Jetstar to Enter Tasman DogfightJetstar to Enter Tasman DogfightArticle Title: “Jetstar to enter Tasman dogfight”Source: The AustralianDate: 3rd August 2005Author: Steve CreedyOVERVIEWThe article by Creedy looks at the newly announced expansion of Jetstar Airline services from its current domestic Australian flight service to its penetration of the trans-Tasman market. Jetstar’s original purpose was to provide Qantas (Same Ownership) a cost-effective alternative for the provision of domestic flights around Australia while also giving customers a cheaper and somewhat “no frills” option when flying locally. The article outlines the considerations and specifications that Qantas and thus Jetstar have undertaken in order to accomplish its “first foray overseas” as part of its “segmentation strategy”. Jetstar’s expansive venture is then obviously significant and relevant to the study of international business’s (any business transaction which involves a cross-border commercial transaction) and the goals and barriers achieved and endured.
WHY THE ARTICLE IS SIGNIFICANT TO IBSubsidiesThe article suggests that Qantas may draw upon subsidy advantages granted by the Australian government through the all-economy “Australian Airlines” subsidiary in order to help the expansion of Jetstar on “low-yielding routes”. The government’s efforts to promote international trade and investment as well as Qantas’s new enterprise agreements with Australian flight attendants will allow Jetstar’s “Cairns-based subsidiary to use new aircrafts, hire foreign crews and fly further”. This permits Jetstar to hurdle non-tariff legal barriers to international expansion such as the labour laws that would otherwise prohibit Jetstar to hire overseas employees or undertake lengthy flights. The efficient use and exploitation of provided subsidies by Qantas and Jetstar are evidently significant in the study of international business’s as they try to overcome barriers to overseas markets.
Trade AgreementsAlthough the impacts of globalisation, the emergence of strategic alliances between firms and the establishment of bilateral trade agreements between nations are not explicitly mentioned in Creedy’s article, they are the unspoken givens of a business report in contemporary times. The article places emphasis on Jetstar’s expansion to New Zealand, a venture only made easier through the improved relations (especially within trading) between Australia and New Zealand. Their Closer Economic Relations (CER) trade agreement together allows for the liberalisation of trade through reduced tariffs, reduced quantitative restrictions on exports and free migration of labour. Such an agreement “was aimed not only at expanding trade but also strengthening and fostering links and cooperation in fields as diverse as investment, marketing, the movement of people, tourism and transport” (Mahoney,
2.6), the development of social, environmental, health, educational, law, technology and research initiatives. Furthermore, it places a higher priority on a better international standard of living and social responsibility, where both governments and the sector is accountable for the development of its workers and are to act positively towards those who earn it. While it is clear that the New Zealand government was not prepared to deal with the situation here “its efforts on a global scale “should have been in some measure motivated by a strategic commitment to reduce the effects of trade barriers․““““““.
3.7 Globalisation and the Business Cycle
This article has been amended from an earlier version which cited information from a previous article, although the original did not. The original made a comment on trading in goods and services as a major part of the trade equation of the United Nations. The updated text, a new section on “Globalisation”, is included in this article.
In a recent article, Creedy’s (‡Pledge of Protection) notes that both trade and economic activity together provide a mechanism by which individuals in the “trade chain” can act to reduce and adapt their economies to change. In an earlier commentary ‡Pledge of Protection‡ she also cited recent research suggesting that both economic and political activities were integral to a large global trend.
With the advent of the global financial crisis and the collapse in oil production in emerging markets over the last two decades, the development of sustainable economies was increasingly taking a more global approach.
3.8 International Trade
3.8.1 Globalisation means that everyone becomes richer and more powerful. We can expect an increased concentration of resources. We can expect that the rich will also gain access to better and better services. We can expect more rapid growth and greater opportunities for growth. All of these are positive developments for the long-term sustainability of people and communities.
3.8.2 A global market for commodities and services can be generated by all sectors of the economy. While such a demand could reduce exports in China during the near future, for example, the value of those exports could increase.
When in effect, globalisation and global trade are associated, we need to think of economic growth as being the sum of all of the following: Increased production; Increased consumption; Increased demand and supply; Productivity; Improved human needs and productivity; The need for a competitive supply chain; Increased demand for goods.
An increasingly dynamic market and competitive economy is necessary to enable an increasing proportion of all goods to reach the marketplace. A shift in supply into demand for goods will change consumer behaviour in the developing world. The introduction of ‘international-level’ tariffs and other policies might bring about a reversal in this dynamic process.
3.8.3 We have already seen that competition does not guarantee the supply and that competition for goods is more intense. So there is an increasing demand for new and better products. Yet prices should have increased without any change. An increase in demand for goods should not be a factor that restricts the supply chain expansion or that reduces a market’s demand.
3.8.4 The future is rapidly becoming more peaceful. There will be more and more competition for good and services but there will also be fewer and fewer ‘foreign jobs’. Inequality of opportunity for each and every citizen of a social economy will increase. Some people (such as young people and women) in developed countries will get poorer and many will end up in poverty. The increasing number of people in developing countries may reduce