AJ letter to Crikey Blog - QANTAS.

[Nigelinoz]

I see now why Virgin put popcorn in all of the VA lounges. Its going to be an interesting time over the next year or so.

Funny you mention popcorn Liam,the way I see it is like running a cinema,for years QF has been like a gold class cinema with reserved seats and food
thrown in whilst with Virgin Blue you still got to see the movie but had to pay extra for a seat,now with VA you get new seats and popcorn while
QF has forgotten about the big picture and is just showing the trailers.
Cheers
N'oz

 

[samiam]

Doubt this very much. Virgin would have had their changes planned well before Qantas changed their FF'er program and I have no doubt it was in the wind before Borghetti joined.

Opinion or fact?

 

[medhead]

So you can see that I'm not talking about what Virgin is doing as a catelsyst (sic) for change but the thing that is going to keep those who are switching. But these are 2 things that are happening at the same time and I suspect that having developed their plans in detail Virgin are now pushing the go button to maximise their gain from the Platinums who have been pushed away.

Doubt this very much. Virgin would have had their changes planned well before Qantas changed their FF'er program and I have no doubt it was in the wind before Borghetti joined. As I have been saying look at how Virgin Australia's product has developed, it has quite clearly been a gradual evolution over several years rather than a revolution or button pushing because you and some other platinums have supposedly been pushed away. I mean to say at present, apart from 4 or so aircraft Virgin doesn't even have it's new product so can hardly be attracting that many disgruntled Qantas passengers.

You doubt this very much? But then you repeat exactly what I implied. I can keep going around in circles all day. But lets try to bring this back to what I'm talking about. This is the thing, if you wish to criticise my opinion try actually addressing my point. I'm talking about what is happening now! The current changes. Borghetti has been there, what, 18 months and has developed a plan in those 18 months and is now implementing that plan. What happened with your gradual evolution over several years has little bearing on that plan, other than perhaps speeding up the process. Borghetti is an agent for change building on what existed.

You need to look at the timeline (recent timeline). Borghetti and team have been putting together a plan for a long time. They have it developed and started rolling it out - Delta and ANZ partnership. Then we get the QFF enhancements at the end of last year. DJ response - Status Match, that's the bait to platinum flyers who are not happy with the enhancements. That is followed by DJ improvements in the air, on board moves to the PE seats for Gold, etc - all discussed here. Then we have more enhancements to QFF. The response more announcements from DJ about their program - pushing the "Go" button on what was planned.

Virgin doesn't even have it's new product so can hardly be attracting that many disgruntled Qantas passengers.

Sorry? So when I suggest that QFF is pushing loyal customers away and hence they are switching, you respond it is because of DJ's hard work. Yet now it isn't. Please make up your mind.

In any case, back to the beginning of my point. QFF has "enhanced" customers into looking elsewhere and DJ are doing all the right things to get them and keep them. It is a mistake by Qantas to enhance those customers away, no doubt due to Joyce. It is Virgin's hard work that will keep them away.

 

[Oneworldplus2]

Don't forget, QF have had a monopoly on the J market since Ansett's demise (10 years). It's not like QF had to try to attract new customers...they do now though.

 

[Jobu]

Now, the things you can do overnight, is what Qantas are failing at. Cheaper flights, and a better onboard experience. That's seems to be why Qantas aren't going so well on the international front. (At least what I think...)

I personally find Qantas onboard (and ground) service and staff to be some of the best and generally most consistent in the industry, it's one of the things that brings me back to Qantas over and over even when they have an inferior seat compared to some of their competition.

J

 

[ajw373]

Opinion or fact?

Clearly fact, simply because there is no way they could have planned the changes in such a short period of time. Also as I have been saying the changes have been gradual over several years.

 

[ajw373]

You doubt this very much? But then you repeat exactly what I implied.

No I didn't. You have been impliying that the changes are as a reaction to the changes in the Qantas FF program. I have been saying the changes have been gradual over the course of a number of years and I do not think the changes at Qantas have altered this time line in any way shape or form. Now that is not implying the same as what you are saying.

I can keep going around in circles all day. But lets try to bring this back to what I'm talking about. This is the thing, if you wish to criticise my opinion try actually addressing my point. I'm talking about what is happening now! The current changes. Borghetti has been there, what, 18 months and has developed a plan in those 18 months and is now implementing that plan. What happened with your gradual evolution over several years has little bearing on that plan, other than perhaps speeding up the process. Borghetti is an agent for change building on what existed.

