Qantas Sustainability Analysis

This assignment analyzes Qantas Airways' management practices, focusing on financial performance, social impact, and environmental sustainability. It proposes utilizing the Balanced Scorecard approach to address financial issues and measure social and environmental implications for improved overall growth. The analysis draws upon various academic sources and real-world data about Qantas.

Advanced Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
1. Section 300A of the corporation Act 2001.........................................................................1
2. Balanced scorecard approach to monitor managerial and divisional performances..........3
3. Social and environment issues related with Qantas...........................................................5
4: Outline the events that are leading up to the international financial crisis.........................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Advance management accounting is a concept which helps to sort out the plans and
strategies related to control business operations and management. This is one of the essential
aspect in terms of analysing the performance and management of operations. This units is
basically helps to analyse the key management aspects which are related with the operations and
management of organisation. This is mainly concerned about the decision making and strategic
planning process. This report is prepared to analyse the report to shareholder at every annual
general meeting. Section 300A of the corporation act 2001 for listed organisations are defined in
this context. Balanced score card approach is used to monitor managerial and divisional
performance. It clearly indicates towards analysing the scope of effective management and
leading services. “Qantas” airline industry is opted organisation to elaborate the dimensions of
advance management accounting (Wickramasinghe and Alawattage, 2012).
1. Section 300A of the corporation Act 2001
This section contains rules are legislations related to annual director's report. As per this
section there are some specific information remain essential in respect of presenting annual
reports. There are 14 main categories are considered in respect of presenting information in
terms of annual general meeting. There are some details included in Director's report such as;
 Dividends and distribution paid by organisation to members and partners
 Dividend declared for the year, paid and not paid
 Name of all the members, directors of the organisation, registered scheme
 Other optional details such as registered scheme, disclosing entity and person to whom
these are granted.
Qantas Airways is the flag carrier of Australia and largest airline by fleet size, this is an
international airline industry which is third oldest airline in the world. It was introduced in 1920.
there is a director's report was published in 30th June 2017 which contains following information
(Harrison and Lock, 2017).
Remuneration report
As per remuneration report of Qantas for the year 2016/17. Organisation retained
approach to base pay contributed during the year 2016/17. Base pay of the CEO remain
unchanged and 2 out of 5 other executive key management personnel gained 3% base pay
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increased. First base pay was increased in 2012 and then after Base pay didn't change for the
remaining 3 Executive KMPs.
Annual incentive plan outcomes for the year 2016/2017
As per above analysis it is seen that Qantas's scorecard outcome of 140% aligned to
strong business performance. As per the report it is analysed that the financial performance of
organisation is in optimum condition. One year's TSR was ranked at first in the ASX100.
STIP is considered as an annual incentive where executives of organisation get an award
which is considered as a combination of a cash bonus and an award with combination of a cash
bonus and an award restricted shares (Ward, 2012). That is STIP awards for 2016/2017 are
considered 20% lower that the year 2015/2016. it expanded the capital by deferred into shares
with a 2 year restriction period. Individual STIP awards are calculated by the following formula.
Base Pay x ‘Target’ Opportunity x STIP Scorecard Outcome x Individual Performance
Factor
The STIP Target opportunity divert by individual and is expressed as a percentage of
base pay. Results are found between 80% to 120%.
Performance measures that comprise 2016/17 STIP scorecard
There is an analysis done in respect of profitability of organisation. Implicit PBT is one
of the key performance measures in the STIP scorecard with 50% of the scorecard outcome
determined on the basis of measures. As per analysis of STIP scorecard outcome it was seen tha
the scorecard outcome was recorded as 140%. achievements are compared parallel to scorecard's
performance measures.
Long term incentive plan outcomes for 2016/2017
It is seen that the long term vision of the Qantas was centralised around 100% rights
vested due to superior TSR performance of +372% over the last 3 years. Qantas was ranked at 1st
in the ASX100 and 1st among the airline peer group. Number of rights was awarded under
2015/2017 LTIP was higher than standard (Shah, Malik and Malik, 2011). It was seen that the
price of shares of Qantas airline was recorded as $1.26 per share on 30th June 2017. Share price
growth was calculated as $4.46.
LTIP remain associated with upfront award of a certain number of rights. Number of
rights allocated is calculated as per following formula;
Base Pay x ‘Target’ Opportunity ÷ Fair Value of Right
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results are considered favourable when the percentage of base pay comes between 50% and
80% on a fair value.
Remuneration outcomes for the CEO in 2016/17
Base pay didn't change since 2011. annual incentive award was made at lower than
2015/17. it is seen that the financial and non financial performance of organisation is strong and
52% deferred from the last 2 year restriction.
2. Balanced scorecard approach to monitor managerial and divisional performances
In order to analyse the performance of any business organisation, it is necessary to make
use of balance scorecard's method. It is use an effective metric which is helpful for strategies
management in order to determine and make modification into internal functions of an
organisation as well as their generated from external outcomes. It assist to measure and deliver
crucial feedback to “Quntas” business organisation. Data gathered is more vital to provide
quantitative outcomes as the data collected in being analyse by managers and executive to make
appropriate decisions for an organisation (Chan, Wang and Raffoni, 2014).
