QANTAS trashed

In October 2011, when Alan Joyce, the CEO of QANTAS, shut the airline down and grounded all aircraft – wherever they were in the world – thus disrupting the travel plans of thousands of (innocent) people, I warned that he risked trashing the famous “brand” QANTAS. He took this action because he had a “stoush” with the various unions in airline and aircraft industry and claims he won.

I lay no claim to being a soothsayer but even I could envisage the damage that would accrue to this famous airline. Likewise I make no claim to being an “expert” on the airline industry but I do know that if any business follows “just” money and not “service” they will fail.

I will quote some of what I wrote then:-

“No businessman worth his salt would consider such an action without some sort of plan and without a time line. Without this timeline the crisis could (and most probably will) reduce the airline and the name QANTAS to a shell – something of no substance. Why?

Because of the action taken by the CEO a few thousand shareholders may applaud the improved value of their share portfolio but who else does? The passengers stranded in airports around the world and Australia? People forget – wrong – EVERYBODY forgets that a company is a service organisation. No matter what the company does it serves someone. A mining company serves the purchaser of the ore; a shipping company serves whoever entrusts them to transport their goods and an airline company serves the travelling public. These are PEOPLE.

The service aspect MUST come first. Provide the best possible service and people will pay. Therefore money follows service. It always has and it always will – not the other way around. Service does not and cannot follow money. Service means serving people. A machine, an aircraft, cannot provide a service, only a person can. This is where humanity comes in. Money serves no one – it is a medium of exchange – made of plastic, paper, or whatever. The number one priority is (or should be) people not money.”

I stand by what I said then because I have been proved right. Alan Joyce has reduced the investment value of this once profitable airline to “junk status” according to various rating agencies. And now he has no capacity to raise any more money!

Alan Joyce says that the “market is soft” which I take to be shorthand for “people are not flying with QANTAS”. I suggest that the travelling public (who have long memories) no longer trust the QANTAS brand – because of what happened just over two years ago.

Trust takes a long time to create – but can be lost in an instant. Through his actions Alan Joyce has lost the public’s trust in QANTAS and so have the investors - there is an element of poetic justice in this! It has been reported that in the five years since he became CEO the share value has halved.

I wonder why?