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Qantas

Winning Customers and Influencing Sales through Corporate Social Initiatives and
Customer-Centric Strategies

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Qantas

Summary

This report aims to put forward the corporate strategy of Qantas airlines and how it has stayed
true to its words regarding its support for social responsibility over the years. The report shares
the strengths, weaknesses, opportunities and threats shared by the airline and how by using the
right type of leadership and corporate strategy, it has managed to survive even after its darkest
days.
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Qantas

Table of Contents

1. Summary 2
2. Introduction 4
3. Managerial Strategies & Socially Responsible Initiatives 5
4. Criticism 6
5. Outcome & Learning 7
6. The environment, threats & Opportunities 8
7. Encountering challenges 9
8. Alan Joyce-The Turnaround King 10
9. Conclusion 11
10. References 12
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Qantas

Introduction

Qantas airlines is Australia’s largest flag carrier. Qantas airlines with time has managed to
impress and get the attention of both critics and public due to its support for social causes and
participating plus initiating programs that minimize the negative effects of carbon and fuel
emissions. It is known for its steps, such as discouraging the use of plastic on its flight and
lounges. Furthermore it has also taken a step ahead by coming up with a plan to recycle and re-
use the general waste it produces. Since Qantas Airlines is functioning in a competitive
environment, there are bound to be competitors too. With almost similar services offered, every
competitor seeks an opportunity to take the lead. Qantas airline by integrating and incorporating
technology, innovative marketing strategies and the right leadership has formed a standard for
others to follow. CEO of Qantas Airlines, Alan Joyce by utilizing his risk-management abilities
has experienced the toughest days at Qantas and never did once considered resigning. At a point
where the airline incurred a loss of $2.8 billion, 5000 job cuts and shares plummeting to $1, for
some it maybe the end, but for Alan Joyce it was just another risk that he had to take and
manage.
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Qantas

Managerial Strategies and Socially Responsible Initiatives

As mentioned above, Qantas is Australia’s largest airline at the moment with Jet Star as the main
competitor. (Acting responsibly, n.d) Qantas puts a lot of weight on the social responsibility it
has to play towards the environment. Since the company has, the largest operations in the
country it needs to keep a constant check on the impact it has on the environment. Qantas has an
internal governance process that keeps an eagle’s eye over the health, environment and safety of
both people and the surrounding environment. Qantas frequent flyers are off the opinion that
businesses should play an important role in combating environmental issues, for which the
company has a green team of more than 800 individuals looking after such concerns and interests
of the people. Qantas has set out on an ambitious aim to set goals and take the lead in reducing
emissions every year. With advancement in technology and improvements in operations, it aims
to improve efficiency. The company has predicted that by 2050, there will be 50% reduction in
emissions by investing in development of carbon market, new technology related to aircraft and
biofuel. The airline targets both “On the ground” and “In the air” impacts. On ground, the
company aims to reduce consumption of electricity by 35% by 2020, water consumption
reduction of 20% by 2020 and reduction in landfill waste of 30% by 2020. Not only that, Qantas
in 2016 had reached an agreement with the industry for carbon neutral growth by 2020.

According to (Healey, 2016) Qantas is very conscious about its people. It believes in
empowering them, it believes in developing and transforming them and least but not the least it
believes that its people and employees play a fundamental role in displaying the outlook of the
company. The company makes sure that it focuses on its people by equipping them with skills,
motivating them providing support wherever needed. Qantas aims to increase engagement,
attracting new talent, diversity in workplace and good relations with the industry. Year 2012 was
a bad period for Qantas, it was facing a disastrous circumstances, increasing fuel expenses,
increase in competition and increase in Australian Dollar. The head of operations Ian Jackson
played a crucial part in turning around the company putting it on a path of excellent financial
results, business transformation, impressive customer feedback, high levels of engagement and
long-term growth.
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Qantas

Criticism

Qantas had excellent aims about how it intended to reduce emissions and impacts that it has on
its part on the environment, even though there were some criticisms and investigations along the
way but it was the mindset of Qantas’s leadership that made it survive. Coming in with
agreements, developing and implementing strategies, bringing everyone on board, it made its
way where it wanted to, but at the cost of some criticism. (Branley, 2018) in his article stated
through a study that Qantas when flying across the pacific was the worst airline when it came to
carbon emissions and fuel efficiency. The international council on Clean Transportation (ICCT)
had found out that Qantas burns 64% more fuel that its competitors mainly due to the fact that
they use four engine jets for their flights as compared to twin engines that consume lesser fuel.
Decrease in full efficiency is directly related to the increase in ticket prices, of course as the
company experiences increase in fuel bills especially at a time when the Australian dollar is
rising, it is bound to cover the profit gaps by increasing its ticket prices, which ultimately might
offset its customers. So if the company worked on reducing fuel consumption, it may lead to
reduction in fuel expenses allowing it to lower its ticket prices.

