Analysis of Qantas Airlines: Market Position and Competitive Analysis

This report analyzes and evaluates the recent market position of Qantas Airlines and the airline industry using Porter's five forces model, SWOT Analysis, and PESTLE Analysis. It examines opportunities in the external market and strengths in the air travel industry.

MARKETING

Executive summary
This report analyses and evaluates the recent market position of the Airline Company
“Qantas” and the airline industry too. In order to evaluate and assess the organisation’s
internal and external situation with the application of Porter`s five forces model, SWOT
Analysis, and PESTLE Analysis. This report leads to examine the opportunities in the
external market and strengths in the air travel industry. Apart from this, this content will
emphasis on given capabilities and definite resources, which will permit to get great
competitive benefit above the other competitors with the use of SWOT analysis.

Contents
Executive summary....................................................................................................................1
Introduction................................................................................................................................3
Qantas Airlines...........................................................................................................................3
SWOT Analysis.........................................................................................................................3
Competitive Analysis.................................................................................................................5
PESTLE Analysis.......................................................................................................................5
Conclusion..................................................................................................................................7

Introduction
This report will bring a discussion on environmental analysis on airline company “Qantas.”
The company has been named Queensland and Northern Territory Aerial Services that has
grown to developed as one of the Australia`s major international and national airline and also
the strong brand in Australia. The report would undertake to analyse aviation industry with
the aid of PESTLE Analysis in order to recognize the environmental influences such as
economic, political, environmental, social, legal, and technological factors. Some of the top
future trending and needs for the change can be seen from the analytical tools. For the
competition analysis, the report has undertaken the analysis of both emerging and recent
airlines so that it can check the environment of the rivalry as confronted by the corporation.
Qantas Airlines
Qantas is an authorized airline as main competitor of the Australia. The flag hauler of
Australia Qantas regulates its flights from Australia to almost top 85 global journey's end
with a fleet extent of nearly 124 airplanes (Qantas, 2018). It accounts to provide air-travelling
services to the customers by operating at both domestic and international market where
Qantas account for significant market share in the Airline industry (Qantas, 2018). Qantas has
been great market leader with more than 65 percent of the market share. The airline was
established in 1920 and it is among the world`s eldest carriers and experienced too (Qantas,
2018). The company operates few subsidiaries such as Qantas freight, Jetstar, Qantas
holidays, and Qantas link. The company hires nearly 30000 people of which 93 percent of the
local Australians that make it one of the nation`s largest employee base organisation (Qantas,
2018).

SWOT Analysis
Strengths
Consistent and continuous progression- Qantas Airlines has been operating since 1920 and
also it is one of world`s ancient carriers The growth and revenue inflow is continuous and
consistent (Ervural, Zaim, Demirel, Aydin, & Delen, 2018).
Transformation programs- The airline has been facing stiff competition in the global travel
from various corporations such as Air India, Etihad Airways, Malaysia Airways, Singapore
Airways, and British Airways (Racz, Fozer, Nagy, Toth, Haaz, Tarjani, & Deak, 2018). In
order to overcome competition threat, organisation has introduced new program named as
Qantas transformational program that aims to improve the service quality and also
maintaining at the low cost. The program is able to deliver $374 million in regards to benefits
that prove for the great success (Gürel, & Tat, 2017).
Surge in domestic business- One of the surging in the domestic business, its closest
competitor named as Virgin Australia has not movingly increased its capability so as a result
SWOT
Opportunities
Low fuel prices
Business travel
Strengths
Consistent growth
Excelled services
surging the domestic business
Threats
high competition at the internaitonal
level
Cost management
Weaknesses
fall in profits in regards to the
internaitonal flights
union problems

