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Jet star airline is a wholly own subsidiary of Qantas group based in Avalon and Tullamarine airports. It operates on a domestic network which is the world’s largest long-haul LCC. It operates a fleet of airbus, A320- Family, and A330 aircraft. It also operates in New Zealand, Singapore, and Vietnam in domestic services. Since its deregulation in 1990, this airline has had many forces imposed on it especially on its environment. These forces have enabled the company come up with two new airlines, one that is of a low-cost carrier. These Environmental forces are either task environment analysis or general environment analysis.
Task environment analysis revolves around conditions that have an impact on the management of the organization. Among this in the jet star airline is the price of oil, which has jump since the oil embargo in the Middle East in 1973. In addition, because of the deregulation of the airline industry, barriers to entry for new competition have been brought down. General environment is about general factors affecting the organization. One of them is the socio-cultural force, which is associated with the outbreak of swine flu in the entire region of Australian. This has become a big concern for the airline industry because Australian is the world’s capital for swine flu.
In today’s day, the airline has a constant advancement in technology. One of the major advancement is the airbus A380 which is a larger airplane carrying a capacity of 840 passengers. This advancement in technology has got some implication in the airline because it will have an ability to cut airfares by 40% on some routes. This is as a result of a reduction of fuel consumption to 1.9 liters per 100km per seat fuel consumption. Unlike other airline organizations, jet star have achieved a business-level strategy, which has enable them to maintain a low-cost strategic plan and a differential strategic plan. Considering this two strategies they have achieved, they have not only stand out in the midst of their competitors but also have gotten to appeal to their customers of their legacy market. With the airbus, which offers better fuel economy, the airline has the potential to cut down the labor cost with its increasing passenger capacity.
On the other hand, being a low-cost carrier, jet star is not in a position to allocate sufficient resources to train staff in issues pertaining to emergency situations. This is evidenced in occurrences happening severally with their flights associated with an in-flight discrepancy such as a forced emergent landing on 23th July 2007. To have a good competitive advantage jet star airline has its own evaluation in terms of its competition with other airlines. Using the SWOT analysis model, jet star has its competitive advantage especially as a low-cost airline.
- Strengths-Among the strengths of jet star airline are that it operates with only three types of fleet. Because of this, the airline is in a position to reduce any maintenance fee for the airplanes, and it is also easy to work with the pilots especially in ensuring easier dispatch. In addition, its point to point model has ensured a lower unit cost and utilization of the aircrafts entirety.
- Weaknesses- Its weakness is that it has so far had three in-flight incidents since the staff has no training on handling emergency issues.
- Opportunities- Among its opportunities is that it is currently dominated in most of routes supplying them with pricing power. In addition, with a high price in fuel, most of its unprofitable competitors will be overtaken in the market.
- Threats- one of its competitors, legacy airline started cutting down costs hence giving jet star competition. In addition, occurrence of serious accidents, terrorist attacks, and disaster like swine flu can affect its market.
As an airline competing with other competitors, jet stars need to maintain its dominance particularly on its main routes. This can be through reduction of fare cost or increasing flight supply. The airline also needs to increase resources towards training of their staff to improve delivery of customer services.