Organizational Best Practice: Qantas Benchmarking and Analysis Report
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This report provides a benchmarking analysis of Qantas Airways, comparing its performance against its main competitor, Virgin Australia. The study examines key metrics such as revenue per passenger, total costs (including staff and operating costs), profit margins, and capital expenditure. It also evaluates the performance of Australian airports in relation to their overseas counterparts. The analysis highlights Qantas's strengths, including its strong brand, efficient operations, and financial performance. The report also discusses ethical and moral considerations within the airline industry and offers recommendations for Qantas to improve its operations, including expanding routes, optimizing flight frequencies, and investing in customer service and fleet modernization. The conclusion emphasizes the importance of benchmarking for organizational competitiveness and market presence.
Running head: ORGANIZATIONAL BEST PRACTICE
Benchmarking
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Benchmarking
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1ORGANIZATIONAL BEST PRACTICE
Table of Contents
Introduction......................................................................................................................................2
Selection of an organization and its lead market competitor...........................................................2
Criteria and justification for the selection of the benchmarks.........................................................3
The benchmark analysis of Qantas..................................................................................................4
Critical reasoning skills including the ethical and the moral consideration....................................6
Recommendation.............................................................................................................................6
Conclusion.......................................................................................................................................7
Reference.........................................................................................................................................8
Table of Contents
Introduction......................................................................................................................................2
Selection of an organization and its lead market competitor...........................................................2
Criteria and justification for the selection of the benchmarks.........................................................3
The benchmark analysis of Qantas..................................................................................................4
Critical reasoning skills including the ethical and the moral consideration....................................6
Recommendation.............................................................................................................................6
Conclusion.......................................................................................................................................7
Reference.........................................................................................................................................8
2ORGANIZATIONAL BEST PRACTICE
Introduction
Considering the present day scenario, it is obvious that the due to the tough competition
the service organization in different parts of the world are trying to offer best quality services in
order to stay ahead of the other market competitors. The airline industry is no doubt also strives
hard to provide the necessary services in order to retain the old customers and the gain new
customers. The superior quality of the services alone is the sole criteria acts as an important
determinant of an airline organization's growth. This study involves the criteria and the
justification of the for the selection of the benchmarks; recommendation for the proper action
that stems from the benchmarking data.
Selection of an organization and its lead market competitor
The study involves the benchmarking and analysis of an organization which is a market
leader and for this purpose Qantas airline is considered and accordingly Virgin airlines are taken
as a leading competitor of Qantas airlines.
Qantas Airways is one of the biggest airline industry of Australia by its fleet size and the
number of the international flights. The airline is founded in the year 1920 and the airline started
its maiden flight in the year 1935. Qantas is actually an acronym which abbreviates to call
Queensland and Northern Territory Aerial Services. Qantas is now regarded as one of the leading
airlines in the world that has long-distance flights and is one of the strongest brands in Australia
(Qantas, 2018).
Virgin Airlines is the second largest airline industry just after the Qantas airlines and is
one of the largest airline industry that has the largest fleet size. In the year 2000, Virgin Airlines
entered the Australian market and the and it brought competition for all the other existing rivals
Introduction
Considering the present day scenario, it is obvious that the due to the tough competition
the service organization in different parts of the world are trying to offer best quality services in
order to stay ahead of the other market competitors. The airline industry is no doubt also strives
hard to provide the necessary services in order to retain the old customers and the gain new
customers. The superior quality of the services alone is the sole criteria acts as an important
determinant of an airline organization's growth. This study involves the criteria and the
justification of the for the selection of the benchmarks; recommendation for the proper action
that stems from the benchmarking data.
Selection of an organization and its lead market competitor
The study involves the benchmarking and analysis of an organization which is a market
leader and for this purpose Qantas airline is considered and accordingly Virgin airlines are taken
as a leading competitor of Qantas airlines.
