qantas operations

Question 1

qantas core operations. waht do customers also expect?

Answer 1

transport customers betw destinations in safe, timely manner
* full service airline –> customers expect high lvl service from Q to reflect prices relative to low cost carriers eg. Jetstar (Q’s budget subsidiary) & AirAsia

Question 2

what does oeprations management at Qantas include

Answer 2

real time, day to day decision making & oversee bus
* schedule, cancel, reschedule flights
* monitor & respond to industrial disputes (may impact flight schedules)
* determine required staffing lvls
* reallocate labout to cover absences
* train new staff (when on the job)
* arrange emergency repairs to aircraft
* react to late aircraft arrival/inclement weather
* resolve customer complaints

Question 3

over past 2 decades, how has operations management at Q demonstrated ability to respond quickly to challenges?

Answer 3

• terrorism threats, natural disasters, rapid ^s fuel prices, success of rival low-cost airlines

flexibility esp COVID-19 able to quickly scale back ops responding to border closures & plummeting demand to reduce costs & ensure company’s viability

Question 4

what did Q struggle with during COVID

Answer 4

struggled to scale up its services after borders reopened (understaffing, supply chain issues –> op perf issues –> damaged brand ST)

Question 5

what is CEO Vanessa Hudson’s key focus & when was she appointed the role?

Answer 5

2023 at low pt for Q brand
* restor Q’s reputation for quality & reliability

Question 6

why is Q’ operations function strategically important?

Answer 6

1. contributes to strategic goal (profit maximisation)
   * provide high quality service to max sales rev in highly comp (internationally) airline industry
   * while minimise prod costs to offer comp prices w/ remaining highly profitable
2. success of other functions relies on daily activities within ops
   * if ops fail meet customer expectations (arrive late, poor inflight service,) marketing objs eg. enhance brand image & ^sales & market share undermined
   * ^ costs –> borrow more –> financial objs eg. profitability, solvency
   * ineff on-the-job training –> low worker satisfaction, absenteeism & turnover, poor bus culture, & incidence of workplace accidents

Question 7

what are Q’s main costs

Answer 7

• staff (wages)
• aircraft maintenance
• fuel
• depreciation (allocate asset costs eg. planes over used life > full expense in year purchased)

Question 8

what has Q done to reduce input costs

Answer 8

ecos of scale
* strategic alliances eg. Oneworld Alliance & bilateral alliances (Emirates) enjoy cost savings by sharing facilities & resources (ground staff, booking systems)
* codesharing (sell seats on flights operated by partner airlines on some routes > operate own flights below capacity
* buy fuel larger quantities
* generate sales of domestic flights to overseas visitors (members of loyalty programs of partner airlines) can accrue reward pts by travelling on Q domestic flights

standardisation
* cut back services to some destinations

tech
* online booking, ticketing reduce need for sales & airport staff

fleet upgrades
* newer planes reduce fuel & maintenance costs
* ecos of scale bc higher passenger capacity

minimise waste
* cost savings bc reduce electricity, water usage

Question 10

key elements of differentiation at Q

Answer 10

comprehensive domestic & international coverage
* offer more flights to more destinations
* Q can meet needs of greater no. travellers

jetstar aims price-conscious customers
* Q can maintain market share & ^ sales rev by appealing to both ends of market

offer First, Bus, Premium Eco, Eco classes on international flights
* Bus & Eco classes on domestic flights appeal to broader range travellers
* max rev by offer expensive add-on services eg. special menus, lounges

Question 11

what has Q outsourced (interdependence of OMFH)

Answer 11

some aspects of operations
* IT
* baggage handling
* call centres

operating flights still core function of busunlike producers who outsource PPs to 3rd party suppliers completely

Question 12

interdependence of Q with finance function

Answer 12

highly depended on F to provide funds to purchase/lease new planes
* records & reports perf of ops to monitor, control, improve ops processes
* producing high quality output while minimising input costs achieve objs (eg. profitability)

