Previously we looked into the SWOT Analysis Airbus, a leading international aerospace manufacturer. In this case study, we will analyse the SWOT Analysis of Qantas.
Australia’s flag carrier and largest airline in terms of fleet size, international flights, and overseas destinations is Qantas Airways Limited. Qantas Airlines is the world’s third-oldest airline still in operation, having started as a single international passenger trip in May 1935 and grown to become Australia’s largest airline.
Qantas’ marketing strategies helped rise in the airline industry. With response to current consumer trends and interests, marketing develops. If you want to learn more about today’s effective marketing, attend our Free MasterClass on Digital Marketing 101, led by the Founder and CEO of IIDE, Karan Shah.
Before we dive into the SWOT Analysis of Qantas, let’s take a look at the company, its history, finances, products, and opponents.
Qantas is widely recognised as the world’s premier long-distance airline and one of Australia’s most powerful brands, having been founded as the Queensland and Northern Territory Aerial Services Limited (QANTAS).
QANTAS and Imperial Airways (a precursor of British Airways) merged to establish Qantas Empire Airways Limited in 1934. (QEA). In December 1934, the new airline started flying between Brisbane and Darwin.
Following nationalisation, Qantas’ remaining domestic network in Queensland was handed to Trans-Australia Airlines, which was also controlled by the Australian government, leaving Qantas with a wholly international network. QEA launched its first services outside the British Empire, to Tokyo, shortly after nationalisation.
|Founder||Hudson Fysh, Paul McGinness and Fergus McMaster|
|No. of Employees||30,179|
|Market Cap||AUD 10.84 Billion (2021)|
|Annual Revenue||AUD 5.93 Billion (2021)|
Products and Services of Qantas
Qanats have secured their position in the market by selling the following –
- International and Domestic air transportation
- Freight services
- Loyalty programs.
Competitors of Qantas
Following are the top competitors of Qantas –
- Virgin Australia
- FIJI Airways
- Singapore Airlines
- Cathay Pacific
- Air Asia
SWOT Analysis of Qantas
The key purpose of the SWOT matrix is to identify the strategies that a firm can utilize to take advantage of external opportunities, counter threats, and rest on & protect QANTAS Airways’ limited strengths, and eradicate its weaknesses.
1. Strengths of Qantas Airways
Qantas Airways has numerous strengths that help it to thrive in the marketplace. These strengths not only help it to guard the market share in existing markets but also help in penetrating new markets. Some of the strengths are:
- Strategic costing: Over the course of three years, Qantas Airways was able to save $ 2 billion in yearly costs. The working agreement between the airlines and the unions has helped to reduce unjustified salary rises, as well as an 18-month pay freeze. All of these issues have contributed to the company’s cost-cutting efforts.
- Rise for domestic travel: When its nearest competitor, Virgin Australia, stopped expanding its capacity, Qantas saw a rise in domestic business. As a result, the airline was able to fill more tickets and so enhance its domestic market returns, which was mirrored overseas as well.
- Consistent Growth: Qantas Airlines has been in operation since 1920 and is one of the world’s oldest airlines. The firm has had sustained growth since its beginning, with regular revenue inflow. This has been made feasible with the support of a strong strategic framework
- Advertising: On all of their flights, Qantas promotes Australian tourism spots. Advertising, social media, print media, and public relations are all used to accomplish this. They also support significant events such as the Australian Tourism Exchange and others. Qantas was able to establish a significant presence in the market as a result of these actions.
2. Weaknesses of Qantas Airways
Weaknesses are an area where Qantas Airways can work upon. Some of the weaknesses are –
- Union Disputes: Qantas has been facing various issues with unionization. The company has been during a perpetual struggle to barter with unions a number of which have even been militant in their approaches just like the Transport Workers Union and Australian Licensed Aircraft Engineers Association
- Financial Planning: Financial planning is not done efficiently and properly. The current asset ratio suggests that the company can use the cash more efficiently than what it is doing at present.
- Directorates: The airline has chosen to start offering direct flights between Australia and Europe. When it comes to operating long-distance flights, the airline has a variety of issues, including combining profitability and demand with the correct pricing strategy.
3. Opportunities for Qantas Airways
- Economic Uptick- Increase in Consumer spending and Economic uptick is an opportunity for Qantas Airways to capture new customers and increase its market share.
- Demand for Cargo Services- demand for cargo services is likely to grow in the next few years. Therefore, it is a very good opportunity for Qantas to grow.
- Low Inflation rate- It brings more stability to the market, enabling credit at lower interest rates to the customers.
- Business Travel- There is an increase in business travel today both in economic as well as business classes. This created a lot of scope for revenues from both classes and also increased the frequency of travel for both business and pleasure.
4. Threats to Qantas Airways
- Increasing Pay Level- Constantly rising pay levels especially movements and increasing prices in China can lead to serious pressure on their profitability
- Competition- There is huge competition from brands such as British Airlines, Air France, and Lufthansa. Increasing no. of players in the industry have put downward pressure on both profitabilities as well as sales of the company.
- Management of Costs- The drastic fluctuation in costs of fuel as well as maintenance and upkeep of their fleet has now been causing problems. Also, it is now exposed to currency fluctuations especially given the volatile political climate in markets all around the world.
Qantas has been leading in Australia and international airline markets with their strong suits in costing, growth and advertising. By working on their business travel packages and catering to the high market demand for cargo services, they can continue maintaining their esteemed stance in the market for years to come.
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