Qantas Risk Management Plan

This assignment delves into the various risks confronting Qantas, an Australian airline. It identifies key threats such as fluctuating fuel prices, a global economic downturn, and increasing competition. To address these challenges, the document proposes a detailed risk management plan encompassing strategies for mitigating each identified risk. The plan includes actions like reducing international business operations, enhancing the company's competitive advantage, and implementing effective communication channels to keep stakeholders informed. Furthermore, the assignment outlines steps for monitoring and evaluating the success of the implemented risk management strategies.

RISK MANAGEMENT PLAN-QANTAS AIRLINE CASE STUDY 1
RISK MANAGEMENT PLAN-QANTAS AIRLINE CASE STUDY
Name
Institution
Professor
Course
Date

RISK MANAGEMENT PLAN-QANTAS AIRLINE CASE STUDY 2
Part 2
Risks Facing Qantas Airline Group
The risks facing Qantas Airline can be identified as illustrated in the SWOT diagram below;
SWOT Analysis Diagram
Strengths
 Strong, reputable
company name in the
home market.
 Fuel efficient and
modern aircraft.
 Have strong
competitive subsidiary
brands.
 Strong government
support.
Weaknesses
 Much concentrated in the
Australian region at the
expense of the international
segment of the business.
 Competition from other
international airline
businesses
Opportunities
 There are opportunities
to grow both domestic
and international
markets.
 The company business
operations have not
saturated in all the
continents.
Threats
 The increase in fuel prices is
likely to affect the company
business operations.
 The cost of acquiring and
maintaining the staff has been
increasing.
 New airlines entry threats in
the industry and competition
in the domestic market
 Global economic crisis
Other Tools and Techniques Tool Identification Techniques
 Probability and Impact Matrix
 Risk Data Quality Management
 Expected Monetary Value Analysis
 Simulation Technique (Monte Carlo Analysis)
 Root Cause Analysis
 Checklist Analysis
 Assumption Analysis
 Information Gathering Techniques

RISK MANAGEMENT PLAN-QANTAS AIRLINE CASE STUDY 3
Part 3
Risk Analysis
Likelihood of the is occurring
There is a large likelihood of the risks facing Qantas Airline to occur. The increase of cost fuel is
evident from the fact oil prices a prone to fluctuation all over the world (Sky News. Com, 2016).
Secondly, the increasing the cost of maintaining the company employees may increase because
of the trade unions and employment agencies that call for the protection of the workers' rights
(The Conversation, 2015). Third, any lucrative business will attract new competitors. Likewise,
the existing competitors are likely to intensify their competition to either increase their market
share or to maintain their competitive advantage. Therefore, there is a risk for the reduction of
the Qantas' Airline domestic market. Finally, the global financial and economic crisis affects all
companies undertaking the international business (Robertson, 2016). Similarly, Qantas Airline is
likely to suffer from the consequences of the economic recession.
The Impacts of the Risk
The occurrence of the risks mentioned above will have the following consequences in the event
of their occurrence;
Fuel increase
The unmanageable increase in fuel prices may force the company to reduce its business
operations (Thomas, 2014). For example, the Qantas Airline may end reducing its business
international operations. This will have negative impacts on the company profits and may also be
an opportunity for the competitors to thrive.
Costs of acquiring and maintaining staff.
The costs of maintaining staff will contribute to negative impacts on the company profits. The
costs being used for normal business operations may exceed the capital expenditure making it
difficult for the company to progress. Additionally, the attempts to lay off or retrench some
workers may result into litigations that will cost the company heavily.
Threat of the new entrants
The entry of the new players in the industry will increase the competition, and this negatively
affects the Qantas Airline profit.
Global economic crisis
The global financial crisis will affect the international business operations of Qantas Airline.
This may lead to the closure of some of its international business segments.

