The 90 senior managers who were terminated at Qantas today can blame two things for their demise.
One is the speed with which passengers numbers are shrinking for airlines world wide as the GFC tightens its grip on disposable and corporate incomes.
The other cause is the change in culture the new Qantas CEO Alan Joyce is driving through the group.
Qantas has always seemed burdened with too many layers of management, not to mention compromised by excessive previous shedding of maintenance and standards personnel.
Joyce is the founding CEO of Jetstar, which deserves some pretty fierce criticism in the flight standards area, but could never be accused of being over burdened with managers involved more in process than production.
Joyce’s ruthless pursuit of outputs from staff rather than the inputs of managers three or four times removed from the coal face helped get him the CEO gig when Geoff Dixon was given an early mark.
As he said today, the cutbacks to middle management are just the start of some ‘longer term organisational changes’. There are even clear signs he has been listening to those who have been worried at the top heavy nature of Qantas in recent years and the contempt often displayed to those whose skills are what gives it the product and reliability standards that had until recent times been above being questioned.
But all of these cultural changes come at a moment when demand for premium travel and ultra cheap conditional travel is plummeting to lows that were unthinkable even half a year ago.
Qantas now finds itself fighting Virgin Blue for the middle, the good value medium priced market, rather than its top or bottom tiers, and even that is showing signs of retreat.
World wide traffic patterns tell much the same story. Down around 20% at the turn of the year, down a reported 30% a month later, heading toward 40% or 50% down in the course of the year.
All airlines will sack staff if they aren’t making enough money to pay their salaries. It’s a simple equation. As the tills get emptier, and the fixed costs of investments in fleet and systems continue, the numbers of people able to work for them will fall to earth, whether by retrenchments, unpaid holidays, or part time employment.