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Qantas and Strategic Operational Moves

 


             The first possible option is to fix their loss-making international operation. Travellers are constantly becoming budget-conscious and they demand airlines that offer the lowest prices with the best value. In the last few years, Qantas has been making heavy losses in its international business. In the last ten years alone, international airlines such as Emirates, Qatar and Etihad stole the market share of Qantas with lower fares and better in-flight products (Ryan 2014; Thomas, G 2013). Also, economies of scale of those giants provide them with cost advantages because of greater purchasing power with suppliers and greater networks (Carpenter, Martin, Rice and Sanders 2010). Furthermore, new airlines such as China Southern and AirAsia also entered the market with even lower prices and costs because of the cheap labour advantages, making competition very tight for Qantas (Thomas, G 2013). What Qantas can do to turn the tide is to have partnerships with the tourism companies of its target markets. By sponsoring international events in other countries and promoting them to Australia and all other countries that Qantas operates, not only it may be able to boost sales and increase global awareness, but Qantas might receive support from the government for promoting their countries as well, and make a sustainable relationships with them. However, Qantas's decision to drop the marketing deal of $44 million with Tourism Australia in 2012 because of a dispute between Alan Joyce and Geoff Dixon was arguably a bad decision (Sexton 2012). Andrew McEvoy, the managing director of Tourism Australia said that the partnership with Qantas is critical to future tourism growth (Sexton 2012). Sponsoring Australia tourism will prove to be profitable for Qantas because it can provide opportunities such as sponsoring international events in Australia which can increase brand awareness and image, and also revenues for its international arm.


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