Qantas Airways is one of the biggest airline industry of Australia by its fleet size and the
number of the international flights. The airline is founded in the year 1920 and the airline started
its maiden flight in the year 1935. Qantas is actually an acronym which abbreviates to call
Queensland and Northern Territory Aerial Services. Qantas is now regarded as one of the leading
airlines in the world that has long-distance flights and is one of the strongest brands in Australia
(Qantas, 2018).
Virgin Airlines is the second largest airline industry just after the Qantas airlines and is
one of the largest airline industry that has the largest fleet size. In the year 2000, Virgin Airlines
entered the Australian market and the and it brought competition for all the other existing rivals
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3ORGANIZATIONAL BEST PRACTICE
in the market. The founder of the airlines is the present CEO Brett Godfrey and co-founder
Richard Branson (Virgin Australia, 2018).
Criteria and justification for the selection of the benchmarks
The benchmarks are selected based on how easily the data are available and how the two
major airlines organization can be compared based on the certain parameters. The selection of
the benchmarks is strictly in accordance with the performance measurement of the two
organizations.
Aeronautical revenue per passenger- This is the most basic of all the benchmarks
and it is measured for a period of one year along with the net discounts or the fee
waivers. This is collected from a passenger in the form of ground handling
charges, passenger-related charges, terminal space, gate charges, passenger-
related charges, airfield landing fees. This can be used for the purpose of internal
benchmarking (Airports Council International, 2018).
Total costs which involves the staff costs and operating costs- the key indicators
that can be evaluated through the calculation of the operating costs and staffs are
the efficiency of the fuel and its cost, productivity of the staff, employment cost,
cost of maintenance, performance within the stipulated time and the management
of the mishandled bags (Airline Cost Management Group Report, 2018).
High profits- profit earning is the main priority of any kind of business and is
important for all types of organization. Especially for the airline industry,
maintaining a high profit is necessary in order to sustain the huge number of the
employees and the large number of the fleet (International Air Transport
Association, 2018).
in the market. The founder of the airlines is the present CEO Brett Godfrey and co-founder
Richard Branson (Virgin Australia, 2018).
Criteria and justification for the selection of the benchmarks
The benchmarks are selected based on how easily the data are available and how the two
major airlines organization can be compared based on the certain parameters. The selection of
the benchmarks is strictly in accordance with the performance measurement of the two
organizations.
Aeronautical revenue per passenger- This is the most basic of all the benchmarks
and it is measured for a period of one year along with the net discounts or the fee
waivers. This is collected from a passenger in the form of ground handling
charges, passenger-related charges, terminal space, gate charges, passenger-
related charges, airfield landing fees. This can be used for the purpose of internal
benchmarking (Airports Council International, 2018).
Total costs which involves the staff costs and operating costs- the key indicators
that can be evaluated through the calculation of the operating costs and staffs are
the efficiency of the fuel and its cost, productivity of the staff, employment cost,
cost of maintenance, performance within the stipulated time and the management
of the mishandled bags (Airline Cost Management Group Report, 2018).
High profits- profit earning is the main priority of any kind of business and is
important for all types of organization. Especially for the airline industry,
maintaining a high profit is necessary in order to sustain the huge number of the
employees and the large number of the fleet (International Air Transport
Association, 2018).
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4ORGANIZATIONAL BEST PRACTICE
Capital expenditure on the passengers and the effective employment of the
capital- it is necessary that an airline organization earns the require amount of
profit and reemploy the same in to the infrastructure so that the revenue is
properly utilized in the smooth conduct of the airline operation as well as the
proper maintenance of the large fleet of airplanes (Bartke, Kliewer & Cleophas,
2018).
Performance of the Australian airports with respect to the overseas counterparts-
the more an airport if performing with respect to the other counterparts, the more
it will help the other airlines to generate the revenues. Airlines functioning from a
particular airport and if the same airport facilities and caters the needs of the
passengers, then there is a strong chance that a specific airline will earn more
revenue. This can be effectively used a benchmark in order to assess the condition
of airline organization (Parliament.nsw.gov.au, 2018).
