Last week, I spent three days in Kuala Lumpur, Malaysia, hanging out with Loyalty marketing professionals from around the world at the Loyalty 2010 conference. I met a number of very talented and interesting people, from airlines, hotels and even retails chain that are trying to drive loyalty.

Also part of the event was the Loyalty 2010 Awards for the Most Innovative Loyalty program. The judges had shortlisted the Top 3, and the audience voted for the best. Air Berlin came out tops, though I think each program was very unique. And I share with you here, what makes them so good!

1. Air Berlin’s MyRoute customers earn double miles on their frequently flown routes

Try to solve this problem. You need to get price sensitive customers to fly you on their most-flown routes, which are also the most competitive due to many airlines offering an undifferentiated product on those routes. You know you got to think out of the box when solving this one. And Air Berlin’s Johannes Ganser and Sophie Wennekers, along with their Loyalty Marketing team, did just that.

In April 2009, the airline launched MyRoute where members select their favorite or most frequently traveled route within Europe. On this route, they earn double miles. Simple. And gets the job done.

Not only did this offering help Air Berlin clearly differentiate itself in the market place, which has other credible carriers like Lufthansa, it also increased loyalty for business travellers and commuters – traditionally a Lufthansa stronghold. Not to say, it minimized churn rate too. The side effects have been that Air Berlin can now forecast high-density routes better and there are more return journeys performed. Very innovative indeed.

2. SAS Scandinavian – visualizing rewards to boost redemption

How many times have you logged in to your Frequent Flier Program (FFP) and didn’t know what to do with your points? Frankly, I’ve had that situation many times. SAS solved this for their loyal customers by visualizing the rewards they can get. And it was all personalized too, with each roll-over showing you how many points you needed to redeem an award.

The results? As Thomas Bruhn, EuroBonus Manager shared, 18,000 redemptions were generated from 80,000 visits – that’s a much higher conversion rate than the industry standard. Personalization matters indeed.

3. Swedish Rail – loyalty program from scratch, for a train service

Imagine you’re a senior executive at a government-owned monopoly that runs trains and this is your situation:

• The industry is deregulated and new competition grabs your customers
• Even though you’re the incumbent, you have no customer date, because no efforts were ever required
• There’s no concept of loyalty in the industry, which was more of a public utility previously

How do you deal with this? Frankly, I was very impressed with what Claes Lindholtz of Swedish Rail shared with me, on how he and his team built a loyalty program from the ground up in a very short period of time. It included totally revamping the customer experience, with on-board wifi and iPhone apps that you can point to a landmark outside the train to retrieve its info from Wikipedia (!!). Swedish Rail is now also the top corporate Twitter account in Sweden!

4. Milan Airport – building loyalty at an airport city

Milan Airport’s Vittorino Capobianco opened my eyes to a new category of loyalty programs – those at an airport! At Italy’s largest airport, you earn points for parking, for eating at restaurants, for buying from Duty Free shops and even by using the speed-check-in service!

And you can redeem these for lounges, phone check-in and even free wireless internet. The best part is that you can earn and burn points at both the airports run by SEA in Italy. Certainly something I’d sign up for when I start shuttling to Lake Como once a month =p

5. Payback – the most personalized loyalty program in the world?

Everyone at the conference was stunned by the presentation made by the folks from Payback – the European retail loyalty program. Yes, the basics are earn and burn, but it was the personalization that everyone was impressed by. Not only offers that were sent out highly customized to each individual’s purchase history, the trending data for each individual is also used for market research and developing more products.

Though airlines are still far from such in-depth business intelligence and personlization, I think it’s important to see what’s being done at the cutting edge and how they can adapt that to drive loyalty for their brands as well.

