Lachlan Stronach ~ 3145500Brent Gentles ~ 3184591Tom Howarth ~ 3183990Samuel Donohoe ~ 3184589

MNGT2001 – Business Strategy Due Thursday, 30.10.14

QANTAS DOMESTIC

QANTAS DOMESTIC

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Executive summaryThis report critically analyses Qantas Domestic and reflects on its current decisions and current position in the aviation market. At the end we draw conclusions on what we deem to be the major issues with company. Qantas has financial, brand and leadership issues.

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Table of ContentsExecutive summary.................................................................21. Introduction........................................................................52. Strategic analysis................................................................7

2.1 External environment analysis...............................................72.1.1 Pestel Analysis............................................................................72.1.2 General environment..................................................................72.2.2 Specific environment..................................................................82.2.3 Conclusions on external environment threats and opportunities.............................................................................................................8

2.3 Internal analysis....................................................................82.3.1 Core competencies.....................................................................82.3.2 Sustainable Competitive Advantage..........................................92.3.3 Internal weaknesses..................................................................92.3.4 Conclusions internal strengths and weaknesses.......................9

2.4 Conclusions about organisation’s competitive position in its market..................................................Error! Bookmark not defined.

3. Strategic directions and strategic objectives...................103.1 Vision...................................................................................103.2 Mission.................................................................................103.3 Strategic objectives..............................................................103.3.1 Ethics position..................................................................103.3.2 Stakeholder analysis and table..........................................10Stakeholder analysis table..........................................................113.4 Conclusions on organisation’s strategic direction and strategic objectives.....................................................................12

4. Strategic choice: the broad business strategies pursued.134.1 Ansoff’s product/ market strategies....................................134.2 Miles and Snow’s adaptive strategies..................................134.3 Porter’s competitive strategies............................................144.4 International strategies.......................................................144.5 Conclusions on broad business strategies being pursued to achieve objectives.......................................................................15

5. Strategic implementation: General perspective...............165.1 Any mismatch between environmental turbulence and business strategy focus?.............................................................165.2 Evidence of unrealised, unintended or imposed strategy?..165.3 Evidence of strategic flux/drift?...........................................165.4 Is transformational change needed?...................................175.5 Where do the business strategies fit on the BCG matrix?...185.6 Conclusions on organisation’s overall implementation of business strategies.....................................................................18

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6. Strategic implementation issues......................................196.1 Important strategic implementation issues faced by Qantas....................................................................................................19

6.1.1 Incorrect CEO...........................................................................196.1.2 Brand damage...........................................................................196.1.3 Inadequate finance...................................................................19

6.2 Conclusions on strategic implementation issues................197. Strategic evaluation..........................................................20

7.1 Triple bottom line reporting................................................207.1.1 Economic bottom line..............................................................207.1.2 Social justice bottom line.........................................................207.1.3 Environmental bottom line......................................................20

7.2 Conclusions on how well the organisation is achieving strategic objectives.....................................................................218. Conclusion: The organisation’s current and future prospects and recommendations................................................................22

9. References........................................................................2310. Appendices......................................................................27

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1.IntroductionQantas domestic was founded in November of 1920 by Fergus McMaster, Paul Mcguiness, Hudson Fysh and Arthur Baird. The name Qantas originated as an acronym for Queensland and Northern Territory Aerial Service; originally operated as a air mail service throughout Queensland and the Northern Territory.

Qantas domestic specifically is an airline based out of Sydney NSW, with it’s main hub situated at Sydney Airport. Qantas is the authority in domestic airline travel within Australia as it currently holds 65% share of the domestic airline market and posting a close to $50m profit in the 2014 financial year.

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2. Strategic analysis2.1 External environment analysis2.1.1 Pestel Analysis

PoliticalIn March 2014, Qantas complained the carbon tax was destroying their ability to compete in the domestic market. The carbon tax cost them $106 million last financial year, and $59 million in the six months to January (Owens, 2014). The carbon tax also caused flights to cost more which would also hurt business as it could prolong people from going on a holiday or force them to seek another airline that is cheaper. That financial burden is immeasurable. With the carbon tax repealed in July Qantas were expected to pass on the savings, to date they have not done so and are currently being questioned by the ACCC (Morgan, 2014). (Appendix 1)

Environmental Unlike its international counterpart Qantas domestic achieved a surplus (of just below $50 million) for the 2014 financial year. CEO Alan Joyce said that would make them “in all likelihood, the only profitable airline in the domestic market” (Frawley, 2014). Qantas currently sits below investment grade, which is not a good position for company that was refused a debt guarantee or loan from the Federal government (Creedy, 2014). Qantas plans to reduce their debt by $1 billion over the next 12 months.

SociologicalPart of the reason Qantas have been so successful in retaining their position in the corporate market is because of their network, frequency of flights, and the destinations that are available as well as their loyalty program, product and on-time performance (Frawley, 2014). This is a service industry and Qantas has always been ahead of its time on the domestic front in terms of providing what society needs.

Technological, Economic and LegalQantas is in the aviation industry so continually updates their fleet to compete with competitors. Their economic situation will be covered in greater depth throughout this report and Legal isn’t of direct concern to this case study due to Qantas’ clean safety record and limited public substantial law infringements.

2.1.2 General environmentThere are many factors to consider with airlines and what is required move them and want people to want to travel on a particular airline. These are the costs that QANTAS must constantly monitor to make sure they are low but rational so customers won’t notice the difference and staff are not inconvenienced. The best example would be the case of Ansett. “A succession of start-up airlines (Impulse Airlines and Virgin Blue), top-heavy and substantially overpaid staff, an aging fleet and grounding of the Boeing 767 fleet due to maintenance irregularities left Ansett seriously short of cash, losing $1.3 million a day.” (Cook, 2001).

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2.2.2 Specific environmentDomestically there are many rival airlines in direct competition to Qantas with one of the most interesting being Jetstar that is owned by Qantas. The fact Qantas owns a major competitor shows how they realize the value of providing quality service for travellers who want more than just a cheap way to get from one location to another. Qantas’ major domestic competition within the high-end aviation market is Virgin Australia. “There were 5.28 million passengers carried on Australian domestic commercial aviation (including charter operations) in July 2014, a decrease of 1.4 per cent on July 2013. For the month of July 2014 there were 60 675 aircraft trips, a decrease of 1.7 per cent compared with July 2013.” (Bitre.gov.au, 2014) This is highlighted on the following graph.

