Small Business

What Joyce did wrong

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The Qantas lockout debacle proves a number of things. First, it demonstrates why I hate airlines for investors. Second, it shows how our unions need to get real and third, Alan Joyce is not good at marketing!

I will be surprised if the Qantas share price goes up, though if the smarties have marked the stock down because they thought this dispute would drag on until Christmas, there’s now a bigger chance that the issues will be resolved before December.

Against this, there has been brand damage. More of the travelling public will have sampled Virgin Australia and many forward planning holidaymakers as well as businesspeople will be making plans that include airlines with a lesser likelihood to stuff up the trip!

Three options

So, what did Alan Joyce get right and wrong?

Well he had to bring this drawn-out battle to a close. He had three options which he outlined on Sunday's Agenda on Sky News.

First, he could cave into the unions. Second, he could have kept battling away or finally, he could have played the shutdown card.

The first two options made no sense with the second bleeding the company of revenue and customer support. So, he was only really left with the ground zero card but I still reckon he misplayed it.

It would have been better for the marketing impact if he had laid down a warning first that if nothing changed within a week he would shut down the show.

That would have meant he would not have hurt the travellers bound for the Melbourne Cup and the businesspeople who needed to be in different places on Sunday or Monday. Obviously, it had the impact of getting the Government to act and a quick-holding solution has resulted but he has cheesed off a lot of customers and damaged the brand.

The plus side

On the plus side, he has underlined how dumb the unions have been in their attempts to keep jobs that no longer are needed with the new planes. The Qantas workers have to understand that the world has changed and it’s a more competitive environment. They don’t have to cave in but they do need to give more ground and understand that the good old days of protection and better wage and conditions outcomes have gone, unless you’re in mining!

Published on: Monday, October 31, 2011

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