Will Qantas and Virgin move call centres back to Australia?
Are airlines ready to follow Westpac's lead?
Big Four bank Westpac made an unusual announcement on Wednesday: it will be shifting its call centres back to Australia.
"We will be returning all dedicated voice roles to Australia to enhance the capacity of our existing call centres," CEO Peter King said in the announcement. "This will mean when a customer calls us, it will be answered by someone in Australia." Around 1,000 roles will move back into Australia.
That's unusual because moving most call centre operations offshore in order to trim costs has been normal business practice in Australia for much of the last decade.
Heading offshore and taking advantage of lower wages and operating costs drove up profits, but the limitations of that approach have become starkly apparent during the coronavirus pandemic.
Banks, airlines and other large businesses have all struggled to maintain regular levels of service, struck by the double whammy of a huge increase in incoming calls and the shutdown of many overseas call centres during coronavirus lockdowns.
Shifting away from the existing system isn't easy or cheap. Westpac's announcement says it will take 12 months to implement and cost at least $45 million.
But it did make me wonder: will Qantas and Virgin ever go down the same path?
Both airlines rely on a mixture of local and overseas call centres, though the balance varies. Qantas does route most calls from Australia to its Australian and New Zealand centres. (If you call from overseas, you might get a Qantas local office in that country.) Virgin's operations rely more heavily on offshore call centres, which was problematic during the early days of the coronavirus crisis.
During the pandemic, both airlines have struggled to deal with requests for cancellations, refunds and vouchers as flying activity has all but ceased.
Despite that pressure, changes don't seem imminent. A Virgin spokesperson told Finder there was "nothing to announce regarding our call centre at this point". A Qantas spokesperson noted that the airline already has call centre operations in Hobart and New Zealand, which have largely been able to operate normally.
Returning all call centre roles to Australia would certainly be an easy public relations win for any airline. But with Virgin still waiting for approval on Bain Capital's buyback and Qantas also seeing profits plunge, it's unlikely either is quite ready to spend the money for a complete shift right now.
That could change if Westpac's move triggers a broader shift back to onshore call centres by corporate Australia. I'll be watching with interest.
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