Source: (Bitre.gov.au, 2014)

2.2.3 Conclusions on external environment threats and opportunitiesBecause Virgin are within the same high end service level Qantas will have to act cautiously to make sure they still deliver better services than Virgin at competitive rates.

2.3 Internal analysis2.3.1 Core competencies

“The actions taken in 2013/2014 have better equipped Qantas to build long term shareholder value, provide world- class service, serve the Australian community, and shape its future in the 21st century aviation industry.” (Qantas Annual Report, 2014). Qantas has always been recognized for its excellent quality service and high level of experience when it comes to their staff.

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2.3.2 Sustainable Competitive Advantage

Qantas’ investor presentation clearly highlights in a table what they deem are the most important advantages they have over rival airlines.

Source: (Qantas Investor Presentation, 2014)

2.3.3 Internal weaknesses

Qantas’ major issue that causes it to lose customers to budget airlines is the fact that it costs substantially more to fly with them. The world is changing and people will put up with less legroom and no check in luggage in exchange for cheaper flights because the destination isn’t very far away for domestic flights.

2.3.4 Conclusions internal strengths and weaknesses

QANTAS will never be able to continue to offer the same high level of quality and service at the same price as competitors. This is a sacrifice they should never attempt to make as they could permanently ruin everything they stand for. Their strengths far outweigh their weaknesses and they should focus on upgrading the quality of their services and frequency of flights. If their planes were upgraded to fly faster, smoother and provide more comfort than their competitors at from better locations at more convenient times than they currently offer for slightly more money they would increase market share.

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3. Strategic directions and strategic objectives3.1 Vision“To be the worlds leading airline group in air, ground, people safety and health.” (Qantas Sustainability Review, 2013). Qantas is constantly living their vision, as the airline currently operates with no fatalities on record (since the adoption of the jet engines in civilian aviation) (Babylon.com, 2013).

3.2 Mission“To build a strong viable business capable of delivering sustainable returns to its shareholders” (Qantas Sustainability Review, 2013). While Qantas has followed through consistently with this mission statement, it has proved to be misleading for the past financial year, as Qantas Domestic suffered a significant loss when compared to the earlier financial year. However, Qantas Domestic did make a surplus, therefore delivered returns to shareholders.

3.3 Strategic objectives

3.3.1 Ethics positionIn order for Qantas to uphold its favourable position as Australia’s premium airline the Qantas group has a robust mandatory training program, which recognises the importance of embedding the principles, group policies and the standards expected of employees (Qantas, 2013). See (Appendix 2) for an outlining of the principles in Qantas’ corporate government framework.The Qantas group believes they have a social responsibility to manage and limit their carbon footprint. This is achieved through a variety of initiatives such as adopting a fuel efficiency target to reduce fuel consumption by 1.5% every year to the year 2020. Qantas also has utilities targets to reduce electricity and water consumption by 10% by 2020 and reduce waste sent directly to landfill by 20% before 2020.

3.3.2 Stakeholder analysis and tableAn in-depth review of the Qantas Group’s stakeholders using the Stakeholder Salience Model (Mitchell, Agle and Wood, 1997) deems that the group’s shareholders, customers and employees are ‘definitive’, whilst the rest of the Qantas group’s stakeholders are classified as ‘dominant’. Meeting the needs/wants of these stakeholder’s is a necessity for Qantas group to continue to be a strong viable business for the future.

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Stakeholder analysis table

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3.4 Conclusions on organisation’s strategic direction and strategic objectivesThe Qantas Group is doing an excellent job at ensuring all of its stakeholders needs are adequately catered for through a variety of initiatives undertaken by the group, such as Carbon Offset initiatives and the supplier relationship program. This has helped Qantas remain Australia’s premium airline and uphold it’s distinguished reputation within the airline industry.

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4. Strategic choice: the broad business strategies pursued4.1 Ansoff’s product/ market strategies

Qantas adapts Ansoff’s product/market business level strategies through product development and market development.

Image: (Businesscasestudies.co.uk, 2014)

The above grid shows the elements involved in each component of Ansoff’s matrix. Qantas is invested in new products to attract more customers within the existing markets they service. For example, Qantas has recently been granted a patent, which entails the innovation of self-service luggage processing stations and self-service passenger check in stations (Appendix 3) (Intellectual Property Australia, 2014). Qantas is also involved with market development. Qantas attempts to attract new markets through engaging with potential customers by offering a range of deals and promotions.

4.2 Miles and Snow’s adaptive strategiesAnalyser:The analyser strategy relates to the aspects of maintaining current consumers whilst enabling innovation in order to attract new consumers to their market (R. Barnat, 1998). Qantas domestic utilizes a range of features to satisfy existing consumers through such features as Qantas domestic frequent flyers and the Qantas club (Group. Q, 2012). A prevalent example of innovation is that Qantas has been granted a patent that allows Qantas to connect passengers to their luggage via identification chips called the “Q bag tag”, that ensures luggage is not lost and does not travel to a different location; whilst also speeding up check in times as customers are able to check bags prior to arrival online (Q. Group, 2014).

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Defender: The defender strategy relates to the protection of a companies current market and the prevention of new entrants into the market (R. Barnat, 1998). With the analyzer strategy being most prominent in relation to Qantas, they do have some aspects of the defender strategy. With the ever-present high barriers to entry, including high capital costs, the domestic airline market acts as a defensive method within it’s self.

4.3 Porter’s competitive strategiesCost-leadership:Is outlined as maintaining low production costs whilst also possessing high quality product (comparable to competitor firms) (Porter. M, 1980). Qantas declared their two brand strategy (other brand being Qantas owned Jetstar) to be, leaders in cost-leadership and low fares leadership (Group. Q, 2009). Meaning that in order to reach these goals Qantas domestic must maintain low cost of production at the same time as providing high quality product with low fares. This is depicted with the introduction of Jetstar as the low airfare division and Qantas as the premium full service (Group. Q, 2009).

