Alan Joyce’s decision to shut down Qantas mainline services over the weekend could result in a win on the industrial relations front, but it seems that the damage done to the brand will see it suffer for some time.
The shock decision to ground all flights from Saturday afternoon indefinitely before a formal lockout commences at 8pm on October 31 has over 70,000 passengers around the world in limbo. Many have turned to Twitter and Facebook to vent their spleens about the inconvenience, while the 24 hour news channels are helping to fuel that discontent further.
Reading through some of those comments, it seems that most of the public are not buying the idea that Qantas was forced into a corner by the three unions who have been involved in industrial action over the past few weeks. Reports are that bookings over the next few weeks had plummeted, particularly after TWU head (and possible future Labor Party president!) Tony Sheldon warned passengers not to book on Qantas to avoid being inconvenienced.
Then there are the simple dollars and cents. Joyce told media recently that the industrial action thus far had cost nearly $15 million a week, but that pales into insignificance over the $25 million per day that the grounding of the airline is having. That is one expensive exercise, particularly if it drags on into the next week.
Even if it is resolved soon, a number of major Qantas customers (notably the high tier Frequent Flyer members) have been inconvenienced already, and given that many are now heading to Virgin Australia, Singapore Airlines and other competing airlines, many will be happy to leave behind Qantas at least in the short term. Virgin Australia in particular has been given the opportunity to show off its wares to very valuable business clients, and you can bet that some of those clients are now being impressed with the Virgin product.
Then there is the consideration for the alliance partners such as British Airways who have also been massively inconvenienced by the disruption. Joyce had earlier highlighted this as a key part of its international strategy going forward. Partner airlines will not be taking this lightly, and there is no doubt that execs of other Oneworld carriers s will be questioning this move, particularly where they are being left to pick up the pieces. Joyce’s phone will no doubt be running hot over the next few days, and it will take some time to explain to the partner carriers’ CEOs. It won’t be enough to force termination of these agreements, but it will definitely strain them.
With past disruptions, Qantas management have boasted how resilient the brand is. My fear is that this one will stretch that resilience too far, and no matter the outcome it will be a long road back for the Flying Kangaroo.