As the enormity of the dislocation caused by the Qantas grounding continues to come home, by the plane load, Qantas and its natural enemy, Virgin Australia, are rolling out a massive and costly bidding war to retain or gain the customers that matter, the ones who fly frequently.
In the Qantas “war room” near Sydney Airport this morning, Alan Milne, the head of its integrated operations centre, was telling the cameras about “vouchers, cash, everything” when it came to compensating the dislocated.
Oddly enough, he didn’t mention the “missing” A380 from London, which lobbed in Brisbane last night because it couldn’t make Sydney before the 11pm jet curfew, or the rather trivial $50 pay-off to some passengers who departed Los Angeles on 14-hour flights that weren’t loaded with enough meals.
However, when one such flight arrived at Sydney this morning. And Qantas did offer meals to the famished in the terminal.
Qantas is being generous to many, many travellers, compensating them for Jetstar, its 100%-owned low-fare subsidiary, gouging displaced Cityflyer customers with outrageously high fares.
In this one hand giveth while the other taketh exercise, those who had bought fares of about the $150 mark to fly to Melbourne on Qantas, and then were “lucky enough” to fork out about $300 for the horrid Jetstar experience, were not only getting their $150 back, but another $150 to ensure they didn’t pay the full price for Jetstar’s opportunistic shake down.
Over at Virgin Australia, where they are struggling to bank the money fast enough, free access to its lounges until Thursday at least was being offered to holders of Qantas Chairman’s Lounge cards (read all politicians, industrial relations judges, aviation regulators and media superstars) or the vastly more numerous platinum level Qantas frequent flyers.
Virgin Australia’s only problem with the Qantas situation appears to be growing its fleet, domestic and international, fast enough to cope with what those Qantas customers who have had it with the flying kangaroo, and recoiled from the weird Jetstar combination of over pricing for a resolutely sub standard level of amenity and service.
(Jetstar is a bargain if you get the cheap fares, but if you want flexible, last-minute scheduling, the result is something akin to uninvited physical violation while Qantas, when it operates, is often way ahead of Virgin Australia and Jetstar in useful low-fare availability with no extra charges for refreshments and a fair bit of checked luggage. )
The messaging that is already being cranked out about the Qantas grounding is mostly severely compromised. Financial analysts are largely praising Alan Joyce for his courageous hard-line stance against the unions.
But it was actually a hard-line stance against its customers. Qantas, as Joyce himself explained in detail, decided to attack approximately 140,000 travellers who have been affected in some direct way by the grounding, in order to make the dispute big enough to get lawful court-sanctioned industrial action by long-haul pilots, licensed engineers and ground staff shut down.
This was a management not a union atrocity. There is a distinct and well-articulated ideological loathing at the top in Qantas for organised labor, and putting the travel plans of 140,000 customers to the sword without warning is according to Joyce, an appropriate price for innocent bystanders to pay.
It points to a real weakness in Qantas under Joyce, in that there is none of the Virgin Australia or legendary Southwest Airlines type of staff engagement. The carrier’s workplace relations are dysfunctional. And that will come at a price in terms of the customer experience as well as productivity.
Much of the commentary about brand damage to Qantas ignores the fact that management cares less for that than the opportunities it sees in the trans border Jetstar franchise and its nascent Asia-based premium small jet carrier.
The pilots, engineers and ground staff were the dissenting voices that raised the difficult question about the dishonesty of Qantas branding offshore-based jets in its livery with the words Spirit of Australia along the side, as well as issues with rotating Asia-based staff trained through domestic flights in order to lower costs.
The very Australian brand values of Qantas have not only been damaged by the grounding, they are, on the public record, of lesser importance to a management determined to exit what it sees as the costs of unaffordable excellence in legacy standards in the full service international Qantas operations.
There is a food chain in the value of Qantas as a business in that the loyalty program, which largely depends on earning points for overseas flights, is being broken by running down the reliability and relevance of this supposedly loss-making division.
Does Qantas really care about repairing that food chain? Perhaps not nearly a much as the chorus of Joyce defenders think.