My 7 Point Plan to Fix Qantas if I were CEO
1. Team re-engagement
Happy staff = happy customers = happy profits = happy shareholders – let’s keep that formula in mind from now on.
Every staff cut I make I reduce my salary and the salaries of the top 100 paid people in the company by the same %
Every wage cut I make I reduce my salary and the salaries of the top 100 paid people in the company by the same %
If, in two years time I don’t get 55% of the vote of a special staff happiness meeting to keep my job I resign on the spot and will stay only as long as necessary for the Board to replace me. If I’m your leader I want you to be behind me (and not with knives).
Dear Unions, I know I need you but you need me too – let’s stop being pricks and work together, but no more meetings with my underlings – here’s my number – you got a bitch? Call me, and I’m turning up at every renegotiation from here on in and handling it personally.
Also Unions, you might represent them but you are not the staff of the company – I respect your position but I reserve my right to go direct to my team too – they need to know I’m on their side. These people “used” to be be the best in the sky – I bet if we work together it won’t be long before they’ll be the best again.
Pilots – you say the books are cooked, the old management says they are not – let’s find out. One thing I’ve learnt about running a company is that the numbers never lie but sometimes you just can’t see what they are saying to you right in front of your face.
So you and your Union appoint any reputable accounting firm in the country, we’ll concoct bullet proof confidentiality clauses and we’ll throw open the books. They can have access to every account, every record, every person who handles the dollars in the company and they can fly anywhere within the net work for free. If anybody blocks them I’ll personally kick down the doors – 100% transparency.
They’ve got three months and then we all get together and discover the truth. If they’re right we’ll work together to fix it, if the old accounts are right then cop it on the chin and we’ll still work together to fix it.
Then we’re all at least on the same page.
Dear Virgin, congratulations, you won the capacity war – yes, yes I know we started it, but it’s over right now. We are immediately withdrawing capacity an any route where our planes are not 85% full at normal prices.
What line in the sand? We will no longer defend market share at the cost of our profitability. Welcome to the sky Virgin, now get out of our way, we’re going to beat you the old fashioned “fair” way – better product and service, not try to bully you out of the sky by dumping capacity.
Any 767, or 747-400 not already converted is grounded immediately and mothballed – we no longer need the capacity
A-330’s – why? Slow, inefficient and another type to maintain – thanks Jetstar – anything we need a plane to fly that range is going to be replaced by one of your 787’s. Love the new Business Class seats we’ve just put in you but don’t worry, I’ve found a spot for em – see below.
Yes I know that means hundreds of staff are not qualified to fly anything else – they’ll join my customer re-engagement program below until we can get them re-qualified.
We lease immediately 777-ER’s and LR’s. It’s the most efficient plane in the sky today per seat mile. And we use them to over-fly our competitors like we should have been doing for a decade.
The 777 will make it all the way from Sydney to London direct in business class mode.
(Some people, including line pilots, have disputed this claim, however Boeing approached Qantas with a special variant of the 200LR that they guaranteed would make the hop. On November 10, 2005, the first −200LR set a record for the longest non-stop flight of a passenger airliner by flying 11,664 nautical miles (21,602 km) eastward from Hong Kong to London. Lasting 22 hours and 42 minutes, the flight surpassed the −200LR’s standard design range and was logged in the Guinness World Records. The theoretical distance from Sydney to London is 9173 nautical miles).
Let’s put business and premium economy only on the 777’s and fly ’em direct everywhere they can go. It shaves 4 hours off the trip to LHR and it’s mostly overnight so our passengers will love just sleeping and/or catching up on work.
Leaves more room on the A380 for economy seats – let’s cram em in and have a sustainable competitive price advantage over everybody else.
Once the 787 is up to speed we’ll rethink the rest of our fleet then but be assured we’re going to focus on utility and product first.
First we have to accept our planes are flying half empty. We will reduce capacity immediately but we still have monster planes (A 380’s and 747’s) flying half to 3/4 full. doing the same thing and expecting a different result is silly so let’s mix it up and get innovative.
