Joyce ‘retires’ early 👍
As you probably already know, the executive Nathan Safe quoted in the article is that Nathan Safe…the ex President of AIPA and apparently still an operational F/O when he's not in the office 'earning' his bonus.
I recognised the name, and had a feeling it might be so, but I really didn’t want to believe it. It’s almost astonishing the level of naïveté I carried with me right through to my forties.
As you probably already know, the executive Nathan Safe quoted in the article is that Nathan Safe the ex President of AIPA and apparently still an operational F/O when he's not in the office 'earning' his bonus.
Nathan Safe needs to get out a little. Some of those legacy airlines pay a LOT more than qantas does.
Also, it's further proof that ONE union should be representing ALL pilots Australia wide. Like the Teamsters. The Teamsters wouldn't tolerate a tool like Nathan Safe.
Here here Mossberg. Going from AIPA to not just a Pilot Management role but an IR executive role is really taking the piss. How he can sleep straight at night…..who knows. Zero moral fibres in that mans body.
short flights long nights
He must be fun to have on the Flight Deck.
By allowing him to still operate as a crew member just shows the total contempt that management at Qantas has for pilots.
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Ben Fordam gave Safe a serve on his show this morning I’m told.
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From Crikey.
MICHAEL SAINSBURY
NOV 01, 2023
Qantas chief executive Vanessa Hudson is nothing if not a chip off the old block. Contrary to her calming words on her coronation, it’s clear she is spoiling for a fight on a number of fronts: with customers, staff and unions.
Rather than trying to show that the Alan Joyce era is behind the airline by working with the Australian Competition and Consumer Commission (ACCC) on a settlement, it lodged its defence in the Federal Court this week to the damaging probe by the competition regulator.
In fighting the charges, the airline is seeking to justify its actions. Just when Hudson should have read the room and settled, she instead signalled a long legal fight that will have lawyers rubbing their hands. Tying itself in knots trying to account for an inadequate and antiquated booking platform and management attitudes, the submission is a serious error of judgment, serving only to further damage its tattered brand while handing critics years of ammunition — particularly about flights really being a “bundle of services”.
Read MoreYesterday Qantas faced a Senate inquiry into the industrial relations closing loopholes bill that could torpedo the airline’s model of dividing and conquering its staff by creating myriad companies with different pay rates. It claimed that to stay afloat, it needed to pay staff (not management, of course) less — and admitted it had negotiated 43 separate pay deals in the past two and a half years.
It appears Hudson is determined to plough on with Joyce’s strategy and that of the board, which will face shareholders at the AGM on Friday. So much for Hudson saying she could count on the help of employees to show customers “why we deserve to be their trusted first choice”.
Pilots, engineers and white-collar staff who spoke to Crikey all said morale remained extremely low and Hudson had not moved the dial.
Indeed, she and her industrial relations team refuse to budge on giving a better deal to pilots at Qantas’ regional airline subsidiary Network Aviation, who are paid only 60% of the wages of mainline pilots, despite flying the same planes. A two-day strike this week has been pulled “in good faith” by the union after the two sides were ordered into mediation for four days next week by the Fair Work Commission (FWC).
It’s an early test of new rules brought in by the Albanese government and will be a closely watched battle, one the union has told its members in documents seen by Crikey to expect to be “long and hard”.
To counter an industrial action, Qantas has sacrificed regular Melbourne-to-Canberra flights, inconveniencing its customers in the east and to cover strike action with a Boeing 717. It also showed it was prepared to sacrifice other routes, such as Adelaide-Perth, flights that were cancelled today to bring in more aircraft in preparation for the strike.
“Unfortunately it’s too late to unwind these plans,” Network Aviation COO Trevor Worgan said in a staff note yesterday.
A pilot familiar with the FWC talks said: “Qantas keeps crying poor but has no financial statements to provide. We have already replaced Qantas on the Perth-to-Darwin route and many Western Australian passenger routes, so where has the money gone? There seems to be plenty of money to pay executives millions.
“Network HQ is in crisis meeting after crisis meeting and Worgan was called over to Sydney last Friday for a meeting with Hudson and there are growing concerns amongst pilots about safety.”
Read MoreIn the meantime, Hudson has raised fares across the group board by 3-3.5% — a bid to contend with, she claims, rising fuel costs, as well as to presumably try to lock in its monopolistic profits ($2.47 billion last financial year).
