Qantas Issues A Challenge To Boeing Airbus -Myassignmenthelp.Com

Question: Discuss About The Qantas Issues A Challenge To Boeing Airbus? Answer: Introducation Ethical consideration may lead to failure or success of a study depending upon the policies applied. Anonymity of the respondents has been maintained to protect their privacy. The data collected will not be used in any other articles or journals. The respondents have participated on their own free will and none of them has been forced to take part in the study. The aim and objectives of the research has not been exaggerated and transparency in data has been maintained. Literary review Cost structure is the segmentation of incurred cost on an organisation. According to Shepherd (2015), cost structure is the cumulating cost of both fixed and variable cost the company incurs in their operational process. Miln et al (2014) on the other hand proposed similar definition of cost structure and stated that it as a method of determining the generated cost in any type of organisation. The author further states that the structure is likely to vary over industries due to the nature of the organization. For example, cost structure of a manufacturing company will surely vary from the one in the service industry. However, the incurred cost can be divided under two broad types that are fixed cost and variable cost. Larson and Gray (2013) identified fixed costs as the costs that are unlikely to change frequently, whereas, the variable costs falls under the cost that frequently changes. Airline Cost Structure As discussed, cost structures significantly various over industries. The cost structure of airlines industry as identified by Button (2017) can be divided into direct operating cost, indirect operating cost and overhead cost. Direct operating costs are directly assigned to the operations of the airplanes and comfort of the passengers. Some of the direct operating cost incurred by the airline companies is fuel, maintenance, aircraft etc. Indirect operating charges as categorised by Osadchy and Akhmetshin (2015) are parking charges, crew and cabin salary etc. Sales and marketing expenses, accounting expenses, personnel related expenses on the other hand are categories under overhead cost by the authors. Impact of Direct Operating Cost As argued by Ferguson et al (2013), direct operating costs are the primary determinants of the cost structure in an airlines company and has significant influence on the pricing of the services provided. Modification of this cost structure incurred by the organisation significantly modifies the pricing of the products. The major players in the airplane related direct operating cost as identified by Ryerson and Hansen (2013) are the fuel price and aircraft price. A number of factors associated with costing further influences these operating costs. The primary influential factor as stated by Morrell (2013) in the currency exchange rate, that significantly modifies the incurred import rate of the products. Impact of fuel cost on cost structure Ryerson and Hansen (2013) in their research on Jet aircrafts identified that the inclined price of the fuel had devastating effect on the operating cost of the airline. The authors categorised the fuel price as the under the variable cost within the cost structure. This led the company to modify the cost model. They further related the fuel cost with the aircraft age as the incurred fuel cost is related to the condition and age of the aircraft. They further developed two cost models for identification of the efficiency of each model as low cost structure. Lim and Hong (2014) on the other hand identified the efficiency of fuel hedging on controlling low cost structure. The authors opined that The large fuel consuming companies can significantly reduce their operation cost by introducing fuel hedging model for minimising their incurred costs. Impact of Aircraft cost on cost structure Airline companies falls under the service industry, which only provides services to the customers instead of manufacturing anything. Hence, the products utilised in the process are imported from the manufacturers. The primary product that they import are the aircrafts itself, costing of which falls under the operating cost structure of the company. However, acquisition of appropriate aircraft is necessary for the airline company in formulating their cost structure and generating revenue. Hu and Zhang (2015) argued that it is possible that the revenue generated form an aircraft is lesser than the investment with requires the company to shutdown that particular aircraft. Impact of currency exchange rate on airline cost structure Morrell (2013) in his book pointed out the impact of the currency exchange rate on the airlines cost structure and profitability. Domestic airlines in this case are likely to be less effected due to the currency movement. Zeller and Metzger (2013) in their work successfully explained the impact of exchange rate on the international airlines companies on the profitability. This has been a critical issue for the international airlines companies and an important parameter for the airline operational cost. Company formulating pricing based on a particular