0 SummaryThe purpose of this report is to look at and identify the basic business objectives of Qantas airlines including what the company is and what services it provides. This report will also be looking at the internal and external factors of the company and what affect they have on the organisation, there is a broad spectrum of different types of market structure and this report will be looking at which one is most relevant to the company.2.0 IntroductionThe field of economics is broken down into two distinct areas of study: microeconomics and macroeconomics. Microeconomics is study of‘What goods and services are going to be produced and in what quantises, since there are not enough resources to produce all the things people desire? How are things going to be produced, given that there is normally more than one way of producing things? For whom are they going to be produced?’ (Sloman, 2003. Pg7)All This report will be looking at the microeconomics of Qantas Airlines along with their operations, products, services and a brief over view.
3.0 Overview of Qantas GroupThe Qantas Group (2010) stated Qantas is the world’s second oldest airline it was first established in 1920 in the Queensland outback. The oldest airline is KLM which was formed in 1919. Qantas is Australia’s largest domestic and international airline it is also regarded as one of the world’s foremost long hall flight carriers, having made journeys to North America, Australia and Europe. Qantas and their subsidiaries which include Jetstar and Qantas Freight owns a staggering 283 aircrafts including a fleet of the new Airbus A380, in 182 airports across 44 countries and employs 32,500 people and with 92 per cent of these being situated in Australia.4.
0 Products and ServicesThe Airline Qantas provides many different types of products and services domestically and internationally it has many flight routes to various. Domestically Qantas, Qantas Freight and Jetstar commandeer around 5,600 flights every week attending 59 city and regional destinations. Jetstar operates 160 internal flights a week with in New Zealand; internationally Qantas along with Jetstar commandeer over 970 flights each week. Other services that Qantas offers is such things as duty free, a vast assortment of inflight entertainment ranging from films and TV programmes from the 80’s to the latest films and series of 2012.
On the long haul flights there are different types of seating class economy, economy plus, business class and First.4.1 Economy and Economy plusEconomy class is the basic it includes things such as in-flight entertainment (TV with movies, audio, games and skymap), free meals; which are served as an entrée and a main course then followed by a desert either served with tea, coffee or hot chocolate. Extra legroom and exit row seats by paying an additional fee, complimentary amenity kit (toothbrush, toothpaste, eye shades), goodie bags for kids and in-flight shopping (electronics, cosmetics, jewellery costume, fragrances, watches, duty free allowances, liquor, toys, accessories).
4.2 Business classBusiness class gives more space with their seats. When Qantas are advertising there business class experience, this business class type offers faster check in, devoted service from cabin crew staff, priority boarding and priority dismemberment, liquor after dinner, more essentials in the amenity kit (stylish pen, socks and earplugs), china dinnerware with stainless steel cutlery served with meals.4.
3 First classFirst class cabins have more variety and cater for everyone. Fully flat beds, laptop power access with a large table, personal 10.4” TV Screen, anytime freedom menu ordering of the menu when you want too, on board bar and passengers have aisle and window access.5.0 Internal and External FactorsThere are many different types of events whether they are natural, political or social, the internal and external factors are risks with in the company they can determine how well a company can do in the given year.
2011 was a difficult year for Qantas with many natural disasters and severe weather events throughout the year including volcanic ash clouds, earthquakes, flooding and the Japanese tsunami. This cost Qantas an estimated $224 million, despite this Qantas Chairman stated that profit before tax (PBT), revenue growth, operating cash flow amongst other indicators all show very pleasing results considering the complex operating conditions (Joyce, 2011).5.1 Internal factors5.1.
1 Risk of employee discrimination this can affect the reputation of the company and can collide with the discrimination Act (1975-2012).5.1.2 Equipment failure is a massive concern to all airlines not just Qantas it can also affect reputation and loss of production and function.5.1.
3 Booking and system failure often has a low possibility off occurring but can affect loss of bookings and company image5.1.4 Individual fraud this is down to the airport not leaking any passenger or employees personal details the effects of this is the breaching of confidential information and security breaches5.1.5 Industrial action this can affect the disruption of service which in turn would cause delays and therefore customers would complain and this would affect the airlines reputation 5.
1.6 Financial Solvency this would affect the downfall of the business due to there not being enough fund to support a long term investment 5.2 External factors5.2.
1 The political effects on the company would be things such as conflicts in countries preventing aircrafts to fly around no fly zones5.2.2 There are very high risks on the company in the economic sector because in today’s economic climate fuel prices are constantly increasing due to the shortage of fuel.5.2.3 Social factors are very important because Qantas must keep improving the fleet of aircrafts to stay ahead of the competition.
5.2.4 The environmental impacts on an airline company can be very dramatic due to the weather conditions which can be very unexpected this can cause delays it can also pose a risk in the air if an aircraft happens to get caught in it5.2.
5 Companies always have to update their technology because there are other comparison websites which engage higher competition6.0 Market structureQantas is a private sector company. By this they’re aiming for increase in profit margins, growth and they want to survive all current economic climates and most importantly their not government owned or funded organisation. As of Monday the 21st of May 2012 Qantas split into two different divisions they made this decision because they were at a loss "Qantas International, a great airline with a rich history, is loss-making and does not deliver sustainable returns". (Joyce, 2012) This strategical business move resulted in the shares of the company rising by 2.8% or 4 cents; this was all a repercussion of Mr Joyce’s 5 year strategy announcement in 2011.