The airplane is an island no more

With LiveTV in-seat video, every passenger on the aircraft gets a personal TV screen with up to 36 channels of live satellite programming, a GPS map channel and four additional channels of stored content. In addition to this, LiveTV allows people to listen to XM Satellite radio, and now with the acquisition of AirFone, connect with those on the ground using their communication devices too. Having built a strong and popular product, JetBlue has now started to encash on LiveTV.

Time to set the cash registers ringing

The LiveTV product provides authentic value-added services to JetBlue’s customers. The keyword here is authentic. Unlike a number of other airlines who seem to be charging for basics like a cup of water in order to make money, LiveTV actually charges for a real value added service. The best part is that many of the channels and services on LiveTV are free, and customers can pay more for what they really want – a very sound business model.

Another business model that works is to make the product so good that it becomes the envy of others in the industry. Then license it to them for a fee.  And this is exactly what LiveTV is capitalizing on. In the US, Continental Airlines is a LiveTV customer, and so are Frontier Airlines and AirTran. Globally, Italy’s AirOne, Canada’s WestJet and Austraila’s Virgin Blue use the system.  Azul Airlines in Brazil, now being run by former JetBlue CEO David Neelman, is considering installing it too.

Having multiple sources of income is the best insurance against turbulent times. Having cultivated a revenue stream other than their core business – flying – JetBlue has certainly found it easier to handle the current crises, as compared to most other US carriers.

A strong product leads to a strong brand

A strong brand is one that is supported by strong products and services over time. And LiveTV has certainly lived up to the reputation of JetBlue providing some of the best products in the US airline market. Successful products like LiveTV only help extend the brand leverage further, as they truly show that the airline is dedicated to providing value added service to the customers.

Over time, the brand remains constant, even as products change. If an airline’s focus is low-fare products, then it should stick to it – like Southwest Airlines and AirAsia do. If the business model is based on providing value for money, then it should be pursued with single-minded focus – like JetBlue does.

JetBlue was rated among the top three domestic low-cost carrier in the US by Travel+Leisure magazine for a reason. They are getting this right.

Key Lessons for other airlines

1. Build a strong product, which provides definite value add to the customer
2. Leverage on the product to build additional revenue sources
3. Build core IP (intellectual property) around the product and then possibly license it to others
4. Create brand leverage by offering products and services of consistently high value to the customers

What do you think? Is this is good way to go down for airlines? Do they need to be concerned about losing their identity in trying to build a variety of products? What about diluting their brand too much by offering many products?

Let’s discuss…

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