Ask a question from expert

Ask now

Principals of Financial Markets Group - Qantas vs Virgin Australia

18 Pages4015 Words239 Views
   

HA1022 Principals of Financial Markets (HA1022)

   

Added on  2019-10-31

Principals of Financial Markets Group - Qantas vs Virgin Australia

   

HA1022 Principals of Financial Markets (HA1022)

   Added on 2019-10-31

BookmarkShareRelated Documents
Principals of Financial Markets GroupAssignment- Qantas vs Virgin Australia Student Name:Student ID:Subject Name:Subject ID:Date Due:Professor Name:1 | P a g e
Principals of Financial Markets Group - Qantas vs Virgin Australia_1
Executive Summary Country prevailing conditions are bound to create an impact on economic parameters for a company. A company profits or loss or performance is governed by macro-economic factors, industry prevalent factors as well as company specific factors. The scope of the current report analyses scope for Virgin Airlines and Qantas Airways in its performance in Australia. for analysis Top-down approach including GDP, inflation, interests rates and other factors for Australia is analysed. In Bottoms-Up approach Company specific parameters with that of industry prevalent rates are analysed. Post such analysis a generalized outlook for Virgin and Qantas is understood which are then summarized and recommendations are provided. As both the airlines are experiencing rising operational costs and lower profitability from fluctuations in oil prices, the companies needs to adopt various measures as adopting online booking system, adopting low cost carriers and other parameters for increasing its profitability. 2 | P a g e
Principals of Financial Markets Group - Qantas vs Virgin Australia_2
ContentsExecutive Summary.........................................................................................................................2Table of Figures...............................................................................................................................31.0 Introduction................................................................................................................................41.1 Company Introduction 1: Virgin Airlines..............................................................................41.2 Company Introduction 2: Qantas Airways.............................................................................52.0 Top-down Analysis....................................................................................................................52.1 GDP........................................................................................................................................52.2 Currency Movement..............................................................................................................72.3 Interest Rates..........................................................................................................................82.4 Inflation..................................................................................................................................93.0 Bottom-up Analysis.................................................................................................................104.0 Summary and Recommendation..............................................................................................14Reference Lists..............................................................................................................................15Table of FiguresFigure 1: Australia GDP..............................................................................................................................6Figure 2: Australian Currency Rate.............................................................................................................7Figure 3: Australia Interest Rates................................................................................................................8Figure 4: Australian Inflation Rate..............................................................................................................9Figure 5: Virgin Airline Stock Price..........................................................................................................11Figure 6: Qantas Airlines Share Price........................................................................................................133 | P a g e
Principals of Financial Markets Group - Qantas vs Virgin Australia_3
1.0 IntroductionEconomy of Australia is developed consisting of largest mixed market economy with a GDP of AUD$1.69 trillion in 2017[ CITATION Aus103 \l 1033 ]. Australia though a small nation is second wealthiest economy post Switzerland. Australia is rated as 14th largest economy according to its GDP. It has had stable GDP since a prolonged period of time and comprises of 20th largest exporter. In recent years Australia had experienced negative growth associated with slowing down of its housing sector and service sector growth. Primary contributor of Australian GDP are Services 61.1%, Mining 6.9%, Construction 8.1%, Agriculture 2.2% and Manufacturing 6.0%. Inflation recorded for the country is at 1.9% for its June quarter 2017[ CITATION Atk071 \l 1033 ]. The country has a stable currency Australian Dollars and a stable financial market. The country has approximately a labor force comprising of 12.6 million and unemployment rates are at 5.6%. Australian airline industry is vast sector that is dominated by two f its giant airlines Virgin and Qantas Airways. The industry is rapidly growing with growth in tourism segment and has attached several endeavors for customers for creating greater sphere of services. The Australian economy has provided various fundamental economic factors that has allowed growth and development in this segment of business[ CITATION Rav07 \l 1033 ]. The scope of the current study analyses industry prevalent conditions in airline industry and two ASX listed companies namely Virgin Airlines and Qantas Airways. Several micro and macro factors are considered within the economy that provides directional changes to it and also create value in its hare prices. 1.1 Company Introduction 1: Virgin AirlinesVirgin Australia Airlines Pty Ltd was earlier known as Virgin Blue Airlines, which was founded in 1999. It is considered second largest airline in Australia and is largest according to its current fleet size[ CITATION www17141 \l 1033 ]. The Company was co-founded by Richard Branson and was previously based in Bowen Hills, Brisbane. Mission statement for the Company is to become Australia’s favorite airline. At The Company has several hubs spread across Australia, it primarily focuses on Adelaide Airport, Perth Airport and Gold Coast Airport with fleet size of over 115 covering 52 destinations. Current revenue earnings for the Company is AUD$ 4.7 billion whereas operating income is AUD$ - 49 million. The Company competes with Qantas Airlines and also several other airline operators from worldwide that operates in Australia. 4 | P a g e
Principals of Financial Markets Group - Qantas vs Virgin Australia_4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
HA1022- Principals of Financial Markets Group
|18
|4109
|183

DEPSTG Analysis and Megatrends in Australia: A Case Study of Jetstar
|11
|1792
|475

Developing and Implementing Strategy | Qantas Airways
|21
|4791
|11

The performance analysis of qantas
|13
|3025
|31

Introduction. Qantas Airways Limited is an Australia’s
|7
|1655
|2

Qantas Airways Limited
|19
|4134
|117