Qantas using crisis to build reputation

Through the clouds above a freezing cold London sky it appeared first as a giant shadow and then gradually took form. Only after it landed at Heathrow could anyone make out the red and white livery and the Kangaroo on its tail. Qantas’ first A380 flight since one of its fleet suffered engine trouble over Indonesia on 4 November had landed.

And one of the first passengers off the plane was Qantas CEO Alan Joyce. It is Joyce, a 44-year-old Irishman, who has personally taken control of the airline’s reputation during the severe turbulence that has surrounded it in recent weeks.

First were the problems with Qantas’ all-important new A380 fleet. Next, two pilots made allegations about outsourcing and the impact it was having on quality control at Qantas. Those comments were echoed on Monday when an anonymous member of an Australian trade union again suggested that Qantas’ fleet was poorly maintained. And worse was yet to come. While Joyce was mid-air over the weekend another Qantas flight to London, this time a 747, was cancelled after an electrical fault.

It’s a mighty set of circumstances to manage – and yet the smart money remains on Joyce riding out the storm. For starters, the past three weeks have witnessed a masterful demonstration of crisis management. As soon as the A380 emergency hit, Joyce took direct control. It was a lightning quick response and one in which he immediately placed the emphasis on the aircraft’s Rolls-Royce engines and not on Qantas’ service record.

That means reinforcing and reiterating the message behind the so-called ’Rain Man moment’

More than a dozen media interviews have followed and each time his emphasis has been on Qantas’ safety record and on communicating updates and reassurance to concerned passengers. Flying on the first A380 since the safety scare is the final touch on what many are hailing as a textbook crisis management performance from Joyce.

Review the past quarter century of brand crises and the following ratio of about 16:3:1 emerges. For 80% of brands that undergo a crisis – like the current tribulations of Toyota – the emergency does enduring damage to brand equity and results in declining sales and profitability. For 15% of crisis-hit brands – like Maclaren which underwent a severe crisis last year with its baby strollers – the best result it can achieve from its crisis management response is to re-emerge with its reputation intact and sales eventually back to normal.

For Joyce and Qantas, however, the objective is much more ambitious than to simply return the brand and its bottom line to pre-crisis levels. Joyce wants to be part of the 5% of brands that actually build brand from a crisis, as the comments he made last week on Australian TV indicate: “These issues demonstrate a strong positive safety culture, because when we found out a problem with an engine that had a design issue, we grounded the fleet until we knew how we could fix the issue. I think it’ll actually do our brand really good in the medium to long term.”

Yes, that’s right. Joyce is going to build brand equity from the crisis, not just recover it. Students of PR will know this as the famed “Tylenol 180” strategy named after the painkiller brand that not only recovered from a poisoning scandal in the Eighties but went on to increase sales and brand equity as a result of the way it handled the subsequent fallout.

The key to Tylenol’s success, and Qantas’ ambitions, is to ignore the very generic PR doctrine that tells all brands to act the same way in a crisis and to use brand positioning to guide the response in a very specific direction.

For Qantas, that means reinforcing and reiterating the message behind the so-called “Rain Man moment” when Raymond Babbitt – the character played by Dustin Hoffman in the Oscar winning 1988 movie – proclaimed that he would only fly Qantas because it was the only airline that had never crashed.

Qantas, like all major airlines, did suffer several fatal crashes early in its history but the perception has stuck and the quote from Hoffman’s character combined with almost six decades without a fatal accident has built an image of infallibility and reliability around Australia’s national airline.

For Joyce, the big challenge is how to use this current crisis to reinforce rather than retract his brand’s safety pedigree. On his side, brand perception and a very deep reservoir of brand equity that many of Qantas’ competitors can only dream of. Recent innovations like instantaneous check-in, immediate baggage drop-off and the funky elan of Mark Newson’s designs for the airline have left Qantas light years ahead of most European carriers.

At least that’s what I am telling myself dear reader. Because I am writing this from Qantas’ first class lounge in Melbourne waiting for a 747 to take me home to London for Christmas. Rarely has a columnist wanted to believe his words so badly as now.