External and Internal Analysis of Qantas Airways

This article provides an in-depth analysis of Qantas Airways, including its external and internal environment, SWOT analysis, and current market situation. It discusses Qantas Airways' strengths, weaknesses, opportunities, and threats, as well as its strategic objectives and value drivers. The article also covers the airline's current operations and its focus on safety and customer service.

Airline Marketing

Table of Contents
Introduction.................................................................................................................................................2
External and internal analysis of Qantas airways.........................................................................................3
Current environment................................................................................................................................5
SWOT analysis of Qantas airways limited, Australia..............................................................................6
Internal market........................................................................................................................................6
External environment..............................................................................................................................7
Strategic objective.......................................................................................................................................8
Value Drivers..........................................................................................................................................9
Action plans to achieve the value drivers..................................................................................................11
Summary...................................................................................................................................................13
Conclusion.................................................................................................................................................15
References.................................................................................................................................................16

Introduction
Qantas Airways is one of the largest airlines of Australia and the flag carrier of the developed
country. Qantas is the largest airways because of few features like international flights,
international locations and the fleet size. Qantas is the third oldest airway that was founded after
Avianca and KLM (Dwyer, et al, 2010). In May 1935, Qantas began its flights for the
international passengers. Qantas stands for “Queensland and Northern Territory Aerial services”.
Qantas is also one of the founding members of the “One world Airline Alliance” and has been
nicknamed as “The flying kangaroo”. In Winton Queensland, Australia Qantas was founded in
1920 and started its commercial operations in 1921. Primary hubs of this airline are Melbourne,
Sydney and the Brisbane airport. Perth airport and Adelaide airport are the secondary hubs of
the Qantas airline. Major airports that are mainly focused on the Qantas airways are Los Angeles
international airport, Darwin international airport, Singapore change airport and the cairns
international airport. Total destinations that are served by the Qantas airways with its services are
around 85. Fleet size of the Qantas airway is 128. Qantas’s tagline is “The spirit of Australia”.
The headquarters of this airline is situated in Mascot, Sydney, Australia. Alan Joyce, AC is the
CEO of the company and Leigh Clifford, AO is the chairperson. According to the 2017
estimates, there are around 26,150 employees are working in the Qantas airways. Another 2017
estimate shows that the net income of Qantas airways is $1.59 billion, revenue is $16.1 billion
and total assets cost around $17.2 billion (Homsombat, Lei and Fu, 2014). In march 2014,
around 65% share of the Australian domestic market were possessed by Qantas, also in the same
year, Qantas also carried around 14.9% of passengers who left or came to Australia. There are
other several subsidiary airlines, which operates under the banner of Qantas link. The major
routes of those subsidiaries are mostly some trunk routes or regional centers only within the
country. There is another subsidiary of Qantas, named as, jet connect which provides its services
between Australia and New Zealand. The Qantas, which provides international, as well as
domestic services in Australia, own a low cost airline named as a jet star. According to the
current survey, there is a total of 285 aircrafts that are operated by Qantas and its subsidiaries.
Qantas link operates around 84 aircrafts, jet star operates 71, express freighters operate five
aircrafts and three are operated by the jet connect. In 2016 Qantas, revamped ad renovated its
few aircrafts and a completely different but latest livery of the aircrafts along with introducing a
new kind of streamlined logo of the aircraft and featured a new typeface for the aircrafts (Small,

