Trident University Qantas Frequent Flyer Program Sale Decision Making Paper
Like many airlines around the world, leading Australian airlineQantas is facing very difficult times in spite of having a 65% marketshare in its home market of Australia. Due to rising fuel costs and aslow world economy, Qantas has recently been losing money and their CEOAlan Joyce has some tough choices to make.
One difficult decision for Joyce is whether or not to sell Qantas’frequent flyer program. It may seem odd for an airline to sell itsfrequent flyer program, but Qantas’ program is much more than just anairline reward program. Members of this program can gain points not onlyby flying on Qantas but also through other means such as shopping atone of Qantas’ corporate partners or using one of their credit cards.Points can be redeemed not only with free flights, but also withproducts from numerous retailers. Over 10 million Australians belong tothis rewards program, almost half of the population.
The frequent flyer program is Qantas’ most valuable asset and a saleof this program would help Qantas get out of its current financialtroubles. However, selling the program would also mean allowing anothercompany to have access to Qantas most loyal customers including theirbusiness class and first class customers. In the long-run, there ispotential the sale could backfire and would not be wise.
Do some research on CEO Joyce’s current choice of whether or not tosell their frequent flyer program, and also thoroughly review thebackground materials on intuitive versus rational decision-makingincluding Buhler (2001) and Kourdi (2011). Your assignment will be toapply the background materials concepts to Joyce’s current big decision.
Some specific articles on Qantas to get you started:
Ross, K. (2014, Aug 27). Qantas CEO faces tough choices. Wall Street Journal [Proquest]
Ironside, R. (2014, Aug 15). Qantas warned to ground plans to sell frequent flyer program. The Gold Coast Bulletin [Proquest]
Gilder, P. (2014, Mar 29). Loyalty future cloudy. The Gold Coast Bulletin [Proquest]
Australia: Qantas frequent flyer hits 10 million member mark. (2014). MENA Report [Proquest]
Once you have finished reading about Qantas and reviewing thebackground materials including Buhler (2001) and Kourdi (2003), write a4- to 5-page paper addressing the following questions:
- Is the decision whether or not to sell Qantas’ frequent flyerprogram a strategic or operational decision? Is it a programmed ornon-programmed decision? Explain your answer using references to Buhler(2001) or Kourdi (2003).
- Suppose Alan Joyce decides to take a rational approach to thedecision whether or not to sell the frequent flyer program. List astep-by-step approach you would recommend, and include specificsregarding what kind of information or choices should be considered ateach step. Do not just list the steps, give detail at each step and usematerial both from your research on Qantas and from Buhler (2001) orKourdi (2003) to come up with these steps.
- Joyce has been the CEO of Qantas for six years and is an experiencedairline executive. Given his experience, do you recommend Joyce use arational or intuitive approach to this decision? If there is a new CEOwho comes from another industry and does not have this airlineexperience, would you recommend they use a rational or intuitiveapproach? Explain your reasoning, and make references to Buhler (2001)or Kourdi (2003) as appropriate.
- Follow the assignment instructions closely and follow all steps listed in the instructions
- Stay focused on the precise assignment questions, don’t go off ontangents or devote a lot of space to summarizing general backgroundmaterials
- Make sure to cite readings from the background materials page. Relyprimarily on the required background readings as your sources ofinformation
Include both a bibliography and in-text citations. See the Student Guide to Writing a High-Quality Academic Paper, including pages 13 and 14 on in-text citations.
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