Macro Environmental Analysis of Qantas Airlines

This article discusses the macro environmental factors that impact the growth of Qantas Airlines, including political, technological, economic, and social factors. It also highlights the impact of competition and macroeconomic indicators such as GDP, inflation, interest rates, and unemployment data.

Macro
environment
analysis
Qantas Airline

Introduction
Qantas airways is a leading air carrier in Western Australia. The airline has been operational
since 1921. There are various micro as well as macro environmental factors that largely
determine the growth of any organization (Johnson, 2016). PEST analysis is a strategic
management tool that helps marketers in gaining a deeper insight about external factors
impacting the organization. This understanding is crucial in order to effectively battle industry
competition and build a sustainable business. The three important factors that impact the
business environment are policy changes, changes in government regulations and macro-
economic factors. The impact of these factors on Qantas Airlines are discussed below:
Political: Government of Australia had deregulated the airline industry in 1990. Since then
Qantas is operating as a private firm. This privatization led to the emergence of a large number
of competitors. For a sustainable growth of Qantas or any airline firm, global political scenario
becomes as important as local.
Technological: With the advent of technology and increasing use of internet, Qantas has been
able to reach out to customers through digital platforms (Felix, Rauschnabel & Hinsch, 2017).
Qantas has created its social media presence which has garnered the firm millions of customers.
This is the result of effective technology. Technology has assisted Qantas in providing customers
with quicker service and enabled effective operational management.
Economic: There are various economic factors too in the macro environment that impact the
performance of Qantas Airline. The improving economic state of the country has increased
purchasing power of people and hence improved their lifestyles. These improved lifestyles have
led to an increase in the frequency as well as the number of air travels by people. Australia
Tourism is also on a rise and hence this increases the number of tourists visiting Australia
annually. Hence resulting in improved number of customers for Qantas.
Social: Society at large has a direct impact on any business. Changing lifestyles of people have
allowed them to shift to air transport from road. People are always looking at ways to save time.
Qantas has also improved its offerings and interiors in order to match up to the changing

demands of its target market. Qantas offers premium services to customers. The changing
societal standards are in turn increasing the target market for Qantas.
Other Macro economic factors
Besides these political, social, technological and environmental factors, the increasing
competition in the industry also has a significant impact on Qantas Airlines. Effective evaluation
of macro environment also helps businesses in understanding changing customer needs. With
growing globalization, the airline industry is consistently growing as more people are travelling
to different parts of the world.
Various macroeconomic indicators including GDP, inflation, interest rates and unemployment
data also impact Qantas airlines. Increasing inflation leads to increased costs for the airline and
hence reduces their effectiveness. Inflation also leads to reduced buying power of customers. The
rising unemployment rate of Australia will adversely impact Qantas Airlines as it will eventually
reduce buying power of customers. The current rate of unemployment is 5.6% (Statista, 2018).
Conclusion and Summary
Businesses conduct macro environmental analysis in order to gain a deeper insight about the
industry in which they operate (Armstrong et. al., 2015). Qantas airlines has a strong government
backing even though it is run privately now. Australia is a developed economy where customers
have a strong buying power hence increasing Qantas’ customer base. There is a high level of
competition in the industry especially with several low cost airlines coming into the picture. The
advent of internet and growing technology as well as globalization in the have also positively
impacted Qantas airlines in a positive manner.

References
Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction.
Pearson Education. India.
Felix, R., Rauschnabel, P. A., & Hinsch, C. (2017). Elements of strategic social media
marketing: A holistic framework. Journal of Business Research, 70, 118-126.
Johnson, G. (2016). Exploring strategy: text and cases. Pearson Education. India.
Statista, (2018), ‘Australia Unemployment Rate’, Retrieved on
https://www.statista.com/statistics/263695/unemployment-rate-in-australia/