Business incident Essay Example

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11Qantas’s Crisis Handling

QANTAS’S CRISIS HANDLING

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Introduction

Effective communication is very critical for organisations and brands during crisis situations. How a business engages with customers and other interested parties during a crisis impacts heavily on its reputation and the strength of its brand(s) (Thiessen & Ingenhoff, 2011). During crisis situations, businesses use press releases, conferences, interviews and other communication channels to handle issues and provide information. It is important for individuals in business to utilise skills, resources, facts and available channels to communicate effectively during various situations (Natti, Rahkolin, & Saraniemi, 2014). This paper details an analysis of how Qantas Airlines was able to use communication to handle a crisis that resulted in the closure of its operations 2011.

Brief description of the incident

In the year 2011, Qantas airlines were faced with a major business situation that involved a protracted dispute between the company and trade unions. Since the beginning of 2011, trade unions representing Qantas workers were continuously engaged with Qantas in talks aimed at negotiating new enterprise agreements (Rourke, 2012). According to Qantas, several trade unions representing more than ten thousand workers had reached agreement with the company by October 2011; However, The Transport Workers Union, Engineers’ Union and pilots’ union had stuck to what Qantas described as unrealistic demands that could not achieve equilibrium in the interests of all parties involved (Qantas Corporate Communication, 2011). Consequently, Qantas was forced to ground its fleet and suspend operations in an attempt to mitigate any disruptive eventuality of an industrial action by the unions. The airline further locked out employees that were affiliated to the three unions (Maiden, 2011). Clearly, this was the culmination of a highly disruptive trade dispute between Qantas and trade unions representing part of its employees.

Sixty-eight thousand passengers were inconvenienced by Qantas’ move to suspend its operations due to the labour dispute. As a result, Qantas was losing an estimated A$ 20 million in daily revenue (Qantas Corporate Communication, 2011). The dispute became a matter of public concern as many Australians and foreigners rely on Qantas to travel within and outside Australia. The Australian government was also concerned about the impact of the crisis on the economy (Maiden, 2011). Qantas addressed the matter through press releases, interviews with leading TV stations, social media engagement and press conferences. Qantas message across various communication channels largely dwelled on justifying its actions and reassuring its customers of the company’s commitment to a quick solution to the problem.

Press releases

In the build-up to the crisis, Qantas issued several press releases detailing its position and opinion regarding industrial actions by trade unions representing its employees. In the press releases, Qantas apologised to any inconveniences caused by industrial action disruptions and sought to blame the situation on coordinated attempts by the Unions to cripple the airlines operations. The airline also announced its intentions to ground its fleet and lock out union employees to find a lasting solution to the disruptive industrial actions by some of the unions representing its employees. Indeed, Qantas informed its customers on the implication of its decision in relation to the cancellation of their flights and refund and fare refunds. After Fair Work Australia had ordered an end to the dispute, Qantas announced a resumption of operations through a press release (Maiden, 2011).

Qantas press releases were highly biased in favour of the airline. For instance, the company issued a press release that detailed its commitment to fair engagement with unions. In the press release, Qantas reported on how it had signed agreements with several unions that represent more than ten thousand employees. In the press release, Qantas alleged that the Transport Workers’, Engineers’ and Pilots’ unions had refused to reach an agreement with the company and should thus be considered as selfish in their course to benefit while their employer suffers financially(Qantas Corporate Communication, 2011). A press release should be objective enough to report both sides of a situation (Lehman & DuFrene, 2010). In this particular situation, the unions had a genuine concern over job losses due to offshoring and restructuring. As a matter of fact, the airline had announced 1000 job cuts earlier in the year (Rourke, 2012). However, Qantas did not address the unions’ concerns in its press releases, choosing to focus on its interests as the basis for its persuasive argument. Clearly, Qantas press releases lacked objectivity in their explanation of the crisis.

Qantas press releases were formal and carefully organised to achieve their mission of convincing the public that the airline is right and the unions are wrong. For example, Qantas presented facts including quantified effects of industrial actions on its productivity and service quality. The Airline also appealed emotionally to the public by showing how its inadequacies were a direct implication of the industrial actions. The press releases further defend the airline’s decision to ground its fleet as the final attempt to solve the dispute between it and unions. Qantas took the opportunity to apologise to its customers and Australians through the press releases (Qantas Corporate Communication, 2011). Emotional appeal and use of logic are very effective in winning arguments and convincing an audience to adopt speaker’s ideas and opinions (Newman, 2014). Qantas is clearly very successful in its use of these elements in handling the labour crisis through official press releases.

