Impact of Covid-19 on Sustainability of Qantas Group and Virgin Australia

This report analyses and compares the disclosures related to the impact of Covid-19 on the sustainability of Qantas Group and Virgin Australia. The report evaluates the financial and non-financial impact of the pandemic on both companies and discusses their sustainability strategies.

Analyse and compare
the disclosures related
to the impact of
COVID-19

ABSTRACT
This research has been carried out the evaluate the sustainability of the aviation industry due to
covid 19 pandemic and this report shows the impact on sustainability of the Qantas and virgin
Australia. The data that has been used to carry out the research is secondary data using the online
sources, articles, books and journal and so on. The main purpose of this research is to judge the
impact in terms of financial and non-financial impact on both the business group as they are
affected the most and not getting the sales as much as expected due to pandemic.

Contents
ABSTRACT....................................................................................................................................2
INTRODUCTION...........................................................................................................................4
Overview of the topic..................................................................................................................4
Research Aim...............................................................................................................................5
Research Objectives.....................................................................................................................5
Background......................................................................................................................................5
Methods...........................................................................................................................................7
Results..............................................................................................................................................7
Discussion........................................................................................................................................9
Conclusion.......................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Overview of the topic
The research study contains of the analyses of the disclosure that re made by two companies the
Qantas Group and Virgin Australia considering the report of CSR and sustainability. The
sustainability report is issued by the companies for enhancing its decision – making process
which could lead to reduction in the risk across the supply chain management of the
organisation. Through, it the performance of the corporations could be analysed by considering
the parameters related to social, environmental, and governance. It helps in handing the risk
problems and gives many future opportunities to the potential stakeholders (Adžić and Al-
Mansour, 2021).
The below research will be done for finding out the impact of Covid – 19 on the companies
related to the aviation industry. The impact on this industry will be huge, because most of the
business were shut and the lockdown was declared in almost all the parts of the world. This
could have been hampered the sustainable position of the organisation in an adverse way.
Because the companies were not being able to generate sales revenue in the shutdown periods
which impacted the profitability and well as the efficiency of working. The borders across the
countries were closed due to the public restrictions and has also lead to increase in the social and
economic toll prices.
The research is being conducted to know and analyse about the disruption that has
happened due to Covid in the aviation industry and not this has impact the environmental
positions of the industry. After the impact of Covid and now the improved situation, it has
positively dealt with company up and generating more profits for the industry globally. This will
significant help in fulfilling the environmental obligations that are suffered by the airlines
industry (Benita, 2021).
The topic that has been chosen holds the important of identifying the areas of sustainability
and the after effects of Covid – 19 on the aviation industry of two company names Virgin
Australia and Qantas Group. This will also lead to satisfy the results that are faced by the
industry due to pandemic situation.

Research Aim
The impact of Covid - 19 sustainability performance of two aviation companies of Qantas Group
and Virgin Australia.
Research Objectives
1. To analyse the concept of sustainability in the aviation industry due to Covid – 19.
2. To give a comparative analysis on the sustainable performance of Qantas Group and
Virgin Australia.
3. To evaluate the impact of Covid – 19 on Qantas Group and Virgin Australia on
sustainability.
Background
To analyse the concept of sustainability in the aviation industry due to Covid – 19.
At the time of pandemic, the airlines of Australia create a hope that domestic stage can
retrieve in spite of the challenges of Covid -19 Omicron variant. The current report of Australia
shows that the industry aviation has collect over $4 billion in losses over the last year, but the
vast favourable situation occurred in recent years show the performance which effect the
industry due to covid -19 and also the border closures. It forecasting that these have to face a
very difficult situation if Australian government not receive any funding to help aviation industry
because of pandemic. It also not clear that the pandemic and other more future variants will also
impact upon the financial retrieve of the aviation industry globally. Country need to face various
of challenges like decrement in funding and irregularity. It also faces difficulty in long time
sustainability objectives. In December 2021 government of Australia allow an aviation retrieve
framework to make plan for removing that challenges and support the aviation industry for the
recovery of loss in the next three years. This framework mainly focusses on remote areas and
also the general aviation industry (Bhutiani and Jaykrishna, 2021).
To give a comparative analysis on the sustainable performance of Qantas Group and Virgin
Australia

