Qatar Airways Strategic Management Analysis

Introduction and Company Overview

The Qatar government owns Qatar Airways, one of the world's five-star airlines operating on both international and domestic destinations. The airline provides some of the most reliable service and best passenger comfort in the industry. Its services are excellent both on the ground and in the air, and its target groups are corporate, middle-class, and upper-middle-class travellers. Through its latest expansion efforts, Qatar Airways has been reiterating its commitment to a wide range of growth opportunities by adding service to different points across the globe.

Qatar Airways is Qatar's national carrier and one of the industry's great success stories. Operations started in 1994 as a small regional carrier serving only a few routes. In 1997, the airline was relaunched under the directive of His Highness The Father Emir, Sheikh Hamad bin Khalifa Al Thani, who defined a vision for turning Qatar Airways into one of the leading international airlines with high standards of service. Since then, Qatar Airways has been one of the fastest-growing airlines in the world, characterized by unprecedented double-digit growth averaging every year.

The airline's development under His Excellency Mr. Akbar Al Baker, the Group Chief Executive appointed in 1997, has proved instrumental in transforming Qatar Airways into an award-winning airline and one of the best in the aviation industry. Mr. Al Baker's leadership saw Qatar Airways mature as a leader in both global and regional aviation, earning the airline widespread admiration for its excellence in service (THE QATAR AIRWAYS STORY, 2016).

Some key facts about Qatar Airways are as follows. The company is owned by the State of Qatar and bears its flag. The airline's headquarters are in the Qatar Airways Tower in Doha. Its network is based on the hub-and-spoke model: the Doha hub manages and connects over 100 international destinations, utilizing a fleet of over 100 aircraft. Qatar Airways operates across Africa, Central Asia, Europe, the Far East, South Asia, the Middle East, North America, South America, and Oceania. The Skytrax World Airline Awards named Qatar Airways the best airline of 2011.

Qatar Airways began as a small regional carrier in 1994, initially servicing very few routes. It became a crown jewel of Middle Eastern aviation after being relaunched by Emir Hamad bin Khalifa Al Thani. His vision of turning Qatar Airways into a leading brand with quality standards and service excellence has since borne fruit. Apart from being Qatar's national carrier, it is also one of the top airlines in the Middle East and one of only four elite airlines to have been awarded five-star status. Founded on 22 November 1993 and commencing operations on 20 January 1994, Qatar Airways drew inspiration from the success of Emirates and earned a comparable place among the world's premier airlines (QATAR report, n.d.).

PEST Analysis

Government norms and other political factors influenced Qatar Airways' evolution as a success story. The national carrier had to deal with opposition from European airlines that used lobbying tactics, driven by concerns about competition from Qatar Airways' growing fleet. Two factors shaped alliance formation: indirect taxes reported by European airlines, and political barriers designed to inhibit certain taxation procedures (QATAR report, n.d.).

During the economic crisis, several factors were likely to affect Qatar Airways, including GDP performance, growth in international trade, and globalization. The GDP rate within the Middle East, according to current statistics at the time, was shown to surpass 3.6%, and passenger traffic increased by 5.5%. As a result, the state-owned airline was able to overcome pricing challenges (QATAR report, n.d.).

It is essential to consider the social factors that ensure both the business and the community are not adversely affected. Qatar Airways, in addressing this issue, has indicated a positive response toward the community by reducing its carbon footprint, since it controls air traffic in ways that minimize carbon emissions (QATAR report, n.d.).

Qatar Airways' strategic partnership with Qtel indicates a long-term technological connection that has been useful in building the airline's foundation for technological advances. Technological development in the airline positively affects areas such as routing and internet booking. The technological alliance assists in improving operations more broadly. Moreover, developments in global distribution systems play an essential role in enhancing services offered by Qatar Airways (QATAR report, n.d.).

Mission, Vision, and Strategic Goals

The airline has remained true to its mission statement, which calls for "excellence in everything that we do." Over the years, the airline has ensured high standards, state-of-the-art security, and five-star service excellence that has come to be associated with Qatar Airways. Its staff is well-trained, polite, and culturally aware (QATAR report, n.d.).

According to its vision statement, Qatar Airways aims "to become a world-class carrier and cargo service provider with global reach." Its forward-thinking approach and growth trajectory have not faltered. To maintain steady progress toward this goal, the airline focuses on three key areas: quality of the product, reliability of the product, and world-class network reach. These aims are not unrealistic, given that the airline's 122 aircraft progressively serve over 120 destinations across all continents (QATAR report, n.d.).

The airline's main focus is to increase brand awareness on a global scale. It has worked to create awareness of airline safety, products, services, and convenience, highlighting the benefits of choosing air travel with the company. Luxury is the keystone of the airline, using creativity and innovation to reach its objectives (QATAR report, n.d.).

Since everything related to Qatar Airways speaks of excellence, the organization is always a step ahead of its customers' needs, consistently exceeding passenger expectations in service and client satisfaction (QATAR report, n.d.).

The success of Qatar Airways and its steady rise can be attributed to the following factors: acquisition of new ventures; experimentation; social and environmental awareness; strong strategic capabilities; well-oriented and streamlined corporate governance; a people-oriented organizational culture; a resilient hierarchical structure; a high level of priority toward customer satisfaction; product and service standards that are not only maintained but continuously improved locally and internationally; growing strategic partnerships and alliances; and a well-founded reputation that remains a source of pride for the company (QATAR report, n.d.).

The growth rate of the airline is remarkable, with revenues and expansion doubling annually. At this stage, the airline can be assessed as follows. The Chief Executive Officer (CEO) Akbar Al Baker, along with other private partners, holds 50% of the private stock, while the government controls the remaining 50%, providing the necessary government support. Under Al Baker's management, Qatar Airways has seen exceptional growth and a strong market presence. The airline has managed to retain 70% of its market, generating 520 billion USD toward Qatar's economy (QATAR report, n.d.).

Qatar Airways maintains its high standards through close collaboration with key partners and alliances. Rolls-Royce supplies and manufactures fleet engines for the airline. Qtel, a high-tech company, provides the necessary infrastructure for sales and marketing and works closely with the airline on ticket management and promotions. As a state-owned airline, Qatar Airways enjoys benefits such as low taxes, lower rental charges, and access to financial and managerial resources from the Qatari government. The airline also benefits from lower maintenance costs and brand loyalty from the Qatari public.

Qatar Airways leans heavily toward luxury and high-class service, with its preferred market being business travellers and the elite. The airline also attracts affluent new-money travellers and upwardly mobile professionals willing to pay higher fares in return for excellent service, though there are also frequent economy-class travellers. Through strategic market segmentation, the airline remains premium yet affordable enough for economy-class passengers. This sustained market penetration strategy has assured the airline a secure future. Qatar Airways' focused strategy works partly because very few competitors can match this level of service delivery, giving the airline a strong share of its target clientele (QATAR report, n.d.).