Qantas has achieved as increased in its domestic corporate. This means that the airline will
fill up additional seats and lead to upsurge the revenues from the Australian marketplace that
in opportunity will reflect at international level.
Great service quality- Qantas is well recognized for its qualified services. Some of facilities
comprise SMS check-in for the travellers, prolonged in-flight entertaining, revitalised lunch,
customised meals, and beverages options for the low-cost class and consistent investment in
improving the superiority of the airport services (Noe, Hollenbeck, Gerhart, & Wright, 2017).
Weaknesses
Unity issues- same like the Qantas Airlines, many of the Australian face the problem of
unionisation. The organisation continuously strive for perpetual struggle in order to negotiate
with the unions (Laseter, Hammer, Laseter, & Metz, 2017).
Low profits from the international flights- Qantas has emerged as official flag transporter of
the nation, Qantas is facing huge pressure in the operation of international flights. The
company is unable to encounter huge profits and break even in relation to the international
context (Singh, 2016).
Directorates- Recently, the company have obvious to presentation a direct journey from
Australia to Europe. Qantas has been facing challenges while operating huge distance flights
in terms of corresponding the effectiveness and the related mandate with the help of
appropriate pricing strategy (Laseter, Hammer, Laseter, & Metz, 2017).
Threats
High level of competition- Qantas faces huge level of competition especially at the
international level from American Airlines, British Airways, Malaysia Airways, and
Singapore Airways (Ngai, Lam, Poon, Shen, & Moon, 2016).

Cost management- one of the most serious threat to the airline is the rapid instability and
shifting of fuel cost and the maintenance to uplift their fleets. Qantas has been struggling to
balance the pricing in order to ensure that the costs will be covered efficiently (Ngai, Lam,
Poon, Shen, & Moon, 2016).
Opportunities
Low pricing fuel- From the government reports, it has been seen that the oil prices have
halved in the last 2015 resulting into financial benefit of nearly $33 million that has affected
the cost in an positive way. Apart from this, the depreciation costs have lowered and the
carbon tax is removed every positive created opportunities for the airline company (Rahman,
Azad, & Mostari, 2015).
Business travelling- There is a penetration in corporate travel particularly when the amount of
travellers in both business and economy class has increased (Rahman, Azad, & Mostari,
2015). This has led to creation of scope for increased revenue from both economy and
corporate class, which has better the frequency of travelling for pleasure and comfort
(Rahman, Azad, & Mostari, 2015).
Competitive Analysis
Competitive rivalry in the airline company have been pacing up through acquisition,
subsidiaries, and mergers. Qantas has established its low costing airline Jetstar in year 2003
by creating the two-brand strategy (Aithal, 2016). By establishing two major brands, Qantas
has become able to evaluate variety of marketplace chances and finally deploy best produce
while suiting the best opportunity and target marketplace for specific market conditions that
will finally provide a competitive advantage (Aithal, 2016). Several emerging paths of Qantas
such as British Airways, Malaysia Airways, and Singapore Airlines. Current situation
indicates Qantas has been competing with the virgin Airline in the local market. Competition

has always remained at extreme level airline that are suffering from huge losses (Aithal,
2016).
PESTLE Analysis
Political factors- Some of the aspects affecting the corporate are political stability, level of
corruption, several trade regulations in relation to transportation, Anti-trust laws, several
pricing policies, legal framework and the risk of military invasion. In Australia, Aviation has
always remained one of the highly influenced industry in the world (Rastogi, & Trivedi,
2016). A flagship carrier in Australia has been influenced by several legal and political
factors. For example- uncertainties in policies of Middle East and other political turbulence in
Thailand remained a notable impact on Qantas operations and its revenue (Rastogi, &
Trivedi, 2016). The company has been maintaining several relations with china, which has
been translated into open aviation market (Fozer et al., 2017).
In 2016, China has agreed for the open skies pact that has removed all the restriction related
to capacity between the two countries. This agreement has resulted into new opening of
routes. As far as open aviation market is concerned, previous capital before the eradication
and the restriction was nearly 67000 seats every week (Rastogi, & Trivedi, 2016). In 2017, it
had been declared as the year of tourism for Australia and china.” The open sky policies with
the china has increased the competition in marketplace and has hurt the market share of the
domestic players especially Qantas (Rastogi, & Trivedi, 2016).
Governmental support is quite important for the national companies when relating to the
cyclical productions that has remained under the inexpensive density from all the global
companies. Qantas has gone through such a tough time in 2014 where it asked the
government debt guarantee but unfortunately, it was refused (Fozer et al., 2017). The
company has much freedom in the form of amendments and changes to the sales act of

