1. Evaluate the strategic choices that Qantas has from both a theoretical and practical perspective, and examine how these choices affect human resource planning. 2. If you were in a position to advise Alan Joyce, what would you recommend he does to maintain the commitment to employees and implement HR Planning? Explain your recommendations.
Qantas Airline was set up in Queensland, Australia in 1920 by two veterans. Superb reputation has made Qantas become the symbol of reliability, security, advanced technology and high quality customer services in civil aviation industry. Except for the core business of passenger and cargo transport, Qantas Group also own many subsidiary companies including Qantas Link, Jet Star etc. At the same time , Qantas also operate many other business relevant aviation, such as airline food and holiday tourism business. Today, Qantas is still one of the leading long haul airline companies as well as one of the most powerful brands in Australia. It is maintaining the first class product and services standard as well as leading the updated development of international civil aviation industry. The health development of the civil aviation industry could present a country’ stronger competence and economic power. With the popularity of the civil aviation industry, the airline company of Qantas is facing some challenges.
Durning 2011 under the pressure followed by the global financial crisis, that was making a loss.Qantas CEO Alan Joyce says out of touch unions leaders are blocking reforms, that is Joyce’s reform warning irks engineers. So, Mr. Alan Joyce think should be reduce the number of pilots, and unreasonable check on some checks of airplane. He described the airline’s maintenance and repair costs as among the least efficient and most expensive in the world” and warned that out of touch union leaders were blocking new business models. Therefore, there have some internal and external factors to influence. For the external factors include industry overview, environment analysis( economic, socio-cultural, global, technological & political-legal) , industry environment, opportunities and threats, and competitive environment. For the internal factors are tangible and intangible reasons, capabilities identification, core competency analysis, and value chain analysis. The purpose is make the best fit between the number of employees and jobs required, by balancing the company labor supply and demand needs.
Through operating middle and high end market, Qantas has established stable local advantaged position in Australia. In order to compete with the low fare airline companies like Tiger Airways and Virgin Australia, and better develop the low end aviation market and perform the advantages of network and traffic rights, Qantas set up its wholly-owned controlling subsidiary Jetstar, carry out the battle in segmented market. Facing the geological restriction of Australian aviation market and the development potential of foreign low end market, Qantas has sought for overseas market especially the low end market in recent years . The strategies choices of Qantas is concentrated on establishing long-term shareholder value, balancing the demand for cautious financial management with its important capital expenditure requirements, as Qantas invests to improve the customer experience. Mr Joyce singled out the airline’s pilots and engineers as stumbling that are block to its move to make it more international competitive and efficient.
He described the airline’s maintenance and repair costs as among the least efficient and most expensive in the world and warned that out of touch union leaders were blocking new business models. The pilot union push for job security would lead to Jetstar pilots being paid at Qantas rates, making the low-cost carrier unviable. An alternative option of removing Jetstar from the Qantas code share regime would weaken the Qantas Groups network and destroy jobs. Maintenance staff were warned that they needed to follow the example of check-in staff and accept the need for change. Mr Joyce said new maintenance regulations issued by the Civil Aviation Safety Authority to bring Australia into line with Europe recognised the enormous advances in aviation technologies. The vast majority of people within our business have helped us to maximize the capabilities of these of aircraft in terms of fuel efficient flying techniques and new product and service offerings. But our maintenance and repair costs are among the least efficient and most expensive in the world.
So it’s time to catch up. We don’t repair ur cars the same way did 40 years ago. We can’t repair our planes the same way either. The Australian Licensed Aircraft Association rejected the claims but warned members to keep a level head. Alan Joyce doesn’t want Australian aircraft engineers inspecting aircraft because we find things wrong with them,” said the association’s federal secretary, Steven Purvinas. He’d rather take his chances that nothing goes wrong at 40,0000 feet. I could make the maintenance of my car more efficient by skipping the routine services, but eventually i would expect the engine to blow up. Joyce’s reform warning irks engineers. With the operation of Jetstar HK, Jetstar has increased its brand reputation in Asia-Pacific region.
Qantas also re-adjusted its strategy of international routes and began cooperation with Emirates Airline, thus involved the broad route network of Emirates in its service scope. Nowadys , Qantas has set up operation base in Dubai, and discusses with Emirates about technological coordination and interest allocation. Meanwhile, Qantas attaches more and more attention to Asia market, and makes every effort to strengthen its relations with Asia. As its competitors like Singapore Airline and Malaysia Airline increase the capacities of Australian routes, Qantas adopts the pricing strategy to earn more market share. In addition, Qantas is keep reducing its operation cost. For example, Qantas froze the basic wage increase of middle and high level managers, but used good salary to attract talents.