Speeches

Human beings use speech to share ideas, opinions and also to communicate. Different occasions require particular speeches that fit the situation. There are also speeches for special occasions including those meant to ensure goodwill. The three speeches meant for goodwill include public relations, justification and apology (Dainton & Zelley, 2005).

Alan Joyce was the CEO of Qantas airlines during the labour dispute of the year 2011. In his speeches, Qantas CEO apologised to the clients while at the same time attempted to justify his company’s actions and critics the unions for their actions and unrealistic demands. In a way, Qantas speeches were a public relations tool meant to position the company as a fair employer that values its employees, customers and society at large (The Telegraph).

In his speech on 13 October 2011, Joyce first apologised to Qantas customers due to the inconveniences caused on their flight schedules as a result of industrial action. In the speech, Joyce said the company was doing its best to maintain operational reliability despite attempts by the unions to cause chaos. He further outlines measures such as new schedules meant to cushion customers against industrial action effects. Expectedly, Joyce blamed the unions for a lack of agreement to end the industrial actions. Specifically, Joyce alleges that the unions want their workers to be paid for doing work that has been made obsolete by technology (Qantas Corporate Communication, 2011). An emotional appeal is a very effective tool in speeches meant to persuade the audience to adopt an ideology or opinion (Frandsen & Johansen, 2010). At the end of the speech, Joyce asks the airline’s customers to continue supporting the company and also pays special tribute to the staff for their hard work and commitment. The success of such a goodwill speech can only be measured in the ability to persuade the audience to view the organisation favourably (Anthonissen, 2008). The speech was successful in minimising the damage caused by industrial actions on Qantas brand. The speech also positioned Qantas as the victim of powerful, self-serving trade unions.

In another speech on 29 October 2011, Joyce adopted a serious tone in announcing Qantas unavoidable decision to ground its fleet and lock out employees. In the speech, Joyce presented facts such as the estimated loss of A$20 million to the airline in case of closure and blamed the unions for the dispute (The Telegraph, 2011). This speech was also effective in its use of facts and emotional appeal to influence public opinion.

Press conferences

Qantas continuously absolved itself of any blame in regard to the prolonged labour dispute through press conferences and interviews on national TV stations (Maiden, 2011). In one such conference, Qantas’ CEO announced the grounding of the airline’s fleet and employee lock-out. A press conference is an effective tool for delivering highly anticipated messages and official positions of an individual or organisation. In the press conference, the CEO started by blaming industrial action on the airline’s decision to halt operation. He further outlined the impossible demands made by the unions that the airline could not be able to meet given the prevailing conditions. Qantas CEO presented facts and figures to back his argument against the unions and justify the management’s decision to suspend operations. He blamed Qantas declining brand strength on industrial action and further claimed that industrial action will lead to the demise of Qantas as a sustainable business. Joyce detailed the impact of the closure to all employees, customers and the economy at large. Joyce responded to questions by saying that Qantas sought a termination of industrial action as opposed to suspension as that would have created more uncertainty in the situation. The press conferences were an extension of a well-organised communication strategy meant to gain public support for Qantas decisions and pile pressure on Unions to abandon their demands.

Social media engagement

Through the @QantasAirways Twitter handle, Qantas announced the grounding of its fleet and lock-out of employees covered by the unions that were in dispute with the company. The company also used the Twitter handle to direct customers and employees to its official press release. The company also made it aware to customers that flights will be affected until further notice (Jung, 2012). While social media is mostly used for somewhat casual language, Companies should utilise its wide reach and instant reachability to engage with customers for public relations. Qantas tweets were formal, factual and empathetic of the situation (Evans, 2010). It is important to adopt a formal tone across texting platforms to ensure a brand’s reputation is not ruined (Thiessen & Ingenhoff, 2011). Qantas further used the Twitter platform to respond to customer enquiries and concerns. The communication officers remained calm and polite despite the angry responses and comments from frustrated customers and employees (Jung, 2012). Social media exposes brands to angry criticism from the public. If such criticism is not handled responsibly, a brand may lose its strength and reputation due to the viral nature of social media conversations (Pang, Hassan, & Chong, 2014). Qantas was successful at using the social media responsibly to provide updates, solutions and facts relating to the crisis.

Conclusion

From the analysis above, it is evident that Qantas relied on several communication techniques to justify its actions, protect its brand and persuade the public to support its position. Qantas used press releases effectively to apologise to its customers for inconveniences while at the same time blaming unions for a protracted dispute. Qantas presented facts and logic to support its arguments in the press releases. Qantas extended this narrative in the press conferences and CEO speeches. The CEO used emotional appeal and logic to gain public support during the announcement of Qantas decisions and position in regard to the labour dispute. Qantas used the social media mostly as a public relations tool to offer information to customers and resolve issues. It can be argued that Qantas was heavily biased in the presentation of facts as it failed to acknowledge the negative impact of its tough position during negotiations with the unions. Qantas decision to ground its fleet could also have been announced in advance to avoid inconveniencing; the company failed to emphasise on this mistake. It is unethical for a speaker to be biased in the presentation of facts and arguments that relate to a serious situation of huge public interest.