Focus strategy:Qantas domestic ties both differentiation and cost-leadership strategies into the framework of its company. The ability to combine the two successfully has made Qantas the authority in the domestic airline industry. Qantas domestic has recently differentiated itself from its main competitor (Virgin Airlines), most appropriate example being the installation of a new superior ‘business class suite’. This suite has created heightened comfort and relaxation for passengers travelling in the business class (ABT, 2014). This installation has been declared the “next generation of business class travel” (ABT 2014). The ability to provide these high standards whilst maintaining price competitiveness has enabled Qantas to tailor a broad range of strengths overtime.

4.4 International strategiesTransnational:With our focus on the domestic side of Qantas, there isn’t a great amount of international strategies. Though Qantas domestic prides itself on multiculturalism and cultural sensitivity, which is relevant to Australia’s current population of consumers (Group. Q, 2013). Having a globalized consumer base even just within the domestic market means that Qantas has to adapt their service to a range of respective cultures that they may provide for. The adaptation examples include adjusting menus sensitive to cultural/religious requirements and changing the security methods to handle cultural dress and practices.

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4.5 Conclusions on broad business strategies being pursued to achieve objectives.

Qantas take on their main rival virgin through all areas including adapting their products to be visually appealing and increasingly more comfortable. “First revealed more than a year ago, the latest “unveiling” will be the final version of the Marc Newson designed suites to be installed in the airline’s A330s by the end of the year. Featuring a lie-flat bed, more storage space and a larger In Flight Entertainment (IFE) selection, the new offering will go head to head with Virgin Australia’s “Super Diamond” suite unveiled in Singapore last month” (Qantas takes Virgin on in business class, 2014). (see Appendix 4)

Source: (Qantas takes Virgin on in business class, 2014)

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5. Strategic implementation: General perspective5.1 Any mismatch between environmental turbulence and business strategy focus?

As stated in the environmental turbulence analysis, Qantas operates within a moderately dynamic environment. Comparing the turbulence analysis and the organisation’s business level strategies, it can be seen that the strategies align appropriately with the industry’s moderate level of volatility. With a highly volatile economic environment, it is important that Qantas continues to focus on its competitive cost position, as currently it is proving to be an effective strategy.

5.2 Evidence of unrealised, unintended or imposed strategy?Qantas had to realign its strategy as a result of the carbon tax in 2012. This is therefore imposed strategy as it was influenced by the Australian Government. As Qantas Domestic continues to deliver a surplus, there is no evidence of unrealized or unintended strategy.

5.3 Evidence of strategic flux/drift?

Strategic drift/flux:In relation to Qantas domestic neither are evidently present, but strategic drift appears to be most relevant. Though in relation to the domestic airline industry of Australia strategic drift is only limitedly present, ever since Ansett’s diabolical collapse in the early 2000s (See Appendix 5). This collapse has paved the way for a steep learning curve of how to avoid negative effects of strategic drift in this industry (Pascoe.M 2012). Qantas has utilized the mistakes made by Ansett to factor in external changes to the industry and have somewhat mirrored or even capitalized on these changes. Qantas has maintained competitiveness with the ability to operate low cost airfares (through Jetstar) and be the authority on regional business travel in Australia (Qantas/Qantaslink) (Hunter.P 2013). As a result of the company’s strong strategies, there is no evidence of strategic flux.

Sigmoid curve:

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The evidence present to suggest second curve activity is the adaptations made by Qantas domestic to the dynamism of the domestic airline. Qantas domestic has added low cost airlines whilst maintaining high quality product, which has enabled it to remain successful and competitive.

5.4 Is transformational change needed?

Qantas is definitely underway with implementing these strategies mentioned. The organization has acknowledged that transformational strategic change is needed, and commenced these changes in 2013.

Image: (Qantas Group, 2013)

This table shows what the transformational changes Qantas desires to achieve before the end of the 2015 financial year. It is stated that Qantas aims to achieve a more competitive relative cost position for Qantas Domestic. This is a priority, as reducing costs will ultimately increase profits. The figures below also show outcomes from the transformational change. Qantas has achieved significant changes over the course of 2013, which allowed Qantas domestic to achieve a surplus of just below $50million. This suggests that Qantas Domestic is implementing the business level strategies effectively.

Image: (Qantas Group, 2013)

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5.5 Where do the business strategies fit on the BCG matrix?

With Qantas group experiencing the $2.8 billion loss (Wardell. J 2014); one of the few successful components is their domestic operations. As Qantas domestic posted a profit of 450m in the 2014 financial year ($30m Qantas & $20m Jetstar) (Frawley. G 2014). Using the BCG matrix Qantas domestic’s enterprise can be clearly identified as a cash cow. With recent trends suggesting Qantas is struggling to hold onto its consumers (Wardell. J 2014) whilst still being one of if not the only profitable airlines in the domestic industry of Australia (Frawley. G 2014). Qantas domestic provides a steady income but has recently been losing part of the market share; which evidently suggests Qantas domestic as a cash on the BCG matrix.

5.6 Conclusions on organisation’s overall implementation of business strategies.

CEO Alan Joyce has come under a lot of scrutiny in the midst of Qantas’ woes, but in response has attempted to remedy the situation. Qantas have cut jobs, appealed for a government debt guarantee, manage to pass the Qantas sales act which has allowed less restriction on the foreign ownership of the airline (now sitting at 49%). With Qantas domestic being one of the few successful components of Qantas airways (in regards to finance) with a $50m profit, the current objectives of the company is to reduce current loss overall and continue behind the success of the domestic sector. There appears to be numerous attempts whether directly or indirectly that

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Qantas/Qantas domestic is addressing their implementation issues and at the present time have made improvements overall.

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6. Strategic implementation issues6.1 Important strategic implementation issues faced by Qantas6.1.1 Incorrect CEO

Alan Joyce may not be the most suitable man for the job to effectively implement the changes Qantas needs to survive. Alan Joyce comes from Jetstar and has a cost cutting mindset and is focused on a lean business model. Cutting costs too drastically can change the experience for customers who won’t be happy if they are paying the same premium prices without the premium services that should be expected. A former senior Qantas executive was quoted as saying in reference to Joyce’s decisions “it doesn’t make sense when your business relies on customer loyalty. It is not a low-cost business where you can price them back in, you can’t do that in a full service business. It’s a big miscalculation.”

