Dear Mr Joyce...

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Not going to try and be an apologist for AJ, but leading the troops through difficult change is not easy.

If even half of the murmur on this can be believed then QF's cost base, re: wages (and probably taxes) is just too high. We can lament this until the cows come home, but it simply can't be ignored at the business level. If QF was simply gouging the hell out of everyone you'd see this in profit statements and dividends to shareholders, theres almost certainly nothing 'shonky' going on whereby ticket pricing is high, wages and support costs are low and QF management and ownership is simply laughing their cough off on the way to the bank.

What we appear to be doing is classic australian whinging. We complain long and loud about the uncompetitive pricing structure, particularly domestic, but plenty of complaining about international as well, yet, at the same time, by and large, there is a lot of support for the high wage/cost base of the group too. I live and work in Australia, I do understand the ambivalence of this situation. Everyone wants to be paid a fair working wage, at the same time we all want cheaper goods and services. Unfortunately, we live in a country who's standard of living is really quite high. We can argue if its getting better or worse, but right now, in comparison to a lot of other places, and certainly in comparison to many of our neighbors, its high.

The only way through the mess would be to nationalise the airline in my opinion (and I'm not generally in favour of this type of move). Essentially run at a loss, propped up by taxpayers. In this way you can provide for employee certainty and wages and still keep ticketing more or less competitive. The alternative, to ask Aussies to pay significantly more for their tickets in order to support an 'Australian' airline and Australian jobs whilst sounding nice is simply a receipe for distaster as we won't, on the whole, accept this idea.


We all know that QF have issues with operating costs and issues with the fact that aviation is a very competitive market, we're not denying that. What we are saying is we think AJ is handling things very wrong. He is taking on the problem with a LCC mindset (eg remove privledges, cut costs etc), and that is a completely wrong mindset to take given the majority of his customers choose QF despite the fact that they are more expensive.

During the course of each day I read a few business blogs, one of the common themes that resonates around all of them is never try and sell on price. (It's also something I never do) and there is a damn fine reason as to why, there is always someone else who can do it cheaper. Considering that QF competitors includes asian airlines (where cost of living is small compared to here) and middle eastern airlines (where tax systems are very favourable towards them) I'd say that there is always someone who can do things cheaper.

They need a CEO who can put the value back into QF. So when people ask "why would I pay double the price to fly with you guys" he can rattle off some real value reasons without resorting to the usual rhetoric of "Because we're Australian" because that is not a good justified reason as to why one should part with big $.
 
The folly of cutting quality and service in an attempt to try to ensure you stay competitive in business as AJ appears to be trying to do is in stark contrast to that other corporate perk, the car. It strikes me as interesting that the car manufacturers that have succeeded most in recent times have been the M Benz's, BMW's, Audi's, R Royce's, Bentley's etc of this world where, here in Australia, they are experiencing double digit growth far outweighing that of the main stream manufacturers, some of whom are going backwards as they appear to take the same approach as AJ. Does this not show that to succeed you do not necessarily have to cut back, but rather make the value proposition attractive enough to those who can afford it? There is room for the Fords and Holdens of this world, but you ignore the BMW and Mercedes owners at your peril.

If AJ is trying to be an Australian Ford Motor Company to all then he will ruin what was once a Mercedes Benz. :!:
 
They need a CEO who can put the value back into QF. So when people ask "why would I pay double the price to fly with you guys" he can rattle off some real value reasons without resorting to the usual rhetoric of "Because we're Australian" because that is not a good justified reason as to why one should part with big $.

Spot on. We all know we pay QF more than we can buy the butt in seat miles elsewhere. Why? Because we see value in it. However that value differential is now, at least for me, negative. So I'm moving my butt in seat mile spend to other carriers who I do see delivering better value for the spend.

You are also dead right about never selling on cost. That is a one way pathway to hitting a brick wall at high speed. Not a nice thought when thinking about a aircraft full of people. :( But the issues with the Dallas flights being diverted to refuel, really should make you think about the systems and processes happening inside QF that would ever allowed this to happen in the first place. In my opinion, something is very wrong and I have decided to minimize my high mileage exposure to an airline which I see making decisions I find hard to follow.
 
I suggest we all do understand the situation as I'm sure most of us fight these same pressures in our businesses. But I do suggest more and more long time QF customers will vote with their wallets (even with heavy hearts) and move some portion of their flying to other carriers while still maintaining QF status for lounge access.

Yes, I don't disagree with you, I'm keeping my own options open on this as are many others. But whats QF to actually do? They seem stuck between a rock and a hard place. Their longevity is now working against them (high embedded costs, long term work force). More modern, newer (upstart!) airlines are trouncing them in the marketplace. My opinion agrees with many who have posted in this thread already, that there are a myriad things that could be done at little to no cost which would improve the customer experience, particuarly for sensitive (and valuable) customers like FFers.

Its hard to know, even if big change is coming, why these relatively simple things are not addressed. Perhaps its no more complex than the inherent difficulty in changing culture in a positive way when your organisation is large and (relatively) old. Perhaps it is truly a lack of leadership from board/CEO level filtering down into positive change on the ground?