Business Class is Full, Premium Economy is Full and First Class is full of frequent flyers on points. Economy is half empty so something’s wrong in our mix.
We had 3 class planes 30 years ago and for some reason we’ve been spending hundreds of millions bringing our planes back to 3 classes now even though our most valuable passengers want to fly on their points* in First. (*This is a well known perk – clock up the frequent flyer points by spending big on your Amex – Amex PAYS Qantas for the points – which is why FF is their most profitable division so Platinum First, Platinum and Gold members who fly all year to maintain their status get a “free” flight in First for their holiday – everybody wins, but if there’s no First I don’t get my number one FF perk and so I may as well fly any airline).
Our top earning competitors have four classes – First, (best in the sky), Business, Premium and Economy.
Air NZ has a world leading Business Class, Premium Economy, Snuggle Seats and Economy at bigger seat pitch and width than our competitors and they just made a record profit and increased staff pay by 7%. Maybe we got it wrong?
Stop pulling first class out of our planes. It’s the hallmark of a Heritage Carrier, all our competitors who are making money have it, and our best customers want their Free First perk. Make it better, but not through hundreds of millions in seats etc – what can we do in soft dollars to make it better and better – food, drink, perks, amenities, etc.
Our planes aren’t full so make economy better too – increase pitch – we can do that immediately at virtually no cost – instant marketable competitive advantage.
Premium economy is a snap – add the same business class seats as we have on domestic planes (we’re replacing the old ones with those new special A330 cool kit anyway) – people will love that and no development cost!
5. Re-Engage the Customers
Every staff member not doing something now (Qantas has hundreds of flight crew awaiting re-training for example), every senior manager, and everybody from every area on the business starts sitting on our planes and talking to customers, “Hi, I’m Peter, I work in baggage, and I want to know how I can make your time on our airline better?”
Senior Management are forced to spend at least one day a week on the front line interacting with customers in every area of the business – check in, baggage claim, Qantas Club desk, call centre.
And then everybody gets together in small groups once a month to brainstorm ideas.
The ideas that rise to the top are implemented. Innovation is brought back and the team and customers are re-engaged.
And if you haven’t got it already stop the hating of frequent flyers (and them actually wanting to use their points). We make more money out of our frequent flyer program than we do out of flying – let’s make it easier for them to redeem. The more they redeem the more we get paid, the more money we make and the happier our frequent flyers (umm, frequent is good right?) are with us. Tick that box!
Let’s commit Jetstar’s world domination strategy to the “seemed like a good idea at the time” basket and seriously review what’s going wrong there.
We took the best discount airline in the world and tried to roll it out internationally but for some reason that didn’t work.
Nobody seems to know why as there’s been no transparency, so let’s start with that – open the books and let us figure it out together.
Time to review and get it right or bin it.
7. Marketing and Brand
Flogging kangaroos and kids singing “I still call Australia home” obviously isn’t working. They might be award winning ads but in the time they’ve been running we’ve lost 50% of market share.
Let’s try something else – selling our product, selling our service, selling our people, selling our innovation and selling our safety. That’s what made us great, that’s what people want and we’ll gawd dang give it to em.
End of story – give us two years and we’ll be back baby!!!
I write this not because I personally am gunning for the CEO’s job – I am not – I’m sure there’s better qualified people out there than me to run an airline (although I’d love a consulting gig on product, brand and marketing which are my areas of expertise), but to articulate a vision, in simple language that is based on my own personal observations as an informed customer.
As a consultant first stop is always “ask the customers”. Second is then “ask the staff”. There’s not a lot I need to know outside those two sources.
I’m sure that as a newly appointed CEO, if I sat down with staff across the airline I’d figure out the holes in my strategy and how I’d need to modify my plan. But this would build even more engagement from the team, rather than what happens at the moment at Qantas – edicts from on high with no transparency or buy in and no obvious vision behind them (apart from “cut costs at all costs”).
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