6.1.2 Brand damage

According to Alan Joyce Qantas has too many staff. Qantas plans to reduce their workforce by 15% over the next two years. This has the potential for brand damage. This is also apparent with the decision to make Jetstar a bigger part of Qantas. This makes the brand seem cheap in the eyes of customers and can only be rectified by distancing the companies.

6.1.3 Inadequate finance

Inadequate finance is a problem for Qantas as the Australian Federal government refused to give them a loan so their choices and changes they make must be very well calculated because they face the risk of running out of money because at the moment they are financially “flying solo”.

6.2 Conclusions on strategic implementation issues.

Qantas continuously seeks out ways of showing that their planes offer the best service that is more comfortable and convenient than any other airline. The current issues could be attributed to Alan Joyce’s current reign as CEO. Perhaps a CEO from a luxury car company would be more beneficial as their mindset would align with the product that is required to be delivered to Qantas customers. They could offer greater innovation and more ways to improve the overall flying experience. This would prevent brand damage and the new CEO would more than likely know cost cutting measures to still deliver quality products.

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7. Strategic evaluation7.1 Triple bottom line reporting

This triple bottom-line analysis has been reported in order to evaluate the Qantas Group’s ability to meet its strategic objectives

7.1.1 Economic bottom lineIn the 2014 financial year, Qantas Domestic recorded an underlying EBIT (earnings before interest & tax) of $30 million, down from $365 million in the 2013 financial year. This decline in earnings can be attributed to weaker demand in the resource and government industries, an increase price pressure on all industries, an increase in fuel costs and the carbon tax. In light of these factors, Qantas Domestic adopted the strategy to maintain a capacity, frequency and product advantage over competing domestic airlines, which saw Qantas retain an 80% share of the domestic corporate travel market and remain Australia’s premium carrier of choice.

7.1.2 Social justice bottom lineThe Qantas Group worked hard with local communities to come up “Share the Spirit” banner, of which all its community activities come under and aims to connect Australian’s with their heroes, loved ones and dreams (Qantas, 2013)An example of an initiative that comes under the “Share the Spirit” banner is ‘Kids to Coast’, which provides children living in remote inland communities that have never seen the ocean before, the opportunity to take part in an educational program to travel to Sydney to experience the ocean and learn about sea and marine life, city living, sporting activities and interact with students from metropolitan Australia. It is evident that the Qantas Group takes its role as responsible corporate citizen very seriously, as its community participation through programs and initiatives is extensive and provides opportunities to all walks of life through focus areas such as communities, sport, art and people.

7.1.3 Environmental bottom lineEnvironmental sustainability is essential to the future viability and sustainability of the Qantas Group. Qantas has implemented programs and targets designed to continue to reduce emissions into the future. Between 2005-2011, Qantas reduced electricity consumption by 8%, water consumption by 19% and waste-to-landfill by 21% and aims to cut net emissions by 50% by 2050. As a result of the Qantas Group’s environmental sustainability initiatives, they have been named one of the worlds leading airlines for environmental action in the annual Air Transport World (ATW) Eco-Aviation awards and have also received the ‘Environmental Award for Leading in Sustainability ‘ at the annual Banksia awards (Qantas, 2013).

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7.2 Conclusions on how well the organisation is achieving strategic objectivesAs a result of the triple bottom line analysis we can conclude that whilst Qantas Domestic experienced poor financial results in the 2014 financial year, this is most likely to improve dramatically due to the retention of over 80% of the domestic market. However, due to the implementation of a range of initiatives and programs the Qantas Group was able to satisfy strategic objectives effectively.

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8. Conclusion: The organisation’s current and future prospects and recommendations.

In the 2014 Qantas annual report CEO Allan Joyce stated, “We have now come through the worst and we expect to report an Underlying Profit Before Tax for the first half of 2014/2015, subject to events beyond our control.” (Qantas Annual Report, 2014). This formed the basis of our report, as it is a window into the mindset of the Qantas CEO. We had to postulate whether this statement would be true or whether the company could potentially fail.

Last Friday (24/10/14) Qantas held their 2014 AGM. Alan Joyce was met with 120 angry shareholders who “were unimpressed and proceeded to unload on the CEO, criticizing his management and accusing him of not understanding the travel industry.” (news.com.au, 2014). Alan Joyce stated that he predicted a half year profit which shows that Qantas is improving however with staff and shareholder morale down and Qantas pilots questioning purchasing choices in particular Qantas “failing to put fuel efficient Boeing 787s on international routes instead of gas guzzling 767s.” (news.com.au, 2014). (see Appendix 5)

It is the conclusion of this report that Qantas should start looking for another CEO who has a better understanding of the premium aviation industry to save the great Australian Airline. There are just too many factors that Alan Joyce has failed to act on appropriately.

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9. References

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Babylon.com,. (2014). Qantas fatal accidents - Free definitions by Babylon. Retrieved 19 October 2014, from http://www.babylon.com/definition/Qantas_fatal_accidents/English

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Cook, T. (2001). Australia’s second biggest airline collapses - World Socialist Web Site. Wsws.org. Retrieved 12 October 2014, from http://www.wsws.org/en/articles/2001/09/anse-s15.html

Creedy, S. (2014). S&P cuts Qantas rating to junk. TheAustralian. Retrieved 2 September 2014, from http://www.theaustralian.com.au/business/aviation/sp-cuts-qantas-rating-to-junk/story-e6frg95x-1226777476886#

Flynn, D. (2014). First look at Qantas' new business class seat. Sydney Morning Herald, pp. http://www.smh.com.au/executive-style/business-travel/high-flyer/first-look-at-qantass-new-business-class-seat-20141021-119lia.html. Retrieved from http://www.smh.com.au/executive-style/business-travel/high-flyer/first-look-at-qantass-new-business-class-seat-20141021-119lia.html

Frawley, G. (2014). Qantas, Jetstar domestic “in all likelihood” only profitable Australian domestic airlines | Australian Aviation. Australianaviation.com.au. Retrieved