DJ's recent lounge access change of allowing their Golds anytime access, even to the extent of no boarding pass at all, was the last bit I needed to join their corp program. I do wish Qantas all the best with making the international division profitable.

DJ's youth and pricing model is presumably serving them well here. They can take on the incumbent and try to beat them at their own game. I wish DJ all the very best of luck in this adventure as incumbents generally don't or won't move at all unless under credible threat from a pretender to the throne.
 
I can understand that Australian crew cost more but also see that there are advantage having our own looking after us .

My biggest gripe on QF domestic flights is the deterioration in the J class meals - surely the uptops must realise that the meal is important particularly on 2 hours plus flights.

Yesterdays flight in J from Broome to Brisbane ( 737) had just edible offerings - my seat mate had the alternative so we sadly compared. Maybe BME has a problem with catering requiring the lunch to be backloaded from the origin of the flight.

The celebrity chefs who design these meals must be paid a lot to see their name tainted by the association of their name and the mimilalist and unapetising offerings .

Good I feel better now - I did not pay the J fare myself, my employer did, but was still embarrassed at how little value for money they got.

Oh , I almost forgot , I asked for the wine on offer - the FA said with a straight face - red or white - both were unkown Queensland offerings - the white was not great so i stuck with rum and cokes.

I just wonder if Mr Joyce realises what is going to happen once Virgin Blue cleans up its Frequent Flier Program act and introduces business class between capital cities. The dust cloud will be worse than the recent volcanic eruptions.

Qantas will really be able to save money then -not have to decently cater for those "front of the aircraft" passengers who cost him all that money in their insatiable demand for decent food and drink.
 
The folly of cutting quality and service in an attempt to try to ensure you stay competitive in business as AJ appears to be trying to do is in stark contrast to that other corporate perk, the car. It strikes me as interesting that the car manufacturers that have succeeded most in recent times have been the M Benz's, BMW's, Audi's, R Royce's, Bentley's etc of this world where, here in Australia, they are experiencing double digit growth far outweighing that of the main stream manufacturers, some of whom are going backwards as they appear to take the same approach as AJ. Does this not show that to succeed you do not necessarily have to cut back, but rather make the value proposition attractive enough to those who can afford it? There is room for the Fords and Holdens of this world, but you ignore the BMW and Mercedes owners at your peril.

If AJ is trying to be an Australian Ford Motor Company to all then he will ruin what was once a Mercedes Benz

Yes, I completely agree. I've posted in another thread (the 'whats coming on the 24th August' thread) to reinforce another poster who believes that the 'middle market' is disappearing. This would align with your comment above. Cheap Korean car manufacturers are improving market share hand over fist, the luxury brands as you mention, are also making significant new sales and improving their market positions by more than just a few percent. All this is coming at the cost of the middle ground. I'm convinced this is the source of QF's major malaise.

I'm going to be quite interested to see what the announcements on the 24th August really are. Although AJ is blamed for heading down the LCC route with QF, and certainly the empirical evidence does appear to support this view, its hard for me to understand what type of strategy this is meant to be if its true. JQ is already filling that space in the QF group and it just doesn't seem sensible to me that you'd push two brands into the LCC space as they'd be competing with each other.

If your cost base is higher than, say, DJ, then you're logically going to have to provide a better service than DJ in order to maintain customers whom you hope will pay more for a ticket than an equivalent service flying DJ. If your regional competitors are outdoing you in service _and_ price ... and if there is truly nothing you can change to become competitive, then that, my friends, is the 'going out of business' sign in the front window.

I've thought for a while that QF might withdraw into becoming a management company and stop being operational. They'd start new services, including business class services, under a new name based out of SE Asia. I read a credible idea from the "August 24th" thread recently though which postulates the possibility that QF might remain to become a 'feeder' airline to a new QF owned business out of SIN or KUL where the real business would be conducted. Lower costs, some sort of retention of the QF logo/name and the remaining goodwill that goes with that, but at much reduced cost base. This now seems much more likely to me. We'll have to wait until the 24th to find out I suppose.
 
Yes, I don't disagree with you, I'm keeping my own options open on this as are many others. But whats QF to actually do? They seem stuck between a rock and a hard place.

The first thing they need to do is bring people back to the front lines (eg checkin \ bag drop)... The more points of contact a person has with a company, the more likely a company is to hear keywords which tell them what they need to do. This is the sort of stuff which surveys will never capture.

