Qantas Airways Ltd www'Qantas'com'au Queensland and Northern Territory Aerial Services Limited QANTA

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Qantas Airways Ltdwww.Qantas.com.auQueensland
and Northern Territory Aerial Services Limited
(QANTAS)
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Executive Summary
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Company Overview

• fully privatised
• one of Australias largest employers
• 10 years on Australian Stock Exchange
• consistently profitable
• since listing, total shareholder return gt 340
  and has grown revenue by 77

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Customers are at the centre of everything we
do

• In 2005
• over 32m passengers to 145 destinations in 40
  countries around the world
• 62 destinations within Australia
• named number 2 airline in the world
• best airline Australasia
• best airline trans-Pacific

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Priorities

• safety and security (invested 600m in 3yrs)
• customer service
• innovation
• first and only airline to build its own aircraft
  (1926)
• pioneer of round-the-world services (1958)
• inventor of Business Class (1979)
• A380 interiors (2007)
• cost and efficiency savings (1bn in 2yrs)

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Culture Leadership

• reflective of Qantas brand
• professional
• innovative
• pioneering
• values staff cash bonuses / apprenticeships
• investment in health safety
• family friendly initiatives
• Sharing the Spirit

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Company Overview
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Industry Trends

• too many airlines
• very competitive market
• shifting consumer travel patterns and preferences
• growing strength of low cost airlines
• rising external costs
• security and political issues
• growing environmental concerns
• an industry in crisis

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Industry Trends

• Domestic Market
• Deregulation
• Social Changes
• Government

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Government Impact

• Continued Government Intervention
• Government blocks Singapore and Emirates airlines
  from competing on lucrative transpacific route
• Competition watchdog blocks equity tie-up
  between Qantas and Air NZ on routes between
  Australia and New Zealand.
• Government limits foreign airline ownership to
  25
• Qantas ordered to delay cutting any maintenance
  jobs until it provides unions with more details

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Porters 5 Forces
High Cost International Regulation Domestic
De-Regulation Qantas Market Strength Intense
Competition
Threat of Entrants
Strong Brand High switching Costs Ext. Price
Fluctuations Limited Distribution Channels
Consumer Power Alternative Methods (i.e. Qantas
Freight) External Govt Support Fragment The Market
Power Of Buyers
Power of Suppliers
Rivalry
Threat of Substitutes
Geographic Location No Real Alternative
Substitute Strong Brand and Reputation Quality
Issues
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Defining The Business

• Qantas main business is the transportation of
  passengers .
• Qantas Website

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Defining The BusinessThe Product

• Flying Business
• the core activity
• Flying Service Business
• providing key operational services to the
  industry
• Associations Business
• adding value to all core flying activity
• Technologies

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The Qantas Market
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Product Market Portfolio
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Product Market Portfolio
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Strategic Overview
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Profit by Company (m)
Efficiency Of Qantas
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Financial Performance
Au m
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People Performance
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Share Performance
Qantas Share price 2nd May 2006 As traded under
QAN
3.40
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Share Performance
Qantas Share price 2nd May 2006 As traded under
QAN
3.40
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Market Challenges Opportunities

• New entrants
• Air-Canada to challenge on LA Sydney route
  2007
• Emirates capacity dumping
• Oversupply of seats causing losses on route
• Ozjet goes under
• Premium only airline Qantas helps out!
• Qantas rationalises airline brands
• Australian Airlines absorbed - 30 lower cost
  base
• Jetstar low-cost, long haul service 45 lower
  cost base

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Future Risks

• High Operating Cost
• 3,000 engineering maintenance jobs at risk
• Ageing Fleet
• 15bn investment planned

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SWOT Analysis
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Summary of Key Messages

• Qantas is a strong player in a fragile and
  volatile industry
• Scans environment for opportunities and takes
  them!
• Strong brand
• Supported by Australia plc
• Not afraid to take tough business decisions

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References / Weblinks

• www.qantas.com.au
• www.qantas.com.au/2005AnnualReport.pdf
• www.airlinequality.com/
• www.finance.yahoo.com
• www.asia-pacific-news.com/s
• www.prnewswire.com
• www.smh.com.au/news/business/qantas-expands-cutpri
  ce-strategy
• www.news.ninemsn.com.au
• www.asia-pacific-news.com/s/TitleQantas-To-Reduce
  -Staff
• www.prnewswire.com
• www.airfleets.net
• www.airguideonline.com
• www.airsafe.com
• www.atwonline.com
• www.theaustralian.news.com.au

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Team Members

• Rosemary Crawford 14950504
• Stephen Bill 15690004
• Martin Towe 10376904
• Paul Toner 11429904
• Stephen McCullough 16159904