Qantas brand hangs in balance
Consumers appeared to remain loyal to Qantas in March despite its February announcement it would slash 5000 jobs, although experts have warned the future of the brand still lurks in the danger zone.
March actually saw a 10% rise in consumer spending with the airline, according to the April Consumer Spending Series report from personal finance site Pocketbook. Meanwhile, rival airline Virgin Australia fared fractionally better – with consumer spending up 11%.
The findings are not dissimilar to those of last month’s Pocketbook report which revealed Qantas’ share of total airline spending had steadily increased from 32% in September 2013 to 35% in February 2014.
“It appears consumer behaviour is difficult to change, and the recent negative publicity around Qantas might have provided the marketing boost it needed to rally the Australian public,” the site’s co-founder Bosco Tan said.
However, last month’s Brand Finance Australia 100 study of the country’s “most powerful and valuable” brands found that, although Qantas remains Australia’s most valuable airline brand, it has slipped further down the overall rankings, from 14th to 17th.
It also showed that Virgin was closing the gap amid the flurry of negative press surrounding the Flying Kangaroo.
“Qantas’ problems are bad news for Brand Australia,” Brand Finance said.
“The national carrier flies the flag for Australia internationally. It is the first point of contact many visitors have with the country and its tailfins advertise Australia’s importance to travellers at airports worldwide.
“If Qantas were to fail, it would have a significant impact on attracting tourism, skilled people and investment to Australia.”
The real issue is whether Qantas can maintain its service levels amid massive redundancies and cost-cutting, according to managing director of brand strategy firm Clear Alan King.
“At the moment, people are prepared to be a little bit more money to fly Qantas because it’s better service,” he told Travel Today.
“But if they are making all these redundancies and stripping all these costs out, I wonder what it’s going to do to the actual service levels on Qantas. At what point does it become not worth the extra money?”
While King acknowledged Qantas’ position as an iconic Australian brand, he stressed that consumers’ emotional loyalty “only extends so far”.
“Australians are quite discerning around functional aspects of service delivery,” he said.
“If they’re not getting perceived value for money and service experience is starting to suffer, they’re not going to pay the premium that Qantas asks them to pay.”
Aussies also have a soft spot for the “underdog”, King added. He highlighted Virgin Australia as an important “challenger brand”.
“There’s a real opportunity for them in the current environment to take Qantas’ customers – while Qantas is stripping out, Virgin is putting in.
“With some clever management from Virgin, they could really take advantage of this.”
However, last month Qantas Domestic chief executive Lyall Strambi insisted that the airline would continue to invest in its customer proposition despite financial pressures on the group.
“It is our commitment to having the best fleet, network, service, lounges and frequent flyer proposition that make the airline the number one choice for business and leisure travel,” he said as he unveiled Qantas' new regional lounge at Broome Airport.
Email the Travel Weekly team at traveldesk@travelweekly.com.au
airlines alan king brand clear qantas virgin australiaLatest News
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