Air Berlin and SAS are setting the standards for airline loyalty program. I must say that I really liked Etihad Airways’ as well, in which I can redeem even my first 3000 miles, for items like USB drives and iPods! Swedish Rail offers lessons to any government owned legacy airline on how to beat the competition. Airports around the world can learn from Milan Airport’s efforts. An Payback seems a decade ahead of its equivalents in airlines. Maybe Aeroplan or The Mileage Company can acquire Payback and we’ll all have a happy life

What do you think about this programs? Is there an airline FFP that you’re very impressed by? Share your thoughts with us here in comments, or over on Twitter (@simpliFlying)

• Top 10 branding insights from the best airline loyalty programs at the Freddies 2008
• Are location-based services a blessing for the airline brand?
• Five clever ways to earn frequent flier miles for upgrades
• Does the latest social media application by Lufthansa have wings? 10 things I would do to ensure MySkyStatus flies
• Randy Petersen of Flyertalk on airline branding – Part 1 of 2

As promised at the start of the year, SimpliFlying will be bringing you more Guest Columns from leading aviation practitioners around the world. Our first guest article of the year is written by Oussama Salah, who is an aviation expert based in Abu Dhabi, UAE. Being a Jordanian who flies around the region a lot and works in the sector, he shares with us his predictions for Middle East carriers in 2010.

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The MENA region airlines bucked the global trend in 2009. It was the only region that had an increase in traffic and had the loss forecast dropped by 50% to half a billion. The region saw an increase in flights and in destinations.

2010 promises to be an exciting year for the region. Airlines in all segments are competing for a leading position.

Emirates facing the crunch?

Emirates remain the leader of the pack, with a brand that, by far has no rival not only in the region but globally. So far Emirates has shown a financial ability to finance its expansion without burdening Dubai. The problem Emirates might face is a tightening of credit due to Dubai World’s and by extension Dubai’s problems. And as previously mentioned on SimpliFlying, even a merger between Emirates and Etihad cannot be absolutely ruled out.

Etihad and Qatar Airways expanding?

Etihad and Qatar Airways are both embarking on an expansion spree, supported by oil revenues of their respective governments, a viable means as long as oil prices hold at their current levels. Needless to say both carriers have not turned any profit yet. On a service level and as a brand both are offering services that in some cases not only rival Emirates, but exceeds it.

Royal Jordanian merging?

Royal Jordanian, the first Arab Carrier to join an alliance (One World) and the second Arab Carrier to privatize and be listed in the Amman Stock Exchange, is floating the idea of a merger with another regional airline or European airline by mid 2010 as the means of sustaining growth. This may be easier said than done since the Government’s approval is crucial (holds 39.5% of the stock) and the other problem is finding an airline that is compatible with the RJA brand displayed in their new A319, A320 and A321 fleets in terms of cabin and IFE.

Gulf Air going regional?

Gulf Air is looking to restructure and reinvent itself as a regional carrier as opposed to an Emirates or Etihad clone. For that they have employed Royal Jordanian’s ex CEO, the same person that lead RJA to profitability, privatization and into an alliance. GFA has already made its first review and as a result returned the Leased B777 back to Jet Airways and confirmed a 20 A320 orders from Airbus with a delivery rate of one aircraft a month. A sticking point is the union that opposes any Bahrain nationals staff cuts. The union has thwarted several restructuring plans in the last 10 years.

Oman Air re-inventing itself?

Oman Air has lead the region with an new First, Business and Economy seating plus connectivity on their A330 fleet with a Thales IFE and Higher bandwidth SwiftBroadband platform to deliver GSM/GPRS and WLAN via OnAir., launching a new campaign of “The Change is Here” .

The LCC onslaught?

On the LCC front as Air Arabia launches its second international hub (Alexandria-Egypt) in 2010, it faces stiff competition from FlyDubai and a reemerging RAK Airways. In Kuwait Jazeera Airways departed form the LCC model and is offering Business Class similar to Bahrain Air.  This sector is facing competition not only from within but from other Legacy regional airlines.

These are a few of the issues facing the region’s airlines and promises an even more exciting year.

• Etihad Airways charging a second bag fee? Bad idea for a brand trying to establish itself
• Gulf Air and Kuwait Airways up for sale – do the brands stand a chance?
• Will the Dubai crises lead to a mega Emirates + Etihad airline brand?
• How airlines in the Middle East are enhancing brand value through their frequent flyer programs
• Etihad Airways video trip report – Business Class: Athens to Delhi, via Abu Dhabi

This is a cross-over article from Rohit Bhargava’s Influential Marketing Blog. When I read it, I couldn’t help but request for it to be posted here. His views resonate completely with mine and this is a perfect example of how authenticity is key in branding. Especially so in airline branding – because it’s so easy for the customer to switch if the brand expectations are not met. And in this case, United seems to be getting it wrong.  I’ve also commented on these previously, in my article entitled “Airlines, stop putting lipstick on a pig!” Meanwhile, enjoy Rohit’s ideas.

