–

As you all know, SimpliFlying is not only devoted to bringing you the best in marketing initiatives by airlines (along with analysis and commentary on digital trends concerning airlines) but we also regularly honour and award the stalwarts behind airline social media initiatives. We call these visionaries SimpliFlying Heroes. Over the past couple of years we’ve profiled about 10 such people who’ve truly rocked the social sphere with their innovative campaigns and leadership.

A new Heroes initiative – led by you!

What started off as a space where we’d have to look for people doing great stuff, has evolved into an incredibly competitive arena where airlines are actively fighting the “war for social supremacy” online. No longer is social a fad. It’s not deeply entrenched in the online consciousness of every Digital Marketing Director. And in many cases, even that of the CEOs. As our monthly Top 10 case-packs indicate, almost every month there are multiple creative initiatives by airlines to drive one or more of their business goals online such as revenue, engagement and loyalty.

With SimpliFlying Heroes, Every month we will choose 3 outstanding folks heading digital/social marketing at airlines and put up their names, along with brief bios for voting. Voting will stay open for a period of 7 days. In that period, our readers and Twitter followers are invited to vote for the person they find the most-deserving. Meanwhile, nominees are welcome to promote their nominations amongst their own friends and followers.

At the end of the 7 days, the person with the highest number of votes will have a full-fledged profile written about them that month and will receive a Certificate of Achievement from SimpliFlying.

The road to the SimpliFlying Awards 2012

The SimpliFlying Social Media Awards 2011 were a huge success and 2012 will be even bigger! So, in the spirit of starting new initiatives in the New Year, we’ve decided to add in a further sweetener to our monthly Heroes initiative. At the end of six months (July 2012), one of the 6 profiled Heroes will get an opportunity to be a wildcard entry to this year’s awards instead of having to go through a rigorous and extended voting and selection process that is the norm. Watch this space for more details in the coming months!

Let the voting begin

Here are the nominees for January 2012:

1.Christian Kamhaug, SAS Scandinavian:

SAS is one of the most active airlines in social media and has distinguished itself for initiatives like the crowdsourcing of new routes, their excellent customer service on Facebook and for being one of the most active airlines on the latest big boy in the social arena: Google Plus. And Christian has not only personally led the social media team at SAS, but also has a tattoo to prove it!

2.Pooja Dua, SpiceJet:

SpiceJet’s social launch of their new Bombardier Q400 turboprop in India was one of the most sensational and effective social media initiatives of the year, resulting in an 88% load factor in the first two weeks of operation. And now she’s leading India’s second plane-spotting contest among other initiatives.

3.Diego Quesada Grimaldo, COPA Airlines:

COPA airlines distinguished itself this year with what was perhaps one of the most successful social media campaigns of the year: the Pasaporte America initiative. The campaign won the airline 150 million impressions, 132,000 new Facebook fans and helped it reach a Klout score of 69 making it the third most influential airline on twitter.

Here’s looking forward to a great year. May the force be with you!

• Vote for the SimpliFlying Hero of March 2012: KLM vs Estonian Air vs SAS
• Results announced: The SimpliFlying Hero for January 2012 is Pooja Dua of SpiceJet!
• Vote for the SimpliFlying Hero of February 2011 – Finnair vs Delta Air Lines vs Malaysia Airlines
• Vote for the SimpliFlying Hero of April 2012: bmibaby vs JetBlue vs Virgin Atlantic
• 2nd Annual SimpliFlying Awards in Social Media Excellence – Nominations now open for airlines, airports and hotels

—–

The latest study from Ideaworks, sponsored by Amadeus; shows that airline ancillary revenue is on the increase, up 45% on last year to €11 billion ($13bn), and that in order to be in the top 10 ancillary revenue generators an airline must drive €300 million in ancillary sales. Airlines cannot afford to ignore the rapid development of this trend but strategies to take advantage of ancillary revenue will need to vary according to each airline’s brand positioning, and this involves careful decision-making.

Unbundling translates into cash

As can be seen from the graphic above, LCCs have moved full steam ahead with unbundling, selling exit-rows, extra legroom and priority boarding. However, the story of the last couple of years has been the entry of the U.S. majors – United and American now generate around €1.5 billion each. Even Singapore Airlines has started charging up to $100 for exit-row seating on their long haul flights.