The benchmark analysis of Qantas
Revenue per passenger- Airports are generating more revenues from each of the
passenger than in comparison to 10 years ago. The measure of the average airport
prices can be effectively done from the collection of the aeronautical revenue
from the airport. Airports are now generating more revenues due to the increase in
the revenue earning per passenger which has increased by 65.5 percent. The Perth
and the Melbourne airports are the ones that have shown significant growth. The
airlines are paying extra for the increase in the price in the airports. The Brisbane
airport is the highest collector of the additional revenues which is followed by
Sydney, Melbourne and Perth. The Qantas and the Virgin airlines operate and
Capital expenditure on the passengers and the effective employment of the
capital- it is necessary that an airline organization earns the require amount of
profit and reemploy the same in to the infrastructure so that the revenue is
properly utilized in the smooth conduct of the airline operation as well as the
proper maintenance of the large fleet of airplanes (Bartke, Kliewer & Cleophas,
2018).
Performance of the Australian airports with respect to the overseas counterparts-
the more an airport if performing with respect to the other counterparts, the more
it will help the other airlines to generate the revenues. Airlines functioning from a
particular airport and if the same airport facilities and caters the needs of the
passengers, then there is a strong chance that a specific airline will earn more
revenue. This can be effectively used a benchmark in order to assess the condition
of airline organization (Parliament.nsw.gov.au, 2018).
The benchmark analysis of Qantas
Revenue per passenger- Airports are generating more revenues from each of the
passenger than in comparison to 10 years ago. The measure of the average airport
prices can be effectively done from the collection of the aeronautical revenue
from the airport. Airports are now generating more revenues due to the increase in
the revenue earning per passenger which has increased by 65.5 percent. The Perth
and the Melbourne airports are the ones that have shown significant growth. The
airlines are paying extra for the increase in the price in the airports. The Brisbane
airport is the highest collector of the additional revenues which is followed by
Sydney, Melbourne and Perth. The Qantas and the Virgin airlines operate and
5ORGANIZATIONAL BEST PRACTICE
occupy the most number of the domestic airports under the lease. The terminals of
the Qantas airlines are exempted from the ACCC monitoring. This benchmark
reveals that the operation of Qantas is far superior with respect to Virgin airlines
(Australian Competition and Consumer Commission, 2018).
Total costs which involve the staff costs and operating costs- the average age of
the Qantas airlines is rising whereas Virgin Airlines is comparatively young. The
return on the invested capital increases with the age of the fleet and this gives the
Qantas airline an advantage over the Virgin airlines. The operational cost of
maintaining the Qantas airlines is 578 million dollars whereas, the Qantas
international is 512 million dollars. The fuel unit cost has gone down by 3 percent
and the net debt is also within the limit. The operating cash flow is calculated to
be around 2.8 billion dollars (Qantas.com.au, 2018).
High profits- the profit earned before tax is 976 million dollars, 20.9 percent is
the amount of the return on invested capital. The Qantas has delivered highest
ever profit from the domestic operation of 652 million dollars. Similarly, from the
international operation was a 5.5 percent lower which is pegged around 222
million dollars (Qantas News Room, 2018).
Capital expenditure on the passengers and the effective employment of the
capital- the net capital expenditure is expected to be around 3 billion dollars for
the financial year 2018-2019. The Qantas airlines are trying taking delivery of the
two 787-9s Dreamliner in the first quarter of the financial year 2018 (REUTERS,
2018).
occupy the most number of the domestic airports under the lease. The terminals of
the Qantas airlines are exempted from the ACCC monitoring. This benchmark
reveals that the operation of Qantas is far superior with respect to Virgin airlines
(Australian Competition and Consumer Commission, 2018).
