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Qantas and Strategic Operational Moves

            News about Qantas has been the rage in Australia and possibly worldwide, because Qantas, one of the most profitable airlines in the world, announced their loss for the first time since its 20 years of operation (Ferguson 2014). Qantas will also be facing even harder times ahead because two leading world credit rating agencies Standard & Poor's and Moody's announced that Qantas's credit rating has been downgraded to high risk ˜junk' investment status, which means Qantas can no longer claim to be the only airline with "investment grade " on unsecured debt in the world anymore, making capital-raising more difficult (Flynn 2014; Ryan 2014; Sandilands 2014). Moreover, Qantas's cry for help to the Federal government was replied by Tony Abbot that Qantas should "get their house in order " before receiving any help (Hall 2014; News & Current Affair Radio 2014). .
             There are several possible strategic options that Qantas has to get their house in order. Qantas will need to fix their loss-making international operation, stop reducing profitability and yield because of excess capacity, and establish new army of senior managers and executives (Ferguson 2014; Thomas 2014; Ferguson and O'Sullivan 2014). Most of the problems that Qantas is facing are due to mismanagement from senior management. To outline the strategic options that Qantas has, several issues need to be addressed. Alan Joyce said the challenges Qantas has been facing are high Australian dollar, growing competition from airlines with partial or full government ownership, highest ever fuel bill which were expected to be $4.6 billion for the year, and carbon tax of $106 million that sat on their expenses tab last year (Heber 2014). However, additional problems are caused by Qantas' actions, such as its strategy to persistently maintain 65 percent market share (Ferguson 2014). This and other decisions made by Alan Joyce-driven-Qantas are the reason of its own demise.

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