REx Management – “OUTthere” or “OUT of there”
Guys/Gals,
I managed to spend some time back in AUS during this past week and I did some travelling on the air transport network around the East coast. Basically, Australian aviation is in a mess showing severe signs of critical problems with service. The regional airlines such as REX and Eastern Australia appear to be coping poorly with schedules and service, and I’d dare say that these two airlines are not alone, given the root cause of a lot of the problems.
One of my trips was into rural NSW flying on Regional Express and this journey proved to be a real eye-opener, not because of journey with REx, but because of the reaction in rural Australia to the causes of the present dilemma at REx and the very real consequences to the customers it serves.
Interestingly, there was considerable knowledge and understanding of the root cause of pilot retention problems at airlines such as REx. Entry level salaries, remuneration to retain senior crew, recent profits, the proposed cadet scheme, schedule cancellations and a myriad of other relevant factors were all openly discussed with me by the friends and business colleagues that I went to visit.
The message was clear; rural Australia requires air transport services and infrastructure, and it won’t tolerate infrastructure or airline managements that won’t respond to the market to ensure reasonable and reliable service. It’s also not just the regional’s that came under fire; Virgin, QANTAS and JetStar also took hits from the rural community.
My return journey to Sydney left me to ponder the state of Australian aviation while watching the landscape from my window of the Saab-340. I then picked up the latest edition of REx’s in-flight Magazine, “OUTthere” (Edition No. 40, 2007, Paul Kelly on the cover).
The opening rexNEWS article, “Staying the Course”, expounded the virtues of the airline’s recent business performance and results; net profit AUD $23.6 M up 50.4%, revenue up 29%, passengers increased by 18%, capacity up 14%, taxed paid dividends, etc.
It was clear that this business has the financial capacity to deal with its issues, but is yet to do anything about it.
The final blow however, came from Page 75 & 76 of the magazine. Within the CountryBIZ section was a Special Feature containing two articles on Human Resources management. The first was “Attracting and Retaining Staff”, followed by another entitled “Mission Impossible”, dealing with the issue of recruitment challenges in times of low unemployment and skills shortages.
Frankly, I was stunned. These articles made an absolute mockery of the incumbent management at REx and the present personnel situation that they’ve not only allowed to develop, but fostered by an ill-conceived denial that all personnel require a fair days pay for a fair days work. Lowering salaries, stagnating remuneration and lowering crew numbers in the pursuit of the “investor’s nirvana” is unfair, un-Australian, and eventually leads to being unprofitable. No Business is entitled to a business at the expense of its employees.
The alarm bells are ringing and it’s time to take action.
Is it any wonder that the CEO resigned for retirement this week; I’m sure he knows what’s coming.
Dragonfly
Last edited by dragonflyhkg; 14th Nov 2007 at 05:23.