But there are signs the continuing industrial relations hardball may be counterproductive, as miners who rely on Network Aviation are rumoured to be exploring other options with Perth-based Alliance, a company similar to Network Aviation. It was the subject of a takeover bid by Qantas but was rejected by the ACCC and dropped by Hudson two weeks ago.
Into this mix comes newly appointed QantasLink CEO Rachel Yangoyan — yet another member of Hudson’s team with minimal operational experience — who is responsible for Network Aviation and other regional subsidiaries. She’s an accountant who worked her way up in the company for 20 years through its loyalty division.
Some of the comments on her welcome note to staff, signed simply “Rachel”, had staff eyes rolling: “Outside of work I like to spend time with my family (including my five-year-old spoodle who definitely loves me the most), attempt to stay fit and love cooking and travel.”
Stay tuned.
Post-Joyce, Qantas’ legal stoush shows nothing new under the Hudson
The new CEO is following in her predecessor's footsteps: take it to the courts, denigrate your staff and alienate your customers.MICHAEL SAINSBURY
NOV 01, 2023
Qantas chief executive Vanessa Hudson is nothing if not a chip off the old block. Contrary to her calming words on her coronation, it’s clear she is spoiling for a fight on a number of fronts: with customers, staff and unions.
Rather than trying to show that the Alan Joyce era is behind the airline by working with the Australian Competition and Consumer Commission (ACCC) on a settlement, it lodged its defence in the Federal Court this week to the damaging probe by the competition regulator.
In fighting the charges, the airline is seeking to justify its actions. Just when Hudson should have read the room and settled, she instead signalled a long legal fight that will have lawyers rubbing their hands. Tying itself in knots trying to account for an inadequate and antiquated booking platform and management attitudes, the submission is a serious error of judgment, serving only to further damage its tattered brand while handing critics years of ammunition — particularly about flights really being a “bundle of services”.
Read MoreYesterday Qantas faced a Senate inquiry into the industrial relations closing loopholes bill that could torpedo the airline’s model of dividing and conquering its staff by creating myriad companies with different pay rates. It claimed that to stay afloat, it needed to pay staff (not management, of course) less — and admitted it had negotiated 43 separate pay deals in the past two and a half years.
It appears Hudson is determined to plough on with Joyce’s strategy and that of the board, which will face shareholders at the AGM on Friday. So much for Hudson saying she could count on the help of employees to show customers “why we deserve to be their trusted first choice”.
Pilots, engineers and white-collar staff who spoke to Crikey all said morale remained extremely low and Hudson had not moved the dial.
Indeed, she and her industrial relations team refuse to budge on giving a better deal to pilots at Qantas’ regional airline subsidiary Network Aviation, who are paid only 60% of the wages of mainline pilots, despite flying the same planes. A two-day strike this week has been pulled “in good faith” by the union after the two sides were ordered into mediation for four days next week by the Fair Work Commission (FWC).
It’s an early test of new rules brought in by the Albanese government and will be a closely watched battle, one the union has told its members in documents seen by Crikey to expect to be “long and hard”.
To counter an industrial action, Qantas has sacrificed regular Melbourne-to-Canberra flights, inconveniencing its customers in the east and to cover strike action with a Boeing 717. It also showed it was prepared to sacrifice other routes, such as Adelaide-Perth, flights that were cancelled today to bring in more aircraft in preparation for the strike.
“Unfortunately it’s too late to unwind these plans,” Network Aviation COO Trevor Worgan said in a staff note yesterday.
A pilot familiar with the FWC talks said: “Qantas keeps crying poor but has no financial statements to provide. We have already replaced Qantas on the Perth-to-Darwin route and many Western Australian passenger routes, so where has the money gone? There seems to be plenty of money to pay executives millions.
“Network HQ is in crisis meeting after crisis meeting and Worgan was called over to Sydney last Friday for a meeting with Hudson and there are growing concerns amongst pilots about safety.”
Read MoreIn the meantime, Hudson has raised fares across the group board by 3-3.5% — a bid to contend with, she claims, rising fuel costs, as well as to presumably try to lock in its monopolistic profits ($2.47 billion last financial year).
But there are signs the continuing industrial relations hardball may be counterproductive, as miners who rely on Network Aviation are rumoured to be exploring other options with Perth-based Alliance, a company similar to Network Aviation. It was the subject of a takeover bid by Qantas but was rejected by the ACCC and dropped by Hudson two weeks ago.
