SXSW Interactive Festival Begins

12 Mar’10 || FOX 7
Southwest Festival began on Friday with tech savvy professionals, including  Shashank Nigam and Michelle Banter, at numerous panels and discussions. One of the co-founders of Twitter, Dom Degola, was one of the featured speakers… read more

Asia, Mid East to help aviation industry soar

11 Mar’10 || Today
… “Air Asia is booming ahead, their latest joint venture was in Vietnam. Tiger Aiways just went IPO, they have new money, new planes coming in, they’re going to expand in the region. South-east Asia, certainly look out for it. India, a lot of domestic airlines will soon be able to fly international, which means a lot of budget airline growth in the region,” said Mr Shashank Nigam, founder and chief executive officer of Simpliflying… read more

Low Cost Airlines World 2010 Asia Pacific Conference

If you are a member of the press and wish to quote SimpliFlying, please email to media@simpliflying.com

For more quotations on aviation/ branding/ travel media, check out Media Mentions archive.

• SimpliFlying in The Media: CNBC, The Straits Times, Asia News Network, AirObserver’s Blog, DrDaveHaleOnline, Travel Reviews, Travel Industry Wire, Facing the Street
• SimpliFlying in The Media: CNBC, Flightglobal, Aerospace Diary and Slideshare
• Five and a half secrets for airlines to drive revenue from social media: Keynote presentation from LCC Summit in Al-Ain
• SimpliFlying in The Media: Reuters, CNBC, Channel News Asia, FlightGlobal, TODAY, Aviation Indian, Ole Kassow Inc, UpTake Travel Industry, Columbia Business School…
• SimpliFlying in The Media: CNBC, ex-United, Flightglobal, Los Angeles Times, Tips from the T-List, Mashable…

Chile has been in the news for the past couple of weeks, due to the earthquake. And then due to the resilient efforts of the Chileans in bringing the country back to its feet quickly. And the aviation community, lead by IATA is also doing its part by going ahead with FIDAE – the Chilean Airshow – and the Wings of Change conference, despite the damage incurred during the earthquake. One of the aims is to get visitors back to Chile as soon as possible. And yours truly is going to be there too.

I’ve been invited to deliver a workshop and speak on how airline brands can drive engagement, loyalty and revenues from the latest Web 2.0 technologies. In conjunction with that, IATA has kindly agreed to give away two free passes to FIDAE (the airshow) and Wings of Change (the conference) to SimpliFlying readers (yes, you!).

Read on to learn how you can be part of this celebration of resilience in Chile too, and rub shoulders with the likes of Patrick Murphy, former Chairman of Ryanair and the CEO of LAN Airlines.

How to win two passes to attend Wings of Change and FIDAE?

It’s simple. Just do either of the two things below.

1. On the blog: Leave a comment on this article answering this question: Which is the foremost challenge Latin American airlines face today and how would you solve it?
2. On Twitter: Follow @SimpliFlying and Tweet to us in 140 chars Which is the foremost challenge Latin American airlines face today. In your Tweet, you must mention @simpliflying (for tracking) and the URL for this article (http://bit.ly/FIDAE)

It’s that simple. Two winners will be announced on 19 March 2010, through a lucky draw. So the more you Tweet, and the more you comment, the better the chances of winning.

So, what’re you waiting for? Get started right now. And you never know, we might just meet face to face in two weeks in Chile!

• It’s our first birthday, and we want you to join us in Athens, Greece at the IATA Commercial Strategy Symposium
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• The day airlines’ Twitter accounts were hacked, and three steps to reverse the brand damage
• SimpliFlying creates history: absolutely unofficial, real-time coverage of the Singapore Airshow 2010
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Over on Twitter, I was alerted to a letter published in Business Traveller Magazine where a customer had sent in a legitimate complaint letter to United Airlines, sharing his experience of poor service in Business Class and suggested that more investments be made into customer service training.

It was great that United Airlines actually responded to the letter in the magazine itself. And that’s where the positives ended. Of the five key points raised by the customer, only one was directly addressed. In fact, the response went on to totally digress from the topic and talked more about the airline’s new premium cabins, and not customer service. That got me thinking, it’s probably not just the cabin crew at United who needs lessons in customer service, but even folks from Corp. Comms.

This is very ironic, because just a couple of weeks ago, at the Loyalty 2010 event, while having lunch with Robert Sahadevan, United’s VP of Loyalty, I was very impressed by the focus they have on their frequent fliers and premium passengers. Hence, this response was disappointing, to say the least.

I thought I’d do my bit here for United (and help other airlines too, who need to get their basics right – you know who you are)

Step 1: Listen to the customer

The key word here is LISTEN. Not look. Not hear. But listen. The difference is stark. If you look or just hear, then you hardly absorb any of the content, let alone understand. It’s very important to seek get an idea of why the customer is saying what he’s saying.

