development techniques in its working. Qantas must discover why people concentrate on couple of organizations and how these organizations are recognized. Qantas carries out the targeting as per the demography. The targeted segments include the working class people as well as the people from upper society. The people who are from low- class can’t purchase the economical set of tickets too. Qantas has achieved a couple of repeating customers. However, it has been concentrating on the high class travellers. As per Qantas details (2016), the buying behaviour of customer and behaviours of clients towards the air ships are different measures which are kept in mind while formulating different strategies. Customers usually plan their voyages and chose the air-services as per the value they get for the prices paid. Customer behaviour has reliably been an essential unequivocal variable in regards to the success, growth or failing of an association. Customer look for legal, comfortable, safe and protected journey and all these aspects play a major role in the choice of client with respect to the carrier.

Conclusion

This report looks into the business performance of Qantas and its SWOT, PESTLE analysis. However it can be seen that the business has been losing its stand in the industry, only because of high competition it faces and the inefficient market situations which prevail in the industry. To deal with these issues, Qantas applies focussed and specialized marketing practices so that it can move towards the top of the ranking in the worldwide airlines businesses. Its approach on branding itself as Australian and focussing on customer service has been valuable for Qantas, and possibly it is the one which will go on. Even though Qantas experiences strong competition, still it has been a market leader and as a result of its positioning and promotion policy, will remain as “The Spirit of Australia”. 

References

Airlineratings.com, (2013). What is wrong with Qantas – and Australia? [online] Retrieved from: https://www.airlineratings.com/news/184/what-is-wrong-with-qantas-and-australia  Freed, J. (2016). Why Qantas is back in the black. The Sydney Morning Herald.

[online] Retrieved from: https://www.smh.com.au/business/aviation/the-five-reasons-qantas-is-back-in-the-black-20150224-13nbws.html Gummesson, E. (2014). Relationship Marketing as a Paradigm Shift: Some

Conclusions From the 30R Approach. Management Decision, 35(4), 267-272.

Kalyanam, K. and McIntyre, S. (2012). The E-Marketing Mix: A Contribution of the E-Tailing Wars. Working Paper, Leavey School of Business, Santa Clara University.

Market Segmentation, (2010). [online] [online] Retrieved from: https://www.wisegeek.org/what-is-market-segmentation.html 

Matusik, S. and Fitza, M. (2012). Diversification in the venture capital industry: leveraging knowledge under uncertainty. Strategic Management Journal, 33(4), 407-426.

Möller, K. (2012). The Marketing Mix Revisited: Towards the 21st Century Marketing by E. Constantinides. Journal of Marketing Management, 22(3), 439-450.

Palmer, A. (2012). Introduction to Marketing – Theory and Practice, UK: Oxford University Press.

Payne, A., and Pennie, F., (2015), “A Strategic Framework for Customer Relationship Management.” Journal of Marketing 69 (October), 167–76.

Qantas.com.au, (2014). Corporate Governance | Qantas [online] Retrieved from: https://www.qantas.com.au/travel/airlines/governance-structure/global/en Qantas details (2016). [online] Retrieved from: https://www.qantas.com.au/infodetail/about/FactFiles.pdf

Rosenberg, L. and Czepiel, J. (2012). A Marketing Approach to Consumer Retention. Journal of Consumer Marketing, 59, 58-70.

Schultz, D. E. (2011). Marketers: Bid Farewell To Strategy Based on Old 4Ps. Marketing News, 35(2), 7.

Solberg, C. A. (2012), “The perennial issue of adaptation or standardization of international marketing communication: Organizational contingencies and performance”, Journal of International Marketing,  vol. 10.

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