There are compelling reasons for an unbundled market position:

1. Unbundling enables completely new revenue streams as customers select services ‘a la carte’
2. In the world of price-centric internet searching, airlines are under pressure to advertise a low base fare
3. An unbundled approach enables greater customer choice, although airlines need to ensure transparency to avoid confusing and misleading their customers.

To unbundle, or to preserve the brand?

For airlines that have built brands on premium service the decision to impose charges is a big one. Emirates, for example, is resisting the trend and even Southwest airlines has bucked the LCC tendency by not charging for baggage fees. If an airline opts for this approach, it is essential that customers are informed at every point of sale because consumers are beginning to expect baggage fees and additional charges.

What’s certain is that brand consistency is a must. If an airline’s offer is unbundled in one channel but not another, the resulting customer confusion will hurt sales and defeats the object of brand differentiation. This requires careful thought and the integration of ancillary services within the selling process, including the travel agent booking flow in order to drive adoption.

Another potential brand and revenue pitfall is delivery –it is one thing to sell a service, quite another to ensure it is delivered, on time, every time. Imagine if there is a disruption and customers are moved to a smaller plane with less exit-row seats, but the airline has already sold too many! Issues such as this require planning upfront.

Integration with an airline’s CRM and revenue management system also help to track and operate ancillary services according to customer value, whilst ensuring maximum revenue capture.

At Amadeus we are working with airlines of all shapes and sizes to deliver ancillary revenue strategies across multiple channels and in line with industry standards.

Editor’s Note: Horses for courses

While the dilemma for choosing between unbundling to drive ancillary revenues or to preserve the brand is a very real one, the best solutions would be customized to individual airline’s specific needs.

For example, while almost every airline in the US is charging a bag fee domestically, Southwest has made it a competitive advantage by not charging one. Similarly, Delta Airlines charges a bag fee for domestic sectors, but none on cross-Pacific flights. Because no other competitors do. It’s horses for courses.

So, what do you think? How far can airlines push the un-bundling argument before seriously compromising the brand, hence loyalty? Let’s hear it in the comments, or over on Twitter (@simpliflying)

• Ancillary revenue: A boon or a bane for the airline brand?
• Ancillary revenues and airline branding Special in March at SimpliFlying
• Low cost airline brands get creative with ancillary revenues – lounges, shops and cargo!
• King of ancillary revenues, RyanAir offers €1,000 for best idea on making money!
• Ancillary revenues and airline branding webinar slides (with video!)

Hence, I’d like to share with you the full article here. You can click on the image to read in a larger font size, or view the text-only version here.

On this hypothetical flight,

• After booking the flight, my Facebook and Twitter friends planned my trip, thanks to a tool called Flip.to
• I pre-ordered food on Twitter
• Pre-selected “family zone” on the flight, where people of similar interests would be sitting
• I managed to get the wifi free, by filling up a survey on the landing page, when I turned on my browser
• “Rented” a power point to plug in my Mac.
• Was offered an iPad, but couldn’t rent it, as they were all booked in advance

So, what do you think? Is this too much to ask of our favorite airlines? If there was one airline that was to adopt most of these technologies, who would it be? Let’s hear your thoughts in comments and on Twitter (@simpliFlying)

Special thanks to Mary Kirby of the RunwayGirl fame, for getting this article published.

• Back to the future – What would air travel be like in a year? Trip report Dec 2010
• Why the in-flight wi-fi business model needs a re-think (Hint: airlines can learn from airports)
• The SimpliFlying Social Media Cheatsheet for Airline Marketers
• Can the Apple iPad revolutionize the way airlines do business? Hell yeah! (Plus: how you can get a promotion)
• Brand Journeys: Delhi to Singapore on Jet Airways, the “best Indian airline flying international”

Though, too often, quotes in the press are either truncated, or lost in translation. Hence, here I share with you many more quotes I had been asked for, and sent out to various press outlets. I think they give a unique insight into the United/Continental merger.