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2 September 2014, from http://australianaviation.com.au/2014/08/qantas-jetstar-domestic-in-all-likelihood-only-profitable-australian-domestic-airlines/

Frawley, G. (2014). Qantas, Jetstar domestic in all likelihood only profitable airlines. Australian Aviation. Retrieved from http://australianaviation.com.au/2014/08/qantas-jetstar-domestic-in-all-likelihood-only-profitable-australian-domestic-airlines/

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Morgan, E. (2014). ACCC examines Qantas over carbon tax repeal pass through. ABC News. Retrieved 2 September 2014, from http://www.abc.net.au/news/2014-07-29/accc-examines-qantas-over-carbon-tax-repeal-pass-through/5632248Creedy, S. (2014). S&P cuts Qantas rating to junk. TheAustralian. Retrieved 2 September 2014, from http://www.theaustralian.com.au/business/aviation/sp-cuts-qantas-rating-to-junk/story-e6frg95x-1226777476886#

NewsComAu,. (2014). Angry Qantas shareholders grill CEO Alan Joyce at AGM. Retrieved 27 October 2014, from http://www.news.com.au/national/angry-qantas-shareholders-grill-ceo-alan-joyce-at-agm/story-fncynjr2-1227100909483

NewsComAu,. (2014). Qantas takes Virgin on in business class. Retrieved 21 October 2014, from http://www.news.com.au/finance/business/qantas-goes-to-business-class-war-with-virgin-for-corporate-customers/story-fnda1bsz-1227096557526

Owens, J. (2014). Qantas blames woes on carbon tax. TheAustralian. Retrieved 2 September 2014, from http://www.theaustralian.com.au/business/aviation/qantas-blames-woes-on-carbon-tax/story-e6frg95x-1226845877582?nk=d0fb5a39a18cf4c1686b4b7eb45101ffParliament of Australia,. (2003). Australian airline industry (pp. 5-7).

Pascoe, M. (2012). Qantas under attack on all fronts. Sydney Morning Herald. Retrieved from http://www.smh.com.au/business/qantas-under-attack-on-all-fronts-20121030-28gwr.html

Porter, M. (1980). Competitive strategy. New York: Free Press.

Qantas 2013, Qantas Sustainability Review 2013, Sydney

Qantas Group,. (2013). Transformational Change (1st ed., p. 24). Retrieved from http://www.qantas.com.au/infodetail/about/investors/qantas-data-book-2013.pdf

Qantas Group. (2013). Commitment to Environmental Sustainability. Retrieved from: http://www.qantas.com.au/infodetail/about/environment/our-commitment-to-environmental-sustainability.pdf

Qantas group. (2013). Environment. Retrieved from: http://www.qantas.com.au/travel/airlines/environment/global/enQantas group. (2013). Qantas group sustainability review for financial year end 2013. Retrieved from: http://www.qantas.com.au/infodetail/about/investors/qantas-sustainability-review-2013.pdf

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Qantas group. (2014). Qantas group Financial results for financial year end 2014. Retrieved from: http://www.qantas.com.au/infodetail/about/investors/mediaReleaseResults14.pdf

Qantas group. (August 2013). Media Release, Qantas wins major environmental award. Retrieved from: http://www.qantasnewsroom.com.au/media-releases/qantas-wins-top-environmental-award

Qantas group. (October 2012). Qantas wins Banksia award for Environmental Sustainability. Retrieved from: http://www.qantas.com.au/travel/airlines/media-releases/oct-2012/5462/global/en

Qantas Investor Presentation. (2014). Retrieved 26 October 2014, from Qantas Investor Presentation. (2014). Retrieved 24 October 2014, from http://www.qantas.com.au/infodetail/about/investors/BuildingaStrongerQantasInvestorPresentation.pdf

Qantasnewsroom.com.au,. (2014). Annual General Meeting – 24 October 2014 CEO’s Address. Retrieved 28 October 2014, from http://www.qantasnewsroom.com.au/speeches/annual-general-meeting-24-october-2014-ceos-address?print=1

Qantas2014.reportonline.com.au,. (2014). Chairman's Report | Qantas Annual Report Online 2014. Retrieved 15 October 2014, from http://qantas2014.reportonline.com.au/chairmans-reportTraveller,. (2011). The other 10th anniversary: 's demise. Retrieved 9 October 2014, from http://www.traveller.com.au/the-other-10th-anniversary-ansetts-demise-1k54n

University of central los angeles,. (2011). A regression discontinuity approach (pp. 1-8).

Viewed at 17th October 2014. Retrieved from: http://www.qantas.com.au/infodetail/about/investors/qantas-sustainability-review-2013.pdf

Wardell, J. (2014). Qantas stays loyal to its frequent flyer cash cow. Reuters. Retrieved 25 October 2014, from http://www.reuters.com/article/2014/08/31/australia-qantas-loyalty-idUSL3N0QZ11M20140831

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10. Appendices. Appendix 1

Qantas blames woes on carbon tax THE AUSTRALIANMARCH 05, 2014 4:50PM

Jared Owens ReporterCanberra

Hockey: no carbon tax is best for QantasQANTAS has urged parliament to support the Coalition’s efforts to support the national airline, as it predicted its carbon tax liability would reach $118 million this year.

In a statement issued this afternoon, the airline complained the carbon tax was “among the most significant challenges we face” and that was unable to pass the cost on to consumers because of the “intensely competitive market”.The statement undermines repeated claims by the Labor Party that the carbon tax is “not a significant issue” for the airline, but also contradicts a Qantas spokesman who last week said: “Qantas’s current issues are not related to carbon pricing.”

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It comes after the Abbott government refused Qantas’s request for a debt guarantee or loan, but moved to relax foreign ownership limits on the embattled airline - a plan that faces opposition in the Senate.

