Qantas International Business Class example essay topic

Business Report Executive Summary This business report intends to discuss Qantas's prime functions. It will also outline Qantas's ales and marketing strategies, and the issues which it will and has been facing during the past year. This report is based on information from the Qantas' 2002 annual report to it's stakeholders. Prime Functions Founded in the Queensland outback in 1920, Qantas Airways is now Australia's #1 airline and a leader in domestic and international flights to and from the country.

Qantas flies to about 142 destinations, 67 within Australia and 75 in other countries. It employs over 33,000 people worldwide. Other Qantas operations include catering and tourism. Qantas continues to play a vital role in supporting cultural, sporting and community organisations across Australia.

The company also has well established programs for indigenous Australian employees and communities. Every day of the year, Qantas helps people who are disadvantaged, chronically ill or in need of urgent assistance. Qantas's up ports many major community organisations. Mission Australia, National Breast Cancer Foundation and Starlight Children's Foundation of Australia are just some examples.

Qantas is also committed to promoting processes and work practices that minimise the environmental impact of its operations. Qantas Airlines Limited has built a reputation for excellence in safety, operational reliability, engineering & maintenance, and customer service. International Operations Qantas operates approximately 540 International flights a week to and from Australia. It offers services to 68 destinations in 31 countries across the Asia Pacific region, Europe, North America, South America, and South Africa. During the year Qantas upgraded many of its international aircraft and lounges. A highlight was the $300 million project to install a new in flight entertainment system on the Qantas fleet of Boeing 747-400's.

This was to feature larger screens in First and Business Class, individual seat back video screens in Economy Class, and in seat telephones in all classes. The interiors of this aircraft are also being upgraded, with new design seat fabrics, curtains, carpets and accessories for First, Business and Economy Class cabins. The upgrade program has been extended to the Boeing 747-300 fleet at an additional cost of $125 million and is due for completion by the end of 2003. Qantas will invest a further $300 million to relaunch its International Business Class, featuring newly designed sleeper seats and cabin upgrades. Qantas has always managed its international network closely, scrutinizing every route to ensure its ongoing viability.

Following the terrorist attacks in the United States on 11 September 2001 and the resulting fall in demand for international air travel, Qantas reduced a number of scheduled international flights. Demand is steadily increasing, resulting in the re introduction or planned re introduction of additional services. Domestic Operations The core domestic airline of Qantas operates an average of 373 flights each day. During the year, Ansett, (the major domestic competitor of Qantas) collapsed. As a result, Qantas significantly increased the number of scheduled flights operated by its core domestic airline. The initial Qantas City flyer service took off on the airline's busiest route, Sydney-Melbourne, on 1 July 2001.

This service offers flights every half hour on weekdays. It quickly established itself as the best domestic product in the market for the business traveller. In February 2002, the service was extended to Sydney-Brisbane, offering flights every half hour during peak times and every hour at other times. It also extended to Melbourne-Brisbane offering hourly flights. Qantas is investing $50 million to upgrade its domestic Qantas Club Lounges around the country. Work has already commenced on the lounges at Sydney, Melbourne and Brisbane domestic terminals, with these projects scheduled for completion in September 2002.

There are also plans to expand and improve the domestic Qantas Club Lounges in Perth, Gold Coast, Darwin, Adelaide and other ports. A highlight of the upgrade program is enhanced business facilities featuring the latest technology. This includes upgrading communications capabilities to allow customers to plug in laptops, charge mobile phones and access email from the comfort of an armchair. Regional Operations Qantas's regional operations have been flying under one brand name, Qantaslink, since May 2001.

QantasLink operates more than 2,700 flights each week to 55 destinations within Australia. QantasLink is an essential part of the Qantas Group, operating an extensive regional network serving 55 cities and towns throughout Australia with connections to a network that extends to 31 other countries. QantasLink provides important transport services for regional Australia and connections to Qantas domestic and international networks. QantasLink employs approximately 1,600 people. Following the collapse of Ansett, QantasLink operated hundreds of additional services to regional Australia and provided and arranged for services to 22 regional destinations previously served only by Ansett and its subsidiaries. QantasLink has grown significantly since September 2001.

