New CEO the key to rebuilding the Qantas brand, says marketing guru Mark Ritson

For a company that’s on the verge of delivering the biggest annual profit in its history, Qantas has been earning more brickbats than bouquets. Why?

For a company that is on the verge of delivering the biggest annual profit in its history, Qantas could be seen as having a miserable time.

From this week’s poor showing at the Skytrax World Airline awards to revelations Qantas is now on Roy Morgan’s most “distrusted brands” list, it would seem the once premium brand has lost its gloss.

The Alan Joyce-led Qantas shrugged off the bad news with the admission the airline had performed poorly last year but it was now doing just as well if not better than pre-Covid.

A myriad of reasons were given for the problems of flight delays, lost bags and infinite call centre waiting times and figures now show those issues have largely been addressed.

But no amount of favourable statistics seem to be able to convince travellers Qantas still embodies the “spirit of Australia”.

At the heart of the problem is high airfares as highlighted by corporate brand analysis, airport chiefs, and the Australian Competition and Consumer Commission.

As Aussies rushed to reconnect with friends, family, clients and colleagues when borders finally reopened, Qantas – along with other airlines – charged a heck of a lot to do so.

High fuel costs were blamed but as the price of jet oil moderated, it became obvious Qantas was striving to make back what it lost during the Covid years, and then some.

It was that perception of “price gouging” and a CEO hell bent on bowing out on a high note, that undermined the premium brand in the eyes of marketing guru and international brand consultant Mark Ritson.

He said the inherent challenge of managing a brand was you had to balance the long and short term.

“The short of it means selling a lot of flights, making a lot of money, harvesting the demand, while the long of it means building future demand, delivering great experiences and building the brand,” Mr Ritson said.

“I think what we’re seeing with Qantas at the end of the Joyce era is a spectacular profit, going out in style with great bonuses etcetera but to some degree at the expense of the longer term.

“I would make a coherent argument that maybe it should be making less profit this year and putting more of that money into longer term things like more advanced planes, refits and so on.”

Mark Ritson.

Mr Joyce would argue Qantas was ploughing money into improving the customer experience, with a $100m investment in lounges and an uplift in food and beverage offerings.

Later this year Qantas planned to overhaul boarding procedures to help speed up the process, and roll out a new app to allow passengers to keep track of their checked bags.

Mr Joyce also hinted there was some good news in the wind for all those customers holding a total of $800m in travel credits, which have proven notoriously difficult to redeem.

Qantas has set a deadline of December 31, 2023 to book flights using the credits that were issued for services cancelled during the Covid pandemic.

“(That figure) has been burning down each week, and in the next few weeks we’re going to make announcements about making it easier for customers as well,” Mr Joyce said earlier this month.

Mr Ritson estimated it would take about two years to return the Qantas brand to its former glory, aided by a new CEO in Vanessa Hudson and an “exceptional” marketing team led by Petra Perry.

He said the size and history of the airline meant it was already ahead of the pack in terms of “mental availability” — or the first company people thought of when planning a trip.

“The second thing is Qantas wants to stand for certain things — it wants to be modern, it wants to be Australian and it wants to have a good service and it needs those things to be getting better in the mind of the market,” said Mr Ritson.

“The third one is are we making a significant profit each year, because brand makes an enormous contribution to profit. It creates demand when the brand is strong and crucially it creates price insensitivity so people are prepared to pay more for Qantas.”

The challenge going forward was evolving the brand which was much harder than it sounded, said Mr Ritson.

“Australia is a moving target, we’re a young country and the fact Qantas has to represent Australia means that it also has to keep reinventing itself,” he said.

“Qantas has to read the room carefully to get that right, and stand for the things Australians care about, to be able to charge a premium and still get demand.”