Question 13

Q operations interdependence w/ marketing

Answer 13

M connects ops w/ customer
* ops for cost-eff high quality service
* M ensure ops catering to flights w/ majority seats filled by determining what services offered through market research, pricing tickets, promoting flight offers, make ticket purchases convenient
* ops provide service lvl & features at given cost determine capabilities of marketing for product design & pricing –> M objs eg. (^ sales rev, market share)

Question 14

Q operations interdependence with HR

Answer 14

lvl custoemr interaction as service provider high
* workforce has diverse skills (Pilot, accountant, flight attendant)
* nature of airline industry needs regularly update skills to maintain safety standards & staff to use new tech
* msot staff employed in O, on the job training largely determine perf for bus culture, worker satisfaction, labour productivity

Question 15

how qantas took adv of globalisation

Answer 15

locating some operations overseas eg. aircraft maintenance, almost all IT ops outsources –> sig lower costs
* globalisation allow Q access new markets overseas –> globally recognised brand (70% of its assets geared to GM 50% just asia)
* established subsidiaries in Asia to take adv growth there eg. Jetstar Asia, Japan,

Question 16

how has Q exposed to ^ comp from globalisation? + susceptibility?

Answer 16

40+ airlines fly to & from Aus, diff to compete for cost leadership esp when most of the airliens receive subsidies from own gvts
* foreign owned airlines eg. Air NZ, Delta compete w/ Q on previously protected routes
* globalisation made Q more susceptible to changes in global eco eg. falling demand during GFC & near-complete shutdown of international travel responding to COVID pandemic

Question 17

How has tech influenced Q operations

Answer 17

adopting & continually upgrading to new tech vital to maintain cost leadership & comp adv
* utilise tech –> mroe eff eg. online bookings reduce commissions paid to travel agents, self-serve kiosks, online & mobile check-in saving time & effort for custoemrs –> reduce need for staff at airport
* newer planes use less fuel & carry more passengers
* also to retain existing customers & secure new ones eg. inflight entertainment, internet access, comfort features (higher humidity & cabing pressure to reduce jetlag –> ^ imp on travellers’ airline choice)
* take adv of new aircraft can fly longer distances by offering direct ultra-long haul services (example, check notes)

Question 18

quality expectations for Q vs Jetstar

Answer 18

custoemr expectations higher for Q > J bc J passengers dont require same standard of product to be satisfied
* Q passengers more disappointed if standard of service lacking
* constant pressure on Q operations to ensure customer expectations fully met & exceeded (if possible) eg. arrive & depart on time, comfort- based features eg. seating, online check-in, self-service kiosks, inflight entertainment, food & beverage service
* must constantly evolve to ensure cater to LT changes in customer expectations (tech eg. latest model aircraft/^ importance on enviro sustainability)
* Q reputation recent failures to meet customer quality expectations –> may impact LT success of bus if ^ comp in market –> ^ options avaialble to consumers who currently limited choice esp domestically

Question 19

Q domestic market share but challenges in international market

Answer 19

enjoys dominant market share of dom market but face sig competitor growth in international market bc fed gvt encourage ^ comp in idnustry & strength of AUS eco relative to other ecos since GFC 2008
* impact on market share & profitability forced Q adopt ^ focus on cost minimisation, sharpened by massive revenue loss during pandemic

Question 20

what cost advs do Q’s competitors have? how does Q achieve the lowest competitive cost then?

Answer 20

• lower wages
• lower taxation
• greater gvt assistance (bc diff laws in home nations, many airlines owned by foreign gvts)

achieves by focus on:
* adopting new tech,
* strategic alliances (Oneworld, Emirates, etc)
* outsourcing,
* reforming HR practices
* restructuring
as full-service airline cant pursue cost minimisation w/o attention to quality –> balance (Q diff achieving mroe recently)

Question 21

what federal & state gvt policies have Q been influenced by in recent yrs?