Today, the national carrier said: “After discussions with Qantas, the government announced that it had deliberated carefully on various options, and that its preferred course of action is to ask the parliament to repeal key provisions of the Qantas Sale Act.“The Act is outdated and puts Qantas at a unique disadvantage over its competition. Both sides of politics have fully accepted that the Australian aviation playing field is distorted.“If the legislation does not pass, then the domestic distortion would remain.”Tony Abbott today defended his refusal to give Qantas an unsecured $3 billion loan, insisting the airline would use “initiative and creativity” to survive for as long as it takes to navigate the government’s legislation through the fractious Senate.“Even under the restrictions of the Qantas Sale Act, there’s still enormous freedom of management that Qantas has … and I suspect they will … use their initiative and creativity, to come up with a whole range of strategies that will make the airline more competitive,” the Prime Minister told 2GB.The airline’s statement said: “Qantas will now focus on what we can control, and that’s operating a great Australian business. We will continue to work through the processes announced last week to take $2 billion in costs out of our business.”Treasurer Joe Hockey said the government had been “forensic” in its approach to Qantas, seeking independent advice on the wisdom of providing a debt guarantee or unsecured loan to the airline.“If you give someone an unsecured loan, you work on the basis that you won’t see it again, that’s what I’ve discovered more than once,” Mr Hockey said, denying the company was likely to collapse.Qantas said it paid a $106 million carbon tax bill last financial year, and $59 million in the six months to January.“We have said that the price on carbon is a cost to our business that we have not been able to recover through fare increases, because of the intensely competitive market we operate in. Domestically, it cost us $106 million in FY13 and $59 million in HY14,” the airline said.“It is among the significant challenges we face, including an uneven playing field, capacity increases in the international market and record high fuel prices.”Qantas’s statement came after Mr Abbott said Qantas should tell non-government senators it wanted the same deal as its major competitor, Virgin.“And that way we can all live happily ever after and Australia can have two fantastic, highly competitive airlines,’’ Mr Abbott said.Opponents of changes to the Qantas Sale Act say it will lead to jobs going overseas.Two investment banks, the federal Treasury, the infrastructure department and accounting firm PricewaterhouseCoopers advised the government that Qantas was basically in good shape.

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“We sent in various experts to look at Qantas and the conclusion that we came to, based on their advice, was that Qantas does not need an unsecured facility from the government,” Mr Abbott said.Labor is demanding the government release its due diligence on Qantas.Finance Minister Mathias Cormann rejected suggestions the legislative changes to the act were doomed.“We’ll make the case to the Senate and the Australian people and let’s see what happens,’’ he said.A Qantas spokesman last week told The Guardian: “Qantas’s current issues are not related to carbon pricing. We have been clear that levelling the playing field is the most important policy measure that needs to be fixed and with some urgency.”Qantas chief executive Alan Joyce will meet the airline’s unions today.

Appendix

2Qantas group Employee Principles

- The Qantas group’s ‘Corporate Government Framework’ comprises a number

of principles and policies, which together enable Qantas to comply with its

legal and regulatory obligations and ethical standards, which derive from

various sources, including the Qantas constitution, the Australian and

international statutory and regulatory framework and the Qantas Group’s

Behaviors and Values.

The principles are:

- Committed to safety as our first priority

- Compliance with laws and regulations

- Treat people with respect

- Act with honesty and integrity, upholding ethical standards

- Committed to true and fair financial report

- Committed to environmental sustainability

- We have a responsibility to safeguard Qantas Group reputation, brands,

property, assets and information

- Proactively manage risk

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Appendix 3

ABSTRACT & PATENT DETAILSInventor/s:

Bowring, RobertBulkin, TanyaCharmand, WisamHudson, VanessaTully, Stephany

Assignee/s:Qantas Airways Limited

ABSTRACT Disclosed herein is a passenger and luggage management system 10 for an airline. The system 10 includes an electronic database for storing particulars associated with a plurality of passengers, including passenger contact details, booked trip particulars and check-in status for each of the plurality of passengers. Various forms of passenger check-in stations are provided for identifying a passenger, checking-in the passenger for a booked trip, transmitting data to the database for updating the passenger's check-in status on the database, and processing a boarding pass for the passenger for the trip. Self-service luggage processing stations 40 are provided at a spaced apart distance from hosted check-in counters 20, self-service passenger check-in stations 30, and self-service check-in kiosks 35, for checking-in any luggage that the passenger may wish to take on the trip. A user interface 42 is associated with the luggage processing station for receiving an input indicating whether the passenger has checked-in. The self-service luggage processing stations 40 are adapted to reject the passenger's luggage if the input indicates that the passenger has not checked-in.This page contains all relevant details related to patent number AU2012101880. This patent was filed on 28/12/2012 and has a status of GRANTED. The inventors associated with this patent are:

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Bowring, RobertBulkin, TanyaCharmand, WisamHudson, VanessaTully, Stephany

The applicant/owner of the patent is registered as Qantas Airways Limited. They used the patent attorney firm FB Rice to file this.Australian patent AU2012101880 is one of over a million that we feature on IP in Australia which covers the entire spectrum of patents in Australia. Qantas Airways Limited is also one of thousands of applicants we’ve analysed. We also understand who are the most prolific inventors in Australia with details on all the patents attributed to individuals.Because we have insights into all the attorney firms that have been used across Australia including which specific patent attorney worked on each patent, we have access to unique analytics on the best attorney to use if you have specific patent needs i.e. it would make sense that the patent attorney you should use for your invention is the one who is most active and has the most experience in your technology area.Filing patents is a time consuming and expensive exercise which is why care needs to be taken ensuring that you’re working with the right individual.Because we’re an independent third party we can give you unbiased insights and recommendations on the right partner to choose.

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Appendix 4

Qantas goes to business class war with Virgin for corporate customersOCTOBER 21, 2014 12:00AM

QANTAS will today take the battle for corporate travellers up another notch, with the launch of its new business class suite in Sydney.

First revealed more than a year ago, the latest “unveiling” will be the final version of the Marc Newson designed suites to be installed in the

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airline’s A330s by the end of the year.

Artist impression ... the new business class suite in a Qantas A330, from August 2013. Picture: Supplied Source: Supplied

Featuring a lie-flat bed, more storage space and a larger In Flight Entertainment (IFE) selection, the new offering will go head to head with Virgin Australia’s “Super Diamond” suite unveiled in Singapore last month.At the time Virgin Australia boss John Borghetti said the Super Diamond suite was superior to the Qantas version, because it offered bigger seats, more leg room and a larger entertainment screen.RELATED: Virgin Australia's flash new business class suite revealedHe also made a point of thanking Qantas for revealing their suite early, and giving Virgin a chance to “tweak” its own design to ensure it was a better product.Yesterday Qantas was remaining tight-lipped about its updated offering, saying only that it had undergone “several improvements” since the August 13 reveal.