Harris and Wilson, 2008). Qantas serves their customers with the best services possible. They
provide several kinds of in- flight entertainment system for the passengers, specially installed by
keeping the needs of passengers in the mind. Different kind of cabins is there on the flights like
first class, business class, business class for international passengers, economy class and even
premium class as well. Considering the network of Qantas Airline, they are coming with many
ranges of carriers such as Jetstar, Emirates, Fiji Airways, Solomon Airlines, and many more
across the south west pacific and New Zealand with a combination of network to 11 destinations
from multiple Australian gateways. In terms of the products, they are providing domestic
economy and business flyer, international economy and premium economy flyer, international
business and international first flyer. The distribution platform of Qantas improves the
functionality of many indirect agent channels so that they can closely be aligned with the
capabilities available at qantas.com. For the purpose of customer service, they are also providing
various contact centers for any type of enquiries, customer service agents to solve issue
personally so that they can build a long-term relationship with the customers. In addition, Qantas
has a flight training system that works as a standard commitment to the customers and
government and that is why Qantas is one of the finest safety records in the world. Training is
done with the help of IT simulations, where the pilot is trained via simulation driving in many
types of the situation. These training fields also include emergency procedures, which is a very
important aspect of the aviation industry.
External and internal analysis of Qantas airways
Qantas airways limited has a mission of accomplishing the position of best airlines in the world
and gain the highest profit in the global market with the best strategies possible. The first priority
of the Qantas airways is the safety of the passengers.
External environment analysis of the Qantas airways includes some factors, which affect the
market performance of Qantas airways in several possible ways. Mainly three external
environmental factor, which affects the Qantas airways - demographic factors, technological
factors and legal factors.
Both of these factors are discussed below:

1) Technological factors- Technology is the key ingredient in the recipe of success. Technology
can help any industry with the proper marketing and innovating new ideas. With the help of
innovation and the proper strategies for marketing, any industry can achieve the high level of
performance and earn a high profit. Qantas has installed several in- flight entertainment system
for passengers. Almost all the mainline aircraft of Qantas has audio video entertainment. Many
features are included with these systems like touch screens, Wi-Fi and other related functions
and also the use of mobile phone and its functions (Franke, 2007). All these features are highly
required by the passengers. Other technology related features are also included for the
passenger’s comfort like a different kind of support for the gadgets or electronics, USB support,
connectivity for iPod etcetera.
2) Demographic and locations- Qantas main focus is towards the enhanced power of the brand,
therefore, Qantas is one of the premium transporter as well as the main airline and flag carrier of
Australia. Therefore, it is the main responsibility of Qantas to choose the international
destinations accordingly. There are many times in which the destinations are decided, for
instance, there are total 21 international and 20 domestic destination to where Qantas flies except
the subsidiaries. All those 21 destinations are in 14 countries in total like Asia, America, Europe,
Oceania, Africa etcetera (Stewart and Mueller, 2008). The whole group of Qantas including the
subsidiaries serves in around 31 international location and 65 domestic location, which is he
thing for any type of airlines. Considering the market share, Qantas has an average of around
28% passenger sharing the international markets but in spite of the continuous growth and
development, they are steadily losing the domestic market. Qantas has achieved a record of
operating the “world’s longest passenger flight” on the largest passenger aircraft in the world.
Due to high demands, Qantas also launched nonstop flights between two destinations that is
Australia and the United Kingdom recently. All these strategies of organizing and starting the
flights on the most demanded route have helped Qantas in so many ways. Competitive advantage
is one of the plus factors and therefore made Qantas the top airline in complete Australia. This
has helped the Qantas to enhance its performance. The current operations of the Qantas airways
have taken a positive turn and achieved lots of success because of some special strategy
introduced by the company. The main objective of all these current operations is to achieve a
greater profit and competitive advantage over other airlines.