On the brand change to United: Though both brands are globally recognized, I personally would have preferred to see the Continental brand survive, because they’ve done a fantastic job of resurrecting the brand over the years, while United has struggled with its re-branding efforts. As long as the name change doesn’t degrade Continental’s product or service, I think customers would be happy to move on.

On the executive appointments: It’s good for the airline in the long term, that Jeffery Smisek becomes the key executive, because he has a proven record as someone who can improve the airline, and please customers as well as shareholders. Moreover, Glen Tilton had publicly stated that his aim was to successfully lead an exit strategy for United Airlines, which this deal accomplishes. Hence, it’s only natural that he gradually shifts into a non-executive role.

On the HQ move to Chicago: A lot of Continental employees may be forced to move from Houston to Chicago, and many may forgo that option. It will also be difficult to retain the Texas culture at the company, which is cherished internally. There’s hard work ahead for the management in order to please the internal stakeholders.

On the impact on the passenger: Customers are likely to see fares rise on overlapping routes, like Houston to Chicago or Washintong DC. Ancillary fees may increase too, in the long term. Though, the frequent fliers wouldn’t have to worry much, as due to Star Alliance, both United’s and Continental’s frequent flier programs are quite similar now.

On what this means for future airline mergers in the US: The second merger of this scale in 24 months in the US is bound to put pressure on other independent airlines, like American and US Airways. Though, I don’t foresee these two merging, because of the huge overlap in routes. I wouldn’t be surprised if we see mergers in the low-cost arena, like Southwest getting in bed with AirTran, or even American Airlines cozying up further to JetBlue!

On impact on Asia: United already has a strong network in Asia-Pacific, and Continental’s presence in key markets like Japan and India will only make it a strong competitor against rivals like Delta. Though, in order to have any chance of acing against Asian carriers, the new airline will have to drastically up its game in terms of service, product and brand strategy.

So, what do you think about the merger? Would it be beneficial to the flying public? Would the combined airline be able to turn a profit? Let’s discuss in the comments or over on Twitter (@simpliflying)

• SimpliFlying in The Media: FinanceAsia, USA Today and Aviation Security International
• Feeling Like a Proud Dad as United Clarifies its Twitter Account :)
• The Perfect Wedding? Will United Airlines and US Airways pull up their socks when Continental joins Star Alliance?
• Conde Nast Traveler 2008 airline rankings prove that product is the brand
• Will Delta and Northwest merger bring back the glory of Pan-Am?

In the last week two governments in the Middle East have declared their desire to sell their national carriers within a relatively short period, about one year. Well it ain’t gonna happen.

Gulf Air goes on sale

Twenty days after Mumtalakat (the investment arm of the Kingdom of Bahrain) returned the ownership of Gulf Air to the government, citing that an airline is a strategic asset that will yield very little return. The government on 25 February 2010 announced its intention to privatize the airline within one year. Well, I don’t think it will happen. Although Bahrain Air is not a major threat, carriers in the region are. Gulf Air has a few advantages:

1. It has a restructuring plan and a vision of where it is heading
2. It has a fleet renewal plan which is in progress
3. It has several code sharing agreements within the region and as far afield as North America.

On the other hand it has definite problems and disadvantages:

1. Allegation of corruption within the airline
2. No record of profitability
3. A very disruptive labor union
4. A potentially explosive geopolitical situation

Image courtesy of rakzp on Flickr

Kuwait Airways on sale – Buy 1, Get 1 Free?

On 28 August 2007 the Government of Kuwait canceled a $3 Billions order for 19 aircraft from Airbus and Boeing that was arranged by Arab Leasing and Finance Co. (ALAFCO) because of pressure from Parliament. On 1 January 2008 the government announced it plans to privatize the airline and that was reiterated again on 25 January 2010. Kuwait Airways is a different proposition.