Step 2: Identify the key issues mentioned by the customer

Once you’ve listened to him, identify the key issues the customer has expressed – both positive and negative. In this case, there are five key issues, as I’ve highlighted below (click on the image for larger font). They include the Business Class passenger’s request for water not being answered, to the responses he received from the flight attendants.

Step 3: Address the issues

Needless to say, after the issues have been identified, they need to be addressed. Even if you intend to dodge the bullets, do it subtly. Not the way United’s response totally ignores the issues raised and goes off on a tangent. It almost seems to me as if a United Airlines Corporate Sales person has written this reply!

Not only are hardly any issues been addressed, Rahsaan appears almost proud of the fact that he’s doged every bullet in his response. From his LinkedIn profile, Rahsaan seems too experienced to get this wrong. This gives me the feeling that this may have more to do with United’s policy governing Corporate Communications, than a personnel’s overlooking the issues. Which is a scary thought!

Step 4: Apologise, if you’re wrong

Nowhere does the response from United Airlines make any mention of what they’re going to do to change the situation. In fact, they don’t even accept that they’ve done anything wrong. Let alone apologize for it. Frankly, the letter seems as if it’s been written by a computer, not a person. A personal reply needs to be just that – personal.

There’s nothing wrong in apologizing if you’re in the wrong. The least United can do is to learn from the likes of Southwest Airlines and JetBlue – remember the famous video apology by then CEO David Neeleman?

Step 5: Thank the customer for his feedback

Nowhere does the United response thank the customer for taking his time to send the (very valuable) feedback. Not at the beginning. Not at the end. That’s the least they couldn’t have done, isn’t it?

—-

If you’re from United Airlines and reading this, I’d love to hear your take on this situation. Was it a one-off? May be Customer Service should be responding to such letters, not Corporate Communications.

What do you think? What are some of the best practices of airlines that do customer service right? Let’s share our suggestions with United Airlines so that they can make flying better for all of us!

• Meet the new Chief Marketing Officer of United Airlines – Dave Carroll. He sings and plays a guitar!
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• Virgin Atlantic embraces cribbing pax, asks him to choose in-flight menu

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

This guest article 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 his thoughts how the proposed sale of two Gulf carriers may or may note be a good idea.
——-

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?
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If you are a member of the press and wish to quote SimpliFlying, please email tomedia@simpliflying.com

For more quotations on aviation/ branding/ travel media, check out Media Mentions archive.

• SimpliFlying in the Media: FOX 7, Today, Air Transport News
• Five and a half secrets for airlines to drive revenue from social media: Keynote presentation from LCC Summit in Al-Ain
• SimpliFlying in The Media: CNBC, Flightglobal, Aerospace Diary and Slideshare
• SimpliFlying in The Media: CNBC, The Straits Times, Asia News Network, AirObserver’s Blog, DrDaveHaleOnline, Travel Reviews, Travel Industry Wire, Facing the Street
• SimpliFlying in The Media: Reuters, CNBC, Channel News Asia, FlightGlobal, TODAY, Aviation Indian, Ole Kassow Inc, UpTake Travel Industry, Columbia Business School…

Today, a number of airline accounts were hacked. First, NYC Aviation pointed out that United Airlines was sending out malicious tweets. Later, I received a Direct Message from Brussels Airlines, with exactly the same message, with the URL taking users to a sexual enhancement website.

Staying true to the real-time nature of social media, within minutes, the news of hacking was doing rounds all over the internet. Of course, it’s only to be expected, when United Airlines sends an abnormal Tweet to it’s 56,000 followers. Though United later removed the specific Tweet, the damage was done.

Reversing the brand damage to the airlines, in 3 steps

This is a situation that any airline jumping on the social media bandwagon can face. So, what’s the best way to deal with it? Here are three simple steps.

1. Be quick. Delete the malicious tweets from your updates (obvious!), but do it quickly. United Airlines took 1 hr 6 mins before their public tweet was deleted. It could have been quicker.
2. Be candid. Send out a public Tweet apologizing and clarifying the matter. Brussels Airlines sent out a Tweet (below) but United has not reacted that way yet [Update, 9am EST: United just sent out a clarifying tweet]. It’s important not to resort to traditional means like a press release. They are too formal, take too long to get to the public, and target the wrong audience. Most importantly, Twitter is personal. So, be candid, like Brussels Airlines.
   
3. Be thankful. Identify the person who alerted you and thank him publicly. He’s likely to re-tweet it and tell all his friends how nice you’ve been to him or her. And you have instantly cultivated a brand advocate! Cathay Pacific did this very well today (even they weren’t hacked)

So, what do you think about the way these airlines reacted? How can they deal with such incidents better? Let’s hear it in the comments, and over on Twitter (@simpliflying).