Actually don't think I have criticized you opinion, just stating that Virgin should be given due credit for the way in which they have developed over the years. I think it is an insult to their hard work to say that they have made these changes as a direct result of Qantas alienating a few of their frequent flyers such as yourself. Their ultimate plan would have been YEARS in the making, not 18 months, and to be honest I still think more is in the pipeline for Virgin Aus. Indeed many of the changes away from the LCC model were set in motion years before Borghetti. As for Borghetti, don't think he was the agent as you put it, I think he was chosen as the custodian, tweaker and implementer of changes that would have been thought up by Godfrey and co.

You need to look at the timeline (recent timeline). Borghetti and team have been putting together a plan for a long time. They have it developed and started rolling it out - Delta and ANZ partnership. Then we get the QFF enhancements at the end of last year. DJ response - Status Match, that's the bait to platinum flyers who are not happy with the enhancements. That is followed by DJ improvements in the air, on board moves to the PE seats for Gold, etc - all discussed here. Then we have more enhancements to QFF. The response more announcements from DJ about their program - pushing the "Go" button on what was planned.

Yes look at the timeline, but go back further to creation of the frequent flyer program, opening of lounges, earlier partnerships, premium economy seating, introduction of smaller aircraft. The list goes on and are the foundations of what the new Virgin Aus is all about. What has been announced recently is clearly a continuation of this evolution, and with the exception of status matching etc not one iota has been as a direct reaction to changes at Qantas in particular with the FF program as you are implying.

Sorry? So when I suggest that QFF is pushing loyal customers away and hence they are switching, you respond it is because of DJ's hard work. Yet now it isn't. Please make up your mind.

In any case, back to the beginning of my point. QFF has "enhanced" customers into looking elsewhere and DJ are doing all the right things to get them and keep them. It is a mistake by Qantas to enhance those customers away, no doubt due to Joyce. It is Virgin's hard work that will keep them away.

Actually if you have read anything I have EVER said rather than twisting my words into pointless arguments, I have NEVER EVER said anything about Qantas pushing customers away and any going to Virgin in great numbers. It is you that have been saying that. Also it is you that is saying Qantas has 'enhanced' customers into looking at DJ. Clearly that is what you have done, but again as I have been saying you seem to be on the extremity in your dislike of the changes, there are clearly others such as myself who are either generally positive about the changes or neutral about them and have not looked elsewhere.

Also I have been saying ALL ALONG the problems at Qantas (which BTW are what this thread is kinda about) are all of their own doing, by not being able to adapt into an airline with a lower cost base. As a separate issue to that (first raised by YOUR assertion that Qantas is pushing customers to Virgin and the changes at Virgin are a reaction), I have made the very valid point that the changes as Virgin are all their own doing, planned over many years, and are clearly not a specific response to any failing by Qantas and Joyce in particular as you implied in an earlier post.

The following, in post 36 of this thread illustrates my point without responding to your posts where you like to twist and turn my words, which is something you clearly enjoy doing.

It is quite true. The problems with Qantas come from within and are related mostly to cost base. So even if the market share between Virgin Australia and Qantas were to remain as is, Qantas would still struggle to generate sufficient return to stay in business. However if Virgin Australia do start to take market share, even the smallest amount Qantas's troubles will be significantly magnified.

Clearly you have a major issue with Qantas, the hundreds of posts on this board are testament to that. As I said in another thread please give responding to my posts a rest, you do that and I will do the same because it is counter productive to the board in general.

 

[Simsy85]

Hmmm i've got to preface my comments with the following:

1. I'm a card carrying member of both the Australian Workers Union and the Australian Labor Party - I believe in unions and a person's right to be a member of one.
2. I write corporate communications for CEO/Exec types for a day job (even though i'm a horrible speller!).
3. I believe any organisation that can't respond in new age media, is fundamentally dead in the water.
4. Why is it so hard to believe a CEO would use a blog? Didn't Simon Westaway use this very website?

So now that i've prefaced this, let me have my rant.

I think it was a very well written communication - Its what I would call as a back to the wall response. Typically in a role such as AJ's your always fighting with one hand tied behind your back, wether that be you can't say somthing because people will read into it too much, because it will set a policy precedent, or because the comment could hurt the underlying nature of your business. The sad thing is, these are the things that are often needed to be said (AKA if Virgin is doing so well, why the profit downgrade?).