1. The airline has no announced restructuring or fleet renewal plans, but there are always talk of consultants recommendations, how relevant are these no one knows.
2. The airline has regional stiff competition from Jazeera Airways and Wataniya Airways. Although Kuwait Airways have the monopoly on long range flights, these have always been very low yield.
3. No track record of profitability since the Gulf War in 1990

Why the selling frenzy is a bad idea

Investors will not rush to buy into Gulf Air or Kuwait airways without resolving some of the issues above. This is a politically charged high risk region and we are still in recession so, one year of profitability will not be sufficient to raise public confidence. Both Royal Jordanian and Air Arabia could not launch an IPO until after a few years of profitability.

Local issues with Parliament and/or labor unions have to be resolved. Both airlines have to prove that they are capable of sustaining profitable growth over a reasonable period.

Gulf Air a better bet than Kuwait Airways?

Between the two airlines, Gulf Air stands a better chance of being privatized, not in one year but in the foreseeable future. It has a CEO with a proven record and a government that appears to have the political will to go ahead. Gulf Air always had a better brand recognition than Kuwait Airways.

For starters, Gulf Air has always been associated with Bahrain which was the center of ooo shore banking in the 70s and 80s and had a long history of being one of the 5 Star Airlines of the region, way before Emirates, Etihad or Qatar Airways came into being. Gulf Air worked on its brand during James Hogan’s days, a new paint scheme and interiors, nannies and chefs in the air and through its sponsorship of the F1 racing in Bahrain.

On the other hand Kuwait Airways never had that brand recognition and it appears to have never recovered from the 1990 Gulf War.

So, what do you think? Which airline would you bet your money on, given a choice? In fact, would you even recommend that these airlines be sold in the first place? Let’s discuss in comments and over on Twitter (@simpliflying)

• What does 2010 have in store for Middle East airline brands like Emirates, Etihad, Qatar Airways and others?
• Etihad Airways charging a second bag fee? Bad idea for a brand trying to establish itself
• Why a country that doesn’t have a national airline should never start one (especially those in Africa)
• What makes airBaltic’s “hybrid” airline model so successful? Interview with CCO Tero Taskila
• Aviation gone WILD! Four Wild Things to Expect at Singapore Airshow 2010 – Live from the tarmac

Grant McHerron (aka Falcon124) is an opinionated aviation enthusiast & co-host of Plane Crazy Down Under, Australia’s only aviation podcast. He is an online/digital project manager and perpetual student pilot who can often be found crewing hot air balloons, working airside at Avalon Airshow and plane spotting at airports around the world. He graciousouly hosted me when I visited Melbourne last year, and we almost watched the sunrise in his hot-air balloon Enjoy!

———–

The latest half-yearly results from QANTAS continue to show an airline that is hemorrhaging cash on its mainline, full service routes. While QANTAS are certainly showing signs of agility, the primary factor keeping the group afloat is the success of their Low Cost Carrier brand Jetstar.

The creation of Jetstar

Towards the end of the 1990′s, QANTAS saw the writing on the wall as customers moved towards the Low Cost Carrier (LCC) model, sacrificing as much as possible to chase cheaper airfares (yet still complaining strenuously about lack of service despite paying next to nothing, but that’s a whole different article Like other airlines they decided to create their own LCC, launching Jetstar in 2004 by rebranding the Impulse Airlines LCC operation that QANTAS had previously purchased in 2001. Re-branding Impulse Airlines was important as it allowed QANTAS to utilise their equipment and, most importantly, their staff agreements.

These agreements have allowed Jetstar to pay their crew less and utilise them more than QANTAS mainline staff who are covered by agreements that are the result of decades of union strength and bargaining. This low cost base provides Jetstar with more room to reduce fares and compete against other LCCs.

Image Courtesy of stuff.co.nz

Jetstar complementing and competing with Qantas

Low fares have not been the only factor that has allowed QANTAS’ baby to survive & grow, unlike other LCC offshoots, such as MetroJet & Song. Competing with Virgin Blue and Tiger Airways, Jetstar are also taking over unprofitable routes from the QANTAS mainline brand, including the routes run by Australian Airlines, the low cost international operation that QANTAS had launched in 2002 but eventually folded in favour of Jetstar.