• High Flying Tweets: 11 of the best airline or aviation bloggers / journalists to follow on Twitter
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• Join me in Santiago de Chile, at IATA Wings of Change conference – 2 free passes up for grabs

If you’re already up and running on Twitter, Facebook or other social media tools, a great way to augment your social media efforts is by tapping on one of the hottest trends around, location based services (“LBS”). Location based social networking is something VERY well suited for airlines. Just like “Tweets” was the buzzword of 2009, by the end of 2010, I expect “Mayor” to be the buzzword. And, these services are made to work well in the travel industry.

Popular Location Based Services

If you’re unfamiliar with LBS, here are a few that are popular, including a couple of travel specific ones:

Foursquare - Foursquare is a location based game/application, where users “check-in” at places around the city.  They get points for check-ins, adding new locations, and extra points for multiple check-ins in one day.  Check-ins can be automatically shared on Twitter and Facebook.  They can also become “Mayor” of a location if they have been there the most out of all Foursquare users.  Friends have access to see where you are, and where you’ve been, which can facilitate social gatherings that might have not otherwise happened.

Some companies are starting to use this application to target users by location.  For example, something like this may pop up on your screen: “Since you’re right around the corner from CVS, stop by and get 10% off”.  It’s  a great way for companies to get a relevant message out.  In general, it’s also a great way to increase awareness… the  more people check-in to the location, the more other people see it. Other similar sites include GoWalla and MyTown.

TripIt - TripIt gives users a way to track their travel itineraries  — including hotels, airlines, and more — and share them with their friends.  The application allows you to check-in online, and share detail on social networking sites, such as LinkedIn.  Users also see a history of their activity and statistics about their travel.  You can also add a trip that you are planning, but you haven’t booked yet.

Dopplr - Dopplr is similar to TripIt, in that it allows you to share your travel plans with other people. You can also find travel tips and advice from other travelers.

Leverage LBS as an Airline or Airport

Encourage Check-Ins

One way for airlines and airports to be “active” with services such as Foursquare, is to encourage travelers to check-in at their airline, airport, or even gate.  The benefit of this is that travelers can connect with each other, and you stay more top of mind, and get a free awareness boost, when they post their check-ins using social networking sites.  Or, if a flight is delayed, it will go much faster, if they find a friend to meet up with at the airport.

You could also tie this in with your frequent flyer program. If they check-in and publicize on Twitter or Facebook, they get 5,000 additional frequent flyer miles.

Reward Travelers

You could also run promotions to encourage check ins, with a giveaway for those who have checked in or for the first to check in.  Mayors are also a great source of loyal customers.  Why not make these people feel special by upgrading them to first class, giving them priority boarding, or announcing their name on the flight? For example, “We are proud to have with us today, the mayor of American Airlines.  That means he has checking-in using Foursquare more than any other traveler.  He was upgraded to first class for being such a special customer.”

Unmet Need

When travelers add trips to TripIt and Dopplr without flight information, what a great way to target them at their point of need, and offer them a flight that may fit what they are looking for.  In addition, if they have a flight booked, but no hotel or rental car, you can suggest your travel partners to them.  You can form a partnership with TripIt or Doppler, to be able to communicate with customers, so you can say something like “We see you are planning a trip from Paris to Istanbul.  We have many flights between those two cities.  Click here to search for a flight.”

Leverage  Frequent Flyer Program

A month ago, Tasti D-Lite began a program that tied their frequent buyer car in with social networking.  Whenever points are earned or redeemed, their system automatically sends out an update to social networking sites, including Twitter and Foursquare.  Why not add this to your frequent flyer program, including their frequent flyer balance?  Imagine, if every time someone uses his SAS Eurobonus card, a tweet or a Facebook status update goes out to his friends that “I just earned 5,000 miles flying from Oslo to Bangkok” or “I just got free petrol for 3,000 miles through EuroBonus”. This action will drive awareness, keep you top of mind, and get people talking.

Advertising

Some of these LBS applications, also allow advertising. It could be a very targeted ad, on TripIt or Dopplr.

What do you think?  Can  you see yourself implementing any of these ideas?  Do you have any other ideas? Let’s hear it in comments and over on Twitter (@simpliflying)

• Randy Petersen of Flyertalk on social media and frequent flyers – Part 2 of 2
• 5 Ways to Incorporate Social Media Into the Flying Experience, and leverage on your “followers”
• Does the latest social media application by Lufthansa have wings? 10 things I would do to ensure MySkyStatus flies
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• SimpliFlying, in the news…and more!

Last week, I wrote an article for CNBC, which talked about the agility of Qantas that keeps the airline in profitable territory. The article resulted in a lively debate with a number of Aussie aviation experts down under, and one of them kindly offered to write a detailed Guest Post on SimpliFlying on how it’s actually Jetstar that’s keeping Qantas afloat.

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

Garuda Indonesia on a roll

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)

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