The recent drop in
oil prices has been good news for Qantas, but turbulence continues in
the airline’s senior ranks. Insiders say there are two clear pretenders
for the throne of CEO Geoff Dixon, (expected by some to leave before
the end of the year). They are John Borghetti, executive general
manager Qantas Airlines, and Peter Gregg, CFO of Qantas. We’re told
both were recently given additional duties outside the core business,
presumably to test them in unfamiliar territory.

Dixon is said to favour Gregg which has divided the exec ranks accordingly.

Reports
filtering out from staff who were at the worldwide Qantas sales
conference three weeks ago say Borghetti was in full flight as a
self-styled “tell it as it is” hardman: throwing cold water on his
company’s profit forecasts and reaffirming his displeasure with the
unions. Apparently he doesn’t care about any rules covering dismissal:
if people are not performing, they should be fired. To some in the
audience this was in line with Qantas’s current management style. One
attendee commented: “How can anyone perform because if you open your
mouth to discuss anything your head gets bitten off.”

In other
words, in the current culture it’s safer to agree with everything
mooted by Borghetti and Rob Gurney, the head of sales and marketing.

The
general feeling is that there’s a lack of strategy in overseas
operations and that Borghetti and Gurney are doing everything to make
themselves look good in the Australian market. For a “worldwide”
conference there was total concentration on Australian domestic sales.
Gurney crowed about his success at achieving results in Australia with
little credit, if any, going to the local sales force. An overseas’
delegate commented: “Does anyone know or care what happens overseas?”

Apparently
Gurney encouraged bias towards subsidiaries Qantas Holidays (run by
Simon Bernadi, a close friend of both Borghetti and Gurney) and Qantas
Business Travel (QBT). Qantas recently again cut agent’s commissions and
has led everyone to believe that these savings have gone to the bottom
line. However insiders at Flight Centres (a major supporter of Qantas)
are crowing about how they pressured Qantas to reinvest some of the
savings in exchange for Flight Centres being now allowed to charge
“service fees” to make up for their loss of revenue.

The general
feeling as staff left the conference was that the people running Qantas
had no idea about the company’s future. For example, a question from
one delegate at the end of the conference about the progress of “videos
on demand” in-flight was met by three different answers from the senior
executives – all of which were wrong.

A senior exec who attended the conference summed it up as a lot of chest beating and bravado but sadly not much common sense.

Peter Fray

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