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Over the course of two days, I saw two stark examples of what could easily be considered the best and worst of airline advertising messages encompassed in two ads done for domestic US-based airlines. Let’s start with the worst from United:

What makes this ad so ineffective? First of all, the call to action to experience their first and business class has almost nothing to do with the visuals and storyline of the animated character. She could just as easily be in economy class. Or on another airline. And the last thing I want to think about is all the creatures in the sea when I’m on a transcontinental flight. If I’m lucky, I won’t see any – which means my plane stayed in the air where it belongs. The beautiful animated characters and music have little relevance to our lives and have been a random choice for as long as United has been running this campaign.

The choice of Gershwin for the music has become a signature for United and most consumers would recognize it as their “theme song” – but again there is no built in message or purpose for this beyond brand awareness. And as one of the largest airlines in the United States, I think it is safe to say that awareness isn’t really what United needs in the first place. Ultimately, as a United customer, I end up watching that ad and wondering to myself what else they chose not to spend money on so they could produce this ineffective message and buy expensive media time to show it (it first aired during the Beijing Olympics).

In contrast, here’s the Southwest ad:

What makes this ad so effective? The first reason is that it is topical. At a time when most domestic US airlines have started charging passengers to check their bags, Southwest is one of the few that has not done this. The ad smartly focuses on one attribute that actually DOES set Southwest apart from their competitors: that your bags fly for free. The execution of the ad is strong as well, featuring a man who is presumably a real baggage handler smiling and generally looking happy to be taking care of your bag. The voiceover humanizes your bag – noting at one point that your bag can even bring its “little bag friends” for free. I love my bag – so I respond to that message. Chances are, you do too. At the end of the ad is a simple, yet effective call to action to pack your bag and go on that trip that you might have been planning for some time, because you’ll save money with Southwest and your bag will fly for free.

Clearly the audiences for these two spots are different. Southwest is going for the leisure traveler on domestic travel while United is targeting the business and first class crowd for international travel. Yet their different approaches underscore the shift that is taking place in marketing today. The more authentic message focused on something people actually care about will trump the artistically created piece of fluff that lacks any strong insight or message any day.

The irony, perhaps, in this post is that because I live in the Washington DC area – I travel all the time with United and rarely on Southwest. In the past I have often pointed to United as the brand that I would most like to work with because they have such a clean slate of possibility. If they could rethink their entire approach to marketing, add more personality and use social media more effectively – they could completely reinvent people’s perception of their brand.

There are some early signs that this is starting to happen – including United starting a twitter account. What it truly needs is a vision from the highest level of marketing to rethink their advertising and pour more internal support into the nacent social media activities starting within the company that have such big potential but are likely underfunded and underappreciated. In case United is listening, drop me a line … as a loyal customer and hopeful marketer, I’d be happy to help.

• Are location-based services a blessing for the airline brand?
• Southwest Airlines’ success secrets on social media revealed by Paula Berg
• The day airlines’ Twitter accounts were hacked, and three steps to reverse the brand damage
• SimpliFlying in the Media: FOX 7, Today, Air Transport News
• How can legacy airlines, airports or hotels make an entry into social media? Start from within

Note: This is a guest article by Darren Dunn

I love Fall weddings! The bustle of summer is gone and the holidays are still a distant thought. You can relax and enjoy the ceremony letting your thoughts turn to the blissful life ahead for the new couple. Even bridesmaid dresses look good against mesh of Fall colors in the background.

So why am I so disappointed about Continental taking their vows and joining the Star Alliance family on October 27th? It is the one time in my life I want to be the guy who stands up on a pew and shouts.. “Stop the Wedding”.

Star Alliance is clearly marrying up as Continental has the best product and service of all the major US carriers. Customers flying in on carriers such as Singapore and Air New Zealand can finally connect on a domestic Star Alliance Member (Continental) who knows that product, service, and accountability are the cornerstones of delivering on brand promise.