The primary purpose of using balance scorecard's techniques is to reinforce positive
behaviour in an the company by isolating four different parts that are needed to be analyse in
effective manner. The primary aspect of using this is to attain objectives, measuring, initiatives
and aims that lead to generate more effective outcomes in near time. It is an strategies planning
management system that needs to be organise in effective manner. This seems to include:
 Communicate all essential aims and plans that they trying to accomplish in coming time.
 Align everyday work that everyone is operating with appropriate strategies.
 It is use to measure and monitor progress towards strategies target market.
The effective link that depends upon strategy among all components such as mission,
vision and core value of an organisation. There are various perspective which is helpful for an
organisation to monitor divisional and managerial performance of Qantas. Some of them are
discussed underneath:
Customer perspective: It is an essential aspects that is use by managers in case their
organisation is satisfying specific needs of customers. They need to determine their own
perception regarding companies overall performance and position (Vosselman, 2014).
Internal business perspective: It is primary requirement which is focus on those vital
internal department that enable them to satisfy customer needs and wants.
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Innovation and learning perspectives: It is an organisations total ability to innovate,
improve and ties directly to their value in an organisation. It is often more reliable aspect in case
of public sectors that use to analyse current position of the company.
Financial perspectives: It is said to be applicable to private sector, these are use to
measure essential focused on profit and market share of Qantas airlines. In case of public sector,
financial aspects use to measure the outcomes oriented to measure essential aspects of
government performances. In this company, all issues those are making huge impacts can leads
huge implication in overall growth and financial position of the company.
Development of BSC:
Lags Objectives Aims Indicators Initiatives
Financial
perspectives
To maximise
total sales and
eliminate overall
cost for costs.
There is an
increment of 15%
in total net sales
and 10% decrease
in operating costs
of expenditure.
It can be analyse
by using financial
statements.
All essential aspects
are needed to be
negotiated with
suppliers.
Customer
perspective
To analyse by
taking
references for
using variety of
services offer by
Qantas.
Maximum in
launching new
services in every
quarter by 15%.
It has been
analyse by taking
into account
launch of new
products as per
present quarter.
Formulating an
innovation committee.
Internal
process
perspectives
In the the role of
department is to
be able to
develop new
products
constantly.
Opening at least
some new services
to be their regular
customers.
This can be
analyse by using
project innovation
reports.
Attain specific tools
and techniques for
managing overall
services provided by
the company.
Learning and
growth
This need to
have high
It need to have at
least couple of
Total number of
responses are
Selection a passengers
the one which is
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perspective knowledgable
employees
regarding
delivering better
services to the
people.
professionals with
master degrees in
services
delivering.
needed to be
collected through
using appropriate
information from
various
passengers.
having master training
and hire some other
with a higher degree.
The financial crisis is generally think to believed to have begun in 2007 with the credit
crunches. During the loss of confidence by UK investors in the value of sub-prime mortgages
cause huge liquidity crisis in the departments. By 2008, the crisis had made worst impacts as
stock markets all around the globe that has become highly volatile. It has been seen that during
the time of crisis customers cannot be able to move around in any places by using air services. It
has been seen that most of them are go international in search of job. For this purpose, they use
to travel by using airline services. They need to connect with their people in order to make use of
air services. Because of financial crisis they are not being able to meet with their team, family or
any important services (Bifaretti and et. al., 2011). It has been found that Qantas was affected
badly during the time of crisis, the ticket prices went at higher rate because the fuel cost get
increased. The turnover of the company in 2008 was just about $15627 million, basically
decreased in 2009 to $14552 million. Because of financial crises they are having sever crisis, an
organization had decided to cut the cost of the company. There are certain aspects those are
taken care at the time of financial crisis. Some of them are:
 Reduction in total spending on fuel hedging.
 Protection of revenue from higher oil prices.
 Take maximum advantages of fuel efficiency.
3. Social and environment issues related with Qantas
There are various types of financial and non-financial issues that are arises in an
organisation. It can be said that an essential ways that affect the viability of a financial institution
and other customers. Environmental issues would be present themselves as temporary or
permanent modification as per the mentioned situations. Whereas social issues can emerge at the
workplace of a customers operations and can also be make impacts on overall surrounding at
social level (Evans, Burritt and Guthrie, 2013). As a company that are being around for 96
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years. Qantas which is used to looks at the big image in front of nations. It has been seen
economic and technological advance and responded through transforming and adopting their
own businesses. Nowadays, company is thinking about sustainability that define in simple terms
about increasing overall performance of an organisation. Its all about taking appropriate actions
to ensure huge success and growth in coming times. The “Qantas” has decided to make
appropriate plan for their sustainability, environmental and social initiatives. It is necessary to
make analysis of main key areas of focus, it covers all those areas as international aircraft and
fuel efficiency during the period of time. There are certain social issues that affecting the
performance of “Qantas” are mentioned underneath:
Obesity: It is said to be effective controversy all around the issues of airlines a
companies tightening their seat obligations for obese passengers. There are some companies
which is gone as far as to charge an overweight person the cost of two seats because of their
extra size (Tappura and et. al., 2015).
