I. Critically discuss the changes that Qantas implemented to become one of the profitable airlines in the world. II. Identify the development features and evaluate their impact on Qantas success. III. What challenges will Qantas will face in the 21 century? What change initiatives would you recommend for Qantas?

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Introduction
Objectives
As a part of our Management of organizational change course, our respected faculty provided
us a case to analysis. As the world is changing rapidly every organization has to adapt the
change to sustain. If any organization fail to adapt the change it will be vanished. Firstly, our
focus was the changes Qantas implemented to become one of the profitable airlines in the
world. Secondly, the identical development features and evaluation of the influence of
Qantas’s success. Thirdly, what kind of challenges Qantas will face in the upcoming years.
Finally, the recommendation for the Qantas airways.
History of Air Lines Industry
Since the birth of flight in 1903, air travel has emerged as a crucial means of transportation
for people and products. The hundred-plus years following the invention of the first aircraft
have brought about a revolution in the way people travel.
Early 20th Century
Airplanes were around the first few years of the 20th century, but flying was a risky endeavor
not commonplace until 1925. In this year, the Air Mail Act facilitated the development of the
airline industry by allowing the postmaster to contract with private airlines to deliver mail.
Shortly thereafter, the Air Commerce Act gave the Secretary of Commerce power to establish
airways, certify aircraft, license pilots, and issue and enforce air traffic regulations.
Mid-20th Century
In 1938, the Civil Aeronautics Act established the Civil Aeronautics Board. This board
served numerous functions, the two most significant being determining airlines' routes of
travel and regulating prices for passenger fares. The CAB based airfares on average costs, so
because airlines couldn't compete with each other by offering lower fares, they competed by
striving to offer the best quality service.
Deregulation
In the mid-1970s, Alfred Kahn, an economist and deregulation advocate, became chairman of
the CAB. Around the same time, a British airline began offering exceptionally inexpensive
transatlantic flights, awakening a desire for U.S.-based airlines to lower their fares. These
influences led to Congress passing the Airline Deregulation Act of 1978, ushering in an era of
unencumbered free market competition.
Late 20th Century
Fares dropped as competition and the number of customers increased. A 1981 air traffic
controllers strike brought a temporary setback to the growth, which continued throughout the
1980s. Some of the major carriers who had dominated the skies during the middle portion of
the century, such as Pan American and TWA, began to collapse in the wake of competition.

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21st Century
In 2001, the industry dealt with the effects of another economic downturn, as business travel
decreased substantially while labor and fuel costs increased. The events 9/11 greatly
magnified the airlines' issues, leading to a sharp decline in customers and significantly higher
operating costs. Losses continued for years; the industry as a whole didn't return to
profitability until 2006. A relatively stable period followed, although controversies arose over
service quality and passenger treatment in terms of flight delays, particularly those involving
planes waiting on the runway. In 2010 and 2011, the U.S. Department of Transportation
issued a series of rules mandating that the airlines provide adequate modifications for
passengers in extenuating circumstances.
Present Position of Airlines industry
The state of the airline industry is strong. Around the world, the number of people flying
increased by 6.6% in 2017. In fact, the world's 20 busiest airports, alone, saw roughly 1.5
billion passengers pass through its terminals last year, trade group Airports Council
International reported. Consolidation, coupled with relatively affordable fuel prices and
increasingly savvy management teams has resulted in record profits for the industry.
However, the airline business is not without its problems. Any cursory look at todays new
will turn up any number of stories about dissatisfied customers or some facet of the industry
under threat. Even as profitability remains solid, the problems that plague airlines have not
gone away. In fact, they have actually become more complex.
It's a fair response. The airline industry for all of its power and prestige is unique in the sheer
number of factors that could negatively affect its business. Over the past couple of years,
airlines have experienced major disruptions caused by everything from electrical fires to
catastrophic disease outbreaks. Then there are also the challenges caused by the world's ever-
shifting economic and political climates. And let's not forget about the issues created by
changes in our actual climate. The vulnerability of airlines to this multitude of factors has to
do with the global nature of the business. The very things that make airlines so interesting
and alluring are also the same things that threaten its well-being.