My chief concern about the pending union is the domestic company Continental will be keeping with United and USAir. I can’t imagine a greater disparity in service. I relayed my concerns to a Continental representative at a recent industry trade show to which they responded, “Well, we are hoping that our joining Star Alliance will help bring the level of service up on the other US partners.” Speaking from personal experience, if I had a dollar for every person I know that hoped their partner habits and quirks would change after the vows. I’d be a rich man. As a frequent traveler moving to a United hub, I pray this partnership will be the exception to the rule.

The good news for United customers is they will be able to use their status when flying on Continental. Premier members will find out all the things they are missing like automatic upgrades, the newest fleet of planes, and having your luggage be first off the plane. The commitment to excellence extends beyond the first class cabin to once extinct amenities like free meals at meal time, pillows, blankets, and direct TV. The brand promise begins at check-in, continues to the back of the plane, and onto the luggage carousel before you leave. Like the Virgin brands, they don’t forget their job is to create an exceptional experience.

Great brands create an emotional response and nothing creates emotions better than a wedding. With that in mind, a wise person once shared the following advice with me. “The most important thing to remember about a planning a wedding is that the Big Day isn’t about you. It’s about the people who are experiencing it with you. Focus on making the people comfortable and happy, yes even that embarrassing uncle.. and the day will be perfect.”

Darren Dunn is currently Director of Sales at WorldMate Inc. The World’s leading travel management application for smart phones. He has spent 13 years in the online marketing space working with destinations and travel suppliers around the globe. He flies about 150,000 + miles a year and appreciate airlines that are passionate about service and culture.

• Will a bloated Star Alliance result in a branding nightmare?
• Conde Nast Traveler 2008 airline rankings prove that product is the brand
• Can Jet Airways survive the recession (and what does the Kingfisher alliance mean)?
• Turkish Airlines – The atypical Middle Eastern airline brand. CEO Dr Temel Kotil outlines global dreams in interview
• Rohit Bhargava feels that United Airlines lacks a brand personality. Is he right?

I had a great laugh watching this latest advertisement by Southwest Airlines. It’s the baggage handlers who take a dig at other airlines (they’ve even censored a United Airlines tail) who charge bags and don’t take good care of them. It’s a refreshing perspective from the tarmac, and I’m sure you’d enjoy it too.

Airline branding at its best! And no, they don’t break guitars.

• The Air New Zealand brand bares all – CEO and staff go nude in latest TV advertisement
• Airline Baggage Fees : The Airline Industry’s Financial Salvation?
• Tearing apart airline lingo, great laughs ahead
• Southwest vs. United: Why Authenticity Wins, Even In TV Advertising
• Three economics tips for airlines, and why a baggage charge does not make sense

I recently read in the news that Aeroflot Russian Airlines had sent their flight attendants to Singapore, for training in grooming and customer service, by Singapore Airlines. This, after holding a competition among 40 design agencies to refurbish their image, including new uniforms. I’ve personally taken four (not-very-memorable) flights on Aeroflot, and trust me, this comes as a pleasant surprise.

In Russia, airlines are often ridiculed for rickety planes, atrocious service, inedible food and constant delays. Moreover, airlines often started on the whim of a billionaire. But this seems to be changing. First, it was Siberian, which hired Landor to re-invent itself at S7 and now there’s Aeroflot trying to pull up its socks. But are these just exceptions, or the coming of age of the Russian aviation industry? Why not have an expert share with us?

In conversation with Stuart Barwood – Russian aviation expert

We had the opportunity to catch up with Stuart Barwood, the Commercial Director for Brolin Consulting. Formerly with easyJet, Stuart is now a Russian aviation expert who probably spends more time in Moscow than his home in the UK.

Watch the interview with Stuart (17:12 mins) to hear him explain:

• The massive untapped potential of the Russian market (1:30)
• The need for non-Russian managers (2:04)
• Why over-regulation is not always a good thing (3:55)
• Why crashes are a thing of the past (3:03)
• Why anything not “Made in Russia” has penalties (4.20)
• Not all Russian aircraft are bad, they just don’t have the leasing agreements (5:19)
• Which Russian airlines stand out (6:00)
• Why foreign investment may not rush into the Russian market (8:25)
• The biggest opportunity in the Russian market (9:40)
• The need for change with airport infrastructure (10:53)
• Why marketing is a “new science” in Russia and the dominance of charter carriers (12:12)
• Aeroflot on Twitter? 3D tours of the aircraft? Why? Why not? (14:46)