3) Legal or Regulatory Factors – Qantas is a key enabler of the economy as it is leading to
growth in the national economy. It is also actively contributing to the development of the public
policy. Qantas Airlines belongs to the aviation industry, which is one of the highly regulated
industries in the world. The Qantas groups continuously support the liberalization policy and
thus they are moving towards the open aviation markets and competition, which will benefit all
the customers and the industry participants (Qantas 2018).
The current market situation of Qantas
Qantas leads the Australian economy in a way. However, in the past few years or the last decade,
the level of competition has increased in the airline industry. Competition is high in this market
but there are very few risks involved in this business. Since of their high costs and rate of returns,
the airline industry can easily handle any kind of economy crisis. In addition, a significant result
has been seen by the Qantas due to their solid profitability as the international division reported
those pretax earnings of $512 million, 95 per cent rise on last year and a $1 billion improvement
on its 2014 loss. Qantas has so many rivals in this industry, especially in the international airline
market. There are many competitors of Qantas, which are providing the services at a very low
cost as compared to Qantas. Another threat to Qantas can be the new entrants (Jiang, 2013).
Because of the deregulations, many potential entrants can easily attract the customers and replace
the pre- existing brands in a very short time period. Another economic threat to the industry is
“substitutes”. Most of the persons prefer taking cars or buses instead of paying high money to the
domestic airlines. This causes a lot of loss to the airways company. Substitutes may be used
highly or only a few times, it all depends upon the choice of the customers/ passengers. If the
passengers want to go abroad then they do not have another choice and they have to choose the
airway no matter what. That is why substitutes are always a determining factor in this industry.
Current environment
Currently, Qantas has made a lot of progress. Mostly in the domestic region, Qantas is doing one
heck of a job. Qantas along with the jet star has made a record and reached $865 million
underlying EBIT in the domestic market. Right now Qantas and jet star are the two airlines in
Australia with a greater share of the profit. Around 90% of the total profit made by the domestic
airways are owned by these two airlines (De Roos, Mills and Whelan, 2010). All the business
strategies have helped Qantas to become one of the most profitable airlines in the world. Qantas

is doing their best for the passengers and providing them with all the best kind of services.
Despite a great amount of competition, Qantas has succeeded in achieving their goals and targets
in the market and has secured a top position in the airline industry along with a competitive
advantage over other airlines. Because of the increasing demands, there has been made an
announcement by the Qantas group regarding the direct flights, flying from east coast part of
Australia directly to New York and London and this is supposed to be achieved by the end of
2022. Due to some economic crisis, the airline market got affected and there was some adverse
effect on the performance of the airline industry. Due to the economic crisis, many problems
have arisen like increased fuel prices, etcetera. Competitors of Qantas like air Asia are trying to
provide the low fare rate in order to gain more customers but it will not affect the performance of
the company in long run terms.
SWOT analysis of Qantas airways limited, Australia
SWOT analysis can be used to evaluate the market strategy of Qantas airways. SWOT analysis
stands for strengths, weaknesses, opportunities and threats. SWOT analysis gives the opportunity
to analyses both the internal as well as the external environment of the Qantas airways limited in
a proper way (Helms and Nixon, 2010). Internal environment can be analyzed by carefully
examining the weaknesses and strength of the organization. On the other hand, threats and
opportunity, which are present outside the industry analysis, give the brief description of the
external environment.
Internal market
Strengths- The business strategy of Qantas airways is very powerful that consist of premiums
and first class full service. Jetstar, on the other hand, focuses mainly on the low fare charges.
Qantas is one of the very old and popular brands, therefore, the brand name has a very strong
reputation along with a high recognition power. The main priority of the company is the safety of
the customers therefore many people choose Qantas because of their strong safety measures. One
world alliance includes many strong airline brands like british airways, cathay pacific, American
airlines and Canadian airlines etcetera and among all these big airlines, Qantas is also a member
of the one world airlines (Knibb, 2007).