According to Gayan Samarakoon, (2018), the aircraft operations in Australia’s is
schedules and the routes for the flights are fixed so that no clash could happen and could help in
preventing the casualties. This is very important criteria to be fulfilled and proper measures
should be taken in order to make a sustainable growth for the industry. The sustainability of the
companies could be measure through its annual report and the estimates of the growth will be
done through the sales revenue.
From the annual reports of the Qantas Group, it could be analysed that sustainability is an
important measure for both the companies. Due to the pandemic now the organisations ensures
that the company form a sustainable environment for itself. For this a vital strategy for the
customers and shareholders are formed. The crisis of Covid – 19 has compelled the Qantas group
to change the way they were handling the thinks and lead the easy to have a sustainable growth
in the aviation industry by reducing the initiatives and declining the waste through emissions.
For this the Qantas Group is reviewing the strategy of waste and ensuring the sustainability for
its recovery. For example, it has removed approximately 80 million usage of plastic from its
service which comes under the corporate social responsibility. In September, 2021 it has started
with the cutlery services and has removed the usage of plastic straws and non – compostable hot
cups. Also the sustainable aviation fuel has been imposed and has been aimed at the zero
emission till the year 2050. For this, the company is determined to expand its business by
entering in the strategic partnership for zero ambitions. Due to the impact of Covid – 19, the zero
use of plastics has been aimed by the company by the year 2027. The general waste to landfill by
2030. The ongoing sustainability of the business is to ensure the risk which has been raised due
to the Covid – 19. The recovery plan for the cost restructuring benefit should be delivered and
the costs of it is approximately $ 650 million (Busareddy, 2021).
The sustainability report of Virgin Australia, reports that the after – tax profit for the
fiscal year of June, 2021 of $ 3.7 billion. This would be a surprise for the enthusiasts of aviation
industry based on the profitability situation of last year in comparison.
To evaluate the impact of Covid – 19 on Qantas Group and Virgin Australia on sustainability.
As per the view point presented by Yahua Zhang, (2021), the restructuring of the
organisation finds that the measures for control has been taken for returning the profitability of
year 2021 after the impact of covid – 19. The federal government contains the request for the

assistance of the industry for the company which has been fair to the Qantas Group as well as for
Virgin Australia. The organisation of Virgin Australia does not hold much of the major
shareholders, which in turn lead it to find the financial difficulty. On the other hand, the Qantas
Group has been doing well has find the approach to modify and amend its problems and
challenges which were faced by the company in the time of Covid pandemic. The failure was
mainly suffered by the corporation Virgin Australia because it led to mismanagement of for the
long – standing of the company (Hydzik and Sobolewski, 2021).
Methods
The research methodology is the method which is to be used by the researcher so that they
can collect, analyse and manage the information and data in a systematic manner. This would
help in providing the selected data according to their suitability and applicability in the research
area. Research philosophy in the belief in which the data is to be collected, gathered and used
accordingly. There are two methods to be carried out in the research philosophy that is
Interpretivism and Positivism. Research approach is the plan which consist of steps regarding the
broad assumptions which detailed the method of data collection, analysis and interpretation there
under. There are following kind of approaches that is Inductive and Deductive. In inductive
approach there is no theory to test or there has been small research involved in it. Where as in
case of deductive, the existing theory has been tested and without the theory such research shall
not be completed. This research shall consist of qualitative data which are being carried out so
that research aims and objectives can be fulfilled. To carry out the research the secondary data
has been used to complete the research. The secondary research has been carried out using the
secondary data which involves conducting literature review from the online sources. In primary
research the data has been collected on the basis of questionnaire amongst the group of people
(Jamir, 2020).
Results
The transportation that has been made through air represents a little share to the GDP of the
country but they are related to other sectors also which are airports and aircraft manufacturing
sector as they are key enabler relating to other economic activities. Due to covid 19, there is a

huge drop in the demand of air passenger because the containment measures affect both the air
transport sector and other aviation industry as many of the employee’s jobs are on stake due to
such pandemic. Such sector has been on red mark by the government and their policies but due
to such crises has caused new suite of loans, guaranteed towards the loan, subsidiaries, concern
about enhanced competition (Kumar and et.al., 2021). Due to covid 19 the aviation industry
requires the sustainable trajectory and government will generate various measures to support the
sector. The air transport sector represents only a small share of OCED countries value added but
yet it plays the vital role for lower and upper sector which makes them important part of the
economy. Due to pandemic the maximum impact has been made on aviation industry as flight s
are being stopped completely nationally and internationally which them very difficult for the
sector to meet out their operational expenses relating to aircrafts. The aircraft manufactures are
highly dependent on the demand of air transport sector, directly or through leasing companies.
The Qantas group and virgin Australia are being the two major airlines groups of the
Australia which suggest that their domestic growth strategies are incompatible. In order to grow
their business, the both giant need to pursue their strategy but it does not mean that every new
flight the virgin puts into the market are being slapped by Qantas. They both are having low
profile but their markets yield is being higher that makes their business running their business.
Virgin is working on the low cost carrier and has achieved almost 10% of the share towards the
government and corporate traffic by making the changes in product changes and their investment
also. The market of the virgin has been enhanced after the CEO John borghetti marks two years
in the business. After the introduction of proper business class, the monopoly of the Qantas
comes to and end and they increase their revenue on the existing flights without increasing their
capacity. The market share the virgin has been maintaining around 17% which helps them in
achieving their goals (Naiem and Al, 2021).
The impact on the covid 19 has been adverse on some of the airlines as they disappear from
the business. The government around the world has been supported the industry in the form of
tax relief, loans to meet their fixed cost etc. At the time of pandemic, the borders of the Australia
have shutting down in the late march of 2020. Virgin Australia having the first casualty towards
travel restrictions. Such company ran out of cash reserves and they had made the request for
$1.40 billion which are rejected by the Australian government. The Qantas has also opposed the
assistance that has been given by the government as they are claiming that this is the tough time