Qantas that has eventually allowed to bring the shareholders especially when the restriction
of nearly 49 percent on the FDIs (Phadermrod, Crowder, & Wills, 2019).
Economic factors-
There is a high liberal policies made by Australian government, which has hurt the many
growth prospects of the airlines of the domestic area. At the same time, decreasing oil prices
increases the profitability whereas the volatility remain a major concern (Phadermrod,
Crowder, & Wills, 2019). The inflation rate of the country-
(Source: trading economies, 2019)
The macro environmental factors include saving rate, inflation rate, interest rate, economic
cycle, GDP, and income level of the consumers (Bohari, Hin, & Fuad, 2017). The airline uses
certain economic factors such as inflation, other industry indicators, consumer spending, and
growth rate of transportation industry (Bohari, Hin, & Fuad, 2017). The GDP of the country
is given below-

(Source: trading economies, 2019)
Social factors- It plays an important role in affecting the sales growth of the business. To be
an Australia’s national carrier, it is seen that it regularly enjoys huge public trust with the
support of native customer base. Local partnership in the nation will help to boost the
customer base. PESTLE Analysis covers to analyse the leadership of the Qantas such as
demographics, level of skills, class structure, power structure, hierarchy, culture, gender
roles, attitudes, and other entrepreneurial spirits.
Technological factors- Improvements and other progressive technology has a benefit for the
airline industry (Jin, Ghasemiesfeh, Ding, & Gao, 2017). From the basic booking of the
tickets including check-ins and checkouts provides an convenient in relation to hassle free
journey for the passengers. Qantas started including technology based crafts in the portfolio,
which has contributed significantly to the business growth (Jin, Ghasemiesfeh, Ding, & Gao,
2017). The airlines have been investing in innovation and technology that is quite critical in
achieving the success. Wi-Fi and stan streaming in regards to the Qantas flights has enriched
the customer experience (Jin, Ghasemiesfeh, Ding, & Gao, 2017).

Legal factors- it covers the repealing of carbon taxation by government. The repeal of the
taxa related to tax by Australian government has assisted the company to return to the
maximum profitability. As per the government, taxation polices help to combat the climate
changes or it will lead to severe penalty (Min, & Joo, 2016).
Environmental factors- Awareness of environment issues and checking then continuously by
contributing to the business growth. It is an key challenge for the world and it need to be
addressed (Min, & Joo, 2016). Qantas has been undertaking environmental and social
initiatives with “Qantas future planet” programs, which aims to address the various aspects
such as sustainable products, better aircraft, and fuel efficiency. Jet fuel contributes to Qantas
emission of nearly 95 percent of total emission (Min, & Joo, 2016).
Conclusion
From the above debate, it can be determined that there is a scope to improve the mentioned
weaknesses so that it could attract customers with the help of improved customer services.
The company can advertise social media in order to involve workers and establish improved
employee administration system in order to accept an appropriate corporate level strategy that
can avail long-term direction to an organisation. Qantas will focus on the cost lessening to
progress a business level strategy, which can clearly focus on requirement for differentiation
and cost cutting. This focus will focus on requirement for increased IT differentiation, cloud
computing, so that it can operational efficiency. On the conclusion part, Qantas has been
adopting potential partnership alliance strategies and partnership strategies so that it can
expand the aviation business. There are some of the crucial threats that has to be undertaken
that will affect factors such as fuel costs, lower cost airlines with the alternative
transportation. Qantas will remain strong with the appliance of core competencies such as
two-brand strategy and the diversity of the services. With an aim to survive global and local

market, the company will need to establish effective strategies in order to maintain a market
position in the aviation industry even with preparing for the unexpected.