(Smyth, 2018) in his article also had to share the same study, that on one hand where Qantas was
ranked as world’s safest airline, on the other hand it had received a label that was not a good sign
especially when it had started its transformation journey and had various plans in pipeline. Using
Boeing 747 and Airbus A380 both (four-engine jets) consumed at least 2/3 more fuel as
compared to their competitors even though they had lower passenger yields and lower freight as
well.

(Guest, 2012) in her article states that Qantas was fined $15,000 for mistreating its employee, the
occasion arose when one of the employees upon demanding his entitlement since he was
stationed overseas was denied and bullied in taking his complaint back, since it was a breach of
labor codes, the manager was fined and it provided an important lesson to the company to
discourage such acts in the future. Qantas accepting and furthermore acting on it, was another
proof of it remaining true to its words.
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Qantas

Outcome & Learning

Qantas in response had accepted that its jets do use more fuel and it is using bigger jets mainly
because it provides premiums cabins with lower passenger capacity. Qantas had also shared that
it planned to use new Boeing Dreamliner in place of 747s that provide more power and are
comparatively more fuel-efficient, it has several programs that run on data to monitor, predict
and help it in reducing fuel consumption. Qantas did improve its fuel efficiency 1 to 2% on
average during the last 7 years according to an analyst. By 2020, Qantas stated that its Los
Angeles bound aircrafts would be using biofuel to add to the reduction of fuel emissions.
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Qantas

The environment, threats & opportunities

According to (Gekara, 2017) Qantas at the moment is performing in an environment that is

becoming competitive day by day, with competitors side by side and on the tail, one single
opportunity can make the difference. The first competition that Qantas faces in in light of the
Boeing Dreamliner it wants, since the Boeing Dreamliner is a huge success it has attracted many
airline giants with hundreds of orders at a time. Leaving that aside for a while the company has
still some opportunities to tap and lookout for any threats that may be incoming.

Strengths

 From the start kept a very strong presence through its strategies and initiatives.
 Has the largest operations in Australia
 Innovative marketing strategies
 Customer-centric policies
 Discount offers on tickets

Weaknesses

 Limited exposure to other destinations as compared to other global airlines

Opportunities

 Qantas should aim to tap the water transport sector as tapping it can make it earn good
profits.
 It should fasten its processes and plans to buy and keep its fleet updated with new jets.
 Qantas can collaborate with other industries and brands, which will help it in multi-
branding.
 It should expand its operations beyond Asia.
 Qantas should opt for digital marketing to convey a strong image of the company and
attract more customer traffic.
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Qantas

Threats

 Its competitor Virgin Australia growing and rising every single day.
 New market entrants that offer lower prices.
 Virgin Australia provides identical services such as Qantas to its customers.
 Increase in Australian dollar.
 Increase in fuel prices.
 Increase in ticket prices.
 Increasing labor prices.

Political Advantage

 Good relations with countries like China has allowed it to penetrate in open market.
 Australian government’s support for the airline is itself a huge benefit

Social Advantage

 Through its strong presence in Australia, Qantas has gained the trust and loyalty of its
people with time, resulting in consumers preferring it above anything else.
 Qantas through partnerships with different companies has allowed it to expand its
customer base.

Technological Advantage

 Qantas has invested heavily, in incorporating technology and increasing its customer
engagement. It was always the aim of Qantas airlines that customers should be valued
above anything else. Likewise the leadership was off the opinion that the key to a
successful organization or corporation is its happy customers. If the customers feel that
they are valued and heard of, they will remain forever loyal to the company.
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Qantas

Encountering Challenges

Qantas Airlines has in order to counter challenges and threats has opted for multi-brand strategy.
The airline has started offering holiday’s services and packages also including catering by
collaborating with different firms and companies in relevant industries. Such collaborations
result in providing more options to the customers hence attracting them. At the same time the
airline has utilized and utilizes its marketing capability to the fullest as it spends quite a lot of
money on its marketing campaigns, its slogan “the spirit of Australia” receives great support
from the locals. Another strategy that Qantas is focusing on is to keep itself updated with newer
airline technology. Newer technology will allow the company to cover more distance and expand
its operations, since the airline is already a well-reputed company it would not need special
introductions and plus Qantas’s dominant presence over the years has provided it the much
needed competitive edge. Qantas should use its Jetstar brand to tap locations around the
continent whereas Qantas can make it self visible to other continents. Qantas airline in order to
gain a competitive edge from its competitors could differentiate its services offered from others
by providing additional services and bringing improvement or changes in the customer service
and operations etc. With Qantas opting for newer Boeing jets in the future, the preference is
likely to increase. (Gekara, 2017)

(Lucarelli, 2014) shares that nowadays competition is about who provides the bigger discount,
Qantas’s strategy of launching applications for Jetstar allows customers to keep in touch of ticket
prices when they are low and also book flights and check in online through their smartphones
whenever wherever. This strategy allows Qantas to quickly cover any market gap or opportunity
that arises in a blink of an eye, since the company consistently keeps on providing good
discounts, it will switch regular customers into loyal ones in no time.

