Aug 28 2014
Qantas is an Australian icon, and having grown up in the travel industry, I am incredibly sad at it’s downturn. Today’s announcement of the record loss and the ‘Transformation Program’ which is apparently turning it around got me curious, so I started looking further.
So far, everything I’ve found about this program comes across as less of a ‘transformation’ than a ‘cost slashing’. It’s inevitably followed by lines about how market share has fallen due to decreased trust, but that’s always from external factors.
Sorry, Alan Joyce, but as one of your customers, it’s not. We trust you less because of the slashes. Everything you move offshore makes Qantas just that much less of an Aussie airline, and we don’t feel that national pride and ownership anymore. The advantages you held – being Aussie, and being a full service airline – feel like they’re being gutted, and all your rhetoric about customer experience doesn’t gel with having fewer people around – and especially fewer Aussie jobs – to handle us.
I’d like to point out, there are two ways to increase profits. One is to cut costs, and the Qantas Transformation Program certainly seems to have that angle well in hand. But the other way is to increase sales. I’m not seeing anything transformative in your approach there, and you don’t seem to have anything in place that will stop the haemorrhaging of trust the cost-cutting brings. In fact, there don’t seem to be any protections in place for the ‘goodwill’ advantages you have, because they seem to be first in line to go!
Trust is what makes or breaks a customer service organisation. Please, please bear that in mind.
When I fly Qantas, I don’t do it because it’s cheaper, although granted I do expect it to be competitive. I do it because I want to enjoy my trip, starting when I arrive at the airport – not arrive stressed out from the flight and need an extra day to recover at my destination. I do it because I know very well that the up front cheap price offered elsewhere is going to be followed by an endless series of sales attempts while I’m a captive audience on board, and that even essentials like luggage are going to add on to that cost. I’d rather know what I’m paying, up front, and not have to second guess what else might now be considered an ‘optional extra’ (charging for water in a vehicle that is going to dehydrate everybody on board should be criminal).
So where are the initiatives that will play to those strengths? If you are differentiated as a full service carrier, where is the media campaign to educate us that your changes will make things more affordable, but that some things won’t be sacrificed (like knowing your ticket price covers you for all the essentials and once you’re on board, you can relax and forget about having to pull out the wallet again). Why not take a few moves that will position you even more strongly as the ‘affordable luxury’ carrier – off the top of my mind I can think of at least three, all of which would fall on the ‘increased profits’ side of the equation. For example, you already cater for special diets. What if you offered your customers the option to upgrade their meals to the same as business class? If cafe’s and restaurants can thrive on food profits alone, why not add that string to the Qantas bow?
The world is changing. The face of industry is changing, and technology is creating a whole new landscape for business to operate in. Cutting costs to offset the things that don’t work anymore isn’t enough. You need to find the things that work NOW, and will continue working into the future, to make yourself truly a sustainable airline.