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History of the company
Qantas was established on 16th November 1920 in Queensland as Queensland and Northern
Territorial Aerial Services Limited. It specialized in airmail services subsidized by the
Australian government, linking railheads in western Queensland. Qantas limited and Britain’s
imperial Airways formed a new company named Qantas Empire Airways limited in 1934.
Both had 49% share and rest 2% in the hands of independent authority. Qantas Empire
airways started to provide services between Brisbane and Singapore as the only Airline in the
Australia. By the 1960 Qantas was operating round the world from Australia and London via
Asia and Middle East and to the North America and South America through United States of
America and Mexico. After wide-body aircraft introduced many of the routes were dropped.
In 1992, Qantas purchased Australian Airlines and combined the domestic operation into the
company. The Company was privatized in 1995.
Qantas had the widespread commercial and ownership links with various regional carriers.
The company created alliances agreements with the international carriers, through the
agreement “one world” alliance. Which was the second largest airline alliance in the airlines
industry. Qantas used alliances to gain market share. Although the company’s main business
was transport the passengers, the company refers to diverse portfolio of airlines related
businesses consist of Engineering, catering, Freight and travel wholesaler subsidiaries. in
2004, the flying businesses of the Qantas group have been branded under two major levels-
Qantas and Jetstar. Which domestically operated 5000 flights a week serving 62 city and
internationally 700 flights a week and offered service to 130 countries.
Present Position of the Company
Qantas Airways is renowned as The Flag carrier of Australia and it is largest airlines by fleet
size and international flights and international destination. It is also known as third oldest
airlines in the world after KLM Royal Dutch airlines and Avianca S.A. Qantas now serves
700 destination in 130 countries worldwide. Qantas and its regional subsidiaries carry more
than 18.5 million passengers a year. Here are some subsidiaries.
Qantas link Qantas Freight Q catering Qantas Holidays

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JetStar Express Ground Handling Jetconnect
Qantas headquarters are located at the Qantas Centre in Mascot, Sydney, New South Wales.
In 2018, Qantas airways has $1.6 billion underlying profit before tax. In addition $1391
million statutory profit before tax. They returned $1 to their shareholders. In 2017, they had
29,596 employees. But in 2018 it increased to 30,248.
Statistics In 2017 In 2018
Total Revenue $16,057 million $17,060 million
Return on investment 20.1% 22%
Passengers carried 53,654 55,273
Aircraft in service(End
period)
309 313
Employees 29,596 30,248
Profit $853 million $980 million
Operating margin 9.9 10.5
In 2018, Qantas EBIT is $708 million through their domestic services and $399 million
through international services.
Products and Services:
The Routes of Qantas Airways:
 Domestics Australia and New Zealand
 Europe
 Asia
 Africa
 South America
 North America
 South Pacific
Qantas airways provides in-flight dining including new 25% larger economy meal and
choices, in-flight entertainment, in-flight communication, Seat maps. Apart from that they
also provides Virtual Reality entertainment, new upgrades reward.

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Competitors of Qantas Airways:
Virgin Australia are the biggest competitors in case of domestic service. But these are the top
global competitors of Qantas airways:
 Air India
 Singapore Airlines
 Etihad Airways
 Malaysian Airlines
 Qatar Airways
 Emirates
 Lufthansa
 British Airways
 Turkish Airlines
 Air France
 United Airlines
 Air New Zealand

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Objective I
Critically discuss the changes that Qantas implemented to become one of the profitable
airlines in the world.
Changes in the organization that made Qantas profitable airlines in the world are given
below:
 Core competence to provide premium customers across verity of platforms, internal
marketing within the organization to provide optimum level of satisfaction to
customers.
 Qantas has a good establishment and maintaining network of agents. Qantas sells
itself through highly developed networks of agents around the world. This is a major
strength to maintain the business
 Qantas has established a marketing channel to provide exquisite customer service to
different types of customers they have corporate contracts for major business travels
to be sold via e-commerce, online ticketing system for regular customers, holiday
packages, and various customer service in-house and outsourced.
 In 1993 CEO James Strong took a challenge to build a new partnership between staff
and management the challenge was to a need for staff understanding that it necessary
to make profit thus the strategies was, reducing costs building up customer service
focus, extensive training programs, development of work teams, new classification
structure, a share ownership scheme, communicating company performance,
outsourcing, competitive tendering and downsizing were introduced to improve
company performance. Strategic recruitment at the top allowed Qantas polies for
change downsize its labor force and reduce cost, it has been a central plank of
employee management in Qantas after deregulation it was a necessary change to
survival.
 In 2001-02 Qantas started newly international low cost Asian based flights Australian
airlines and jetconnect in 2004 they agreed to partnered up with 49.9% share with
Singapore and later launch Jetstar international on 2005 in keep up in a maximum
range in the industry. In domestic market lunch of jatstar market share raise from35%
to 60%.
 Qantas have other businesses as a part of their development strategies, they have joint
venture with Australian post, Qantas operates Australian air express and road freight

