Professor Larry Dwyer

The Qantas dispute may be far from settled, but by giving away thousands of free tickets, the airline will kick-start a mini boom in the tourism sector.

Australian holidaymakers may need reminding of the allure of the attractions that are right under their noses. And with domestic travellers representing three quarters of Australia’s tourism market, it’s an area that resorts need to capitalise on.

Qantas’ offer of 100,000 free air tickets to customers stranded by last week’s decision to ground the airline for 24 hours appears to offer a chance for domestic tourism to capitalise on those who will travel much further than they normally would for the two years of the offer, which gives away a free return flight to anywhere in Australia from December 14th.

In Australia there is a lot of goodwill towards Qantas and a lot of affection for the brand: we think of it as ‘our’ airline. So at the start of the dispute I think the public was more on side with Qantas and its need to restructure than it was with the unions, however, I think Qantas has lost a direct proportion of that goodwill in terms of what it’s done, the timing of it and so on. Now, this is a chance for them to buy some of that goodwill back, and get passengers back on a Qantas plane, which many of them may not have considered.

In Australia six out of ten tourism operators are reporting forward sales to be worse or much worse than they were, according to a recent Mastercard survey. I would certainly expect that those resorts are looking forward to plenty of bookings from those who plan to use their free tickets to go to as remote a destination in Australia as possible: Sydney residents for example are already looking at Broome as a way to use their tickets – and these resorts have been hit hard by the downturn. Equally those on the west coast may now be looking at staying in the party resorts in Cairns.

However we must remember that not only were customers severely disadvantaged in terms of their travel plans but because tourism is a global network the impact was felt all over Australia and as a result of that there was widespread impact on the Australian economy. The Qantas initiative will also go some way to gaining support from industry stakeholders around Australia who felt badly let down by the Qantas lockout.

However the boost to holiday tourism and Qantas may only be temporary. It appears that Qantas was simply not geared up to meet the crisis head-on and, of course, that further eroded customer confidence in Qantas management. What Qantas has done by the lockout is to force many customers to trial Virgin Australia. Now, of course, a good percentage of those will now continue on with Virgin. The big area where there’s going to be competition between Qantas and Virgin in the future is in the area of business and government travellers. They pay a premium, they’ve been disadvantaged, and it’s an area that Qantas can’t ill afford to lose.

Larry Dwyer is a Professor in the School of Marketing at the Australian School of Business.