In January 2002, five Dash 8-300 aircraft were added to the QantasLink fleet, boosting services and creating more than 90 jobs. Three months later, six Boeing 717 aircraft were added, resulting in more non-stop services and creating more than 150 jobs for pilots, flight attendants, engineers and operational staff. QantasLink introduced a number of new regional destinations to its network during the year, including Longreach, Mt Isa and Weipa in Queensland, and Port Hedland and Newman in Western Australia. QantasLink is also a strong supporter of regional tourism and is involved extensively in the sponsorship and promotion of rural & regional events and organisations. Subsidiary Businesses Qantas has a number of non-flying, airline related subsidiary businesses, including Qantas Flight Catering, Qantas Holidays and Qantas Freight. Qantas subsidiary businesses, including QantasLink, contributed 26 per cent of the Qantas Group's earnings before interest and tax in the 2002 financial year.

Qantas hopes to boost the airline's overall profitability, by shaping and growing these key businesses so that they contribute about one third of future profits. Qantas operates three catering businesses within the Qantas Catering Group. These include Qantas Flight Catering Limited (Q FCL), Cater air Airport Services and Snap Fresh. These three businesses collectively employ more than 3,800 Australians. The Qantas Catering Group operates seven catering centres in Sydney, Melbourne, Brisbane, Cairns, Adelaide and Perth. During the year, Qantas Catering Group provided nearly 38 million meals to Qantas and other airlines as well as non-airline clients including railways and hospitals.

Qantas holidays is Australia's largest travel wholesaler of both international and domestic holidays designed for independent travellers and small groups. Qantas Holidays caters to more than one million customers a year and employs more than 1,000 people across the world, including nearly 700 within Australia. With nearly 30 years' experience, Qantas Holidays continues to offer customers an unmatched range of holiday packages and product. Freight Although Qantas is primarily a passenger airline, air freight is an vital part of the core Business.

Qantas freight is the specialised air freight division of Qantas and has been operating since the initial Qantas scheduled service in November 1922. Qantas Freight is an integral part of the company, generating revenue in excess of A$700 million per annum. Qantas Freight employs more than 700 people and offers a varied and flexible range of services through three primary products which include Cargo, Mail and Express Service, on all international sectors of Qantas flights. Domestic freight is marketed by Australian air Express (AaE), a 50 per cent joint venture company with Australia Post. AaE is the largest domestic airline-haul company in Australia. Qantas Freight carries letters and lettuces, parcels and pets, frozen seafood and prime breeding stock.

Special facilities include cool rooms and freezers for perishable goods, warm rooms for tropical fish & other live animals and strongrooms & safes for valuables. Qantas Freight is part of the oneworld global route network of 135 countries and territories and this number is still growing. Marketing Qantas uses the same brand and logo globally. This gives instant recognition and reduces Qantas's packaging, design and advertising production costs. Qantas standardizes most elements of the marketing mix such as product design, brand name, packaging, distribution and product positioning. Most of these marketing strategies are alliance based.

Qantas's alliances create a larger range of global products for its existing customers, reducing the chance that they will need to fly off-line. The most recent products include: In-flight Dining Renowned chef and restaurateur Neil Perry worked with Qantas on a completely new approach to in-flight cuisine in 1997, when the airline relaunched its First Class service. The new meals featured quality produce and ingredients sourced from around the Qantas international network. This approach to in-flight dining has since been extended to Qantas International Business Class. Perry has also been involved in developing the Qantas domestic in-flight product that offers fresh, contemporary meals and snacks. Business Class In March 2002 Qantas announced a $300 million investment in a new International Business Class, including new custom-built seats that convert to beds, which will offer the highest level of comfort and service.

Qantas has developed the seat design in partnership with one of the world's leading industrial designers, Marc Newson and US manufacturer BE Aerospace. The new seats will be introduced initially on the airline's London and Hong Kong routes in the first half of 2003. The new International Business Class will also feature a new lighting system designed exclusively for Qantas, a self service bar area and new-style catering to provide more choice and flexibility. Qantas Club Lounges In February 2002, Qantas opened its new flagship Qantas Club Lounge at the Sydney International Terminal. With facilities for up to 500 Business Class and 150 First Class customers, it is the largest departure lounge in the Southern Hemisphere.

