Qantas CEO exits early after lawsuits hit airline – How has the flag carrier’s brand been impacted?
September 21st, 2023, Samuel Tan

Qantas CEO exits early after lawsuits hit airline – How has the flag carrier’s brand been impacted?

On September 6, Alan Joyce stepped down as CEO of Qantas Airways two months ahead of schedule, handing over leadership of the Australian flag carrier to former CFO Vanessa Hudson.

His abrupt departure came days after the airline faced legal action from the Australian Competition and Consumer Commission (ACCC), for allegedly selling tickets for thousands of flights that had already been cancelled over a three-month period in 2022 – which had followed on the heels of a class-action lawsuit that accused Qantas of failing to refund passengers for flights cancelled during the COVID-19 pandemic and illegally retaining billions of dollars of customer funds.

Barely a week after the leadership change, the High Court of Australia unanimously ruled that Qantas broke industrial law by illegally firing 1,700 ground staff at 10 Australian airports in 2020, upholding an earlier federal court ruling which the airline had appealed against.

Following this tumultuous string of high-profile lawsuits, how has Qantas’ brand health been impacted?

Latest data from YouGov BrandIndex shows that consumer sentiment towards “The Flying Kangaroo” has soured sharply as news of its alleged misconduct spreads far and wide.

Qantas’ Buzz score (which measures whether consumers have heard more positive or negative things about a brand in the past two weeks) hovered around 10 points for most of July, but dipped to 7.7 on August 21 when it was served a class-action lawsuit for allegedly withholding refunds on cancelled flights, then dropped to 3.1 on August 31 when the ACCC started legal proceedings.

By the time Joyce stepped down on September 6, Qantas’ Buzz score had entered negative territory at -1.9 – which meant more consumers heard something negative than positive about the brand over the past two weeks – before plummeting to -7.2 by September 14, a day after Australia’s top court ruled that the carrier illegally fired 1,700 ground staff during the pandemic.

Consumer impression towards Qantas took a similar nosedive. Between the class-action lawsuit on August 21 and Joyce’s early exit on September 6, the airline’s Impression score lost 10 points – declining from 26.9 to 16.9 – before falling to 8.3 the day after the High Court ruling, on September 14.

Meanwhile, the flag carrier’s Index score (an overall measure of brand health calculated as an average of Impression, Quality, Value, Reputation, Satisfaction, Recommendation scores) more than halved over the same period: tumbling from 21.5 on August 21 to 10.2 by September 14.

Data from YouGov BrandIndex also reveals that Virgin Australia has emerged as the main beneficiary of Qantas Airways’ ongoing crisis. Virgin’s Index score, which was neck to neck with Qantas in early August, has started on an upward trend since late August – as Qantas’ Index score moved in the opposite direction.

Between Qantas’s class-action lawsuit on August 21 and its change of CEO on September 6, Virgin’s Index score rose from 25.1 to 27.6 points – before climbing to 28.8 by September 14, after Australia’s top court ruled Qantas has illegally fired ground staff during the pandemic.

During this period, Virgin also launched a baggage tracking tool covering more than two-thirds of its domestic network in Australia, and a self-service flight rebooking tool for business passengers whose flights have been disrupted.

Qantas’ smaller rival Bonza Aviation also recorded slight gains in consumer sentiment over the same period. The low-cost carrier saw its Index score increase from 3.1 on August 21 to 4.7 by September 14, although this remains more than five points lower than Qantas.

With the ACCC, on September 15, planning to block an upcoming partnership renewal between Qantas and China Eastern Airlines – which allows both companies to coordinate passengers and cargo movement between Australia and China – on grounds of breaching competition laws, and Qantas’ new CEO ordered by the federal court on September 20 into mediation with the Transport Workers’ Union to settle final compensation to the 1,700 ground staff illegally fired during the pandemic, how will consumer perception towards Qantas change? YouGov BrandIndex’s daily tracking of consumer perceptions towards the brand will allow interested parties to see just how much – and how soon.

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Methodology: YouGov BrandIndex collects data on thousands of brands every day. Buzz scores are based on the following question: “Over the past two weeks, which of the following brands have you heard something Positive/Negative about (whether in the news, through advertising, or talking to friends and family)?" (Net score). Impression scores are based on the following question: “Overall, of which of the following brands do you have a positive/negative impression?” (Net score). Index scores, an overall measure of brand health, are an average of Impression, Quality, Value, Reputation, Satisfaction, Recommendation scores. Figures are based on a 4-week moving average. Learn more about BrandIndex.

Cover Photo by Robert Cianflone