Airline business continuity plan

Create a Summary Business Continuity Plan (BCP) 1.5 - 2 pages long for business in one of the industries below - Your tutor will choose the industry for your group. International Airline Qantas Business Continuity Plan: Link: https://www.business.qld.gov.au/running-business/protecting-business/riskmanagement/continuity-planning/plan Introduction + Scenario - John With the serious outbreak of COVID-19 in the last year, there have been tremendous impacts on the airline industry, with significant declines in total revenues due to collapsed customer sales. The airline industry has seen major declines in flight frequency and number of passengers, reaching a global peak of 62.9% decrease in flights in June 2020 (Statista, 2020). More specifically, international airline Qantas has seen passenger numbers drop to just 40.48 million this year, as opposed to 2019 where they reached 55.81 million (Statista, 2020). Qantas’ Business Continuity Plan (BCP) will provide information on the effective actions, procedures and policies necessary to ensure that sound business operations continue and customer satisfaction is upheld throughout and after the impacts of the current global pandemic. Risk Management Plan with business impact (How has COVID impacted the business) - Ruoman It is true that risk management plays a significant role in an airline industry. Both social and internal factors affect the risk management of the aviation industry, such as fluctuations in currency exchange rates, volatility in passenger demand and competition from low-cost carriers (Pyke & Sibdari, 2018). Apparently, as a special factor, COVID-19 pandemic indeed has adverse impacts on both staff and organisation’s economy of Qantas. On the one hand, Covid-19 pandemic has ‘Devastating’ effects, which mainly reflected in the fact that Qantas has experienced an extreme financial loss of A$2.7 billion and a mass unemployment of approximate 6,000 workers (Davies, 2020). In addition, some international flights of Qantas have also been suspended owing to the pandemic. The continuous reduction of Qantas’ finance becomes an unexpected risk that may lead to a worse loss even a bankruptcy of Qantas. Thus, the preventive ‘rainy day’ fund is necessary for those unforeseen circumstances. On the other hand, Qantas has applied an integrated security management system to risk criteria including working health and safety (Qantas, 2020). However, six Qantas staff were quarantined after being tested positive (Eddie & Gorrey, 2020). During the period, risks management is imperative, and the crisis management systems should be functioned to respond to the emergency. The board is required to put the staff first and may sacrifice the chairman's salary if necessary. Incident response plan - Iain Back in 2016 within the Corporate Governance Statement, Qantas outlined a series of risks that could in turn affect the operating performance of the business and included on the list is “natural disasters or the rapid spread of contagious illness, placing restrictions on aviation operations” which is exactly what occurred during the COVID-19 pandemic (Qantas, 2016). Such governmental restrictions and the general loss of travel desire from the public has brought Airline operations to a halt across the globe and Qantas is no exception, leading to operating losses and cash flow problems that threaten the bottom line of Qantas’ survivability. This required the grounding of a majority of Qantas operated planes and the subsequent redundancy of over 6000 staff from the loss of revenue and 100 aircraft grounded for a period of at least 12 months and 12 A380s being sent to storage for 3 years (Butler, 2020). In order for Qantas to survive through the crisis, the operating costs and expenses must be brought to an absolute minimum in order to prevent continued hemorrhaging of funds. There has been a reduction in costs tot the sum of $15 billion expected across 3 years and a $1.9 billion equity raising plan in order to restore liquidity into the airline as a means of ensuring continued operability and ability to pay suppliers and employees (Qantas News Room, 2020). Recovery plan (after COVID)- Andrea Qantas’ recovery plan post COVID-19 is implemented in a way that provides a pathway to achieve it’s key goals such as regaining market share within the airline industry, maximising profit potential, increasing value to shareholders and retaining the jobs of their most valuable and skillful employees. In the next three year period, Qantas are targeting a reduction of $15 Billion in costs and holding off the use of 100 aircrafts to minimise its associated operating expenses (Qantas news room, 2020). Along with lowering and making modifications to it’s issued share prices, Qantas are also standing down an estimated 20,000 employees in order to manage its budget with the decreased demand for international flying (ZDNet, 2020). To combat the economic loss suffered during the pandemic, Qantas are seeking to recapitalise by raising as much equity as possible through their share purchase plan to improve their financial resilience and accelerate recovery. This restructuring of Qantas' business model and structure will take several years of adapting before they experience the success that was achieved before the crisis.