The second, realise that once the "cat is out of the bag" so to speak in terms of extra's for the airlines FFers, it will be very difficult to reduce the new higher level of service without risking losing your frequent flyers to other airlines. FFers are the people who through either extraordinary commitment to your airline (in the case of PS \ SG \ WP \ WP1) or via payment to confirm commitment (in the case of QP). Sure insist that your FFer's do actually fly a certain amount with QF, and not just other OW airlines (as they are not really your FFers) but even down at the PS level these guys have chosen to fly you again and again. (That or done a full fare F trip)

Third, make sure that every experience is the same. Bar any unforeseen or unavoidable circumstances no pax should be leaving the flight and thinking (gee that FA really didn't want to be there). Make things consistant. This also includes making the food and drink offered on each flight the same. (exception, for morning flights offer breakfast, not last nights dinner). Plus seriously, is it really that much easier to hand out water and juice (as well as beer and wine) on SYD - CBR flights compared to also handing out softdrinks? Not everyone want's a beer on a 30 minute flight before having to hop into a car and drive (especially if you've had a couple in the QP before hand)

Fourth, there is a massive difference between a A380 skybed and a B737 convertable seat. Selling both under the business class brand is not going to win you any favours. Yes I know both Airbus and Boeing have been late in delivering promised models, in that case re-do the cabins of your current A/C's so they at least feel new. Pax don't care about how old a plane is, just how old the interior looks. The same with things like IFE... I booked a flight to PER last year, the A/C type was meant to have IFE, it got swapped out for one that didn't. This doesn't scream premium airline to me.

Fifth, if I'd wanted to book with JQ, I'd have gone to the JQ website. Having JQ flights mixed in with QF flights and sometimes with "QF" flights number attached can be very misleading. JQ do not provide a premium service, and thus there should be no risk that one could pick a JQ flight by accident. There are numerious complains on things like nonews from people who booked on the QF website but ended up on a JQ flight. Yes they should have looked at what they where doing more closely, but the reality is they are going to be rubbishing your "premium" brand to everyone they know because they paid for a QF flight (at QF prices, oftan the JQ option is the same price as the QF option via the QF website) and yet where given a seat and nothing more. Doesn't sound very premium to me.

Sixth, seriously, is a $10 lean cuisine meal too much to ask for? Yes it costs money to transport food on board flights, but you are charging a premium price for the service to cover such things.

Seventh, make your qantas clubs special again. When I decide to spend my time waiting down in the terminal to escape the noise of the QP something has gone wrong. Provide some decent food (on the ground where everything is cheaper), and thus you may not need to carry so many in-flight meals.

Eighth, the ticket price should include everything, and not just for the FFer's. After the ticket has been purchased (and with limited exception if the pax decides to take everything including the kitchen sink as checked luggage) there should be no additional fees. No fees to pre-select seats (sure lock off seats for your premium pax, but give everyone a chance to pick the seat they'd like. There are many airlines out there that let non-status pax pick seats for free), no fees to talk to someone by phone, no fees to check baggage (yes I know QF don't do this - yet). Emphasise on the fact that you pay an amount and that's it. (Don't just put up posters explaining that your "full service" as that translates to "what ever that means").


Ninth, routes which may seem unprofitable may have futher reaching implications if you hand them over to JQ... Treat JQ and QF as two separate airlines. Don't remind people that JQ is part of the QF group, don't let QF make concessions for JQ. Let them go head to head on a route and let the public decide, otherwise you risk pushing people over to other options if they don't like JQ, but feel forced to use them if they want a QF option.



Sure charge a premium for these things, but make sure that people know this is what they are getting for their $$$. You'll never win over the TT \ JQ \ AAX crowd, but that shouldn't be your aim. (as that's one fight you'll never win), but those mid level people who have some extra $$$ sitting around (but not enough to splurge on J or F) should be the ones you are targetting. They are the ones who could be QF's bread and butter. But they won't spend extra $$$ just because it's the patriotic thing to do.
 
Yep, can't disagree with any of the points made. Its a long list you have posted but well thought out and relevant. Many of the ideas would cost nothing more than chump change to implement too.

Lets see what comes on August 24th. It can't be more of the same because conflict with JQ's space is imminent.
 
Wot where they thinking.... Is it a real ad that they are going to put on tv... Wots the go with a buzzard bird... It does not make sense... Someone has probably got a big pat on the back and a pay rise... cough ad.... To my knowledge a buzzard is a bird of prey and lives of the carcus of other animals... Probably not the right bird for a tvc.
 
OMG, that ad is terrible. The analogy is appalling! And as for "5 second check in"....
 
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The more I think about it, the more I think Qantas will get into trouble for this ad. 5 second checkin is a bit like how I'm suppose to be getting 30mb/s internet.

5second checkin is available if:

You are a Silver, Qantas Club, Gold or Platinum member and have the Q Card with you.
You have no baggage to checkin,
Not sitting in an exit row,
There is an available pole nearby with no queue,
The machine actually reads the card instantly, not having to fumble around with it.

They don't have any conditions on the ad. Just 5 second checkin.
 
As post 236 the question you must ask is "What would you do if QF international was losing 4 million dollars a week and you have upset staff?"
 
As post 236 the question you must ask is "What would you do if QF international was losing 4 million dollars a week and you have upset staff?"

Fire them all and call it a "passanger enhancement"
 
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100 years... 8 years... 5 seconds..... huh??
So am I the hummingbird or the buzzard? And WTH has any of that got do with an airline? I watched the entire thing and just felt like qantas stole 30 secs of my life for no good reason.
 
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