Qantas contemporary case study for U4 AOS2

Describe the change (memorize for the start of the question)

On June 11, 2025, the Qantas Group announced a strategic restructure that involved the closure of its Asian budget airline, Jetstar Asia, in response to 14 years of unprofitability, increased competition in the Asian budget carrier industry and a projected $35 million loss in the 2025 financial year.

Importance of leadership at Qantas during the change

Clear Communication: Public statements and media releases explained the financial losses ($35 million projected for FY25) and the competitive pressures from low-cost carriers like AirAsia and Scoot. Employees were notified about the closure by the CEO in a team meeting, along with the support available to employees.

Empathy and Support: Acknowledging the impact on employees, leadership is committed to providing all affected Jetstar Asia employees with redundancy benefits as well as employment support services. The media release also stated that Qantas is also actively working to find job opportunities across the Group and with other airlines in the region.

KPIs that Jetstar Asia needs to respond to

Net Profit Figures: Jetstar Asia is projected to have a $35 million loss. The business has also had 14 unprofitable years previously.

Number of Sales: Number of sales have not met expectations due to increased competition.

Percentage of Market Share: Estimates show that Jetstar Asia’s market share has shrunk from 27% in 2010 to 15% in 2025

Strategies to respond to Jetstar Asia’s KPIs

Cost-cutting: Closing the airline is a way to limit the costs of Qantas Group. With the airline regularly losing money, and expected to lose $25 million in the final 6 months alone, CEO Vanessa Hudson made the decision to close the airline to put an end to the losses.

Redeployment of resources (capital): The closure enables Qantas to move the planes into other areas of the business. Planes will be redeployed to New Zealand and Australia to help increase their capacity to run more flights in these competitive but profitable markets. This will increase their competitiveness against the likes of Virgin Australia.

Corporate culture at the Qantas Group

Qantas’ corporate culture is built on its core values of safety, respect, innovation, customer service, and sustainability. These values shape decision-making and behaviour across the business and are reinforced through a range of strategies:

Clear communication of values and behaviours: Qantas communicates its values and expected behaviours to all employees through the induction process, internal communications, and leadership messaging. These values are integrated into performance reviews, ensuring staff understand how dayto-day actions connect to the company’s culture.

Employee recognition and reward programs: Staff who demonstrate Qantas’ values are recognised through awards and career progression opportunities. Public recognition reinforces the desired behaviours and motivates others to adopt them.

Training and development: Qantas invests in professional development programs, leadership training, and customer service skills. The training develops the skills needed to deliver on Qantas’ service and safety values.

Employee engagement and feedback mechanisms: Qantas conducts regular employee engagement surveys and hosts feedback sessions to understand staff concerns and ideas. This strengthens trust and encourages ownership of cultural change.

Wellbeing and support: Employee assistance programs, mental health resources, and flexible work arrangements demonstrate care for employee wellbeing, which builds loyalty and engagement.

Personal mastery at Qantas

• Qantas already invests in training for cabin crew, pilots, engineers, and ground staff, and offers leadership development programs.

• Retraining and redeployment programs could be offered to Jetstar Asia employees affected by the closure, allowing them to continue their careers in other parts of the Qantas Group.

• Having a business where the people are driven to learn new skills can develop a flexible workplace that drives change.

Mental models at Qantas

• Qantas executives were able to review the business and determine that their current operations were not appropriate moving forward.

• This resulted in the decision to close a 20-year-old part of the business and redeploy the aircraft to help them compete with their Australian and New Zealand rivals.

• This demonstrates forward thinking and an ability to adapt to market changes that have occurred, challenging existing assumptions of the sustained profitability in Southeast Asia, the strategic value of a Singapore-based low-cost carrier, and the long-held belief that presence in overseas markets was essential for long-term growth.

Shared vision at Qantas

• Qantas’ stated vision is to “be the best premium airline in the world.”

• Leaders could connect the closure decision to this vision, explaining that resources saved will be reinvested into core markets and fleet renewal in order to strengthen Qantas’s position.

• If leaders are able to get its employees to believe in this shared vision and understand that the closure of Jetstar Asia is aligned to it, they are likely to be more supportive and accepting of this transformation.

• This could be one of the reasons why Qantas Group was able to implement the closure in such a tight timeline.

Team learning at Qantas

• Qantas could structure their employees into teams, helping their employees learn from each other more rapidly than if they were on their own.

• Bringing multiple teams together to implement the closure of Jetstar Asia could ensure they learn together and implement the closure quickly within its tight deadline of ceasing all flights by July 31, 2025.

Systems thinking at Qantas

Qantas’ decision to close Jetstar Asia affects many other areas of the business.

IT AFFECTS:

• Fleet allocation - allows Qantas to gain access to the airplanes that were being used by Jetstar Asia, allowing them to bring them back to Australia to be used in Qantas’s Australian and New Zealand markets instead, allowing for increased flight options to be offered in these regions and better compete with other Australian airlines like Virgin.

• Staffing - The closure of Jetstar Asia results in the loss of jobs for its Singapore-based workforce, including pilots, cabin crew, and ground staff. The mass redundancies that are likely to result in employees across the entire Qantas group to experience a loss of job security, which can negatively impact morale and corporate culture.

