Qantas Airways Limited is a renowned Australian airline that has been in operation for over 100 years. Over time, the company has faced many changes and challenges that have been navigated strategically to maintain a strong foothold in the aviation industry. This article seeks to provide an in-depth analysis of Qantas’ business strategy and how it has navigated these industry challenges.
Leading up to 2020, the global aviation industry was facing unprecedented challenges, including declining passenger numbers, increased competition and changeable oil prices. Qantas, being one of the largest airlines in Australia, was not immune to these trends and embarked on a strategic plan to navigate these challenges.
One of the significant strategies Qantas used was to review its cost base. As competition became increasingly fierce, Qantas realized that it needed to restructure its operations, reduce costs and increase efficiency. In 2014, Qantas announced a turnaround plan, which included reducing 5,000 jobs, retiring older aircraft, and renegotiating arrangements with suppliers, saving the company over $2 billion in costs.
Qantas also made strategic investments to diversify its business, reduce dependency on its core airline business and improve revenue streams. Among these investments was the establishment of the Qantas Loyalty Unit. This investment, which involved the separation of its frequent flyer program from its core airline business, proved valuable in generating substantial revenues during the COVID-19 pandemic, when conventional revenue streams from the airline took a massive hit.
Another critical strategy Qantas used to navigate industry challenges was its focus on customer experience. Qantas invested in upgrading its fleet, including the acquisition of fuel-efficient aircraft equipped with advanced technology and comfort amenities. Additionally, Qantas established a strong loyalty program while investing in its digital platforms and website, making it easier for customers to book flights, upgrade, and handle customer service inquiries.
Innovative collaboration is also an essential element of navigating industry challenges for Qantas. For example, Qantas partnered with American Airlines, which helped it offer more connections to North America, resulting in a significant boost in revenue.
As the aviation industry continues to face new challenges, Qantas continues to adapt its business strategies to stay ahead of the curve. By reviewing its cost base, diversifying its revenue streams, keeping a customer-centric approach, and engaging in innovative collaborations, it will ensure that the airline achieves sustainable growth in the coming years.
In conclusion, Qantas Airways’ business strategy has involved strategic plans that proved valuable in responding to industry challenges. These strategies include reviewing its cost base, diversifying its revenue streams, focusing on customer experience, and engaging in innovative collaborations. As the airline industry continues to evolve, Qantas must continue to adapt and innovate to remain competitive and maintain its position as one of Australia’s leading airlines.
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