The flight services in Australia account for 56% of the total of all flights Qantas and its subsidiary companies offer per week. Qantas offers approximately 5000 flights per week locally and internationally. These flights fly between 14 destinations in Australia. 12. 1 POLITICAL ANALYSIS Australia still remains a federal state which recognizes British Monarch as sovereign. 12. 2 ECONOMIC ANALYSIS An increase in local output in conjunction with healthy business and consumer confidence are factors helping the economy improve.
An increase in exports of raw materials and agricultural products are also responsible for this upbeat economy. The trade deficit has increased due to droughts and strong import demand. The trade deficit as of 2004 sits at $8 billion. 12. 3 INFRASTRUCTURE Australia possesses a vast network of roads and railways and ports which cater for each cardinal point in Australia. Australia has 305 paved and unpaved airports which are spread throughout the whole continent. 12. 4 TOURISM AND TRAVEL Australia’s tourism sector contributes 4. % to the GDP. Australia has many destinations which are of international acclaim. Some of these destinations are Ayers rock, Sydney Opera house and the Great Barrier Reef. Explanation key facts from the above SWOT Analysis •S2) Qantas’ aircrafts are equipped with product features that provide high quality service standards, which cater to a diverse range of travelers tastes. •O1) Allows passengers to bypass normal check-in lines and allow them to print their boarding passes and check baggage. O2) Qantas employed many pricing initiatives on many of their flights which increased revenue across the board (77. 8% revenue seat factor). •T3) Threat in setting up operations in India. 10. 1. PORTER 5 FORCES The Porter 5 Forces framework is based on a service (flight) industry perspective. 1. The rivalry in the airline industry takes the form of alliance competition as well as individual airlines competing in markets where Qantas is present. 2.
Bargaining power of the buyers is existent because prices have to accommodate their needs. However, the buyers are so significant they create a substantial demand which gives Qantas control to establish prices that meets the needs of the company and its customers. 3. Strong entry barriers exist in this industry. Some of the key barriers include capital or investment requirements, access to sufficient resources, and economies of scale. The main potential entrant threat for Qantas is the emergence of future discount airline carriers. 4.
Because Qantas is a service industry they are not faced with the pressures of the bargaining power of suppliers. With approximately 84% of their sales and revenues coming directly from their flights, they do not have to worry about suppliers threatening to integrate forward into the industry. 5. Each airline alliance has broken the world into sections with each section being run by a specific airline in that respective alliance. Because of this understanding and through its service industry outlook the threats of substitutes are at a minimum for Qantas.