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operator star track express 2006 express freighters Australia a newly formed
subsidiary was set up support their domestic operations they also have Qantas
holidays, engineering’s, flight catering, express, ground handling and Qantas defense
services.
 In order to align its labors costs more closely with its rivals they enforced increased
redundancies, increased use of accumulated leave to reduce staffing numbers, an
expended leave without pay program and increased use of part time workers.
 Reducing operating cost by $1.5 billion though productivity initiative and re-
engineering process, savings were made on fuel and maintenance by introducing new
aircraft
Objective II
Identify the development features and evaluate their impact on Qantas success.
An Integrated Approach to Change: The impacts
I. Discontinuing flights to infeasible routes
II. Extending business opportunities beyond Commercial Air Travel
III. Focusing on efficient employee management
IV. Modification of corporate structure
V. Efficient relationship management with partners and alliances
I. Discontinuing flights to infeasible routes
• Qantas discontinued their flights to destinations like Buenos Aires, Rome and Paris.
They did the same to Asian and Trans-Tasman routes in an attempt to be cost efficient
at a time when fuel cost was spiraling high.
• The discontinuation was compensated by the launching of a new low cost
International carrier in partnership with Singapore called Jet Star.
II. Extending business opportunities beyond Commercial Air Travel
• Extending into Freight Forwarding Business:
- Qantas extended its air travel business to air and road freight forwarding. Australian
Air Express in partnership with Australia Post took over the air cargo business. They
also ventured into road freight services under the brand name Star track Express.

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Qantas is also set to acquire Linfox, the trucking business of country’s second-biggest
freight operator, Lindsay Fox.
• Other diversified portfolio.
- Qantas also invested heavily in the following sectors:
• Engineering,
• Holidays,
• Flight Catering
• Express Ground Handling
• Defense Services
III. Focusing on Efficient Employee Management
• Qantas went on for an extensive labor reform program. As a part of the program
Qantas introduced the following:
- increased redundancies,
- increased use of accumulated leave to reduce staffing numbers
- An expanded leave-without-pay program and increased use of part-time workers.
• As a part of its cost cutting strategy for labor markets, Qantas began to recruit labors
from International markets like New Zealand and Thailand. Relocating a fifth of its
long-haul flight attendants off shore led to $18 million cost cut annually
IV. Modification of corporate structure
• In an attempt to optimizing accountability, collaboration and agility, Qantas
established eight different businesses in three categories:
 Flying businesses
 Flying services and
 Associated businesses
This re-structuring led to increased operational efficiency and better internal coordination
V. Efficient relationship management with partners and alliances
• Qantas and Singapore Airlines partnered to:
- share costs on new training and

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- share maintenance facilities for the super-sized Airbus-380
• Qantas founded one world alliance in 1998, which aimed to unify code-sharing so
capacity utilization and domestic hub traffic could be optimized while realizing
savings in combined marketing and customer loyalty programs.
Impact: Changes that Matter
I. Efficient strategic management led Qantas become world’s most profitable airline at
the time when aviation industry suffered $43 billion in losses
II. Qantas set a benchmark in the following areas:
- Effective utilization and management of asset bases
- Addressing inefficient practices and
- Expanding networks through bold diversification
Objective III
What challenges will Qantas will face in the 21 century? What change initiatives would
you recommend for Qantas?
Challenges Qantas will face:
A changed environment is emerging in which strong regional giants are becoming stronger
and teaming up globally to form larger and more formidable global partnerships. Formation
of such strong and strategic global airline partnerships/ alliance's will result high competition.
So, in 21st century Qantas will face high competition. Competitors will use strategic weapon
through partnerships/ alliance's to bit each other. With global consolidation leading airline's
will ultimately supply most of the world's air transport demand. Growing market shares of
competitors is another threat for them. Due to increase share of Emirates (9.8%) and Pacific
Blue (7.7%) Qantas and Air New Zealand has fallen from 90.5 to 77.2%. Moreover Qantas
will face corporate social responsibility pressures to reduce noise pollution and other
emissions.