Into this mix comes newly appointed QantasLink CEO Rachel Yangoyan — yet another member of Hudson’s team with minimal operational experience — who is responsible for Network Aviation and other regional subsidiaries. She’s an accountant who worked her way up in the company for 20 years through its loyalty division.
Some of the comments on her welcome note to staff, signed simply “Rachel”, had staff eyes rolling: “Outside of work I like to spend time with my family (including my five-year-old spoodle who definitely loves me the most), attempt to stay fit and love cooking and travel.”
Stay tuned.
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How to turnaround a business.
https://www.afr.com/companies/retail...0171212-h039l8
1. Staff 2. Customers 3. Shareholders.
Hudson and Co is in reverse gear on that one.
https://www.afr.com/companies/retail...0171212-h039l8
1. Staff 2. Customers 3. Shareholders.
Hudson and Co is in reverse gear on that one.
They aren’t business people. They’ve never run one risking their own money. Therefore they lack the skill set. They won’t understand, can’t grasp the concepts and you’re wasting your time trying to explain it.
You’re (correctly) looking at business as a people oriented exercise.
They are looking at it through the spectrum of a spreadsheet.
Diametrically opposed viewpoints.
Spreadsheets will win and enrich those with the passwords to same in the short term.
Looking at business on a people level is the reason business is actually in business. If you lose sight of that fact, your days are inexorably numbered. There is NO escaping that ultimate truth.
You’re (correctly) looking at business as a people oriented exercise.
They are looking at it through the spectrum of a spreadsheet.
Diametrically opposed viewpoints.
Spreadsheets will win and enrich those with the passwords to same in the short term.
Looking at business on a people level is the reason business is actually in business. If you lose sight of that fact, your days are inexorably numbered. There is NO escaping that ultimate truth.
Looking at business on a people level is the reason business is actually in business. If you lose sight of that fact, your days are inexorably numbered. There is NO escaping that ultimate truth.
How to turnaround a business.
https://www.afr.com/companies/retail...0171212-h039l8
1. Staff 2. Customers 3. Shareholders.
Hudson and Co is in reverse gear on that one.
https://www.afr.com/companies/retail...0171212-h039l8
1. Staff 2. Customers 3. Shareholders.
Hudson and Co is in reverse gear on that one.
I think Ansett and Virgin MK1 proved the reverse approach doesn’t work either.
the 3 need to be in balance. Joyce thought he could screw staff and customers forever, whilst lining his and shareholders pockets.
he was wrong
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JDR............Hudson clearly thinks she can continue to screw both staff and customers. Nothing's changed since Joyce 'departed', and despite all the insincere apologies, it's clear that nothing IS going to change until the idiots in charge at Qantas realize that their toxic management style is doing nothing to restore public confidence in the brand.
From a customer's point of view, Qantas represents poor value for money, is a difficult company to deal with, and the reality is that other international carriers offer a far more attractive product.
If Hudson doesn't start to change things really quickly, there will be no business left at the Dying Kangaroo for her to manage.
From a customer's point of view, Qantas represents poor value for money, is a difficult company to deal with, and the reality is that other international carriers offer a far more attractive product.
If Hudson doesn't start to change things really quickly, there will be no business left at the Dying Kangaroo for her to manage.
Of course there has to be a balance, but if you look at a business through the prism of a spreadsheet it doesn’t matter whether you are selling widgets or moving them.
Qantas is an airline. It needs to be passionate about aeroplanes and travel - that is what it does. If the passion shifts from aeroplanes to numbers, then the reason it is in business in the first place is lost. A Mission Statement of ‘enrich senior staff and shareholders’ is a VERY different thing to ‘be the best airline we can be’.
Qantas is an airline. It needs to be passionate about aeroplanes and travel - that is what it does. If the passion shifts from aeroplanes to numbers, then the reason it is in business in the first place is lost. A Mission Statement of ‘enrich senior staff and shareholders’ is a VERY different thing to ‘be the best airline we can be’.
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From Crikey.
BERNARD KEANE AND GLENN DYER
NOV 02, 2023
Australia’s least effective lobby group, the Business Council of Australia (BCA), is in dire need of a credibility boost.
