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Virgin Blue CEO Brett Godfrey told a luncheon on November 19 that action taken by his airline’s staff during the economic crisis have helped it survive the most challenging time for the aviation industry since the dawn of the jet era.
Godfrey told the Queensland Media Club that while the airline came close to issuing redundancies during the past year, it firstly sought out other ways to cut costs instead which has placed it on a good footing for an upturn. “Shedding staff is very expensive. First there is the cost of redundancies and then there is the cost of rehiring and retraining when you do decide to turn the corner,” he said.
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“The cost of large scale slash and burn of assets and people is negative (because) it lowers service standards right at the exact time when your loyal customers have the most incentive to try out the competition.”
Instead of launching large-scale redundancies, he noted that a number of managers at the airline have taken 20-30 per cent pay cut, while other staff agreed to measures such as taking 12 months of leave without pay. He added that the strong culture developed within the airline has proven to be a great asset to the company.
“For nine years this culture and attitude has meant we have not lost a single minute to industrial unrest, not like our major competitors,” he said.