Security: It has been seen that Qantas has gone in the safety precaution as they take,
upping the stake in safety measures because of past terrorism attacks. While increase in security
should can cause some level in the minds of pilots, passengers and their families. It has been
increase the mental state and let-down with the total amount of time and attempt, it takes to get
from the airport ticket table to the terminal gates (Social Impacts, 2017).
Ethnicity: It is all about passengers perceptions which is major factors in order to deal
with the various people of different countries. It is mostly related with the air travel that has
much to do with perception of various people. Thus, the point of matter is that they have gone
continuously to the ethnicity of passengers those are moving on a specific air planes.
Environmental issues:
There are certain implication those are related with the aviation sectors which occur
because of aircraft engines emit heat and gases which contributed to global warming. There are
some other issues those are making huge impacts on environment. Some of them are discussed
underneath:
Climate changes: Such as all necessary activities that consists of combustion. It has been
seen that plenty of carbon dioxide( C02) and other greenhouse gases into the atmosphere. These
are mainly concern with highlighted by present volume of technical aviations and rate of growth.
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At the global level, 8.3 million people are flying daily. Airlines alone burned almost 16.2 billion
gallons of fuel in an accounting period.
Continual increase in travel and freight: There are plenty of passengers kilometres
increase with 5.2% per year. During the first three quarter, air travel market expanded at an
annualised rate methods are 10%. but this is still in line with long operations rate of traffic rate
seen in historical manner. Air freight reached at a new level but, certain end of stock restocking
activities, capacity that have slipped back to settle at common level.
Reducing air travel: It has been observed that travel explore regarding how travel makes
impacts in everyday in present life scenario. In an informal research project which provide huge
information about reduction of travel in air so that environment cannot get much affected
because of their continuous moving (Beams, Brozovsky and Shoulders, 2017).
There are various measure Qantas is uses in order to deal with all kind of issues those are
affecting the overall profitability of an organisation. It is essential to provide more conformable
services and facilities to passengers so that they get motivated to travel more freely. By the help
of pure petrol they can use to control impacts on environment.
Accounting to the mentioned report of Qantas, it has been seen that there are ultimate
goal of our transformation which ensure the better sustainability for the company. They are
continuously making investments in promoting Australian tourism that indicate suppliers and
speak up on their critical issues that goes to increase overall profitability for an organization.
4: Outline the events that are leading up to the international financial crisis
It has been seen that financial crisis are arises because banks are not able to create too
much wealth, too speedily and can use it to make up house prices and suppose into financial
markets. In that particular period of time, lending of huge sum of money into the airlines prices
along with personal debts are taken into consideration. The global financial crisis has bring wide
range of modification in the consumer spending attitude and behaviour and overall consumption
rate. In order to analyse their implication, they has decided to make identification of some effects
that are seen after the financial crisis. Such as advantage of taking fuel efficiencies has increase
drastically. While certain reform in airport rule and regulation are analyse effectively during the
period of time.
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CONCLUSION
From this particular project, it has been concluded that management of all necessary data
of Qantas can needs to be analyse in effective manner. This project purpose is to attain their
overall growth and sustainability that are seen on the basis of their financial position. By the help
of balance scorecard's approach certain financial issues can be resolve by the company in more
quick manner. Implication related with social and environment can be analyse by using
appropriate measure in accordance to increase overall growth for the company.
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REFERENCES
Books and journals:
Ates, A. and et. al., 2013. The development of SME managerial practice for effective
performance management. Journal of Small Business and Enterprise Development.
20(1). pp.28-54.
Beams, F. A., Brozovsky, J. A. and Shoulders, C. D., 2017. Advanced accounting. Pearson.
Bifaretti, S. and et. al., 2011. Advanced power electronic conversion and control system for
universal and flexible power management. IEEE Transactions on Smart Grid. 2(2).
pp.231-243.
Chan, H. K., Wang, X. and Raffoni, A., 2014. An integrated approach for green design: Life-
cycle, fuzzy AHP and environmental management accounting. The British Accounting
Review. 46(4). pp.344-360.
Evans, E. E., Burritt, R. and Guthrie, J., 2013. The Virtual University: Impact on Australian
Accounting and Business Education.
Harrison, F. and Lock, D., 2017. Advanced project management: a structured approach.
Routledge.
Shah, H., Malik, A. and Malik, M. S., 2011. Strategic Management Accounting-A Messiah For
Management Accounting?. Australian Journal of Business and Management Research.
1(4). p.1.
Tappura, S. and et. al., 2015. A management accounting perspective on safety. Safety science.
71. pp.151-159.
Vosselman, E., 2014. The ‘performativity thesis’ and its critics: Towards a relational ontology of
management accounting. Accounting and Business Research. 44(2). pp.181-203.
Ward, K., 2012. Strategic management accounting. Routledge.
Wickramasinghe, D. and Alawattage, C., 2012. Management accounting change: approaches
and perspectives. Routledge.
Online
Social Impacts. 2017.[Online]Available
Through:<https://sites.google.com/a/cornell.edu/sustainable-solutions-for-the-aviation-
industry/airline-industry/social-impacts>.
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