Despite boasting an array of business luminaries on its board and having an open invitation in Canberra under both sides of politics, the BCA for the best part of a decade has been good only for vomiting up the same banal calls for industrial relations deregulation, increasing the GST and company tax cuts over and over again. Even the BCA’s Liberal mates got sick and tired of how ineffectual the council was in 2016.
Hapless CEO Jennifer Westacott has finally retired — taking a board gig with wage thieves Wesfarmers — to be replaced by former Liberal staffer Bran Black (because the BCA isn’t at alljust a Liberal Party front). And chairman Tim Reed — whose tenure since 2019 has been marked by… erm… well, if anyone can think of anything, let us know — this week announced he too was moving on.
Read MoreHis replacement is the opportunity for the BCA to secure that much-needed injection of credibility, because it’s Geoff Culbert, the CEO of Sydney Airport.
Culbert is best known recently for exposing the sordid tactics of Qantas (and, to a much lesser extent, Virgin) in hoarding airport slots for flights it never intended to operate. Culbert’s revelations were confirmed when the Australian Competition and Consumer Commission charged Qantas with selling tickets for ghost flights it said were only scheduled to take up slots, and which were never going to operate.
So from February, Culbert will be chairman of the BCA, which features among its most prominent members… Qantas (who can forget then-CEO Alan Joyce, who was also on the BCA board, promenading around Canberra in 2017 demanding a cut to the corporate tax rate, when Qantas was paying no corporate tax).
What better time for the council to politely inform Qantas that its monopolist ways, anti-competitive behaviour, demonstrated illegal industrial relations tactics and rotten treatment of customers are not welcome in the big end of town anymore?
If you’re looking for a good reason why big business struggles to get its message across and influence policy, it’s Qantas. The airline itself is, along with the fossil fuel industry, one of the most influential in the country, and like big carbon, has Labor in a vice-like grip that means what Qantas wants, Qantas gets. But the hatred that Qantas has engendered in the community has helped convince the community that the political and economic system is too far tilted in favour of big business and away from workers and customers.
Booting Qantas out of the BCA would be a good start in signalling that the council wants to make a serious contribution to public debate and has no truck with those who abuse and exploit Australians.
The pretext can be the airline’s ridiculous ghost flights “defence”, in which it seriously argued it doesn’t sell tickets to flights, just sells a “bundle of rights”. Obviously that’s only the latest example of the spectacular misjudgment that marks the Qantas board and executive, but the contempt for customers and persistent inability to read the room around its misconduct continues to make Qantas the poster child for corporate greed.
Read MoreIf the Federal Court accepts Qantas’ bizarre defence, it will be disastrous for consumer laws, creating a precedent in other areas of activity across the economy where services or promises of performance are made. Inevitably, the government — even this government, which is owned by Qantas — will be forced to amend consumer law to make clear that you can’t redefine your way out of a clear-cut sale of a service for money.
That’s not something that would appeal to big business — especially once such laws get to the Senate and a committee inquiry starts looking at other ways to tighten the net around business in order to enforce consumer rights and stifle anti-competitive behaviour.
The Qantas AGM is on Friday. Chairman Richard Goyder is leaving next year, but other directors are leaving after Friday’s meeting and a couple are going in February. Goyder should depart this Friday, along with alleged branding guru Todd Sampson — not just for their failings during the Joyce era but for allowing this stupidly offensive ghost flights defence to see the light of day.
If they don’t, and Sampson survives the array of institutions voting their stock against him, it’s another excuse for the Business Council of Australia to dump the most complained-about company in the country from its illustrious membership list.
If the big business lobby wants to gain influence again, it should expel Qantas
The Business Council of Australia should expel Qantas from its ranks. And its incoming chair is the ideal person to do it.BERNARD KEANE AND GLENN DYER
NOV 02, 2023
Australia’s least effective lobby group, the Business Council of Australia (BCA), is in dire need of a credibility boost.
Despite boasting an array of business luminaries on its board and having an open invitation in Canberra under both sides of politics, the BCA for the best part of a decade has been good only for vomiting up the same banal calls for industrial relations deregulation, increasing the GST and company tax cuts over and over again. Even the BCA’s Liberal mates got sick and tired of how ineffectual the council was in 2016.
Hapless CEO Jennifer Westacott has finally retired — taking a board gig with wage thieves Wesfarmers — to be replaced by former Liberal staffer Bran Black (because the BCA isn’t at alljust a Liberal Party front). And chairman Tim Reed — whose tenure since 2019 has been marked by… erm… well, if anyone can think of anything, let us know — this week announced he too was moving on.