Total costs which involve the staff costs and operating costs- the average age of
the Qantas airlines is rising whereas Virgin Airlines is comparatively young. The
return on the invested capital increases with the age of the fleet and this gives the
Qantas airline an advantage over the Virgin airlines. The operational cost of
maintaining the Qantas airlines is 578 million dollars whereas, the Qantas
international is 512 million dollars. The fuel unit cost has gone down by 3 percent
and the net debt is also within the limit. The operating cash flow is calculated to
be around 2.8 billion dollars (Qantas.com.au, 2018).
High profits- the profit earned before tax is 976 million dollars, 20.9 percent is
the amount of the return on invested capital. The Qantas has delivered highest
ever profit from the domestic operation of 652 million dollars. Similarly, from the
international operation was a 5.5 percent lower which is pegged around 222
million dollars (Qantas News Room, 2018).
Capital expenditure on the passengers and the effective employment of the
capital- the net capital expenditure is expected to be around 3 billion dollars for
the financial year 2018-2019. The Qantas airlines are trying taking delivery of the
two 787-9s Dreamliner in the first quarter of the financial year 2018 (REUTERS,
2018).
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6ORGANIZATIONAL BEST PRACTICE
Performance of the Australian airports with respect to the overseas counterparts-
the performance of the Qantas airlines is far more superior with more number of
the terminals are given at least in comparison to the Virgin airlines. The terminals
of the Qantas are also exempted from the ACCC monitoring (Australian
Competition and Consumer Commission, 2018).
Critical reasoning skills including the ethical and the moral consideration
The employee of the Qantas airlines performs the business of the organization along with
the highest level of integrity and ethics and it serves best for the Qantas group. There is also an
obligation that the dealings with the stakeholders, employee, regulators, government,
competitors, suppliers, customers, shareholders (Qantas.com, 2018).
Virgin airlines also, on the other hand, maintains a high standard of ethics and moral and work
in accordance with the and in compliance with the regulations, rules and laws. Due to this
reason, Virgin Airlines has adopted a code of ethics that will help in providing a guide to the
employees and the officers of the company (Virginaustralia.com, 2018).
Recommendation
Increasing the operations in Europe, UK, New Zealand and Asia and also other
parts of the world.
Removal of some of the routes which are showing an increased amount of traffic
and also decrease the number of flights from the routes which already has a high
frequency of flights.
Continuing the strategy of co-branding and continuing the same will be beneficial
for Qantas.
Performance of the Australian airports with respect to the overseas counterparts-
the performance of the Qantas airlines is far more superior with more number of
the terminals are given at least in comparison to the Virgin airlines. The terminals
of the Qantas are also exempted from the ACCC monitoring (Australian
Competition and Consumer Commission, 2018).
Critical reasoning skills including the ethical and the moral consideration
The employee of the Qantas airlines performs the business of the organization along with
the highest level of integrity and ethics and it serves best for the Qantas group. There is also an
obligation that the dealings with the stakeholders, employee, regulators, government,
competitors, suppliers, customers, shareholders (Qantas.com, 2018).
Virgin airlines also, on the other hand, maintains a high standard of ethics and moral and work
in accordance with the and in compliance with the regulations, rules and laws. Due to this
reason, Virgin Airlines has adopted a code of ethics that will help in providing a guide to the
employees and the officers of the company (Virginaustralia.com, 2018).
Recommendation
Increasing the operations in Europe, UK, New Zealand and Asia and also other
parts of the world.
Removal of some of the routes which are showing an increased amount of traffic
and also decrease the number of flights from the routes which already has a high
frequency of flights.
Continuing the strategy of co-branding and continuing the same will be beneficial
for Qantas.
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7ORGANIZATIONAL BEST PRACTICE
There is an option for improvement in certain areas like the in-flight facilities and
customer service.
Increasing the number of terminals in all the major airports will increase and help
in maintaining a large flow of the passengers.
The fleet of the Qantas airlines is ageing and this can be effectively mitigated by
buying and incorporating new airlines that will match the needs of the different
types of the passengers.
