Prepared by:
Election Majilakwa (00158281T)
Tatiana Herrera (00166241T)
Mariam Elzeiny (NA)
Prepared for:
Daniel Evans
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Table of Contents
Introduction 4
Opportunity for Growth 4
Body of Industry Information 5
Discussion 5
Analyzing the new needs for Qantas 6
New Opportunities 7
Emerging Technologies 8
Project Details, Scope and Identification of new Routes 8
Deploying Research Framework 9
Guidance to the Senior Management of Qantas Airlines 10
References 12
Appendix 14
Appendix-A: Questions for the Client 15
Opportunity for Growth
The pressure posed by oil prices limits the growth of the airlines. At the same time, the company sees significant opportunities for international growth. Therefore, the Qantas International segment should become a priority for the development.
The rapid development of airline industry in UAE and its economic growth turned it into one of the strategic destinations (Joyce, 2018). Hence, Qantas should expand its travel routes to Emirates. Thus, the customers of the airlines will benefit from incredible reach that Emirates have from its Dubai hub. The growth of Asia-Pacific region suggests that the company should start new routes between Asia (e.g. Singapore) and Europe (e.g. London). This will help the company to leverage its strengths by offering more choice and maintaining high margin.
The existing partnership with American Airlines allows Qantas to expand the number of codeshare routes. Joyce (2018) states that, this move will provide customers with a wide range of discounts. Also, this partnership creates an opportunity for launch of the new routes between Australia and New Zealand and United States.
The airline should also continue to innovate the industry launching “kangaroo routes”. The company has launched a 17-hour direct flight from Perth to London in 2018 (Smyth, 2018). The customers want to travel without stopping to their final destinations. Hence, the companies that will be able to offer such flights will disrupt the industry and push the boundaries of airlines travel. Qantas should focus on premium customer segment when developing such routes to make them economically efficient. The company should use fuel-efficient jets that can handle such long-distance trips. Connecting such distant destinations is a challenging task but the demand for such trips shows that the company should use this opportunity (Smyth, 2018). The company has capacities and technologies to overfly competitors and stopover hubs, which will put the company in a stronger competitive position.
The potential travel routes include Sydney – Paris, Sydney – Cape Town, Sydney -New York, Sydney – Rio de Janeiro, and Sydney – Frankfurt. Such choices of routes given Qantas advantage in geography allow the company to combat the domination of such global connection hubs ad Dubai, Heathrow, and O’Hare (Smyth, 2018). The short-term goals suggest that such ultra-long-haul flights will be designed to business class clients who value their time. Nevertheless, in the future, the company should increase the number of passenger seats and offer 2nd class options for long-distance flights.
Discussion
Today, with increasing challenges of oil prices, it is found that the airline industry is facing severe challenges in their daily activities. Their profitability margins are reduced and some of them are occurring huge losses on a daily basis (Dana & Orlov, 2014).
Further, the cancellation of the flights and unable to serve the passengers as per their expectations is also hurting the brand image and service principles of the respective airline organization. Today, with rapid development of the airline industry, it has become important for the different airlines to not only launch new routes but also provide effective and efficient services to the customers that they will enjoy their overall travelling experience.
The customers are long out for the flight options that will provide them with several benefits such as – lowest travelling time, long distance journey options, in-airline support services, hospitality services, and other benefits to the customers (Dana & Orlov, 2014). In this case scenario, Qantas Airlines is thereby looking out for multiple options and several strategies through which they will be able to increase their market share. It will subsequently help them overcome the challenges and improve bottom-lines in a given working environment.
Analyzing the new needs for Qantas
Today, majority of the customers are looking out for the airlines that will provide them with memorable and fun experience. Customers are associating airlines with food, services, and prices, charges for their luggage, on-boarding facilities, and other supplementary services offered by the airlines (Kuilman & Wezel, 2013).
Hence, it becomes important for the management team of the organization to inspect into each of these elements. They thereby need to provide support services that will help them overcome the issues of the customers and instead serve them with better services. For this purpose, the management team of Qantas Airlines will be required to provide exceptional and loyalty-building services to the customers.
Qantas Airlines needs to launch customers insight program wherein they will be rewarding customers based on their travelling miles. The travelling miles can be exchanged in terms of cash during the next journey; thus, it will act like a type of discount scheme in a given environment.
Further, the research team of Qantas Airlines needs to deploy data research techniques to identify the changing needs and patterns of the customers. It will thereby make sure that customers will not receive the on-board benefits but will also receive multiple discount offers for their future journeys. It will thereby improve the customer retention ratio for the organization (Kuilman & Wezel, 2013).
