Soothing statement to Qantas members

Qantas has attempted to soothe its loyal customers’ concerns about their Qantas points after it was announced yesterday the airline was undergoing a $2 billion cost cutting initiative including the loss of 5000 jobs.

The statement to members comes off the half yearly results released yesterday as well as the estimated $1 million spent on the Modern Family initiative, according to The Age.

Andrew McGinnes, executive manager of corporate affairs and communications said: “Of the 5,000 job losses we unfortunately had to announce yesterday, around 1,500 will be from management and non-operational roles. Senior managers are working through a process with their teams on the detail of this, but obviously the impact will be felt broadly across the head office function.”

“For commercial reasons, we don’t disclose the cost of partnerships such as Modern Family or Ellen, but we only invest in these initiatives because they work so well. With the Ellen project, there was a 22 percent increase in bookings from the US to New South Wales alone and we’re very confident that Modern Family will generate a lot of positive exposure when it’s seen by more than 100 million people worldwide.”

The email statement Lesley Grant, CEO of Qantas Loyalty, read: “Today Qantas announced a range of measures to take $2 billion in costs out of the business over three years, including through deferring and selling aircraft, and significant job reductions."

“These are tough but necessary measures to ensure a strong future for Qantas and our nearly 10 million Qantas Frequent Flyer members.

“Let me assure you, however, that these measures will not impact your Qantas Points balance or cause your Qantas Points to expire.”

The email outlines a number of initiatives Qantas has planned to keep rewarding Qantas Frequent Flyers.

From the statement:

We will continue to introduce more everyday ways to earn and redeem Qantas Points.

On 31 March 2014, we will launch our new business loyalty program, Aquire. Australian-based small and medium businesses could earn Aquire Points through their everyday transactions, including travel, and convert them into Qantas Points in the name of an individual Qantas Frequent Flyer member.

We will continue to introduce new features and benefits to Qantas Cash, with more than 200,000 members using the prepaid facility already.

We are opening new stylish Lounges. The Qantas Hong Kong Lounge will open in March 2014. The new Los Angeles Business Lounge will open in April 2014, with a new world class Qantas First Lounge to open in Los Angeles in the second half of 2014.

The upgrade of our Airbus A330 fleet is progressing well, with the aircraft featuring new Business fully flat beds and the latest Panasonic entertainment system to feature on our domestic and international network from late 2014.

We will be introducing new member communities, in addition to our food and wine community Qantas epiQure, which will provide opportunities for members to be engaged with the things we know you are passionate about.

The results released yesterday caused a ripple of shock throughout the industry as Qantas announced an underlying PBT loss of $252 million and a statutory loss after tax of $235 million for the six months ending 31 December 2013.

CEO Alan Joyce said these results were unacceptable and that Qantas was facing some of the toughest conditions ever seen in Australian aviation, ensuring comprehensive action would be taken.

“Australia has been hit by a giant wave of international airline capacity, with a 46 per cent increase in competitor capacity since 2009 – more than double the global increase of 21 per cent over the same period,” Joyce said.

“Qantas has been undertaking its biggest ever transformation over the past four years, cutting comparable unit costs by 19 per cent over four years, but this is not enough for the circumstances we face now.

“With structural economic changes being exacerbated by the uneven playing field in domestic aviation, we must now take actions that are unprecedented in scope and depth.

“We will accelerate our Qantas Transformation program to achieve $2 billion in cost reductions by FY17. Hard decisions will be necessary to overcome the challenges we face and build a stronger business."

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