There were no bells and whistles for a subdued Vanessa Hudson as she stood with her head down, barefoot and jacket off, waiting to clear security at Melbourne Airport on her first day as the new chief executive of Qantas.
Instead of the normal first-class, five-star international roadshow she should have been on to talk up Qantas’s record $2.47bn profit, Hudson and her new chief financial officer, Rob Marcolina, were instead hearing from domestic staff about what had been going wrong.
“I think investors would prefer I was doing this,” Hudson said of her decision to cancel the roadshow, at the chance encounter in Tullamarine.
Hudson is right. Qantas has self inflicted “serious, long-term damage” to its brand over the past 18 months as its lurched from illegally firing staff, stranding passengers, record baggage losses, and failing to take customer phone calls; to selling tickets for already cancelled flights and lobbying Canberra to block competition from Qatar while simultaneously charging record high airfares on routes the two would have faced off on.
The nation’s biggest airline is now in need of a serious reset.
Like fellow branding powerhouses such as Westpac, consulting giant PwC, AMP, Crown Resorts, and Star Entertainment, it will need to do a mountain of work to win back trust, experts say.
“It’s not the first example of an Aussie institution letting us down with self-interested behaviour,” says Kantar head of brand strategy Ryan France.
Think about “the banking royal commission, AMP, Westpac, insurers refusing seemingly reasonable claims, Scott Morrison’s multi-ministries. We can’t trust the motives and transparency of our institutions”.
The flying kangaroo has brought Australians back home for generations, says Mr France, who says the problem with such powerful positive emotions from a brand brings the potential for backlash.
“Stronger positive emotion creates the potential for stronger negative emotion when we feel betrayed whereas the same behaviour from a lower profile brand would not generate the same level of emotion,” Mr France says.
The higher you fly, the harder you fall, so the saying goes.
It was certainly a big fall from grace for Alan Joyce, who made a shock announcement on Tuesday to bring forward his retirement by two months to the next day, in an effort to lance the sore on one of Australia’s most valuable brands.
Mr France believes this will help because the average customer will disassociate Qantas’ corporate behaviour from the longer-standing Qantas customer-facing brand.
“These behaviours get pinned instead to Alan Joyce, or the Alan Joyce era,” says Mr France.
Brand expert Mike Wilson, who chairs media agency Hatched, also believes the negative brand impact is “strongly associated with the outgoing CEO,” and could dissipate with the right approach.
“Given the acute attention right now, even ‘going dark’ (pulling all communications) will be seen as a calculated move, so every step needs to be considered, as everything will be scrutinised,” Mr Wilson says.
Qantas needs to put out a statement of intent, and some straightforward key goals, and then a relentless, visible action plan to deliver them, Mr Wilson says.
“Actions, of course, in this case will speak far louder than words. It can happen relatively quickly. There’s still a lot of latent love for the brand, so the brand equity needle can move positively, quickly,” he says.
It will need to.
Data from Roy Morgan shows Qantas has plummeted from one of the country’s most trusted brands to one of its most distrusted. In the nine months to June, Qantas fell 181 rankings. To put that in context, over the same period, Australia’s most distrusted brand Optus fell only 18 rankings.
Roy Morgan chief executive Michele Levine says this distrust has turned Qantas into a fragile brand, leaving it vulnerable to competitors, litigation, and increasingly vulnerable to government action given that its political capital has all but evaporated.
“Ms Hudson will need to consider distancing herself from the Joyce era, convincing the board to pay back the $900m in JobKeeper payments, refunding all flight credits, and conducting a campaign delivering more palatable airfares,” Ms Levine says.
“This Qantas level of toxic distrust takes years to repair, and it starts with the board recognising and apologising for the moral blindness it has exhibited since Covid.”
But does something so intangible, like a brand really matter? Very much so, as it turns out. Ms Levine uses AMP as a case study in getting things wrong.
“A catastrophic level of distrust in AMP following the Hayne royal commission’s revelations of AMP’s unethical and immoral behaviour toward clients led to more than $25bn in cumulative cash outflows from AMP’s wealth management arm since 2018,” Ms Levine says.
After the royal commission, AMP’s FY18 net profit plummeted by 97 per cent, and its share price crashed.
“AMP became the most distrusted brand in Australia – it even pushed Facebook out of top spot,” recalls Ms Levine. “Subsequent sexual misconduct allegations against executives only fuelled the distrust blowtorch.”
The most distrusted company now on Roy Morgan data is Optus, which is in the position following a widespread hacking scandal that impacted 10 million current and former customers, but the No.2 telco is seeing “green shoots” of brand repair, according to Ms Levine.
“The lessons for CEOs suffering the kind of brand shock that Optus and Medibank faced is to be alive to soaring distrust, be upfront with the public from day one, and tell the truth simply,” she says.
“None of this is rocket science but how rarely do we see it?”
It’s a fact that Qantas director Todd Sampson, who is an advertising specialist and co-host on the marketing discussion program Gruen, certainly should be able to hammer home to a board considered to have been asleep in the cockpit while the airline veered off course.
Mr Wilson figures Mr Sampson should be able to explain to the rest of the board – if they didn’t already know – that brand is critical.
“Brand value is immensely important – it increases the chances of customer loyalty; it helps businesses charge higher prices; it can help reduce marketing costs, as businesses are already familiar to the market, and of course it can contribute to increased company valuations,” Mr Wilson says.
Ms Hudson does not come from a marketing background but has worked across much of the business, including running the Americas, before becoming CFO and now CEO.
Sophie Ayles, an independent brand expert who is hired by some of the nation’s top companies when in need of a fix, says she is on the right track with listening to her staff.
“Vanessa can make an incredible impact given her experience across the different functions at Qantas,” Ms Ayles says.
“She needs to unite the organisation, generating belief in the brand while creating focus and momentum. A central theme needs to be putting customers first, providing people with a better customer experience, rebuilding internal culture and reigniting the love that Australians once had for the Qantas brand.”
The airline appears as if it has “turned its back on Australians” and now needs to fix the basics, says Ms Ayles, who wants Ms Hudson to be clear with customers on how they are addressing the shortcomings and solving the basics in customer experience such as ticket pricing, lost bags, lines in terminals, and increased reliability.
Like any company that’s had a breakdown in customer service, the new Qantas boss needs to break down what she’s hearing.
“What is the clear, informative and transparent advice we are providing? What changes are we making in the way we operate to care for and serve our staff and customers? What new initiatives are we pursuing to care for our customers that go ‘above and beyond’? How are we fixing the basics of our customer experience?” Ms Ayles says.
And for a whole bunch of Australians, a massive airfare sale might just shift that dial even further.
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