Running head: QATAR AIRWAYS 1
Qatar Airways International Business Audit
Walid Lamkhatri
Felician University
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Qatar Airways International Business Audit
A business organization is always expected to make its targeted profits in the market it
performs. However, if it operates only within national boundaries, it will always earn limited
profits and one day, it will not have enough popularity. So, a business should always plan to
expand its business internationally and compete on a global level so that international customers
also buy from it. It is a very good idea to go and do business internationally because more profits
can be earned, but the business might risk to fail. This is why I chose to do research on Qatar
Airways which is now famous around the globe.
Qatar Airways is established in 1993 and it is owned by the government of Qatar. It is an
aviation business organization, which is very popular in international aviation industry. The
airlines offer 177 flights to 150 locations around the world daily and it has a huge workforce of
46,000 employees. The organizational structure is very complicated, where a major upper
management section of the company is controlled and managed directly under the Group CEO
executive Akbar Al Baker. Although the organization has its headquarter in Doha Qatar and it
has maintained a decentralized management, which works as a network for the company. The
company operates in more than 150 locations, but the hub of Qatar Airways is Hamad
International Airport. The airways company offers its services to America, Asia, Middle East,
Africa and Europe (Qatar Airways, 2018).
Qatar Airways has been very skillful when it comes to the use of schemes for the benefit
of the company. The airways has worked together with international service providers for the
offering services that has made the travelling experience of the passengers special and effective
to that of the rivals in the market. This airline company offers its customers complimentary
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services such as free visa’s, 30 day touring offers, free transit visa and most importantly free stay
over. It is worth the mention that in order to avail the benefits provided by Qatar airways, the
passengers have to accept the terms and conditions of the company, which basically makes the
organization profitable. The airways have also managed to attract the customers on their
honeymoon by offering packages that are planned for honeymoon couples (Qatar Airways,
2018).
Qatar Airways offers the international travelers a great travelling experience. They offer
special meals for persons with medical issues, child special foods including ice cream, chocolate,
sweets and many other stuff. As for the regular passengers travelling through the airlines
egional foods are provided, while there are options for choosing between vegetarian and
non-vegetarian that are also available (Qatar Airways, XXXXXXXXXXThe tissues and furniture that are
used are within the aircrafts and the materials used are all from the premium quality. The
aircrafts are also one of the best in class, making travelers around the world confident of
themselves in deciding on taking Qatar Airways as an airline.
The aviation industry in which Qatar Airways is a best competitor and has a possibly
chance of growth. It is expected that the global industry is set of benefit from a stable growth
increasing from 4.6% in 2017 to 4.7% in 2018. The number of passengers has also increased by
6% than 2017’s 4.1 billion in total. There is also a stable growth noticed in the shipment of
cargos. Although the fuel prices, labor expenditure and implementation of newer technology are
cutting deep to the profit margins (IATA, 2017).
Regardless of the increase in the prices of fuel and airline tickets, the number of
passengers has increased globally. The increasing customer traffic is set to increase the revenue
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of the business. It is assumed that until the end of 2018 the total revenue earned by aviation
industry would be 581 billion, a growth of 9.2% than 2017 (IATA, XXXXXXXXXXIt is assumed that of
the number of customer continued to increase in the same rate the availability of the ticket would
slowly reduce, which will increase the aviation business and aviation business organizations and
will increase the capacity of the fuel load.
The global aviation companies such as Qatar Airways are facing competition from the
local airlines companies that are operating in local places. The major competitors are Southwest
Airlines, JetBlue Airlines, Spirit Airlines and many more (Digi Bulletin, XXXXXXXXXXAs refe
ed by
Rodríguez and O’Connell (2018), local aviation companies have smaller routes because they can
work with limited capacity, few crews and cheap fares making it hard for the international
companies to compete because sometimes if there is a traveler looking for ticket on his budget,
he or she would get even if the quality of the airline is poor.