Weaknesses- The headquarters manages all the tasks regarding the maintenance and the
engineering from the overseas. Sometimes it becomes very tough to find the highly skilled and
qualified staff to handle the job. If the staff or employees are not qualified, enough then it might
damage the image of the brand and many people will try to change their airline and leave the
Qantas because of this issue. On the other hand, Qantas provide an inadequate amount of training
for their staff and employees and they cannot even control their employees. Qantas focus more
on the safety of the passengers no matter how long the flight takes. Also, they do not provide
holidays for that reason many engineers from Qantas has a strike which delays further work
(Chang, et al, 2014). Due to this, many issues occurred and put the passengers in an
uncomfortable situation.
External environment
Opportunities- Qantas is trying to use the latest technology that is available in the market, in
order to attract the customers at a larger rate. Many new features were introduced for the comfort
of the customers. They are also using an ecofriendly technique in which customers are provided
with a barcode instead of paper boarding passes. This service is only available in the domestic
flights yet. On the other hand, Qantas has the membership of the one world alliance and many
other bigger brands related to the airline industry are the member of one world alliance (Douglas,
2010). It gives a huge opportunity to Qantas to be connected to major airlines. Qantas has
launched many promotional strategies along with frequent flyers. It can be a huge opportunity
for Qantas airways limited.
Threats- Qantas’s current situation is slightly on the verge of getting affected by the economic
crisis of the country. Many economic crises like, environmental problems, rising prices of fuels,
deregulations and constantly changing legal framework etcetera. All these factors really put a
damper over the performance of the airlines. Increasing fuel prices are the biggest challenge for
the Qantas airways limited (Leggat, Zwar and Hudson, 2009). Due to increased prices of fuel,
the airline's industry has to increase their prices. The high cost of tickets really affect the
customer population and people prefer substitutes instead. However environmental problems like
sudden weather change, natural calamities etcetera affects the working of airways as well and
can even cause delay or cancellation of the flights.

Strategic objective
Any airline company requires developing some strategic objectives in order to achieve the
required business growth or goals of the company along with providing the better services to the
customers (Liu and Ko, 2011). Strategic objectives for the Qantas over the next 3 years are as
explained below:
 More investment in services and the products
In this industry, the passengers play the most important role. If the passengers are satisfied then
the airline industry can earn a huge profit. To make the customers happy, Qantas need to enhance
their services and the products. It can be achieved by increasing the alliances both at domestic as
well as international level (Wensveen and Leick, 2009). This will help the airline industry to
great competitive advantage as well as satisfied customers. For instance, if the Qantas airways
collaborate with hotels, banks, grocery stores, ATM’s and restrauts nearby the airports then it
will be easy for the customers to use the services in the most efficient way. This collaboration
will make it easy for the customers to make the stay. On the other hand, customers will get an
extra discount for using the collaborated place. Qantas also should do the surveys in order to
know their current position according to the customers (Park, 2007).
 Enhancing the safety measures
Although Qantas always gives the first priority to the safety of the people the employees of the
Qantas are not that well trained and can use some new techniques and strategies to prevent any
kind of damage. Qantas can introduce some special kind of safety management system so that
the Qantas airline can achieve an amazing yet exceptional safety management along with regular
superior level inspections. The vision of Qantas should be, to achieve the safest airline system
along with the maximum security in aircrafts as well as on airports by the end of 2021
(Vespermann, Wald and Gleich, 2008). There should be no incursion and breaches. Another
objective under this strategy can be including the implementation of highest standard cyber
security on an international level. Qantas can encourage a healthy relationship between the
airline and the federal regulators for the security purpose.
 Regulating the fares and become eco friendly

The airline industry is under no control of government directly, which causes deregulation.
Therefore, they have the freedom to set the fare charges. Many airline industries in order to
increase the level of competition set the prices low and even provide the low quality service as
well (Dunn, 2008). However, customers are not aware of that so they go for the low priced
airlines unaware of the further consequences. To prevent this from happening, the aim of Qantas
should be to provide exceptional services to the passengers. Qantas should aim at increasing the
per passenger spending rate for the food items as well as beverages that too duty free and retail in
Australia. Qantas should focus on minimizing the environment pollution to a zero level before
2021 (Nair and Paulose, 2014). Reducing the Greenhouse gas emission and reducing the amount
of carbon can be a powerful step.
Value Drivers
There are few key commercial value drivers, which can help to achieve the objectives of the
Qantas airways, and they are mentioned below.
 Price
Price of the products and thus earned revenues from the sale of products and services is
one of the most significant value drivers for Qantas. If the sale and cash flow of the
business are not reliable then it can be said that the organization is not performing well.
 Product
Product or service offered by the business organization is one of the most empirical factor
that contributes largely in the success and growth and hence it is also considered as one
of the biggest value driver for the firm. Moreover, products are the factors that are
considered as the elements that are driving strength to the business entity by focusing in
niche fields. But this may also become a reason for the creation of risks from lack of
diversification and overdependence on limited markets.
 Network
To maintain the current viability of the business, it is very important to maintain the
strong customer base and network. A diversified and large customer base and network
can really help the company in many different ways possible to achieve their strategic
objectives. Improving the customer experience will help the company to increase their