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Findings
1. Qantas has highly developed network of agents: Qantas has one of the biggest network in the
airlines industry. As it is considered as third oldest airways it has also fame in networking
through the industry in the whole world.
2. Staff and Management, Training programs: Management is very robust and they are very
focused. When there is any unprofessional practice in the organization the go for the
dismissals.
3. Introduced Jet star to compete with Virgin Blue and Tiger airways Australia: Only to compete
with domestic airlines, Qantas launched the Jet Star airlines also to take the competitive
advantage in case of price consideration.
4. Focus on the labor cost to reduce operating cost: Very standard in cutting the labor cost so
that it will reduce operating cost. Which is beneficial for the company.
5. Routes changed and introduced new air service for that particular routes: During the time
when the oil price was high, they avoided some place to cut the fuel cost, even they changed
the routes.
6. Great relationship with the partners and alliances: They maintain a very good relation with
Singapore airlines. They shares the maintaining cost and training cost with them.
Recommendation for change initiatives
When global aviation has suffered $43 billion in losses Qantas has become the most
profitable airline in the world, 62 largely because it has been strategically well managed. On a
global stage, Qantas has led the way in effective utilization and management of its asset base,
effectively reducing costs by addressing inefficient practices and expanding networks through
bold diversification. However Qantas have to take few more strategies to be competitive in 21
century. It conducts business in a world of more aviation choice than ever before for
Australian travelers. For Qantas to succeed, they need to keep investing in what delights their
customers and brings them back to them. They need to be the best airline for global travelers.
Qantas may transform itself into a lean and sleek marketing and strategy led powerhouse.
Qantas use e-commerce for corporate contracts for major business travel. It has an online
ticketing system for regular customers for convenience, combined with Qantas stores
providing collaborated travel and holiday packages and various customer service Centre’s in-
house and outsourced. They have agents in different locations as well for smooth business
operation. This indicates that Qantas has developed an organizational system and an
operational network to support its broad differentiation strategy. To be the best for travelers,

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it can conduct more internet based marketing. Qantas can differentiate itself from the
competitors through introducing updated services like wireless internet in flight, mobile
phone and internet uses opportunities etc. By launching such kind of offerings to customers
they can get competitive advantage over competitors. To remain competitive it has to be
continually upgraded its core competencies and continue to be pioneer in bringing
innovations. They can also expand their business through more alliances. It also can buildup
partner with British Airways to fly onwards from Bangkok and Hong Kong to London and
can expand its business in Asia through partnership with Malaysia Airlines. This can be part
of their strategy to reduce loss-making, asset intensive flying, while continuing to provide
great connections and Frequent Flyer points for travelers to the UK, and other destinations in
Europe. . In addition, global warming and climate change is now very much a social and
corporate issue. So Qantas should be focused on CSR activities to reduce environmental
pollution. They should develop strategy to be recognized themselves as green company.
Conclusion
In this economic circumstances every person wants to travel with a very low cost to their
pocket. In past few years, despite of their low cost airlines are able to achieve profits in their
business. Which surprises the market. These days cost of two hour flight destination in
cheaper than that of travelling same distance with taxi which is high.. These are point to point
travel and low distance. As we all know, Qantas “Jet Star” which offers low rates than
“Tiger” airways. Most customers are unaffected by the limit of baggage and low or no food
services when they travel so cheaper to saving some money. And other added advantage is
these companies uses smalls aircrafts whish are so efficient that reduces overall cost of the
company thus increases profit margin. So despite of having so many issue and difficulties in
operation and competition in the market, then also Qantas is able to succeed in the market
and retain its position of one of the preferred way of travel not only in Australia but also
worldwide.

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References
Alam, Q. (2007). Case study B - Qantas Airlines. In D. M. Waddell, T. G. Cummings, & C.
G. Worley (Eds.), Organization Development & Change: Asia Pacific (3 ed., pp. 454 - 464).
South Melbourne Vic Australia: Thomson Learning.
Amin, N. (2018), Management of Organization Change. [PowerPoint Slides Lecture: 1, 2, 3,
4, 5, 6] Retrieved from https://www.facebook.com/groups/178099509751188/
Qantas Airways. (2018). 2017 Annual Report Retrieved from
http://investor.qantas.com/FormBuilder/_Resource/_module/doLLG5ufYkCyEPjF1tpgyw/fil
e/annual-reports/2017AnnualReport.pdf