Airline industry and branding outlook for 2009: Experts speak

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Over the past few months, I’ve had a chance to interact with some of the brighest minds of the airline industry as well as key brand leaders. Though these were all individual interviews, there was a common question in all of them – “What’re your thoughts about airlines and branding in 2009”.

I’ve now compiled them in the video below and you can hear the expert views of Lisa Markovic – VP of Sales & Marketing at Jet Airways, Joe Crump – VP of Strategic Planning at Razorfish, Rodney Abbot and Randall Stone – Senior Partners at Lippincott.

Their predictions?

Fewer airlines at the end of 2009

Lisa  of Jet Airways feels that this is probably the most difficult of recessions for the airline industry. She believes that the year ahead will see a number of consolidations in the industry, and generally the larger airlines will emerge as dominant players globally.

Focus on customer service and the brand

Rodney from Lippincott believes that the fewer airlines that survive will have to focus on the brand experience, because customers will be extremely picky about choosing a carrier that provides the best value. This way, not only will they retain existing customers, but also attract others disgruntled with the competition.

Mobility – in-flight wifi will be a hidden opportunity

Joe from Razorfish is looking forward to surfing the internet on-board airlines and is curious to see what opportunities arise from this developement. Moreover, he believes that “transactions” and “advertisements” will become much more seamless than they are right now.

Without any further revelations, I’ll let you enjoy the video yourself! I have to admit that two of these interviews have not been released on the site yet, so here’s a sneak preview for you!

Lisa sums her love for the airline industry the best, “it’s the dynamics, never a dull moment, always new challenges and I clearly don’t see any of that changing in the future.” That’s the reason I’m in love with the industry as well! Always keeps you on your feet, isn’t it? What’re your thoughts on where the industry is headed in 2009, and what role branding has to play?

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Shashank Nigam

Shashank Nigam

Shashank Nigam is the CEO of SimpliFlying and a globally sought-after consultant, speaker and thought-leader on airline branding and customer engagement strategy. He is also the youngest winner of the Global Brand Leadership Award and has addressed senior aviation executives globally, from Chile to Canada and from Sydney to San Francisco. Shashank's perspectives have found their way into major media outlets, including CNN Travel, CNBC, MSNBC, Bloomberg UTV, Mashable and in leading publications like Airline Business, ATW, Aviation Week, and others. Shashank studied Information Systems Management and Business Management at Singapore Management University and Carnegie Mellon University. Hailing from India, he splits his time between Singapore and Vancouver, among other cities.
Shashank Nigam
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Showing 21 comments
  • Andy Caddy
    Reply

    I notice that your blog has a skew towards triditional flag/legacy airlines. The LCC market in europe should be an area that merits your attention; huge competition under difficult conditions with companies that “get” the internet and understand the importance of brand. I think 2009 will be an important year in this market – do customers care about brand when they can compare 20 LCCs on a comparison site? Are they truely affected by the collapse of airline x or airline y when they can get a flight for $10? Can you *have* brand value at thi send of the market?

    These are questions that we are asking ourselves. I’d be interested in your views. You shoul dget on an easyJet flight next time you are in europe!

    Andy Caddy
    Head of architecture and strategy
    easyJet

  • krishna
    Reply

    I wonder during this recession period brands can play some role ??. I feel something like survival of Air Lines industry is going to be the key factor now. Lets talk about the brands later on :). What say ??

  • Randy Harrison
    Reply

    One phenomenon I see in this industry is the true emergence of the “anti-brand.” The major carriers have lost connection with their brand and with their customers. “We get you there when we do, and that’s it…” appears to be their motto and its wide spread. I mean look at the way they handled some of the new, now permanent extra charges and fees. Customer contempt I would say.

    This unpleasant situation also opens the door for “brand-oriented” carriers as well. Those that work to make the experience pleasant, efficient and smooth. I expect the Jet Blues and Southwest types to do very well, and the major players to blend into each other, nickel and diming their customers and in the end putting the final nail into commoditizing themselves once and for all. We will fly them if we have to… and won’t if we have an alternative, lower cost or otherwise.

