This morning’s sharp review of the situation at Qantas by Ian Verrender in the Sydney Morning Herald and The Age business pages points very clearly at the critical question, which is what does Qantas do now?
Verrender’s suggestion, that Qantas go back to the basics, and apply itself to being an airline of quality and relevance, seems an unlikely course for the current board or the man The Australian declared to be the country’s ‘most influential chief executive.’
The article is prompted by the failure of the brashly trumpeted Asia premium carrier plan, which did cause the occasional editorial here as well.
Verrender says of that plan:
It would be unfair to label the abandoned Asian plan as half-baked for it never reached that stage. There was no oven, no cake tin and certainly no ingredients.
But it goes further than this. The only credibility Joyce will likely have in the future in business negotiations in Asia is as a comedian, and only if the audience is in the mood to be amused rather than offended.
If Qantas is to find its future in Asia, it needs to have leadership that doesn’t blab in advance about all the things it is going to do, in Asia’s market, before getting around to telling the parties it needs to negotiate with, although it appears to have gone public when it had not even reached a stage beyond pointing to the atlas and rattling off a list of countries.
Credibility is critical to the direction of a company. It isn’t credible to tell shareholders there will be no new investment in its core product until it starts to show returns, and tie those returns to an Asian project that in what detail was revealed, seemed ridiculously fanciful, and never had a chance in hell except in the minds of a conga line of people claiming to be financial analysts.
It isn’t credible to go public with death threats before a police investigation, nor to cause a police investigation which was abruptly abandoned after some costs to the public, without at the very least producing the sort of evidence that would have the remotest chance of supporting a criminal case.
It isn’t credible to so bitterly complain about losing 82% of the overseas market from Australia to competitors, and then reduce London flights in a way that can only encourage even more of its shrinking customer base to fly there on a competing airline.
All that we seem to have gained from Qantas in recent years is ideological rhetoric against unions and its staff, whether in or out of unions. This isn’t to argue for a moment that there aren’t very real labor/management issues that companies like Qantas need to address. The trick surely is to address them in a timely and constructive manner, not stuff around for ages and then chuck a tantrum that ends with management going on strike and locking out its customers, only to result in one FWA arbitration so far that could have been reached a year earlier without trashing the brand and its shareholders.
There are other matters that really need to be at the fore at Qantas other than ideological knickers twisting. The very first one is plainly on show at Air Asia X, where the critical question is whether the low cost carrier model can be successfully applied to long haul operations, and where from it’s point of view, the answer is “N0.”
This is a critical question too for the Qantas subsidiary Jetstar. Is Jetstar, like Air Asia, going to work best within the short-to-medium haul sectors, or can it be successful to Los Angeles, London, and the major centres of the Asia Pacific further away than say Denpasar?
It is not a matter of what people might want the answer to be, but a matter as to what is reasonably possible, and this is something that Qantas needs to assess and act upon, and it requires some very hard and smart and prompt work to resolve in the interests of the future strategic direction of the Jetstar franchise and the parent full service brand.