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Another artist impression ... Qantas originally unveiled this as its new A330 business class suite in August 2013 but it has since gone back to the drawing board. Picture: Supplied Source: Supplied

The changes mean both airlines will soon offer aisle access from every business class suite as well as seats that convert into “fully flat” beds.In Virgin’s case, the airline is even removing some economy seats to give high-paying business passengers more room.Qantas will be the first to fly with the flash new look, with Virgin’s refurbishment of its A330s and Boeing 777s not expected to be completed until mid-2015.Passengers on domestic and international flights will get to experience the new level of luxury that is expected to coincide with a gradual increase in fares.

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Virgin Australia’s sleek new business class suite will be on board its A330 and Boeing 777 fleet by mid-2015. Source: Supplied

The latest Federal Government index on domestic airfares shows business class prices are already higher than they were at the same time last year.Corporate travellers are paying an average of 87.4 per cent of “full price” compared with 81.2 per cent in October 2013.In the same period, discount economy fares also crept up slightly from 56.7 per cent of full economy, to 59.5 per cent.Corporate customers continue to be the main battleground for Qantas and Virgin Australia with both airlines doing all they can to woo the business and government market.Qantas also announced yesterday it would build a new domestic business lounge at Perth Airport next year, adding 30 per cent more lounge capacity

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Appendix 5

Australia’s second biggest airline collapsesBy Terry Cook 15 September 2001In the early hours of September 14, Ansett Airlines, Australia’s second largest and oldest domestic carrier, suddenly ended all flights after an administrator appointed by its parent company Air New Zealand declared that it had no funds to continue operating.Right up to the eleventh hour, Ansett management was assuring staff and the public that flights would continue, despite the company being placed in the hands of the administrator, accounting firm PricewaterhouseCoopers. Ansett staff only found out when they turned up to work yesterday morning. Thousands of passengers due to fly that day were left standing helplessly and unassisted outside terminals across the country. Many thousands more who had purchased tickets or tour packages are unlikely to be refunded.The airline’s demise will have far-reaching implications. In the first place, it is the largest mass sacking in Australian history. More than 16,000 Ansett jobs have been destroyed and another 60,000 are under threat in supplier companies and throughout the tourism industry. Travel Land, partly owned by Ansett, has already closed down over 100 agencies. Catering company Gate Gourmet, owed $26 million by the airline, has stood down its 800-strong workforce and placed itself in administration.Ansett employees also stand to lose more than $500 million owed to them in accrued entitlements, including annual and long service leave and severance pay. Having refused to lift a finger to prevent the airline’s liquidation, the government of Prime Minister John Howard has announced a levy on airfares that will only cover some of their entitlements.People in regional and rural areas serviced by Ansett subsidiaries—Hazelton, Kendell, Aeropelican and Flight West—will be deprived of air services or left with only limited access.Air New Zealand placed Ansett into “voluntary administration” on September 12 after revealing that its Australian subsidiary was losing $1.3 million a day. Frantic negotiations on both sides of the Tasman over the previous weeks had failed to produce a solution.The collapse could spark turmoil in banking circles. More than 30 banks have exposure to the airline, with the National Australia Bank alone facing losses of $100 million. Shares in travel, tourism and bank stocks have plunged. Harvey Travel shares fell 11 percent to $5.54 and Flight Centre shares fell 8 percent to $20.50.Ansett’s failure is the latest and most dramatic in a string of corporate collapses

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since the beginning of the year. It follows the demise of Australia’s third largest communications company One.Tel, insurance giant HIH, domestic budget-price airline Impulse and retail chains Harris Scarfe and Franklins.

Countdown to collapseOver the past few days, all the major players—the management of Air Zealand and Ansett, the New Zealand and Australian governments—washed their hands of any responsibility for maintaining the airline and for the future of its workforce. Last week, Singapore Airlines, a 25 percent shareholder in Air New Zealand, withdrew from a proposal that involved the NZ government freeing-up restrictions on foreign ownership provisions to allow Singapore to increase its share in Air NZ to 49 percent and inject more than $1 billion to re-capitalise Ansett. The NZ government then ruled out any assistance to Air New Zealand in order to maintain Ansett. It insisted that Air NZ concentrate on resolving its own financial problems that included a forecast annual loss of more than $NZ200 million ($A168 million). After Air NZ cut Ansett adrift, the NZ government agreed to inject $NZ550 million to keep its national carrier afloat.There is now evidence that since fully taking over Ansett last October, cash-strapped Air NZ began asset-stripping its subsidiary, even to the extent of running the entire group’s fuel bill through the Ansett account, adding another $300 million a month to the airline’s costs. Moreover, in the company’s closing days, Air NZ awarded chief executive Gary Toomey and other Ansett executives “performance bonuses” worth millions of dollars. Yet, within hours of its closure, representatives of Air NZ argued in the Australian Industrial Relations Commission that the company was “only a shareholder” in Ansett and was not responsible for its debts, including workers’ entitlements.Despite the looming loss of jobs and livelihoods, the Howard government ruled out any government assistance, even to keep the airline afloat pending a sale. Howard insisted that any such action would involve a “bad principle”—in other words, it would cut across the demands of big business and finance that its program of deregulation and privatisation be accelerated.In the final days, the government asked the former state-owned airline, Qantas—Australia’s largest carrier—to consider taking over its failing competitor, indicating that it would relax competition regulations to allow a bid to go ahead. On September 12, however, Qantas walked away from the proposal, declaring that Ansett’s debts were too great. Even if Qantas had decided to intervene, it would have carved the company up, eliminating an estimated 9,000 jobs.In mutual buck-passing, the Howard government has claimed that it was unaware of the extent of Ansett’s financial crisis, but Air NZ executives have produced documents showing that they warned Canberra of the situation as early as June.Unions prostrateSince the outset of the crisis, the Australian Council of Trade Unions and the airline unions have worked to prevent any action by workers to defend Ansett