  • Tricia Cadena Converse
    Reply

    Someone in the airline industry must get “it” at some point. Consumers want more comfort and service when flying. Traveling in plain words, sucks! We want it to be made as pleasant an experience as possible. Companies like Jet Blue & Virgin America will hopefully lead the way – they brand themselves perfectly. Will the other airlines ever get it? Why don’t they raise prices on airline tickets and offer more. Why the ridiculous baggage fees, add it to our airline ticket price.

  • Oussama Salah
    Reply

    Very tough question, off the bat there will be consolidation, what high fuel prices did not kill this recession will, a much fewer number of operators.
    Who will survive are carriers with healthy cash flow and access to credit.
    As for branding, I would have thought that if your brand is not established and was the cause of your healthy disposition, it will be very tough.

    2009 will be the real test of what is the real contribution of branding to the individual carrier.

  • Zia Khan
    Reply

    Headed South would be my guess – and I don’t mean that geographically. If they could focus on making the experience not so unpleasant it would help. They have come a long way on pre-flight service from a technology standpoint. But from a human service perspective it is so severely lacking it is baffling. For starters, one no cost/low cost change that can be instituted: get the darn staff to treat passengers as customers, not captives. JetBlue seems to get it. Why not the others. I’m curious to find out from you Shashank why there is resistance to this. Surely airline executives are familiar with the service-profit chain concept.

  • Michael Gaughan
    Reply

    Interesting topic and no easy answers exist. I believe the legacy carriers will lead 2009 with cost cutting and further reduction while the low cost carriers will see even lower yields. For those that want to see profits they will have to dig deep and think outside of the box and continue to find ways to NOT spend money.

    From a marketing stand point this could become a dynamic year with lots of opportunities to show off newer and far more economical plans by using items such as Search Marketing & Ad Words. This is a year for marketers in all industries to dig deep and find a way to succeed in reaching more people without having to buy expensive print advertising. A creative team will help weather this recession!

  • Riyaz Muhammed
    Reply

    I think it’s going to be a PRICE WAR, which I mentioned in earlier discussison. Retaliatory price reduction is always a hasty decline in Aviation industry profit. We all know about price wars of 1992. When AA, NW and other US carrier fought toe-to-toe in matching and exceeding one another’s reduced fares, the result was record volumes of air travel-and record losses. Which I think is going to happen in 2009. At present, even SQ (Singapore Airline) has entered into price war upto 60percent without support of Indian Travel Agents with various south-east asian sector. They’ve reduced the fare when KingFisher Airline planning to launch HKG and SIN operations. Let’s see now how many airline is going to bankcrupt this year..,

  • Aamer Quraishi
    Reply

    In relation to the airline industry in India, it looks quite positive for 2009. The fuel prices are down to 2006 levels, the government cutting excise duty and common tax of 4% in all states in India are some of the highlights that we can see in 2009. Hence operationally 2009 seems very viable and conducive for the airline business in India. In relation to branding, as a brand manager it will be TOMA (Top of Mind Awareness) first, followed by key services offered which would delight consumers. Example Kingfisher announcing 5 course meal on board their new Mumbai-London flights in all cabins along with a bar and massage service in Premiere class. I know this is not the first of its kind in the world but in India its certainly the first of its kind and not many airlines in the world currently offer the same. Hence USPs and its awareness form an integral ppart of airline branding for marketing managers. Brand recollection has always been a challenge for Brand Managers and this will be the key as to how one achieves the same at minimal investment possible. Thanks to a lot of media chanels in place this I feel is possible but a careful anaylysis is always advisable before the GO GET IT signal is switched on.

  • Paritosh Sharma
    Reply

    Branding for the Airline industry, well I would prefer giving an example which would be an answer: Kingfisher RED!!
    Now everyone knows that Branding in these hard times is relevant to not only the Airline industry but to all the businesses. And what better way than Social Media?
    http://paritoshs.wordpress.com/

  • Christopher Lower
    Reply

    Hi Shashank;

    Living in a town once defined by Northwest, I am in the process of watching an iconic brand disappear. In no other industry have I actually seen branding itself matter so little. To me, your second expert, Mr. Lippincott appears to be on the better path. In the airline industry, it matters more to the consumer how the brand is perceived (defined). Focusing on Customer Service, amenities, being on time, not charging extra “fees”, etc. will determine the success or failure of an airline.