Human Resource Planning
Human resource planning is very essential for survival of the business. It is a process in which the HR department takes stock of its current scenario and prepares for the future. This is all with respect to the most vital resource of an organization–its employee. The HR department sees whether all departments in the organization are an appropriate size or not and also prepares for future job openings and vacancies. Qantas airways refused to rule out job cuts to help propel its international operations toward profitability amid a rise in passenger numbers from the grounding of Tiger Airways. The strategic overhaul will focus on future investment, cost cutting, the airline’s partnerships and its future in fast- growing Asia. Qantas’ current round of wage negotiations with several unions had resulted in “ some very outrageous demand” being put on the table, with some unions asking for a fee to be paid if major changes are introduced. Though Qantas is an international company operating in many countries around the world, 90% of its staff are based in Australia. For this reason, many of its issues are based around workplace conditions and practices in Australia.
However, the issues are in line with the issues faced by many of the world’s leading airlines. Provide for a flexible workforce, Qantas have implemented a strategy coordinated by the Alternative Employment Committee (AEC). The AEC have been successful in providing a significant level of flexibility, particularly for flight crews. Traditionally, these positions were notoriously inflexible (QANTAS 2011). Cabin Services have been provided with a formal and consistent approach to assessing a crew’s family and life commitments. The AEC has also provided all reasonable requests for flexibility, while continuing to meet the operational requirements of the business. These innovations have been achieved because of senior managements commitment and drive to balance the crew’s requirements for work and family. Qantas hope this retention rate will increase in the future. It has seen a larger number of women managers accessing flexible working arrangements.
This is true particularly in the Short Haul Services, and also shows Qantas commitment to the advancement of women. This strategy has proven to be successful, and is an innovative response to working above and beyond the workplace limitations to provide more opportunities for all staff, particularly women. To address the issues of productivity, workplace safety and internal recruitment , Qantas have become innovators world wide in training delivery. Qantas College Online use a refined web-based system to provide training for over 30,000 staff worldwide (QANTAS 2011). They also provide training to the travel industry. Teaching approaches include business or workplace simulations, interactive course material and information support. The learner has access to a library of resources and communication facilities. Tutorial support is provided by tutors. Although blended approaches are used, predominantly courses are online. Qantas human resource strategy and the role of learning and development have changed deeply. They now improve internal consultancy to Qantas business units.
For facing these big challenges, Mr. Joyce make some decisions for Qantas. Business level: Scientific pricing system could help improve the ticket income of Qantas. With time passes, ticket pricing becomes more complicated, thus Qantas could imitate the actions of some low cost airlines to adopt realtime pricing strategy. Besides, Qantas should make innovations in terms of communication way, so as to enhance communication with customers. Whether Qantas could narrow the psychological distance with customers in shortest time is an important part to gain customer trust and loyalty. Qantas should pay more attention to customers’ suggestions and complaints, handle and feedback in time. Though the feedback of customers, Qantas could further adjust the business level of service teams, improve service quality, meet consumer demands, so as to gain more support and trust.
Corporate level: Qantas should further simplify the complexity of operation and improve financial income. Meanwhile, Qantas should simplify the management level, cut down on bureaustic departments, enhance the functions of human resource management, satisfy employees’ demands and attract more talents, so as to establish an more efficient crew team. International level: Qantas should strengthen its cooperation with the airline alliance and airline giants in Europe, America and Asia.Through the sharing information handling system, Qantas could have more benefits when buying fuel and airplanes. Through cooperation and coordination, Qantas could do better resource integration of products, service, and airport facilities, so as to reduce cost and improve efficiency.
On the positive side, the development of aircraft manufacturing, the improvement of additional business in civil aviation industry, the financial and policy support from government, the ease of travel by aircraft at a cheaper price than before, the best services among other airways, the already settled fuel supply, all these enabled Qantas more room for development. However, the economic crisis of 2011 still had a strong hit on the company, the first-class passengers sharply reduced. The emerging layoffs, cuts in positions and the general strike had a bad influence on the development of Qantas.
What’s more, the decline in corporate credit rating made the situation even worse. For the strategic choice, that are concentrated on establishing long-term shareholder value, balancing the demand for cautious financial management with its important capital expenditure requirements, as Qantas invests to improve the customer experience. Also have some recommendation, like business level is scientific pricing system could help improve the ticket income of Qantas, corporate level is Qantas should further simplify the complexity of operation and improve financial income, and international level is Qantas should strengthen its cooperation with the airline alliance and airline giants in Europe, America and Asia.
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