currency faces competitive challenge in the market due to the exchange rate and accidentally might position themselves in a disadvantageous position due to the exchange rate. Customers might enjoy a greater benefits form a different airlines in the scenario. Furthermore, as stated by Delbari et al (2016) fluctuation in the currency rate is the greatest threat to the airline companies. This might significantly reduce the profit margin in of the company. Delta Airlines faced similar issue in their operations in Pacific market during the fourth quarter of 2014, when value of the Japanese yen drastically fell increasingly against the US dollar. This reduced the Deltas revenue by US$31 million (Sergio Mendoza, 2018). Exchange rate has similar impact on the other section of the operating cost. The primary sections that can be identified are aircraft import and fuel price. Modification in the exchange rate significantly modifies the fuel rate (Lim and Hong, 2014). This fluctuation in the costing destabilise the cost structure of the company. Fuel price is occasionally modified due to the exchange rate of currency. This demands the company to put the fuel cost under the flexible costing of the cost structure. Exchange rate has similar impact on the aircraft pricing. Lim and Hong (2014) relates the issue to the import and export of the aircrafts as the airline companies has to buy aircraft from the limited number of manufacturers around the world. Fluctuation of the exchange rate modifies the cost incurred by the company on the purchase, hence, affecting the operational cost of the company. Literature Gap The existing literature identifies the issues separately and fails to identify the relationships between the phenomenons. However, these interrelated issues are faced by the airline organisations. Gap into the literature provides opportunity for connecting the issues and identify how these elements influence each other, ultimately modifying the cost structure of the organisations. Objective of the research To identify the risk factors associated with fluctuations in exchange rates To identify the current strategies used by Qantas to mitigate risk factors associated with fluctuations in exchange rates To identify the impact of imported aircraft prices on cost structure of Qantas To identify the impact of currency exchange rate on imported fuel prices of Qantas To identify the impact of currency exchange rate has impact on cost structure of Qantas To identify the impact of fuel prices on the cost structure of Qantas To recommend suitable strategies for reducing the cost structure of Qantas Research Design The unidentified facts in a study are systematically revealed in research methodology. The approaches, designs and methods used during the overall study is described using research methodology. The research methodology will provide justification for choosing each of the methods. The variation of research methodology will be based on the nature of research, research purpose and general classification. Various criteria will determine whether the study is quantitative or qualitative, applied or fundamental, analytical or descriptive, exploratory or conclusive (Best and Kahn, 2016). This study belongs to the category of an applied research where a current research problem faced by Qantas. The managers in their organizational business model can implement the findings of the study. The identification of methods for data collection and analysis can be executed by research philosophy. Research philosophy increases the awareness of the assumptions and beliefs of the study. However, selection of the appropriate research methodology will depend on the practical implication. Positivism, interpretivism, realism and pragmatism are the different research philosophies used in the study (Bryman and Bell, 2015). Interpretivism consists of human element where reality is accessed using social construction. Phenomenology, constructivism and hermeneutics are combined in interpretivism. The view accepted in research is subjectivism, which consists of data collection from secondary sources such as blogs, articles, and peer reviewed journals. Naturalistic approach is used for conducting survey and questionnaires. Human mind is not dependent on reality where scientific approach is used for forming the main assumptions in realism. Realism will consist of both critical and direct re alism, where critical realism rejects human experiences and direct realism accepts human senses (Creswell and Poth, 2017). Positivism is used to identify the hidden facts and truths through observations. In positivism philosophy, the researchers are limited through collection and interpretation of data. Statistical analysis will be used for data analysis as observations are quantifiable in research. When actions support the concept then pragmatism will accept the dogmas as legit. There are multiple realities and various ways of interpreting data. In order to move to a different position on the range, the philosophical assumptions are modified. This is effective generally for dogmas that are mutually exclusive such as positivism and interpretivism. In this study positivism is the research philosophy selected as