The Qantas Crusade

To the Qantas Board, Open Letter

Dear Board Members,

As a Platinum Frequent Flyer with Qantas and 40 years patronage, I am disappointed with Alan Joyce’s brazen support of SSM; like most frequent flyers, I am not interested in your CEO’s opinion on any social issues. On a plane I am only interested in safety, service and scheduling.

Qantas have peddled their internal policies with gay dating in their in-flight magazine for some time. This has now blown out to include their campaign with ‘Same Sex Marriage’ messages on boarding passes and black open rings for staff.

It is easy to see the temptation to use decades of careful investment in a unique and trusted national icon to campaign for social and political issues….but hard to imagine the diligent research and responsible management processes that demonstrate that these actions improve customer franchise and investor returns.

Two obvious issues that come to mind immediately are: does this overt and emphatic support of the SSM platform place Qantas customers at risk of terrorist reprisal, as the only airline in the world with such a position; what does this mean for dissenting staff who for reasons of personal conscience and democratic privilege do not support the SSM platform?

To the extent to which we can find objective measure of the performance of Mr Joyce and the new culture at Qantas, the data appears worrying. Since his appointment in late 2008 it would appear that:

• Qantas has slipped from #2 to #9 in the global rankings in the World Airline Awards. (This week I have come off a Qantas flight from the US and the plane is best described as old and shabby.)
• Average EBIT margins have been 1.5%, Air New Zealand for the same period has achieved 5.9% (3.9X)
• Return on Equity a staggeringly low average of 0.5%, Air New Zealand 10.6% (21.2X)
• Dividend Payout Ratio 28%, Air New Zealand 100% (3.6X)

Recent improvement in performance has only been achieved as the result of massive asset write downs, huge redundancies and a very significant favourable shift in fuel prices.

In the circumstances, it is surely incumbent on the Board of Qantas to demonstrate to the public that the decision to place Qantas at the forefront of the SSM movement in this country has been carefully researched and is in the best interests of customers, shareholders and employees; in addition it needs to be clear that the personal crusade of the CEO has not impacted on the extraordinarily poor performance of the national airline during his tenure.

As to the Ban on a 67 year old “Pie Man”, this reaction is petulant and hissy, and I expected better from Qantas.

Bans go both ways, I have banned all my staff from travelling with Qantas, as you are no longer providing good service or value for money. But mainly we are offended by your selective presentation of SSM as part of our flying experience, which we consider is both dangerous and unnecessary, instead of focussing on the prime task of making a good airline great.

Dr Stuart Ballantyne, CEO
Sea Transport Corp
Australia, China, Hong Kong, U.S.