Answer 21

• national border closures, mandatory hotel quarantine, caps on international arrivals implemented by fed & state gvts responding to pandemic –> force Q operate minimal int. flights during that time
• fed gvt subsidies eg. payments to airliens for operating unprofitable domestic, regional & international flights during pandemic & $1.2bn half-price flights scheme 2021 to stim demand for dom travel & support tourism industry
• last 2 decades access to previously protected Q international routes gradually opened up to airlines (Delta, Virgin) making routes less profitable for Q by reducing Q’ market share & putting downward pressure on prices + fed gvt blocked request by majro rival Qatar Airways 2023 to double its flights in &out AUS (1 reason to protect Q) –> threat Q’ dom & int. market share
• FWAct 2009 influences Q’s decisions how to organise its workforce eg. Albanese gvt’s ‘Secure Jobs, Better Pay’ & ‘Same Job, Same Pay’ amendments to Act ^ labour costs (eg. agreement w/ flight attendants to comple SJ,SP amendments ^ wages 26%) & may affect Q’ use of subsidiaries to carry out tasks & outsourcing other tasks

Question 22

legal regulation (other) that apply to Q

Answer 22

• required to hold operating licences issued by CASA, Civil Aviation Safety Authority
• laws promoting comp enforced by ACCC (while many allianced eg. Oneworld, bilateral alliances approved, proposed agreements w/ Air NZ & Japan Airlines knocked back in past due to sig reductions in comp otherwise)

Question 23

how Q implements enviro initiatives

Answer 23

combine into 1 single program ‘Q Future Planet’
* emissions from using fuel is Q’ largest enviro impact –> ^ fuel efficiency for sustinability in operations
* reduce electricity use, water consumption & waste going to landfill
* committed to phase out sibgle use plastics entirely by 2027 & zero general waste to landfill by 2030
* eliminated 100 million single-use plastics per yr & 75% of waste going to landfill by switching to compostable coffee cups, wooden cutlery packs,
* under its Climate Action Plan pledged to cut net carbon emissions by 25% by 2030 & to net zero by 2050 (one of most ambitious targets of airlines globally), pursuing through fleet renewal (new aircraft sig mroe fuel efficient than planes being replaces)
* repurpose materials from its retired aircraft into components for newp lanes to contribute to supply chain decarbonisation (check c2 notes)

Question 24

practices at Q that are examples of CSR

Answer 24

• investming millions recent yrs to reduce carbon emissions through fleet renewal, investing in biofuel projects & Fly Carbon Neutral Scheme giving passengers option of paying extra to offset co2 emitted by flight (money goes to carbon offset projects eg. plant trees, construct wind turbines)
• adopt Supply Chain Assurance Program to manage ethical risk in sourced inputs –> places requirements on suppliers for enviro sustainablity, WHS & modern slavery (child, forced labour)
• donate millions to charitable causes (eg. commit $10m over 10yrs from 2024 to Reef Restoration Fund –> expand restoration work on GBReef & fund research to regenerate corals)

Question 25

however, critics of Q point several egs. of actions recent yrs argue not socially responsible (relate to its aggressive cost-cutting)

Answer 25

• amde 9,000+ emps redundant during pandemic, despite by far largest recipient fed gvt’s JobKeeper wage subsidy (included outsourcing 1,700 ground services roles ruled illegal by fed court)
• customer treatment (complaints of flight cancellations & Q’ policies on refunds & flight credits, Q faced lawsuits over both with ACCC taking legal action on continuing selling tickets on flights already cancelled & class action lawsuit involving hundreds of thousands customers allege misled to use flight credits when entitled to cash refunds),, refuse take responsibility for damage to baggage during transit, decline in service standards esp customer service (delays, cancellations, lost baggage, call centre wait times) bc prioritised cost savings & max profitability
• recent accusations ‘greenwashing* (make exaggerated/false claims abt enviro sustainability of products & PPs) –> enviro advocacy group Climate Integrity filed complaint w/ ACCC accusing Q misleading customers by charging extra to fly carbon-neutral when reality emits 4% of AUS’ annual carbon emissions & no clear path to decarbonising