The Qantas 2009 annual report out this morning is served up with side dishes of amnesia and hope.
Yes, there is a good story told well about managing the GFC and swine flu crisis. And also all the figures that account for a pre-tax profit the previous year of $1.4 billion plunging to $181 million, an underlying loss of $77 million for the Qantas brands and a bottom line saved by flogging loyalty points to department stores or other third parties and expansion of Jetstar, in that order.
Under the heading “Restoring our Reputation” in his supporting spiel on the annual report website, CEO Alan Joyce refers to a “long running engineering industrial dispute”. It was in fact an overtime ban, imposed because the company had run down staff numbers and replacement parts inventory to such an extent that too much of its fleet became filthy and unreliable.
As a consequence of this approach to maintenance, flying Qantas became a miserable ordeal that included the high visibility reporting of passengers sleeping on seats in terminals, “storming” a Qantas Club lounge and engaging in other mass displays of displeasure.
Joyce said earlier this year that the legacy of the engineering dispute was financial damages of about $300 million that impacted in this financial year, even thought the dispute was settled before June 30 last year, because it forced Qantas to deal with a maintenance backlog lasting well into the first half.
But this was all self-inflicted, and done by a predecessor who had been hell bent on flogging the airline to a private equity consortium that was going to pay him a reported $100 million. And that given the subsequent economic events would have destroyed Qantas. Yes, it cost money to keep jets clear and fully serviced. And if this isn’t done, damage to brand and reputation ensues.
Joyce also overlooks an adverse report on Qantas safety standards in the CASA special audit of August 2008. To blame public “perceptions” about Qantas safety on the engineers and ignore the policy decisions of former management is to re-write the reality.
Qantas is still in la-la land over the Boeing 787 Dreamliner fiasco, but not alone in that regard either. The B787 isn’t “ideal” for anything until it actually completes its certification, and it hasn’t even flown yet, being two-and-a-half years late and having failed a wing stress test already. In fact Qantas doesn’t really know when it will get any, apart from parroting a manifestly untrue Boeing promise of mid-2013 delivery for a stretch version of the jet, for which Air New Zealand is also the launch customer, that it won’t get until at least 2014.