SWOT Analysis Strength • Improving Margins: As economic showing a significant progress, Qantas margins are also improving. • Diversified Business : Qantas range of subsidiary business operates in different sector but all of them supporting airlines industry’s activity, such as catering, baggage handling and engineer. This also helped them to control supplier and aircraft maintenance cost. • Oneworld Alliance Oneworld Alliance is a management company founded by Qantas, American Airlines, British Airways, Canadian Airlines and Cathay Pacific.
Purpose of this centralized management company is to helping each other with non? core business activity such as marketing, engineering/maintenance, and online ticketing to reduce cost thus give the company allowance to cut ticket price. Members of the alliance are also possible to transfer passenger for connecting flight. • Efficient Use of Resources Qantas have a home ground advantage as Australia national airlines. Its subsidiary company also provide great resources for Qantas core business. Weakness • Reliability Concerns: Qantas has been involved to some incident with some of their aircrafts in 2008/09.
Although nothing ended in major accident, its affected company’s safety image. • Wild? Cat Strikes: A wildcat strike action, often referred to as a wildcat strike, is a strike action taken by workers without the authorization of their trade union officials. Qantas been hit with worst strike in the company history in 2009, caused a major delay that also affected other flights. Opportunities • Open Skies Policy: Open skies polity open up an opportunity for aviation industry as a result of liberalisation of international aviation industry rules and minimum government intervention.
Benefit that created by open skies provisions are: Free market competition Pricing determined by market forces Fair and equal opportunity to complete Cooperative marketing arrangements Provisions for dispute settlement and consultation Liberal charter arrangements Safety and security Optional seventh freedom all? cargo rights Qantas noticed this opportunity as a window to new market and as a result it created Jetstar. • Entering New Markets of low? budget airlines with potential huge customer. • Introduction of A380 : The world’s biggest jumbo jet is an attraction of its own.
It offers an ultimate comfort for passenger especially during long haul flight. Airbus A380 still excited people and plenty of customer chose Qantas for an experience of flying in world’s largest, luxurious and technologically advanced aircraft. Threat • Consolidation in Airline Industry Long haul route between Australia and United States is Qantas’ second? most important international market. It’s now come under threat since the merger between United Airlines and Continental to form world’s largest airline. United Airlines? Continental now aiming Australia market, • Volatility in Fuel Prices
Oil price instability in 2008 resulted in sky rocketed airline tickets. Together with global economic crisis, airlines were in the next in line of collapsed list. Qantas survived by slashed numbers of its employee, but numerous worlds’ major airlines were not so lucky. • Shrinking Aviation Industry Aviation industry got hit real hard as a result of global financial crisis. Nov ’08 IATA’ traffic data showed a 4. 6% drop in international passenger traffic and 13. 5% drop in international cargo and stated that the worldwide aviation industry “shrinking by all measures”.
During this hard time, Qantas made a drastic cut out 1500 as its struggles with the crisis. • Intense Competition Warren Buffet, America most successful tycoon, once stated, you can never rich by doing airlines transportation. It’s because the competition are super fierce. Each parties want to be the largest share market. Qantas are currently head to head with every major airlines in the world. • Fluctuating Oil Prices According to Qantas, the soaring price of fuel poses a greater commercial challenge to Qantas that terrorism. Qantas’ fuel bill had jumped from $3 billion in 2006 to $8 billion in 2009.