    It is also incredibly hard to build brand awareness for airlines that are only regional, or do not service all cities. I’m sure it will change when the carriers are whittled down to only a few large players.

    From the personal booking habits that I and others consider, in the day of Expedia/Travelocity/etc., the primary key factors I will base a purchase on is time convenience, price, and number of stops. It really doesn’t matter whose emblem is on the tail of the plane.

    My two cents…

    Cheers;

    Christopher Lower
    Sterling Cross Communications
    Traditional Storytelling Integrating Today’s Technology
    http://www.sterlingcrossgroup.com

  • Dave Kohl
    Reply

    At this point in time, I consider the airlines to be a separate animal in the world of marketing and publicity. If I ruled the world, I would have all of the airlines combine for one marketing campaign to try and stop the madness.

    A “10 Reasons to Fly On Your Next Business Trip / Vacation”. Try to make consumers and travel planners overlook the charges for pillows, blankets, headphones, and incidentals. Make us not feel at fault because we want to bring tooth paste and incidentals on a trip without having to pay an extra charge to do so.

    I can drive 500 miles in just over 8 hours, arrive when I plan on it, and bring anything and everything I can fit in a trunk and back seat with me. And now I can do it on less than $50 worth of gas for up to 4 people total.

    Yet, if I want to fly those 500 miles, I have to leave for the airport close to 3 hours before my flight. If it’s on time it’s :90 on the plane, and then get from the destination airport to my actualy destination, which could be another hour. That’s 5 1/2 hours – IF my flight is on time. And for at least $100 MORE per person.

    The airlines need to work together and show us why we should consider flying on shorter trips. They need us.

  • Jim Monson
    Reply

    Nowhere in 09, 10, 11, 12, ……. until labor costs are contained and dramatically reduced. These costs continue to be passed to the flyer in either higher fares, or reduced services, tainting every facet of the customer experience. Branding??? A brand is the promise a company makes, and the promise it keeps. The airline industry has only promised that air travel in the future will be less enjoyable than today. I was in the airline indusrty for a decade in the 70’s, and nothing has changed in almost 30 years.

  • Krishna Reddy
    Reply

    I wonder during this recession period brands can play some role ??. I feel something like survival of Air Lines industry is going to be the key factor now. Lets talk about the brands later on :). What say ??

  • Thomas Stoeckel
    Reply

    Heading? Will there be any other thought than “DOWN”? No matter how the airline is branded… Is there someone who believes that people in bad times spend money and simply fly because of a nice brand rather than getting from A to B?

  • Vijender Sharma
    Reply

    I agree with Mr Stoeckel. A great brand will do no good to the slumping airline industry. The airlines should get their act together on cost and revenues before jumping to branding. after all branding is not just about an amazing logo or a punch line. Talking about Indian airlines, Indigo stands out. When every one is desperate to lay off staff and going around the world to find an investor, Indigo is expanding its network and “Hiring”.

  • Aditi Das
    Reply

    Key points as per me:

    1. Money crunch>many organisations freezing travel>decline in business for airlines
    2. Budget airlines may rise at the cost of luxury service providers for the reasons mentioned above
    3. Branding will be key, today when the competition is fierce as the market size is shrinking, branding will protect/grow consumer base.
    4. There may be a downward correction in ticket prices.

  • Ramesh Premkumar
    Reply

    Being closely tied to the economy, they will maintain a level keel at best. Branding will be an important cost avoidance for airlines this year. Many of them have introducing branded fares. In the short term, this serves to force more traffic to their dot-com point of sale, helping them avoid intermediary costs.

  • Stan Aaronson, CSEP
    Reply

    A brand is a set of perceptions the buyer has about an experiential solution. The airlines are not in the hospitality industry and use a military/post-military business model.

    Partnering with the hospitality industry is the airline’s most effective approach to problem solving and ultimate profitability.

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