Jetstar Essay

682 Words3 Pages
Article Title: “Jetstar to enter Tasman dogfight”
Source: The Australian

OVERVIEW

The article by Creedy looks at the newly announced expansion of Jetstar Airline services from its current domestic Australian flight service to its penetration of the trans-Tasman market. Jetstar’s original purpose was to provide Qantas (Same Ownership) a cost-effective alternative for the provision of domestic flights around Australia while also giving customers a cheaper and somewhat “no frills” option when flying locally. The article outlines the considerations and specifications that Qantas and thus Jetstar have undertaken in order to accomplish its “first foray overseas” as part of its “segmentation strategy”. Jetstar’s expansive venture is
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The efficient use and exploitation of provided subsidies by Qantas and Jetstar are evidently significant in the study of international business’s as they try to overcome barriers to overseas markets.

Trade Agreements
Although the impacts of globalisation, the emergence of strategic alliances between firms and the establishment of bilateral trade agreements between nations are not explicitly mentioned in Creedy’s article, they are the unspoken givens of a business report in contemporary times. The article places emphasis on Jetstar’s expansion to New Zealand, a venture only made easier through the improved relations (especially within trading) between Australia and New Zealand. Their Closer Economic Relations (CER) trade agreement together allows for the liberalisation of trade through reduced tariffs, reduced quantitative restrictions on exports and free migration of labour. Such an agreement “was aimed not only at expanding trade but also strengthening and fostering links and cooperation in fields as diverse as investment, marketing, the movement of people, tourism and transport” (Mahoney, Trigg, Griffin, Pustay, 2001, p317). Such measures make evident the reasons behind the “dogfight” taking place in the trans-Tasman market as Qantas competes against Pacific Blue and Air New Zealand by expanding Jetstar, allowing for an addition of “1500 seats a week to the Qantas Group’s

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