Why there is no silver bullet for Qantas’ reputational crisis
When a reputational crisis strikes it’s very human to look for a quick fix. But the problems now facing Qantas are a vivid lesson for companies everywhere.
When a reputational crisis strikes it’s very human to look for a quick fix. But the problems now facing Qantas are a vivid lesson for companies everywhere.
As bad news keeps rolling in for the airline, with every critic and their dog lining up to stick the boot in, it’s clear Qantas is facing an ongoing reputational crisis. Plus a potential financial crisis too, with stockbroker Angus Aitken warning his clients last month that Qantas shares could fall 30% as the airline faces hefty spending on aircraft and its once-loved brand continues to dive.
But while the diagnosis is not in dispute, what can Qantas do to rebuild its reputation?
One thing seems very clear: looking for circuit breakers, big gestures – like handing back billions in COVID handouts or sacking the whole Board – is not the prescription.
For one thing, the company has a legal obligation to act in the best interests of its shareholders, and repaying billions of dollars to the government could well be challenged in court.
Such quick-fix responses might please some people but would have no substantive long-term impact on performance. The truth is there is no silver bullet for a reputational crisis.
Nothing Qantas does will escape negative scrutiny from a media pack that smells blood in the water. It will probably be like that for years, and they had better get used to it. Whatever actions the airline takes will be judged as a bribe, a PR stunt, a desperation move, or even worse.
Take the news that the airline has hired Boston Consulting Group (BCG) to improve its reputation with customers. Under the alarming headline “Qantas critics for the meat grinder? Airline hires bin Salman’s reputation launderer”, Crikey’s Bernard Keane wrote: “Qantas is relying on Saudi Arabian murderer Mohammed bin Salman’s top reputation launderer to rehabilitate itself in the eyes of Australians … And BCG has extensive experience in laundering the reputations of some of the world’s most evil people.”
While not all the media commentary is quite so blood-thirsty, it surely is a taste of what’s to come.
The other problem is that nothing will be soon enough. Rebuilding reputation is a long, slow business, but within months a few impatient and ill-informed journalists and media commentators will almost certainly start asking Qantas, “So what have you done? What’s different? Why is it taking so long” and some may even make snide remarks such as “Told you so. Not a job for a woman.”
When the new CEO announced an $80 million package this week to address “customer pain points” critics were quick to say “too little too late”.
The difference between brand and reputation
So what is the answer?
The first step is to remember the difference between brand and reputation. A brand is what you say about yourself. Reputation is what others say about you. Qantas therefore needs to reassess its relationship with those stakeholders who determine reputation.
Customers are obviously crucial, but first Qantas needs to sort out its ongoing industrial problems and start trying to get staff onside (not helped by the High Court decision confirming the mass sacking of ground staff was illegal). Then it needs to put genuine measures in place to address overall performance. And maybe some quiet initiatives to win back big corporate customers.
It can be done. Consider Malaysia Airlines, which used to be one of the top 10 airlines in the world. Then it lost two aircraft in 2014 – one shot down over Ukraine and one mysteriously disappeared at sea. The following year the chief executive even declared that Malaysia Airlines was “technically bankrupt”, after which it was devastated by the pandemic. However, aided by the seemingly bottomless pockets of the country’s sovereign wealth fund, the company is slowly but steadily recovering and is now spending up large to re-equip its fleet.
And late last year Malaysian was named the 26th best international airline out of 50 by baggage manufacturer Bounce’s 2022 Airline Index, including an 83.98% on-time arrival rate, and 8.01% cancellation rate.
Of course, Qantas is an entirely different case, and Malaysia still has major problems, but it illustrates that recovery is possible.
The other key step for Qantas now should be to abandon the high media profile so ardently pursued by Alan Joyce. Keep new CEO Vanessa Hudson out of the media for a while; no more self-indulgent press junkets. And please, no more meme-worthy happy snaps of the CEO yucking it up with the Prime Minister.
Images really matter. What Australian political cartoonist will ever forget the notorious 2014 photos of then treasurer Joe Hockey and finance minister Mathias Cormann relaxing and smoking cigars outside Parliament House in Canberra just before unleashing a costly federal budget?
Bottom line: Qantas needs to focus on performance, and it needs to reduce, not increase its media profile.
But my prediction is it will be advised by ‘experts’ to do the opposite.
Dr Tony Jaques is managing director of the Melbourne-based consultancy Issue Outcomes. He writes the two-weekly newsletter Managing Outcomes, and his latest book is Crisis Counsel: Navigating Legal and Communication Conflict. (Rothstein, New York, 2020)