Read MoreHis replacement is the opportunity for the BCA to secure that much-needed injection of credibility, because it’s Geoff Culbert, the CEO of Sydney Airport.
Culbert is best known recently for exposing the sordid tactics of Qantas (and, to a much lesser extent, Virgin) in hoarding airport slots for flights it never intended to operate. Culbert’s revelations were confirmed when the Australian Competition and Consumer Commission charged Qantas with selling tickets for ghost flights it said were only scheduled to take up slots, and which were never going to operate.
So from February, Culbert will be chairman of the BCA, which features among its most prominent members… Qantas (who can forget then-CEO Alan Joyce, who was also on the BCA board, promenading around Canberra in 2017 demanding a cut to the corporate tax rate, when Qantas was paying no corporate tax).
What better time for the council to politely inform Qantas that its monopolist ways, anti-competitive behaviour, demonstrated illegal industrial relations tactics and rotten treatment of customers are not welcome in the big end of town anymore?
If you’re looking for a good reason why big business struggles to get its message across and influence policy, it’s Qantas. The airline itself is, along with the fossil fuel industry, one of the most influential in the country, and like big carbon, has Labor in a vice-like grip that means what Qantas wants, Qantas gets. But the hatred that Qantas has engendered in the community has helped convince the community that the political and economic system is too far tilted in favour of big business and away from workers and customers.
Booting Qantas out of the BCA would be a good start in signalling that the council wants to make a serious contribution to public debate and has no truck with those who abuse and exploit Australians.
The pretext can be the airline’s ridiculous ghost flights “defence”, in which it seriously argued it doesn’t sell tickets to flights, just sells a “bundle of rights”. Obviously that’s only the latest example of the spectacular misjudgment that marks the Qantas board and executive, but the contempt for customers and persistent inability to read the room around its misconduct continues to make Qantas the poster child for corporate greed.
Read MoreIf the Federal Court accepts Qantas’ bizarre defence, it will be disastrous for consumer laws, creating a precedent in other areas of activity across the economy where services or promises of performance are made. Inevitably, the government — even this government, which is owned by Qantas — will be forced to amend consumer law to make clear that you can’t redefine your way out of a clear-cut sale of a service for money.
That’s not something that would appeal to big business — especially once such laws get to the Senate and a committee inquiry starts looking at other ways to tighten the net around business in order to enforce consumer rights and stifle anti-competitive behaviour.
The Qantas AGM is on Friday. Chairman Richard Goyder is leaving next year, but other directors are leaving after Friday’s meeting and a couple are going in February. Goyder should depart this Friday, along with alleged branding guru Todd Sampson — not just for their failings during the Joyce era but for allowing this stupidly offensive ghost flights defence to see the light of day.
If they don’t, and Sampson survives the array of institutions voting their stock against him, it’s another excuse for the Business Council of Australia to dump the most complained-about company in the country from its illustrious membership list.
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Exclusive
Save
ShareQantas has slumped behind arch-rival Virgin on all measures of brand trust, pride, “love”, value and transparency, damning confidential figures presented to senior managers show, revealing the extent of damage to the airline’s reputation this year.
The material, marked “prepared for internal discussion”, shows the proportion of consumers who would consider flying Qantas domestically has fallen so low that it is only two percentage points above that of its low-cost Jetstar subsidiary, and 19 points belo
The documents, dated October 12 and obtained by The Australian Financial Review, show the percentage of consumers who said they trusted Qantas had fallen from 70 per cent in August to just 49 per cent. In that time, consumers who trusted Virgin rose from 53 per cent to 59 per cent.
Qantas will hold its annual meeting of shareholders on Friday, and major investors, including the Future Fund, indicate they intend to vote against not only the company’s remuneration report but also the re-election of marketing executive Todd Sampson to the airline’s board.1 year1 dayNov 22May Qantas has been the focus of customer animosity after a sharp increase in fares and a deterioration in on-time services since the end of the COVID-19 pandemic. Alan Joyce resigned as the airline’s chief executive in September, two months early, after Qantas was accused by the competition regulator of misleading customers by cancelling flights and not telling them,
Mr Joyce’s successor, Vanessa Hudson, has repeatedly said she intends to repair the airline’s reputation. Qantas has abandoned plans to cancel flight credits accrued by customers during the pandemic, and will have to spend hundreds of millions of dollars shoring up services.