it will improve the scope of observation by allowing testing of formulated hypotheses. Deductive approach, abductive approach and inductive approach are the three different types of approaches in research (Flick, 2015). In deductive approach, the existing theories in the literature review are validated by testing the hypotheses formulated. Inductive approach is used for generation of new theories and generalizations in the study. Thus, deductive approach facilitates in quantitative measuring and analysis of data. Inductive approach is conducted in scarce resources and risk is high due to formulation of new theories. Abductive approach introduces facts that are surprising and the entire process will focus on examining and explaining he validity of these facts. This research consists of four hypotheses, which will be validate by using deductive approach. Thus, the deductive approach will improve the observational scope in the study. There are two types of research design in the study and they are conclusive and explorative research (Kumar, 2014). Exploratory research will not provide relevant conclusion by exploring the research questions. The studies in which the problems are not defined accurately will use explorative research design to gather relevant information. The alternate option to a specific problem will be provided by using explorative study. The research problem in conclusive study will be framed in a structured way and specific conclusion will be reached by using conclusive research design. This present study will use conclusive research for proving the existing theories in the study by testing the hypotheses. This study will consist of primary data collection method for conducting quantitative data analysis (Orkin, 2014). The study consists of single design so quantitative analysis is conducted through surveys and questionnaire. The questionnaire will consist of close-ended question asked to the employees at lower level in Qantas. Quantitative analysis is chosen because as the it takes less amount of time and comparison of findings can be done in easier way. The raw data collected using quantitative analysis will be transformed into meaningful data by using research tools of different types. Mean, mode and median will be calculated in descriptive statistics. Regression analysis is done to identify the degree and nature of relationship between variables in the study. The study will conduct four-regression analysis to link the variables to reach validate conclusion in the study. The selection of sample population form the overall population in the study can be done using sampling. When the sample population is large, the difficulty level of quantitative analysis and comparison becomes complex. Thus, for complexity reduction, the study will use sampling method to select a small sample size, which will represent the overall population. Probabilistic sampling and non-probabilistic sampling are two different types of sampling method used in the academic and business research (Panneerselvam, 2014). Probabilistic sampling consists of different methods such as, cluster sampling stratified sampling, systematic sampling and simple random sampling. Systematic sampling will select the kth variable form the population sample where k is the range. Stratified sampling will divide the population in groups that are non-overlapping and then simple random sampling will be used to select sample population from each of the groups. Simple random sampling will use randomization t o select population randomly. This will provide equal opportunity to the overall population of being selected in the study. Non-probabilistic sampling will include extensive sampling, snowball sampling, quota-sampling convenience sampling, and judgement sampling. This is used when there is a cost constraint in the study and population size is small. This is also used for gather-hidden population where there is scarcity of data. In this study, 250 employees in Qantas will be interviewed using structured close-ended questionnaire and 50 samples will be selected using simple random sampling. Researchers can use methods used in a specific study to gain similar results or different results. When the results are similar then it can said that the reliability of the study is high. Validity is the accuracy and precision of different instrument used in the study (Einstein, 2014). Validity and reliability in a study has to be high for obtaining positive result. References Baur, D. 2014.Explainer: how the Australian dollar affects the results of companies. [online] The Conversation. Available at: https://theconversation.com/explainer-how-the-australian-dollar-affects-the-results-of-companies-72585 [Accessed 19 Jan. 2018]. Best, J.W. and Kahn, J.V., 2016.Research in education. Pearson Education India. Bryman, A. and Bell, E., 2015.Business research methods. Oxford University Press, USA. Button, K. ed., 2017.Airline deregulation: international experiences(Vol. 1). Routledge. Creswell, J.W. and Poth, C.N., 2017.Qualitative inquiry and research design: Choosing among five approaches. Sage publications. Delbari, S.A., Ng, S.I., Aziz, Y.A. and Ho, J.A., 2016. 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