References
Aithal, P. S. (2016). Study on ABCD analysis technique for business models, business
strategies, operating concepts & business systems. International Journal in
Management and Social Science, 4(1).
Bohari, A. M., Hin, C. W., & Fuad, N. (2017). The competitiveness of halal food industry in
Malaysia: A SWOT-ICT analysis. Geografia-Malaysian Journal of Society and
Space, 9(1).
Ervural, B. C., Zaim, S., Demirel, O. F., Aydin, Z., & Delen, D. (2018). An ANP and fuzzy
TOPSIS-based SWOT analysis for Turkey’s energy planning. Renewable and
Sustainable Energy Reviews, 82, 1538-1550.
Fozer, D., Sziraky, F. Z., Racz, L., Nagy, T., Tarjani, A. J., Toth, A. J., ... & Mizsey, P.
(2017). Life cycle, PESTLE and multi-criteria decision analysis of CCS process
alternatives. Journal of cleaner production, 147, 75-85.
Gürel, E., & Tat, M. (2017). SWOT analysis: A theoretical review. Journal of International
Social Research, 10(51).
Jia, S., Jin, X., Ghasemiesfeh, G., Ding, J., & Gao, J. (2017, May). Competitive analysis for
online scheduling in software-defined optical WAN. In IEEE INFOCOM 2017-IEEE
Conference on Computer Communications (pp. 1-9). IEEE.
Laseter, T. M., Hammer, J., Laseter, T. M., & Metz, J. (2017). Tork Corporation:
Competitive Cost Analysis. Darden Business Publishing Cases, 1-9.
Min, H., & Joo, S. J. (2016). A comparative performance analysis of airline strategic
alliances using data envelopment analysis. Journal of Air Transport Management, 52,
99-110.

Ngai, E. W., Lam, S. S., Poon, J. K. L., Shen, B., & Moon, K. K. (2016). Design and
Development of Intelligent Decision Support Prototype System for Social Media
Competitive Analysis in Fashion Industry. Journal of Organizational and End User
Computing (JOEUC), 28(2), 13-32.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill
Education.
Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis
based SWOT analysis. International Journal of Information Management, 44, 194-
203.
Qantas, (2018). Annual Report. Retrieved from:
https://investor.qantas.com/FormBuilder/_Resource/_module/doLLG5ufYkCyEPjF1t
pgyw/file/annual-reports/2018-Annual-Report-ASX.pdf
Racz, L., Fozer, D., Nagy, T., Toth, A. J., Haaz, E., Tarjani, J. A., ... & Deak, C. (2018).
Extensive comparison of biodiesel production alternatives with life cycle, PESTLE
and multi-criteria decision analyses. Clean Technologies and Environmental
Policy, 20(9), 2013-2024.
Rahman, K., Azad, S., & Mostari, S. (2015). A Competitive Analysis of the Airline Industry:
A Case Study on Biman Bangladesh Airlines. IOSR Journal of Business and
Management, 17(4), 23-33.
Rastogi, N. I. T. A. N. K., & Trivedi, M. K. (2016). PESTLE technique–a tool to identify
external risks in construction projects. International Research Journal of Engineering
and Technology (IRJET), 3(1), 384-388.

Singh, A. K. (2016). Competitive service quality benchmarking in airline industry using
AHP. Benchmarking: An International Journal, 23(4), 768-791.
TRADING ECONOMICS, (2019). Australia GDP. Retrieved from:
https://tradingeconomics.com/australia/gdp
TRADING ECONOMICS, (2019). Australia inflation. Retrieved from:
https://tradingeconomics.com/australia/inflation-cpi