Ben McGarry, a fund manager at Totus Capital, said Qantas had been “over-earning”. He said improving customer service and replacing an ageing fleet was “going to be expensive and going to impact margins and the capital position and the ability to pay for dividends and buybacks”.
“I don’t think Qantas is a buy by any means at this level,” Mr McGarry said. “We still have a short position. Some of it is in the [share] price, but not all of it. It could be a struggle for a little bit longer.”
By March 2023, Qantas’ rating for “strong and appealing leader” fell to 58.3 per cent. Dion GeorgopoulosIn a presentation dated June 8, RepTrak outlined “pathways to recovery” including “improving perceptions of conduct, offering value for money, meeting customer needs, having a positive influence on society, as well as being seen to have an appealing leader”.
At the time, RepTrak, which monitors Qantas’ reputation and provides advice to management, said its surveys showed a significant decline in ratings for “meets customer needs” and “good value products and services”.
The rating for “strong and appealing leader” fell 8.6 percentage points to 58.3 per cent in the 12 months to the end of March.
“The crisis is ongoing with RepTrak’s ‘signal’ of a reputation crisis remaining and customer perceptions on key drivers more than 10 points lower than a year ago,” the presentation, also marked confidential, reads.
The more recent figures, described as the Brand Health AU Domestic Study, were circulated to senior managers including several who have since left the business. It shows only 43 per cent of consumers – who had flown domestically in the past 12 months or intended to in the next 12 months – said they were proud of Qantas. That was down from 59 per cent in August.
Forty-nine per cent of consumers said they were proud of Virgin.
Chris Newtown, a former executive director of responsible investments at IFM Investors who now advises industry funds, said the Qantas board should be prepared for Virgin to snare disgruntled customers. “The board will need to be watching what happens if Virgin really do go full throttle to attract both corporate clients and frequent flyers,” Mr Newton said.
The internal data shows only 39 per cent of consumers said Qantas was “transparent with its customers”, the lowest level since the measure began in March last year, when it was at 57 per cent. During that time, Virgin’s rating has increased from 46 per cent to 52 per cent, the document shows.
A Qantas spokesman said that it “shouldn’t come as a surprise that our brand has taken a hit in recent months”. “A significant amount of work is already underway to fix pain points and earn back their trust, and we’re seeing that reflected in the most recent brand research,” he added.
The airline said that the internal measures had improved since mid-October and the company was now ahead of Virgin on pride and value scores.
The collapse of Qantas’ reputation has created significant pressure on Mr Sampson’s re-election to the board. Already, Qantas chairman Richard Goyder has flagged that he intends to leave next year, as have Jacqueline Hey and Maxine Brenner. The latter two are scheduled to leave in February.
Ownership Matters, an influential proxy adviser, and the Australian Council of Superannuation Investors have both recommended a vote against Mr Sampson. The former Leo Burnett chairman joined the board in 2015.
Angus Hewitt, an analyst at Morningstar, said it would be difficult to model the damage to Qantas’ brand. “When we look at a company’s sustainable competitive advantage or its [economic] moat, we don’t think Qantas or any airline has a moat. I don’t think any customer is rusted on,” he said.
“Travellers aren’t dumb, by and large they know air travel is a commodity and when there is a mismatch between what they’re paying for and what they receive, they’ll switch,” he added. “Customers don’t care who the CEO is, they care about whether their flight arrives on time, if their luggage arrives with it, and they care about the price they’re paying.”
Internal documents reveal collapse in Qantas brand, trust
Kylar Loussikian and Ayesha de KretserNov 3, 2023 – 5.00amSave
ShareQantas has slumped behind arch-rival Virgin on all measures of brand trust, pride, “love”, value and transparency, damning confidential figures presented to senior managers show, revealing the extent of damage to the airline’s reputation this year.
The material, marked “prepared for internal discussion”, shows the proportion of consumers who would consider flying Qantas domestically has fallen so low that it is only two percentage points above that of its low-cost Jetstar subsidiary, and 19 points belo
The documents, dated October 12 and obtained by The Australian Financial Review, show the percentage of consumers who said they trusted Qantas had fallen from 70 per cent in August to just 49 per cent. In that time, consumers who trusted Virgin rose from 53 per cent to 59 per cent.
