Essays on Strategic Management of Jetstar Airline Case Study

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The paper "Strategic Management of Jetstar Airline" is a perfect example of a management case study.   Jetstar Airline was established by Qantas in 2003. It is therefore owned and managed by Qantas. Its headquarters are in Melbourne, Australia. Jetstar Airline is highly associated with low-cost consideration for the services it provides. It commenced its domestic services in 2004 and its international services in 2005 to New Zealand. In the same year, 2005, Jetstar merged with Valuair and continued operations under their own brands. The first flight of Jetstar’ s sister airline, Jetstar Asia Airways took off in 2004 from Singapore to Hong Kong, marking Qantas entry into Asia low-cost market.

At the end of 2005, Jetstar started its operations out of Sydney, Melbourne, Brisbane and Gold Coast. At the present, Jetstar flies from Australia to the United States, Thailand, Singapore, Bali and Japan, as well as out of Sydney to Kuala Lumpur. Jetstar major domestic competitors are Virgin Blue, Qantas Domestic, Rex, SkyWest, Virgin Australia and Tiger Airways. On the other hand, Jetstar international competitors include Air New Zealand, Emirates, Pacific Blue, Singapore Airlines, V Australia, THAI and Qantas International among others.

One of the major competitive strategy of Jetstar its cost consideration, that is, Jetstar has all along focused on operating and offering its airline services and products at low cost. At one time, Virgin Blue had to sue Jetstar due to the low-cost strategy though it was unsuccessful. Jetstar and its Competitors Analysis of Operations Jetstar Australia operates as part of the Qantas Group hence it is fully owned by Qantas. The merger of Jetstar and Valuair has led the Qantas’ ownership of about 42.5 per cent of both airlines following the merger.

With regards to domestic market share, Jetstar is the third-largest airline. On the other hand, Jetstar is the top 5 international airline by capacity share. Jetstar Australia operates across seventeen Australian domestic destinations and fifteen short and long haul overseas. As at February 2011, Jetstar Australia and New Zealand based fleet comprises of 59 aircraft which includes: 44 airbus A3230s, 6 Airbus A321s and 9 Airbus A330-200s. Subsidiaries of Jetstar Australia are Jetstar Airways Limited in New Zealand and Express Ground Handling. The major competitors of Jetstar Australia are Tiger Airways and Virgin Australia.

Tiger Airways is based in Melbourne being Tiger’ s hub and fully owned by Tiger Airways Holdings. Tiger competitive strategy comprises of increasing its total market size through an increase in the number of passengers, control operating costs of the airline while at the same time maximizing the number of sectors served by its aircraft keeping costs low by avoiding expensive airports. Virgin Australia considered the possibility of establishing a low-cost offshoot to fend off Tiger Airways.

However, it decided to put efforts in funding its new trans-Pacific carrier, V Australia and to increase business travel share. Jetstar SWOT Analysis and Five Forces Model Jetstar Five Forces Model relates to competitors, customers, suppliers, substitutes and rivals. Since Jetstar operates in the low-cost airline industry, there are few barriers for entry making the market remains quite price sensitive. There is a high bargaining power for consumers due to the use of e-commerce and increased access to online services and products. SWOT Analysis relates to the Strengths, Weaknesses, Opportunities and Threats.

Further, Jetstar Strengths and Weaknesses are factors internal to its business operations, while Threats and Opportunities are factors external to its business operations (Jones and Hills, 2007). Jetstar strives to exploit opportunities.

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