• Customer relationships - Customers who had purchased flight tickets for Jetstar Asia and are now having their flights be cancelled are likely to be dissatisfied with this, therefore Qantas should ensure they provide appropriate compensation.

How Qantas used communication (low risk strategy)

• Leaders such as Qantas Group CEO Vanessa Hudson and Jetstar Asia CEO John Simeone publicly explained the reasons for the closure, citing long-term unprofitability ($35 million projected loss in FY25) and better opportunities to redeploy aircraft elsewhere.

• This was performed via a media release, a statement to shareholders and direct communication to Jetstar Asia employees.

• This clear communication gave direct information about when the closure was to take place (July 31) as well as the support available to redundant employees.

• This reduced uncertainty in a challenging time for employees, helping reduce resistance.

How support was used by Qantas (low risk strategy)

• Qantas offered redundancy packages for every Singapore-based Jetstar Asia employee whose contract was terminated as a result of the closure, along with employment support services to help them find new job opportunities.

• Qantas also had a team actively looking for job opportunities across Qantas Group and with other airlines in Singapore to support employees in finding new employment.

• While redundancy is challenging, these supports can reduce resistance as employees feel valued and can find new employment, reducing resistance.

Unfreeze step at Qantas

• For Qantas, this could include where they clearly presented and communicated the financial situation including Jetstar Asia’s 14 years of unprofitability and the projected $35 million loss for FY25, and explaining the competitive pressures from low-cost rivals in Asia.

• Public statements from Qantas Group CEO Vanessa Hudson and Jetstar CEO Steph Tully helped “unfreeze” the status quo by clearly communicating that continuing operations was no longer sustainable in order to help employees understand why the change is necessary.

• It was also communicated in a staff meeting that the Singapore-based employees would be provided with redundancy packages along with employment support services to help them find new job opportunities across Qantas Group and with other airlines in Singapore.

Change step at Qantas

• For Qantas, this meant actually beginning the process of closing Jetstar Asia, developing a timeline for ceasing operations (July 31, 2025), and redeploying the aircraft that were being used by Jetstar Asia into the Australian and New Zealand markets.

• Support measures such as redundancy packages and transition assistance were provided to employees, helping reduce resistance during the move.

• For the employees from the Singapore-based workforce who were able to be redeployed into other areas of the Qantas group, they needed to be provided with training so that they were equipped with the knowledge and skills to fulfil their new roles.

Refreeze step at Qantas

• Qantas could refreeze the change by fully integrating redeployed aircraft into other Qantas or Jetstar operations, ensuring schedules and staffing are stable, and using lessons from Jetstar Asia’s performance to inform future route and investment decisions.

• Qantas could evaluate KPIs to determine if the change was successful (for example, evaluating net profit figures before and after the closure to determine if removing Jetstar Asia’s projected $35 million loss has improved the company’s financial position, or if further action is needed).

Effect of the change on shareholders

• The decision to close Jetstar Asia may initially concern shareholders due to the loss of a brand presence in the Singapore market.

• However, removing a business that has been unprofitable for 14 years and redirecting assets to more profitable routes should improve overall group performance, potentially increasing returns in the long term.

Effect of the change on customers

• Passengers with existing bookings on Jetstar Asia flights will be directly impacted through cancellations and the need to be rebooked or refunded.

• In the longer term, travellers in the region will have fewer low-cost airline options, which could lead to higher prices and fewer flight options.

• However, customers in Australia and New Zealand may benefit from increased flight availability as Qantas Group (including Jetstar in these regions) have increased their capacity due to the redeployment of planes.

Effect of the change on employees

• The closure results in redundancies for Jetstar Asia staff, particularly those based in Singapore.

• While Qantas has offered redundancy packages and transition support, job losses can create financial and emotional stress for employees and their families.

Effect of the change on suppliers

• Suppliers of goods and services to Jetstar Asia, such as catering companies, ground handling services, and maintenance providers, may lose business contracts.

• This could have flow-on effects for their own revenue and employment levels.

Effect of change on competitors in South East Asia

• The removal of Jetstar Asia from the low-cost carrier market in Southeast Asia reduces competition, potentially allowing rival airlines to increase prices or capture greater market share.

Why is it important for Qantas to review its KPIs after closing Jetstar Asia?

• Reviewing KPIs after implementing a change will allow Qantas to determine whether the change has achieved its intended objectives and to identify any further action required.

• For Qantas, closing Jetstar Asia was intended to reduce financial losses, improve overall group profitability, and redeploy resources to more profitable routes.

The KPIs that Qantas needs to review to evaluate the success of the closure

• Net Profit Figures: Tracking group net profit before and after the closure will show whether removing Jetstar Asia’s $35 million projected annual loss has improved the company’s financial position.

• Percentage of Market Share: While market share in the Singapore low-cost carrier market will naturally decline, Qantas can review its market share in Australia and New Zealand to assess whether redeployed aircraft have strengthened its ability to compete in these regions.

• Number of Sales (Ticket Bookings): Monitoring passenger numbers and ticket sales on the routes that receive additional capacity from the redeployed aircraft will reveal whether the closure has generated growth in more profitable markets.