In response to Tiger Airways starting a Melbourne to Sydney service in 2009, QANTAS allowed Jetstar onto the route in direct competition with their own “City Flyer” high-frequency services. The route between Melbourne & Sydney is the world’s third busiest and features high numbers of corporate travellers commuting between the cities. QANTAS reasoned that with fares falling further thanks to Tiger’s arrival, they might as well try to capture the discount travellers and keep them “in house” rather than lose them entirely.

It was this introduction of Jetstar onto one of QANTAS’ domestic cash cow routes that spurred Alan Joyce to famously state there would be “no further Jetstarisation of QANTAS.” If only that were true.

The Jetstarisation of Qantas

Jetstar’s growth has survived challenges such as the Bird Flu epidemic, Swine Flu and now the global financial meltdown. In fact, the current crises appears to have helped drive more traffic to Jetstar as business travellers and other frequent flyers have had to face reality and reduce the size of their travel budgets.

QANTAS recognised the surging “flight to value” as their First Class cabins drained down into Business Class while business travelers wound up back into Economy Class. Many passengers were lost to other airlines on some routes in the mid 2000′s, apparently fuelled by QANTAS’ lack of any Premium Economy offerings. Many of us in Australia were wondering why QANTAS was slow to realise that frequent travelers often want space & comfort, something certainly not encountered in the cramped conditions of cattle class.

QANTAS did eventually introduce a premium economy service in April 2008, slowly expanding to most of their international routes by the end of 2008. While this helped retain customers, it was becoming clear that high-end premium traffic was not only down but may, in fact, never come back to QANTAS. With high end premium traffic down and growing competition from the top quality First Class offerings at Emirates and Singapore Airlines, QANTAS have taken the wise step and are removing first class from their remaining 747-400s and 8 of their A380s (those arriving in 2012 & beyond). They will still have a First Class offering on 12 of their A380s but are reducing the number of Business Class seats on those aircraft to provide space of more Premium Economy and Economy seats.

This is yet another step along the Jetstarisation of QANTAS, even though the aircraft are still under the mainline QANTAS brand. Additional steps towards Jetstar’s dominance include their current push into Asia and their intended use of 787s to open up Europe. It is perhaps no surprise that all the new jet services & routes that QANTAS is adding (or re-opening) appear to be under the Jetstar brand, not QANTAS itself.

Qantas for Business, Jetstar for everyone else?

Over at the Plane Crazy Down Under podcast, this ongoing movement towards Jetstar has us making reference to “QANTAS, a member of the Jetstar group.” We have also joked that the ultimate end point for Jetstar will be flying JQ branded high density A380s across the Pacific and into Europe. As Ben Sandilands has pointed out in a recent Plane Talking entry, this may very well become a reality if the 787-9 does not live up to original expectations.

If current trends in domestic & international airline passenger transport continue, it is clear that Jetstar will continue to gain market share as QANTAS reduce their mainline aircraft to only those routes that still have a good market for business class. It seems likely that Alan Joyce will eventually regret his comment that the Jetstarisation has ceased as it appears to be, if anything, speeding up.

• Australia’s Qantas Airways – the world’s most agile airline brand?
• Is Premium Economy here to stay? A brand review of All Nippon Airlines
• Five clever ways to earn frequent flier miles for upgrades
• Is business-class travel going extinct? Part 1 of 2
• The business of business class

At the Singapore Airshow, I had to opportunity to interview the CEO of Garuda Indonesia – Emirsyah Satar at the CNBC studios and it was quite a revelation (see video below).

After churning a healthy $66 million profit in 2008 (after years of losses!), going through a major re-branding effort and ordering brand new Boeing 777s,  Garuda Indonesia is set to start an LCC, CityLink, have an IPO this summer and re-launch flights to Europe at the same time. It’s certainly a brand on a roll, and kudos to Mr Satar for championing the turn-around. Though, work still needs to be done.

A brand that needs to re-build trust

As we discussed in the interview, the Garuda Indonesia brand suffered setbacks after a few of crashes between 1997-2007, resulting in a ban from the EU for all Indonesian airlines to fly to the continent. Although the ban has been lifted since June last year, and Garuda has its safety certified by IATA, perceptions from the past linger in the minds of travelers, especially Europeans.

So, what can the airline do to re-build the brand and ensure that its European operations are successful? Here are some ideas.