So, what do you think? Are Russian airlines pulling up their socks? Or is it all doom and gloom?Let’s discuss in the comments or over on Twitter (@simpliflying)

• Do you work for an airline? This five minute video on social media can change the way you do marketing
• Why time is running out for the Singapore Airlines brand to get into Web 2.0
• Etihad Airways charging a second bag fee? Bad idea for a brand trying to establish itself
• Three lessons in airline branding from Singapore Airlines, Virgin Atlantic and Delta
• SimpliFlying in The Media: CNBC, ex-United, Flightglobal, Los Angeles Times, Tips from the T-List, Mashable…

Last week, I was in Sydney at the Aviation Outlook Summit and on the first day of the conference, I sent out this Tweet:

Right in the lobby of the Four Seasons Hotel in Sydney, Turkish Airlines had this flagrant display of teenagers in red, visible not just to all the conference attendees but also to those passing by the hotel (see pic below). And they had totally stolen the thunder from Malaysia Airlines, which had paid thousands of dollars for being the official sponsor of the conference.

Turkish Airlines had announced its presence, and in quite some style. After spending some time with Dr Temel Kotil, the airlines’ humble CEO, I feel other competitors should be vary of the rising star from Turkey.

Why’s Turkish the atypical Middle Eastern airline?

Dr Kotil mentions a number of points in the video interview below which prove that Turkish Airlines in not yet another Middle Eastern airline with global ambitions. Rather, it’s doing things differently, connecting with customers differently and is not just going after explosive growth. Here’s why I believe they pack a punch.

• Turkish Airlines was one of the Top 4 most profitable airlines in the world in 2008 (according to AviationWeek TPC)
• The current cash reserves of $1.5 billion are certainly adequate for surviving the recession and measured growth
• It leverages its membership of the Star Alliance when entering new markets – something most other carriers in Middle East lack
• Turkish hires locals when it enters new markets – key to reaching out to the local customers and cater to local tastes
• Turkish is working hard on delivering a consistently great product, with special focus on the in-flight cuisine – certainly a brand differentiator

In Dr Kotil’s words, “Potential is high, and ambition is big for Turkish Airlines…and quality doesn’t need a passport.” Hope you enjoy his interview in which he talks about what makes Turkish hard to ignore.

Isn‘t it a good feeling to hear some positivity in these gloomy times in the industry? What do you think about Turkish Airlines’ prospects viz-a-viz other Middle Eastern carriers? Let’s discuss in the comments or over on Twitter (@simpliflying)

• Three reasons airlines in India will come out strongest from the recession
• Branding Head at Burson-Marsteller wants airlines to “stop being the Greyhound of the skies”
• Airline branding: Keynote video from Abu Dhabi, and CNBC Arabia
• Are the Beijing Olympics a lost opportunity for airlines?
• Airline brands need to emerge from the “jurassic era” – Joe Crump

A picture speaks a thousand words, so I’ll share with you the screen shot of an email by Virgin America that was posted by a blogger last week. Three words to describe this marketing effort – appropriate, effective and spreadable.

Don’t you think?

• Reality check: Why social media can be the solution for airlines’ grey skies
• Virgin America takes in-flight experience to a new level
• Virgin America’s online community – bull’s eye, or a flop?
• What makes Virgin America an outstanding airline brand? The delivery.
• Richard Branson’s interview about Virgin America goes viral. But why?

This is a guest post by Rob Mark from Jetwhine.com in Chicago. We’ve decided to begin a little cross-posting here at SimpliFlying and at Jetwhine.

A commercial pilot and journalist, Rob has been writing Jetwhine as the blog of “aviation buzz and bold opinion,” for two and a half years. His posts are never dull because you never need to try to figure out where he and his co-writer Scott Spangler stand on an issue. Enjoy.

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For as long as I can remember, Southwest Airlines, now the largest U.S. domestic airline, created in the 1970s by Herb Kelleher and Rollin King, has been the low-cost airline others most want to emulate. The need to copy isn’t just about money, although Southwest has a profit history better than any other airline in the world. Most Southwest look-a-likes have, in fact, been dismal failures.

