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Qantas Airlines: A Case Study Analysis Why Has Qantas Been So Successful?

2637 words - 11 pages

1Profile of QantasThe Qantas Group has a long history in the Australian airline industry. It began its operations in 1920 as the second oldest airline in the world. Passenger and mail services started in 1920. When the Australian Government bought Qantas in 1947 to operate as the nation's flag carrier, Qantas was restricted to flying only internationally, while the domestic market was heavily regulated.After deregulation of the industry in the early 1990's, Qantas was able to re-enter the domestic market in Australia.Through continual restructuring and reorganisation, the Qantas Group is changing to reflect the demands of the market and keep the business profitable by generating revenue from various business areas. As well as operating the core flying business, Qantas operates a number of profitable subsidiaries to support the airline.The core flying business of the Qantas Group includes Qantas, for the business and full service economy traveller, QantasLink, for the regional flyer, Australian Airlines, for the leisure market in Asia and Jetstar, for the low-budget traveler. Qantas operates carriers to cater for various segments in the market, rather than concentrating on one brand to appeal to many.It has also been announced that Jetstar International will begin operations late 2006, with flights to start in major cities in Asia. This carrier will replace Australian Airlines and will extend the domestic Jetstar network in Australia (Media release, Jetstar Web site).Qantas also operates Flying Services Businesses and airline-related businesses. The Flying Services Businesses consists of the Qantas Engineering Technical Operations and Maintenance Services (ETOMS), one of the largest aircraft engineering and maintenance organisations in Asia-Pacific (Galvin, P., & Twyonials, S., 2005). Airports and Catering are also successful subsidiaries.Associated airline businesses include Qantas Freight, including a joint venture with Australia Post, the wholesale holiday sales groups of Qantas Holidays and Viva Holidays and Qantas Defence Services, the aircraft maintenance group for the Defence force.The current leaders of the airline are Geoff Dixon, Chief Executive Officer and Managing Director since 2001, Peter Gregg, Chief Financial Officer and Margaret Jackson, Chairman. There are also a number of Independent Non-Executives including James Packer and General Peter Cosgrove.The Qantas Group is successful and profitable, posting reports of after tax profit for 11 years. The last financial year 2004/2005 generated $1027.2 million before tax, $763.6 million after tax.2Qantas's External Environment2.1The Industry environmentThe five forces model, (Porter, in Hill, Jones & Galvin 2004) is a framework to analyse competitive forces in an industry environment. These forces are: the threat of new entrants; the degree of rivalry between companies in the industry; the bargaining power of buyers and suppliers; and the threat of substitute products (Hill et...

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