Operations Management - Jetstar

1. Defining Jetstar’s Strategy

1.1 Strategic Decisions

Operations Management is the activity of managing resources which produce and deliver goods and services (Slack et al, 2010). Jetstar, as the leading low-cost carrier in Oceania and the Asia Pacific, has an operations strategy to provide air travel at minimal cost, while maximizing its operating margin.

According to Carrilho (2009), strategy is a set of goals and plans and resources to achieve these goals, for Jetstar these include:

• Maintaining a common aircraft fleet to optimise efficiency in operations and maintenance;

• Increasing the aircraft seat capacity;

• Charging for all additional services such as luggage, priority boarding, food, entertainment-on-board etc.;

• Providing supplementary services such as hotel bookings, car rentals, or insurance;

• Keeping wages, maintenance and other operating costs to a minimum;

• Outsourcing operations, such as non-routine aircraft maintenance, ticketing, and luggage handling;

• Aggressive marketing.

1.2 Jetstar’s Five Performance Objectives

To ultimately increase Jetstar’s competitiveness, it is useful to analyse its operations with the help of five performance objectives:

Quality: Even the most competitive price structure will not attract customers if the quality of the service offered falls below basic levels. These areas includes maintenance, efficient booking, punctuality, and interaction with the airline’s staff.

Speed: The speed in essential areas like turnaround time of aircrafts, reservations, luggage handling, and aircraft maintenance have a direct impact on costs. While implementations are in place to increase speed, it also dependent on service providers where delivery of services are not directly under its control.

Dependability: This relates mostly to flights being on schedule. The figures for the January of 2014 indicate 92% on-time flights (Jetstar, 2014). This is in line with...