Qantas will be investing more resources in social and digital media following the wake-up call it received after the QF32 incident in which tweets saying it had crashed had an immediate impact on its share price.
CEO Alan Joyce (left), speaking at the Australian Tourism Exchange, said that that incident showed how rapidly rumours could spread on networks such as Twitter and that airlines had to better positioned to respond.
Immediately after the engine blowout over Indonesia, a member of the public had tweeted that there had been a Qantas crash and this was picked up by the mainstream media immediately.
“It had an immediate impact on share prices,” said Joyce.
The airline responded with a press release in 30 minutes which in normal times could be considered fast but in today’s instant social world, may be a bit slow.
It now has a team in public relations monitoring Twitter and Facebook, “watching for rumours and misinformation to correct”, said Joyce.
“It’s proven to be an effective channel for us and we are investing heavily in its use for crisis management,” said Joyce.
Beyond crisis management, Rob Gurney, group commercial director for the Qantas group (right), also said it would be also investing in social and digital media for brand marketing and customer advocacy purposes.
As with Tourism Australia, he said Qantas would look at building advocates among its frequent flyers and would also develop a comprehensive programme for customer interaction.
“It helps us to have conversations with customers and we will segment our messages more carefully across different channels.
“With a big brand like us, we have to give different messages to different customers at different times and how you communicate those values will depend on the different channels,” he said.
Joyce said these were challenging times for airlines with jet fuel prices at their highest since 2008 and that Qantas would spend A$3.7 billion this year in fuel bills.
“We are one of the best hedged airlines in the world and this will allow us to ride out the remainder of the year but if fuel prices continue to rise, it will be a challenge,” he said.
Adding to this challenge has been the floods and cyclones in Queensland, the earthquake in Christchurch as well as the Japanese quake and tsunami, all of which have affected loads. The high Australian dollar, if it continued to rise, would also hurt inbound tourism, he said. “We don’t want to see a super strong Australian dollar,” he said.
Calling it a “constant crisis with short periods of stability”, he said Qantas would take a A$40 million hit this financial year, ending June 30, from the Japan crisis. It’s seen a 25% drop in volumes across Japan and has suspended services to Tokyo.
“However past experience has shown us that this is a fairly resilient market and will respond and recover fast,” he said.
Jetstar, meanwhile, remains a key part of Qantas growth strategy. “It is one of the fastest growing low cost airlines in Asia Pacific and in terms of revenue, is the largest carrier in APAC and Singapore,” he said.
The airline had seen a 46% growth out of Singapore and had grown in market share in Australia, New Zealand and Vietnam. He noted that with less than 5% low cost carrier penetration in China and Japan, “there’s tremendous room for growth”.
He also noted that there were opportunities for a low cost carrier in Japan, and the airline was still talking to Japan Airlines for a partnership but did not give further details.
He noted that, given its diverse portfolio of assets, Qantas was one of the strongest airlines financially to ride out any challenges.
He said IT investment would be a key plank to the group remaining competitive. “This will be critical if fuel oil prices continue to increase,” he said, and new aircraft like the A380 which is back in full flying schedule will give it a strategic advantage.
