Strategic planning and competitive challenges at Qantas Airlines

Business of Qantas

Australia's largest airline is named as QANTAS and it is taken as a symbol of national pride by many Australians. On 16th November 1920, it started its operations as the Queensland and Northern Territory Aerial Services Limited (QANTAS) in Queensland. To date, QANTAS is known to be one of the strongest brands in Australia and regarded as world's best long distance airline. Nearly 140 destinations in nearly 40 countries are covered by the airline while carrying almost 40 million passengers (Fleisher and Bensoussan, 2007). QANTAS is the market leader on the domestic front. However, Virgin Blue is considered to be its competitor that started its operations in August 2000. Internationally, this airline is leading the market in regards of flights to and from Australia, but having tough competition from Malaysian Airlines, Emirates, Air New Zealand and Singapore Airlines.

Annual report of QANTAS highlights many fact and figures which indicates that the airline has experienced a rise in profits by 58%, and making profit before tax of $1,032.1 million for the year which ended in June 2007. Jetstar, one of the brands of QANTAS, has been offering services since May 2004 which is centered about cost differentiation. The strategy behind the formation of Jetstar allows QANTAS to meet the varying customer demands, and compete with low budget airlines while capturing the wider market. Generation Cabins and seating has been provided by the airlines to the customer. Moreover, premium economy will be in operations on international B747-400. Jetstar offers cost effective services to the customers by having new aircraft carriers. It also provides with exceptional customer service (Qantas Annual report 2009).

Strategic planning and Qantas

Qantas has recently had its credit rating reduced to sub-investment grade by the ratings agency Standard & Poor, making access to capital more expensive. QANTAS asked for assistance from the federal government but got a response of 'get your house in order'. This paper outlines the strategic choice QANTAS has to make 'to get their house in order'. To achieve success, planning should be the integral process for any company. QANTAS and other airlines are striving hard to make good plans in order to attain their goal. QANTAS also did some good planning in this regard. The following section will discuss their plans and some suggestions, reviews and ideas to improve for better results.

Summary:

Steven Creedy wrote an article "Qantas looks to extend lead with upgrade" which showed that some planning theory is being announced by the CEO of QANTAS airline. There is a budget set up of millions of dollars to improve the flights, lounges and other services offered by the airlines in order to overcome their competition with Virgin Blues. It is also stated that the airline is soon introducing a new technology for passengers to check in.

Moreover, QANTAS promises to beat all the competitors including Virgin Blue and that's what makes QANTAS stand out in the local market. Upgrading includes improvement of aircraft, food, on-board entertainment, services, lounges and infra-structure. Additionally, QANTAS has plans of offering the replica services of international flights to domestic ones. Plans include famous chef cuisines for domestic passengers along with the lounges for the domestic routes.

While the JETSTAR and Virgin Blues also announced some upgrading plans. Thus, QANTAS has some good plans announced for the improvement and promises to beat all the competitors in the market place.

Discussion:

The concept and the process for the planning are clearly announced. This paper will throw light on some of the attributes.

Targets

There was a good performance by QANTAS in the improvement of various services and introduction of the check-in technology. However they need to consider their customer's priorities. Customers should be their utmost consideration, their choices should be given preference. Customers prefer low pricing, improved services without delays. By fulfilling these demands, QANTAS will be able to achieve good reputation.

Destinations

To beat the competitors more profoundly, QANTAS needs to introduce new destinations and flight routes in order to fulfill the needs of the customer. Direct flights are preferred by the customer. It is noted that customer wants to reach the destination directly, rather than having a luxurious in-direct flight. Thus, QANTAS should focus more on the comfort of the customers.

New class

Other airlines introduced a new class in between the business and economic for the people who have average incomes, QANTAS should focus on the same objective, and this will help to get more customers on board as the customers with average incomes will prefer a good brand name with affordable services. Accomplishment of this objective will lead QANTAS to more success.

Conclusion

Objectives and plans for improvements are quite clear by the QANTAS airlines. These improvements and variations in the services will lead them towards accomplishments and success. Suggestions are made for better performance and achievement. New destinations and routes are demanded by the customers and failure to meet this demand will surely lead to lose many customers. Launch of new class was suggested to target the business and normal passengers with average incomes. Low pricing and better services were suggested to meet customers' demands. Implementing these suggestions will help QANTAS to be more recognized in the international and local market.