How can Garuda Indonesia fill up the planes from Europe?

1. Going beyond ITB Berlin. Mr Satar mentioned that Garuda will be heading to ITB Berlin for re-establishing relationships with the travel agents. But that’s only part of the battle won. At the same time, it’s crucial to win the trust of the potential customers who will fly the airline, and promise them a unique and safe experience. How about partnering with the Indonesia Tourism Board to jointly drive traffic, by offering a uniquely Indonesian in-flight experience? I’d love a Balinese massage in the Business lounge, or Chicken Redang on-board

    

2. Build relationships directly with the customer – I’ve emphasized that there’s a need to build trust with the customers. How about building a micro-site where travelers share their experiences on-board Garuda Indonesia? This can then be followed up with a Facebook fanpage or even a Twitter account that has Q&A sessions directly with the CEO. Allowing the faces behind the brand to connect with the customers would make the airline feel more welcoming. For inspiration, they need to look just across the Malacca Straits to AirAsia, and see how they’re doing such a great job building their brand in new markets.
3. Go deep, not wide. Mr Satar spoke about starting London, Paris, Amsterdam and more cities in Europe. Though, I’d say that focus on a few cities, rather than spreading itself out over multiple European capitals would be better for yields as well as market penetration. So, double-daily London flights might work better than a daily flight to London, and another daily to Amsterdam. This is even more relevant, since Garuda currently doesn’t have any European airline partners, to feed its long-haul flights.
4. Offer something unique. How about direct flights to Bali from London, as opposed to Jakarta? If Garuda is competing on price, then it’s mostly going to attract the leisure traveler. And more of these are headed to Bali, than Jakarta. The good news is that Garuda also has a hub in Bali, so the passengers can easily connect to other destinations too. Garuda needs to stand out from the competition in order to sustain its long haul flights.
5. Dubai as a mini-hub. Untill the B777s arrive, Garuda will be flying to Europe on their A330s, with all flights being via Dubai. It will be a good idea to start cultivating some airline partnerships with regional Middle East carriers, like Oman Air or even GulfAir, to drive traffic from Dubai-Indonesia and vice-versa.

It’s good to see the strong revival of another Asian airline brand, and I hope Garuda Indonesia will be successful. For that to happen, they need to build bonds with the customers, personally.

What do you think? Would you fly Garuda Indonesia if they came to your city? Other than price, how can they entice you to fly them? Let’s hear it in the comments, or on Twitter (@simpliFlying)

• Former Garuda Indonesia CEO jailed – effects on the brand (+ what other airlines can learn)
• Three ways airlines can brand themselves in a recession
• Routes Americas 2012 – Airport-Airline Relationship Building at its Best
• SimpliFlying and Airline Business launch social media conference for airlines and airports [Plus: how you can win two passes]
• How does a pilot strike affect the Air France and KLM brands (and what can be done about it?)

Qantas announced today a net profit after tax of A$58 million for the first half of the financial year, down from $210 million a year earlier, although the airline did recover from a loss in the second-half of last financial year. This 72% dip in profits resulted in the shares falling by up to 7.2% in early morning trades. However, Alan Joyce, the CEO, says the carrier has done better than most of its rivals. And it has, indeed, thanks to its agility.

Agility through smart cost-cutting

Although revenues dipped by 13.4%, costs were slashed by 16.2%, which shows Qantas’ diligence and discipline in reducing expenditure in the past year. The cutting of frequencies to unpopular routes and grounding of older aircrafts was key to these cost savings.

Load-factors have been the highest in five years – at 82.4%, on flights that carried a lesser number of total passengers as compared to the past year.

This simply means that flights were more full than in the past, despite the recession. Of course, the downside was that this was achieved by offering very low fares on certain routes, which are unsustainable in the long run. Alan Joyce eluded to this fact as well, by indicating that the industry’s survival depends on higher fares.

Agility in re-configuring the cabin

Qantas was one of the first airlines to add a Premium Economy cabin to their flights. Now, they’re standing by their decision by overhauling their cabins. Qantas will be removing First Class on most of its long-haul routes, with the exception of London and Los Angeles, and adding Premium Economy to their widebody jets.