core value (Gentile, Spiller and Noci, 2007). Qantas can achieve the superior amount of
margin by the huge customer base with customer loyalty and other ways in which
customers are happy because that is the whole point of the strategy developed. However,
the resources should be carefully allocated for the customer services in order to prevent
the risk of losing a great number of revenues while doing so. Otherwise, it is a great value
driver.
 Distribution
The distribution channels are the mediums through which the business entity makes the
availability of the products and services offered. An appropriate and timely availability of
the desired products and services will be aiding points in the success and growth of
Qantas and hence distribution is one of the crucial value driver for the corporation.
 Customer service
Customers are considered as the king of the market and hence the products and services
offered to them should be up-to their expectations and post purchase services are also
required to be given for their complete satisfaction. A full and complete package of
services is required to be offered to the customers in order to gain value for the
organization and hence this is the reason customer service is one of the significant
element as a value driver.
 Enablers
Enablers in an organization can be referred to some of the functions or departments such
as IT and training departments. IT team deals with the functions and operations related to
software, systems, mechanizations and applications used within the organizational
structure, whereas the training department offers various forms of training and
development sessions to the employees and other staff within the entity. These both the
departments increases efficiency and productivity of the workforce and thus contributes
in the generation of value for Qantas.
 Human capital of the organization
Employees are the key essential aspects of any organization. Employees can also be
called as the heart of the organization since they are one of the main value drivers of the
strategic objective (Jain, 2014). Employees with their high skills, knowledge, training and
experience have the ability to enhance the business of any organization. To fulfil the

business strategic objective, employees are required to be provided with the proper
training so that they can use the proper skills and the training in the necessary forte.
Employees are essential because they are the key part of any organization, therefore,
Qantas should focus more on their employees also and train them well in the upcoming
years and before 2021 to stay in the competition.
 Promotion and branding
Customers respond to the services of the company and its products if the marketing is
done right (Selby, Jones and Kagawa, 2009). To do the marketing in a proper manner,
Qantas should use different promotion technique because it will help them to enhance
their strategic objective’s growth and help them to accomplish the objective sooner. Since
Qantas is already a major brand therefore that can be an advantage for the company and
help to enhance the company sales due to its popularity and a large amount of
recognition. Branding with proper strategies for marketing can really be helpful for
Qantas in the long run, because then people will get to know more about their services
and the products. It can be great key commercial value driver to achieve the strategic
objective of the Qantas airways.
Action plans to achieve the value drivers
An action plan is very necessary in order to achieve the value drivers for any company and an
action plan for Qantas is as follows:
Choosing the appropriate goal
Goal choosing will allow the company to make their objective clear and help Qantas to just focus
on the important things rather than focusing on other useless things. This will allow Qantas to
analyses their goal and then will help to decide the reachability of the goal along with the
timeframe and resources required for the goal (Sarina and Lansbury, 2013). To enhance or
achieve the value drivers, it is very important to first analyses the situation and then lay out the
objectives to achieve those value drivers. A proper planning and strategies are required for the
completion of the whole project. A strong team is required to lay these plans out and to allocate
the resources and the capital.

