National carrier Qantas is seeking to stop the bleeding at its loss-making international business and assure its future profitability by unveiling what it dubs as one of its most significant overhauls ever.
Under wide-ranging plans announced yesterday, Qantas will scrap or scale back some of its international routes, will order aircraft worth $9 billion, and establish a budget joint venture flying into Japan and a premium airline targeting Asia, likely to be based in either Kuala Lumpur or Singapore.
The downside? One thousand jobs will go.
While the market likes the news, and Qantas shares continue to lift this morning after slumping to a two-year low last week, eyebrows were raised by the airline’s decision to splash out with about $4 million advertising its decision.
The letter from CEO Alan Joyce, published in newspapers across the country, featured pictures of children and reminders of its “unrivalled safety record.”
“We will always be owned by Australia,” it says. “We will always call Australia home.”
It’s an interesting approach. Here are the SmartCompany marketing lessons from its moves.
Australians have an attachment to the decades-old carrier, and despite their grumblings about Qantas’ pricings, or safety scares over the past few years, few would genuinely want the airline to collapse or stop operating under its own name.
Hence comments by Joyce that “to do nothing, or tinker around the edges, would only guarantee the end of Qantas international in our home Australian market” strike a nerve. Having said that, the “1,000 jobs lost” headline remains, even if the message you are selling is forward-looking. Pacific Brands found the same when it scrapped 1,850 local jobs in 2009.
Focusing on Asia may be where the growth is at, but it risks alienating core supporters who have been willing to wear higher costs for emotional reasons. Brand expert and SmartCompany blogger Michel Hogan warns the outsourcing of workers and disputes with its employees cast doubt in the minds of its passengers, who might think, “If they’re not going to support Australia, why should I support them?”
Hogan says Qantas has had a story for some time – its Australian identity and safety record. “When you ask people what does Qantas mean, there’s the flying kangaroo, Australian and safety.”
Hogan says the changes announced yesterday seem to be “out of step with what they say the brand is, so that makes me ask, what is the brand of Qantas?”
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