This not just reflects the growing sentiment that Premium demand will change in the coming years, but also the fact that there are more First Class seats in the market than required. For example, from Sydney to London, a passenger has the choice to fly on First Class Suites on board Singapore Airlines, Emirates, Etihad, Qatar Airways and Qantas. Certainly a case of over-capacity.

Qantas is one of the first airlines in the world to remove the First Class in a systematic fashion, and change their long-haul plane configuration to Business, Premium Economy and Economy classes. This effectively increases the number of seats and hence reduces the cost per seat even further. Such agility will pay off for Qantas in the long term.

Leveraging on Jetstar

It’s a known fact that the two brand strategy, growing Jetstar aggressively, gives Qantas Group a very valuable option that few others can match. Jetstar’s profits tripled in the past year and continue to provide Qantas a very valuable asset to leverage on low-yielding routes. The two-brand strategy has also ensured that the Qantas Group doesn’t lag behind LCC competition from Virgin Blue and Tiger Airways.

Moreover, the recent Jetstar-AirAsia cost alliance should also help the airlines reap additional benefits in the near future through by tapping on each other’s scale and synergies.

In conclusion, even though profits have dipped, Qantas remains one of the most agile airline brands in the world and it’s this quick-thinking that will keep them ahead of most competition in the coming times. What do you think? Let’s discuss in the comments, and over on Twitter (@simpliFlying)

• The “Jetstar-isation” of Qantas is not over yet. Is the LCC taking over the legacy parent brand?
• Is Premium Economy here to stay? A brand review of All Nippon Airlines
• Five clever ways to earn frequent flier miles for upgrades
• Why a Qantas and British Airways merger is good (and why Qantas + Cathay Pacific will be even better!)
• The business of business class

—–—–—–

“ETIHAD may charge for second piece of luggage”

This  was a remark made by James Hogan Etihad’s CEO, otherwise I would have thought it was a joke. Why would an aspiring and highly branded airline with cash flushed owners want to do something like this?

Etihad operates in a highly competitive and well connected market, whether it is the UAE, MENA or the Indian subcontinent. The traveling public (both Arabs and Indians) in the region is traditionally price sensitive and is used to weight and not number of bags. It is basically a visit friends and relatives (VFR) market used to carrying gifts and shopping across continents, bags and sacks of them.

So price sensitive, just look at the number of LCCs and quasi LCCs in the GCC alone  (Air Arabia, FlyDubai, Jazzera Airways, nasair, SAMA and Bahrain Air) that have started in the last 5 years. There are rumors of another LCC in Abu Dhabi and Qatar Airways intimated that they may set up one to compete in that segment. Even legacy carriers compete on price, at the peak of the summer season an extra ten (10) kilos of free excess baggage may be the only price differentiator.

Currently and among legacy carriers, the least expensive tickets are probably on Qatar Airways. So as long as you are not in a hurry and do not mind transiting through Doha for a few hours, then you are in luck. And, this is a highly branded airline too.

At a time when carriers in the region are restructuring (Gulf Air) or have joined alliances (Royal Jordanian and Egypt Air) or are rebranding (Saudia and Oman Air), and faced with stiff competition from two of the most branded airlines in the world (Emirates and Qatar Airways), I fail to see what Etihad hopes to achieve.

It seems airline branding does not include economy class. And this is a sad situation indeed.

What do you think? Is it a good idea or a bad idea for a premium Middle East airline to charge a bag fee? Will they lose customers? Let’s hear your thoughts in the comments and on Twitter (@simpliflying)

• What does 2010 have in store for Middle East airline brands like Emirates, Etihad, Qatar Airways and others?
• Gulf Air and Kuwait Airways up for sale – do the brands stand a chance?
• The future of Middle East Super-Airlines: Emirates and Etihad to merge, and Qatar to join an alliance
• How airlines in the Middle East are enhancing brand value through their frequent flyer programs
• King of ancillary revenues, RyanAir offers €1,000 for best idea on making money!

MySkyStatus – what’s the fuss about?