to survive as they do not want to the bailout this time Qantas revenue has been three times higher
than the virgin which is $4.20 billion so that they can level the playing field. The virgin business
has been hampered and they have with not choice and their board has made the decision to enter
into voluntary administration on 20/04/2020 and they have announced to move on 21/04/2020.
The company has been focusing on attempted to tap up their major shareholders group such as
Etihad airways, Singapore airlines etc. who normally own 90 % of the airlines and they are not
interested to come up in front for the more funding which was required on the scale. Virgin has
been for the federal bank for several bank and aske AUD 1.40 billion loan to sustain their
business. However, they have declined the request as they were indulged in virgin bailout. Both
the company has sustained their business on the very tough note during the covid 19 pandemic as
their fixed cost is higher in the aviation industry and revenues are not being emerging as the very
past pace (Okulicz and Rutkowska, 2020).
Discussion
On the basis of the above analysis the discussion has been made that it is important for the
business to sustain their model by making changes according to the market condition. Both the
airlines have been facing tough times as pandemic affect many businesses and sector globally.
Aviation industry has affected because of the consumer are afraid of travelling around the world
and most important in the restriction that has been imposed by the government of Australia.
Qantas and virgin Australia has survived their business by working towards low cost model so
that their operational cost could be recovered. The above analysis has shown that revenue is
being hampered completely makes shortcake of funds and both the airlines are need of resources
in the form of loans from the banks as they are able to generate sufficient return from the
business (Oxford Analytica, 2020).
Conclusion
This research has been carried out to analyse the impact of covid 19 on the aviation industry
and to carry out such research the secondary data has been used which is online sources. The
comparative analysis has been done between Qantas and virgin Australia that how their business
has been hampered in such phase and what measures they have taken place to mitigate the effects

for the same to bring their business at the normal scale. The company has been affected by the
Covid 19 to which it is recommended that it must come up with some effective policies and rules
so that it can help them in sustaining their existing market share in the aviation industry and also
to make improvements in its existing practise so that it can implement its strategy in an efficient
manner. In this research paper the concept of sustainability has been measured considering the
impact of covid 19 on the aviation industry. After addressing the above case the comparative
analysis has been carried out regarding the performance of Qantas group and virgin Australia in
such a down phase. At last the impact of covid 19 on Qantas group and virgin group towards
sustainability has been evaluated that how they survived such as tough phase. The further
suggestion that could be made to other researcher is that to make further research they need to
make sure that consider other factor too that affect the aviation business.

REFERENCES
Books and Journals
Adžić, S. and Al-Mansour, J., 2021. The Negative Impact of Covid-19 on Firms: I
Benita, F., 2021. Human mobility behavior in COVID-19: A systematic literature review and
bibliometric analysis. Sustainable Cities and Society, 70, p.102916.
Bhutiani, S. and Jaykrishna, M.D., 2021. THE COVID-19 SCARE AND AIR TRAVEL:
EXPLORING PASSENGERS'CONCERNS AND ATTITUDES. Academy of Strategic
Management Journal, 20, pp.1-7.
Busareddy, M., 2021. Forecasting Passenger Demand and Estimating the Impact of the COVID
19 on US Air Transport Passenger Demand using Intervention Analysis (Doctoral
dissertation, State University of New York at Buffalo).
Hydzik, P., Nycz, M. and Sobolewski, M., 2021. An Estimation of the Number of Lost Airport
Passenger Services as a Result of the Covid-19 Pandemic in Poland. European
Research Studies Journal, 24(4), pp.753-762.
Jamir, I., 2020. Forecasting Potential Impact of COVID-19 Outbreak on India's GDP Using
ARIMA Model. Available at SSRN 3613724.
Kumar, R. and et.al., 2021. Study of social and geographical factors affecting the spread of
COVID-19 in Ethiopia. Journal of Statistics and Management Systems, 24(1), pp.99-
113.
Naiem, M. and Al, A., 2021. Impacts of COVID-19 Pandemic on Tourism & Hospitality
Industry in Bangladesh. Impacts of COVID-19 Pandemic on Tourism & Hospitality
Industry in Bangladesh (April 28, 2021).
Okulicz, M. and Rutkowska, P., 2020, October. The Impact of Covid-19 on Airport Operations.
In International Scientific Conference on Air Traffic Engineering (pp. 86-105).
Springer, Cham.
Oxford Analytica, 2020. COVID-19 global climate impact may be brief. Emerald Expert
Briefings, (oxan-db).
Scott, B.I., 2020. National aviation law responses to COVID-19. Air and Space Law, 45(Special
issue).
Suk, M. and Kim, W., 2021. COVID-19 and the airline industry: crisis management and
resilience. Tourism Review.
Sustainability at Qantas, 2021 [Online] Available through <https://www.qantas.com/au/en/about-
us/our-company/in-the-community/sustainability-at-qantas.html>
COVID-19 and bailout policy: The case of Virgin Australia, 2021 [Online] Available through
<https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8479560/>