RISK MANAGEMENT PLAN-QANTAS AIRLINE CASE STUDY 4
Impacts
NEGLIGIBLE MARGINAL CRITICAL CATASTROPHIC
Likelihood
LOW New entrants
MEDIUM Global economic
crisis
HIGH
Staffing costs Fuel prices
increase
Risk Matrix
Evaluating and Prioritizing Risks for Treatment (3)
New entrants threats (3)
The likelihood of the new entrant threat is low. However, its impacts are high. This call the
company to call for the additional competitive advantage to overcome the threat of the
competitors. This risk suits to be position three in the matrix.
Staffing Costs (4)
There is a high probability of this risk occurring. However, its impact is moderate. Therefore, the
company can operate with its existence. This ranks the staffing cost risk at position four.
Global Economic Crisis (2)
The probability of this risk occurring is medium, and its impact is extreme. This is the risk that
can hamper company operations in the international market. Based on the likelihood and severity
of this risk it is ranked at position two.

RISK MANAGEMENT PLAN-QANTAS AIRLINE CASE STUDY 5
Fuel Prices Increase (1)
This is major risk facing the Qantas Company. Its probability to occur it high as well as its
consequences. Fuel increase is the critical concern that the company should adopt an appropriate
mechanism to switch to another alternative in case it occurs. Based on the matrix mix evaluation,
this risk qualifies to be in the first position.
Part 4: Selecting and Implementing the Treatments
Appropriate options for treating the top three risks
The most appropriate strategy to overcome the risk of oil prices is by having an alternative. This
means that the company will continue to operate even when the oil prices go up. The global
crisis problem appears to be challenging for the company to overcome it. However, in case this
risk occurs the company can reduce its international business operations and concentrate more on
the domestic business.
Action plan for implementing risk treatments
Risk Option Treatment Plan
Increase in fuel prices Transfer Alternatives to fuels
Global Economic crisis Reduce Reduce international business operations
New entrants threats Accept Accept the competition by increasing the
company competitive advantage.
Communicating the action plan
The communication plan will include all the content pertaining the risks treatment plans. The
concerned parties will be notified about the risk treatment plans through emails, telephone calls
and memo circulations to their departments both in the company parent business and subsidiary
businesses.
Documentation needed
The action plan options and treatments strategies will be documented both in the hard copy and
in the soft copy. The soft copy will be stored in the company’s data base while the hard copy will
be under the custody of the company secretary.
Steps to Implement Risk Management Plan
There four key steps are (Crain, 2014);
 Identifying the risk
 Analyzing the risk
 Treating the risk
 Monitoring and assurance to the concerned parties

RISK MANAGEMENT PLAN-QANTAS AIRLINE CASE STUDY 6
Monitoring the Action Plan
The company should evaluate the risk management plans after every three months to determine
whether the identified risks are being addressed as well as check for the emergence of the new
risks.
Evaluating the Process of Managing Risks
The evaluation of the risk management plan will be based on the risk assessment tools and
techniques identified earlier in this paper. These techniques will include checklist analysis and
SWOT analysis.

RISK MANAGEMENT PLAN-QANTAS AIRLINE CASE STUDY 7
References
Crain, J., 2014. Four Key Steps to a Risk Management Plan. [Online]
Available at: http://gibraltarrisk.com/content/4-key-steps-risk-management-plan
[Accessed 29 August 2017].
Robertson, A., 2016. Airline capacity cuts an early warning of Australian economic malaise.
[Online]
Available at: http://www.abc.net.au/news/2016-04-19/airline-capacity-cuts-an-early-warning-of-
economic-malaise/7339562
[Accessed 29 August 2017].
Sky News. Com, 2016. Qantas warns of industry challenges. [Online]
Available at: http://www.skynews.com.au/business/business/company/2016/10/21/qantas-warns-
of-industry-challenges.html
[Accessed 29 August 2017].
The Conversation, 2015. What the Qantas shakeup means: expert analysis. [Online]
Available at: http://theconversation.com/what-the-qantas-shakeup-means-expert-analysis-2882
[Accessed 29 August 2017].
Thomas, G., 2014. WHAT IS WRONG WITH QANTAS – AND AUSTRALIA?. [Online]
Available at: http://www.airlineratings.com/news/what-is-wrong-with-qantas-and-australia/
[Accessed 29 August 2017].