Qantas Airways Case Study Analysis

This assignment analyzes Qantas Airways, a leading Australian airline, based on the provided case study by Palepu et al. It examines Qantas's history, strategic decisions (like privatization and mergers), financial performance, and competitive landscape using Porter's Five Forces and SWOT analysis. The analysis highlights Qantas' strengths, weaknesses, opportunities, and threats in the global aviation market. Finally, the assignment recommends investing in or holding Qantas stock based on its future prospects.

Self Reflected Summary
Qantas is one of the leading airlines of Australia with its domestic and global presence. The
company has faced tremendous competition in domestic domain from Virgin and other globally
acclaimed airlines for international market. I have gone through and read the text book narrating
the case study of Qantas by Palepu, K. G., P. M. Healy, V. Bernard, S. Wright, M. Bradbury, P.
Lee, Business Analysis and Valuation Using Financial Statements: Text and Cases, 2nd
edition .Asia Pacific Edition, Cengage Learning, 2015: Chapter 2: page 51 – page 66 Chapter 4:
page 125 – page 128 Chapter 5: page 188 – page 194.
I have learnt the establishment of this company along with its road of triumph both in domestic
and global market.
Through analysis of Porter’s five forces I have identified the following observations:
Threats of new entrants- Due to open global economy, all businesses are threatened by the new
entrants and Qantas is no exception to that.
Bargaining power of suppliers- The supply chain associates of airlines industry have the power
to dictate terms of supply and Qantas has to be flexible to meet their demands.
Bargaining power of buyers- Buyers are the target audience of Qantas, and they have the liberty
to compare and select the service they want to buy.
Threat of substitutes- There are availability of substitutes in the airlines industry globally and
Qantas has to remodel its offerings for the customers to make them loyal customer base of them.
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Competitors’ rivalry- competitors tend to price cut and offering value added services which are
to be faced by Qantas through innovative power and research and development process.
(University, 2015)
SWOT analysis of Qantas is made by me, which shows that the company has good amount of
strengths in the form of strong presence, Government assistance, and traditional identity in the
industry, strong network of more than 80 global and domestic destinations. The weaknesses are
lesser in the form of old issues like pricing and other incidents with limited presence of Qantas
comparing to other global leaders of this industry. Opportunities are there to explore Asian
market and strategic alliance with other airlines to grab more shares in the market. Threats are in
the forms of increased fuel price and labor price in global market with strong presence of other
global players in the segment. (mbaskool, 1999)
Till 1991, Qantas was owned by government. Then the process of privatization started and the
company initiated business strategies to prove long term sustainability with introduction of
technology.
Merger with different international airlines giants after the company is merged with Australian
Airlines in 1992. The company is listed in ASX to identify it existence and public limited
company. The company initiated certain strategic alliances with big airlines companies to prove
its existence in global market. In 2003, the company launched cost effective airlines Jetstar.
Accounting policies are mainly emphasized in the areas of revenue recognition and depreciation
to derive fair value of assets for impairment purpose. (Qantas, 2013)
Comparison of financial reports of 2017 in respect of 2013 had shown marginal increment with
the proof of sustainability in aviation market. (Healey M, 2014)
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With the case study, I recommend to invest in the company or holding the stocks instead of
selling it, because the company will pay good return with rights issue or dividend in future.
(qantas, 2017)
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References:
Healey M, W.S.B.M.L.p.P.k., 2014. Business Analysis and Valuation: Using Financial Statements - Text
and Cases Asia Pacific Edition. 2nd ed. Cengage Learning Australia.
mbaskool, 1999. Qantas Airways SWOT Analysis, USP & Competitors. [Online] Available at:
https://www.mbaskool.com/brandguide/airlines/536-qantas-airways.html [Accessed 03 May 2018].
Qantas, 2013. Qantas Super Annual Report 2012-13. Annual Report. Qantas.
qantas, 2017. Qantas annual reprot 2017. [Online] Available at:
http://investor.qantas.com/FormBuilder/_Resource/_module/AH_NGR9NxUaXc0W8Qv3Kfg/docs/
QantasAnnualReport2017.pdf [Accessed 03 May 2018].
University, F.F., 2015. Qantas Airways Limited Porter Five Forces Analysis. [Online] Available at:
http://fernfortuniversity.com/term-papers/porter5/asx/2178-qantas-airways-limited.php [Accessed 03
May 2018].
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