Jetstar chief alters course after hitting turbulence

JETSTAR chief Bruce Buchanan is on a mission to restore public faith in a brand he describes as "an Australian success story", with the airline still smarting over mismanagement of disabled passengers and controversy at its Vietnamese venture, Jetstar Pacific.

The Jetstar Pacific saga first hit the headlines in early January when Tristan Freeman, chief financial officer, and Daniela Marsilli, chief operating officer, were barred from leaving Vietnam as the government investigated losses the company made on fuel futures. The story then broadened to include claims of safety deficiencies by former staff, and a damning report by the Civil Aviation Authority of Vietnam.

Buchanan steadfastly rejects allegations of safety problems, saying Jetstar and all its overseas ventures including Jetstar Pacific meet Qantas Group safety standards. Qantas itself conducted 11 audits of Jetstar Pacific and forwarded its findings to Vietnamese air safety regulators for inclusion in their report.

While some have lauded the two former Jetstar Pacific engineers who raised safety concerns with Vietnamese regulators as whistleblowers, Buchanan disputes the label and says the airline is moving to solve issues of inadequate record keeping identified in the maintenance department. He maintains the record-keeping lapses never posed a risk to safety.

"We wouldn't put our brand on any airline we had any concern about.. We measure the flight data from every single flight that operates in Jetstar, Jetstar Pacific, [and] Qantas operations. All the operational data we measure gives us complete confidence this airline [Jetstar Pacific] is now one of the safest in the region."

He says Jetstar Pacific's troubles the two executives are still under Vietnamese government orders to stay in the country highlight how volatile the aviation industry is, especially in a country that its having its first foray into capitalism.

"We always envisaged that the first privatisation of any business in Vietnam would be a difficult road," Buchanan says.

"To have this complete reform agenda in a country that just doesn't have the infrastructure . . . it's a huge challenge."

But he says Jetstar won't pull out of Vietnam and will consider expanding the franchise into other Asian markets.

Back on home turf, the airline's lowest point came last November, when Paralympian Kurt Fearnley crawled through Brisbane airport, rather than use a Jetstar wheelchair that he could not propel or steer independently. He had been forced to surrender his own wheelchair before boarding a flight.

The incident sparked a rash of complaints to The Age from other disabled passengers about their treatment by Jetstar and other domestic carriers.

It also led to a "please explain" from the Parliamentary Secretary for Disabilities, Bill Shorten, which ultimately led to a staff retraining process.

Reforms included improved "front-line recovery" (empowering staff at airports to resolve problems on the spot) and installing an "escalation team" in the call centre to solve complex issues quickly, Buchanan says.

Jetstar is also aiming to cut complaint resolution times from 90 days to seven.

For disabled passengers, Jetstar's wheelchair policy has been "better defined" so it is more consistent.

"We needed to be better at solving customers problems," Buchanan says."We've done all the training and we're starting to see some early signs of success."

It's part of a broader culture in the organisation, which he says is focused on innovation.

Jetstar owes its beginning, albeit indirectly, to Ansett's collapse. From the ashes came a new breed of low-cost airline.

Richard Branson's Virgin Blue mopped up initially, forcing Qantas, saddled with a full-service model that could not compete on price, to take action.

In 2004, Jetstar was born.

Buchanan led the team at Boston Consulting Group that prepared the business case for the Qantas board.

Alan Joyce ( then Jetstar chief executive, now Qantas') and Geoff Dixon (then Qantas CEO) asked him to stay on for six months to set up the fledgling carrier.

"I found myself not only staying for six years but also now running the business," he says.

There's been three deliberate marketing phases: first, "lowest prices, guaranteed", then "choices, choices, choices" (travel class, frequent flyer awards, lounge access, etc), and now it's "low fares, good times" to tap the social purpose of travel, Buchanan says. That has led to commercial success that has helped Qantas' bottom line during the global financial crisis.

Buchanan recently forecast that the carrier would sell tickets to almost 14 million passengers this year, with ticket revenue to top $2.5 billion across the region, up from $1.8 billion last year.

"We've got one of the fastest growing airlines, we've got the largest low-cost carrier by revenue terms in Asia, we were one of the most profitable airlines in the world last year."

The Hard Questions

1 Whats the best part of the

job? Working in a front-line role once a

month as part of our Frontline

program, where I put on the uniform and

serve our customers. Seeing the

excitement on the faces of customers on

their way to somewhere special reminds

me why we do what we do at Jetstar.

2 What keeps you awake at

nights? If its not one of my daughters

unable to sleep, its worrying about

ensuring the Jetstar team are engaged

and motivated in their roles. Keeping the

team excited about what we do

ultimately means a better experience for

our customers.

3 Why set up with communist

Vietnam? Youve got a population of

100 million and its an exciting market.

Its a long-term play and you can see a

long-term future for the Qantas group

and for an Australian-based airline in the

region. Theres a lot of growth in the

region we can serve.

4 What curbs exist on Jetstars

expansion? For the success of this

business, are we able to train the next

level of managers up, can we get that

talent from within? If we can, I think well

continue to grow. But it requires us to get

some tight people plans around

development and training.

CV

EDUCATION

?! Civil engineering degree from the

University of NSW

?! Master of business administration from

the Australian Graduate School of

Management and the Anderson School at

UCLA

CAREER HIGHLIGHTS

?! Boston Consulting Group 1999-2003

?! Involved in the establishment of Jetstar in

2003 and its launch in May 2004

?! Development of Jetstar?fs long-haul

international model that launched in

November 2006

?! Setting up Jetstar Pacific through

commercial partnership with Vietnam, May

2008

?! Appointed chief executive of Jetstar,

October 2008.

DIRECTORSHIPS

?! Newstar (Jetstar Asia and Valuair) and

Jetstar Pacific