The competition is also noticed at the global level, as all international aviation
organizations try to offer best deals and that could also offer good profit. The other international
aviation organizations such as Lufthansa, Emirates, and Singapore Airlines are creating
competition for Qatar Airways as the refe
ed international airlines offer great services in
Europe, Asia and USA, where Qatar Airways offers its services also. (The Independent, 2018).
Qatar Airways had faced many different issues such as restricted visa, ca
ying of cargo, political
issues, air ticket pricing and multicultural human resource management on global scale. Firstly,
in many countries Qatar Airways is not being able to offer its services because the local
government of these countries have stopped their policies for visa, which makes the company not
to give the air travelers their services (Qatar Airways, 2018).
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Also, Qatar Airways have faced many problems with the import and export duties applied
on its cargos, making the profit percentage to be very poor. It is also seen that Qatar Airways
have not been able to work in countries where Qatar doesn’t have diplomatic relationship. The
increase in the fuel prices, as stated by Qiu and Chen (2018), have forced the airlines companies
to higher the air tickets price so they could get a good amount of profit so they could keep up
with the business. In many countries the economic strength has made Qatar Airways to higher
the ticket prices in fact, they have faced many problems with making the prices equal for all the
countries as the price of the cu
encies is different.
In the term of Foreign Direct Investment, Qatar Airways has chosen to enter Indian
aviation market as the government of India has promised an ownership percentage of 100%.
India has a huge population and is cu
ently one of the fastest growing economies. In addition, a
country has air routes to neighboring countries, which makes the choice by Qatar Airways
logical and profitable, however, the local aviation companies are opposing 100% FDI, therefore,
the entry to the Indian market is pending (Hindustan Times, 2017).
Qatar Airways has to maintain a high standard of quality for its products offered to the
passengers, therefore, large amounts of money are expended for retaining the standards of the
products relating to food, leisure items and furniture that are used by the air travelers. In order to
enefit in the local market, Qatar Airways uses its global partners for importing products. The
importing of the products is done through cargo air ca
iers of the company (Qatar Airways,
2018). Qatar Airways uses the global partners and their business ties to get products at cheaper
ate, which met national standards, eventually giving the company competitive edge over the
local aviation companies who struggle to offer all the quality products on cheaper rates. In order
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to provide its passengers the best in class foods and utility products, Qatar Airways uses
international business partner both partners work as a team, offering the best of both sides. In
case of availing regional foods at best rates and quality, Qatar Airways ties up with regional
usiness partners in the zone, they are serving (Supply Chain Digital, 2018).
As Qatar Airways operates internationally, it is very aware and strategic about its human
esource policies. As mentioned by Caliskan (2010), international business organizations must be
very careful about their human resource policies to save the potential risk of different types of
cultural, religious and social expectation of the employees, offering service to a huge number of
customers. Even though Qatar is an Arab country, Qatar Airways starts to recruit staffs from all
over the globe. In case of career opportunity, Qatar Airways has also given newcomer chance to
learn the skills necessary for becoming a part of aviation industry (Gulf Times, XXXXXXXXXXAs for the
human resource retention policies, Qatar Airways has proved itself as one of the most prefe
ed
aviation business organization internationally. The company based on its consistently high profit
earning has focused on the development, recruitment of staffs with medical benefits, enough
salary and accommodation facilities for international staffs travelling most of the time.
The company has fixed salary rates and employees offering service areas where the
minimum wages rates are high do not get more salaries. In case of employees offer longer duty
hours, the wages are paid on fixed rates. This airline company has a very fast and formal
organizational culture, however, it has assessed the importance of multicultural practices and
have been very flexible in its approach. As supported by Meyer and Xin (2018), multicultural
prioritization is a very effective human resource retention policy.
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To consider the growth in the aviation business recognized in the last few years, it could
e assured that the near future years are helpful for aviation business companies such as Qatar
Airways. The company is planning to buy a dozen of new passenger aircrafts every year based
on the increasing number of air travelers around the globe