New international lounges in Melbourne and Honolulu, and for First Class customers in Singapore have also been opened and plans are in place for new First and Business Class lounges in Bangkok and a new Singapore Business Class lounge. The airline is also investing $50 million in the redevelopment of domestic Qantas Club lounges across Australia. Cityflyer Qantas introduced Cityflyer in July 2001, offering customers travelling between Melbourne and Sydney more flights and more seats than any other airline. On-ground Cityflyer services include priority departure gates, dedicated customers service desk at the departure gate for travellers with hand baggage only, and dedicated baggage carousels in Sydney and Melbourne.

Cityflyer was extended to Sydney-Brisbane and Melbourne-Brisbane services in February 2002. Adelaide services began in November 2002 and Perth services are scheduled to commence in early 2003. QuickCheck Qantas introduced state-of-the-art self-service QuickCheck kiosks at Sydney and Melbourne domestic terminals in August 2002. QuickCheck provides real customer benefits by reducing check-in times to less than one minute for customers without baggage.

The kiosks are easily accessible in terminal departure areas, in Qantas Club Lounges and close to Cityflyer departure gates. Qantas Total Entertainment Qantas is installing progressively on its 747-400 fleet, a new $300 million in-flight entertainment system. The new system features seat-back video screens offering movies and games in Economy Class, new larger touch-activated individual screens and in-seat power points for laptop computers in First and Business Class, and in-seat telephones in all classes. Qantas Drive Qantas also introduced Qantas Drive, a limousine service that can be booked through Qantas or Qantas Clubs or at special desks at Sydney, Melbourne, Brisbane and Coolangatta airports. The service offers standard and luxury sedans, stretch limousines, coaches and buses.

Qantas Flight Update Qantas launched an SMS short message service in November 2001. The service sends details of flight departure time changes to registered users with compatible mobile phones. It advises domestic customers if their flight has been delayed by more than 30 minutes, and customers travelling on international services if their flight has been delayed by more than an hour. Sales Qantas maintains sales forces in Australia and around the world. Key markets for the airline include leisure, corporate, group and incentives travel. The airline distributes its product through travel agents, its own Qantas Travel centres, as well as through Qantas Telephone Sales centres and the internet.

E-Commerce Qantas has introduced a range of internet-based initiatives aimed at consumer and corporate customers, travel and purchasing partners. The Qantas internet site, qantas. com, allows customers to make domestic and international bookings and provides a facility for Frequent Flyers to redeem their points for travel. Telephone Sales Telephone Sales Australia has a staff of more than 1,200. It operates 24 hours a day seven days a week. Three Australian Contact Centres are located in Melbourne, Brisbane and Hobart. Telephone Sales also provides support for internet / online sales and Australian Airlines.

There are also 14 overseas Qantas Contact Centres. Industry Sales Qantas has a strong commitment to the travel agency network. The airline works closely with some 4,000 travel agencies throughout Australia as well as industry bodies such as the Australian Federation of Travel Agents (AFTA), the International Air Transport Association (IATA), and global distribution systems that allow travel agents to quote fares and make bookings from their own offices. Corporate and Government Sales Qantas is a major player in the corporate and government account area, and has a dedicated department, (Qantas Corporate and Government Sales) which is responsible for setting the strategic direction and policy for the airline in its dealings with these markets in Australia. Corporate and Government sales teams in each state manage a portfolio of accounts and formulate strategies to ensure the airline's success in the major account market segment.

They negotiate mutually beneficial preferred supplier agreements and develop and execute plans for account performance and improvement. In addition, they provide the day to day interaction with key customers and coordinate appropriate representation nationally. Qantas Business Travel Qantas Business Travel is a specialist unit providing total travel management services through six offices located in major centres around Australia. More than 490 experienced business travel specialists manage some of Australia's largest and highest profile corporate and government accounts. Qantas Business Travel provides a personalised travel management service to a broad cross section of corporate and government customers from small and medium enterprises to large multinationals, and from local to state and federal government departments. Group Sales Qantas Group Sales tailors travel arrangements for groups of 10 or more people travelling internationally or domestically.

