Australia Airline
Management
Case Study Report: Airlines
This paper provides a comparative study of the goals, management style, and labor relations policies of three Australian airlines: Qantas, Virgin Blue, and Air Australia Airways. It examines the recent history of these major airlines, with a specific focus on the labor relations difficulties of Qantas, Virgin Blue's attempt to create a more innovative model of customer service as a budget airline, and Air Australia Airway's challenge to Qantas' dominance. It suggests that ultimately Virgin Blue offers the best prospects for investment, given its track record, size, and strong human resource policies.
Organisational culture
Employee motivation
Leadership
Conclusion and summary
Introduction
The airline industry has been one of the most severely-affected industries by the recent global recession. Although Australia was mercifully not impacted as much as some other nations by the recent credit crisis, because airlines have a global focus as organizations, all of the major airlines that fly through Australia were shaken to some degree because of their international exposure to risk. The instability of the global economic environment is one reason that airlines are often considered bad investments. However, it is important to evaluate each airline on an individual basis before making such an assessment.
Organisational culture
Qantas Airline is the major carrier within Australia at this time. It embraces both a 'budget' and a 'premium' strategy through its marketing of its main brand Qantas and lower-cost Jetstar. "Qantas was named "Airline of the Year" (2003) by Aviation Transport World magazine. Qantas' achievements in employee safety, and its subsequent cost and efficiency savings, were recognised as a key influence in winning this prestigious award," not simply the airlines' ability to solicit customers (Changing the culture of an Australia icon, 2004, Qantas.). Qantas often labels itself as 'the' Australian airline, given its size and venerability as an institution.
Qantas's dual-tiered budget-premium strategy can be contrasted with Virgin Blue Holdings Limited, which primarily deploys a budget-focused strategy. In contrast to Qantas' more traditional managerial approach, Virgin is noted for its freewheeling, fun attitude, similar to that of the Southwest and Jet Blue business models in the United States. According to charismatic and iconoclastic CEO Richard Branson: "[He] once said that Virgin Blue was more Virgin than Virgin. In my opinion, I think the culture here surpasses those of the other Virgin airlines. That's not to put them down, but the culture here works brilliantly for the local environment" (Breaking into a new culture: The Virgin Blue story, 2003, HR Magazine.). Virgin's fun marketing campaign caused its Q-rating to soar even before its planes took off in Australia. It is a budget airline where everyone is meant to feel at home because of the relaxed atmosphere communicated by its crew.
Air Australia Airways similarly offers low-cost travel to passengers, much like Jet Blue. However, it also stresses the charter services and unique routes it is able to offer to customers, as a way of 'branding' itself. In fact, its CEO said "the airline would not be competing directly with Qantas or Jetstar and would focus on under-serviced routes, particularly direct international flights from Brisbane and Melbourne. 'We're on a bit of a different model...We're trying to offer them a different service to fly directly out of these airports,'" [he said]..."No other airline was flying to Honolulu from Brisbane or Melbourne" (New budget Air Australia 'a warning to Qantas,' 2011, News.com. au). Its organizational culture is iconoclastic, given this 'out of the box' business model that focuses on creating an airline that offers unique services for Australians, by Australians, in contrast to the internationally-focused cultures of Qantas and even Virgin.
Employee motivation
Qantas Airline has heavily publicized the recent changes in the regulations it put into place to better protect employee's safety and security in the air, in its promotional literature. When safety procedures were found to be inadequate, based upon unsatisfactory workplace safety audit results by government agencies, Qantas engaged in an organization-wide effort to mitigate these problems and created an initiative known as "People Safe, driving the safety cultural reform process" (Changing the culture of an Australia icon, 2004,Qantas.). However, this also underlines the fact that for many years, Qantas employees were at risk. This behavior indicates that Qantas tends to attend to a problem only when it becomes a legal or publicity problem. When Qantas wishes to motivate employees, it uses top-down, organization-wide initiatives. Managers set specific benchmarks for managers and employees to achieve, rather than engage in participatory dialogue.
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