For the unaware, MySkyStatus is a tool that posts your flight info (altitude, location and arrival updates) automatically to Facebook and/or Twitter while you fly. And you guessed it, it’s the real-time nature of this app that’s making it go viral. And as you can see below, the updates can generate quite a discussion.

At first glance,  MySkyStatus is true value add for the customer. But the application is not perfect – and it need not be perfect in its first release anyway. However, there are some small tweaks that can be made, as well as some enhancements, which will make MySkyStatus a win-win proposition for both Lufthansa and the customer. And if I was the Product Manager, here are the ten things I’d do to ensure that the application flies.

Four things Lufthansa should tweak on MySkyStatus 1.0

1. Cut down on the Lufthansa branding: The most confusing aspect of this application seems to be the overdose of Lufthansa (LH) branding. The website is in LH colors, along with the logo and each update ends with “Powered by Lufthansa”. I think it’s confuses the user if this service is exclusively for LH flights. This is accentuated by the fact that other than the three “Add a flight”, “Confirm”, “Preview” links, everything leads to the LH website. It’d be much better if there was just a small link to the LH website, and just a small “Powered by Lufthansa” button on the website. I think a link in the update is more than enough.
2. State clearly that the updates are not real-time. It’s just predicted path: Although it appears that the application is tracking a flight in real-time, it actually isn’t the case – something I realized when a friend’s flight was delayed and the updates were being sent out while he sat at the airport. In social media, a lack of information is often construed as mis-information. And LH can avoid this by putting in a disclaimer that updates are not based on dynamic data. Transparency is king on the social web.
3. Be a bit more specific about the locations. “Flying over Asia” isn’t really insightful. If LH can tweak the system a little to give more specific locations, the updates might be more interesting.
4. Connect users with the people behind the app. One big advantage social media applications have is the ability to facilitate 1-1 communications. And I personally would love to meet the people behind the app. But that’s not an option right now. Just digging around, I could only find out that @kateobriennyc was somehow involved in the development process. It’ll be great to “meet” the others too.

Six things Lufthansa should add to MySkyStatus 2.0

1. Track the users. LH is probably already doing this, but keeping track of all the Twitter users and Facebook users who sign up for the application can be beneficial for mining in the future. If not for flying habits, then just as an independent source of data for LH to analyze when planning its own routes and capacity.
2. Apply basic analytics.  How about applying basic analytics to determine the most popular route? Seeing what segment of travelers visit certain destinations during certain months? The options are endless.
3. Ask for LH FFP numbers. How about putting in a field where travelers can input their LH frequent flier number? This would allow LH insight into when its own FFP members are not flying LH on certain routes – and generally airlines do not have any insight into this data.
4. Allow people to earn LH FFP miles when they fly on any partner airline. It may be just 10 miles per flight, but at lease something. If I’m in an adventurous mood, I’d even open it up to passengers on any airline! And give them half of what I’d give them for flying an LH partner airline. Ultimately, I’m getting them enticed into the LH FFP cycle. Unless they earn, they won’t redeem. And everyone likes miles, no matter how little.
5. Destination specific data-mining. I’d have the Revenue Management team cross-check with their highest yielding destinations or lowest yielding and give those who use MySkyStatus an incentive to fly LH the next time round? Good way to acquire new customers, isn’t it?
6. Partner with the likes of TripIt, AirValid and FlightMemory. These are websites where travelers already track their mileage and review airlines. How about partnering with these sites to provide additional value to travelers?

So, what do you think? Is this a good initiative by Lufthansa? Will it fly? Let’s discuss in the comments or over on Twitter (@simpliflying)

Special thanks to @singabai , @smarketer , @frittatun , @bretthenry and @martinmorjet for providing fodder for this article.

• Malaysia Airlines takes booking and check-in to Facebook. And now, you can sit next to your friend too!
• [Slides] Social Media Strategy for Lufthansa – how a legacy airline built a strong customer engagement model
• Lufthansa shares love with their 100,000 Facebook fans by giving miles
• Lufthansa’s CloudStream carry-on solution allows you to read SimpliFlying in-flight
• 5 Ways Airlines Can Drive Revenue with Social Media (Mashable.com)