Qantas The Qantas Airways Group has extensive commercial and ownership links with a number of regional carriers. Qantas also has code-sharing 4 and alliance arrangements with international carriers through the One World Alliance. The Ansett group was a member of the largest alliance, the Star Alliance.
Qantas The Qantas Airways Group has extensive commercial and ownership links with a number of regional carriers. Qantas also has code-sharing 4 and alliance arrangements with international carriers through the One World Alliance.
This is the second largest of the five 'airline alliances', or the groupings of allied airlines that underpin the globalisation of the airline industry. The Ansett group was a member of the largest alliance, the Star Alliance.
Qantas also has strong international equity links with British Airways, which owns over Qantas has a Qantas Domestic is now the only provider of nationwide, 'full-service' scheduled air services. Qantas has expanded its fleet rapidly since the Ansett group collapsed, when Qantas's domestic market share was 55 per cent; it now has around 70 per cent of the travel market on the domestic trunk route network.
Qantas's extensive domestic and international route network can be seen by clicking here to view an interactive electronic route map. In response to the growing popularity of discount air travel in recent years, and to meet the competitive challenge from Virgin Blue at the 'low fare' end of the market, Qantas has built on the low-cost operating arrangements it inherited in its May acquisition of Impulse Airlines.
Qantas has also further built on Impulse's value-based marketing approach by expanding its range of 'all-economy', leisure-oriented services and buying more Boeing s. Virgin Blue Virgin Blue Airlines is the Brisbane-based subsidiary of the Virgin group of companies and began operation in The Virgin Group owns 46 per cent of the equity in Virgin Blue company while Patrick Corporation—the large, diversified Australian transport and logistics company—acquired 50 per cent of the airline in — Senior staff of Virgin Australian airline industry hold the remaining four per cent.
As a member of the Virgin group, Virgin Blue has loose links with Virgin Atlanticwhich operates international services out of Londonand Virgin Express, the group's low-fare European airline based in Brussels. Virgin Blue is not a member of any of the international airline alliances.
In Octoberhowever, Virgin Blue began to code-share with a Star Alliance member, United Airlines, somewhat compensating the latter for the loss of its Australian Star Alliance partner, the Ansett group.
Since the winding-up of the Ansett group in earlyVirgin Blue has provided the main trunk route competition for Qantas. Virgin Blue operates mainly on the busiest portions of the trunk network, offering single-class, no-frills, low-cost air travel, mainly between selected capital cities and other centres.
To contain costs, Virgin Blue operates only one aircraft type, a Boeing jet fleet, while crew costs are minimised through work arrangements which require crew to have a relatively wide range of skills and to perform a relatively broad array of work tasks. In this respect, Virgin Blue has many of the characteristics of the new breed of low cost airlines emerging worldwide known as 'value-based airlines'.
However, as its route network and service frequencies have expanded, it has shown an increasing marketing orientation towards travellers who are more concerned about travel times and service frequencies and less concerned about fare levels, such as business travellers.
Although initially reporting trading losses, the modestly capitalised airline's trading position has turned around, bolstered partly by the Ansett group's collapse. Virgin Blue has taken over much of the domestic terminal space that the Ansett group occupied at the major airports.
For example, on 6 NovemberVirgin Blue announced that it had entered an agreement with Sydney Airports Corporation Limited Industry Finance Revenue for domestic operators derives chiefly from the business sector and domestic and inbound tourism. It has been estimated that domestic tourism which includes visiting relatives and friends contributes 40 per cent of revenue, with the business sector contributing 35 per cent and inbound tourism 25 per cent.
These gave the incumbents decided advantages over potential entrants in terms of long term contractual access to terminals and landing and take-off slots.
Since the Ansett group's collapse, the industry's profitability has held up well by world standards, despite the inbound tourism slump. Qantas increased its profitability partly by picking up much of the 'high yield end' of the market eg business travel which Ansett Australia formerly filled.
That the recent steep escalations in fuel prices do not appear to have had significant adverse consequences for the Australian airline industry's profitability is partly because airline operators hedge against large, short-term cost increases of this nature through forward purchase contract arrangements.
In addition, Virgin Blue operates mainly new generation aircraft that are very fuel efficient, while Qantas has progressively withdrawn those aircraft types that are less fuel efficient. Aviation war-risk insurance has become a significant issue since the September 11 terrorist events in the United States in War-risk insurance covers losses arising from acts of war, including acts of terrorism, strikes, riots and sabotage.
Because existing aviation third-party war-risk insurance was withdrawn from the global marketplace after the September 11 attacks, the Australian Government, like those of many countries, agreed to provide third-party war, terrorist and hijacking indemnity cover for damage on the ground to airlines, airports and other service and facilities providers.
The Commonwealth indemnity covers the gap between the insurance available in the market and the level of insurance held prior before the September 11 attacks, and recipients of the Commonwealth indemnity are required to hold commercial war-risk insurance to the extent it is available.The Australian airline industry 2.
The External Environment Demographic Changes Momentarily, there is a growing, but also aging population in Australia. The Generation Y represents about million of the 20 million people living in Australia. This group is reported to be setting and influencing spending pattern trends (Ben Wyld, ).
The Australian airline industry traditionally has been relatively profitable by world standards, although this varies among airlines and sectors, reflecting the on-going consequences of the two airline policy and airport leasing agreements. The size of the airline industry today, comprises of over airlines functioning more than aircraft, providing services to over airports that has contributed 35% of the global growth.
Over the past 30 years, the growth of global air travel has increased an average approximately of 5% per year. The Australian airlines industry will expand capacity as demand for air travel returns.
However, higher fuel prices will lift airfares and slow potential industry revenue growth. However, higher fuel prices will lift airfares and slow potential industry revenue growth. The Australian airline industry traditionally has been relatively profitable by world standards, although this varies among airlines and sectors, reflecting the on-going consequences of the two airline policy and airport leasing agreements.