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Perception and Reality

They didn't have the planes, any staff, access to gates at any Australian airports, or even a name for the local company. Just the motivation of a strong vision and the power of a highly successful brand.

But when Virgin Airlines issued a simple media announcement on November 30th, 1999 that it was about to enter the Australian market, QANTAS lost $872 million in market value (15% of its total) in 24 hours. Over the following couple of weeks QANTAS eventually lost over $1 billion as its share price dropped 72c to $4.15.

After that a succession of safety incidents, some significant and others minor, coupled with investigations by the US Federal Aviation Authority and Australia's Civil Aviation Safety Authority, seemed to have the airline besieged.

Dismissing media reports as a "self-sustaining, self-justifying feeding frenzy" of publicity, Chief Executive James Strong missed the point: perception is reality. All controversial issues have two dimensions: substance and perception - and both must be addressed in a successful campaign.

By stating variously that cost-cutting was needed to avoid bankruptcy, touting conspiracy theories and union barrow pushing, rushing out announcements about new plane purchases and arguing that it was not the right time for a Senate airline safety enquiry, Strong missed the opportunity to give a consistent message about QANTAS' strong record and unwavering commitment to safety.

By focusing on his reality, he missed the opportunity to address both the substance, and community perceptions, of a growing safety issue.

Both perception and reality must be addressed congruently if managing any issue.

© Kerrie Mullins-Gunst
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