Conclusion
Thus, from the above study, it can be concluded that the benchmarking is the most
important activity for any organization that wants to increase its market presence and market
competitiveness over its rivals. Benchmarking is a vital process that incorporates a wide variety
of the parameters so that the present condition of a given organization can be effectively
analysed. For this study, Qantas airlines are considered which is a one of the leading airline
industry in Australia and it is compared with its rival Virgin Airlines. The Qantas airlines are
found to be performing outstanding due to this market presence and the experience.
There is an option for improvement in certain areas like the in-flight facilities and
customer service.
Increasing the number of terminals in all the major airports will increase and help
in maintaining a large flow of the passengers.
The fleet of the Qantas airlines is ageing and this can be effectively mitigated by
buying and incorporating new airlines that will match the needs of the different
types of the passengers.
Conclusion
Thus, from the above study, it can be concluded that the benchmarking is the most
important activity for any organization that wants to increase its market presence and market
competitiveness over its rivals. Benchmarking is a vital process that incorporates a wide variety
of the parameters so that the present condition of a given organization can be effectively
analysed. For this study, Qantas airlines are considered which is a one of the leading airline
industry in Australia and it is compared with its rival Virgin Airlines. The Qantas airlines are
found to be performing outstanding due to this market presence and the experience.
8ORGANIZATIONAL BEST PRACTICE
Reference
Airline Cost Management Group Report. (2018). Iata.org. Retrieved 26 March 2018, from
http://www.iata.org/whatwedo/workgroups/Documents/ACMG/ACMG_Report_FY2014
_Enhanced_Version_restricted_public.pdf
Airports Council International. (2018). aci-lac.aero. Aci-lac.aero. Retrieved 26 March 2018,
from http://www.aci-lac.aero/
Australian Competition and Consumer Commission. (2018). Airport monitoring report 2015-16.
Australian Competition and Consumer Commission. Retrieved 26 March 2018, from
https://www.accc.gov.au/publications/airport-monitoring-reports/airport-monitoring-
report-2015-16
Bartke, P., Kliewer, N., & Cleophas, C. (2018). Benchmarking filter-based demand estimates for
airline revenue management. EURO Journal on Transportation and Logistics, 7(1), 57-
88.
International Air Transport Association. (2018). IATA - Another Strong Year for Airline Profits
in 2017. Iata.org. Retrieved 26 March 2018, from
http://www.iata.org/pressroom/pr/Pages/2016-12-08-01.aspx
Parliament.nsw.gov.au. (2018). Parliament.nsw.gov.au. Retrieved 26 March 2018, from
https://www.parliament.nsw.gov.au/researchpapers/Documents/sydney-airport-
performance-and-potential-competi/Briefing%20Paper%20-%20Airport%20Competition
%20FINAL%201.pdf
Reference
Airline Cost Management Group Report. (2018). Iata.org. Retrieved 26 March 2018, from
http://www.iata.org/whatwedo/workgroups/Documents/ACMG/ACMG_Report_FY2014
_Enhanced_Version_restricted_public.pdf
Airports Council International. (2018). aci-lac.aero. Aci-lac.aero. Retrieved 26 March 2018,
from http://www.aci-lac.aero/
Australian Competition and Consumer Commission. (2018). Airport monitoring report 2015-16.
Australian Competition and Consumer Commission. Retrieved 26 March 2018, from
https://www.accc.gov.au/publications/airport-monitoring-reports/airport-monitoring-
report-2015-16
Bartke, P., Kliewer, N., & Cleophas, C. (2018). Benchmarking filter-based demand estimates for
airline revenue management. EURO Journal on Transportation and Logistics, 7(1), 57-
88.