New Opportunities
Based on the research conducted, it is found that the frequent flyers are looking and expecting flights from Qantas Airlines that will make them travel without taking any halts in their long journeys. Customers are looking for directly flights from the East Coast of Australia to US, UK, and other European countries (Brueckner, Lee, & Singer, 2014).
It is thereby a great opportunity for Qantas Airlines since this option will revolutionize the air travel and the entire airline industry. Based on the survey conducted by the research team at Qantas, customers are looking for options that will provide them with – stretch bed, exercise zone, crèche, communal bar, self-service cafe one, dining zone, and work and study section in the flights.
It will thereby keep them fresh during this entire long distance journey. The airline has thereby asked Air Boeing to develop such airplanes that will allow the airline organizations to offer such services to the customers. There are several options considered under this journey option. These include – Sydney – Paris, Sydney – Cape Town, Sydney -New York, Sydney – Rio de Janeiro, and Sydney – Frankfurt.
Emerging Technologies
Qantas Airlines needs to capture the new emerging opportunity of the long-distance journey without halting at any intermediary station. It will thereby allow them to travel these destinations in lesser time and at the same time will save on their fuel costs. The research numbers state that the journey from Sydney to London will take around 20 hours and 20 minutes; it will thereby save additional three hours and 45 minutes on journeys to London.
The long-distance journeys can only be covered by focusing on the emerging technologies. The management team of both Qantas Airlines and Air Boeing need to work together on this project so that they can build an airbus that will be able to serve these options and services to the customers (Ciliberto & Williams, 2014).
Qantas Airlines will thereby be able to provide long distance journey option to the customers, which later will change the entire airline industry. It will subsequently help Qantas Airlines to increase their market share and thereby become more profitable compared to other airline options in a given environment.
Project Details, Scope and Identification of new Routes
The purpose of this project is to identify the different air routes of long distance journeys that will be feasible for the Qantas Airlines. Second, the project scope will be limited to identification of the routes since there are still no approaches found through which these air routes can be covered by the Qantas Airlines.
Based on the research conducted, the major long distance routes recommended include – Singapore-Paris (daily), Moscow (three times in a week), New Delhi (four times in a week), Johannesburg (three times a week), Frankfurt with Hong Kong (daily), and London (two times a week). Each of these options will allow Qantas to expand their base in Singapore hub as well as leverage their options in the Asian territories as well.
It will also be able to capture new opportunities in the African territories by providing connecting flight options. Similarly, the management team also needs to focus on their local domestic routes that will connect Melbourne-Shanghai, Sydney-Beijing, and Adelaide-Singapore. This strategy will help them overcome the market competition and sustain their position in a given market scenario (Huse & Oliveira, 2012).
Deploying Research Framework
There are different research options that can be implemented for the purpose of conducting the stated research in this report. There are also research and project management frameworks that can be deployed for the purpose of overcoming the workplace challenges, focus on innovation and thereby devise new routes to Qantas Airlines, focus on research techniques through which new service levels can be identified, and finally determine new ways through customer loyalty can be increased.
The top-level management thereby needs to consider a proper agile working approach that will guide them on identification of new routes, checking the feasibility from the financial and practical perspectives, and thereby designing the air travelling programs for the customers (Zhang, Yang, & Wang, 2013).
It will ensure of overcoming the challenges and other risk factors that could pose hurdles toward the implementation of the project management framework in a given working environment. Finally, the organization needs to review and monitor these new strategies and thereby judge on the overall performance (Zhang, Yang, & Wang, 2013). The senior management team can recommend changes wherever required.
Guidance to the Senior Management of Qantas Airlines
Today, with increased challenges in the external environment and with increased competition levels, it has become mandatory for the management team of Qantas Airlines to revise their current strategies. They need to target Asia-South America traffic which still seems to be underdeveloped in the present environment (Lucier & III, 2013).
Qantas Airlines needs to use the Sydney hub to connect with Sao Paulo, Buenos Aires, and Santiago. Further, they need to enter into a joint-venture program with the China Eastern airlines to connect with major cities of China and Russia. It will thereby help them capture the new locations in a given working environment.
Finally, they need to collaborate with Emirates and thereby serve Middle-East destinations that will further connect with other European nations (. Thus, customers will have both options of long-distance travelling. They can either travel through airline where there will be no halts or can travel through airline wherein there will be one or two intermediary stations to connect with.
Joyce, A. (1 June 2018). Making the most opportunity: Alan Joyce, Qantas Group. Airlines IATA. Retrieved from https://airlines.iata.org/ceo-interviews/making-the-most-opporunity-alan-joyce-qantas-group.
Smyth, J. (23 March 2018). Qantas pushes boundaries with 17-hour ‘kangaroo route’. Financial Times. Retrieved from https://www.ft.com/content/7cbf6024-2ce2-11e8-9b4b-bc4b9f05f381.