I'll make a segway here. Take politicians. They are in this position 99.9% of the time. Imagine a State Premier who can't speak out against a Federal PM. Sure its easy for us to say you should stand up for your state blah blah blah, but the harsh reality is that your damned if you do, damned if you don't. You speak out of turn and you might get a small win for your state, but you may mortally wound the PM (please don't respond with he/she deserves it, i'm speaking about both Liberal and Labor - after all statistically, half the people in this country will disagree with you, regardless of your position). Whilst this small win might be good for you in the short term, imagine the implications.

Pretty soon your dealing with a Federal Government of a different political colour. They want to screw you on everything - and in the long term, hurt your state. Why are they there, because of what you did to the previous PM. Then you have to look at your party ties. Is your time limited? Although it was a small win for you, will this haunt you for the rest of your time in the job and past that? These are the things you MUST consider.

This is why so often Pollies go for the middle of the road approach - often governing to offend the least amount of people. That is why Rudd/Gillard have reversed policy decisions on less-popular decisions, that is why Gillard is PM not Rudd. Sure it might be easy to say don't do that, don't govern for middle of the road, but what happens then? Look at Howard - Look at Work Choices (think what you want about Unions, but they had a massive victory here). A policy framework where Howard took the ground he believe was right, but not popular. Utlimately it was the downfall of his Government and his own Seat.


Now how do I relate this to QANTAS and Virgin. Well, its not a big stretch of the imagination to think of QANTAS as the LNP and Virgin as the ALP. QANTAS is the steady hand that has guided Australian Travel for some time - has a relatively good record and has done pretty well at keeping people happy, but EVERYONE has a bad story to tell from time to time. Now take Virgin. Formed from the workering class ideas (Branson) and was designed for the workers (low airfares etc) Its been sucessful, but always run in second place.

Now VA is trying to rebrand itself (think Kevin07) become the morally repugnant superior Airline. All of a sudden QANTAS looks old, tired and even a little dull. We as the travelling public (read voters) are saying, "yeah, why not, lets give VA a guernsey" and we do so (think the 2007 election). QF responds with new and exciting things, VA responds with even newer slogans, different paint jobs and a refurb on the lounge (which lets face it, was probably in the leasing agreement anyway) - all of a sudden its starting to sound like an election campaign.

Now, how do we read Joyce's comment? We read it as last hurrah. His push to try and cut through the spin. He's the embattled PM and he's finally fighting without his hands tied. He knows that if he doesn't, quite honestly he's effed. He'll recieve the same outcome as Howard - his throat cut and his company mortally wounded. Think of this brutally raw comment from Joyce the same as Tony Abbotts "You can't believe everything I say" or Julia Gillards "From now on, its the real Julia".

My predication - Virgin will win this battle, just as Labor did the 2007 election, but it won't win the war - no-one will.

In a couple of years time VA will suffer from the same thing Labor has - The expectation of having to deliver (or more commonly known as the hand being tied behind your back) and the problem of having the keep governing (read being the lead airline) while your trying to be inventive.

What we have is a battle for the Middle Ground. VA increasing services from a budget airline and QF reducing theirs to get the biggest marketshare.

Sad thing is, no-one wins.

 

[harvyk]

Lets take airlines out of it for a minute...

If company A provides the best service you've ever experienced. You've been using them for years and never had a complaint with them, would you try company B who until now was known for providing an inferior service? (LCC's provide inferior service to full service carriers, it's almost a requirement when doing things on the cheap, and VA \ DJ's beginnings was as a LCC) What if company B said they provide the exact same level of service as company A, would you try company B just because the had a flashy ad on the TV, even though you've always used company A and are extremely happy with them?

Realistically in this senario company A needs to start making mistakes before the customer would be open to try company B. People like to stick with what they know (which is why people complain about their Bank, but rarely do anything about it)...

IMHO if QF was perfect, VA could also offer the best service in the world, they wouldn't stand a chance (why take a risk on an unknown if what you have is perfect). Because QF is not perfect, some of their customers have decided to try the competition due to being unhappy. (Truely happy customers rarely try the competition "just to see what it's like"). Thus it's because QF is not perfect customers are trying VA...