References

Anthonissen, P., 2008, Crisis Communication: Practical PR Strategies for Reputation Management & Company Survival. Kogan Page Publishers .

Dainton, M., & Zelley, D., 2005, Applying Communication Theory for Professional Life. London: Sage Publications.

Evans, D., 2010, Social media marketing: The next generation of business engagement. John Wiley and sons.

Frandsen, F., & Johansen, W., 2010, Apologizing in a globalizing world: crisis communication and apologetic ethics. Corporate Communications: An International Journal, 15(4), 350-64.

Jung, M., 2012 ‘Corporate Crisis Management Through Twitter: A Case Study Analysis of Qantas Airways’, Thesis, Leonard N. Stern School of Business, New York University. Viewed from HYPERLINK «http://www.stern.nyu.edu/sites/default/files/assets/documents/con_042975.pdf» http://www.stern.nyu.edu/sites/default/files/assets/documents/con_042975.pdf

Lehman, C., & DuFrene, D., 2010, Business Communication. Cengage Learning .

Maiden, M., 2011, ‘Joyce’s gamble is he’ll win Trojan War, Ulysses-like, with audacious roll of the dice’, Sydney Morning Herald, viewed 1 November 2015 from HYPERLINK «http://www.smh.com.au/business/joyces-gamble-is-hell-win-trojan-war-ulysseslike-with-audacious-roll-of-the-dice-20111030-1mqhg.html» l «ixzz1cIlk61BE» http://www.smh.com.au/business/joyces-gamble-is-hell-win-trojan-war-ulysseslike-with-audacious-roll-of-the-dice-20111030-1mqhg.html#ixzz1cIlk61BE

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Natti, S., Rahkolin, S., & Saraniemi, S., 2014, Crisis communication in key account relationships. Corporate Communications: An International Journal, 19(3), 234-46.

Newman, A., 2014, Business Communication: In Person, In Print, Online. Cengage Learning .

Pang, A., Hassan, N. B., & Chong, C. A., 2014, Negotiating crisis in the social media environment: Evolution of crises online, gaining credibility offline. Corporate Communications: An International Journal, 19(1), 96-118.

Qantas Corporate Communication., 2011, Qantas reaches agreements with storeworkers and cabin crew while TWU to cause more disruptions to customers, press release 5203, Qantas Airways Limited, viewed 1 November 2015 from HYPERLINK «http://www.qantas.com.au/travel/airlines/media-releases/oct-2011/5204/global/en» http://www.qantas.com.au/travel/airlines/media-releases/oct-2011/5204/global/en
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Qantas Corporate Communication., 2011, Industrial relations update (Alan Joyce Speech), press release 0000, Qantas Airways Limited, viewed 1 November 2015 from HYPERLINK «http://www.qantas.com.au/travel/airlines/media-releases/oct-2011/0000/global/en» http://www.qantas.com.au/travel/airlines/media-releases/oct-2011/0000/global/en
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Qantas Corporate Communication., 2011, Qantas responds to industrial action, press release 5218, Qantas Airways Limited, viewed 1 November 2015 from HYPERLINK «http://www.qantas.com.au/travel/airlines/media-releases/oct-2011/5218/global/en» http://www.qantas.com.au/travel/airlines/media-releases/oct-2011/5218/global/en
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Rourke, A., 2011, ‘Qantas grounds entire worldwide fleet’ The Guardian, viewed 1 November 2015, from HYPERLINK «http://www.theguardian.com/business/2011/oct/29/qantas-grounds-fleet-industrial-action» http://www.theguardian.com/business/2011/oct/29/qantas-grounds-fleet-industrial-action

The Telegraph, 2011, Chief executive: ‘this is a crisis for Qantas’, online, viewed 1 November 2015 from HYPERLINK «http://www.telegraph.co.uk/news/newsvideo/8857160/Chief-executive-this-is-a-crisis-for-Qantas.html» http://www.telegraph.co.uk/news/newsvideo/8857160/Chief-executive-this-is-a-crisis-for-Qantas.html

Thiessen, A., & Ingenhoff, D., 2011, Safeguarding reputation through strategic, integrated and situational crisis communication management: Development of the integrative model of crisis communication. Corporate Communications: An International Journal, 16(1), 8-26.