Southwest has a record of solid labor relations – despite last week’s pilot contract rejection – and a culture of customer fun in an industry that most others have never been able to duplicate. Southwest simply delivers a solid, consistent service at a fair price that keeps passengers coming back. To me, an airline that actually still responds in writing to a customer complaint says quite a bit.

The airline’s no hidden fees policy has also carried it quite a long way at a time when competitors have tried charging for everything short of breathing space. True, Southwest did appear to break with tradition last week when it announced some new fees, but charging for the work related to managing unaccompanied minors as well as pets carried in the cabin is something the average man or woman on the street will most likely never notice.

On to Ireland

When Ryanair opened for business in 1985, many analysts thought the Dublin-based carrier could evolve into a European airline modeled on the success of Southwest. Having had the opportunity to fly Ryanair a few times, I can tell you that the Southwest folks probably have very little to worry about on that front, something my first flight on the European airline confirmed. At Southwest, boarding is by group to bring some sort of order to the process of putting folks in their seats. In fact, we spoke to Southwest’s Doug Lawson about just that topic last year.

When boarding at Ryanair, they essentially open the terminal doors, aim passengers at the airplane and yell “go.” It’s every man, woman and child for themselves to find a good seat using both the front and rear doors. There was nothing even remotely funny about watching people run like crazed dogs for the Boeing while I tried to make sure they didn’t mow down my family in the process. To me, Ryanair’s business model is not so much about low cost as it is about being cheap. Even ads for the airline tout “cheap.” And when a company is cheap, consumers should beware.

In March, Ryanair CEO Michael O’Leary made news by suggesting pay toilets might be a good idea aboard his airplanes where flights are often no more than an hour per leg. In the U.S., we laughed, especially when O’Leary’s press officer confirmed that the CEO often makes this stuff up as he goes. Then last week O’Leary confirmed he’s in talks with Boeing to find a workable pay toilet solution, one that will help Ryanair remove two of the three lavs on the Boeing 737 to make room for more seats.

Making passengers pay to use a toilet is sure to become one of the largest revenue losers in the history of the airline business. But it also opens the door to a discussion about how Ryanair is fast become an airline at which the wheels have finally begun to come off the wagon. The company has clearly crossed the line between what passengers will accept and what they will not. O’Leary just doesn’t seem to realize it because he’s in business to make money, not run an airline.

I always thought no one could be less customer-focused than United Airlines. Clearly I was wrong. The only thing that really worries me is that some airline bean counter here in the states might think Ryanair is on to something. They are of course. It’s just not anything good for airline passengers. And if you do fly Ryanair in the future, you just might want to bring along a can of Lysol to kill the germs. It’s going to get messy over there.

• King of ancillary revenues, RyanAir offers €1,000 for best idea on making money!
• Hot topic: Will Ryanair charging for toilets work for its brand?
• Ancillary revenue: A boon or a bane for the airline brand?
• Airline Baggage Fees : The Airline Industry’s Financial Salvation?
• Ryanair’s New Fee To ‘Check In’ & The Real Cost Of Some Low Cost Carriers

American Airlines has recently launched a new flash-animated website where visitors can sample their new Business Class and First Class seats and amenities. It’s tastefully done, and similar to the effort by Cathay Pacific last year.

What’s more impressive is how American Airlines has created a highly personalized email brand campaign to get people to this website. Basically, anyone can increase their chances of winning the lucky draw by recommending the website to four friends. You may think that’s like spamming, but the thinking ends there.

What comes to the inbox is a beautifully crafted email that is highly personalized for the recipient. You’d almost want to jump ahead and click the link. The email is concise, humorous and actionable. Of the three key points they mention, only one is a “sell”, and the others are bound to make you laugh, like “You wish you’d rather win that amazing prize instead of Thomas”.

I’ve taken a screenshot of the email here and distilled the key lessons anyone can learn about email marketing. And with all the spam that we get in our inbox these days, such an email is a breath of fresh air. Well done, AA.

• Engaging the customer in the A380 experience: before, during and after
• Three economics tips for airlines, and why a baggage charge does not make sense
• Five lessons from the most innovative loyalty programs in the world – Inspired from Loyalty 2010
• Tearing apart airline lingo, great laughs ahead
• Will Delta and Northwest merger bring back the glory of Pan-Am?