Qantas Airways : The Deepest Loss

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In 2014 Qantas Airways LTD reported the deepest loss in the airline’s history. Qantas informed they made massive losses and cut thousands of jobs (Ross K, 2014). The situation was caused by write-downs, higher fuel costs, weak demand in Australia and market capacity growth outstripping demand (Creedy S, 2014). Qantas chief executive Alan Joyce said that the company needed to take measures to fix the airline. Qantas Frequent Flyer is a loyalty program. A person who flies Qantas Airlines, books a hotel or rents a car can earn points and exchange them for rewards. Qantas Frequent Flyer has a value of $3 billion (Wardell J, 2014).
Qantas chief executive Alan Joyce decided not to sell the Frequent Flyer (Schott C, 2014). His decision was
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Joyce didn’t sell the Frequent Flyer as he knew the program would offer profitable growth opportunities. While the rest of the company was struggling overall the frequent flyer program valued at $3.6 billion.The loyalty program is a valuable asset for Qantas. It is also a great marketing tool that reaches millions of consumers. Qantas already doubled the membership of the loyalty program from 5 million in 2008 to more than 10 million. If Joyce decided to sell the program he would lose access to Australia’s largest and richest database of customer details and spending patterns. Members of the loyalty program gain points not only when they book a flight, but also when they shop at Qantas’s corporate partners or use their credit cards.
Alan Joyce has been the CEO of Qantas since 2008. During this time he had to make many tough decisions. He shut down the airline in the industrial dispute, laid off many of Qantas employees, was involved in government negotiations and restructured the airline (Collins B, 2014). The CEO wasn’t face with the problem of selling Frequent Flyer program before therefore his decision would be a non-programmed one. Non-programmed decisions involve situations that are most important, new, complex, unstructured, and there is no proven correct answer to use to solve the problem (Rao S, 2010). When making a non-programmed decision, there are no rules to follow. There is a risk that will need to be taken make the decision. However Joyce knows the
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