Qantas will hold its annual meeting of shareholders on Friday, and major investors, including the Future Fund, indicate they intend to vote against not only the company’s remuneration report but also the re-election of marketing executive Todd Sampson to the airline’s board.1 year1 dayNov 22May Qantas has been the focus of customer animosity after a sharp increase in fares and a deterioration in on-time services since the end of the COVID-19 pandemic. Alan Joyce resigned as the airline’s chief executive in September, two months early, after Qantas was accused by the competition regulator of misleading customers by cancelling flights and not telling them,
Mr Joyce’s successor, Vanessa Hudson, has repeatedly said she intends to repair the airline’s reputation. Qantas has abandoned plans to cancel flight credits accrued by customers during the pandemic, and will have to spend hundreds of millions of dollars shoring up services.
Ben McGarry, a fund manager at Totus Capital, said Qantas had been “over-earning”. He said improving customer service and replacing an ageing fleet was “going to be expensive and going to impact margins and the capital position and the ability to pay for dividends and buybacks”.
“I don’t think Qantas is a buy by any means at this level,” Mr McGarry said. “We still have a short position. Some of it is in the [share] price, but not all of it. It could be a struggle for a little bit longer.”
‘The crisis is ongoing’
Separate internal documents obtained by the Financial Review show Qantas management was warned that its “reputation, levels of trust, admiration and respect [were] substantially below levels recorded one year ago” in June.By March 2023, Qantas’ rating for “strong and appealing leader” fell to 58.3 per cent. Dion GeorgopoulosIn a presentation dated June 8, RepTrak outlined “pathways to recovery” including “improving perceptions of conduct, offering value for money, meeting customer needs, having a positive influence on society, as well as being seen to have an appealing leader”.At the time, RepTrak, which monitors Qantas’ reputation and provides advice to management, said its surveys showed a significant decline in ratings for “meets customer needs” and “good value products and services”.
The rating for “strong and appealing leader” fell 8.6 percentage points to 58.3 per cent in the 12 months to the end of March.
“The crisis is ongoing with RepTrak’s ‘signal’ of a reputation crisis remaining and customer perceptions on key drivers more than 10 points lower than a year ago,” the presentation, also marked confidential, reads.
The more recent figures, described as the Brand Health AU Domestic Study, were circulated to senior managers including several who have since left the business. It shows only 43 per cent of consumers – who had flown domestically in the past 12 months or intended to in the next 12 months – said they were proud of Qantas. That was down from 59 per cent in August.
Forty-nine per cent of consumers said they were proud of Virgin.
Chris Newtown, a former executive director of responsible investments at IFM Investors who now advises industry funds, said the Qantas board should be prepared for Virgin to snare disgruntled customers. “The board will need to be watching what happens if Virgin really do go full throttle to attract both corporate clients and frequent flyers,” Mr Newton said.
The internal data shows only 39 per cent of consumers said Qantas was “transparent with its customers”, the lowest level since the measure began in March last year, when it was at 57 per cent. During that time, Virgin’s rating has increased from 46 per cent to 52 per cent, the document shows.
A Qantas spokesman said that it “shouldn’t come as a surprise that our brand has taken a hit in recent months”. “A significant amount of work is already underway to fix pain points and earn back their trust, and we’re seeing that reflected in the most recent brand research,” he added.
The airline said that the internal measures had improved since mid-October and the company was now ahead of Virgin on pride and value scores.
The collapse of Qantas’ reputation has created significant pressure on Mr Sampson’s re-election to the board. Already, Qantas chairman Richard Goyder has flagged that he intends to leave next year, as have Jacqueline Hey and Maxine Brenner. The latter two are scheduled to leave in February.
Ownership Matters, an influential proxy adviser, and the Australian Council of Superannuation Investors have both recommended a vote against Mr Sampson. The former Leo Burnett chairman joined the board in 2015.
Angus Hewitt, an analyst at Morningstar, said it would be difficult to model the damage to Qantas’ brand. “When we look at a company’s sustainable competitive advantage or its [economic] moat, we don’t think Qantas or any airline has a moat. I don’t think any customer is rusted on,” he said.
“Travellers aren’t dumb, by and large they know air travel is a commodity and when there is a mismatch between what they’re paying for and what they receive, they’ll switch,” he added. “Customers don’t care who the CEO is, they care about whether their flight arrives on time, if their luggage arrives with it, and they care about the price they’re paying.”
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