International Air Transport Association. (2018). IATA - Another Strong Year for Airline Profits
in 2017. Iata.org. Retrieved 26 March 2018, from
http://www.iata.org/pressroom/pr/Pages/2016-12-08-01.aspx
Parliament.nsw.gov.au. (2018). Parliament.nsw.gov.au. Retrieved 26 March 2018, from
https://www.parliament.nsw.gov.au/researchpapers/Documents/sydney-airport-
performance-and-potential-competi/Briefing%20Paper%20-%20Airport%20Competition
%20FINAL%201.pdf
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9ORGANIZATIONAL BEST PRACTICE
Qantas News Room. (2018). QANTAS DELIVERS RECORD FIRST HALF PROFIT, INVESTS
IN AIRCRAFT AND TRAINING. Qantas News Room. Retrieved 26 March 2018, from
https://www.qantasnewsroom.com.au/media-releases/qantas-delivers-record-first-half-
profit-invests-in-aircraft-and-training/
Qantas. (2018). The Qantas Story | Qantas. Qantas.com. Retrieved 26 March 2018, from
https://www.qantas.com/travel/airlines/history/global/en
Qantas.com. (2018). Qantas.com. Retrieved 26 March 2018, from
https://www.qantas.com/infodetail/about/corporateGovernance/CodeofConductandEthics
.pdf
Qantas.com.au. (2018). Qantas.com.au. Retrieved 26 March 2018, from
https://www.qantas.com.au/infodetail/about/corporateGovernance/2016AnnualReport.pdf
REUTERS. (2018). BRIEF-Qantas Airways says net capital expenditure expected to be....
REUTERS. Retrieved 26 March 2018, from https://www.reuters.com/article/brief-qantas-
airways-says-net-capital-ex/brief-qantas-airways-says-net-capital-expenditure-expected-
to-be-3-0-billion-for-fy18-and-fy19-combined-idUSFWN1LA0SF
Virgin Australia. (2018). Enable Cookies | Virgin Australia. Virgin Australia. Retrieved 26
March 2018, from https://www.virginaustralia.com/uk/en/about-us/
Virginaustralia.com. (2018). Virginaustralia.com. Retrieved 26 March 2018, from
https://www.virginaustralia.com/cs/groups/internetcontent/@wc/documents/
webcontent/~edisp/vaa-policy-code-conduct.pdf
Qantas News Room. (2018). QANTAS DELIVERS RECORD FIRST HALF PROFIT, INVESTS
IN AIRCRAFT AND TRAINING. Qantas News Room. Retrieved 26 March 2018, from
https://www.qantasnewsroom.com.au/media-releases/qantas-delivers-record-first-half-
profit-invests-in-aircraft-and-training/
Qantas. (2018). The Qantas Story | Qantas. Qantas.com. Retrieved 26 March 2018, from
https://www.qantas.com/travel/airlines/history/global/en
Qantas.com. (2018). Qantas.com. Retrieved 26 March 2018, from
https://www.qantas.com/infodetail/about/corporateGovernance/CodeofConductandEthics
Qantas.com.au. (2018). Qantas.com.au. Retrieved 26 March 2018, from
https://www.qantas.com.au/infodetail/about/corporateGovernance/2016AnnualReport.pdf
REUTERS. (2018). BRIEF-Qantas Airways says net capital expenditure expected to be....
REUTERS. Retrieved 26 March 2018, from https://www.reuters.com/article/brief-qantas-
airways-says-net-capital-ex/brief-qantas-airways-says-net-capital-expenditure-expected-
to-be-3-0-billion-for-fy18-and-fy19-combined-idUSFWN1LA0SF
Virgin Australia. (2018). Enable Cookies | Virgin Australia. Virgin Australia. Retrieved 26
March 2018, from https://www.virginaustralia.com/uk/en/about-us/
Virginaustralia.com. (2018). Virginaustralia.com. Retrieved 26 March 2018, from
https://www.virginaustralia.com/cs/groups/internetcontent/@wc/documents/
webcontent/~edisp/vaa-policy-code-conduct.pdf
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