Creating a strong team
The next step is to create a strong team in order to achieve those goals. Different members, when
involved in this project, can present their different ideas about the project and help the team to
create a stronger plan and strategies about completing the task before the timeline with maximum
profit possible (Jansen, et al, 2008). They will also help with choosing the action steps to
complete the objective and achieve the value drivers for the strategic objectives.
Scheduling and dividing the teams
Developing a proper schedule for the completion of tasks can be beneficial and help the
organization to achieve their goals within a pre- decided period (Tambe and Kulkarni, 2015).
First, the identification step is necessary which identifies the responsibility of each member of
the organization and his or her role in the action plan. Then the next step is to provide them with
a proper schedule, which consists of different steps regarding the completion of the action plan.
Reviewing the progress
During the ongoing task, the head of the task or any leader should evaluate and observe the
progress of the task. He or she also determines whether the task is profitable or not. If not then
the plans should be changed and other goals should be chosen in order to achieve the value
drivers of the organization (Kontogiannis, 2010). The action plan can be carried out effectively if
each member of the organization is dedicated completely towards the project.
Target and Measure
The main target of the Qantas airways is to enhance their customer base and for that, they should
focus on those who prefer airways to any other transport ways and those who are going abroad
for any purpose. Qantas should focus on their target audience in order to achieve the strategic
objective. Competition is also increasing so for that the company is required to come up with
better human resources strategy, which can help the company to get a competitive advance and
achieve the goal of the company in an efficient manner (Hazledine, 2010).

Summary
Airways industry is one of the most efficient industry according to the economy point of view.
Airline industry really adds a lot of fortune to the economy of a country. This report includes a
brief discussion about the Qantas airways limited, which is situated in Australia. The first
segment of the report describes the organization and the market associated with it. Qantas is one
of the most popular airlines in Australia and their flag carrier, which is a huge privilege for any
airline. Qantas has a very strong brand recognition and reputation. This airline industry provides
premium services to the customers in every way possible. Qantas provides a range of first class
services and products to their customers and wants to create a huge brand recognition in the
global market. Jet star is one of the subsidiaries of Qantas airways limited, which provide its
services in the domestic region at a very low rate. Qantas uses the latest technology to entertain
their customers and provide them with every comfort and to make the journey easy. The main
aim of the Qantas is to provide the customers with better services but with the maximum safety
possible. Qantas has given a huge priority to the safety of the passengers, which makes it better
than any other airlines. In the further segment, many aspects of the airline market have been
discussed.
External and internal market analysis is also present in the report. It shows the market analysis
of Qantas and the progress of the company in the market on a global level. SWOT analysis of
Qantas Is also present in the report, which explains all the external and internal factors affecting
the Qantas airways limited. SWOT analysis gives a brief description of the threats and
opportunity as well as strength and weaknesses associated with the company. Strength and
weaknesses are the internal factors, which shows the internal analysis of the market showing all
the strengths and weaknesses associated with it. On the other hand, threats and opportunity
explain the external analysis of the market and describes the external factors associated with or
affecting the Qantas airways.
This report also consists of a short segment, which describes the competition and the progress of
Qantas in all these years. It also shows the competition level that Qantas is battling with right
now in the industry.
Strategic objectives and vision of Qantas are also developed in this report for the upcoming 3
years. It consists of different kind of objectives that are needed by the company in order to

enhance their growth and the brand value. Value drivers are very essential for achieving the
strategic objectives, therefore; they are also mentioned in this report. Action plan for Qantas is
also obtained in order to achieve the value drivers for the strategic objectives. The action plan
shows the different steps required to be taken for the fulfillment of the strategic objectives and
make Qantas, the world’s one of the best and top airline in an efficient manner.

Conclusion
In conclusion, “strategy is winning”. In this competitive strategy, the business enterprise needs
efficient strategies with successful timely implementation. As per the market analysis in the
airline industry, Qantas had successfully undertaken various changes to adapt to the dynamic
environment.
From the perspective of future, Qantas has to redefine its goals and strategy, creating a strong
and united team, and scheduling and diverging their teams to the appropriate goals. In addition,
they also need to make a continuous review of the progress of the airline so that at the time
necessary changes can be made effectively.
In the future, Qantas can face corporate social responsibility pressure but if the management
comes with the disruptive technology in the market, no one can stop Qantas to become the leader
in the airline industry.

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