Dana, J., & Orlov, E. (2014). Internet Penetration and Capacity Utilization in the US Airline Industry. American Economic Journal: Microeconomics, 6(4), 106-137.
Kuilman, J., & Wezel, F. (2013). Taking off: Category contrast and organizational mortality in the UK airline industry, 1919-64. Strategic Organization, 11(1), 56-77.
Brueckner, J., Lee, D., & Singer, E. (2014). City-Pairs versus Airport-Pairs: A Market-Definition Methodology for the Airline Industry. Review of Industrial Organization, 44(1), 1-25.
Huse, C., & Oliveira, A. (2012). Does Product Differentiation Soften Price Reactions to Entry? Evidence from the Airline Industry. Journal of Transport Economics and Policy, 46(2), 189-204.
Ciliberto, F., & Williams, J. (2014). Does multimarket contact facilitate tacit collusion? Inference on conduct parameters in the airline industry. The RAND Journal of Economics, 45(4), 764-791.
Zhang, Q., Yang, H., & Wang, Q. (2013). Market Conduct of the Three Busiest Airline Routes in China. Journal of Transport Economics and Policy, 47(3), 335-347.
Lucier, J., & III, W. (2013). Scheduled passenger air transportation in the Producer Price Index: Improvements and trends. Monthly Labor Review, 31-47.
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Subject Name and Code |
BIZ304 Business Consulting Project |
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Client Name (Organisation) |
Qantas (fictitious) |
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Student Group Name |
Group 2 |
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Student Names |
Election Majilakwa, Tatiana Herrera Morera , Mariam Elzeiny |
Appendix-A: Questions for the Client
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No. |
Question |
Rationale (why ask this question) |
Reference (if applicable) |
Lecturer Feedback |
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1 |
Can you help me see how the project connects to the desired outcomes of your business? |
The question helps us identify the business problem and opportunity that the client after. |
We are constantly trying to identify and promote the routes that will generate the greatest revenue for the business |
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2 |
Can you please name top 3 of the most profitable and least profitable domestic routes in your company? |
Qantas is currently operating approximately 65 domestic routes nationwide. The question helps to gain an insight of the domestic airline performance and the factors that may affect it. |
Qantas Airways Limited. (2015). Qantas Route Maps. Retrieved from https://www.transport.govt.nz/assets/Uploads/Air/Documents/Annexure-C1-Qantas-Domestic-Route-Map.pdf |
For the consultant to research |
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3 |
There are quite a few of new launched domestic routes as well as existing one being terminated over the years. What are the criteria used to determine the new launched and terminated routes? |
This question will help to identify key criteria and information needed in evaluating the domestic routes that align with client’s company business perspective. |
Profitability. Which is primarily a function of “bums on seats”. We are open to new routes if they can be justified |
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4 |
How is the market response to the new launched domestic routes in 2014 such as Melbourne to Coffs Harbour and Sydney to Hervey Bay ? How the company measures the performance of the mentioned routes? |
The question helps to discover measureable performance criterion of domestic routes from client’s business perspective. |
News Room. (2014). QANTAS ANNOUNCES NEW DOMESTIC ROUTES. Qantas.com. Retrieved from https://www.qantasnewsroom.com.au/media-releases/qantas-announces-new-domestic-routes/ |
This is commercial in confidence |
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5 |
What is the target market of your company’s domestic airlines? |
The question helps to discover the demographic needs in identifying potential domestic routes to be focus on. |
Johne, A. (1999). Successful market innovation. European Journal of Innovation Management, 2(1), pp.6-11. https://doi.org/10.1108/14601069910248838 |
Typically working Australian travelling for either business or pleasure – along with international tourists travelling within Australia |
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6 |
What are the strategic alliances that currently available in your company? |
The question asks for a referral that can provide context for the research and helps to identify types of services that will benefit the company performance. |
For the consultant to research |
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7 |
What were the results of these strategic alliances? How did you measure the success and outcomes? |
The question helps to gain insight for client’s perspective for strategic alliances and allow us to identify key performance index to evaluate potential opportunities for strategic alliances. |
Johne, A. (1999). Successful market innovation. European Journal of Innovation Management, 2(1), pp.6-11. https://doi.org/10.1108/14601069910248838 |
Commercial in confidence |
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8 |
What is the short comings of your business strategy in promoting your services and expand market share in domestic airlines? |
This question help us to identify whether there are Things that the client and his employees done that may hinder the company from achieving desired result. |
Doz, Y. L. (1996). The evolution of cooperation in strategic alliances: Initial conditions or learning processes? Strategic Management Journal, 17, pp.55-83. https://doi.org/10.1002/smj.4250171006 |
I am not sure I understand the question – but in any case it is out of scope |