Qantas International: Analysis of the External Environment

Qantas capitalized on by increasing its domestic share of the market from 55% to approximately 80%. Qantas management had effectively filled the gap left by Ansett by moving planes from the depressed international routes to the company’s expanded domestic market and by leasing planes from overseas to expand its aircraft fleet by

7. Current Competitors: “The Company faces competing service from at least one, and sometimes more than one, domestic airline including: Alaska Airlines (Alaska), Delta Air Lines (Delta), Frontier Airlines, JetBlue Airways (JetBlue), Hawaiian Airlines, Southwest Airlines (Southwest) and AirTran Airways (Air Tran)”

In the local region, Qantas managed to outweigh its competitor by gaining a toll of 65% compared to its competitor. Evidently this shows Qantas is the number one preferred airlines compared to other competitor airlines like Virgin, Tiger Airways and Emirates airlines. However the situation is not the same in South East Asian region as Qantas only managed to obtain about 15% of market share compared to likes of Air Asia who leads the market share with 60% in this region. Conversely, this is not a concern for the airlines as the airlines managed to generate revenue of 5 billion dollars, with a predicted passenger growth of 4.9% which is equivalent to 2.9 billion passengers by 2034.

Already JetStar, Tiger, Air Asia, Virgin Blue, for example, are low-cost airlines and are established in the Australian domestic market. This creates the need to differentiate to survive.

This report largely focuses on constructing a situational analysis of Qantas Airlines. An organisations situational analysis refers to an analysis that consists of ascertaining the key factors that will be used as a basis for development of marketing strategy. (Elliot 2014). Situational analysis consists of the environment analysis (both internal and external environment), competitor’s analysis and finally the swot analysis.

Domestic market Virgin Australia, including Tiger Australia (Virgin owns 60% of Tiger now), occupies 35% of the domestic market share in Australia, and its major competitor Qantas, including its subsidiary Jetstar, accounts for a majority of 61% of the domestic market share in January 2014.Qantas (QF) has grown by 18% over 5 years (Jan 2008 vs. Jan 2014) while Virgin Australia

With only a few large companies across the globe (Boeing, MD, and Airbus), the commercial aircraft industry essentially exhibits the qualities of an oligopolistic competition with intense rivalry. Here is an analysis of competition in the commercial aircraft business using Porter’s Five Forces.

The number of rivals that Air Canada would have would depend on the location of the airports. The major competitors for Air Canada are American Airlines Group, Delta Air Lines, WestJet Airlines, and Porter Airlines. The quality of these other airlines depends on each of their planes, some of Delta Air Lines planes are a lot bigger so they can offer a lot more than Air Canada. Air Canada offers a lot of services as they have a lot of flights that fly from city to city in Canada unlike Delta or American air lines. Air Canada competes a lot with WestJet and Porter airlines in Canada. Rivalry is more intense at bigger airports around Canada. For example, Charlottetown only has three different airlines that currently fly here every week. Where in Toronto they experience a lot more air traffic so more airlines can offer better deals to fly somewhere from Toronto to anywhere in the world where Charlottetown. If people in Charlottetown can find a better flight from Moncton or Halifax they might

At the moment Australian passenger airline industry is dominated by thee large domestic carriers: Quantas, Jetstar and Virgin Blue.

Australis’s largest Airline, Qantas, serves both international and domestic air flights, has over 8200 flights every week with 33,600 employees and 8 million

Global airline alliances in another issue included in Virgin’s external environment. Alliances benefit airlines in many ways as they enable them more market access, convergence of technologies and even help overcome legal barriers (Anon., 2009). One weakness for Virgin therefore is not being part of an alliance such as Oneworld Alliance (Anon., 2009), in order to take full advantage of its potential Virgin should look into adjusting their market strategy and look into joining an alliance, if not form its own.

Through s Porters Five Forces analysis (Figure 1 – Appendices) the greatest threat for Qantas is the rivalry. Qantas is taking advantage of this opportunity as through the alliance it creates greater certainty for the shareholders while also being able to increase its numbers in international routes to 33 one-stop destinations in Europe in addition to 31 one-stop destinations in the Middle East and North Africa (Ryan, 2012). Additionally, as competition was putting pressure on the market while Qantas was restricted by financial reasons, this alliance came as a great opportunity. Furthermore, from 31st of March Qantas frequent flier point users were able to book Emirates flights while the customers’ high status with Qantas was recognized at Emirates as well. Lastly, on European, Asian and African destinations Qantas mirrored Emirates baggage policies (from 20kg to 30kg) (Panaus Travel, 2013).

Competitive rivalry: Airline industry can be characterized as imperfect oligopoly. There are several big airlines that dominate in long-distance flights and several smaller airlines compete for short-distance flights. The competition and price sensitive buyers lower the returns airlines receive. This market situation is favorable for a company like JetBlue, which differentiated itself by comfort at low price, but this can be easily duplicated by other companies.

With regards to competition within the industry, British Airways' position is strong, even though competition if very strong in the short route sector due to a larger number of smaller competitors and the consolidation of certain competitors. Over time, in the long route sector there is very little difference in prices between the company and its competitors.

Launched just 8 years ago, today, the Jetstar Group consists of a network of value-based air carriers that deliver high quality air passenger services for budget-minded travelers across Australia, New Zealand and the Asia Pacific region. Beginning with just 400 employees, the company currently employs more than 7,000 people and carries about 20 million passengers a year. To gain some insights into how the Jetstar Group achieved this impressive growth in such a short amount of time, this paper provides a review of the relevant literature concerning the air passenger industry in general and the business strategy used by the Jetstar Group in particular. A summary of the research and recommendations for this company are provided in the paper's conclusion.