Qantas Case Study
Qantas Case Study
Qantas is an Australian icon. Australia’s national airline has enjoyed a long history as a profitable business, a respected brand name and has a deserved reputation for safe and reliable travel. For a small country of 22 million people, the Australian domestic airline industry is significant. The high level of urbanization of Australia’s population, the long distances between major urban centres, the lack of high speed trains and the importance of Australia’s tourism industry all spurred growth in air travel in Australia. Qantas has always been the dominant player in the industry.
In recent years, however, the company has encountered turbulent times. The airline industry in Australia has become significantly more competitive, and the international airline industry has seen the fall of a number of well-known airlines and the rise of a number of new carriers. The vision of the Qantas group is to be one of Australia’s great businesses and among the world’s great airline groups. However, in the 2011/12 environment, Qantas faced a number of setbacks to this vision.
In 2011 the airline struggled on two fronts. The first front was the declining profitability of international operations. This problem culminated with Qantas reporting a $257 million dollar loss for the year ending on 30th June, 2012. This was the first loss for the airline since it was fully privatized in 1995. The airline is, however, profitable in the domestic market, holding a 65% market share and having a commanding lead in the key domestic business market. However Qantas was losing money in the international market and in 2012 it only carried 18.7% of passengers travelling to and from Australia.
The most profitable activity for Qantas is travelling business class passengers. Flying economy between Sydney and Melbourne, for example, can often be less than $100 return. A business class, return flight on this route costs more than $1300 on Qantas. Domestic business class
Qantas is an Australian icon. Australia’s national airline has enjoyed a long history as a profitable business, a respected brand name and has a deserved reputation for safe and reliable travel. For a small country of 22 million people, the Australian domestic airline industry is significant. The high level of urbanization of Australia’s population, the long distances between major urban centres, the lack of high speed trains and the importance of Australia’s tourism industry all spurred growth in air travel in Australia. Qantas has always been the dominant player in the industry.
In recent years, however, the company has encountered turbulent times. The airline industry in Australia has become significantly more competitive, and the international airline industry has seen the fall of a number of well-known airlines and the rise of a number of new carriers. The vision of the Qantas group is to be one of Australia’s great businesses and among the world’s great airline groups. However, in the 2011/12 environment, Qantas faced a number of setbacks to this vision.
In 2011 the airline struggled on two fronts. The first front was the declining profitability of international operations. This problem culminated with Qantas reporting a $257 million dollar loss for the year ending on 30th June, 2012. This was the first loss for the airline since it was fully privatized in 1995. The airline is, however, profitable in the domestic market, holding a 65% market share and having a commanding lead in the key domestic business market. However Qantas was losing money in the international market and in 2012 it only carried 18.7% of passengers travelling to and from Australia.
The most profitable activity for Qantas is travelling business class passengers. Flying economy between Sydney and Melbourne, for example, can often be less than $100 return. A business class, return flight on this route costs more than $1300 on Qantas. Domestic business class