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jobs. Furious sacked workers and their colleagues at Qantas have been confined to brief walkouts, protests and symbolic pickets outside empty Ansett terminals.Having already helped Qantas and Ansett cut thousands of jobs in recent years, union officials presented the closure as either a fait accompli or sought to divert the anger of workers into anti-New Zealand tub-thumping. Throughout the week, their activity has largely consisted of trying to find a company to take over Ansett under any conditions, while pleading with Howard to launch a bailout. The unions offered to cooperate with a Qantas takeover, even while conceding that the outcome would be an “aggressive cost cutting drive” and massive job losses.With Qantas out of the picture, the unions have now accepted the liquidation. Ansett workers have been confined to begging the Liberal government to underwrite their entitlements or told to wait for protracted legal action to extract payments from Air NZ. Labor Opposition leader Kim Beazley has sought to make political mileage by castigating the Howard government for refusing a bailout. It needs to be recalled that he was a key minister in the Labor government that de-regulated the airline industry, privatised Qantas and backed wholesale cost cutting.Ansett, plundered and mismanagedOver the past decade, Ansett has been hit hard by the cutthroat competition in the airline industry globally. In addition, last year two budget-price airlines—Virgin Blue and Impulse—entered the Australian market, setting off a price cutting war. When Impulse eventually went to the wall, Qantas benefited most. Six years ago, Ansett commanded 50 percent of the domestic market but this subsequently plunged to 39 percent. The airline was also badly savaged by rising aviation fuel costs and by the falling value of the Australian dollar, which pushed up the cost of parts and essential items.However, Ansett’s plight cannot be understood only from recent developments. Over the past two decades, it became a victim of the type of corporate plundering that has become the hallmark of major capitalist investors.Originally established in the 1930s, Ansett expanded during the post-World War II period with the help of government protection under the official two-airline policy. It grew to rival the government-owned national domestic carrier TAA, emerging in 1969 as Australia’s largest domestic carrier.In the late 1970s, Ansett became the target of hostile takeover bids. In 1979, Rupert Murdoch of News Corp and transport giant TNT, headed by Peter Abeles, gained control after waging a battle against Robert Holmes a Court’s Bell Group and Ampol. News Corp and TNT starved the airline of vital reinvestment needed to upgrade its fleet and operations. Murdoch’s primary interest was to gain control of television broadcaster Channel 10, owned by Ansett, and to use the airline as a cash cow to fund the growth of his media empire. In 1984, News Corp used a $78 million dividend from its half share in Ansett to finance its expansion into the US media market.From 1989, dividends from Ansett began to fall and the two investors began to focus on milking it for all it was worth, and then making a killing on its sale. In 1996, TNT sold its half share to Air NZ for $325 million. News Corp eventually offloaded its share in 2000 for $580 million and a deferred equity stake worth

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$100 million.News Corp and TNT left Ansett with a fleet now ranked as the second oldest among 50 world-class airlines. The airline began to suffer systemic maintenance problems, eventually resulting in the grounding of its jets on safety grounds twice since last December, costing millions of dollars in lost revenue. Air NZ was unwilling and unable to provide the billions needed to rectify the years of pillaging and neglect.Ansett’s destruction again focuses attention on the enormous contradictions involved in the collapse of major corporations. Its demise has not been caused by any fall in the need or desire for air travel—on the contrary, the introduction of lower fares in Australia over the past year has produced a substantial increase in numbers. The crisis in the entire airline industry results from the fact that these vital assets remain privately owned, run solely for the financial gain of a handful of giant corporate investors.

Appendix 6

Angry Qantas shareholders grill CEO Alan Joyce at AGM5 DAYS AGO OCTOBER 24, 2014 1:48PM

QANTAS’S return to profit in the first quarter of the financial year has failed to appease angry shareholders at today’s AGM in Melbourne.CEO Alan Joyce was quick to point out that despite the record $2.8 billion loss in 2013-14, the worst was behind the group and it was recovering well.He also predicted a half year profit for the Qantas Group.But shareholders were unimpressed and proceeded to unload on the CEO, criticising his management and accusing him of not understanding the travel industry.Qantas pilot Andrew Harper suggested “record” customer satisfaction ratings quoted by Mr Joyce were a lie.He said many customers had been forced to go elsewhere as a result of the withdrawal of services in Adelaide, Perth and Brisbane.And Mr Harper also questioned the wisdom in failing to put fuel efficient Boeing 787s on international routes instead of gas guzzling 767s.Another Qantas worker Colin Rayner told the meeting morale was at an all time low at Sydney International Airport.Recovering ... . Alan Joyce has predicted a half year profit for the Qantas Group. PhotogRecovering ... . Alan Joyce has predicted a half year profit for the Qantas Group. Photographer: Ian Waldie/Bloomberg Source: Supplied

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Mr Joyce replied that poor morale was understandable given the big financial loss, but said it would improve in line with the bottom line.In a furious tirade that was followed by loud applause, one mature shareholder said Mr Joyce had no understanding of the travel industry.She compared the airline industry with the cruising industry which has been warmly embraced by retirees.Mr Joyce said Qantas worked closely with cruise lines to get passengers to their ports and denied the company’s was lettingwell-heeled seniors down.South Australian Independent Senator Nick Xenophon also grilled the CEO about the amount of money being used to prop up Jetstar Asia.Mr Joyce said the low cost airline had made money in four of its ten years of service.He said last year’s loss of $200 million was because other airlines put a huge amount of capacity in the market.Looking up ... Qantas Alan Joyce says customer satisfaction was at record levels across tLooking up ... Qantas Alan Joyce says customer satisfaction was at record levels across the business. Source: News Corp AustraliaQantas Chairman Leigh Clifford opened the airline’s Annual General Meeting by telling shareholders last year’s $646 million underlying loss was “a totally unsatisfactory result”.Mr Clifford went through the reasons for the big loss including over capacity, a record fuel bill and weaker demand.Mr Xenophon announced he had bought $500 worth of Qantas shares on Wednesday in order to attend today’s meeting.He said he would be asking why Alan Joyce remained CEO despite the record financial loss, and extensive job shedding.About 120 shareholders are at the meeting at the Melbourne Convention Centre.

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