Moreover, since the airline is already quite ambitious and working on reducing impact on
environment, it can gain a huge advantage in terms of positive global image if it succeeds in
achieving its environment sustaining goals. (Rosen, 2019) in his article states that Qantas airlines
is working on new ways to recycle and reuse waste material to reduce waste that is produced by
the company. It plans and aims to discourage usage of plastic made products by the end of 2020
from both its flights and lounges also encouraging others in the process.
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Qantas

Alan Joyce-The Turnaround King

Qantas airlines had seen its part of struggles and bad days, it was quite near to be taken over but
it made it through, success stories do not come up easily, it is due to a company’s or an
individual’s vision, hard work, commitment and hustle to be the best, which brings them to the
limelight and Alan Joyce (CEO) was the one in this case that possessed all that. Alan Joyce had a
transformational mindset, he transformed a couple of things but at the same time, chose to adhere
to some principles and strategies that he believed were fundamental to the company’s long-term
growth.(Hawthorne, 2017) in his article shares that Alan Joyce had many critics waiting for him
especially when the company’s Airbus A30 engine failure nearly brought it down. What
followed would be Alan’s most heavily criticized decision of his career when he grounded the
entire fleet due to an industrial dispute with staff. Qantas’s shares plummeted very low and
things were not looking good, but since then Qantas has had a wonderful turnaround making it
one of the most profitable airlines in the world. Alan gives credit where its due and that is his
ability plus the airline’s, to manage calculated risk. He was off the opinion that you have to take
risks in the business if you have to move forward, it not an option but a necessity, reason being
because competitors in the market will come forward, take those risks and ultimately take the
lead.

According to (Smith.M, 2016). Alan Joyce never thought of resigning when the company was at
its lowest, it was grounded, in a total lockout, 5000 jobs had to be cut down, loss of $2.8 Billion
etc. it was all due to his gutsy decisions, vision and risk management ability to see in the future
and plan accordingly. In addition to that, Alan’s support for social causes such as Prostate
Cancer has earned him great reputation amongst the public and proved that he shares the same
idea of support for social responsibility as the company itself. Alan Joyce’s leadership style has
set high standard bar especially for the new market entrants. It not only makes the competition
tougher but also brings the best out of everyone. It was no doubt not only Alan Joyce’s vision but
consistency too that made the company stand on its feet again for years to come.
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Qantas

Conclusion

Alan Joyce and Qantas Airline are not overnight success stories, consistent hardwork, the ability
to overcome hurdles and vision of the future has made them successful. Qantas has come up with
various strategies over the years and they have proved excellent in bringing them whatever
results they were implement for in the first place, making them stand stronger than ever.
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Qantas

References

 Qantas, (n.d). Acting Responsibly. Qantas. Available at:

https://www.qantas.com/au/en/qantas-group/acting-responsibly/our-planet.html
 Smyth.J. (2018). Qantas named most polluting transpacific airline. Smyth.J. Available at:
https://www.ft.com/content/6692709e-fa5a-11e7-9b32-d7d59aace167
 Rosen. E. (2019). Qantas Announces Ambitious Environmental Plan to Cut Plastic and
waste. Rosen.E. Available at:
https://www.forbes.com/sites/ericrosen/2019/02/21/qantas-announces-ambitious-
environmental-plan-to-cut-plastic-and-waste/#4d44227498de
 Branley. A. (2018). Qantas ‘worst major airline’ for fuel efficiency on tans-Pacific
flights’. Branley.A. Available at:
https://www.abc.net.au/news/2018-01-17/qantas-fuel-efficiency-worst-for-trans-pacific-
flights-study/9333616
 Lucarelli. G. (2014). The corporate strategy of Qantas Airways. Lucarelli.G. Available at:
https://www.grin.com/document/307979
 Healey. B. (2016). How did Qantas improve its human resources management? Healey.B.
Available at:
https://www.hrmonline.com.au/section/strategic-hr/qantas-improve-human-resources-
management/
 Gekara.F. (2017). Qantas Case Study Analysis. Gekara.F. Available at:
https://researchcampus.wordpress.com/2017/02/09/qantas-case-study-analysis/
 Hawthorne. M. (2017). How Alan Joyce faced down his critics and won. Hawthorne.M.
Available at:
http://www.executivestyle.com.au/how-alan-joyce-faced-down-his-critics-and-won-
gzhzdt
 Smith. M. (2016). True Leaders 2016: How Qantas CEO Alan Joyce became the
turnaround king. Smith.M. Available at:
https://www.afr.com/boss/true-leaders-2016-alan-joyce-qantas-ceo-20160711-gq37e9
 Guest. A. (2012). Qantas fined $15,000 for mistreating worker. Guest.A. Available at:
https://www.abc.net.au/news/2012-08-15/qantas-ruling-a-warning-to-bullies/4201296