A S S I G N M E N T
Qantas is the world’s second oldest airline, having been founded in the Australian outback in 1920. It
is Australia’s largest domestic and international airline. The name comes from the initial letters of the
words in the original registered title—Queensland and Northern Territory Aerial Services Limited. The
Qantas Group employs approximately 32,500 people and operates a fleet of over 250 aircraft,
comprising Boeing, Airbus and Bombardier aircraft from full-size long-haul aircraft to smaller shorthaul
aircraft. The Group offers services across a network spanning 182 destinations in 44 countries
(including those covered by code share partners). International Air Transport Association (IATA) data
for 2009 shows Qantas was the world’s 11th largest airline in terms of Revenue Passenger
Kilometres (RPKs).1
Its brands include Qantas, Jetstar and Qantas Link (as well as several Jetstar brands in East Asia).
Qantas is the Group’s standard fares airline, based in Sydney, while Jetstar is the Group’s budget
fares airline that also manages the Jetstar Asia operations, based in Singapore. Both offer Australian
domestic and international services, and are intended as complementary, rather than competitor,
brands to each other.
In recent years the Qantas Group has been one of the few airline groups in the world still making a
profit. Many airlines have been making substantial losses, and there have been some mergers (such
as KLM–Air France), takeovers and bankruptcies (such as Northwest and American Airlines).
Despite the apparent rosy initial impression, the actual profitability picture across the Group is mixed,
with Jetstar’s domestic and international operations generally doing well, while the Qantas division of
the business has been doing less well. Qantas’s international market share has fallen sharply in the
past decade. While the airline was in a dominant market position in 2000–2001 with 34.4 per cent of
the traffic to and from Australia, by 2010–2011 its market share had dropped to 18.7 per cent. Part of
the response to this was the launch of Jetstar, which has absorbed 8 per cent of international traffic
into and out of Australia leaving the overall Qantas Group with a 26.5 per cent market share by late
2011.2
The economic viability of the Qantas international operations is, however, central to the Qantas
Group business mission and objectives. Reflecting this, the need to cut costs is a central tenant of the
Group’s strategy for Qantas. According to the airline, the cost base is around 20 per cent higher than
key competitors.3 It simply does not have the low cost structure of many of the competitors, especially
the Asian competitors. Neither does Qantas have the well positioned hubs of the competitor Asian
and Middle Eastern carriers. Accordingly Qantas is having to undertake its marketing in an
environment where competitors, such as Emirates, Etihad, and Singapore Airlines (with great hubs)
are tackling them head-on. Given the above, a large number of Qantas routes, primarily to Asia and
Europe, are loss-making.4
In contrast, a central tenant of the JetStar strategy is to grow the brand in Asian markets through
stand alone operations, joint ventures and strategic alliances, as much as possible and as rapidly as
possible. Jetstar is one of the world’s fastest growing and most profitable low-fares airlines, set for
significant future growth.5
1 http://www.qantas.com.au/infodetail/about/FactFiles.pdf
2 http://www.news.com.au/travel/news/qantas-fights-international-market-slide/story-e6frfq80-1226204436766
3 http://www.qantas.com.au/travel/airlines/building-a-stronger-qantas/global/en
4 ibid.
5 ibid. ……. …..

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Management perceives that part of the solution for the Qantas division of the international business is
offshore maintenance of aircraft, employment of overseas flight crew, and pilots on much lower
salaries. All of this is part of the perceived need to pair down costs, just as the Group was able to
when it established JetStar as the low cost brand in the Qantas Group.
This assignment is focused on the international side of the Qantas Group business, specifically the
Qantas and Jetstar international passenger operations. Their domestic Australian operations are not
the principal focus of this assignment. Commentary on them should either be very limited, or
excluded.
 Consider the basic tools for conducting a marketing audit, like the SWOT and the PEST. How
might Qantas use specific business tools to assist it to undertake formal marketing auditing and
planning? Provide four examples. Note: do not describe the business tools at length, rather explain
how they might be used.
(3 marks)
 Thinking specifically of the airline market, what are the most important factors in Qantas macroenvironment?
Briefly describe them and explain the reasons for their importance. Note: there is not
a right or wrong answer – explain the reasons for choosing these as the most important factors.
(3 marks)
 Thinking specifically of the airline market, what are the most important factors in Qantas microenvironment?
Briefly describe them and explain the reasons for their importance. Note: there is not
a right or wrong answer – explain the reasons for choosing these as the most important factors.
(3 marks)
 How would Qantas position itself differently for its consumer and business markets? How could
Qantas use marketing research and marketing intelligence to assist it to undertake marketing
planning and implement marketing strategy for each of these two markets?.
(6 marks)
 How could Qantas use segmentation and specific segmentation variables like demographics,
psychographics, buyer-graphics and geographics? Provide a specific example.
(3 marks)
 How could an understanding of market positioning be of assistance to Qantas for targeting its
target segments?
(3 marks)
 How could an understanding of buyer behaviour be of assistance to Qantas? Provide a specific
example of how Qantas could tailor its promotions based on buyer behaviour.
(3 marks)
 Why would Qantas undertake formal marketing auditing and marketing planning? What is the link
between auditing, planning and corporate strategy? Note – do not simply discuss these broadly—
apply the concepts directly to the Qantas case.
(6 marks)
Ultimately, your report should demonstrate that you understand the linkages between marketing
audits, marketing plans and marketing strategies, and their relationships with each of the concepts or
thematic areas above. Your report should also demonstrate that you can apply these to the Qantas
Group. ……. …..