A team of more than 60 Sydney-based specialist consultants manages group sales Australia-wide for Qantas. Different teams within Qantas Group Sales look after different market segments to ensure that the diverse and specialised requirements of the groups are handled knowledgeably and efficiently. Qantas Travel Centres In addition to the strong relationship Qantas has with travel agents all around Australia, Qantas has 23 of its own retail travel stores. These stores are located in every Australian state and territory.

Qantas Information Technology Qantas Information Technology supports the information systems used throughout the Qantas Group and is involved in the acquisition, development and application of new systems. Major projects include the migration of the Qantas reservations and ticketing systems to Amadeus in November 2002, the implementation of the Integrated Revenue Information System (IRIS) in April 2002, and ongoing joint investments in the evolution of management systems with British Airways. Issues Facing the Business It has been a dramatic and at times traumatic year for Qantas. The events of September 11 2001 changed the industry forever and the collapse of Ansett has transformed the Australian aviation market. Qantas performed well in the face of these turbulent events.

The many issues that are facing Qantas are sourced from both the external and internal business environments. These issues have affected the behaviour and conduct of the business. They represent a series of external and internal challenges that have demanded new responses and strategies from Qantas' management. The SARS virus has had a huge impact on Qantas.

There has been an decrease in the demand for overseas tickets due to the virus. Qantas Airways may delay more than A$1 billion of spending in the next financial year after Severe Acute Respiratory Syndrome cut ticket sales. Qantas' earnings will be as much as 30 per cent below analysts' forecasts this year because of the virus, which has spread worldwide. Demand for seats on flights to Australia from Europe, which stop in Hong Kong and Singapore, has slumped because of the virus. This has dented sales at home, where international visitors account for 15 per cent of domestic sales. Qantas is retrenching staff and replacing full-time jobs with part-time positions to cut costs.

Qantas bookings have fallen 25 per cent on the high-profit Australia-Hong Kong route and have dropped 20 per cent on flights to Japan since the onset of SARS. European bookings have fallen 20 per cent, and UK travel is down 10 per cent. The virus has hit the carrier's bottom line harder than the war. The September 11th tragedy and the Iraqi War have also had a dramatic effect on Qantas.

As people became scared to travel overseas Qantas' ticket sales dropped immensely. The demand for overseas tickets decreased by 17% from a combination of the Iraqi war and SARS virus. Qantas Airways forced staff to take accumulated leave due to this. Qantas temporarily cut the equivalent of 1,000 jobs, as it cut costs in the face of the war in Iraq. Since September 11, Qantas has reduced its international flying capacity by 11%. All flights to New York were withdrawn from November 25, 2001 and there was a reduction in flights to Rome, Johannesburg, Bangkok, Manila and Buenos Aires.

Collapse of Ansett The collapse of Ansett in September 2001 created a series of immediate and longer term challenges for Qantas on the domestic front. To assist stranded Ansett passengers, Qantas leased extra aircraft and added hundreds of special flights, including to regional Australia. The airline flew over 50,000 former Ansett passengers for free and another 65,000 on heavily discounted fares. Qantas was able to add the equivalent of about seven year's growth, virtually overnight.

This huge effort was critical in minimising the impact of the Ansett collapse on the Australian economy, tourism, business and national life. Qantas currently employs approximately 1,500 ex-Ansett staff across its operations. Australian Airlines - A new International Airline Australia's newest airline took to the skies on 27 October 2002, with the first of Australian Airlines services travelling between Cairns and the Japanese cities of Nagoya and Osaka. Australian Airlines is wholly owned by Qantas but operated independently and managed separately. It uses a lower cost model which allows it to serve markets from which Qantas has had to withdraw. The all economy class airline has a fleet of four Boeing 767-300 aircraft and offers a full in-flight service.

Air new Zealand and Qantas tie-up The proposed merge of Qantas and air new Zealand has not taken place due to the A. They believed that it would be an uncompetitive environment.